HF 3497

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to commerce; establishing a division of 
  1.3             insurance fraud prevention within the department of 
  1.4             commerce to investigate and prosecute insurance fraud; 
  1.5             providing new grounds for revocation of a chiropractic 
  1.6             license for the employment of runners, cappers, or 
  1.7             steerers; requiring chiropractors to disclose their 
  1.8             financial interest before referrals to any health care 
  1.9             provider; establishing removal from arbitration for 
  1.10            allegations of fraud; appropriating money; prescribing 
  1.11            criminal penalties; amending Minnesota Statutes 2000, 
  1.12            sections 60A.951, subdivisions 1, 2, by adding 
  1.13            subdivisions; 60A.952, subdivisions 1, 2, by adding 
  1.14            subdivisions; 60A.953; 65B.525, by adding a 
  1.15            subdivision; 168A.40, subdivisions 3, 4; Minnesota 
  1.16            Statutes 2001 Supplement, section 148.10, subdivision 
  1.17            1; proposing coding for new law in Minnesota Statutes, 
  1.18            chapters 45; 60A; 609; repealing Minnesota Statutes 
  1.19            2000, sections 175.16, subdivision 2; 299A.75. 
  1.20  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.21     Section 1.  [45.0135] [DIVISION OF INSURANCE FRAUD 
  1.22  PREVENTION.] 
  1.23     Subdivision 1.  [CREATION.] The division of insurance fraud 
  1.24  prevention is established in the department of commerce.  The 
  1.25  division of insurance fraud prevention shall: 
  1.26     (1) initiate inquiries and conduct investigations when the 
  1.27  division has reason to believe that insurance fraud has been or 
  1.28  is being committed; 
  1.29     (2) respond to notifications or complaints of suspected 
  1.30  insurance fraud generated by state and local police, other law 
  1.31  enforcement authorities, governmental units, including the 
  1.32  federal government, and any other person; 
  2.1      (3) review notices and reports of insurance fraud submitted 
  2.2   by authorized insurers, their employees, and agents or 
  2.3   producers, and to investigate those incidents of alleged fraud 
  2.4   that, in its judgment, require further investigation; 
  2.5      (4) report incidents of alleged insurance fraud disclosed 
  2.6   by its investigations to appropriate law enforcement 
  2.7   authorities, including, but not limited to, the attorney 
  2.8   general, county attorneys, and to any other appropriate law 
  2.9   enforcement, administrative, regulatory, or licensing agency, 
  2.10  and to assemble evidence, prepare charges, and otherwise assist 
  2.11  any law enforcement authority having jurisdiction; and 
  2.12     (5) administer the automobile theft prevention program 
  2.13  under section 45.0136. 
  2.14     Subd. 2.  [POWERS.] The division of insurance fraud 
  2.15  prevention may employ investigators who are certified by the 
  2.16  board of peace officers standards and training.  The general 
  2.17  laws applicable to law enforcement officers of this state are 
  2.18  applicable to the investigators.  The powers of the division 
  2.19  include, but are not limited to, the following powers: 
  2.20     (1) to administer oaths and affirmations, subpoena 
  2.21  witnesses, compel their attendance, take evidence, and require 
  2.22  production of any books, papers, correspondence, memoranda, 
  2.23  agreements, or other documents or records that the division 
  2.24  considers relevant or material to an inquiry concerning 
  2.25  insurance fraud; 
  2.26     (2) to make arrests for criminal violations established as 
  2.27  a result of their investigations; and 
  2.28     (3) to execute arrest and search warrants for the same 
  2.29  criminal violations. 
  2.30     Subd. 3.  [EVIDENCE, DOCUMENTATION, AND RELATED MATERIALS.] 
  2.31  If the division seeks evidence, documentation, and related 
  2.32  materials pertinent to an investigation, and the matter is 
  2.33  located outside of this state, the division may designate 
  2.34  representatives, including officials of the state where the 
  2.35  matter is located, to secure the matter or inspect the matter on 
  2.36  its behalf. 
  3.1      Subd. 4.  [CONFIDENTIALITY AND IMMUNITY.] The provisions of 
  3.2   chapter 13, including, but not limited to, section 13.82, apply 
  3.3   to the classification, disclosure, and collection of data 
  3.4   relating to the division of insurance fraud prevention. 
  3.5      Subd. 5.  [ANNUAL REPORT ON ACTIVITIES AND 
  3.6   COST-EFFECTIVENESS.] The division of insurance fraud prevention 
  3.7   shall maintain records and information in order to produce an 
  3.8   annual report of its activities as may be prescribed by the 
  3.9   commissioner of commerce.  The commissioner shall report 
  3.10  annually to the house and senate standing committees with 
  3.11  jurisdiction over insurance issues as to the activities of the 
  3.12  division and the cost-effectiveness of the programs established 
  3.13  by the division. 
  3.14     Subd. 6.  [INSURANCE FRAUD PREVENTION ACCOUNT.] The 
  3.15  insurance fraud prevention account is created in the state 
  3.16  treasury.  It consists of all money deposited according to 
  3.17  section 60A.957 and any appropriations made by law.  Money in 
  3.18  this fund is appropriated to the commissioner of commerce for 
  3.19  the purposes specified in this section and sections 60A.951 to 
  3.20  60A.957. 
