SB 588

This bill modifies various insurance statutes that are generally administered

by the Office of the Commissioner of Insurance.

The bill requires that OCI maintain accreditation with the National

Association of Insurance Commissioners and allows OCI to adopt minimum

education and certification requirements for job classifications that monitor the

financial solvency of insurers to meet NAIC accreditation and best practice

standards.

The bill modifies the penalty for violations of insurance statutes and rules.

Under current law, a person who violates an insurance statute or rule, intentionally

aids a person in such a violation, or knowingly permits such a violation by a person

over whom he or she has authority is subject to a penalty of not more than $1,000.

The bill increases this penalty to not more than $5,000 if the violation specifically

involves a consumer who is an adult at risk or at least 60 years of age.

The bill modifies the policyholder meeting requirements that apply to mutual

insurance corporations (mutuals) to allow mutuals to hold meetings by means of

remote communication and to allow policyholders to participate by means of remote

communication. In order to allow remote participation, a mutual must implement

reasonable measures regarding participation and participant verification and must

maintain a record of voting and other actions by remote participants. The bill also

requires that the meeting notice describe the means of remote communication to be

used. The bill also allows remote participation in shareholders' meetings for stock

insurance corporations.

Under the bill, a domestic insurer with a certificate of authority to transact the

business of life insurance and annuities may issue a “funding agreement,” which the

bill defines as an annuity without life contingencies that is an agreement for an

insurer to accept and accumulate funds and to make one or more payments at future

dates in fixed or variable amounts that are not based on mortality or morbidity

contingencies. In order to issue a funding agreement, the insurer's board of directors

must approve a funding agreement plan, the insurer must comply with form filing

requirements, and OCI must determine that the issuance is not adverse to the

interest of the insurer's policyholders, although no determination is required if the

insurer has more than $200 billion in admitted assets. Additionally, the bill provides

that no amounts may be guaranteed or credited under a funding agreement except

upon reasonable assumptions as to investment income and expenses and on a basis

equitable to all holders of a given class. The bill specifies that the issuance or delivery

of a funding agreement in Wisconsin constitutes doing an insurance business in the

state and that an insurer may directly offer funding agreements. The bill provides

that amounts payable under funding agreements are treated as loss claims, funding

agreements are not subject to rate regulation requirements, and materials provided

to OCI related to funding agreements are confidential. The bill also specifies that