Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB432 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 SENATE BILL 432
5	5	September 15, 2023 - Introduced by Senator F ELZKOWSKI, cosponsored by
6	6	Representative CALLAHAN. Referred to Committee on Insurance and Small
7	7	Business.
8	8	AN ACT to repeal 49.45 (12) (a), 601.41 (8), 601.41 (10), 601.415 (12), 601.56,
9	9	601.57, 628.92 (5) and 635.10; to renumber and amend 601.64 (3) (c); to
10	10	amend 15.165 (3) (b) 9., 49.45 (12) (b), 601.415 (3), 601.63 (2), 628.10 (2) (b),
11	11	646.11 (2), 646.51 (1m), 646.51 (3) (am), 646.51 (3) (ar) and 646.51 (3) (b); and
12	12	to create 601.41 (13), 601.465 (1m) (c) 9m., 601.64 (3) (c) 2. a., b. and c., 609.98
13	13	(5), 611.12 (5) and 646.13 (2) (h) of the statutes; relating to: various changes
14	14	to insurance laws and providing a penalty.
15	15	Analysis by the Legislative Reference Bureau
16	16	This bill modifies various insurance statutes that are generally administered
17	17	by the Office of the Commissioner of Insurance. Specifically, the bill does all of the
18	18	following:
19	19	1. Allows the commissioner of insurance to appoint the deputy commissioner,
20	20	chief legal counsel, or chief financial regulator in OCI to serve as a member on the
21	21	Wisconsin Retirement Board, rather than limiting the commissioner's designee to an
22	22	experienced actuary in OCI.
23	23	2. Eliminates the requirement that the commissioner develop a uniform
24	24	employee application form that small employer insurers must use when a small
25	25	employer applies for coverage under a group health benefit plan, including the
26	26	requirement that small employer insurers must use the form.
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36	36	3. Eliminates the requirement that the commissioner prescribe, by rule,
37	37	uniform questions and the format for applications for individual major medical
38	38	health insurance policies and the requirement that all insurers may use only those
39	39	questions and that format for individual major medical health insurance policy
40	40	applications.
41	41	4. Allows the commissioner to enter directly into a contract for the services of
42	42	a consultant if OCI is coordinating a review on a regulatory matter with another
43	43	state's or U.S. territory's insurance department that has already procured the
44	44	services of the consultant.
45	45	5. Eliminates the commissioner's remaining responsibility regarding
46	46	dissolution of the former Health Insurance Risk-Sharing Plan.
47	47	6. Adds the insurance security fund to the list of persons with whom OCI may
48	48	confidentially share or from whom OCI may confidentially obtain information.
49	49	Current law includes on that list a similar fund or other entity in another state but
50	50	does not expressly include this state's fund.
51	51	7. Eliminates the requirement that the commissioner study, and provide a
52	52	report to the legislature and governor on, a) whether the cost of health care
53	53	administration is likely to be reduced by health insurers' compliance with certain
54	54	standards in their transactions with health care providers and b) the feasibility and
55	55	cost-effectiveness of certain requirements related to uniform health insurance
56	56	identification cards. The bill also eliminates the requirement that the commissioner
57	57	must promulgate rules depending on the results of those studies.
58	58	8. Changes the procedures for providing notice of the revocation of an insurer's
59	59	authority to do business in this state.
60	60	9. Increases the forfeiture amount, from $1,000 to $5,000 per violation, for a
61	61	violation of an insurance statute or rule that involves or constitutes fraud.
62	62	10. Requires a health maintenance organization that participates in the
63	63	Family Care Program to make a monetary deposit, in an amount determined by the
64	64	Department of Health Services, to pay for services on behalf of an insolvent or
65	65	financially hazardous care management organization. The Family Care Program
66	66	provides community-based long-term care services to eligible individuals. Current
67	67	law requires a care management organization that provides services under the
68	68	Family Care Program to make the deposit.
69	69	11. Allows a domestic stock or mutual insurance corporation to include certain
70	70	forum selection provisions in its articles of incorporation or bylaws.
