Minnesota Legislature
SF 4091
1st Engrossment - 91st Legislature (2019 - 2020) Posted on 05/16/2020 07:46am
Bill Text Versions
| Engrossments | Comparisons | ||
|---|---|---|---|
| Introduction | Posted on 03/05/2020 | ||
| 1st Engrossment | Posted on 04/30/2020 | compared with HF4055 1st Engrossment |
Current Version - 1st Engrossment
1.20 1.21
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A bill for an act
relating to commerce; making technical changes to various provisions governing
or administered by the Department of Commerce; modifying the Minnesota Life
and Health Insurance Guaranty Association Act; amending Minnesota Statutes
2018, sections 47.60, by adding a subdivision; 48A.11; 53.03, by adding a
subdivision; 53A.03; 53B.07, by adding a subdivision; 53C.01, subdivision 12;
53C.02; 56.02; 58.02, subdivision 21; 58.06, by adding a subdivision; 58A.02,
subdivision 13; 58A.13; 59A.03, by adding a subdivision; 60A.031, subdivision
4; 60A.07, subdivision 1d; 60A.16, subdivisions 1, 2; 60B.02; 61B.19, subdivisions
1, 2, 3, 4; 61B.20, subdivisions 10, 13, 16; 61B.21, subdivision 1; 61B.22,
subdivision 1; 61B.23, subdivisions 1, 3, 4, 8a, 12, 13, 14; 61B.24, subdivisions
3, 5, 6, 7, 8, 10; 61B.26; 61B.27; 61B.28, subdivisions 3, 3a, 4, 6, 7, 8; 62D.18,
subdivision 1; 82.68, subdivision 2; 82C.03, subdivision 2; 82C.06; 82C.15;
216C.437, subdivision 11; 297I.20, subdivision 1; 332.30; 332.54, subdivision 4,
by adding a subdivision; 332.57, subdivision 2; 332A.03; 332B.04, by adding a
subdivision; proposing coding for new law in Minnesota Statutes, chapter 61B;
repealing Minnesota Statutes 2018, sections 53B.27, subdivisions 3, 4; 60A.07,
subdivision 1a; 72B.14.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
COMMERCE PROVISIONS
Section 1.
Minnesota Statutes 2018, section 47.60, is amended by adding a subdivision
to read:
new text begin Subd. 7. new text end
new text begin Records and fees; maintenance and processing. new text end
new text begin
Section 58A.04, subdivisions
2 and 3, apply to this section.
new text end
Sec. 2.
Minnesota Statutes 2018, section 48A.11, is amended to read:
48A.11 NATIONAL BANKS AS FIDUCIARIES.
A national bank in this state granted a special permit to act in a fiduciary capacity by
either the Federal Reserve Board under subsection K of section 11 of the Federal Reserve
Act, as amended by the act of September 26, 1918, or the Office of the Comptroller of the
Currency under the provisions of United States Code, title 12, section 92a, may without
oath or security assign, transfer to, and deposit with the commissioner, the kinds and amounts
of authorized securities required by section 48A.03 of a bank or trust company in a city in
which the national bank is located. If the national bank has a capital of $500,000 or more,
it is not required to deposit these securities for more than the lesser ofnew text begin $1,000,000 ornew text end ten
percent of deleted text begin this capital or $1,000,000deleted text end new text begin the amount of assets the bank is acting in a fiduciary
capacity for at offices located in Minnesotanew text end . The securities so deposited must be held and
maintained as a guaranty fund for the national bank for the performance of its duties in this
fiduciary capacity.
When a national bank has complied with section 48A.03, no oath or security is required
of it to accept and perform the trust, as provided in section 48A.07, subdivision 4.
For purposes of this section, "bank" and "trust company" have the meanings given in
section 48A.09.
Sec. 3.
Minnesota Statutes 2018, section 53.03, is amended by adding a subdivision to
read:
new text begin Subd. 9. new text end
new text begin Records and fees; maintenance and processing. new text end
new text begin
Section 58A.04, subdivisions
2 and 3, apply to this section.
new text end
Sec. 4.
Minnesota Statutes 2018, section 53A.03, is amended to read:
53A.03 APPLICATION FOR LICENSE; FEES.
(a) An application for a license must be in writing, under oath, and in the form prescribed
and furnished by the commissioner and must contain the following:
(1) the full name and address (both of residence and place of business) of the applicant,
and if the applicant is a partnership or association, of every member, and the name and
business address if the applicant is a corporation;
(2) the county and municipality, with street and number, if any, of all currency exchange
locations operated by the applicant; and
(3) the applicant's occupation or profession, for the ten years immediately preceding the
application; present or previous connection with any other currency exchange in this or any
other state; whether the applicant has ever been convicted of any crime; and the nature of
the applicant's occupancy of the premises to be licensed; and if the applicant is a partnership
or a corporation, the information specified in this paragraph must be supplied for each
partner and each officer and director of the corporation. If the applicant is a partnership or
a nonpublicly held corporation, the information specified in this paragraph must be required
of each partner and each officer, director, and stockholders owning in excess of ten percent
of the corporate stock of the corporation.
(b) The application shall be accompanied by a nonrefundable fee of $1,000 for the review
of the initial application. Upon approval by the commissioner, an additional license fee of
$500 must be paid by the applicant as an annual license fee for the remainder of the calendar
year. An annual license fee of $500 is due for each subsequent calendar year of operation
upon submission of a license renewal application on or before September 1. Fees must be
deposited in the state treasury and credited to the general fund. Upon payment of the required
annual license fee, the commissioner shall issue a license for the year beginning January 1.
(c) The commissioner shall require the applicant to submit to a background investigation
conducted by the Bureau of Criminal Apprehension as a condition of licensure. As part of
the background investigation, the Bureau of Criminal Apprehension shall conduct criminal
history checks of Minnesota records and is authorized to exchange fingerprints with the
Federal Bureau of Investigation for the purpose of a criminal background check of the
national files. The cost of the investigation must be paid by the applicant.
new text begin
(d) Section 58A.04, subdivisions 2 and 3, apply to this section.
new text end
deleted text begin (d)deleted text end new text begin (e)new text end For purposes of this section, "applicant" includes an employee who exercises
management or policy control over the company, a director, an officer, a limited or general
partner, a manager, or a shareholder holding more than ten percent of the outstanding stock
of the corporation.
Sec. 5.
Minnesota Statutes 2018, section 53B.07, is amended by adding a subdivision to
read:
new text begin Subd. 6. new text end
new text begin Records and fees; maintenance and processing. new text end
new text begin
Section 58A.04, subdivisions
2 and 3, apply to this section.
new text end
Sec. 6.
Minnesota Statutes 2018, section 53C.01, subdivision 12, is amended to read:
Subd. 12.
Sales finance company.
"Sales finance company" means a person engaged,
in whole or in part, in the business of purchasing retail installment contracts new text begin entered into new text end in
this state from one or more retail sellers. The term includes a bank, trust company, or
industrial loan and thrift company, if so engaged. The term also includes a retail seller
engaged, in whole or in part, in the business of creating and holding retail installment
contracts. The term does not include the pledges of an aggregate number of the contracts
to secure a bona fide loan thereon.
Sec. 7.
Minnesota Statutes 2018, section 53C.02, is amended to read:
53C.02 SALES FINANCE COMPANY; LICENSE, FEES, REFUND.
(a) No person shall engage in the business of a sales finance company in this state without
a license therefor as provided in sections 53C.01 to 53C.14 provided, however, that no bank,
trust company, savings bank, savings association, or credit union, whether state or federally
chartered, industrial loan and thrift company, or licensee under the Minnesota Regulated
Loan Act authorized to do business in this state shall be required to obtain a license under
sections 53C.01 to 53C.14.
(b) The application for a license shall be in writing, under oath and in the form prescribed
by the commissioner. The application shall contain the name of the applicant; date of
incorporation, if incorporated; the address where the business is or is to be conducted and
similar information as to any branch office of the applicant; the name and resident address
of the owner or partners, or, if a corporation or association, of the directors, trustees and
principal officers, and other pertinent information the commissioner requires.
(c) The licensee fee for the fiscal year beginning July 1 and ending June 30 of the
following year, or any part thereof shall be the sum of $250 for the principal place of business
of the licensee, and the sum of $125 for each branch of the licenseedeleted text begin , maintained in this statedeleted text end .
Any licensee who proves to the satisfaction of the commissioner, by affidavit or other proof
satisfactory to the commissioner, that during the 12 calendar months of the immediately
preceding fiscal year, for which the license has been paid that the licensee has not held retail
installment contracts exceeding $15,000 in amount, shall be entitled to a refund of that
portion of each license fee paid in excess of $25. The commissioner shall certify to the
commissioner of management and budget that the licensee is entitled to a refund, and
payment thereof shall be made by the commissioner of management and budget. The amount
necessary to pay for the refundment of the license fee is appropriated out of the general
fund. All license fees received by the commissioner under sections 53C.01 to 53C.14 shall
be deposited with the commissioner of management and budget.
(d) Each license shall specify the location of the office or branch and must be
conspicuously displayed there. In case the location be changed, the commissioner shall
endorse the change of location on the license.
(e) Upon the filing of such application, and the payment of the fee, the commissioner
shall issue a license to the applicant to engage in the business of a sales finance company
under and in accordance with the provisions of sections 53C.01 to 53C.14 for a period which
shall expire the last day of June next following the date of its issuance. The license shall
not be transferable or assignable. No licensee shall transact any business provided for by
sections 53C.01 to 53C.14 under any other name.
new text begin
(f) Section 58A.04, subdivisions 2 and 3, apply to this section.
new text end
Sec. 8.
