Section 17.35. Primary coverage; requirements; permissible exclusions; deductibles.

 

(1)   Purpose. This section implements ss. 631.20 and 655.24 , Stats., relating to the approval of policy forms for health care liability insurance subject to s. 655.23 , Stats.

(2)   Required coverage. To qualify for approval under s. 631.20 , Stats., a policy shall at a minimum provide all of the following:

(a) Coverage for providing or failing to provide health care services to a patient.

(b) Coverage for peer review, accreditation and similar professional activities in conjunction with and incidental to the provision of health care services, when conducted in good faith by an insured.

(c) Coverage for utilization review, quality assurance and similar professional activities in conjunction with and incidental to the provision of health care services, when conducted in good faith by an insured.

(d) Indemnity limits of not less than the amounts specified in s. 655.23 (4) , Stats.

(e) Coverage for supplemental payments in addition to the indemnity limits, including attorney fees, litigation expenses, costs and interest.

(f) That the insurer will provide a defense of the insured and the fund until there has been a determination that coverage does not exist under the policy or unless otherwise agreed to by the insurer and the fund.

(g) If the policy is a claims-made policy:

1. A guarantee that the insured can purchase an unlimited extended reporting endorsement upon cancellation or nonrenewal of the policy.

2. If the policy is a group policy, a provision that any health care provider, as defined under s. 655.001 (8) , Stats., whose participation in the group terminates has the right to purchase an individual unlimited extended reporting endorsement.

3. A prominent notice that the insured has the obligation under s. 655.23 (3) (a) , Stats., to purchase the extended reporting endorsement unless other insurance is available to ensure continuing coverage for the liability of all insureds under the policy for the term the claims-made policy was in effect.

4. A prominent notice that the insurer will notify the commissioner if the insured does not purchase the extended reporting endorsement and that the insured, if a natural person, may be subject to administrative action by his or her licensing board.

(2b)   Aggregate limits; unlimited extended reporting endorsements.

(a) This subsection interprets and implements s. 655.23 (4) , Stats.

(b) Highest aggregate limit applies.

1. `Claims-made coverage.' The aggregate limit applicable to all claims reported during a reporting year of a claims-made policy shall be the highest limit specified in s. 655.23 (4) (b) , Stats., that applies during the reporting year.

2. `Occurrence coverage.' The limit applicable to all occurrences during an occurrence year of an occurrence policy shall be the highest limit specified in s. 655.23 (4) , Stats., that applies during the occurrence year.

(c) Unlimited extended reporting endorsements issued before January 1, 1999. Before January 1, 1999, the aggregate limit applicable to an unlimited extended reporting endorsement shall be one of the following:

1. The total amount of the annual aggregate limit specified in s. 655.23 (4) , Stats., as it applied on the date of the occurrence, shall be available for each occurrence year, less amounts previously paid under any policy for that occurrence year.

2. The following minimum percentage of the annual aggregate limit specified in s. 655.23 (4) , Stats., as it applied to the last reporting year of the canceled or nonrenewed claims-made policy shall be available for all claims reported under the extended reporting endorsement: 100% when the policy was in effect for 1 year or less, including any retroactive coverage period; 130% when the policy was in effect for more than 1 year, but less than or equal to 2 years, including any retroactive coverage period; 150% when the policy was in effect for more than 2 years, but less than or equal to 3 years, including any retroactive coverage period; 160% when the policy was in effect for more than 3 years, including any retroactive coverage period.

(d) Unlimited extended reporting endorsements issued on and after January 1, 1999. On and after January 1, 1999 the minimum aggregate limit applicable to an unlimited extended reporting endorsement shall be that specified in par. (c) 2.

(2e)   Requirements for group coverage.

(a) In this section, "provider" means a health care provider, as defined in s. 655.001 (8) , Stats.

