Section Ins 8.54 - Guaranteed renewability; cancellation and renewal restrictions(1) DEFINITION. (a) In this section, "medically underwritten policy" means a policy that is issued after the small employer insurer has, for purposes of risk selection, used information about the group's claim experience or the health history or medical records of one or more persons eligible for coverage.(b) Notwithstanding par. (a), a small employer insurer may apply medical underwriting standards to an individual who originally declined and later applies for coverage under a nonmedically underwritten policy without converting that policy to a medically underwritten policy. (2) CLASS OF BUSINESS. (a) In this section, each of the following is a separate class of business, regardless of variations in policy forms, marketing methods or duration of coverage among small employers in the class of business:1. All small employers with medically underwritten policies.2. All small employers with policies that are not medically underwritten.3. All small employers whose policies constitute a block of business assumed by the small employer insurer under a specific assumption treaty with an insurer that is not an affiliate.(b) No small employer insurer may establish a class of business other than one specified in par. (a). (3) GUARANTEED RENEWABILITY. Except as provided in s. 635.07, Stats., a policyholder has the right to renew a policy on the same terms subject to the premium rate restrictions specified in s. Ins 8.52(3). The subsection does not prohibit a small employer insurer from offering a policyholder renewal with altered benefit design characteristics if the offer is available to all policyholders in the same class of business without regard to claim experience. Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749, Stats.
(4) NONRENEWAL OR TERMINATION BASED ON PARTICIPATION REQUIREMENTS. (a) A small employer insurer that intends to nonrenew a policy or terminate a policy under s. 635.07(1) (d), Stats., because the number of eligible employees is less than the number required to keep the policy in force shall do all of the following: Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749(2), Stats.
1. Notify the small employer of its intent to nonrenew or terminate and the reason for the nonrenewal or termination. The notice shall be given as required under s. 631.36, Stats., for a nonrenewal or at least 20 days before the termination date for a termination.2. Offer to continue the small employer's coverage for not less than 60 days after the nonrenewal or termination date in order to allow the small employer to increase the number of eligible employees to the required number.3. Provide the additional coverage, if the small employer accepts the offer under subd. 2. before the nonrenewal or termination date and pays the premium for the additional coverage at the rate in effect at the time the additional coverage is provided.(b) A small employer insurer may not nonrenew a policy or terminate a policy under s. 635.07(1) (d), Stats., if the reason the number of eligible employees is less than the required number is due to an employee's sickness or injury, approved leave of absence or temporary layoff. The small employer insurer may establish participation requirements and reasonable verification procedures as part of the policy or employer agreement. Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749(2), Stats.
(c) A small employer insurer may not take into consideration factors related to an individual small employer's claim experience in deciding whether to nonrenew a policy or terminate a policy under s. 635.07(1) (d), Stats. Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749(3), Stats.
(d) A small employer insurer that intends to terminate a policy under s. 635.07(1) (a) to (c) or (e), Stats., shall comply with the notice requirements under s. 631.36(2) (b) and (c), (4), (6) and (7), Stats. Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749(2), Stats.
(5) NONRENEWAL OF CLASS OF BUSINESS. (a) If a small employer insurer ceases to renew policies issued to all small employers in the same class of business under s. 635.07(2), Stats., the small employer insurer may not establish any new class of business during the 5-year period beginning with the latest expiration date for policies in effect in the class of business that is not renewed. Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749(3), Stats.
(b) At least one year before a small employer insurer ceases to renew policies under s. 635.07(2), Stats., the small employer insurer shall provide the office with all of the following information: Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749(3), Stats.
1. The reason for the decision not to renew.2. The number of small employers and the total number of eligible employees affected by the decision not to renew.3. The number of small employers in other classes of the small employer insurer's business that are not affected by the decision not to renew.(c) The commissioner may order an examination under s. 601.43, Stats., in order to determine the premium rate history and obtain information on the profitability of the nonrenewed class of business.(d) At least one year before a small employer insurer ceases to renew policies under s. 635.07(2), Stats., the small employer insurer shall provide written notice of that intent to all affected small employers and the insurance regulatory agency in each state in which an affected insured individual resides. The notice shall include all of the following: Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749(3), Stats.
1. The reason for the decision to terminate coverage for the class of business.2. The date on which coverage will terminate.(e) In addition to the requirement under par. (d), the small employer insurer shall, at least 60 days but not more than 75 days before the date coverage will terminate, provide each affected small employer with written notice, complying with s. 631.36(6) and (7), Stats., of the intent not to renew the policy. The notice shall also comply with the notice requirements of ss. 632.79 and 632.897, Stats.(6) CONVERSION OF ASSUMED CLASS OF BUSINESS. A small employer insurer that assumes a class of business from another small employer insurer shall, by the 2nd renewal date for each policy or one year from the date of assumption, whichever is later, convert each policy in the assumed class of business to a policy with the same or similar benefit design characteristics in another class of business specified under sub. (2) (a).Wis. Admin. Code Office of the Commissioner of Insurance Ins 8.54
Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. (4) (a) to (c), Register, November, 1993, No. 455, eff. 2-1-94.