Minnesota Statutes 2018, section 56.02, is amended to read:
56.02 APPLICATION FEE.
new text begin (a) new text end Application for license shall be in writing, under oath, and in the form prescribed by
the commissioner, and contain the name and the address, both of the residence and place
of business, of the applicant and, if the applicant is a copartnership or association, of every
member thereof, and if a corporation, of each officer and director thereof; also the county
and municipality, with street and number, if any, where the business is to be conducted, and
such further information as the commissioner may require. The applicant at the time of
making application, shall pay to the commissioner the sum of $500 as a fee for investigating
the application, and the additional sum of $250 as an annual license fee for a period
terminating on the last day of the current calendar year. In addition to the annual license
fee, every licensee hereunder shall pay to the commissioner the actual costs of each
examination, as provided for in section 56.10. All moneys collected by the commissioner
under this chapter shall be turned over to the commissioner of management and budget and
credited by the commissioner of management and budget to the general fund of the state.
new text begin (b) new text end Every applicant shall also prove, in form satisfactory to the commissioner, that the
applicant has available for the operation of the business at the location specified in the
application, liquid assets of at least $50,000.
new text begin
(c) Section 58A.04, subdivisions 2 and 3, apply to this section.
new text end
Sec. 9.
Minnesota Statutes 2018, section 58.02, subdivision 21, is amended to read:
Subd. 21.
Residential real deleted text begin property; residential realdeleted text end estate.
deleted text begin
"Residential real property"
or "residential real estate" means real property improved or intended to be improved by a
structure designed principally for the occupancy of from one to four families, whether or
not the owner occupies the real property.
deleted text end
new text begin
"Residential real estate" means real property
located in Minnesota upon which a dwelling is constructed or is intended to be constructed,
whether or not the owner occupies the real property.
new text end
Sec. 10.
Minnesota Statutes 2018, section 58.06, is amended by adding a subdivision to
read:
new text begin Subd. 4. new text end
new text begin Records and fees; maintenance and processing. new text end
new text begin
Section 58A.04, subdivisions
2 and 3, apply to this section.
new text end
Sec. 11.
Minnesota Statutes 2018, section 58A.02, subdivision 13, is amended to read:
Subd. 13.
Residential mortgage loan.
"Residential mortgage loan" means a loan
primarily for personal, family, or household use that is secured by a mortgage, deed of trust,
or other equivalent consensual security interest on a dwelling, as defined in United States
Code, title 15, section 1602deleted text begin (v)deleted text end new text begin (w)new text end , or residential real estate upon which a dwelling is
constructed or intended to be constructed.
Sec. 12.
Minnesota Statutes 2018, section 58A.13, is amended to read:
58A.13 SURETY BOND REQUIRED.
Subdivision 1.
Coverage, form, and rules.
(a) Each mortgage loan originator must be
covered by a surety bond meeting the requirements of deleted text begin thisdeleted text end sectionnew text begin 58.08new text end . In the event that
the mortgage loan originator is an employee or exclusive agent of a person subject to this
chapter, the surety bond of the person subject to this chapter can be used in lieu of the
mortgage loan originator's surety bond requirement.
(b) The surety bond shall provide coverage for each mortgage loan originator in an
amount as prescribed in subdivision 2.
(c) The surety bond must be in a form as prescribed by the commissioner.
Subd. 2.
Penal sum of surety bond.
The penal sum of the surety bond must be maintained
in deleted text begin andeleted text end new text begin thenew text end amount that reflects the dollar amount of loans originated as determined deleted text begin by the
commissionerdeleted text end new text begin under section 58.08, subdivision 1a, paragraph (c)new text end .
Subd. 3.
Action on bond.
When an action is commenced on a licensee'snew text begin residential
mortgage originatornew text end bondnew text begin ,new text end the commissioner may require the filing of a new bond.
Subd. 4.
New bond.
Immediately upon recovery upon any action on the bondnew text begin ,new text end the deleted text begin licenseedeleted text end new text begin
residential mortgage originatornew text end shall file a new bond.
Sec. 13.
Minnesota Statutes 2018, section 59A.03, is amended by adding a subdivision to
read:
new text begin Subd. 4. new text end
new text begin Records and fees; maintenance and processing. new text end
new text begin
Section 58A.04, subdivisions
2 and 3, apply to this section.
new text end
Sec. 14.
Minnesota Statutes 2018, section 60A.031, subdivision 4, is amended to read:
Subd. 4.
Examination report; foreign and domestic companies.
(a) The commissioner
shall make a full and true report of every examination conducted pursuant to this chapter,
which shall include (1) a statement of findings of fact relating to the financial status and
other matters ascertained from the books, papers, records, documents, and other evidence
obtained by investigation and examination or ascertained from the testimony of officers,
agents, or other persons examined under oath concerning the business, affairs, assets,
obligations, ability to fulfill obligations, and compliance with all the provisions of the law
of the company, applicant, organization, or person subject to this chapter and (2) a summary
of important points noted in the report, conclusions, recommendations and suggestions as
may reasonably be warranted from the facts so ascertained in the examinations. The report
of examination shall be verified by the oath of the examiner in charge thereof, and shall be
prima facie evidence in any action or proceedings in the name of the state against the
company, applicant, organization, or person upon the facts stated therein.
(b) No later than 60 days following completion of the examination, the examiner in
charge shall file with the department a verified written report of examination under oath.
Upon receipt of the verified report, the department shall transmit the report to the company
examined, together with a notice which provides the company examined with a reasonable
opportunity of not more than 30 days to make a written submission or rebuttal with respect
to matters contained in the examination report.
(c) Within 30 days of the end of the period allowed for the receipt of written submissions
or rebuttals, the commissioner shall fully consider and review the report, together with the
written submissions or rebuttals and the relevant portions of the examiner's work papers
and enter an order:
(1) adopting the examination report as filed or with modification or corrections. If the
examination report reveals that the company is operating in violation of any law, rule, or
prior order of the commissioner, the commissioner may order the company to take any
action the commissioner considers necessary and appropriate to cure the violation;
(2) rejecting the examination report with directions to the examiners to reopen the
examination for purposes of obtaining additional data, documentation, or information, and
refiling the report as required under paragraph (b); or
(3) calling for an investigatory hearing with no less than 20 days' notice to the company
for purposes of obtaining additional documentation, data, information, and testimony.
(d)(1) All orders entered under paragraph (c), clause (1), must be accompanied by
findings and conclusions resulting from the commissioner's consideration and review of
the examination report, relevant examiner work papers, and any written submissions or
rebuttals. The order is a final administrative decision and may be appealed as provided
under chapter 14. The order must be served upon the company by certified mail, together
with a copy of the adopted examination report. Within 30 days of the issuance of the adopted
report, the company shall file affidavits executed by each of its directors stating under oath
that they have received a copy of the adopted report and related orders.
(2) A hearing conducted under paragraph (c), clause (3), by the commissioner or
authorized representative, must be conducted as a nonadversarial confidential investigatory
proceeding as necessary for the resolution of inconsistencies, discrepancies, or disputed
issues apparent upon the face of the filed examination report or raised by or as a result of
the commissioner's review of relevant work papers or by the written submission or rebuttal
of the company. Within 20 days of the conclusion of the hearing, the commissioner shall
enter an order as required under paragraph (c), clause (1).
(3) The commissioner shall not appoint an examiner as an authorized representative to
conduct the hearing. The hearing must proceed expeditiously. Discovery by the company
is limited to the examiner's work papers which tend to substantiate assertions in a written
submission or rebuttal. The commissioner or the commissioner's representative may issue
subpoenas for the attendance of witnesses or the production of documents considered relevant
to the investigation whether under the control of the department, the company, or other
persons. The documents produced must be included in the record. Testimony taken by the
commissioner or the commissioner's representative must be under oath and preserved for
the record.
This section does not require the department to disclose information or records which
would indicate or show the existence or content of an investigation or activity of a criminal
justice agency.
(4) The hearing must proceed with the commissioner or the commissioner's representative
posing questions to the persons subpoenaed. Thereafter, the company and the department
may present testimony relevant to the investigation. Cross-examination may be conducted
only by the commissioner or the commissioner's representative. The company and the
department shall be permitted to make closing statements and may be represented by counsel
of their choice.
(e)(1) Upon the adoption of the examination report under paragraph (c), clause (1), the
commissioner shall continue to hold the content of the examination report as private and
confidential information for a period of 30 days except as otherwise provided in paragraph
(b). Thereafter, the commissioner may open the report for public inspection if a court of
competent jurisdiction has not stayed its publication.
(2) Nothing contained in this subdivision prevents or shall be construed as prohibiting
the commissioner from disclosing the content of an examination report, preliminary
examination report or results, or any matter relating to the reports, to the Commerce
Department or the insurance department of another state or country, or to law enforcement
officials of this or another state or agency of the federal government at any time, if the
agency or office receiving the report or matters relating to the report agrees in writing to
hold it confidential and in a manner consistent with this subdivision.
(3) If the commissioner determines that regulatory action is appropriate as a result of an
examination, the commissioner may initiate proceedings or actions as provided by law.
