Date:June 23, 2000
To:All Insurers Authorized to Write Insurance in Wisconsin
From:Connie L. O'Connell
Subject:Newly Enacted Legislation

This memorandum summarizes several new insurance statutes affecting insurers doing business in Wisconsin. Insurers should carefully review the new laws and this memorandum to determine which laws apply to your company. It is each insurer's responsibility to ensure that its policy forms and procedures are in compliance with the new laws. You may obtain copies of the new laws from Legislative Documents, 1 East Main Street, Madison, Wisconsin 53703, (608) 266-6400. Copies of legislation are also available on the Internet at http://www.legis.state.wi.us/.

Act 79 - Penalties for Violations of Medical, Mental Health and Treatment Record Confidentiality Laws

Act 79 increased the penalty that may be assessed against the person, including the state or any political unit of the state, for violating the mental health record requirements contained in s. 51.30, Wis. Stat. The penalty for such violation has been increased to no more than $1,000 for each violation plus costs and attorney fees. If the violation was "knowing and willful," the violator may be assessed a penalty of not more than $25,000 for each violation plus costs and attorney fees. If mental health records are released and the violator knows the records are confidential and discloses the information for financial gain the penalty increases to not more than $100,000 and/or imprisonment for a specified period of time. The Act also includes penalties (forfeitures and/or imprisonment) against individuals who knowingly and willfully obtain "information about an individual" from an insurer or insurance support organization as described in s. 610.70, Wis. Stat.

Act 79 is effective May 6, 2000.

Act 95 - Written Notice of Denial Reasons and Prohibited Insurance Practices Involving Domestic Abuse

Act 95 prohibits certain insurance practices based on evidence of domestic abuse. Certain provisions of the new law apply to all insurers doing business in Wisconsin, while other provisions apply only to certain lines of business as described in this bulletin. In the act, disability insurance policy has the meaning given in s. 632.895 (1) (a), Wis. Stat.

Written Notice of Denial Reasons

Act 95 creates s. 631.17, Wis. Stat., that requires an insurer who denies coverage under an individual or group life or disability insurance policy to advise the applicant in writing of the reasons for the denial.

Prohibited Insurance Practices Involving Domestic Abuse

The creation of s. 631.95, Wis. Stat., prohibits all insurers from:

  • refusing to provide or renew or from canceling a person's coverage under an individual or group policy or certificate on the basis that the person or a member or the person's family has been or is a victim of domestic abuse.
  • refusing to provide or renew or from canceling an employer's or other group's coverage on the basis that an employe or other group member or a member of their family has been or is a victim of domestic abuse.
  • rating an individual or group policy on knowledge or suspicion that a person has been or is a victim of domestic abuse.

Insurers writing individual or group disability insurance may not exclude or limit coverage of, or deny a claim for health care services related to the treatment of injury or disease resulting from domestic abuse on the basis that the person has been or is a victim of domestic abuse.

Individual or group life insurers may not deny or limit benefits under an individual or group life insurance policy in the event the insured's death results from domestic abuse.

Property insurers that exclude coverage for loss or damage resulting from intentional acts may not deny payment to an innocent insured for damage or loss that resulted from an act of abuse or domestic abuse, if the insured did not cooperate in or contribute to the loss or damage and the person who committed the act is criminally prosecuted.

Permitted Insurance Practices

Insurers are allowed to:

  • establish premiums for individual or group disability insurance coverage using information related to a person's existing medical condition, regardless of whether the condition was or may have been caused by domestic abuse.
  • deny or limit benefits under an individual or group life insurance policy to a beneficiary who is the perpetrator of domestic abuse that results in the death of the insured.
  • refuse to issue an individual or group life policy/certificate, or a disability income or long-term care insurance policy/certificate to a person who is or was the perpetrator of domestic abuse against the person who is to be insured.
  • refuse to issue an individual or group life insurance policy/certificate that names as beneficiary, a person who is or was the perpetrator of domestic abuse against the person who is to be insured.
  • refuse to name as beneficiary under an individual or group life policy/certificate, or a disability income or long-term care insurance policy/certificate, a person who is or was the perpetrator of domestic abuse against the person who is insured.
  • refuse to issue an individual or group life policy/certificate, or a disability income or long-term care insurance policy/certificate to a person who lacks an insurable interest in the person to be insured.
  • inquire about and use information related to a person's medical history or existing medical condition regardless of whether the condition was caused by abuse or domestic abuse for purposes of underwriting, processing a claim, or determining a person's eligibility for coverage under an individual or group life policy/certificate, or a disability income or long-term care insurance policy/certificate, provided any adverse underwriting decision is based on sound actuarial principles or actual or reasonably anticipated experience.

Other Prohibitions

Persons employed by or contracted with any insurer may not use, disclose, or transfer information relating to whether a person is or has been a victim of domestic abuse, and may not disclose or transfer that person's telephone number or address, except for a purpose related to the provision of health care services or for a valid business purpose, including disclosure or transfer of information to a reinsurer, the insurer's attorney, medical, underwriting or claims personnel under contract with the insurer, the policyholder's assignee, in response to a legal process, or as required by court order or by order of OCI. An insured or applicant may also obtain his or her own insurance records from an insurer.

The new law applies to all policies or certificates that are issued, renewed or applied for on or after November 1, 2000. There is an exception to coordinate the application of this new law to policies or certificates affected by a collective bargaining agreement.

Act 115 - Immunizations for Children

This act creates s. 632.895 (14), Wis. Stat., and requires every disability insurance policy (with some exceptions) and every self-insured health plan of the state or a county, city town, village or school district, that provides coverage for a dependent of an insured, to provide coverage of appropriate and necessary immunizations, from birth to the age of 6 years, for a dependent who is a child of the insured. The coverage may not be subject to any deductibles, copayments or coinsurance under the policy or plan.

Act 115 is effective for disability insurance policies that are issued or renewed on or after November 1, 2000.

Act 191 - Preneed Funeral Policies

This act amends s. 632.41 and creates s. 632.415, Wis. Stat. The changes repeal certain minimum standards for the benefits and compensation arrangements of preneed funeral plans, and allow insurers to issue multipremium funeral policies under certain conditions. It also permits a policyholder to designate a different beneficiary without notifying the current beneficiary. OCI will review existing administrative rules for changes that may be necessary for consistency with statutes.

Act 191 is effective July 1, 2000.

Act 155 - Independent Review of Health Plans

Act 155 establishes independent review of health plan decisions. Act 155 applies to all group and individual health plans.

OCI is required to draft administrative rules to implement portions of this bill. Additional information regarding Act 155 will be issued with the administrative rules. Act 155 does require all insurers who issue health benefit plans to establish internal grievance processes no later than December 1, 2000, including notice to policyholders.

Persons to Contact for Additional Information

If you have any questions, please put them in writing to the attention of the individuals listed below or by e-mail formatted as firstname.lastname@wisconsin.gov:

Medical Records Privacy:Julie Walsh
Legal Unit
Domestic Abuse: Phil Kress, Property and Casualty Section Chief or
Mike Honeck, Health and Life Section Chief
Immunization Mandate:Diane Dambach
Market Regulation Bureau
Pre-Need Funeral Policies:John Kitslaar
Market Regulation Bureau