2023 - 2024 LEGISLATURE
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2023 SENATE BILL 432
September 15, 2023 - Introduced by Senator FELZKOWSKI, cosponsored by
Representative CALLAHAN. Referred to Committee on Insurance and Small
Business.
1 AN ACT to repeal 49.45 (12) (a), 601.41 (8), 601.41 (10), 601.415 (12), 601.56,
2 601.57, 628.92 (5) and 635.10; to renumber and amend 601.64 (3) (c); to
3 amend 15.165 (3) (b) 9., 49.45 (12) (b), 601.415 (3), 601.63 (2), 628.10 (2) (b),
4 646.11 (2), 646.51 (1m), 646.51 (3) (am), 646.51 (3) (ar) and 646.51 (3) (b); and
5 to create 601.41 (13), 601.465 (1m) (c) 9m., 601.64 (3) (c) 2. a., b. and c., 609.98
6 (5), 611.12 (5) and 646.13 (2) (h) of the statutes; relating to: various changes
7 to insurance laws and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill modifies various insurance statutes that are generally administered
by the Office of the Commissioner of Insurance. Specifically, the bill does all of the
following:
1. Allows the commissioner of insurance to appoint the deputy commissioner,
chief legal counsel, or chief financial regulator in OCI to serve as a member on the
Wisconsin Retirement Board, rather than limiting the commissioner's designee to an
experienced actuary in OCI.
2. Eliminates the requirement that the commissioner develop a uniform
employee application form that small employer insurers must use when a small
employer applies for coverage under a group health benefit plan, including the
requirement that small employer insurers must use the form.
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SENATE BILL 432
3. Eliminates the requirement that the commissioner prescribe, by rule,
uniform questions and the format for applications for individual major medical
health insurance policies and the requirement that all insurers may use only those
questions and that format for individual major medical health insurance policy
applications.
4. Allows the commissioner to enter directly into a contract for the services of
a consultant if OCI is coordinating a review on a regulatory matter with another
state's or U.S. territory's insurance department that has already procured the
services of the consultant.
5. Eliminates the commissioner's remaining responsibility regarding
dissolution of the former Health Insurance Risk-Sharing Plan.
6. Adds the insurance security fund to the list of persons with whom OCI may
confidentially share or from whom OCI may confidentially obtain information.
Current law includes on that list a similar fund or other entity in another state but
does not expressly include this state's fund.
7. Eliminates the requirement that the commissioner study, and provide a
report to the legislature and governor on, a) whether the cost of health care
administration is likely to be reduced by health insurers' compliance with certain
standards in their transactions with health care providers and b) the feasibility and
cost-effectiveness of certain requirements related to uniform health insurance
identification cards. The bill also eliminates the requirement that the commissioner
must promulgate rules depending on the results of those studies.
8. Changes the procedures for providing notice of the revocation of an insurer's
authority to do business in this state.
9. Increases the forfeiture amount, from $1,000 to $5,000 per violation, for a
violation of an insurance statute or rule that involves or constitutes fraud.
10. Requires a health maintenance organization that participates in the
Family Care Program to make a monetary deposit, in an amount determined by the
Department of Health Services, to pay for services on behalf of an insolvent or
financially hazardous care management organization. The Family Care Program
provides community-based long-term care services to eligible individuals. Current
law requires a care management organization that provides services under the
Family Care Program to make the deposit.
11. Allows a domestic stock or mutual insurance corporation to include certain
forum selection provisions in its articles of incorporation or bylaws.
12. Changes a standard under which the commissioner may revoke, suspend,
or limit the license of an insurance marketing intermediary or individual navigator
from finding that the licensee “is not of good character” to finding that the licensee
“is not competent or trustworthy.” Under current law, proof of competence and
trustworthiness are required for the initial issuance of a license.
13. Eliminates the financial responsibility requirement under current law that
applies to navigators.
14. Reduces the number of segregated accounts that compose the insurance
security fund, from six to five, by merging the life insurance and annuities accounts.
The bill retains the current law requirement that the board of directors of the fund,
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SENATE BILL 432
when it authorizes assessments of insurers that have been ordered liquidated, must
continue to estimate the amounts necessary to make payments from the fund and
must authorize assessments separately for life insurance policies and for annuity
contracts in the merged life insurance and annuities account.
15. Changes the manner in which the board calculates assessment amounts for
the merged life insurance and annuities account. Under current law, the amount is
calculated as a percentage of average annual premiums received in this state by an
insurer for life insurance policies and for annuity contracts for the three most recent
years. Under the bill, the amount is calculated as a percentage of premiums for the
year immediately preceding the year in which the board authorizes the assessment
or, if that data is not available, for the most recent year for which that data is
available.