(f) All working papers, new text begin scheduling orders, new text end recorded information, documents and copies
thereof produced by, obtained by, or disclosed to the commissioner or any other person in
the course of an examination made under this subdivision, or in the course of market analysis,
new text begin including documents related to scheduling conferences, new text end must be given confidential treatment
and are not subject to subpoena and may not be made public by the commissioner or any
other person, except to the extent provided in paragraph (e). Access may also be granted to
the National Association of Insurance Commissioners (NAIC), the Financial Industry
Regulatory Authority, and any national securities association registered under the Securities
Exchange Act of 1934. The parties must agree in writing prior to receiving the information
to provide to it the same confidential treatment as required by this section, unless the prior
written consent of the company to which it pertains has been obtained. For purposes of this
section, "market analysis" means a process whereby market conduct surveillance personnel
collect and analyze information from filed schedules, surveys, required reports, such as the
NAIC Market Conduct Annual Statement, or other sources in order to develop a baseline
profile of an insurer, to review the operation or activity of an insurer, or to identify patterns
or practices of insurers licensed to do business in this state that deviate significantly from
the norm or that may pose a potential risk to the insurance consumer.
(g) Information in the possession or control of, or obtained or disclosed to, the
commissioner in the course of, or derived from, market analysis, as defined in paragraph
(f), by an insurance company new text begin and any scheduling order, supplement to a scheduling order,
or document related to a scheduling conference required under section 60A.033 new text end is:
(1) subject to confidential treatment as provided under paragraph (f); and
(2) not subject to subpoena or other discovery nor admissible in evidence in a private
civil action. Neither the commissioner nor any person who received information while acting
under the authority of the commissioner is permitted or required to testify in a private civil
action concerning the information. Nothing in this paragraph limits the ability of the
commissioner to use the information in furtherance of an action brought by the commissioner.
(h) Requests for information issued by the commissioner to an insurance company in
the course of a market analysis, as defined in paragraph (f), must be issued under the
commissioner's authority as provided in this section.
(i) Notwithstanding paragraph (h), the commissioner may request information from an
insurance company pursuant to the commissioner's authority under section 45.027,
subdivision 1a or 2, if:
(1) the request for information is in connection with an unresolved consumer complaint;
or
(2) there is an imminent risk of significant harm to a consumer.
(j) Requests for information from the commissioner to an insurance company under
paragraph (i) are not subject to section 60A.033.
Sec. 15.
Minnesota Statutes 2018, section 60A.07, subdivision 1d, is amended to read:
Subd. 1d.
Certificate of incorporation; amendments.
The certificate of incorporation
of an insurance corporation organized and existing under the laws of this state may be
amended in the manner set forth in section 302A.135. deleted text begin Amendments must be filed with the
secretary of state in the manner set forth in section 302A.151, except the secretary of state
may not accept a certificate of filing unless the certificate also contains the endorsement of
the commissioner of commerce.deleted text end new text begin Amendments are effective upon the commissioner's approval.
new text end
Sec. 16.
Minnesota Statutes 2018, section 60A.16, subdivision 1, is amended to read:
Subdivision 1.
Scope.
(1) Domestic insurance corporations. Any two or more domestic
insurance corporations, formed for any of the purposes for which stock, mutual, or stock
and mutual insurance corporations, or reciprocal or interinsurance contract exchanges might
be formed under the laws of this state, may be
(a) merged into one of such domestic insurance corporations, or
(b) consolidated into a new insurance corporation to be formed under the laws of this
state.
(2) Domestic and foreign insurance corporations. Any such domestic insurance
corporations and any foreign insurance corporations formed to carry on any insurance
business for the conduct of which an insurance corporation might be organized under the
laws of this state, may be
(a) merged into one of such domestic insurance corporations, or
(b) merged into one of such foreign insurance corporations, or
(c) deleted text begin consolidated into a new insurance corporation to be formed under the laws of this
state, or
deleted text end
deleted text begin (d)deleted text end consolidated into a new insurance corporation to be formed under the laws of the
government under which one of such foreign insurance corporations was formed, provided
that each of such foreign insurance corporations is authorized by the laws of the government
under which it was formed to effect such merger or consolidation.
Sec. 17.
Minnesota Statutes 2018, section 60A.16, subdivision 2, is amended to read:
Subd. 2.
Procedure to be followed.
(1) Plan of merger. The merger or consolidation
of insurance corporations can be effected only as a result of a plan of merger adopted,
approved, and filed as follows:
(a) A resolution containing the plan of merger shall be approved by the affirmative vote
of a majority of the directors of the board of each constituent corporation. The plan of merger
shall prescribe the terms and conditions of merger or consolidation, and the mode of carrying
the same into effect, with such other details and provisions as are deemed necessary. In the
case of merging or consolidating stock insurance corporations or stock and mutual insurance
corporations, such plan of merger may prescribe that stock of one or more of such
corporations shall be converted, in whole or in part, into stock or other securities of a
corporation which is not a merging or consolidating corporation or into cash.
(b) The plan of merger, or a summary of the plan approved by the commissioner, shall
be submitted to the respective shareholders or members, as the case may be, of each
constituent corporation, for consideration at a regular meeting or at a special meeting duly
called for the purpose of considering and acting upon the plan. Written notice of the meeting,
which shall state that the purpose of the meeting is to consider the proposed plan of merger,
shall be given to each shareholder or member entitled to vote upon the plan of merger not
less than 30 nor more than 60 days before the meeting. The plan of merger must be approved
by the affirmative vote of the holders of two-thirds of the voting power of the shareholders
or members present or represented at the meeting of each constituent corporation; provided,
however, that in the case of a merger, except one in which any shares of the surviving
insurance corporation are to be converted into shares or other securities of another corporation
or into cash, the agreement need not be submitted to the shareholders or members of that
one of the insurance corporations into which it has been agreed the others shall be merged.
Upon receiving the approval of the shareholders or members of each constituent corporation,
articles of merger shall be prepared that contain the plan of merger and a statement that the
plan has been approved by each corporation under this section.
(c) The articles of mergernew text begin and plan of mergernew text end shall be delivered to the commissioner of
commerce, who, if the plan of merger is reasonable and if the provisions thereof providing
for any transfer of assets and assumption of liabilities are fair and equitable to the claimants
and policyholders, shall deleted text begin place a certificate of approval on the articles ofdeleted text end new text begin issue an order
approving thenew text end merger deleted text begin and shall file the articles in the commissioner's office, anddeleted text end new text begin .new text end Copies of
the articlesnew text begin of mergernew text end , certified by the commissioner of commerce, shall be deleted text begin filed for record
in the Office of the Secretary of State anddeleted text end delivered to the surviving corporation or its legal
representative.
(2) Articles of incorporation of new company. (a) If the plan of merger is for a
consolidation into a new insurance corporation to be formed under any law or laws of this
state, articles of incorporation for such new insurance corporation shall be prepared and
delivered to the commissioner of commerce together with the articles of merger as provided
in clause (1) hereof.
(b) Such articles shall be prepared, executed, approved, filed and recorded in the form
and manner prescribed in, or applicable to, the particular law or laws under which the new
insurance corporation is to be formed.
(3) Abandonment. A proposed merger or consolidation may be abandoned at any time
prior to approval by the commissioner under the provision for abandonment, if any, set forth
in the plan of merger.
(4) Mutual insurance holding companies. In the case of a merger of two mutual
insurance holding companies under section 66A.40, subdivision 2, paragraph (c), the
procedures set forth in subdivisions 1, 2, 3, 4, and 6 shall apply, subject to the following:
(a) the plan of merger must be fair and reasonable to the members of each constituent
corporation;
(b) no member of either constituent corporation on the effective date of the merger shall
lose membership solely on account of the merger;
(c) membership and voting rights in each respective constituent corporation for purposes
of the meeting of the members held to consider the plan of merger shall be determined in
accordance with the articles and bylaws of that constituent corporation as of a record date
established in the plan of merger; and
(d) the commissioner may require changes to the plan or require certain undertakings
from the surviving corporation to assure compliance with this clause.
Sec. 18.
Minnesota Statutes 2018, section 82.68, subdivision 2, is amended to read:
Subd. 2.
Financial interests disclosure; licensee.
(a) Before the negotiation or
consummation of any transaction, a licensee shall affirmatively disclose to the owner of
real property that the licensee is a real estate broker or agent salesperson, and in what capacity
the licensee is acting, if the licensee directly, or indirectly through a third party, purchases
for himself or herself or acquires, or intends to acquire, any interest in, or any option to
purchase, the owner's property.
(b) When a principal in the transaction is a licensee or a relative or business associate
of the licensee, that fact must be disclosed in writingnew text begin before negotiating or consummating
any transactionnew text end .
Sec. 19.
Minnesota Statutes 2018, section 82C.03, subdivision 2, is amended to read:
Subd. 2.
Owner requirements.
(a) An appraisal management company applying to the
commissioner for a license in this state deleted text begin maydeleted text end new text begin mustnew text end not be deleted text begin more than ten percentdeleted text end owned by
any person that is currently subject to any cease and desist order or injunctive order that
would preclude involvement with an appraisal management company, or that has ever:
(1) voluntarily surrendered in lieu of disciplinary action an appraiser certification,
registration or license, or an appraisal management company license;
(2) been the subject of a final order revoking or denying an appraiser certification,
registration or license, or an appraisal management company license; or
(3) a final order barring involvement in any industry or profession issued by this or
another state or federal regulatory agency.
(b) A person that owns more than ten percent of an appraisal management company in
this state shall:
(1) be of good moral character, as determined by the commissioner;
(2) submit to a background investigation, as determined by the commissioner; and
(3) certify to the commissioner that the person has never been the subject of an order of
certificate, registration or license suspension, revocation, or denial; cease and desist order;
injunctive order; or order barring involvement in an industry or profession issued by this
or another state or federal regulatory agency.