(b) An insurer or self-insured provider that provides primary coverage under a group policy or self-insured plan shall do all of the following:

1. At the time of original issuance of the policy or when the self-insured plan takes effect, and each time coverage for an individual provider is added:

a. Furnish each covered provider with a copy of the policy or a certificate of coverage specifying the coverage provided and whether the coverage is limited to a specific practice location, to services performed for a specific employer or in any other way.

b. Include on the first page of the policy or the certificate of coverage, or in the form of a sticker, letter or other form included with the policy or certificate of coverage, that it is the responsibility of the individual provider to ensure that he or she has health care liability insurance coverage meeting the requirements of ch. 655 , Stats. , in effect for all of his or her practice in this state, unless the provider is exempt from the requirements of that chapter.

2. For a policy or self-insured plan in effect on October 1, 1993, furnish the documents specified in subd. 1. a. and b. to each individual covered provider before the next renewal date or anniversary date of the policy or self-insured plan.

3. Notify each covered provider individually when the policy or self-insured plan is cancelled, nonrenewed or otherwise terminated, or amended to affect the coverage provisions.

4. On the certificate of insurance filed with the fund under s. 655.23 (3) (b) or (c) , Stats., and s. Ins 17.28 (5) , specify whether the coverage is limited to a specific practice location, to services performed for a specific employer or in any other way.

(2m)   Risk retention groups. If the policy is issued by a risk retention group, as defined under s. 600.03 (41e) , Stats., each new and renewal application form shall include the following notice in 10-point type:

NOTICE

Under the federal liability risk retention act of 1986 ( 15 USC 3901 to 3906 ) the Wisconsin insurance security fund is not available for payment of claims if this risk retention group becomes insolvent. In that event, you will be personally liable for payment of claims up to your limit of liability under s. 655.23 (4) , Wis. Stat.

(3)   Permissible exclusions. A policy may exclude coverage, or permit subrogation against or recovery from the insured, for any of the following:

(a) Criminal acts.

(b) Intentional sexual acts and other intentional torts.

(c) Restraint of trade, anti-trust violations and racketeering.

(d) Defamation.

(e) Employment, religious, racial, sexual, age and other unlawful discrimination.

(f) Pollution resulting in injury to a 3rd party.

(g) Acts that occurred before the effective date of the policy of which the insured was aware or should have been aware.

(h) Incidents occurring while a provider's license to practice is suspended, revoked, surrendered or otherwise terminated.

(i) Criminal and civil fines, forfeitures and other penalties.

(j) Punitive and exemplary damages.

(k) Liability of the insured covered by other insurance, such as worker's compensation, automobile, fire or general liability.

(L) Liability arising out of the ownership, operation or supervision by the insured of a hospital, nursing home or other health care facility or business enterprise.

(m) Liability of others assumed by the insured under a contract or agreement.

(n) Any other exclusion which the commissioner determines is not inconsistent with the coverage required under sub. (2) .

(4)   Deductibles. If a policy includes a deductible or coinsurance clause, the insurer is responsible for payment of the total amount of indemnity up to the limits under s. 655.23 (4) , Stats., but may recoup the amount of the deductible or coinsurance from the insured after the insurer's payment obligation is satisfied.

History: Cr. Register, June, 1990, No. 414 , eff. 7-1-90; emerg. cr. (2m), eff. 7-1-91; cr. (2m), Register, July, 1991, No. 427 , eff. 8-1-91; cr. (2e), Register, September, 1993, No. 453 , eff. 10-1-93; cr. (2b), Register, June, 1994, No. 462 , eff. 7-1-94; emerg. r. and recr. (2b) (b) and cr. (2b) (c) and (d), eff. 6-1-98; r. and recr. (2b) (b) and cr. (2b) (c) and (d), Register, August, 1998, No. 512 , eff. 9-1-98.

Note

Subsection (2m) first applies to applications taken on October 1, 1991. Microsoft Windows NT 6.1.7601 Service Pack 1 Subsection (2b) applies to all claims made health care liability insurance policies for which certificates have been filed with the patients compensation fund, whether issued before, on or after July 1, 1994. Microsoft Windows NT 6.1.7601 Service Pack 1 Note: See the table of Appellate Court Citations for Wisconsin appellate cases citing s. Ins 17.35 . Microsoft Windows NT 6.1.7601 Service Pack 1