16. Adds to the powers of the insurance security fund the authority to negotiate
and contract with other guaranty associations to provide and receive administrative,
claims, and other services that are usual to guaranty associations.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
1 SECTION 1. 15.165 (3) (b) 9. of the statutes is amended to read:
2 15.165 (3) (b) 9. The commissioner of insurance or an experienced actuary in
3 the office of the commissioner designated by the commissioner the commissioner's
4 designee under s. 601.415 (3).
5 SECTION 2. 49.45 (12) (a) of the statutes is repealed.
6 SECTION 3. 49.45 (12) (b) of the statutes is amended to read:
7 49.45 (12) (b) If the commissioner of insurance promulgates rules under s.
8 601.57 (2), 2021 stats., establishing a health insurance identification card system
9 and its computerized support system, the department shall develop a plan to
10 coordinate a system of machine-readable identification cards for medical assistance
11 recipients with the systems established by the commissioner and shall submit the
12 plan to the governor, and to the legislature under s. 13.172 (2), before issuing a
13 request for proposals under par. (c).
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SENATE BILL 432 SECTION 4
1 SECTION 4. 601.41 (8) of the statutes is repealed.
2 SECTION 5. 601.41 (10) of the statutes is repealed.
3 SECTION 6. 601.41 (13) of the statutes is created to read:
4 601.41 (13) INTERSTATE REGULATORY REVIEWS; CONSULTANT CONTRACTS.
5 Notwithstanding ss. 16.70 to 16.78, the commissioner may enter into a contract for
6 the services of a consultant if all of the following apply:
7 (a) The office and the insurance department of another state are coordinating
8 a review on a regulatory matter.
9 (b) The other state's insurance department has already procured the services
10 of the consultant.
11 SECTION 7. 601.415 (3) of the statutes is amended to read:
12 601.415 (3) WISCONSIN RETIREMENT BOARD. The commissioner or an experienced
13 actuary the deputy commissioner, chief legal counsel, or chief financial regulator in
14 the office designated by the commissioner shall serve as a member of the Wisconsin
15 retirement board under s. 15.165 (3) (b).
16 SECTION 8. 601.415 (12) of the statutes is repealed.
17 SECTION 9. 601.465 (1m) (c) 9m. of the statutes is created to read:
18 601.465 (1m) (c) 9m. The security fund created under ch. 646.
19 SECTION 10. 601.56 of the statutes is repealed.
20 SECTION 11. 601.57 of the statutes is repealed.
21 SECTION 12. 601.63 (2) of the statutes is amended to read:
22 601.63 (2) NOTIFICATION TO AGENTS OF REVOCATION OF CERTIFICATE OF AUTHORITY
23 OF INSURER. Upon issuance of any order limiting, suspending or revoking an insurer's
24 authority to do business in this state, the commissioner insurer shall within 10
25 business days and by separate written notice notify by mail all agents of appointed
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SENATE BILL 432 SECTION 12
1 with the insurer of whom and shall provide a copy of the notice to the commissioner
2 has record. The commissioner shall also publish a class 1 notice of the order under
3 ch. 985 revocation in whatever reasonable form the commissioner designates.
4 SECTION 13. 601.64 (3) (c) of the statutes is renumbered 601.64 (3) (c) 1. and
5 amended to read:
6 601.64 (3) (c) 1. Whoever violates an insurance statute or rule or s. 149.13, 2011
7 stats., intentionally aids a person in violating an insurance statute or rule or s.
8 149.13, 2011 stats., or knowingly permits a person over whom he or she has authority
9 to violate an insurance statute or rule or s. 149.13, 2011 stats., shall forfeit to the
10 state not more than $1,000 for each violation, except that.
11 2. Notwithstanding subd. 1., whoever violates an insurance statute or rule,
12 intentionally aids a person in violating an insurance statute or rule, or knowingly
13 permits a person over whom he or she has authority to violate an insurance statute
14 or rule shall, if the violation specifically involves a consumer who is an adult at risk,
15 as defined in s. 55.01 (1e), or an individual who is at least 60 years of age, forfeit to
16 the state not more than $5,000 for each violation. if any of the following applies:
17 3. If the statute or rule violated under subd. 1. or 2. imposes a duty to make a
18 report to the commissioner, each week of delay in complying with the duty is a new
19 violation.
20 SECTION 14. 601.64 (3) (c) 2. a., b. and c. of the statutes are created to read:
21 601.64 (3) (c) 2. a. The violation specifically involves a consumer who is an adult
22 at risk, as defined in s. 55.01 (1e).
23 b. The violation specifically involves an individual who is at least 60 years of
24 age.
25 c. The violation involves or constitutes fraud or misrepresentation.
