Wisconsin Administrative Code
Office of the Commissioner of Insurance
Chapter Ins 13 - Town Mutual Insurance
Section Ins 13.09 - Reinsurance
Universal Citation: WI Admin Code ยง Ins 13.09
Current through August 26, 2024
(1) PURPOSE. This rule implements and interprets s. 612.33, Stats., for the purpose of setting rules or guidelines for permitted and prohibited reinsurance and required reinsurance.
(2) SCOPE. This rule shall apply to all town mutual insurers subject to ch. 612, Stats.
(3) DEFINITIONS. For the purpose of this section only:
(a) ``Maximum attachment point"
means the amount of losses, expressed as a percentage of net premiums written,
which constitutes the limit of the town mutual's retention under the aggregate
excess of loss reinsurance required by sub. (4).
(b) ``Net premiums written" means gross
premiums written less premiums ceded for reinsurance inuring to the benefit of
an aggregate excess of loss reinsurance contract. Reinsurance premiums ceded
for aggregate excess of loss reinsurance, reinsurance premiums paid or
recovered related to coverage for other years, and dividends paid to
policyholders shall not be considered in determining net premiums
written.
(4) REQUIRED REINSURANCE.
(a)
Aggregate excess of
loss reinsurance. Every town mutual shall obtain and continuously
maintain unlimited aggregate excess of loss reinsurance for all risks covered
by property and nonproperty insurance that is not otherwise ceded under another
reinsurance contract. The aggregate excess of loss reinsurance shall provide a
maximum attachment point expressed as a percentage of net premiums written,
which is based on the relationship of the town mutual's prior year-end surplus
to prior year-end gross premiums written, as set forth in the following
schedule:
1.
|
Ratio that results from the division of prior year-end surplus by prior year-end gross premiums written |
Maximum attachment point expressed as a percentage of net premiums written during the calendar year of coverage |
|
300% or higher |
150% |
|
101% to 299% |
100% |
|
100% or less |
75% |
2. For
purposes of this section
13.09,
all calculations shall be based on the final annual statement filed with the
commissioner.
3. The aggregate
excess of loss reinsurance contract shall warrant by specific reference that it
complies with this section.
4. Any
town mutual that fails to comply, or has reason to believe that it is in
imminent risk of failure to comply, with this section after its effective date
shall notify the commissioner within 5 days of such failure or
awareness.
(b)
Reinsurance of nonproperty insurance. Any town mutual which
provides nonproperty insurance coverage shall obtain reinsurance as required by
s.
612.33(2) (b), Stats.
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