646.31 Eligible claims.

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

(1)Conditions of eligibility. A claim is not eligible for payment from the fund unless it is an unpaid claim for a loss insured under the policy or annuity, or an unpaid claim under a supplementary contract providing for a retained asset account, and all of the following conditions are met:

(a)Issued by authorized insurer. The claim arises out of an insurance policy or annuity issued by an insurer which was authorized to do business in this state either at the time the policy or annuity was issued or when the insured event occurred, and against which an order of liquidation, which is not stayed, has been entered by a court of competent jurisdiction in the insurer’s domiciliary state.

(b)Assessability of insurer.

1. The claim arises out of business not exempt from assessment under s. 646.01

(1).

2. The claim does not arise out of business against which assessments are prohibited under any federal or state law.

(c)Contact with state. The claim is a member of one of the classes of claims under sub.

(2).

(cm)Termination of coverage. Except for claims under life insurance policies, annuities or noncancelable or guaranteed renewable disability insurance policies, the claim arises within 30 days after the order of liquidation is entered or before any of the following occur:

1. The policy expires, if the expiration date is less than 30 days after the order of liquidation is entered.

2. The insured replaces or cancels the policy, if either action is taken within 30 days after the order of liquidation is entered.

(d)Exceptions. The claim is not any of the following:

1. Based solely on a judgment.

2. Made for interest on any claim.

3. Made under s. 645.63

(2).

4. Subordinated under s. 645.90 .

5. An indemnification recovered as a voidable preference under s. 645.54

(c).

6. Made by an affiliate of an insurer in liquidation.

7. A retrospective premium rate adjustment.

8. Made for health care costs, as defined in s. 609.01

(1j), for which an enrollee, as defined in s. 609.01

(1d), or policyholder of a health maintenance organization insurer is not liable under ss. 609.91 to 609.935 .

9. Made for health care costs, as defined in s. 609.01

(1j), for which an enrollee, as defined in s. 609.01

(1d), or policyholder of a health maintenance organization is not liable for any reason.

10. Based on an obligation that does not arise under the express written terms of the policy or contract, including any of the following:

a. A claim based on marketing materials.

b. A claim based on misrepresentations regarding policy benefits.

c. An extra-contractual claim, including a claim for punitive or exemplary damages.

d. A claim for statutorily imposed multiple damages.

e. A claim for penalties or consequential or incidental damages.

f. A claim for bad faith damages.

11. In the case of a life or disability insurance policy or an annuity contract, based on side letters, riders, or other documents that do not meet or comply with applicable policy form filing or approval requirements.

(2)Classes of claims to be paid. No claim may be paid under this chapter unless the claim is in one of the following classes:

(a)Residents.

1. The claim of a policyholder, including a ceding assessable domestic insurer that is organized under ch. 612 and a domestic insurer that is a bona fide policyholder of the insurer in liquidation, who is a resident of this state under sub.

(13).

2. Except for a claim of a beneficiary, assignee, or payee under a life or disability insurance policy or annuity contract, the claim of an insured, including a certificate holder, under a policy or annuity contract who is a resident of this state under sub.

(13).

(b)Certain nonresidents. The claim is made under a life or disability insurance policy or annuity contract subject to this section and issued by a domestic insurer and the claimant is a resident of another state that provides coverage similar to the coverage provided under this chapter but does not provide coverage for the claimant because the insurer was not licensed in that state at the time specified as a requirement for coverage under that state’s guaranty association law.

(c)Owners of property interests. The first-party claim of a person having an insurable interest in or related to property with a permanent location in this state at the time of the insured event.

(d)Third-party claimants. A claim under a liability or workers’ compensation insurance policy, if either the insured or the 3rd-party claimant was a resident of this state at the time of the insured event.

(e)Assignees. The claim of a direct or indirect resident assignee, other than an insurer, of a person who except for the assignment could have claimed under par.

(a),

(b),

(c)or

(d).

(f)Beneficiaries, assignees, and payees; life or disability policy or annuity contract. Except for a claim of a nonresident certificate holder under a group policy or contract, a claim made under a life or disability insurance policy or annuity contract by a resident or nonresident beneficiary, assignee or payee of a person who fulfills all of the following criteria:

1. The person is a policyholder of, or a certificate holder under, the life or disability insurance policy or annuity contract.

2. The person is a resident of this state or could have made a claim under par.

(b).

(g)Payees; structured settlement annuity.