Wisconsin Administrative Code
Office of the Commissioner of Insurance
Chapter Ins 6 - General
Section Ins 6.09 - Prohibited acts by captive agents of lending institutions and others
Universal Citation: WI Admin Code ยง Ins 6.09
Current through August 26, 2024
(1) PURPOSE. This rule implements and interprets applicable statutes, including but not limited to ch. 628, Stats., prohibiting concerted acts of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of the business of insurance as unfair methods of competition and as unfair or deceptive acts or practices in the business of insurance.
(2) DEFINITIONS.
(a)
Agent. A natural person,
other than a captive agent, holding a valid and current certificate of
registration as an insurance agent and one or more valid and current licenses
to represent one or more admitted insurers in the solicitation and sale of
policies of insurance in this state.
(b)
Borrower. Any person,
firm, association, or corporation which obtains, other than in the regular
course of its trade or business, a loan of money or credit from a lending
institution on the security of real or personal property in return for a
promise to repay the consideration at a time subsequent.
(c)
Captive agent. An agent
who is a director, officer, or employee of the lending institution which, in
connection with a loan transaction, holds or acquires a security interest in
real or personal property of a borrower.
(d)
Lending institution. Any
person, firm, association, or corporation, whether or not licensed or chartered
by any agency of government, which in the regular course of business lends
money or credit to a borrower on the security of real or personal property in
return for the borrower's promise to repay the consideration at a time
subsequent.
(e)
Policy of
insurance. Any policy, certificate or memorandum of insurance
affording in whole or in part any one or more of the kinds of insurance
described, respectively, in any paragraph of s.
Ins 6.75(2).
(3) DECLARATION OF POLICY.
(a) Every borrower in this state should be
afforded a reasonable opportunity to purchase any policy of insurance, the
form, content, and provisions of which have previously been approved by the
office of the commissioner of insurance for use in this state, for the purpose
of providing insurance coverage on real or personal property required by a
lending institution to be placed in force by the borrower at the borrower's
expense to protect its security interest in such real or personal
property.
(b) Every borrower in
this state should be afforded a reasonable opportunity to purchase a policy of
insurance, from any insurer and through any agent currently licensed by the
office of the commissioner of insurance to issue or sell in this state, which
is designed to protect and which affords protection for security interests in
real or personal property and which is required by a lending institution to be
placed in force by the borrower at the borrower's expense for such
purpose.
(c) At the minimum, every
borrower in this state should be afforded the opportunity at any time within 30
days following initial inception of coverage and at any time within 30 days
prior to any annual anniversary date of any existing policy to substitute for
an existing policy insuring real or personal property of the borrower in which
the lending institution has a security interest any other policy affording
adequate limits of insurance with respect to such property provided that such
replacement policy has been approved for use in this state, and the insurer
currently licensed by the office of the commissioner of insurance.
(4) PROHIBITED ACTS. Each of the following acts is declared to constitute the commission, by concerted action, of an act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of the business of insurance and is prohibited:
(a)
Refusal to accept
policy.
1. The solicitation or sale
by a captive agent of any policy of insurance to a borrower or to a lending
institution for the account of any borrower under which coverage is afforded
for the security interest of such captive agent's lending institution in real
or personal property of the borrower if such lending institution has refused or
then refuses to accept for such purpose the policy of any insurer licensed in
this state, the form, content, and provisions of which have previously been
approved as appropriate for the insurance of such security interest on the
property of such borrower by the office of the commissioner of insurance for
use in this state.
2. The
solicitation or sale by an agent of any policy of insurance to a borrower or to
a lending institution for the account of any borrower under which coverage is
afforded for the security interest of any lending institution in real or
personal property of such borrower if such agent knows or in the exercise of
reasonable care should have known that such lending institution has refused or
then refuses to accept for such purpose the policy of any insurer licensed in
this state, the form, content, and provisions of which have previously been
approved as appropriate for the insurance of such security interest on the
property of such borrower by the office of the commissioner of insurance for
use in this state.
(b)
Restriction on replacement of existing policy.
1. The solicitation or sale by a captive
agent of any policy of insurance to a borrower or to a lending institution for
the account of any borrower under which coverage is afforded for the security
interest of such captive agent's lending institution in real or personal
property of the borrower if such lending institution then imposes or enforces
any requirement or condition, whether or not assented thereto by a borrower,
which abrogates or otherwise penalizes or restricts the right of any borrower,
exercisable at any time within 30 days following initial inception of coverage
and at any time within 30 days prior to any annual anniversary date of any
existing policy effectively to substitute for an existing policy insuring real
or personal property of the borrower in which the lending institution has a
security interest any other policy approved by the office of the commissioner
of insurance which affords adequate limits of insurance with respect to such
property.
2. The solicitation or
sale by an agent of any policy of insurance to a borrower or to a lending
institution for the account of any borrower under which coverage is afforded
for the security interest of any lending institution in real or personal
property of such borrower if such agent knows or in the exercise of reasonable
care should have known that such lending institution then imposes or enforces
any requirement or condition, whether or not assented to by a borrower, which
abrogates or otherwise penalizes or restricts the right of any borrower,
exercisable at any time within 30 days following initial inception of coverage
and at any time within 30 days prior to any annual anniversary date of any
existing policy effectively to substitute for an existing policy insuring real
or personal property of the borrower in which the lending institution has a
security interest any other policy approved by the office of the commissioner
of insurance which affords adequate limits of insurance with respect to such
property.
(5) FREE CHOICE OF INSURANCE; TOWN MUTUAL INSURERS.
(a) A person may not disapprove, under s.
628.34(5),
Stats., a policy of insurance issued by a town mutual insurer licensed in this
state based wholly or partially on the ground that:
1. The insurer does not have an acceptable
rating with a rating service or publication;
2. The policy of insurance is assessable;
or
3. The financial condition of
the insurer is unacceptable, unless the condition constitutes a violation of s.
Ins 13.06 or 13.09.
(b) A person may disapprove a policy issued
by a town mutual insurer based wholly or partially on the ground that it does
not have a mortgagee clause in the form permitted under s.
Ins 13.04(7) (b).
(6) NONAPPLICATION. The provisions of this rule shall not apply to renewal of any policy of insurance where the obligation of the borrower to procure insurance for the security interest of the lending institution accrued prior to the effective date of this rule.
Disclaimer: These regulations may not be the most recent version. Wisconsin may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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