Various changes to insurance laws

The bill adds the following to current law grounds for rehabilitation or liquidation of an insurer: failure by a domestic fraternal to comply with a commissioner's order related to the financial event and failure by a domestic fraternal to remedy the hazardous condition within the time specified by the commissioner. The bill, however, specifies that unless the commissioner reasonably believes that rehabilitation of the fraternal has a high probability of returning the fraternal to long-term viability or will facilitate transfer to another fraternal or insurer, rehabilitation of the fraternal is presumed to be futile and to serve no useful purpose. After a petition for liquidation of a fraternal is filed, the fraternal may not assess payment of shares of a deficiency, unless the commissioner determines the assessment is for the purpose of satisfying obligations to creditors. Liquidation of domestic fraternals must be conducted consistent with the purposes of the current law purpose of enhancing efficiency and economy of liquidation, through clarification and specification of the law, to minimize legal uncertainty and litigation in a manner designed to conserve assets, limit liquidation expenses, and avoid any assessment of shares of a deficiency.

A liquidator of a fraternal under the bill must attempt to transfer insurance policies or certificates by assignment, assumption, or another means to another qualified fraternal, or if no qualified fraternal will accept the transfer, to an insurer authorized to sell life insurance in Wisconsin. Upon transfer to an insurer, each member of the transferring fraternal and owner of an insurance policy or certificate being transferred is considered to agree that any terms of the policy or certificate that provide for the fraternal's solvency or that subject the policy or certificate to the fraternal's policies are null and void and to agree to any other changes in terms that are determined by the liquidator to be necessary to effectuate the transfer.

Under current law, a fraternal organization that issues insurance policies and that has an impaired financial position may apportion the deficiency among members of the fraternal. This bill specifies that the assessment of the share of the deficiency may not take effect sooner than 90 days after the date the commissioner of insurer is notified of the assessment, unless the commissioner specifies an earlier date. The bill also allows the commissioner to disapprove the assessment if the commissioner finds that the assessment does not conform with the law or is contrary to the interest of the fraternal's members .

Injured patients and families compensation fund Under current law, the injured patients and families compensation fund pays excess medical malpractice claims and other amounts. Certain health care providers who are covered by the compensation fund must pay an annual assessment to the compensation fund in an amount calculated under formulas in current law. When calculating the fees assessed to physicians, current law requires the commissioner to provide for not more than four payment classifications, based upon the amount of surgery performed and the risk of diagnostic and therapeutic services provided or procedures performed. The bill changes the number of payment classifications to no fewer than four classifications.

Currently, the Injured Patients and Families Compensation Fund Peer Review Council reviews claims made and determines any future changes to fees assessed against the health care provider. The board of governors of the plan of health care liability coverage for health care providers appoints members to the peer review council and designates the chairperson and other officers of the council. The bill dictates that the chairperson of the peer review council must be a physician. Current law requires the peer review council to consist of five persons, not more than three of whom are physicians who are actively engaged in the practice of medicine in Wisconsin. The bill specifies that those physicians must be licensed and in good standing to practice medicine instead of actively practicing. Current law requires the chairperson of the peer review council to serve as an ex officio nonvoting member of the Medical Examining Board. The bill allows the chairperson to designate another peer review council member to be the ex officio member of the Medical Examining Board and specifies that the chairperson or peer review council member may attend meetings of the Medical Examining Board as appropriate.

Corporate governance annual disclosure initial filing deadline This bill delays the date on which the first governance annual disclosure is due to the first June 1 that occurs after the date the final rules implementing the disclosure requirements are promulgated.

2017 Wisconsin Act 313 requires an insurer or an insurance holding company system of which an insurer is a member to annually submit to the commissioner a corporate governance annual disclosure containing certain information.

Confidentiality of information Under current law, the Office of the Commissioner of Insurance may refuse to disclose and may prevent disclosure of testimony, reports, records, communications, and information that are obtained from various entities under a pledge of confidentiality or for the purpose of assisting or participating in the entity's monitoring activities or in conducting an inquiry, investigation, or examination.

This bill adds to the list of entities whose information may not be disclosed a fund or other entity in another state, or an association acting on behalf of the fund or other entity, that is organized for the same purpose as the security fund created under Wisconsin law.

Placement of surplus lines insurance This bill eliminates the requirement that, for an intermediary to place surplus lines insurance with an unauthorized insurer domiciled in the United States, the unauthorized insurer must provide to the commissioner, no more than six months after the close of the period reported on, a certified copy of its current annual statement that is filed and approved by the regulatory authority in the unauthorized insurer's domicile and certified by an accounting or auditing firm licensed in the jurisdiction of the unauthorized insurer's domicile. The bill maintains the requirements for placement of surplus lines insurance that the unauthorized insurer that is domiciled in the United States is authorized to write the type of insurance to be placed with the insurer in its place of domicile and has capital and surplus in an amount specified under current law.

Financial statements of property service contract providers This bill changes the deadline for submission of financial statements by providers of property service contracts that use a deposit or irrevocable letter of credit from the end of the fifth month following the end of the provider's fiscal year to March 31 of each year.