646.51 Assessments.
(1c) Definitions. In this section:
(a) “Authorize” means, with respect to assessments, to approve, by the adoption of a resolution by the board, that an assessment from insurers in a specified amount be called immediately or in the future. An assessment is authorized when the resolution is adopted by the board.
(b) “Call” means, with respect to assessments, to require payment, by the mailing of a notice to insurers by the fund, of an authorized assessment within the time set forth in the notice. An assessment is called when notice is mailed to insurers by the fund.
(c) “Premiums” means gross premiums and other considerations received for direct insurance and annuities, including considerations for a plan established under ss. 185.981 to 185.985, less return premiums and other considerations, dividends, and experience credits paid or credited to policyholders on such business. The term “premiums” does not include premiums or other considerations received for policies or contracts, or for portions of policies or contracts, for which coverage is not provided under this chapter, except that the amount of assessable premiums or other considerations shall not be reduced on account of limitations with respect to a single risk, loss, or life under s. 646.31 (4) or on account of interest limitations under s. 646.35 (6) (c).
(1m) Duty to assess. As soon as practicable after a liquidation order has been issued, the board shall estimate separately for each of the accounts of s. 646.11 (2), the amounts necessary to make the payments provided by this chapter and shall authorize assessments separately for each account.
(3) Calculation.
(am) General. Except as provided in pars. (ar), (b) and (c), assessments shall be calculated as a percentage of premium written in this state by each insurer in the classes protected by the accounts for the year preceding the year in which the assessment is authorized by the board.
(ar) Disability. Except as provided in par. (c), with respect to disability insurance policies, including policies issued by health maintenance organization insurers, assessments shall be calculated as a percentage of premium written in this state by each insurer in the classes protected by the accounts for the year preceding the year in which the assessment is authorized by the board. If the assessment data for the year immediately preceding the year in which the assessment is authorized by the board is not available when the assessment is called, the fund may use the assessment data for the most recent year for which data is available.
(b) Life and annuities. Except as provided in par. (c), with respect to annuity contracts or life insurance policies, assessments shall be calculated as a percentage of average annual premium received in this state by each insurer in the classes protected by the accounts for the 3 most recent years preceding the year of the entry of the order of liquidation.
(c) Administrative assessments. The board may authorize assessments on a prorated or nonprorated basis to meet administrative costs and other expenses whether or not related to the liquidation or rehabilitation of a particular insurer. Nonprorated assessments may not exceed $500 per insurer in any year.
(4) Limits.
(a) Subject to pars. (b) and (d), the total of all assessments for an amount authorized by the board under this section with respect to an insurer may not, in one calendar year, exceed 2 percent of the insurer’s assessable premiums under sub. (3) (am), (ar), or (b) on the types of policies and contracts that are covered by the account.
(b) If the maximum assessment under par. (a), together with the other assets of the fund in an account, does not provide in one year in the account an amount that is sufficient for the fund to meet its obligations, the board shall assess additional amounts in each succeeding year until the amounts available enable the fund to meet its obligations.
(c) Assessments to meet the obligations of the fund with respect to an insurer in liquidation may not be authorized or called unless the board makes a finding that it is necessary for implementing the purposes of this chapter. Recognizing that exact determinations may not always be possible, the board shall endeavor to classify and calculate assessments with a reasonable degree of accuracy. No authorized assessment may be called if the assets held in the appropriate account of the fund are sufficient to cover all estimated payments for liquidations in progress.
(d) If 2 or more assessments are authorized in one calendar year with respect to insurers placed in liquidation in different calendar years, the average annual premiums for purposes of the limitation in par. (a) shall be equal and limited to the higher of the 3-year annual premium average for the applicable account.
(5) Collection. After the rate of assessment has been fixed, the fund shall send to each insurer a statement of the amount it is to pay. The fund shall designate whether the assessments shall be made payable in one sum or in installments.
(6) Appeal and review. Within 30 days after the fund sends the statement under sub. (5), an insurer, after paying the assessment under protest, may appeal the assessment to the board or a committee thereof. The decision of the board or committee on the appeal is subject to judicial review in the circuit court for Dane County. A petition for judicial review shall be filed within 60 days of the board’s or committee’s decision.
(7) Recoupment or tax credit.
(a) An insurer’s premium rates are not excessive because they contain an amount reasonably calculated to recoup assessments called under this chapter.
(b) If the premium rates on a class of business are fixed, so that it is not possible for an insurer to recoup its assessments by increasing premium rates on the class of business, the insurer may offset 20 percent of the amount of the Wisconsin portion of the assessment against its tax liabilities to this state, other than real property taxes, in each of the 5 calendar years following the year in which the assessment was paid.
(c) If an insurer ceases doing business in this state, all assessments not yet offset may be offset against its tax liabilities to this state for the year it ceases doing business. If the offset exceeds the tax liabilities, no refund will be made and there will be no carry-forward of the deficit to later years.
(d) Any amount available for credit against future tax liabilities under this subsection may be regarded as an asset of the insurer under rules promulgated by the commissioner.
(8) Abatement and deferral. The board may abate or defer the assessment of an insurer in whole or part if payment of the assessment would endanger the ability of the insurer to fulfill its contractual obligations. The amount by which an assessment is abated or deferred may be assessed under this section against other insurers. When the conditions that prompted the board to defer assessment of an insurer no longer exist, the insurer shall pay all assessments that were deferred in accordance with a repayment plan approved by the board.
(9) Obligation to contribute ceases.
(a) Except as provided in par. (b), if an insurer’s license or certificate of authority to do business in this state terminates, expires, or is surrendered, the insurer’s obligation to pay assessments under this section ceases beginning on the day after the insurer’s license or certificate of authority terminates, expires, or is surrendered.
(b) An insurer whose license or certificate of authority to do business in this state terminates, expires, or is surrendered remains liable after the termination, expiration, or surrender to pay all of the following:
1. Assessments authorized or called before the insurer’s license or certificate of authority terminated, expired, or was surrendered.
2. Assessments authorized or called after the insurer’s license or certificate of authority terminated, expired, or was surrendered that relate to a liquidation order entered before the insurer’s license or certificate of authority terminated, expired, or was surrendered.
(10) Assessment of converting insurers. When an insurer converts to a different type of entity or license and the effect of the conversion is to subject the insurer to the liabilities of a different account or accounts of the fund, the converting insurer’s obligation to pay assessments is as follows:
(a) Assessments authorized prior to or during the year of conversion. For assessments authorized by the board prior to or during the year in which the insurer’s conversion to a different type of entity or license is effective, the insurer is liable for assessments to cover the obligations of the account or accounts to which it was subject prior to conversion.
(b) Assessments authorized after the year of conversion. For assessments authorized by the board after the year in which the insurer’s conversion to a different type of entity or license is effective, the insurer is liable for assessments to cover the obligations of the account or accounts to which it is subject after conversion.
History: 1979 c. 109; 1983 a. 120; 1985 a. 216; 1989 a. 23, 31; 1995 a. 396; 1999 a. 30; 2003 a. 261; 2007 a. 170; 2009 a. 342; 2015 a. 90; 2021 a. 114.
Sub. (7) is applicable to franchise taxes, income taxes, and fire department dues. Only Wisconsin assessments are used for offsets against Wisconsin taxes. Section 76.66 applies. If assessments are reimbursed, tax credits should be recaptured. 72 Atty. Gen. 17.