(1) PURPOSE. This rule implements and
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.
DEFINITIONS. For the purpose of this
(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
Aggregate excess of
. 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
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
101% to 299%
100% or less
purposes of this section
all calculations shall be based on the final annual statement filed with the
3. The aggregate
excess of loss reinsurance contract shall warrant by specific reference that it
complies with this section.
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
Reinsurance of nonproperty insurance. Any town mutual which
provides nonproperty insurance coverage shall obtain reinsurance as required by
Wis. Admin. Code Office of the Commissioner of Insurance § Ins 13.09
Cr. Register, December,
1974, No. 228, eff. 1-1-75; r. and recr., Register, June, 2001, No. 546, eff.