618.41 Surplus lines insurance.

854 words·~4 min read·/wi/chapter-618/618-41-4

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)General permission. A domestic surplus lines insurer or a nondomestic insurer which has not obtained a certificate of authority to do business in this state under s. 618.12 may negotiate for and make insurance contracts with persons in this state and on risks located in this state, subject to the limitations and requirements specified in this section.

(2)Incidental acts permitted. With respect to contracts made under this section, the insurer may in this state also inspect risks to be insured, collect premiums and adjust losses, and do all other acts reasonably incidental to the contract.

(3)Solicitation prohibited. Nothing in subs.

(1)and

(2)permits the solicitation of business in this state by or on behalf of an insurer without a certificate of authority. The commissioner may by rule prescribe the manner in which insurance agents or brokers may advertise the availability of their services in procuring, on behalf of persons seeking insurance, contracts with domestic surplus lines insurers or with insurers without a certificate of authority.

(4)Information to policyholder. The insurer and any agent or broker are obligated promptly to furnish the policyholder a statement in a form prescribed or approved by the commissioner, informing the policyholder that the insurer has not obtained a certificate of authority to do business in this state and is not regulated in this state except as provided in this section.

(5)Trade practices. With respect to contracts made under this section, nondomestic insurers and domestic surplus lines insurers are subject to s. 628.34 and rules promulgated thereunder.

(6)Prohibited and restricted surplus lines business.

(a)Prohibited classes. The commissioner may by rule prohibit the making of contracts under sub.

(1)in a specified class of insurance if authorized insurers provide an established market for the class in this state which is adequate and reasonably competitive with reputable unauthorized insurers.

(b)Restricted classes. The commissioner may by rule place restrictions and limitations on and create special procedures for the making of contracts under sub.

(1)for a specified class of insurance if there have been abuses of placements in the class or if the policyholders in the class, because of limited financial resources, business experience or knowledge, cannot be expected to protect their own interests adequately.

(c)Exclusion of individual insurers. The commissioner may prohibit an individual insurer or group policyholder, including but not limited to a risk purchasing group, from making any contracts under sub.

(1)or issuing evidence of coverage and may prohibit all insurance agents and brokers from dealing with the insurer or group policyholder, if:

1. It has willfully violated this section, ss. 610.11

(1), 628.34 , or any rule promulgated under any of them; or

2. It has failed to pay the fees and taxes specified in s. 618.43 ; or

3. The commissioner has reason to believe that the insurer, or the insurer which issued the policy to a group policyholder, is in an unsound condition or the insurer or group policyholder is operated in a fraudulent, dishonest or incompetent manner or in violation of the law of its domicile.

(d)Evaluations. The commissioner may issue lists of unauthorized nondomestic insurers whose solidity he or she believes to be doubtful or whose practices he or she believes to be objectionable. The commissioner may issue lists of unauthorized nondomestic insurers he or she believes to be reliable and solid. The commissioner may also issue other relevant evaluations of unauthorized insurers. No action may lie against the commissioner or any employee of the office for anything said in the issuance of such lists and evaluations.

(6m)Rustproofing warranties insurance. An insurer issuing a policy of insurance under this section to cover a warranty, as defined in s. 100.205

(g), shall comply with s. 632.18 and the policy shall be on a form approved by the commissioner under s. 631.20 .

(7)Surplus lines agent’s license.

(a)The commissioner may, pursuant to s. 628.04

(2), issue to any licensed agent or broker a surplus lines license granting authority to procure insurance under this section.

(b)The fee for issuance of a surplus lines license is the fee required by s. 601.31

(L)3.

(7m)Risk purchasing groups; licensed agents. A natural person may not solicit, negotiate or obtain liability insurance for a risk purchasing group from an unauthorized insurer unless the natural person is licensed as a surplus lines agent under sub.

(7).

(8)Surplus lines agents, brokers and group policyholders.

(a)Responsibility. An agent or broker may not place insurance under this section with, and a person who offers liability insurance coverage under a group policy may not solicit the purchase of coverage under a group policy issued by, an unauthorized insurer if all of the following exist:

1. The insurer is financially unsound, engaging in unfair practices or otherwise substandard.

2. The agent, broker or other person fails to give the applicant written notice of the insurer’s deficiencies.

3. The agent, broker or other person either knows of, or fails to adequately investigate, the insurer’s financial condition and general reputation.