Chapter 552, Laws of 1957, created chapter 211 of the statutes relating to the supervision of employee welfare funds. In a declaration of policy, the law stated that
... employe welfare funds are of great benefit to employes and their families and that their growth should be encouraged; that the establishment and management of such funds vitally affect the well-being of millions of people and are in the public interest; and that such funds should be supervised by the state to the extent necessary to protect the rights of employes and their families . . . . (section 211.01, Wisconsin Statutes)
Employee welfare funds which received payments of more than 2,000 dollars per year or which provided payments for benefits under plans covering 26 or more employees working in Wisconsin were required to register with the Commissioner of Insurance and to describe their organization, operations, and affairs (section 211.03). The commissioner was authorized to examine the operations of employee welfare funds as often as necessary but at least once every five years; and he was empowered to appoint an examiner who would report back to him. Examination reports could not be made public until a copy had been given to the employee welfare fund, which would bear expenses for the examination (sections 211.04-211.07). Trustees of every fund were required to file an annual statement on or before June 1, giving the names and addresses of the trustees; number of persons covered; fiscal year; and type of plan used, showing the benefits provided, method of determining eligibility for benefits, copy of the plan or collective bargaining agreement under which the plan was established and operated, source of financing and identity of the organization through which benefits were provided, and employee booklet describing the plan (section 211.08). The commissioner was authorized to request special statements or reports as needed, and trustees of every fund were also required to file an annual report showing the condition of the fund on December 31 (sections 211.09-211.10). Sections 211.11-211.13 concerned reports by insurance companies to trustees of funds, reports of employer contributions to employee welfare funds, and waivers of examinations of foreign (out of state) funds. Section 211.14 provided for compliance, enforcement, and penalties. Specifically, it assigned responsibility to fund trustees for money, property, and assets received, managed, or disbursed by them; prohibited an individual from serving as an employee of an employee welfare fund as well as an agent of a company providing insurance to the fund, which would be a conflict of interest; prohibited political contributions; provided penalties for embezzlement and other violations of the provisions of this chapter; and authorized court action by the attorney general in cases of wrongful or negligent fund depletion. Section 211.15 allowed the commissioner to seek an injunction restraining persons from doing acts in violation of this chapter which would cause irreparable injury to the interests of the people of the state or the beneficiaries of the fund. Section 211.16 authorized the commissioner to appoint an advisory council to advise him in carrying out his functions under chapter 211.
Chapter 2, Laws of 1959, repealed and recreated section 211.08, changing the filing date for annual statements. Section 211.10, as recreated, eliminated the requirement to file annual reports.
Chapter 225, Laws of 1961, further amended the statutes. Section 211.03 was amended to require registration from trustees of every fund, instead of just those receiving more than 2,000 dollars per year or covering 26 or more employees working in Wisconsin. Section 211.04 was amended to provide for examinations of funds at regular intervals. Section 211.05 was repealed and recreated to provide an alternate means of examination; in lieu of the commissioner appointing an examiner, trustees or sponsoring employers of funds could submit a report of an examination performed by certified public accountants. Section 211.08 was amended to require annual statements only from the trustees of funds covering 26 or more employees working in Wisconsin. Section 211.14(6) was created, authorizing the commissioner to impose a forfeiture of 5 dollars per day, not to exceed 500 dollars per default, upon funds which failed or refused to comply with the filing requirements of chapter 211.
Chapter 43, Laws of 1967, created section 211.07(2) of the statutes, allowing the commissioner to determine filing fees to be paid by every employee welfare fund registered under chapter 211. The fee was set at 25 dollars and, after June 30, 1972, raised to 40 dollars.
Chapter 309, Laws of 1967, amended section 211.04(l), clearly enabling the commissioner to examine the actuarial status of employee welfare funds. Prior to this, the authority to examine the actuarial status of funds was never directly authorized by law, although actuarial examinations had been conducted by the Employee Welfare Funds Division. Several amendments and renumbering changes were made in section 211.14 (the compliance, enforcement, and penalty section), clarifying the standards by which trustees of funds were expected to manage the fund's affairs. Section 211.14(1) was amended to include a statement that trustees were to invest funds and manage fund affairs using the judgment and care which men of prudence, discretion, and intelligence exercise in the management of their own affairs. Section 211.14(2) was renumbered section 211.14(2)(a) and section 211.14(2)(b) was created, requiring that trustees investing employee welfare fund monies in securities take adequate safeguards in purchasing them.