Sec. 20.
Minnesota Statutes 2018, section 82C.06, is amended to read:
82C.06 EXEMPTIONS.
This chapter does not apply to:
(1) a person that exclusively employs appraisers on an employer and employee basis
for the performance of appraisals, and:
(i) the employer is responsible for ensuring that the appraisals are performed by
employees in accordance with USPAP; and
(ii) the employer accepts all liability associated with the performance of the appraisal
by the employee;
(2) a department or unit within a financial institution that is subject to direct regulation
by an agency of the United States government, or to regulation by an agency of this state,
that receives a request for the performance of an appraisal from one employee of the financial
institution, and another employee of the same financial institution assigns the request for
the appraisal to an appraiser that is an independent contractor to the institution, except that
an appraisal management company that is a wholly owned subsidiary of a financial institution
deleted text begin shall not bedeleted text end new text begin isnew text end considered a department or unit within a financial institution to which the
provisions of this chapter do not apply;
(3) a person that enters into an agreement, whether written or otherwise, with an appraiser
for the performance of an appraisal, and upon the completion of the appraisal, the report of
the appraiser performing the appraisal is signed by both the appraiser who completed the
appraisal and the appraiser who requested the completion of the appraisal, except that an
appraisal management company may not avoid the requirements of this chapter by requiring
that an employee of the appraisal management company that is an appraiser to sign an
appraisal that is completed by an appraiser that is part of the appraisal panel of the appraisal
management company; or
(4) any governmental agency performing appraisals on behalf of that level of government
or any agency performing ad valorem tax appraisals for county assessors.
Sec. 21.
Minnesota Statutes 2018, section 82C.15, is amended to read:
82C.15 ADJUDICATION OF DISPUTES BETWEEN AN APPRAISAL
MANAGEMENT COMPANY AND AN INDEPENDENT APPRAISER.
deleted text begin Except within the first 30 days after an independent appraiser is first added to the
appraiser panel of an appraisal management company,deleted text end An appraisal management company
may not remove an appraiser from its appraiser panel, or otherwise refuse to assign requests
for real estate appraisal services to an independent appraiser without:
(1) notifying the appraiser in writing of the reasons why the appraiser is being removed
from the appraiser panel or is not receiving appraisal requests from the appraisal management
company;
(2) if the appraiser is being removed from the panel for illegal conduct, having determined
that the appraiser has violated USPAP, or chapter 82B, taking into account the nature of
the alleged conduct or violation; and
(3) providing an opportunity for the appraiser to respond and appeal the notification of
the appraisal management company.
Sec. 22.
Minnesota Statutes 2018, section 216C.437, subdivision 11, is amended to read:
Subd. 11.
Powers of the commissioner.
(a) The commissioner has under this section
the same powers the commissioner has under section 45.027, including the authority to
impose a civil penalty not to exceed $10,000 per violation.
(b) The commissioner may condition or refuse to renew a license for any of the reasons
the commissioner may deny, suspend, or revoke a license.
(c) The commissioner may order restitution against persons subject to this section for
violations of this section.
(d) The commissioner may issue orders or directives under this section as follows:
(1) order or direct persons subject to this chapter to cease and desist from conducting
business, including immediate temporary orders to cease and desist;
(2) order or direct persons subject to this chapter to cease any harmful activities or
violations of this chapter, including immediate temporary orders to cease and desist;
(3) enter immediate temporary orders to cease business under a license if the
commissioner determines that the license was erroneously granted or the licensee is currently
in violation of this chapter; and
(4) order or direct other affirmative action the commissioner considers necessary.
(e) Each violation or failure to comply with any directive or order of the commissioner
is a separate and distinct violation or failure.
new text begin
(f) Section 58A.04, subdivisions 2 and 3, apply to this section.
new text end
Sec. 23.
Minnesota Statutes 2018, section 332.30, is amended to read:
332.30 ACCELERATED MORTGAGE PAYMENT PROVIDER; BOND
REQUIREMENTS.
(a) Before beginning business in this state, an accelerated mortgage payment provider,
as defined in section 332A.02, subdivision 8, clause (9), shall submit to the commissioner
of commerce an authorization fee of $250 and either:
(1) a surety bond in which the accelerated mortgage payment provider is the obligor, in
an amount determined by the commissioner; or
(2) if the commissioner agrees to accept it, a deposit:
(i) in cash in an amount equivalent to the bond amount; or
(ii) of authorized securities, as defined in section 50.14, with an aggregate market value
equal to the bond amount. The cash or securities must be deposited with the commissioner
of management and budget.
(b) The amount of the bond required by the commissioner shall vary with the amount
of Minnesota client funds held or to be held by the obligor. For new businesses, the bond
must be no less than $100,000, except as provided in section 332.301. The commissioner
may increase the required bond amount upon 30 days' notice to the accelerated mortgage
payment provider.
(c) If a bond is submitted, it must name as surety an insurance company authorized to
transact fidelity and surety business in this state. The bond must run to the state of Minnesota
for the use of the state and of any person who may have a claim against the obligor arising
out of the obligor's activities as an accelerated mortgage payment provider. The bond must
be conditioned that the obligor will not commit any fraudulent act and will faithfully conform
to and abide by the provisions of accelerated mortgage payment agreements with Minnesota
residents.
new text begin (d) new text end If an accelerated mortgage payment provider has failed to account to a mortgagor
or distribute funds to the mortgagee as required by an accelerated mortgage payment
agreement, the mortgagor or the mortgagor's legal representative or receiver or the
commissioner shall have, in addition to any other legal remedies, a right of action in the
name of the debtor on the bond or the security given pursuant to this section.
new text begin
(e) Section 58A.04, subdivisions 2 and 3, apply to this section.
new text end
Sec. 24.
Minnesota Statutes 2018, section 332.54, subdivision 4, is amended to read:
Subd. 4.
Update of information.
The credit services organization must update the
registration statement required under this section not later than deleted text begin 90deleted text end new text begin 30new text end days after the date
from which a change in the information required in the statement occurs.
Sec. 25.
Minnesota Statutes 2018, section 332.54, is amended by adding a subdivision to
read:
new text begin Subd. 8. new text end
new text begin Records and fees; maintenance and processing. new text end
new text begin
Section 58A.04, subdivisions
2 and 3, apply to this section.
new text end
Sec. 26.
Minnesota Statutes 2018, section 332.57, subdivision 2, is amended to read:
Subd. 2.
Contents.
The disclosure statement required under subdivision 1 must be printed
in boldface and in at least 10-point type and must include the following statement:
"CONSUMER CREDIT FILE RIGHTS UNDER MINNESOTA AND FEDERAL LAW
deleted text begin
You have a right to obtain a copy of your credit report from a credit bureau. You may
be charged a reasonable fee. There is no fee, however, if you have been turned down for
credit, employment, insurance, or a rental dwelling because of information in your credit
report within the preceding 30 days. The credit bureau must provide someone to help you
interpret the information in your credit file.
deleted text end
deleted text begin
You have a right to dispute inaccurate information by contacting the credit bureau
directly. However, neither you nor any "credit repair" company or credit services organization
has the right to have accurate, current, and verifiable information removed from your credit
bureau report. Under the federal Fair Credit Reporting Act, the credit bureau must remove
accurate, negative information from your report only if it is over seven years old. Bankruptcy
can be reported for ten years.
deleted text end
deleted text begin
You have a right to sue a credit repair company that violates Minnesota's Credit Services
Organization Act. This law prohibits deceptive practices by credit repair companies and
gives you a right to cancel your contract for any reason within five working days from the
date you signed it.
deleted text end
deleted text begin
Credit bureaus are required to follow reasonable procedures to ensure that creditors
report information accurately. However, mistakes may occur.
deleted text end
deleted text begin
You may, on your own, notify a credit bureau in writing that you dispute the accuracy
of information in your credit file. The credit bureau must then reinvestigate and modify or
remove inaccurate information. The credit bureau may not charge any fee for this service.
Any pertinent information and copies of any documents you have concerning an error should
be given to the credit bureau.
deleted text end
deleted text begin
If reinvestigation does not resolve the dispute to your satisfaction, you may send a brief
statement to the credit bureau to keep in your file, explaining why you think the record is
inaccurate. The credit bureau must include your statement about disputed information with
any reports it issues about you."
deleted text end
new text begin
You have a right to dispute inaccurate information in your credit report by contacting
the credit bureau directly. However, neither you nor any 'credit repair' company or credit
repair organization has the right to have accurate, current, and verifiable information removed
from your credit report. The credit bureau must remove accurate, negative information from
your report only if it is over seven years old. Bankruptcy information can be reported for
ten years.
new text end
new text begin
You have a right to obtain a copy of your credit report from a credit bureau. You may
be charged a reasonable fee. There is no fee, however, if you have been turned down for
credit, employment, insurance, or a rental dwelling because of information in your credit
report within the preceding 60 days. The credit bureau must provide assistance to help you
interpret the information in your credit file. You are entitled to receive a free copy of your
credit report if you are unemployed and intend to apply for employment in the next 60 days,
if you are a recipient of public welfare assistance, or if you have reason to believe that there
is inaccurate information in your credit report due to fraud.
new text end
new text begin
You have a right to sue a credit repair ORGANIZATION that violates the Credit Repair
Organization Act. This law prohibits deceptive practices by credit repair organizations.
new text end
new text begin
You have the right to cancel your contract with any credit repair organization for any
reason within three business days of the date you signed it.
new text end
new text begin
Credit bureaus are required to follow reasonable procedures to ensure that the information
they report is accurate. However, mistakes may occur.
new text end
new text begin
You may, on your own, notify a credit bureau in writing that you dispute the accuracy
of information in your credit file. The credit bureau must then reinvestigate and modify or
remove inaccurate or incomplete information. The credit bureau is prohibited from charging
any fee for this service. Any pertinent information and copies of all documents you have
concerning an error should be given to the credit bureau.
new text end
new text begin
If the credit bureau's reinvestigation does not resolve the dispute to your satisfaction,
you may send a brief statement to the credit bureau, to be kept in your file, explaining why
you think the record is inaccurate. The credit bureau must include a summary of your
statement about disputed information with any report it issues about you."
new text end
Sec. 27.
