Wis. Admin. Code Office of the Commissioner of Insurance § Ins 13.06 - Surplus requirements

Current through March 28, 2022

(1) PURPOSE. This rule implements and interprets ss. 612.31 and 612.33, Stats., for the purpose of setting minimum surplus requirements as a condition for the transaction of specified types of business.

(2) SCOPE. This rule shall apply to all town mutual insurers subject to ch. 612, Stats.

(3) NONPROPERTY INSURANCE.

(a) If a town mutual insurer retains any portion of a risk covered by nonproperty insurance, the town mutual shall obtain reinsurance on that nonproperty business with an insurer authorized to do business in this state. The maximum aggregate liability for incurred losses on nonproperty coverage retained by a town mutual insurer for any calendar year or contract year may not exceed the lesser of $200,000 or 20% of its surplus as of the preceding December 31.

(b) A town mutual may retain nonproperty insurance coverage not to exceed a proportional share of each limit of liability as shown in the following schedule:

Surplus as of the Preceding December 31	Proportional Share of each Limit of Liability Retained
$1,000,000 or greater	15%
$800,000 to $999,999	12%
$600,000 to $799,999	9%
$400,000 to $599,999	6%
$200,000 to $399,999	3%
Under $200,000	0%

(4) SURPLUS REQUIREMENTS. A town mutual insurer shall maintain a surplus of the greater of $200,000 or 20% of the net written premiums and assessments in the 12-month period ending on or not more than 60 days before the date as of which the calculation is made. Every town mutual shall achieve and maintain this minimum surplus by December 31, 2001.

(5) INDIVIDUAL CIRCUMSTANCES. The commissioner may take into consideration the experience, management and any other significant information about an individual town mutual insurer in determining whether to approve or disapprove town mutual property and nonproperty reinsurance and in setting of minimum surplus requirements.

Notes

Wis. Admin. Code Office of the Commissioner of Insurance § Ins 13.06

Cr. Register, December, 1974, No. 228, eff. 1-1-75; cr. (4) to (6), Register, July, 1984, No. 343, eff. 8-1-84; am. (3) and (5), r. and recr. (6), cr. (3) (b) and (c), Register, December, 1984, No. 348, eff. 1-1-85; r. (3) (a) and (5), renum. (3) (b) and (c) to be (3) (a) and (b), and (6) to be (5), and am. (4), Register, June, 2001, No. 546, eff. 1-1-02; except (4), eff. 7-1-01.