Wis. Admin. Code Office of the Commissioner of Insurance Ins 51.01

Current through October 28, 2024

Section Ins 51.01 - Definitions

In this subchapter:

(1) "Adjusted risk based capital report" means a risk based capital report which has been adjusted by the commissioner in accordance with s. Ins 51.05 (6).

(2) "Authorized control level event" means any of the following events:

(a) The filing of a risk based capital report by the insurer which indicates that the insurer's total adjusted capital is greater than or equal to its mandatory control level risk based capital but less than its authorized control level risk based capital.

(b) The notification by the commissioner to the insurer of an adjusted risk based capital report that indicates the event in par. (a), if the insurer does not challenge the adjusted risk based capital report under s. Ins 51.50.

(c) If, under s. Ins 51.50, the insurer challenges an adjusted risk based capital report that indicates the event in par. (a), notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.

(d) The failure of the insurer to respond, in a manner satisfactory to the commissioner, to a corrective order, if the insurer has not challenged the corrective order under s. Ins 51.50.

(e) If the insurer has challenged a corrective order under s. Ins 51.50 and the commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond, in a manner satisfactory to the commissioner, to the corrective order subsequent to rejection or modification by the commissioner.

(3) "Authorized control level risk based capital" means the number determined under the risk-based capital formula in accordance with the risk based capital instructions.

(4) "Company action level event" means any of the following events:

(a) The filing of a risk based capital report by an insurer which indicates one of the following:

1. The insurer's total adjusted capital is greater than or equal to its regulatory action level risk based capital but less than its company action level risk based capital.

2. If a life or health insurer that completes the life annual statement for the reporting year, the insurer has total adjusted capital which is greater than or equal to its company action level risk based capital but less than the product of its authorized control level risk based capital and 3.0 and has a negative trend.

3. If a health insurer that completes the health annual statement for the reporting year, the insurer has total adjusted capital which is greater than or equal to its company action level risk based capital but less than the product of its authorized control level risk based capital and 3.0 and has a negative trend.

4. If a property and casualty insurer, the insurer has total adjusted capital which is greater than or equal to its company action level risk based capital but less than the product of its authorized control level risk based capital and 3.0 and has a negative trend.

(b) The notification by the commissioner to the insurer of an adjusted risk based capital report that indicates an event in par. (a), if the insurer does not challenge the adjusted risk based capital report under s. Ins 51.50.

(c) If, under s. Ins 51.50, an insurer challenges an adjusted risk based capital report that indicates the event in par. (a), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.

(5) "Company action level risk based capital" means, with respect to any insurer, the product of 2.0 and its authorized control level risk based capital.

(6) "Corrective order" means an order issued by the commissioner specifying corrective actions which the commissioner has determined are required.

(7) "Domestic insurer" means an insurer organized under the laws of this state.

(8) "Foreign insurer" means any insurer which is licensed to do business in this state that is not a domestic insurer.

(8m) "Health maintenance organization insurer" has the meaning given in s. 600.03(23c), Stats.

(9) "Insurer" means:

(a) An insurer as defined under s. 600.03(27), Stats., except, unless otherwise required by the commissioner under par. (b), it does not include any of the following:

1. A town mutual insurer organized under ch. 612, Stats.

2. An insurer governed by ch. 616, Stats.

3. A service insurance corporation as defined under s. 600.03(41m), Stats., but only until the date on which the commissioner makes a determination that risk based capital reporting forms and instructions for service insurance corporations have been developed and adopted by the NAIC.

4. An insurance plan administered by the office or a board attached to the office or a plan established under ch. 619, Stats.

5. Monoline mortgage guaranty insurers, financial guaranty insurers and title insurers.

(b) One or more persons otherwise excepted from the definition of insurer under par. (a) if the commissioner finds that compliance with this subchapter will improve the efficiency and effectiveness of the office's solvency monitoring and the commissioner requires the person to comply as an insurer under this subchapter.

(10) "Life or health insurer" means any insurer licensed to write life, annuity or health insurance or 2 or more of those lines. A "life or health insurer" includes a fraternal insurer but does not include a health maintenance organization insurer as defined in s. 600.03(23c), Stats., or an insurer writing only limited service health organization business as defined in s. 609.01(3), Stats.