Minnesota Statutes 2018, section 332A.03, is amended to read:
332A.03 REQUIREMENT OF REGISTRATION.
new text begin (a) new text end On or after August 1, 2007, it is unlawful for any person, whether or not located in
this state, to operate as a debt management services provider or provide debt management
services, including but not limited to offering, advertising, or executing or causing to be
executed any debt management services or debt management services agreement, except
as authorized by law without first becoming registered as provided in this chapter. A person
who possesses a valid license as a debt prorater that was issued by the commissioner before
August 1, 2007, is deemed to be registered as a debt management services provider until
the date the debt prorater license expires, at which time the licensee must obtain a renewal
as a debt management services provider in compliance with this chapter. Debt proraters
who were not required to be licensed as debt proraters before August 1, 2007, may continue
to provide debt management services without complying with this chapter to those debtors
who entered into a contract to participate in a debt management plan before August 1, 2007,
except that the debt prorater must comply with section 332A.13, subdivision 2.
new text begin
(b) Section 58A.04, subdivisions 2 and 3, apply to this section.
new text end
Sec. 28.
Minnesota Statutes 2018, section 332B.04, is amended by adding a subdivision
to read:
new text begin Subd. 8. new text end
new text begin Records and fees; maintenance and processing. new text end
new text begin
Section 58A.04, subdivisions
2 and 3, apply to this section.
new text end
Sec. 29. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2018, sections 53B.27, subdivisions 3 and 4; 60A.07, subdivision
1a; and 72B.14,
new text end
new text begin
are repealed.
new text end
ARTICLE 2
LIFE AND HEALTH INSURANCE GUARANTEE ACT AMENDMENTS
Section 1.
Minnesota Statutes 2018, section 60B.02, is amended to read:
60B.02 PERSONS COVERED.
The proceedings authorized by sections 60B.01 to 60B.61 may be applied to:
(1) all insurers who are doing, or have done, an insurance business in this state, and
against whom claims arising from that business may exist now or in the future;
(2) all insurers who purport to do an insurance business in this state;
(3) all insurers who have insureds resident in this state;
(4) all other persons organized or in the process of organizing with the intent to do an
insurance business in this state; and
(5) all nonprofit service plan corporations incorporated or operating under the Nonprofit
Health Service Plan Corporation Act,new text begin all health maintenance organizations operating under
chapter 62D,new text end any health plan incorporated under chapter 317A, all fraternal benefit societies
operating under chapter 64B, except those associations enumerated in section 64B.38, all
township mutual or other companies operating under chapter 67A, and all reciprocals or
interinsurance exchanges operating under chapter 71A.
Sec. 2.
Minnesota Statutes 2018, section 61B.19, subdivision 1, is amended to read:
Subdivision 1.
Purpose.
(a) The purpose of sections 61B.18 to 61B.32 is to protect,
subject to certain limitations, the persons specified in subdivision 2 against failure in the
performance of contractual obligationsdeleted text begin ,deleted text end under life deleted text begin insurance policiesdeleted text end , health deleted text begin insurance
policiesdeleted text end , new text begin and new text end annuity new text begin policies or new text end contracts, and new text begin the new text end supplemental contracts specified in
subdivision 2, because of the impairment or insolvency of the member insurer that issued
the policies or contracts.
(b) To provide this protection, an association ofnew text begin membernew text end insurers has been created and
exists to pay benefits and to continue coverages, as limited in sections 61B.18 to 61B.32.
Members of the association are subject to assessment to provide funds to carry out the
purpose of sections 61B.18 to 61B.32.
Sec. 3.
Minnesota Statutes 2018, section 61B.19, subdivision 2, is amended to read:
Subd. 2.
Scope.
(a) Sections 61B.18 to 61B.32 provide coverage for the policies and
contracts specified in paragraph (b) to:
(1) persons who are owners deleted text begin of ordeleted text end new text begin ,new text end certificate holdersnew text begin , or enrolleesnew text end under these policies
or contracts, or, (i) in the case of unallocated annuity contracts, to the persons who are
participants in a covered retirement plan, or (ii) in the case of structured settlement annuities,
to persons who are payees in respect of their liability claims (or beneficiaries of such payees
who are deceased) and who:
(A) are residents; or
(B) are not residents, but only under all of the following conditions: the new text begin member new text end insurers
that issued the policies or contracts are domiciled in the state of Minnesota; those insurers
never held a license or certificate of authority in the states in which those persons reside;
those states have associations similar to the association created by sections 61B.18 to 61B.32;
and those persons are not eligible for coverage by those associations; and
(2) persons who, regardless of where they reside, except for nonresident certificate
holders under group policies or contracts, are the beneficiaries, assignees, or payees of the
persons covered under clause (1).new text begin This includes health care providers rendering services
covered by a health insurance policy or contract.
new text end
(b) Sections 61B.18 to 61B.32 provide coverage to the persons specified in paragraph
(a) for direct, nongroup lifenew text begin insurancenew text end , healthnew text begin insurancenew text end , annuity, and supplemental policies
or contracts, for subscriber contracts issued by a nonprofit health service plan corporation
operating under chapter 62C, new text begin for health maintenance contracts issued by a health maintenance
organization under chapter 62D, new text end for certificates under direct group policies and contracts,
and for unallocated annuity contracts issued by member insurers, except as limited by
sections 61B.18 to 61B.32. Except as expressly excluded under subdivision 3, annuity
contracts and certificates under group annuity contracts include, but are not limited to,
guaranteed investment contracts, deposit administration contracts, unallocated funding
agreements, allocated funding agreements, structured settlement annuities, annuities issued
to or in connection with government lotteries, and any immediate or deferred annuity
contracts. Covered unallocated annuity contracts include those that fund a qualified defined
contribution retirement plan under sections 401, 403(b), and 457 of the Internal Revenue
Code of 1986, as amended through December 31, 1992.
Sec. 4.
Minnesota Statutes 2018, section 61B.19, subdivision 3, is amended to read:
Subd. 3.
Limitation of coverage.
Sections 61B.18 to 61B.32 do not provide coverage
for:
(1) a portion of a policy or contract not guaranteed by the new text begin member new text end insurer, or under
which the investment risk is borne by the policy or contract holder;
(2) a policy or contract of reinsurance, unless assumption certificates have been issued
and the insured has consented to the assumption as provided under section 60A.09,
subdivision 4a;
(3) a policy or contract issued by an assessment benefit association operating under
section 61A.39, or a fraternal benefit society operating under chapter 64B;
(4) any obligation to nonresident participants of a covered retirement plan or to the plan
sponsor, employer, trustee, or other party who owns the contract; in these cases, the
association is obligated under this chapter only to participants in a covered plan who are
residents of the state of Minnesota on the date of impairment or insolvency;
(5) a structured settlement annuity in situations where a liability insurer remains liable
to the payee;
(6) a portion of an unallocated annuity contract which is not issued to or in connection
with a specific employee, union, or association of natural persons benefit plan or a
governmental lottery, including but not limited to, a contract issued to, or purchased at the
direction of, any governmental bonding authority, such as a municipal guaranteed investment
contract;
(7) a portion of a policy or contract issued to a plan or program of an employer,
association, or similar entity to provide life, health, or annuity benefits to its employees or
members to the extent that the plan or program is self-funded or uninsured, including benefits
payable by an employer, association, or similar entity under:
(i) a multiple employer welfare arrangement as defined in the Employee Retirement
Income Security Act of 1974, United States Code, title 29, section 1002(40)(A), as amended;
(ii) a minimum premium group insurance plan;
(iii) a stop-loss group insurance plan; or
(iv) an administrative services only contract;
(8) any policy or contract issued by an insurer at a time when it was not licensed or did
not have a certificate of authority to issue the policy or contract in this state;
(9) an unallocated annuity contract issued to or in connection with a benefit plan protected
under the federal Pension Benefit Guaranty Corporation, regardless of whether the federal
Pension Benefit Guaranty Corporation has yet become liable to make any payments with
respect to the benefit plan;
(10) a portion of a policy or contract to the extent that it provides for (i) dividends or
experience rating credits except to the extent the dividends or experience rating credits have
actually become due and payable or have been credited to the policy or contract before the
date of impairment or insolvency, (ii) voting rights, or (iii) payment of any fees or allowances
to any person, including the policy or contract holder, in connection with the service to, or
administration of, the policy or contract;
(11) a contractual agreement that establishes the member insurer's obligations to provide
a book value accounting guaranty for defined contribution benefit plan participants by
reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in
each case is not an affiliate of the member insurer;
(12) a portion of a policy or contract to the extent that the rate of interest on which it is
based, or the interest rate, crediting rate, or similar factor determined by use of an index or
other external reference stated in the policy or contract, employed in calculating returns or
changes in value:
(i) averaged over the period of four years prior to the date on which the member insurer
becomes an impaired or insolvent insurer under sections 61B.18 to 61B.32, whichever is
earlier, exceeds the rate of interest determined by subtracting two percentage points from
Moody's Corporate Bond Yield Average averaged for that same four-year period or for the
lesser period if the policy or contract was issued less than four years before the member
insurer becomes an impaired or insolvent insurer under sections 61B.18 to 61B.32, whichever
is earlier; and
(ii) on and after the date on which the member insurer becomes an impaired or insolvent
insurer under this chapter, whichever is earlier, exceeds the rate of interest determined by
subtracting three percentage points from Moody's Corporate Bond Yield Average as most
recently available;
new text begin
(iii) however, this paragraph shall not apply to a contract, policy, or rider for long-term
care or health insurance;
new text end
(13) a portion of a policy or contract to the extent it provides for interest or other changes
in value to be determined by the use of an index or other external reference stated in the
policy or contract, but which have not been credited to the policy or contract, or as to which
the policy or contract owner's rights are subject to forfeiture, as of the date the member
insurer becomes an impaired or insolvent insurer under sections 61B.18 to 61B.32, whichever
is earlier. If a policy's or contract's interest or changes in value are credited less frequently
than annually, then for purposes of determining the values that have been credited and not
subject to forfeiture under this clause, the interest or changes in value determined by using
the procedures defined in the policy or contract will be credited as if the contractual date
of crediting interest or changing values was the date of impairment or insolvency, whichever
is earlier, and will not be subject to forfeiture;
(14) a portion of a policy or contract to the extent that the assessments required by section
61B.24 with respect to the policy or contract are preempted by federal or state law; deleted text begin and
deleted text end
(15) a policy or contract providing any hospital, medical, prescription drug, or other
health care benefits pursuant to United States Code, title 42, chapter 7, subchapter XVIII,
Part C or Part D, commonly known as Medicare Part C & D, new text begin or United States Code, title
42, chapter 7, subchapter XIX, commonly known as Medicaid, new text end or any regulations issued
under those provisionsnew text begin ; and
new text end
new text begin (16) structured settlement annuity benefits to which a payee or beneficiary has transferred
his or her rights in a structured settlement factoring transaction, as defined in United States
Code, title 26, section 5891, regardless of whether the transaction occurred before or after
the effective date of section 5891new text end .
