Key Takeaways
- Wisconsin Unfair Methods of Competition and Unfair Trade Practices law prohibits unfair insurance practices
- Rebating is prohibited with limited exceptions
- Misrepresentation and false advertising are prohibited
- Twisting and churning are illegal practices
- Unfair discrimination in underwriting is prohibited
Last updated: January 2026
Unfair Trade Practices
Wisconsin prohibits various unfair or deceptive practices in the insurance industry under Chapter 628 of the Wisconsin Statutes.
Misrepresentation
Producers and insurers are prohibited from:
False Statements
- Making false statements about policy terms or benefits
- Misrepresenting the financial condition of an insurer
- Using misleading policy illustrations
- Making false statements about competitors
- Misrepresenting the nature of the insurance transaction
Rebating
Rebating is prohibited under Wisconsin law:
What Is Prohibited
- Returning part of premium to insured
- Offering gifts or prizes of significant value
- Paying for referrals to individuals
- Sharing commission with non-licensed persons
Limited Exceptions
Wisconsin allows:
- Premium financing arrangements
- Dividends specified in policy
- Legitimate marketing items of nominal value
- Group premium discounts
Twisting and Churning
Twisting
Twisting is making misrepresentations to induce replacement:
- Falsely claiming existing policy is worthless
- Misrepresenting surrender values
- Making incomplete or false comparisons
- Omitting material information
Churning
Churning is excessive replacement to generate commissions:
- Multiple replacements for same client
- Pattern of replacements in book of business
- Ignoring client's best interests
Unfair Discrimination
Unfair discrimination is prohibited:
Prohibited Discrimination
No person may make or permit any unfair discrimination:
- Between individuals of the same class
- Of essentially the same hazard
- In the amount of premium, policy fees, or rates charged
What IS Permitted
Risk-based underwriting using:
- Age
- Health history
- Claims history
- Occupation (with limitations)
- Lifestyle factors (smoking, hazardous activities)
Unfair Claims Practices
Wisconsin requires insurers to handle claims fairly:
Prohibited Practices
- Misrepresenting policy provisions to claimants
- Failing to acknowledge claims promptly
- Denying claims without reasonable investigation
- Delaying payment to force settlement
Penalties for Violations
| Violation | Potential Penalty |
|---|---|
| First offense | Warning, fine, or suspension |
| Repeat offense | License revocation |
| Per violation | Fines up to $10,000 |
| Consumer harm | Restitution may be required |
Test Your Knowledge
Under Wisconsin law, is rebating generally permitted?
A
B
C
D
Test Your Knowledge
What is twisting under Wisconsin insurance law?
A
B
C
D