Chapter 276, Laws of 1969, section 533, repealed and recreated section 211.16 of the statutes, changing the name of the Employee Welfare Funds Advisory Council to the Employee Welfare Plans Advisory Council.
Chapter 337, Laws of 1969, section 84, repealed section 211.16 of the statutes, which had authorized the creation of the Employee Welfare Plans Advisory Council. Section 85 of the same law created chapter 601 of the statutes, revising and consolidating the insurance laws, which had been scattered throughout the statutes resulting in ambiguity, repetition, and inconsistency. The law suggested that the agency rely on administrative rule-making. More specifically, the newly created section 601.20 of the statutes empowered the commissioner to create advisory councils and committees under section 15.04(3) of the statutes. In a commentary, the law stated that the power to create advisory councils and committees existed in the absence of statute, but that enactment, while adding nothing to the legal powers of the commissioner, might encourage the use of advisory groups and endow them with more prestige and effectiveness. However, since it was felt that acceptance or use of such councils could not be forced upon a commissioner without diminishing his power and responsibility, the law made the appointment of such bodies possible without making it mandatory.
[The commissioner] could shape advisory bodies in terms of size, formality, frequency of meeting or any other variable, or he could dispense with them altogether . . . . The employee welfare plan advisory board (now council) [was] created by s. 211.16. [This section has] been dropped. While [this body performs] useful functions and should be continued, simplification of the statutes demands that such bodies be created in the same way as other advisory bodies, i.e. by rule, not by statute. Rules creating and governing [this council] should therefore be promulgated simultaneously with the enactment of this chapter, so [it] may continue [its] useful existence on an appropriate basis. (p. 337, Laws of 1969)
Section Ins. 8.10 of the Wisconsin Administrative Code, effective August 1, 1970, continued the council, pursuant to sections 15.04(3) and 601.20 of the statutes. The rule made minor changes in the composition and administrative structure of the council and the frequency of its meetings, but the purposes of the council remained essentially the same.
The administration of employee welfare fund laws was affected by other sections of the Wisconsin Administrative Code as well. Of particular interest as it applies to the special investigations conducted by the Employee Welfare Funds Division (Series 1737) is section Ins. 8.01, effective September 1, 1960, clarifying the prohibition of the receipt of payments from funds by parties-in-interest, described in section 211.14(2), later (2)(a), of the statutes. This rule was not intended to prohibit trustees from investing fund monies in a certain way, but it prohibited them and other specified persons who would be in a position to influence the transactions of a fund (parties-in-interest) from using their positions to enrich themselves at the expense of the fund. Penalties were enforceable against the parties-in-interest, rather than against the fund. Other sections of chapter 8 of the Wisconsin Administrative Code, relating to the Employee Welfare Funds Division, concerned the following: section Ins. 8.02, various portions effective in 1962, 1968, and 1971, definition of “trust fund or other fund;” section Ins. 8.03, effective August 1, 1962, definition of “employee benefits;” section Ins. 8.04, effective August 1, 1962, requirements of registration; section Ins. 8.05, effective August 1, 1962, cancellation of registration; section Ins. 8.06, effective August 1, 1962, requirements for filing annual statements and number of fund participants; section Ins. 8.07, effective August 1, 1962, definition of “persons employed in this state;” section Ins. 8.08, effective August 1, 1962, availability of information to fund participants; section Ins. 8.09, effective August 1, 1962, preservation of records; and section Ins. 8.10, effective August 1, 1970, previously mentioned, which created the Employee Welfare Plans Advisory Council.
The regulatory activity performed by the Commissioner of Insurance was terminated by the Federal Employee Retirement Income Security Act of 1974 (Public Law 93-406), effective January 1, 1975, which superseded all state laws relating to employee benefit plans. In a declaration of policy, Congress stated that the pre-emption of state laws was necessary because of the rapid growth of employee welfare plans; the increasingly interstate operational scope and economic impact of their activities; the well-being of millions of employees and their dependents which was directly affected by these plans; the large volume of activities which were carried on by mails and instrumentalities of interstate commerce; the benefits of full disclosure and safeguards to employees and their families; and the inadequacy of then current minimum standards.
See the Agency History in the catalog.
