Date: June 25, 2014
To:All Insurers Authorized to do Business in Wisconsin
From:Theodore K. Nickel, Commissioner of Insurance
Subject:New Laws Bulletin - 2013-14 Legislative Session Summaries

The following is a summary of the statutory provisions completed in the 2013-2014 Legislative Session to date. The purpose of this summary is to make individuals aware of these new provisions. Please review the actual language in order to determine how it affects you or your company.

2013 Wisconsin Act 73. Creates s. 610.60, Wis. Stat., relating to electronic delivery of notice and documents by insurers. This statute allows for the storage, presentation and delivery of information that serves as evidence of insurance coverage by electronic means, as long as the notice or other document meets the requirements of ch. 137, Wis. Stat. This section does not affect any requirement related to the timing of a notice or document required under applicable law, nor does it apply to a notice or document delivered by an insurer by electronic means before the effective date of this Act. Notwithstanding specific instances highlighted in subsections (1) and (5) of the Act, an insurer may post on the insurer's internet site any standard policy, and any endorsements to such a policy, that do not contain personally identifiable information. Any insurer that does so must comply with the requirements of the Act.

2013 Wisconsin Act 186. Amends ss. 40.51 (8), 40.51 (8m), 66.0137 (4), 120.13 (2) (g) and 185.983 (1), Wis. Stat., and creates ss. 609.837 and 632.867, Wis. Stat., relating to coverage provided on a parity or capped basis for oral and injected or intravenous chemotherapy. Section 632.867, Wis. Stat., requires an insurer offering a disability insurance policy or a self-insured non-federal governmental health plan that provides coverage for injected or intravenous chemotherapy to provide coverage of oral chemotherapy with cost sharing on parity or, in the alternate, using a copayment not to exceed $100 per 30-day supply per oral chemotherapy medication. Defined network plans and limited service health organizations are specifically subject to this law.

2013 Wisconsin Act 212. Repeals and recreates s. 628.02 (1) (b) 8., Wis. Stat., and creates s. 632.977, Wis. Stat., relating to the sale of limited lines of travel insurance. Section 628.02 (1) (b) 8., Wis. Stat., now reads "a travel retailer, . . . or an employee or authorized representative of a travel retailer, that offers and disseminates . . . travel insurance." Section 632.977, Wis. Stat., grants authority for the Commissioner to issue a limited lines travel insurance producer license to a person licensed as an intermediary under ch. 628, Wis. Stat., who applies on a form and in the manner prescribed by the Commissioner. This license authorizes the intermediary to sell, solicit, or negotiate travel insurance through an insurer. Furthermore, a travel retailer, or an employee or authorized representative of a travel retailer, may offer and disseminate travel insurance under a license of the firm only if the firm holds such a license and meets the specific requirements of the newly created statute.

2013 Wisconsin Act 230. Amends s. 632.975 (2) (d), Wis. Stat., and creates ss. 424.301 (6) and 424.401 (6), Wis. Stat., relating to insurance for portable electronics that are financed by the consumer. The created sections are implemented so that ss. 424.301 and 424.401, Wis. Stat., do not apply to portable electronics insurance. Section 632.975 (2) (d), Wis. Stat., is amended to state that a vendor selling or offering portable electronics insurance is subject to ss. 601.41, 601.42, 601.61, 601.63, and 601.64, Wis. Stat., except that any forfeitures or penalties shall be in the amounts specified in subsection (3).

2013 Wisconsin Act 238. Creates s. 146.816, Wis. Stat., relating to the uses and disclosures of protected health information. The created statute asserts that ss. 51.20 (4) (a) and 146.82, Wis. Stat., as well as the rules promulgated under s. 51.309 (2), Wis. Stat., do not apply to the use, disclosure, or request for disclosure of protected health information by a covered entity or its business associates that meets all the criteria outlined in the statute. Covered entities that are treatment facilities shall comply with the notice of privacy practice obligations under 45 CFR 164.520, including the obligation to include in plain language in the notice of privacy practices a statement of the individual's rights with respect to protected health information and a brief description of how the individual may exercise those rights including the right to request restrictions on uses and disclosures of protected health information about the individual to carry out treatment, payment, or health care operations as provided in 45 CFR 164.522.