71	71	12. Changes a standard under which the commissioner may revoke, suspend,
72	72	or limit the license of an insurance marketing intermediary or individual navigator
73	73	from finding that the licensee “is not of good character” to finding that the licensee
74	74	“is not competent or trustworthy.” Under current law, proof of competence and
75	75	trustworthiness are required for the initial issuance of a license.
76	76	13. Eliminates the financial responsibility requirement under current law that
77	77	applies to navigators.
78	78	14. Reduces the number of segregated accounts that compose the insurance
79	79	security fund, from six to five, by merging the life insurance and annuities accounts.
80	80	The bill retains the current law requirement that the board of directors of the fund, - 3 -2023 - 2024 Legislature
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84	84	when it authorizes assessments of insurers that have been ordered liquidated, must
85	85	continue to estimate the amounts necessary to make payments from the fund and
86	86	must authorize assessments separately for life insurance policies and for annuity
87	87	contracts in the merged life insurance and annuities account.
88	88	15. Changes the manner in which the board calculates assessment amounts for
89	89	the merged life insurance and annuities account. Under current law, the amount is
90	90	calculated as a percentage of average annual premiums received in this state by an
91	91	insurer for life insurance policies and for annuity contracts for the three most recent
92	92	years. Under the bill, the amount is calculated as a percentage of premiums for the
93	93	year immediately preceding the year in which the board authorizes the assessment
94	94	or, if that data is not available, for the most recent year for which that data is
95	95	available.
96	96	16. Adds to the powers of the insurance security fund the authority to negotiate
97	97	and contract with other guaranty associations to provide and receive administrative,
98	98	claims, and other services that are usual to guaranty associations.
99	99	For further information see the state fiscal estimate, which will be printed as
100	100	an appendix to this bill.
101	101	The people of the state of Wisconsin, represented in senate and assembly, do
102	102	enact as follows:
103	103	SECTION 1. 15.165 (3) (b) 9. of the statutes is amended to read:
104	104	15.165 (3) (b) 9. The commissioner of insurance or an experienced actuary in
105	105	the office of the commissioner designated by the commissioner the commissioner's
106	106	designee under s. 601.415 (3).
107	107	SECTION 2. 49.45 (12) (a) of the statutes is repealed.
108	108	SECTION 3. 49.45 (12) (b) of the statutes is amended to read:
109	109	49.45 (12) (b) If the commissioner of insurance promulgates rules under s.
110	110	601.57 (2), 2021 stats., establishing a health insurance identification card system
111	111	and its computerized support system, the department shall develop a plan to
112	112	coordinate a system of machine-readable identification cards for medical assistance
113	113	recipients with the systems established by the commissioner and shall submit the
114	114	plan to the governor, and to the legislature under s. 13.172 (2), before issuing a
115	115	request for proposals under par. (c).
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130	130	SECTION 4 SENATE BILL 432
131	131	SECTION 4. 601.41 (8) of the statutes is repealed.
132	132	SECTION 5. 601.41 (10) of the statutes is repealed.
133	133	SECTION 6. 601.41 (13) of the statutes is created to read:
134	134	601.41 (13) INTERSTATE REGULATORY REVIEWS; CONSULTANT CONTRACTS.
135	135	Notwithstanding ss. 16.70 to 16.78, the commissioner may enter into a contract for
136	136	the services of a consultant if all of the following apply:
137	137	(a) The office and the insurance department of another state are coordinating
138	138	a review on a regulatory matter.
139	139	(b) The other state's insurance department has already procured the services
140	140	of the consultant.
141	141	SECTION 7. 601.415 (3) of the statutes is amended to read:
142	142	601.415 (3) WISCONSIN RETIREMENT BOARD. The commissioner or an experienced
143	143	actuary the deputy commissioner, chief legal counsel, or chief financial regulator in
144	144	the office designated by the commissioner shall serve as a member of the Wisconsin
145	145	retirement board under s. 15.165 (3) (b).
146	146	SECTION 8. 601.415 (12) of the statutes is repealed.