  3.21     Sec. 2.  [45.0136] [AUTOMOBILE THEFT PREVENTION PROGRAM.] 
  3.22     Subdivision 1.  [PROGRAM DESCRIBED; DUTIES.] (a) The 
  3.23  division of insurance fraud prevention shall: 
  3.24     (1) develop and sponsor the implementation of statewide 
  3.25  plans, programs, and strategies to combat automobile theft, 
  3.26  improve the administration of the automobile theft laws, and 
  3.27  provide a forum for identification of critical problems for 
  3.28  those persons dealing with automobile theft; 
  3.29     (2) coordinate the development, adoption, and 
  3.30  implementation of plans, programs, and strategies relating to 
  3.31  interagency and intergovernmental cooperation with respect to 
  3.32  automobile theft enforcement; 
  3.33     (3) annually audit the plans and programs that have been 
  3.34  funded in whole or in part to evaluate the effectiveness of the 
  3.35  plans and programs and withdraw funding should the commissioner 
  3.36  determine that a plan or program is ineffective or is no longer 
  4.1   in need of further financial support from the fund; 
  4.2      (4) develop a plan of operation including: 
  4.3      (i) an assessment of the scope of the problem of automobile 
  4.4   theft, including areas of the state where the problem is 
  4.5   greatest; 
  4.6      (ii) an analysis of various methods of combating the 
  4.7   problem of automobile theft; 
  4.8      (iii) a plan for providing financial support to combat 
  4.9   automobile theft; 
  4.10     (iv) a plan for eliminating car hijacking; and 
  4.11     (v) an estimate of the funds required to implement the 
  4.12  plan; and 
  4.13     (5) distribute money according to subdivision 3 from the 
  4.14  automobile theft prevention special revenue account for 
  4.15  automobile theft prevention activities, including: 
  4.16     (i) paying the administrative costs of the program; 
  4.17     (ii) providing financial support to the state patrol and 
  4.18  local law enforcement agencies for automobile theft enforcement 
  4.19  teams; 
  4.20     (iii) providing financial support to state or local law 
  4.21  enforcement agencies for programs designed to reduce the 
  4.22  incidence of automobile theft and for improved equipment and 
  4.23  techniques for responding to automobile thefts; 
  4.24     (iv) providing financial support to local prosecutors for 
  4.25  programs designed to reduce the incidence of automobile theft; 
  4.26     (v) providing financial support to judicial agencies for 
  4.27  programs designed to reduce the incidence of automobile theft; 
  4.28     (vi) providing financial support for neighborhood or 
  4.29  community organizations or business organizations for programs 
  4.30  designed to reduce the incidence of automobile theft and to 
  4.31  educate people about the common methods of automobile theft, the 
  4.32  models of automobiles most likely to be stolen, and the times 
  4.33  and places automobile theft is most likely to occur; and 
  4.34     (vii) providing financial support for automobile theft 
  4.35  educational and training programs for state and local law 
  4.36  enforcement officials, driver and vehicle services exam and 
  5.1   inspections staff, and members of the judiciary. 
  5.2      (b) The division may not spend in any fiscal year more than 
  5.3   ten percent of the money in the fund for the program's 
  5.4   administrative and operating costs.  The division must 
  5.5   distribute the full amount of the proceeds credited to the 
  5.6   automobile theft prevention special revenue account each year. 
  5.7      Subd. 2.  [ANNUAL REPORT.] By January 15 of each year, the 
  5.8   division shall report to the governor and legislature on the 
  5.9   activities and expenditures in the preceding year. 
  5.10     Subd. 3.  [GRANT CRITERIA; APPLICATION.] (a) A county 
  5.11  attorney's office, law enforcement agency, neighborhood 
  5.12  organization, community organization, or business organization 
  5.13  may apply for a grant under this section.  Multiple offices or 
  5.14  agencies within a county may apply for a grant under this 
  5.15  section. 
  5.16     (b) The division must develop criteria for the fair 
  5.17  distribution of grants from the automobile theft prevention 
  5.18  account that address the following factors: 
  5.19     (1) the number of reported automobile thefts per capita in 
  5.20  a city, county, or region, not merely the total number of 
  5.21  automobile thefts; 
  5.22     (2) the population of the jurisdiction of the applicant 
  5.23  office or agency; 
  5.24     (3) the total funds distributed within a county or region; 
  5.25  and 
  5.26     (4) the statewide interest in automobile theft reduction. 
  5.27     (c) The division may give priority to: 
  5.28     (1) offices and agencies engaged in a collaborative effort 
  5.29  to reduce automobile theft; and 
  5.30     (2) counties or regions with the greatest rates of 
  5.31  automobile theft. 
  5.32     (d) The minimum amount of a grant award is $5,000.  After 
  5.33  considering the automobile theft rate and total population of an 
  5.34  applicant's jurisdiction, if a grant award, as determined under 
  5.35  the criteria and priorities in this subdivision, would be less 
  5.36  than $5,000, it must not be awarded. 
  6.1      Subd. 4.  [ADVISORY BOARD; CREATION; MEMBERSHIP.] An 
  6.2   automobile theft prevention advisory board is established to 
  6.3   advise the division on the distribution of grants under this 
  6.4   section.  The board must consist of seven members appointed by 
  6.5   the division and must include representatives of law 
  6.6   enforcement, prosecuting agencies, automobile insurers, and the 
  6.7   public.  The division must annually select a chair from among 
  6.8   its members.  
  6.9      Sec. 3.  Minnesota Statutes 2000, section 60A.951, 
  6.10  subdivision 1, is amended to read: 
  6.11     Subdivision 1.  [APPLICATION.] The definitions in this 
  6.12  section apply to sections 60A.951 to 60A.955 60A.957. 
  6.13     Sec. 4.  Minnesota Statutes 2000, section 60A.951, 
  6.14  subdivision 2, is amended to read: 
  6.15     Subd. 2.  [AUTHORIZED PERSON.] "Authorized person" means 
  6.16  the county attorney, sheriff, or chief of police responsible for 
  6.17  investigations in the county where the suspected insurance fraud 
  6.18  occurred; the superintendent of the bureau of criminal 
  6.19  apprehension; the commissioner of commerce; the division of 
  6.20  insurance fraud; the commissioner of labor and industry; the 
  6.21  attorney general; or any duly constituted criminal investigative 
  6.22  department or agency of the United States. 
