4.
Detailed statutory authority for the rule (including the statutory citation and language): The agency shall reference each statute that authorizes the promulgation of the proposed rule and each statute or rule that will affect the proposed rule or be affected by it. The agency shall also explain in detail the agency’s authority to promulgate the proposed rule under those statutes. An agency shall rely on an explicit grant of authority from the Legislature to promulgate a rule, if one exists. An agency shall not rely upon general statements of legislative purpose or legislative findings or agency general powers and duties clauses to confer authority to promulgate rules.The statutory authority for this rule is s. 227.11 (2) (a), , s. 620.03, s.620.21, s. 620.22, S. 623.02, s. 623.03, s. 623.04, and s. 623.21 Stats. which generally regulate how insurers account for assets and liabilities and specifically s. 627.23 Stat. which addresses credit for reinsurance. 5.
Estimates of the amount of time that state employees will spend to develop the rule and of other resources necessary to develop the rule:200 hours and no other resources are necessary to develop the rule.
6.
List with description of all entities that may be impacted by the rule: This includes a description of any local governmental units, businesses, economic sectors, or public utility ratepayers who may reasonably be anticipated to be affected by the rule.The update of Wisconsin’s standards to match those in other states will create uniformity. This uniformity along with the potential lower collateral requirements could entice more reinsurers to do business in Wisconsin. Reinsurers operating in the state will be subject to new rules and potentially lower collateral requirements. However, only reinsurers that demonstrate financial soundness to the commissioner’s satisfaction will be allowed to have low collateral requirements for licensed insurers to take credit for risk ceded to them. Domestic insurers who cede liability to these reinsurers will be indirectly affected by this change. In the unlikely event a reinsurer had difficulty paying claims made by the ceding domestic insurer, the lower collateral requirements could slightly increase the risk the ceding domestic insurer will not receive a full recovery. Because the reduced collateral requirements are tied to the reinsurer’s financial strength, this risk should be mitigated.
7.
Summary and preliminary comparison of any existing or proposed federal regulation that is intended to address the activities to be regulated by the rule:There are no existing or proposed federal regulations intended to address this area. The federal Nonadmitted and Reinsurance Reform Act precludes the extraterritorial application of state credit for reinsurance requirements.
8.
Anticipated economic impact of implementing the rule (note if the rule is likely to have a significant economic impact on small businesses):significant economic impact on small businesses?
____ yes
___X_ no
local/statewide economic impact (choose one)
X minimal or none (< or = $50,000)
moderate ($50,000--$20,000,000)
significant (>$20,000,000)