Sec. 5.
Minnesota Statutes 2018, section 61B.19, subdivision 4, is amended to read:
Subd. 4.
Limitation of benefits.
The benefits for which the association may become
liable shall in no event exceed the lesser of:
(1) the contractual obligations for which thenew text begin membernew text end insurer is liable or would have
been liable if it were not an impaired or insolvent insurer; or
(2) subject to the limitation in clause (5), with respect to any one life, regardless of the
number of policies or contracts:
(i) $500,000 in life insurance death benefits, but not more than $130,000 in net cash
surrender and net cash withdrawal values for life insurance;
(ii) $500,000 in health insurancenew text begin , long-term care, and disability income insurancenew text end benefits,
including any net cash surrender and net cash withdrawal values;
(iii) $250,000 in the present value of annuity benefits, including net cash surrender and
net cash withdrawal values;
(iv) $410,000 in present value of annuity benefits for structured settlement annuities or
for annuities in regard to which periodic annuity benefits, for a period of not less than the
annuitant's lifetime or for a period certain of not less than ten years, have begun to be paid,
on or before the date of impairment or insolvency; or
(3) subject to the limitations in clauses (5) and (6), with respect to each individual resident
participating in a retirement plan, except a defined benefit plan, established under section
401, 403(b), or 457 of the Internal Revenue Code of 1986, as amended through December
31, 1992, covered by an unallocated annuity contract, or the beneficiaries of each such
individual if deceased, in the aggregate, $250,000 in net cash surrender and net cash
withdrawal values;
(4) where no coverage limit has been specified for a covered policy or benefit, the
coverage limit shall be $500,000 in present value;
(5) in no event shall the association be liable to deleted text begin expenddeleted text end new text begin covernew text end more than $500,000 in
new text begin benefits in new text end the aggregate with respect to any one life under clause (2), items (i), (ii), (iii),
(iv), and clause (4), and any one individual under clause (3);
(6) in no event shall the association be liable to deleted text begin expenddeleted text end new text begin covernew text end more than $10,000,000 new text begin in
benefits new text end with respect to all unallocated annuities of a retirement plan, except a defined
benefit plan, established under section 401, 403(b), or 457 of the Internal Revenue Code of
1986, as amended through December 31, 1992. If total claims from a plan exceed
$10,000,000, the $10,000,000 shall be prorated among the claimants;
(7) for purposes of applying clause (2)(ii) and clause (5), with respect only to health
insurance benefits, the term "any one life" applies to each individual covered by a health
insurance policynew text begin or contractnew text end ;
(8) where covered contractual obligations are equal to or less than the limits stated in
this subdivision, the association will pay the difference between the covered contractual
obligations and the amount credited by the estate of the insolvent or impaired insurer, if
that amount has been determined or, if it has not, the covered contractual limit, subject to
the association's right of subrogation;
(9) where covered contractual obligations exceed the limits stated in this subdivision,
the amount payable by the association will be determined as though the covered contractual
obligations were equal to those limits. In making the determination, the estate shall be
deemed to have credited the covered person the same amount as the estate would credit a
covered person with contractual obligations equal to those limits; or
(10) the following illustrates how the principles stated in clauses (8) and (9) apply. The
example illustrated concerns hypothetical claims subject to the limit stated in clause (2)(iii).
The principles stated in clauses (8) and (9), and illustrated in this clause, apply to claims
subject to any limits stated in this subdivision.
CONTRACTUAL OBLIGATIONS OF:
| $100,000 |
||||
| Estate |
Guaranty Association |
|||
| 0% recovery from estate |
$ 0 |
$100,000 |
||
| 25% recovery from estate |
$25,000 |
$75,000 |
||
| 50% recovery from estate |
$50,000 |
$50,000 |
||
| 75% recovery from estate |
$75,000 |
$25,000 |
||
| $250,000 |
||||
| Estate |
Guaranty Association |
|||
| 0% recovery from estate |
$ 0 |
$250,000 |
||
| 25% recovery from estate |
$62,500 |
$187,500 |
||
| 50% recovery from estate |
$125,000 |
$125,000 |
||
| 75% recovery from estate |
$187,500 |
$62,500 |
||
| $300,000 |
||||
| Estate |
Guaranty Association |
|||
| 0% recovery from estate |
$ 0 |
$250,000 |
||
| 25% recovery from estate |
$75,000 |
$187,500 |
||
| 50% recovery from estate |
$150,000 |
$125,000 |
||
| 75% recovery from estate |
$225,000 |
$62,500 |
Sec. 6.
Minnesota Statutes 2018, section 61B.20, subdivision 10, is amended to read:
Subd. 10.
Health insurance.
"Health insurance" means accident and health insurance
as described in section 60A.06, subdivision 1, clause (5)(a), long-term care insurancenew text begin as
described in section 62A.46, subdivision 2, and chapter 62Snew text end , credit accident and health
insurance regulated under chapter 62B, deleted text begin anddeleted text end subscriber contracts issued by a nonprofit health
service plan corporation operating under chapter 62Cnew text begin , and health maintenance contracts
issued by a health maintenance organization operating under chapter 62Dnew text end .
Sec. 7.
Minnesota Statutes 2018, section 61B.20, subdivision 13, is amended to read:
Subd. 13.
Member insurer.
"Member insurer" means an insurernew text begin or health maintenance
organizationnew text end licensed or holding a certificate of authority to transact in this state any kind
of insurancenew text begin or health maintenance organization businessnew text end for which coverage is provided
under section 61B.19, subdivision 2, and includes an insurernew text begin or health maintenance
organizationnew text end whose license or certificate of authority in this state may have been suspended,
revoked, not renewed, or voluntarily withdrawn. The term does not include:
(1) a nonprofit hospital or medical service organization, other than a nonprofit health
service plan corporation that operates under chapter 62C;
deleted text begin
(2) a health maintenance organization;
deleted text end
deleted text begin (3)deleted text end new text begin (2)new text end a fraternal benefit society;
deleted text begin (4)deleted text end new text begin (3)new text end a mandatory state pooling plan;
deleted text begin (5)deleted text end new text begin (4)new text end a mutual assessment company or an entity that operates on an assessment basis;
deleted text begin (6)deleted text end new text begin (5)new text end an insurance exchange;
deleted text begin (7)deleted text end new text begin (6)new text end a community integrated service network; or
deleted text begin (8)deleted text end new text begin (7)new text end an entity similar to those listed in clauses (1) to deleted text begin (7)deleted text end new text begin (6)new text end .
Sec. 8.
Minnesota Statutes 2018, section 61B.20, subdivision 16, is amended to read:
Subd. 16.
Resident.
"Resident" means a person deleted text begin who resides indeleted text end new text begin whose principal place
of residence isnew text end Minnesota at the time a member insurer is initially determined by the
commissioner or a court to be an impaired or insolvent insurer and to whom a contractual
obligation is owednew text begin , whichever occurs firstnew text end . A person may be a resident of only one state,
which deleted text begin in the case ofdeleted text end new text begin for a natural person is the person's principle place of residence, for new text end a
person other than a natural person is its principal place of business, and deleted text begin which, in the case
ofdeleted text end new text begin fornew text end a trust, is the principal place of business of the settlor or entity which established the
trust. Citizens of the United States who are either (i) residents of foreign countries, or (ii)
residents of United States possessions, territories, or protectorates that do not have an
association similar to the association created by sections 61B.19 to 61B.32, are considered
residents of this state if the insurer that issued the covered policies or contracts was domiciled
in this state.