  6.23     Sec. 5.  Minnesota Statutes 2000, section 60A.951, is 
  6.24  amended by adding a subdivision to read: 
  6.25     Subd. 3a.  [CONCEAL.] "Conceal" means to take affirmative 
  6.26  action to prevent others from discovering information.  Mere 
  6.27  failure to disclose information does not constitute 
  6.28  concealment.  Action by the holder of a legal privilege, or one 
  6.29  who has a reasonable belief that a privilege exists, to prevent 
  6.30  discovery of privileged information does not constitute 
  6.31  concealment. 
  6.32     Sec. 6.  Minnesota Statutes 2000, section 60A.951, is 
  6.33  amended by adding a subdivision to read: 
  6.34     Subd. 4a.  [INSURANCE POLICY OR POLICY.] "Insurance policy" 
  6.35  or "policy" means the written instrument in which are set forth 
  6.36  the terms of any certificate of insurance, binder of coverage, 
  7.1   or contract of insurance, including a certificate, binder, or 
  7.2   contract issued by a state-assigned risk plan; benefit plan; 
  7.3   nonprofit hospital service plan; motor club service plan; or 
  7.4   surety bond, cash bond, or any other alternative to insurance 
  7.5   authorized by the Minnesota Financial Responsibility Act. 
  7.6      Sec. 7.  Minnesota Statutes 2000, section 60A.951, is 
  7.7   amended by adding a subdivision to read: 
  7.8      Subd. 4b.  [INSURANCE PROFESSIONAL.] "Insurance 
  7.9   professional" means sales agents, agencies, managing general 
  7.10  agents, brokers, producers, claims representatives, adjusters, 
  7.11  and third-party administrators. 
  7.12     Sec. 8.  Minnesota Statutes 2000, section 60A.951, is 
  7.13  amended by adding a subdivision to read: 
  7.14     Subd. 4c.  [INSURANCE TRANSACTION.] "Insurance transaction" 
  7.15  means a transaction by, between, or among: 
  7.16     (1) an insurer or a person who acts on behalf of an 
  7.17  insurer; and 
  7.18     (2) an insured, claimant, applicant for insurance, public 
  7.19  adjuster, insurance professional, practitioner who performs 
  7.20  professional services as defined by section 319B.02, subdivision 
  7.21  19, attorney, or any person who acts on behalf of any of the 
  7.22  foregoing for the purpose of obtaining insurance or reinsurance, 
  7.23  calculating insurance premiums, submitting a claim, negotiating 
  7.24  or adjusting a claim, or otherwise obtaining insurance, 
  7.25  self-insurance, or reinsurance, or obtaining the benefits or 
  7.26  annuities thereof or therefrom. 
  7.27     Sec. 9.  Minnesota Statutes 2000, section 60A.951, is 
  7.28  amended by adding a subdivision to read: 
  7.29     Subd. 5a.  [PERSON.] "Person" means a natural person, 
  7.30  company, corporation, unincorporated association, partnership, 
  7.31  professional corporation, and any other entity. 
  7.32     Sec. 10.  Minnesota Statutes 2000, section 60A.951, is 
  7.33  amended by adding a subdivision to read: 
  7.34     Subd. 5b.  [PREMIUM.] "Premium" means consideration paid or 
  7.35  payable for coverage under an insurance policy.  Premium 
  7.36  includes any payment, whether due within the insurance policy 
  8.1   term or otherwise; any deductible payment, whether advanced by 
  8.2   the insurer or insurance professional and subject to 
  8.3   reimbursement by the insured or otherwise; any self-insured 
  8.4   retention or payment, whether advanced by the insurer or 
  8.5   insurance professional and subject to reimbursement by the 
  8.6   insured or otherwise; and any collateral or security to be 
  8.7   provided to collateralize any such obligations to pay. 
  8.8      Sec. 11.  Minnesota Statutes 2000, section 60A.951, is 
  8.9   amended by adding a subdivision to read: 
  8.10     Subd. 5c.  [PREMIUM FINANCE COMPANY.] "Premium finance 
  8.11  company" means a person engaged or purporting to engage in the 
  8.12  business of advancing money, directly or indirectly, to an 
  8.13  insurer or producer at the request of an insured under the terms 
  8.14  of a premium finance agreement, including, but not limited to, 
  8.15  loan contracts, notes, agreements, or obligations, wherein the 
  8.16  insured has assigned the unearned premiums, accrued dividends, 
  8.17  or loss payments as security for advancement of payment of 
  8.18  premiums on insurance policies only, but does not include the 
  8.19  financing of insurance premiums purchased in connection with the 
  8.20  financing of goods or services. 
  8.21     Sec. 12.  Minnesota Statutes 2000, section 60A.951, is 
  8.22  amended by adding a subdivision to read: 
  8.23     Subd. 5d.  [PREMIUM FINANCE TRANSACTION.] "Premium finance 
  8.24  transaction" means a transaction by, between, or among an 
  8.25  insured, a producer, or other party claiming to act on behalf of 
  8.26  an insured and a third-party premium finance company, for the 
  8.27  purposes of purportedly or actually advancing money directly or 
  8.28  indirectly to an insurer or producer at the request of an 
  8.29  insured under the terms of a premium finance agreement, wherein 
  8.30  the insured has assigned the unearned premiums, accrued 
  8.31  dividends, or loan payments as security for such advancement in 
  8.32  payment of premiums on insurance policies only, but does not 
  8.33  include the financing of insurance premiums purchased in 
  8.34  connection with the financing of goods or services. 
  8.35     Sec. 13.  Minnesota Statutes 2000, section 60A.952, 
  8.36  subdivision 1, is amended to read: 
  9.1      Subdivision 1.  [REQUEST.] After receiving a written 
  9.2   request from an authorized person stating that the authorized 
  9.3   person has reason to believe that a crime or civil fraud has 
  9.4   been committed in connection with an insurance claim, insurance 
  9.5   transaction, payment, or application, an insurer must release to 
  9.6   the authorized person all relevant information in the insurer's 
  9.7   possession.  
