Current through August 26, 2024
(1) PURPOSE. This
section requires insurers who may return a premium that is less than the pro
rata unearned premium to disclose this to the insured. This section also
establishes prohibitions concerning specified practices relating to premiums.
This section implements and interprets ss.
227.10(1),
601.01(2),
625.13(1),
628.34(1), (3), (11), and (12),
631.20 and
631.36(2),
Stats.
(2) SCOPE. This section
applies to all lines or classes of insurance classified as property and
casualty insurance in s.
Ins 6.75(2), except lines or classes of
insurance providing disability insurance under s.
Ins 6.75(2) (c) and
(k).
(3) DEFINITIONS. In this section:
(a) "Pro rata unearned premium" means the pro
rata portion of the written premium covering the unexpired portion of the
policy term for which the written premium has been charged by the insurer to
the policyholder.
(b) "Written
premium" means the entire amount of premium charged a policyholder for the term
of the policy.
(4)
PREMIUM IN EXCESS OF PRO RATA EARNED PREMIUM: FILING, RESTRICTIONS,
DISCLOSURES.
(a) An insurer shall file with
the commissioner in accordance with s.
625.13,
Stats., and s.
Ins 6.06 any schedule of return premium applicable in the
event of policy cancellation wherein the return of premium is less than the pro
rata unearned premium for that policy form. The rate filing shall include the
basis of the premium calculation in the event of a policy
cancellation.
(b) Subject to par.
(c), in any policy under which an insurer may return a premium that is less
than the pro rata unearned premium, the insurer shall provide the policyholder
with a separate written notice that the policyholder may pay a substantial
penalty if the policyholder cancels the policy prior to its expiration date. No
insurer may return a premium that is less than the pro rata unearned premium
until at least 10 days after the insurer mails or delivers this written notice
to the policyholder.
(c)
Notwithstanding pars. (a) and (b), no insurer may return to the policyholder a
premium that is less than the pro rata unearned premium if the insurer
initiates cancellation or for a cancellation due to the nonpayment of
premium.
(5)
MISCELLANEOUS PREMIUM PROHIBITION. No insurer may initiate cancellation of one
policy solely to apply the pro rata unearned premium of that policy to the
balance due on another policy.