147	147	SECTION 9. 601.465 (1m) (c) 9m. of the statutes is created to read:
148	148	601.465 (1m) (c) 9m. The security fund created under ch. 646.
149	149	SECTION 10. 601.56 of the statutes is repealed.
150	150	SECTION 11. 601.57 of the statutes is repealed.
151	151	SECTION 12. 601.63 (2) of the statutes is amended to read:
152	152	601.63 (2) NOTIFICATION TO AGENTS OF REVOCATION OF CERTIFICATE OF AUTHORITY
153	153	OF INSURER. Upon issuance of any order limiting, suspending or revoking an insurer's
154	154	authority to do business in this state, the commissioner insurer shall within 10
155	155	business days and by separate written notice notify by mail all agents of appointed
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183	183	SECTION 12
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185	185	with the insurer of whom and shall provide a copy of the notice to the commissioner
186	186	has record. The commissioner shall also publish a class 1 notice of the order under
187	187	ch. 985 revocation in whatever reasonable form the commissioner designates.
188	188	SECTION 13. 601.64 (3) (c) of the statutes is renumbered 601.64 (3) (c) 1. and
189	189	amended to read:
190	190	601.64 (3) (c) 1. Whoever violates an insurance statute or rule or s. 149.13, 2011
191	191	stats., intentionally aids a person in violating an insurance statute or rule or s.
192	192	149.13, 2011 stats., or knowingly permits a person over whom he or she has authority
193	193	to violate an insurance statute or rule or s. 149.13, 2011 stats., shall forfeit to the
194	194	state not more than $1,000 for each violation, except that.
195	195	2. Notwithstanding subd. 1., whoever violates an insurance statute or rule,
196	196	intentionally aids a person in violating an insurance statute or rule, or knowingly
197	197	permits a person over whom he or she has authority to violate an insurance statute
198	198	or rule shall, if the violation specifically involves a consumer who is an adult at risk,
199	199	as defined in s. 55.01 (1e), or an individual who is at least 60 years of age, forfeit to
200	200	the state not more than $5,000 for each violation. if any of the following applies:
201	201	3. If the statute or rule violated under subd. 1. or 2. imposes a duty to make a
202	202	report to the commissioner, each week of delay in complying with the duty is a new
203	203	violation.
204	204	SECTION 14. 601.64 (3) (c) 2. a., b. and c. of the statutes are created to read:
205	205	601.64 (3) (c) 2. a. The violation specifically involves a consumer who is an adult
206	206	at risk, as defined in s. 55.01 (1e).
207	207	b. The violation specifically involves an individual who is at least 60 years of
208	208	age.
209	209	c. The violation involves or constitutes fraud or misrepresentation.
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236	236	SECTION 15 SENATE BILL 432
237	237	SECTION 15. 609.98 (5) of the statutes is created to read:
238	238	609.98 (5) FAMILY CARE PROGRAM; DEPOSIT REQUIRED. (a) In this subsection,
239	239	“family care program” means the program under ss. 46.2805 to 46.2895 that provides
240	240	the family care benefit, as defined in s. 46.2805 (4).
241	241	(b) A health maintenance organization participating in the family care
242	242	program is subject to s. 648.75.
243	243	SECTION 16. 611.12 (5) of the statutes is created to read:
244	244	611.12 (5) FORUM SELECTION PROVISIONS. Section 180.0145 applies to stock
245	245	corporations, and s. 181.0163 applies to mutuals.
246	246	SECTION 17. 628.10 (2) (b) of the statutes is amended to read:
247	247	628.10 (2) (b) For other reasons. Except as provided in pars. (c) to (d), after a
248	248	hearing, the commissioner may revoke, suspend, or limit in whole or in part the
249	249	license of any intermediary or individual navigator if the commissioner finds that the
250	250	licensee is unqualified as an intermediary or navigator, is not of good character
251	251	competent or trustworthy under s. 628.04 (1) (b) 2., or has repeatedly or knowingly
252	252	violated an insurance statute or rule or a valid order of the commissioner under s.