  9.8      Sec. 14.  Minnesota Statutes 2000, section 60A.952, 
  9.9   subdivision 2, is amended to read: 
  9.10     Subd. 2.  [NOTIFICATION BY INSURER REQUIRED NOTICE TO AND 
  9.11  COOPERATION WITH THE DIVISION OF INSURANCE FRAUD PREVENTION.] If 
  9.12  an insurer has reason to believe that an insurance fraud has 
  9.13  been committed, the insurer shall, in writing, notify an 
  9.14  authorized person and provide the authorized person with all 
  9.15  relevant information in the insurer's possession.  It is 
  9.16  sufficient for the purpose of this subdivision if an insurer 
  9.17  notifies and provides relevant information to one authorized 
  9.18  person.  The insurer may also release relevant information to 
  9.19  any person authorized to receive the information under section 
  9.20  72A.502, subdivision 2.  Any insurer or insurance professional 
  9.21  that has reasonable belief that an act of insurance fraud will 
  9.22  be, is being, or has been committed, shall furnish and disclose 
  9.23  all relevant information to the division of insurance fraud 
  9.24  prevention or to any authorized person and cooperate fully with 
  9.25  any investigation conducted by the division of insurance fraud 
  9.26  prevention.  Any person that has a reasonable belief than an act 
  9.27  of insurance fraud will be, is being, or has been committed, or 
  9.28  any person who collects, reviews, or analyzes information 
  9.29  concerning insurance fraud may furnish and disclose any 
  9.30  information in its possession concerning the act to the division 
  9.31  of insurance fraud prevention, any authorized person, or to an 
  9.32  authorized representative of an insurer that requests the 
  9.33  information for the purpose of detecting, prosecuting, or 
  9.34  preventing insurance fraud.  The insurer may also release 
  9.35  relevant information to any person authorized to receive the 
  9.36  information under section 72A.502, subdivision 2.  If disclosure 
 10.1   is made to an authorized person other than the division of 
 10.2   insurance fraud prevention, a copy of the disclosure must be 
 10.3   sent to the division of insurance fraud prevention. 
 10.4      Sec. 15.  Minnesota Statutes 2000, section 60A.952, is 
 10.5   amended by adding a subdivision to read: 
 10.6      Subd. 4.  [TOLLING OF TIME PERIODS.] If an insurer has a 
 10.7   reasonable or probable cause to believe that an insurance fraud 
 10.8   has been committed in connection with an insurance claim, and 
 10.9   has properly notified the division of insurance fraud prevention 
 10.10  of its suspicions according to subdivision 2, the notification 
 10.11  tolls any applicable time period in any unfair claims practices 
 10.12  statute or related regulations, or any action on the claim 
 10.13  against the insurer to whom the claim had been presented for bad 
 10.14  faith, until 30 days after determination by the division of 
 10.15  insurance fraud prevention and notice to the insurer that the 
 10.16  division will not recommend action on the claim. 
 10.17     Sec. 16.  Minnesota Statutes 2000, section 60A.952, is 
 10.18  amended by adding a subdivision to read: 
 10.19     Subd. 5.  [REWARD FOR INFORMATION.] The division of 
 10.20  insurance fraud prevention, in cooperation with authorized 
 10.21  insurers and insurance professionals, may establish a voluntary 
 10.22  fund to reward persons not connected with the insurance industry 
 10.23  who provide information or furnish evidence leading to the 
 10.24  arrest and conviction of persons responsible for insurance fraud.
 10.25     Sec. 17.  Minnesota Statutes 2000, section 60A.953, is 
 10.26  amended to read: 
 10.27     60A.953 [ENFORCEMENT; REFUSAL TO COOPERATE WITH AN 
 10.28  INVESTIGATION.] 
 10.29     The intentional failure to provide relevant information as 
 10.30  required by section 60A.952, subdivision 1, or to provide 
 10.31  notification of insurance fraud as required by section 60A.952, 
 10.32  subdivision 2, is punishable as a misdemeanor.  It is unlawful 
 10.33  for any person to knowingly or intentionally interfere with the 
 10.34  enforcement of the provisions of sections 60A.951 to 60A.957 or 
 10.35  investigation of suspected or actual violations of sections 
 10.36  60A.951 to 60A.957 and is punishable as a misdemeanor. 
 11.1      Sec. 18.  [60A.956] [OTHER LAW ENFORCEMENT AUTHORITY.] 
 11.2      Nothing in sections 60A.951 to 60A.957 preempts the 
 11.3   authority of or relieve the duty of any other law enforcement 
 11.4   agencies to investigate and prosecute alleged violations of law, 
 11.5   prevent or prohibit a person from voluntarily disclosing any 
 11.6   information concerning insurance fraud to any law enforcement 
 11.7   agency other than the division of insurance fraud prevention, or 
 11.8   limit any of the powers granted elsewhere by the laws of this 
 11.9   state to the commissioner of commerce to investigate alleged 
 11.10  violations of law and to take appropriate action. 
 11.11     Sec. 19.  [60A.957] [CIVIL ACTIONS.] 
 11.12     Subdivision 1.  [BY DIVISION.] If the division of insurance 
 11.13  fraud prevention or its designees initiate civil action against 
 11.14  any person and that person is found by a court of competent 
 11.15  jurisdiction to have committed a fraudulent insurance act as set 
 11.16  forth in section 60A.951, subdivision 6, that person is subject 
 11.17  to a civil penalty not to exceed $5,000 for the first violation, 
 11.18  $10,000 for the second violation, and $15,000 for each 
 11.19  subsequent violation.  When two or more offenses were committed 
 11.20  by the same person in two or more counties, the accused may be 
 11.21  prosecuted in any county in which one of the offenses was 
 11.22  committed for all the offenses aggregated under this section.  