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SENATE BILL 432 SECTION 15
1 SECTION 15. 609.98 (5) of the statutes is created to read:
2 609.98 (5) FAMILY CARE PROGRAM; DEPOSIT REQUIRED. (a) In this subsection,
3 “family care program” means the program under ss. 46.2805 to 46.2895 that provides
4 the family care benefit, as defined in s. 46.2805 (4).
5 (b) A health maintenance organization participating in the family care
6 program is subject to s. 648.75.
7 SECTION 16. 611.12 (5) of the statutes is created to read:
8 611.12 (5) FORUM SELECTION PROVISIONS. Section 180.0145 applies to stock
9 corporations, and s. 181.0163 applies to mutuals.
10 SECTION 17. 628.10 (2) (b) of the statutes is amended to read:
11 628.10 (2) (b) For other reasons. Except as provided in pars. (c) to (d), after a
12 hearing, the commissioner may revoke, suspend, or limit in whole or in part the
13 license of any intermediary or individual navigator if the commissioner finds that the
14 licensee is unqualified as an intermediary or navigator, is not of good character
15 competent or trustworthy under s. 628.04 (1) (b) 2., or has repeatedly or knowingly
16 violated an insurance statute or rule or a valid order of the commissioner under s.
17 601.41 (4), or if the intermediary's or navigator's methods and practices in the
18 conduct of business endanger, or financial resources are inadequate to safeguard, the
19 legitimate interests of customers and the public. Nothing in this paragraph limits
20 the authority of the commissioner to suspend summarily an intermediary's or
21 individual navigator's license under s. 227.51 (3).
22 SECTION 18. 628.92 (5) of the statutes is repealed.
23 SECTION 19. 635.10 of the statutes is repealed.
24 SECTION 20. 646.11 (2) of the statutes is amended to read:
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SENATE BILL 432 SECTION 20
1 646.11 (2) ACCOUNTS. The fund shall be composed of 6 5 segregated accounts,
2 one for life insurance, one for and annuities, one for disability insurance other than
3 policies issued or coverage provided by a health maintenance organization insurer,
4 one for health maintenance organization insurers, one for all other kinds of
5 insurance subject to this chapter, and an administrative account.
6 SECTION 21. 646.13 (2) (h) of the statutes is created to read:
7 646.13 (2) (h) Negotiate and contract with other guaranty associations to
8 provide and receive administrative, claims, and other services that are usual to
9 guaranty associations.
10 SECTION 22. 646.51 (1m) of the statutes is amended to read:
11 646.51 (1m) DUTY TO ASSESS. As soon as practicable To meet the board's
12 obligations under this chapter, after a liquidation order has been issued, the board
13 shall estimate separately for each of the accounts of s. 646.11 (2) and separately for
14 life insurance policies and for annuity contracts in the life insurance and annuities
15 account, the amounts necessary to make the payments provided by this chapter and.
16 The board shall authorize assessments separately for each account and separately
17 for life insurance policies and for annuity contracts in the life insurance and
18 annuities account.
19 SECTION 23. 646.51 (3) (am) of the statutes is amended to read:
20 646.51 (3) (am) General. Except as provided in pars. (ar), (b), and (c), the board
21 shall calculate the assessments shall be calculated as a percentage of premium
22 premiums written in this state by each insurer in the classes protected by the
23 accounts under s. 646.11 (2) for the year immediately preceding the year in which the
24 board authorizes the assessment is authorized by the board.
25 SECTION 24. 646.51 (3) (ar) of the statutes is amended to read:
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SENATE BILL 432 SECTION 24
1 646.51 (3) (ar) Disability. Except as provided in par. (c), with respect to the
2 disability insurance policies, including policies issued by account under s. 646.11 (2)
3 and the health maintenance organization insurers, account under s. 646.11 (2), the
4 board shall calculate the assessments shall be calculated as a percentage of premium
5 premiums written in this state by each insurer in the classes protected by the
6 accounts for the year immediately preceding the year in which the board authorizes
7 the assessment is authorized by the board. If the assessment data for the year
8 immediately preceding the year in which the board authorizes the assessment is
9 authorized by the board is not available when the assessment is called, the fund
10 board may use the assessment data for the most recent year for which data is
11 available.
12 SECTION 25. 646.51 (3) (b) of the statutes is amended to read:
13 646.51 (3) (b) Life and annuities. Except as provided in par. (c), with respect
14 to annuity contracts or life insurance policies, assessments shall be calculated the
15 life insurance and annuities account under s. 646.11 (2), the board shall calculate the
16 assessments separately for life insurance policies and for annuity contracts as a
17 percentage of average annual premium premiums received in this state by each
18 insurer in the classes protected by the accounts account for the 3 most recent years
19 year immediately preceding the year of the entry of the order of liquidation in which
20 the board authorizes