253	253	601.41 (4), or if the intermediary's or navigator's methods and practices in the
254	254	conduct of business endanger, or financial resources are inadequate to safeguard, the
255	255	legitimate interests of customers and the public. Nothing in this paragraph limits
256	256	the authority of the commissioner to suspend summarily an intermediary's or
257	257	individual navigator's license under s. 227.51 (3).
258	258	SECTION 18. 628.92 (5) of the statutes is repealed.
259	259	SECTION 19. 635.10 of the statutes is repealed.
260	260	SECTION 20. 646.11 (2) of the statutes is amended to read:
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287	287	SECTION 20
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289	289	646.11 (2) ACCOUNTS. The fund shall be composed of 6 5 segregated accounts,
290	290	one for life insurance, one for and annuities, one for disability insurance other than
291	291	policies issued or coverage provided by a health maintenance organization insurer,
292	292	one for health maintenance organization insurers, one for all other kinds of
293	293	insurance subject to this chapter, and an administrative account.
294	294	SECTION 21. 646.13 (2) (h) of the statutes is created to read:
295	295	646.13 (2) (h) Negotiate and contract with other guaranty associations to
296	296	provide and receive administrative, claims, and other services that are usual to
297	297	guaranty associations.
298	298	SECTION 22. 646.51 (1m) of the statutes is amended to read:
299	299	646.51 (1m) DUTY TO ASSESS. As soon as practicable To meet the board's
300	300	obligations under this chapter, after a liquidation order has been issued, the board
301	301	shall estimate separately for each of the accounts of s. 646.11 (2) and separately for
302	302	life insurance policies and for annuity contracts in the life insurance and annuities
303	303	account, the amounts necessary to make the payments provided by this chapter and.
304	304	The board shall authorize assessments separately for each account and separately
305	305	for life insurance policies and for annuity contracts in the life insurance and
306	306	annuities account.
307	307	SECTION 23. 646.51 (3) (am) of the statutes is amended to read:
308	308	646.51 (3) (am) General. Except as provided in pars. (ar), (b), and (c), the board
309	309	shall calculate the assessments shall be calculated as a percentage of premium
310	310	premiums written in this state by each insurer in the classes protected by the
311	311	accounts under s. 646.11 (2) for the year immediately preceding the year in which the
312	312	board authorizes the assessment is authorized by the board.
313	313	SECTION 24. 646.51 (3) (ar) of the statutes is amended to read:
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340	340	SECTION 24 SENATE BILL 432
341	341	646.51 (3) (ar) Disability. Except as provided in par. (c), with respect to the
342	342	disability insurance policies, including policies issued by account under s. 646.11 (2)
343	343	and the health maintenance organization insurers, account under s. 646.11 (2), the
344	344	board shall calculate the assessments shall be calculated as a percentage of premium
345	345	premiums written in this state by each insurer in the classes protected by the
346	346	accounts for the year immediately preceding the year in which the board authorizes
347	347	the assessment is authorized by the board. If the assessment data for the year
348	348	immediately preceding the year in which the board authorizes the assessment is
349	349	authorized by the board is not available when the assessment is called, the fund
350	350	board may use the assessment data for the most recent year for which data is
351	351	available.
352	352	SECTION 25. 646.51 (3) (b) of the statutes is amended to read:
353	353	646.51 (3) (b) Life and annuities. Except as provided in par. (c), with respect
354	354	to annuity contracts or life insurance policies, assessments shall be calculated the
355	355	life insurance and annuities account under s. 646.11 (2), the board shall calculate the
356	356	assessments separately for life insurance policies and for annuity contracts as a
357	357	percentage of average annual premium premiums received in this state by each
358	358	insurer in the classes protected by the accounts account for the 3 most recent years
359	359	year immediately preceding the year of the entry of the order of liquidation in which
360	360	the board authorizes the assessment. If the assessment data for the year
361	361	immediately preceding the year in which the board authorizes the assessment is not
362	362	available when the assessment is called, the board may use the assessment data for
363	363	the most recent year for which data is available.
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