 11.23  Civil penalties paid under this section must be deposited in the 
 11.24  division of insurance fraud prevention fund. 
 11.25     Subd. 2.  [COSTS AND EXPENSES.] Costs and expenses incurred 
 11.26  in any investigation or other action arising out of a violation 
 11.27  under this chapter may be sought in any judgment or court 
 11.28  decree.  Any recovery costs, except criminal penalties, shall be 
 11.29  deposited by the division of insurance fraud or its designees in 
 11.30  the division of insurance fraud prevention account created in 
 11.31  section 45.0135, subdivision 6.  The court may make additional 
 11.32  orders or judgments as may be necessary to restore to any person 
 11.33  in interest, any compensation which may have been acquired by 
 11.34  means of any act prohibited in section 60A.951, subdivision 6. 
 11.35     Subd. 3.  [BY INSURER.] Any insurer damaged as the result 
 11.36  of a violation of any provision of sections 60A.951 to 60A.957 
 12.1   may sue in any court of competent jurisdiction to recover 
 12.2   compensatory damages, and reasonable investigation expenses, 
 12.3   costs of suit, and attorney fees.  An insurer shall recover 
 12.4   treble damages if the court determines that the defendant has 
 12.5   engaged in a pattern of violating sections 60A.951 to 60A.957. 
 12.6      Subd. 4.  [INSURER NOTIFICATION TO COMMISSIONER.] An 
 12.7   insurer shall mail a copy of the initial claim, amended claim, 
 12.8   counterclaims, briefs, and legal memoranda to the commissioner 
 12.9   at the time of filing of the documents with the court where the 
 12.10  matter is pending.  Upon receipt of notification of the filing 
 12.11  of a claim by an insurer, the commissioner may join in the 
 12.12  action for the purpose of seeking judgment for the payment of a 
 12.13  civil penalty including court costs and reasonable attorney fees 
 12.14  actually incurred by the commissioner.  
 12.15     Sec. 20.  Minnesota Statutes 2000, section 65B.525, is 
 12.16  amended by adding a subdivision to read: 
 12.17     Subd. 3.  [REMOVAL DUE TO FRAUD OR MISREPRESENTATION.] At 
 12.18  any time after a petition for no-fault arbitration is filed, a 
 12.19  reparation obligor may make a written demand for removal from 
 12.20  no-fault arbitration jurisdiction, when the basis for that 
 12.21  demand is fraud or misrepresentation of material fact on the 
 12.22  part of the claimant, the claimant's treatment provider, or any 
 12.23  other person or entity that is materially associated with either 
 12.24  the treatment provider or claimant.  When a written demand for 
 12.25  removal is made, the reparation obligor shall: 
 12.26     (1) file within ten days of the date of the written demand 
 12.27  for removal being filed with the American Arbitration 
 12.28  Association, a motion for removal from district court 
 12.29  jurisdiction, together with a memorandum of law in support of 
 12.30  the insurer's demand, any applicable affidavits, and any other 
 12.31  supporting exhibits and documents with the district court 
 12.32  administrator for the county in which the claimant resides; 
 12.33     (2) as part of its demand for removal, the reparation 
 12.34  obligor may request an in-camera hearing before the district 
 12.35  court judge to whom the demand for removal is assigned.  Upon a 
 12.36  request for an in-camera hearing of the grounds and evidence for 
 13.1   the demand for removal, the district court shall schedule the 
 13.2   in-camera hearing within 30 days of filing with the district 
 13.3   court administrator of the demand for removal.  The reparation 
 13.4   obligor must serve the claimant and the no-fault arbitration 
 13.5   proceeding with a copy of its demand for removal and supporting 
 13.6   affidavits or documentation at the time that the demand for 
 13.7   removal is filed with the district court administrator.  The 
 13.8   claimant in the no-fault arbitration proceeding has ten days 
 13.9   from the day of service of the demand for removal and supporting 
 13.10  documentation to serve and file a response upon the district 
 13.11  court administrator and the reparation obligor; and 
 13.12     (3) upon a prima facie showing that there is a good faith 
 13.13  basis that a question of fact exists as to fraud or 
 13.14  misrepresentation of material facts on the part of the claimant, 
 13.15  the claimant's treatment provider or any person or entity 
 13.16  associated with either the claimant or the treatment provider, 
 13.17  the district court shall take jurisdiction over the arbitration 
 13.18  proceeding and the case shall proceed as a district court civil 
 13.19  litigation matter.  Either the reparation obligor or the 
 13.20  claimant may request a jury trial upon appropriate demand and 
 13.21  payment of the appropriate civil jury fee. 
 13.22     Sec. 21.  Minnesota Statutes 2001 Supplement, section 
 13.23  148.10, subdivision 1, is amended to read: 
 13.24     Subdivision 1.  [GROUNDS.] (a) The state board of 
 13.25  chiropractic examiners may refuse to grant, or may revoke, 
 13.26  suspend, condition, limit, restrict or qualify a license to 
 13.27  practice chiropractic, or may cause the name of a person 
 13.28  licensed to be removed from the records in the office of the 
 13.29  court administrator of the district court for: 
 13.30     (1) Advertising that is false or misleading; that violates 
 13.31  a rule of the board; or that claims the cure of any condition or 
 13.32  disease. 
 13.33     (2) The employment of fraud or deception in applying for a 
 13.34  license or in passing the examination provided for in section 
 13.35  148.06 or conduct which subverts or attempts to subvert the 
 13.36  licensing examination process.  
 14.1      (3) The practice of chiropractic under a false or assumed 
 14.2   name or the impersonation of another practitioner of like or 
 14.3   different name.  
