SB 516

This bill makes a number of changes to the insurance laws, including the

following:

1. The Interstate Insurance Receivership Compact was created to develop and

facilitate uniform insurer receivership laws. Receiverships are established to

oversee and distribute assets of insurers that have become insolvent. Although

enacted as part of Wisconsin law, the compact never became effective in this state and

now is dissolving. The bill repeals the compact.

2. Under current law, an issuer of a charitable gift annuity must keep its assets

in a segregated account. Issuers of charitable gift annuities are subject to the same

requirements for investing assets in their segregated accounts as are other annuity

insurers for investing their assets, including being limited to investing no more than

20 percent of the assets in common stock and shares of mutual funds and no more

than 3 percent in the common stock of a single corporation and its affiliates. The bill

increases, for charitable gift annuity segregated accounts, the amount of assets that

may be invested in common stock from 20 percent to 50 percent and the assets that

may be invested in the common stock of a single corporation and its affiliates from

3 percent to 10 percent. The bill also provides that, if the assets of a charitable gift

annuity segregated account are invested in a mutual fund, the investment will be

treated as if it consists of the same percentage of common stock or bonds as that held

by the mutual fund.

3. Under current law, the Health Insurance Risk-Sharing Plan is funded in

part by assessments paid by health insurers. The amount of the assessment paid by

each insurer is proportional to the amount of that insurer's health care coverage

revenue as compared to all health care coverage revenue for all health insurers in

this state. The Commissioner of Insurance (commissioner) may exempt an insurer

from paying the assessment if that insurer's assessment would be smaller than the

cost of collecting it. The bill allows the commissioner to exempt any insurer from the

fee assessment upon the request of the insurer and after holding a public hearing.

4. Under current law, insurers authorized to do business in this state, with a

number of exceptions, must participate in the insurance security fund (fund), which

protects insureds under certain kinds and lines of direct insurance in the event of a

liquidation of an insurer. This bill explicitly exempts from the types of insurance to

which the fund applies policies issued to individuals with coverage under Medicare

or the Medical Assistance program (MA) and contracts between the federal

government and an insurer to provide health care or prescription drug benefits.

Under current law, the fund has standing to appear in any court having

jurisdiction over an impaired or insolvent insurer. An impaired insurer, under

current law, is an insurer that is subject to the requirements of the fund that is placed

under an order of rehabilitation or conservation by a court of competent jurisdiction

but without a finding of insolvency. This bill eliminates the classification of impaired