Wyoming P&C Study Guide

The combined paper reaches past coverage into the regulatory material — insurer insolvency, producer conduct, and what you may lawfully give a client. Several of Wyoming’s figures here are not the model figures, and one of them is a penalty ceiling that applies specifically to you rather than to insurers.

When a property and casualty insurer fails

The caps are not in the definition of “covered claim.” W.S. 26-31-103 defines the term and sets no dollar figure at all. The limits live in a different section, W.S. 26-31-106(c), and they run three ways:

“(i) Shall pay the full amount of a covered claim for benefits under worker’s compensation coverage; (ii) Shall pay not more than seven thousand five hundred dollars ($7,500.00) per policy for a covered claim for return of each unearned premium; (iii) Shall pay not more than three hundred thousand dollars ($300,000.00) for each covered claim, other than worker’s compensation and return of unearned premium claims…”

Read limb (iii) to the end. The $300,000 expressly excludes workers’ compensation and unearned premium — those have their own treatments. Workers’ compensation covered claims are paid in full, with no cap at all, and unearned premium is $7,500 per policy, not the $10,000 most states use.

Two things Wyoming’s association does not have, and both are departures from the NAIC model: there is no net-worth exclusion for high-net-worth insureds, and no per-claim deductible. The “covered claim” definition’s exclusions cover subrogation recoveries, amounts exceeding policy limits, supplementary obligations such as adjustment fees, attorney fees, court costs, interest and bond premiums, punitive damages unless specifically named as covered risks, and incurred-but-not-reported damages — but no net-worth test appears anywhere.

Where a claimant goes first, when more than one state’s association could pay: to the association of the insured’s place of residence — except a first-party claim for damage to property with a permanent location, which goes to the association of the property’s location, and a workers’ compensation claim, which goes to the association of the claimant’s residence (W.S. 26-31-111(b)).

Seventeen unfair claims settlement practices, and a disjunctive standard

W.S. 26-13-124(a) enumerates seventeen practices at roman-numeral paragraphs (i) through (xvii). The NAIC model has fourteen. Wyoming bolted on three more — (xv), (xvi) and (xvii) — all concerning external review and all cross-referencing W.S. 26-40-201: denying or failing to timely pay disability claims for medically necessary services required by that section; failing to comply with its external review procedures; and failing to pay after an external review organization has declared the claim covered.

Now the standard, and read the conjunction:

“A person is considered to be engaging in an unfair method of competition and unfair and deceptive act or practice in the business of insurance if that person commits or performs with such frequency as to indicate a general business practice any of the following…”

That is disjunctive. A single commission reaches the first limb. Wyoming is not a pure general-business-practice state for unfair claims settlement — and the Unfair Trade Practices Act generally, at W.S. 26-13-102, imposes no frequency threshold at all.

The penalty that applies to you is the smaller one

This is the adjoining-subsection trap, and it is real. W.S. 26-1-107(b) sets civil penalties at not more than $5,000 for each offense, or $50,000 in the aggregate for all offenses within any one-year period — and then sets a different, lower ceiling for a different class of actor: not more than $1,000 for each offense, or $10,000 in the aggregate for all offenses within any one-year period, for individual agents or adjusters.

A guide that quotes $5,000 and $50,000 as “the Wyoming producer penalty” is quoting the wrong limb.

Grounds for licence action: thirteen, at roman-numeral paragraphs W.S. 26-9-211(a)(i) through (xiii). The commissioner may place on probation, suspend, revoke or refuse to issue or renew, or levy a civil penalty, or any combination — the remedies are cumulative, not alternative.

What you may give a client — and the thresholds are in the statute

This inverts the usual pattern. Most states put rebate thresholds in regulation; Wyoming puts them in the statute, at W.S. 26-13-110(c).

Non-cash gifts, items or services offered in connection with marketing, sale, purchase or retention of insurance are permitted provided their cost is not passed on to another person and the customer is not required to buy, continue or renew in exchange — and provided the total value per customer per calendar year does not exceed:

• $100, or 5% of the written premium for a current customer, capped at $1,000; or
• $100, or 5% of the quoted premium for a prospective customer, capped at $1,000.

Read that as two alternatives rather than one number: $100 is available regardless of premium, and 5% is available up to a $1,000 ceiling for a large enough premium.

Raffles and drawings are separate, at (c)(ii): permitted where open to the public, at no cost to entrants, with no purchase or renewal required, and where “the total value of each raffle or drawing shall not exceed one hundred dollars ($100.00)” — that is per raffle, not per customer.

And keep the receipts. Subsection (d) requires anyone providing a gift, item, service or prize under (c) to retain records — treated as records of transactions under W.S. 26-9-228 — including receipts of purchase, dates of transaction and names of customers, produced on the commissioner’s request.

The clocks you run on

Appointment is required to act as an insurer’s agent, not to hold a licence. W.S. 26-9-213(a): “An insurance producer who is not acting as an agent of an insurer is not required to become appointed.” The insurer files within 15 days of the earlier of the agency contract being executed or the first application submitted, and pays an annual continuation fee on or before March 31.

Termination runs three clocks in three directions (W.S. 26-9-214): insurer to commissioner within 30 days of the effective date; insurer to producer within 15 days of that notification; producer to commissioner within 30 days of receiving it, to file written comments.

Reporting of actions (W.S. 26-9-216): both 30 days, from different triggers — administrative actions from the final disposition, criminal prosecutions from the initial pretrial hearing date.

Premium is trust money. W.S. 26-9-229 makes premiums received trust funds held in a fiduciary capacity in a separate account that may not be commingled, and a producer who diverts them is “guilty of embezzlement.” The statute sets no days; Rule §46-4 does, and the directions differ: into the trust account by the close of the 5th business day after receipt; to the insurer by the contractual due date, or within 45 days of receipt if there is none; and return premium back to the insured by the close of the 5th business day. The 45 days runs one way only.

Records: three years. W.S. 26-9-228(c) requires a complete record of transactions kept at your place of business, available for inspection “for a period of at least three (3) years after completion of the transactions.”