 14.4      (4) The conviction of a crime involving moral turpitude.  
 14.5      (5) The conviction, during the previous five years, of a 
 14.6   felony reasonably related to the practice of chiropractic.  
 14.7      (6) Habitual intemperance in the use of alcohol or drugs.  
 14.8      (7) Practicing under a license which has not been renewed.  
 14.9      (8) Advanced physical or mental disability.  
 14.10     (9) The revocation or suspension of a license to practice 
 14.11  chiropractic; or other disciplinary action against the licensee; 
 14.12  or the denial of an application for a license by the proper 
 14.13  licensing authority of another state, territory or country; or 
 14.14  failure to report to the board that charges regarding the 
 14.15  person's license have been brought in another state or 
 14.16  jurisdiction.  
 14.17     (10) The violation of, or failure to comply with, the 
 14.18  provisions of sections 148.01 to 148.105, the rules of the state 
 14.19  board of chiropractic examiners, or a lawful order of the board. 
 14.20     (11) Unprofessional conduct.  
 14.21     (12) Being unable to practice chiropractic with reasonable 
 14.22  skill and safety to patients by reason of illness, professional 
 14.23  incompetence, senility, drunkenness, use of drugs, narcotics, 
 14.24  chemicals or any other type of material, or as a result of any 
 14.25  mental or physical condition, including deterioration through 
 14.26  the aging process or loss of motor skills.  If the board has 
 14.27  probable cause to believe that a person comes within this 
 14.28  clause, it shall direct the person to submit to a mental or 
 14.29  physical examination.  For the purpose of this clause, every 
 14.30  person licensed under this chapter shall be deemed to have given 
 14.31  consent to submit to a mental or physical examination when 
 14.32  directed in writing by the board and further to have waived all 
 14.33  objections to the admissibility of the examining physicians' 
 14.34  testimony or examination reports on the ground that the same 
 14.35  constitute a privileged communication.  Failure of a person to 
 14.36  submit to such examination when directed shall constitute an 
 15.1   admission of the allegations, unless the failure was due to 
 15.2   circumstances beyond the person's control, in which case a 
 15.3   default and final order may be entered without the taking of 
 15.4   testimony or presentation of evidence.  A person affected under 
 15.5   this clause shall at reasonable intervals be afforded an 
 15.6   opportunity to demonstrate that the person can resume the 
 15.7   competent practice of chiropractic with reasonable skill and 
 15.8   safety to patients.  
 15.9      In addition to ordering a physical or mental examination, 
 15.10  the board may, notwithstanding section 13.384, 144.651, or any 
 15.11  other law limiting access to health data, obtain health data and 
 15.12  health records relating to a licensee or applicant without the 
 15.13  licensee's or applicant's consent if the board has probable 
 15.14  cause to believe that a doctor of chiropractic comes under this 
 15.15  clause.  The health data may be requested from a provider, as 
 15.16  defined in section 144.335, subdivision 1, paragraph (b), an 
 15.17  insurance company, or a government agency, including the 
 15.18  department of human services.  A provider, insurance company, or 
 15.19  government agency shall comply with any written request of the 
 15.20  board under this subdivision and is not liable in any action for 
 15.21  damages for releasing the data requested by the board if the 
 15.22  data are released pursuant to a written request under this 
 15.23  subdivision, unless the information is false and the provider or 
 15.24  entity giving the information knew, or had reason to believe, 
 15.25  the information was false.  Information obtained under this 
 15.26  subdivision is classified as private under sections 13.01 to 
 15.27  13.87.  
 15.28     In any proceeding under this clause, neither the record of 
 15.29  proceedings nor the orders entered by the board shall be used 
 15.30  against a person in any other proceeding.  
 15.31     (13) Aiding or abetting an unlicensed person in the 
 15.32  practice of chiropractic, except that it is not a violation of 
 15.33  this clause for a doctor of chiropractic to employ, supervise, 
 15.34  or delegate functions to a qualified person who may or may not 
 15.35  be required to obtain a license or registration to provide 
 15.36  health services if that person is practicing within the scope of 
 16.1   the license or registration or delegated authority.  
 16.2      (14) Improper management of health records, including 
 16.3   failure to maintain adequate health records as described in 
 16.4   clause (18), to comply with a patient's request made under 
 16.5   section 144.335 or to furnish a health record or report required 
 16.6   by law.  
 16.7      (15) Failure to make reports required by section 148.102, 
 16.8   subdivisions 2 and 5, or to cooperate with an investigation of 
 16.9   the board as required by section 148.104, or the submission of a 
 16.10  knowingly false report against another doctor of chiropractic 
 16.11  under section 148.10, subdivision 3.  
 16.12     (16) Splitting fees, or promising to pay a portion of a fee 
 16.13  or a commission, or accepting a rebate.  Employment or use of 
 16.14  runners, cappers, steerers, or other persons to procure patients.
 16.15     (17) Revealing a privileged communication from or relating 
 16.16  to a patient, except when otherwise required or permitted by law.
 16.17     (18) Failing to keep written chiropractic records 
 16.18  justifying the course of treatment of the patient, including, 
 16.19  but not limited to, patient histories, examination results, test 
 16.20  results, and X-rays.  Unless otherwise required by law, written 
 16.21  records need not be retained for more than seven years and 
 16.22  X-rays need not be retained for more than four years.  
 16.23     (19) Exercising influence on the patient or client in such 
 16.24  a manner as to exploit the patient or client for financial gain 
 16.25  of the licensee or of a third party which shall include, but not 
 16.26  be limited to, the promotion or sale of services, goods, or 
 16.27  appliances.  
 16.28     (20) Gross or repeated malpractice or the failure to 
 16.29  practice chiropractic at a level of care, skill, and treatment 
 16.30  which is recognized by a reasonably prudent chiropractor as 
 16.31  being acceptable under similar conditions and circumstances.  