2013 Wisconsin Act 271. This Act creates s. 632.65, Wis. Stat., which exempts "qualified charitable gift annuities" that satisfy the statute's requirements from regulation by the Office of the Commissioner of Insurance (OCI). Under the statute a "qualified charitable gift annuity" is defined as an annuity that is: (1) established under a transaction that is treated, for federal income tax purposes, partly as a charitable contribution and partly as an investment in an annuity contract, and (2) for which the obligation to pay is not an "acquisition of indebtedness" under section 514 (c) (5) of the Internal Revenue Code.

2013 Wisconsin Act 276. This Act amends provisions in ch. 628, Wis. Stat., to require OCI to deny or revoke insurance licenses or registrations issued by OCI upon certification from the Department of Workforce Development that the individual is liable for delinquent unemployment insurance contributions.

2013 Wisconsin Act 278. This Act amends and creates provisions in Wisconsin's insurance code regarding compensation for the sale and replacement of long-term care insurance policies. First, the Act amends s. Ins 3.46 (13) (a), Wis. Adm. Code, to allow insurers to provide compensation to intermediaries for the sale of long-term care policies and certificates if the compensation provided in the second year and subsequent years is the same and is provided for at least five renewal years. The Act also creates an exemption that lessens the restrictions on certain compensation for replacement long-term care policies. Section Ins 3.46 (13) (c), Wis. Adm. Code, now permits first-year compensation for a replacement long-term care policy or certificate if the replacement policy or certificate meets certain criteria including that the replacement policy is suitable for the applicant.

2013 Wisconsin Act 279. The Act creates ch. 622, Wis. Stat., which requires insurers or an insurance holding company system of which the insurer is a member to conduct an own risk and solvency assessment (ORSA) and file a confidential summary report of the assessment with OCI. Insurers domiciled in Wisconsin whose premiums are above $500 million (single company) or $1 billion (group) will begin to file ORSA reports with OCI in 2015.

An ORSA report is developed by insurance company management and provided to the Board of Directors (or an assigned Board committee). The report identifies all of the key business risks the insurance company is exposed to (e.g., investment risks, underwriting risks, IT risks, etc.), how the company monitors and controls each risk, and how the company limits its financial exposure to each risk to ensure that the company will continue to meet its financial obligations.

After the Board reviews the ORSA report, an ORSA summary report is filed confidentially with OCI. The Act requires the assessment to be conducted on an annual basis or whenever there are significant changes to the risk profile of the insurer or the insurance holding company system of which the insurer is a member. The NAIC publishes an ORSA Guidance Manual for companies to use in preparing the ORSA report. The 2013 ORSA Guidance Manual may be found at the following link: http://www.naic.org/documents/committees_e_orsa_wg_related_docs_guidance_manual_2013.pdf (opens in new window).

The Act permits proxy voting by mutual policyholders unless it is prohibited or limited by the mutual insurer's articles of incorporation or bylaws. The Act also allows the policyholder to make the appointment of a proxy, a proxy solicitation firm, a proxy support service organization, or other like agent through "electronic transmission."

Persons to Contact for Additional Information

If you have any questions, please put them in writing to the attention of the individuals listed below:

Acts 73, 186, 212, 230, 238, 276, and 278:Cari Lee
Director, Bureau of Market Regulation
cari.lee@wisconsin.gov
 
Act 271:Stephen Caughill
Insurance Examiner Supervisor, Bureau of Financial Analysis and Examinations
steve.caughill@wisconsin.gov
 
Act 279:Peter Medley
Deputy Director, Bureau of Financial Analysis and Examinations
peter.medley@wisconsin.gov