Sec. 9.
Minnesota Statutes 2018, section 61B.21, subdivision 1, is amended to read:
Subdivision 1.
Functions.
The Minnesota Life and Health Insurance Guaranty
Association shall perform its functions under the plan of operation established and approved
under section 61B.25, and shall exercise its powers through a board of directors. The
association is not a state agency for purposes of chapter 16A, 16B, 16C, or 43A. For purposes
of administration and assessment, the association shall establish and maintain two accounts:
(1) the life insurance and annuity account which includes the following subaccounts:
(i) the life insurance account;
(ii) the annuity account; and
(iii) the unallocated annuity account; and
(2) the health deleted text begin insurancedeleted text end account.
Sec. 10.
Minnesota Statutes 2018, section 61B.22, subdivision 1, is amended to read:
Subdivision 1.
Members.
The board of directors of the association consists of nine
deleted text begin membersdeleted text end new text begin member insurersnew text end serving terms as established in the plan of operation under section
61B.25. deleted text begin Members ofdeleted text end Thenew text begin insurernew text end boardnew text begin membersnew text end must be elected by member insurers,
subject to the approval of the commissioner, for the terms of office specified in their
nominations.new text begin Each elected insurer board member shall designate its representative and may
designate an alternate.new text end Vacancies on the board shall be filled for the remaining period of
the term by a majority vote of the remaining board members, subject to approval of the
commissioner. In approving selections or in appointing deleted text begin members to the boarddeleted text end new text begin insurer board
membersnew text end , the commissioner shall consider whether all member insurers are fairly represented.
Sec. 11.
Minnesota Statutes 2018, section 61B.23, subdivision 1, is amended to read:
Subdivision 1.
Impaired domestic insurer.
If a member insurer is an impaired domestic
insurer, the association may, in its discretion, and subject to any conditions imposed by the
association that do not impair the contractual obligations of the impaired insurer and that
are approved by the commissioner, and that are, except in cases of court ordered conservation
or rehabilitation, also approved by the impaired insurer:
(1) guarantee, assume, new text begin reissue, new text end or reinsure, or cause to be guaranteed, assumed, new text begin reissued,
new text end or reinsured, any or all of the policies or contracts of the impaired insurer;
(2) provide money, pledges, notes, guarantees, or other means as are proper to exercise
the power granted in clause (1) and assure payment of the contractual obligations of the
impaired insurer pending action under clause (1); or
(3) loan money to the impaired insurer.
Sec. 12.
Minnesota Statutes 2018, section 61B.23, subdivision 3, is amended to read:
Subd. 3.
Insolvent insurer.
If a member insurer is an insolvent insurer then, subject to
any conditions imposed by the association and approved by the commissioner, the association
shall, in its discretion:
(1) guaranty, assume, new text begin reissue, new text end or reinsure, or cause to be guaranteed, assumed,new text begin reissued,new text end
or reinsured, the policies or contracts of the insolvent insurer;
(2) assure payment of the contractual obligations of the insolvent insurer which are due
and owing;
(3) provide money, pledges, guarantees, or other means as are reasonably necessary to
discharge its duties; or
(4) provide benefits and coverages in accordance with subdivision 4.
Sec. 13.
Minnesota Statutes 2018, section 61B.23, subdivision 4, is amended to read:
Subd. 4.
Payments; alternative policies.
When proceeding under subdivision 2,
paragraph (a), clause (2), or subdivision 3, clause (4), the association shall, with respect to
deleted text begin life and health insurancedeleted text end policies and deleted text begin annuitiesdeleted text end new text begin contractsnew text end :
(a) Assure payment of benefits deleted text begin for premiums identical to the premiums and benefits,
except for terms of conversion and renewability,deleted text end that would have been payable under the
policies of the impaired or insolvent insurer, for claims incurred:
(1) with respect to group policies, not later than the earlier of the next renewal date under
those policies or contracts or 45 days, but in no event less than 30 days, after the date on
which the association becomes obligated with respect to those policies; or
(2) with respect to individual policies,new text begin contracts, and annuitiesnew text end not later than the earlier
of the next renewal date, if any, under those policies or one year, but in no event less than
30 days, from the date on which the association becomes obligated with respect to those
policies.
(b) Make diligent efforts to provide all known insuredsnew text begin , enrollees,new text end or annuitants for
individual policies or group policynew text begin or contractnew text end owners with respect to group policies 30
days' notice of the termination pursuant to paragraph (a) of the benefits provided.
(c) With respect to individual policiesnew text begin and contractsnew text end , make available to each known
insurednew text begin , enrollee,new text end or annuitant, or owner if other than the insured or annuitant, and with
respect to an individual formerlynew text begin annew text end insured deleted text begin or formerly andeleted text end new text begin , enrollee, ornew text end annuitant under a
group policy new text begin or contract new text end who is not eligible for replacement group coverage, make available
substitute coverage on an individual basis in accordance with paragraph (d), if the insuredsnew text begin ,
enrollees,new text end or annuitants had a right under law or the terminated policynew text begin , contract,new text end or annuity
to convert coverage to individual coverage or to continue an individual policynew text begin , contract,new text end or
annuity in force until a specified age or for a specified time, during which the insurernew text begin or
health maintenance organizationnew text end had no right unilaterally to make changes in any provision
of the policynew text begin , contract,new text end or annuity or had a right only to make changes in premium by class.
(d)(1) In providing the substitute coverage required under paragraph (c), the association
may offer either to reissue the terminated coverage or to issue an alternative policynew text begin or
contract at actuarially justified rates subject to prior approval of the commissionernew text end .
(2) Alternative or reissued policies new text begin or contracts new text end must be offered without requiring evidence
of insurability, and must not provide for any waiting period or exclusion that would not
have applied under the terminated policynew text begin or contractnew text end .
(3) The association may reinsure any alternative or reissued policynew text begin or contractnew text end .
(e)(1) Alternative policies new text begin or contracts new text end adopted by the association are subject to the
approval of the commissioner. The association may adopt alternative policies new text begin or contracts
new text end of various types for future issuance without regard to any particular impairment or insolvency.
(2) Alternative policies new text begin or contracts new text end must contain at least the minimum statutory
provisions required in this state and provide benefits that are not unreasonable in relation
to the premium charged. The association shall set the premium in accordance with a table
of rates which it shall adopt. The premium must reflect the amount of insurance to be
provided and the age and class of risk of each insured, but must not reflect any changes in
the health of the insured after the original policy new text begin or contract new text end was last underwritten.
(3) Any alternative policy new text begin or contract new text end issued by the association must provide coverage
of a type similar to that of the policynew text begin or contractnew text end issued by the impaired or insolvent insurer,
as determined by the association.
(f) If the association elects to reissue terminated coverage at a premium rate different
from that charged under the terminated policynew text begin or contractnew text end , the premium must benew text begin actuarially
justified andnew text end set by the association in accordance with the amount of insurance new text begin or coverage
new text end provided and the age and class of risk, subject to new text begin prior new text end approval of the commissioner deleted text begin or by
a court of competent jurisdictiondeleted text end .
(g) The association's obligations with respect to coverage under any policynew text begin or contractnew text end
of the impaired or insolvent insurer or under any reissued or alternative policynew text begin or contractnew text end
ceases on the date the coveragenew text begin ,new text end or new text begin on the date the new text end policynew text begin or contractnew text end is replaced by another
similar policynew text begin or contractnew text end by the deleted text begin policyholderdeleted text end new text begin policy or contract holdernew text end , the deleted text begin insurerdeleted text end new text begin insured,
the enrolleenew text end , or the association and the preexisting condition limitations have been satisfied.
(h) When proceeding under this subdivision with respect to any policy carrying
guaranteed minimum interest rates, the association shall assure the payment or crediting of
a rate of interest consistent with section 61B.19, subdivision 3, clause (12).
Sec. 14.
Minnesota Statutes 2018, section 61B.23, subdivision 8a, is amended to read:
Subd. 8a.
Deposits in this state for insolvent or impaired insurer.
A deposit in this
state, held pursuant to law or required by the commissioner for the benefit of creditors,
including policynew text begin or contractnew text end owners, not turned over to the domiciliary liquidator upon the
entry of a final order of liquidation or order approving a rehabilitation plan of deleted text begin andeleted text end new text begin a membernew text end
insurer domiciled in this state or in a reciprocal state, pursuant to section 60B.54, shall be
promptly paid to the association. The association is entitled to retain a portion of any amount
so paid to it equal to the percentage determined by dividing the aggregate amount of policy
deleted text begin ownersdeleted text end new text begin or contract owners'new text end claims related to that insolvency for which the association has
provided statutory benefits by the aggregate amount of all policynew text begin or contractnew text end owners' claims
in this state related to that insolvency. The association shall remit to the domiciliary receiver
the amount so paid to the association and not retained pursuant to this subdivision. Any
amount retained by the association shall be treated as a distribution of estate assets pursuant
to section 60B.46 or similar provision of the state of domicile of the impaired or insolvent
insurer.
Sec. 15.
Minnesota Statutes 2018, section 61B.23, subdivision 12, is amended to read:
Subd. 12.