 16.32     (21) Delegating professional responsibilities to a person 
 16.33  when the licensee delegating such responsibilities knows or has 
 16.34  reason to know that the person is not qualified by training, 
 16.35  experience, or licensure to perform them. 
 16.36     (22) Referring a patient to any health care provider as 
 17.1   defined in section 144.335 in which the referring chiropractor 
 17.2   has any financial interest unless the chiropractor has disclosed 
 17.3   the physician's own financial interest. 
 17.4   The chiropractor shall make the disclosures required in this 
 17.5   clause in advance and in writing to the patient and shall 
 17.6   include in the disclosure a statement that the patient is free 
 17.7   to choose a different health care provider.  This clause does 
 17.8   not apply to the distribution of revenues from a partnership, 
 17.9   group practice, nonprofit corporation, or professional 
 17.10  corporation to its partners, shareholders, members, or employees 
 17.11  if the revenues consist only of fees for services performed by 
 17.12  the physician or under a physician's direct supervision, or to 
 17.13  the division or distribution of prepaid or capitated health care 
 17.14  premiums, or fee-for-service withhold amounts paid under 
 17.15  contracts established under other state law. 
 17.16     (b) For the purposes of paragraph (a), clause (2), conduct 
 17.17  that subverts or attempts to subvert the licensing examination 
 17.18  process includes, but is not limited to:  (1) conduct that 
 17.19  violates the security of the examination materials, such as 
 17.20  removing examination materials from the examination room or 
 17.21  having unauthorized possession of any portion of a future, 
 17.22  current, or previously administered licensing examination; (2) 
 17.23  conduct that violates the standard of test administration, such 
 17.24  as communicating with another examinee during administration of 
 17.25  the examination, copying another examinee's answers, permitting 
 17.26  another examinee to copy one's answers, or possessing 
 17.27  unauthorized materials; or (3) impersonating an examinee or 
 17.28  permitting an impersonator to take the examination on one's own 
 17.29  behalf.  
 17.30     (c) For the purposes of paragraph (a), clauses (4) and (5), 
 17.31  conviction as used in these subdivisions includes a conviction 
 17.32  of an offense that if committed in this state would be deemed a 
 17.33  felony without regard to its designation elsewhere, or a 
 17.34  criminal proceeding where a finding or verdict of guilt is made 
 17.35  or returned but the adjudication of guilt is either withheld or 
 17.36  not entered. 
 18.1      (d) For the purposes of paragraph (a), clauses (4), (5), 
 18.2   and (6), a copy of the judgment or proceeding under seal of the 
 18.3   administrator of the court or of the administrative agency which 
 18.4   entered the same shall be admissible into evidence without 
 18.5   further authentication and shall constitute prima facie evidence 
 18.6   of its contents. 
 18.7      (e) For the purposes of paragraph (a), clause (11), 
 18.8   unprofessional conduct means any unethical, deceptive or 
 18.9   deleterious conduct or practice harmful to the public, any 
 18.10  departure from or the failure to conform to the minimal 
 18.11  standards of acceptable chiropractic practice, or a willful or 
 18.12  careless disregard for the health, welfare or safety of 
 18.13  patients, in any of which cases proof of actual injury need not 
 18.14  be established.  Unprofessional conduct shall include, but not 
 18.15  be limited to, the following acts of a chiropractor: 
 18.16     (1) gross ignorance of, or incompetence in, the practice of 
 18.17  chiropractic; 
 18.18     (2) engaging in conduct with a patient that is sexual or 
 18.19  may reasonably be interpreted by the patient as sexual, or in 
 18.20  any verbal behavior that is seductive or sexually demeaning to a 
 18.21  patient; 
 18.22     (3) performing unnecessary services; 
 18.23     (4) charging a patient an unconscionable fee or charging 
 18.24  for services not rendered; 
 18.25     (5) directly or indirectly engaging in threatening, 
 18.26  dishonest, or misleading fee collection techniques; 
 18.27     (6) perpetrating fraud upon patients, third-party payors, 
 18.28  or others, relating to the practice of chiropractic, including 
 18.29  violations of the Medicare or Medicaid laws or state medical 
 18.30  assistance laws; 
 18.31     (7) advertising that the licensee will accept for services 
 18.32  rendered assigned payments from any third-party payer as payment 
 18.33  in full, if the effect is to give the impression of eliminating 
 18.34  the need of payment by the patient of any required deductible or 
 18.35  copayment applicable in the patient's health benefit plan; or 
 18.36  advertising a fee or charge for a service or treatment different 
 19.1   from the fee or charge the licensee submits to a third-party 
 19.2   payer for that service or treatment.  As used in this clause, 
 19.3   "advertise" means solicitation by the licensee by means of 
 19.4   handbills, posters, circulars, motion pictures, radio, 
 19.5   newspapers, television, or in any other manner.  In addition to 
 19.6   the board's power to punish for violations of this clause, 
 19.7   violation of this clause is also a misdemeanor; 
 19.8      (8) accepting for services rendered assigned payments from 
 19.9   any third-party payer as payment in full, if the effect is to 
 19.10  eliminate the need of payment by the patient of any required 
 19.11  deductible or copayment applicable in the patient's health 
 19.12  benefit plan, except as hereinafter provided; or collecting a 
 19.13  fee or charge for a service or treatment different from the fee 
 19.14  or charge the licensee submits to a third-party payer for that 
 19.15  service or treatment, except as hereinafter provided.  This 
 19.16  clause is intended to prohibit offerings to the public of the 
 19.17  above listed practices and those actual practices as well, 
 19.18  except that in instances where the intent is not to collect an 
 19.19  excessive remuneration from the third-party payer but rather to 
 19.20  provide services at a reduced rate to a patient unable to afford 
 19.21  the deductible or copayment, the services may be performed for a 
 19.22  lesser charge or fee.  The burden of proof for establishing that 
 19.23  this is the case shall be on the licensee; and 
 19.24     (9) any other act that the board by rule may define.  
