GENERAL CIRCULAR LETTER 404 APRIL 20, 1999
To: Members of the Bureau
FROM: Donna Knepper
RE: Rule V. Premium Basis
Manual Rule Page R-19
The Bureau has been asked to recirculate the following information released in General Circular Letter 305 dated July 8, 1983:
Rule V., as found on Page R-
It appears that some insurers are not including such remuneration when developing final premium for certain risks. More specifically, some insurers providing coverage to school boards (or municipalities) are not "picking up" contributions made by the employer on behalf of employee teachers into the State Teachers Retirement Fund.
The Teachers Retirement Plan is statutory. It requires the employee
teacher to pay 5% of his or her salary into the Plan, with the employer paying in a
matching contribution. We understand that the school boards (or municipalities) are paying
the employees 5% in addition to the normal employers share. This is clearly
remuneration under manual Rule V.B.2.
This is clearly contrary to the insurance laws and could subject the insurer to forfeiture or other disciplinary action by the Insurance Commissioner.
Please see that the information contained in this circular is disseminated to the Underwriting, Auditing and Marketing Departments within your company who are responsible for Wisconsin business. Also, please make sure your field force, including your agents, are aware of this manual rule.
We appreciate your cooperation."