(11) "Mandatory control level event" means any of the following events:

(a) The filing of a risk based capital report which indicates that the insurer's total adjusted capital is less than its mandatory control level risk based capital.

(b) Notification by the commissioner to the insurer of an adjusted risk based capital report that indicates the event in par. (a), if the insurer does not challenge the adjusted risk based capital report under s. Ins 51.50.

(c) If, pursuant to s. Ins 51.50, the insurer challenges an adjusted risk based capital report that indicates the event in par. (a), notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.

(12) "Mandatory control level risk based capital" means the product of .70 and the authorized control level risk based capital.

(13) "NAIC" means the national association of insurance commissioners.

(14) "Negative trend" means an adverse trend test result, as determined in accordance with the trend test calculation included in the risk based capital instructions.

(15) "Property and casualty insurer" means any insurer licensed to sell property or casualty insurance.

(16) "Regulatory action level event" means any of the following events:

(a) The filing of a risk based capital report by an insurer which indicates that the insurer's total adjusted capital is greater than or equal to its authorized control level risk based capital but less than its regulatory action level risk based capital.

(b) The notification by the commissioner to an insurer of an adjusted risk based capital report that indicates the event in par. (a), if the insurer does not challenge the adjusted risk based capital report under s. Ins 51.50.

(c) If, pursuant to s. Ins 51.50, the insurer challenges an adjusted risk based capital report that indicates the event in par. (a), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.

(d) The failure of the insurer to file a risk based capital report by the March 1, unless the insurer has provided an explanation for such failure which is satisfactory to the commissioner and has cured the failure within ten days after March 1.

(e) The failure of the insurer to submit a risk based capital plan to the commissioner within the time period set forth in s. Ins 51.15 (2).

(f) Notification by the commissioner to the insurer of all of the following:

1. The risk based capital plan or revised risk based capital plan submitted by the insurer is, in the judgment of the commissioner, unsatisfactory.

2. Such notification constitutes a regulatory action level event with respect to the insurer, provided the insurer has not challenged the determination under s. Ins 51.50.

(g) If, under s. Ins 51.50, the insurer challenges a determination by the commissioner under par. (f), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected such challenge.

(h) Notification by the commissioner to the insurer that the insurer has failed to adhere to its risk based capital plan or revised risk based capital plan, but only if such failure has a substantial adverse effect on the ability of the insurer to eliminate the company action level event in accordance with its risk based capital plan or revised risk based capital plan and the commissioner has so stated in the notification, provided the insurer has not challenged the determination under s. Ins 51.50.

(i) If, under s. Ins 51.50, the insurer challenges a determination by the commissioner under par. (h), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the challenge.

(17) "Regulatory action level risk based capital" means, with respect to any insurer, the product of 1.5 and its authorized control level risk based capital.

(18) "Revised risk based capital plan" means a risk based capital plan prepared by an insurer with or without the commissioner's recommendation after the original plan is rejected by the commissioner.

(19) "Risk based capital instructions" means the risk based capital report including risk based capital instructions adopted by the NAIC, as of September 1, 1996, and, if approved in writing by the commissioner, the risk based capital report and instructions as amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.

(20) "Risk based capital level" means an insurer's company action level risk based capital, regulatory action level risk based capital, authorized control level risk based capital, or mandatory control level risk based capital.

(21) "Risk based capital plan" means a comprehensive financial plan containing the elements specified in s. Ins 51.15 (1).

(22) "Risk based capital report" means the report required under s. Ins 51.05.

(23) "Total adjusted capital" means the sum of all of the following:

(a) An insurer's statutory capital and surplus.

(b) Such other items, if any, as the risk based capital instructions may provide.

Wis. Admin. Code Office of the Commissioner of Insurance Ins 51.01

Cr. Register, December, 1996, No. 492, eff. 1-1-97; cr. (8m), r. (9) (a) 1., 2., renum. (9) (a) 3. to 8. to be (9) (a) 1. to 6., am. (10), Register, May, 1999, No. 521, eff. 6-1-99; CR 10-077: am. (4) (a) 2., (10), and (14); cr. (4) (a) 3. and 4., r. (9) (a) 3., renum. (9) (a) 4., 5., and 6. to be (9) (a) 3., 4., and 5. Register December 2010 No. 660, eff. 1-1-11.

Amended by, CR 22-071: am. (21) Register June 2023 No. 810, eff. 7/1/2023