 19.25     Sec. 22.  Minnesota Statutes 2000, section 168A.40, 
 19.26  subdivision 3, is amended to read: 
 19.27     Subd. 3.  [SURCHARGE.] Each insurer engaged in the writing 
 19.28  of policies of automobile insurance shall collect a surcharge, 
 19.29  at the rate of 50 cents per vehicle for every six months of 
 19.30  coverage, on each policy of automobile insurance providing 
 19.31  comprehensive insurance coverage issued or renewed in this 
 19.32  state.  The surcharge may not be considered premium for any 
 19.33  purpose, including the computation of premium tax or agents' 
 19.34  commissions.  The amount of the surcharge must be separately 
 19.35  stated on either a billing or policy declaration sent to an 
 19.36  insured.  Insurers shall remit the revenue derived from this 
 20.1   surcharge at least quarterly to the commissioner of public 
 20.2   safety for purposes of the automobile theft prevention program 
 20.3   described in section 299A.75 45.0136.  For purposes of this 
 20.4   subdivision, "policy of automobile insurance" has the meaning 
 20.5   given it in section 65B.14, covering only the following types of 
 20.6   vehicles as defined in section 168.011: 
 20.7      (1) a passenger automobile; 
 20.8      (2) a pick-up truck; 
 20.9      (3) a van but not commuter vans as defined in section 
 20.10  168.126; or 
 20.11     (4) a motorcycle, 
 20.12  except that no vehicle with a gross vehicle weight in excess of 
 20.13  10,000 pounds is included within this definition. 
 20.14     Sec. 23.  Minnesota Statutes 2000, section 168A.40, 
 20.15  subdivision 4, is amended to read: 
 20.16     Subd. 4.  [AUTOMOBILE THEFT PREVENTION ACCOUNT.] A special 
 20.17  revenue account is created in the state treasury to be credited 
 20.18  with the proceeds of the surcharge imposed under subdivision 3.  
 20.19  Revenue in the account may be used only for the automobile theft 
 20.20  prevention program described in section 299A.75 45.0136. 
 20.21     Sec. 24.  [609.622] [CRIMINAL PROCUREMENT OF CLIENTS, 
 20.22  PATIENTS, OR CUSTOMERS.] 
 20.23     Subdivision 1.  [DEFINITIONS.] For the purpose of this 
 20.24  section, the following terms have the meanings given them:  
 20.25     (1) "provider" means an attorney, a health care 
 20.26  professional, an owner or operator of a health care practice or 
 20.27  facility, any person who creates the impression that they or 
 20.28  their practice or facility can provide legal or health care 
 20.29  services, or any person employed or acting on behalf of any of 
 20.30  the aforementioned persons; 
 20.31     (2) "public media" means telephone directories, 
 20.32  professional directories, newspapers and other periodicals, 
 20.33  radio and television, billboards, and mailed or electronically 
 20.34  transmitted written communications that do not involve in-person 
 20.35  contact with a specific prospective client, patient, or 
 20.36  customer; and 
 21.1      (3) "runner," "capper," or "steerer" means a person who, 
 21.2   for a pecuniary benefit, procures or attempts to procure a 
 21.3   client, patient, or customer at the direction of, request of, or 
 21.4   in cooperation with a provider whose purpose is to seek to 
 21.5   obtain benefits under a contract of insurance or assert a claim 
 21.6   against an insured or an insurance carrier for providing 
 21.7   services to the client, patient, or customer.  Runner, capper, 
 21.8   or steerer shall not include a person who procures or attempts 
 21.9   to procure clients, patients, or customers for a provider 
 21.10  through public media. 
 21.11     Subd. 2.  [CRIME.] A person is guilty of unlawful 
 21.12  procurement of clients, patients, or customers when that person 
 21.13  knowingly acts as a runner, capper, or steerer or uses, 
 21.14  solicits, directs, hires, or employs another to act as a runner, 
 21.15  capper, or steerer. 
 21.16     Subd. 3.  [SENTENCING.] Whoever violates this section may 
 21.17  be sentenced to imprisonment for not more than: 
 21.18     (1) three years, or to payment of a fine of not more than 
 21.19  $5,000 for the first conviction; and 
 21.20     (2) five years, or to payment of a fine of not more than 
 21.21  $10,000 for any subsequent convictions.  
 21.22     Subd. 4.  [AGGREGATION.] When two or more offenses were 
 21.23  committed by the same person in two or more counties, the 
 21.24  accused may be prosecuted in any county in which one of the 
 21.25  offenses was committed for all the offenses aggregated under 
 21.26  this section. 
 21.27     Sec. 25.  [TRANSFER OF POWERS.] 
 21.28     Subdivision 1.  [FRAUD INVESTIGATION UNIT.] The powers and 
 21.29  duties of the department of labor and industry under Minnesota 
 21.30  Statutes, section 175.16, are transferred to the division of 
 21.31  insurance fraud prevention of the department of commerce.  The 
 21.32  provisions of Minnesota Statutes, section 15.039, apply to this 
 21.33  transfer of powers. 
 21.34     Subd. 2.  [AUTOMOBILE THEFT PREVENTION PROGRAM.] The powers 
 21.35  and duties of the commissioner of public safety under Minnesota 
 21.36  Statutes, section 299A.75, are transferred to the division of 
 22.1   insurance fraud prevention of the department of commerce.  The 
 22.2   provisions of Minnesota Statutes, section 15.039, apply to this 
 22.3   transfer of powers. 
 22.4      Sec. 26.  [REPEALER.] 
 22.5      Minnesota Statutes 2000, sections 175.16, subdivision 2; 
 22.6   and 299A.75, are repealed.