Assignments; subrogation rights.
(a) A person receiving benefits under
sections 61B.18 to 61B.32 shall be considered to have assigned the rights under, and any
causes of action against any person for losses arising under, resulting from or otherwise
relating to, the covered policy or contract to the association to the extent of the benefits
received because of sections 61B.18 to 61B.32, whether the benefits are payments of or on
account of contractual obligations, continuation of coverage, or provision of substitute or
alternative new text begin policies, contracts, or new text end coverages. The association may require an assignment to
it of those rights and causes of action by deleted text begin adeleted text end new text begin an enrollee,new text end payee, policy or contract owner,
beneficiary, insured, or annuitant as a condition precedent to the receipt of rights or benefits
conferred by sections 61B.18 to 61B.32 upon that person. The assignment and subrogation
rights of the association include any rights that a person may have as a beneficiary of a plan
covered under the Employee Retirement Income Security Act of 1974, United States Code,
title 29, section 1003, as amended.
(b) The subrogation rights of the association under this subdivision against the assets of
the impaired or insolvent insurer have the same priority as those of a person entitled to
receive benefits under sections 61B.18 to 61B.32.
(c) In addition to paragraphs (a) and (b), the association has all common law rights of
subrogation and other equitable or legal remedies that would have been available to the
impaired or insolvent insurer or person receiving benefits under sections 61B.18 to 61B.32
including without limitation, in the case of a structured settlement annuity, any rights of the
owner,new text begin enrollee,new text end beneficiarynew text begin ,new text end or payee of the annuity, to the extent of benefits received
pursuant to sections 61B.18 to 61B.32, against a person originally or by succession
responsible for the losses arising from the personal injury relating to the annuity or payment
thereof, excepting any such person responsible solely by reason of serving as an assignee
in respect of a qualified assignment under section 130 of the Internal Revenue Code of
1986, as amended.
(d) If the preceding provisions of this subdivision are invalid or ineffective with respect
to any person or claim for any reason, the amount payable by the association with respect
to the related covered obligations shall be reduced by the amount realized by any other
person with respect to the person or claim that is attributable to the policies new text begin or contracts new text end or
portion thereof covered by the association.
(e) If the association has provided benefits with respect to a covered obligation and a
person recovers amounts as to which the association has rights as described in the preceding
paragraphs of this subdivision, the person shall pay to the association the portion of the
recovery attributable to the policies new text begin or contracts new text end or portion thereof covered by the association.
Sec. 16.
Minnesota Statutes 2018, section 61B.23, subdivision 13, is amended to read:
Subd. 13.
Permissive powers.
The association may:
(1) enter into contracts as are necessary or proper to carry out the provisions and purposes
of sections 61B.18 to 61B.32;
(2) sue or be sued, including taking any legal actions necessary or proper to recover any
unpaid assessments under section 61B.26 to settle claims or potential claims against it;
(3) borrow money to effect the purposes of sections 61B.18 to 61B.32 and any notes or
other evidence of indebtedness of the association not in default are legal investments for
domestic new text begin member new text end insurers and may be carried as admitted assets;
(4) employ or retain persons as are necessary or appropriate to handle the financial
transactions of the association, and to perform other functions as the association considers
necessary or proper under sections 61B.18 to 61B.32;
(5) enter into arbitration or take legal action as may be necessary or appropriate to avoid
or recover payment of improper claims;
(6) exercise, for the purposes of sections 61B.18 to 61B.32 and to the extent approved
by the commissioner, the powers of a domestic life deleted text begin ordeleted text end new text begin insurer,new text end health insurer,new text begin or health
maintenance organization,new text end but in no case may the association issue deleted text begin insurancedeleted text end policies or
deleted text begin annuitydeleted text end contracts other than those issued to perform its obligations under sections 61B.18
to 61B.32;
(7) join an organization of one or more other state associations of similar purposes, to
further the purposes and administer the powers and duties of the association;
(8) negotiate and contract with any liquidator, rehabilitator, conservator, or ancillary
receiver to carry out the powers and duties of the association;
(9) participate in the organization of and/or own stock in an entity which exists or was
formed for the purpose of assuming liability for contracts or policies issued by impaired or
insolvent insurers; deleted text begin and
deleted text end
(10) request information from a person seeking coverage from the association in order
to aid the association in determining its obligations under sections 61B.18 to 61B.32 with
respect to the person, and the person shall promptly comply with the requestdeleted text begin .deleted text end new text begin ;
new text end
new text begin
(11) in accordance with the terms and conditions of the policy or contract, file for
actuarially justified rate or premium increases for any policy or contract for which it provides
coverage under this act; and
new text end
new text begin
(12) take other necessary or appropriate action to discharge its duties and obligations
under this act or to exercise its powers under this act.
new text end
Sec. 17.
Minnesota Statutes 2018, section 61B.23, subdivision 14, is amended to read:
Subd. 14.
Association election to succeed to rights of insolvent or impaired insurer
under indemnity reinsurance contracts.
(a) At any time within one year after the date on
which the association becomes responsible for the obligations of a member insurer the
coverage date, the association may elect to succeed to the rights and obligations of the
member insurer, that accrue on or after the coverage date and that relate to new text begin policies, new text end contractsnew text begin ,
or annuitiesnew text end covered in whole or in part by the association, under any one or more indemnity
reinsurance agreements entered into by the member insurer as a ceding insurer and selected
by the association. However, the association may not exercise an election with respect to a
reinsurance agreement if the receiver, rehabilitator, or liquidator of the member insurer has
previously and expressly disaffirmed the reinsurance agreement. The election shall be
effected by a notice to the receiver, rehabilitator, or liquidator, and to the affected reinsurers.
If the association makes an election, clauses (1) through (4) apply with respect to the
agreements selected by the association:
(1) the association is responsible for all unpaid premiums due under the agreements for
periods both before and after the coverage date, and is responsible for the performance of
all other obligations to be performed after the coverage date, in each case that relates to
contracts covered in whole or in part by the association and the association may charge
new text begin policies, new text end contractsnew text begin , or annuitiesnew text end covered in part by the association, through reasonable
allocation methods, the costs for reinsurance in excess of the obligations of the association;
(2) the association is entitled to any amounts payable by the reinsurer under the
agreements with respect to losses or events that occur in periods after the coverage date and
that relate to new text begin policies, new text end contractsnew text begin , or annuitiesnew text end covered by the association in whole or in part,
provided that, upon receipt of any such amounts, the association is obliged to pay to the
beneficiary under the policy deleted text begin ordeleted text end new text begin ,new text end contractnew text begin , or annuitynew text end on account of which the amounts were
paid a portion of the amount equal to the excess of:
(i) the amount received by the association, over
(ii) the benefits paid by the association on account of the policy or contract less the
retention of the impaired or insolvent member insurer applicable to the loss or event;
(3) within 30 days following the association's election, the association and each indemnity
reinsurer shall calculate the net balance due to or from the association under each reinsurance
agreement as of the date of the association's election, giving full credit to all items paid by
either the member insurer or its receiver, rehabilitator, or liquidator or the indemnity reinsurer
during the period between the coverage date and the date of the association's election and
(i) either the association or indemnity reinsurer shall pay the net balance due the other within
five days of the completion of the aforementioned calculation and (ii) if the receiver,
rehabilitator, or liquidator has received any amounts due the association pursuant to paragraph
(a), the receiver, rehabilitator, or liquidator shall remit the same to the association as promptly
as practicable; and
(4) if the association, within 60 days of the election, pays the premiums due for periods
both before and after the coverage date that relate to contracts covered by the association
in whole or in part, the reinsurer shall not be entitled to terminate the reinsurance agreements
insofar as the agreements relate to contracts covered by the association in whole or in part
and shall not be entitled to set off any unpaid premium due for periods prior to the coverage
date against amounts due the association.
(b) In the event the association transfers its obligations to another insurer, and if the
association and the other insurer agree, the other insurer shall succeed to the rights and
obligations of the association under paragraph (a) effective as of the date agreed upon by
the association and the other insurer and regardless of whether the association has made the
election referred to in paragraph (a) provided that:
(1) the indemnity reinsurance agreements shall automatically terminate for new
reinsurance unless the indemnity reinsurer and the other insurer agree to the contrary;
(2) the obligations described in the proviso to paragraph (a), clause (2), shall no longer
apply on and after the date the indemnity reinsurance agreement is transferred to the
third-party insurer; and
(3) paragraph (b) does not apply if the association has previously expressly determined
in writing that it will not exercise the election referred to in paragraph (a).
(c) The provisions of this subdivision shall supersede the provisions of any law of this
state or of any affected reinsurance agreement that provides for or requires any payment of
reinsurance proceeds, on account of losses or events that occur in periods after the coverage
date, to the receiver, liquidator, or rehabilitator of the insolvent member insurer. The receiver,
rehabilitator, or liquidator shall remain entitled to any amounts payable by the reinsurer
under the reinsurance agreement with respect to losses or events that occur in periods prior
to the coverage date subject to applicable setoff provisions.
(d) Except as otherwise expressly provided in this subdivision, nothing in this subdivision
alters or modifies the terms and conditions of the indemnity reinsurance agreements of the
insolvent member insurer. Nothing in this subdivision abrogates or limits any rights of any
reinsurer to claim that it is entitled to rescind a reinsurance agreement. Nothing in this
subdivision gives a policy ownernew text begin , contract owner, enrollee, certificate holder,new text end or beneficiary
an independent cause of action against an indemnity reinsurer that is not otherwise set forth
in the indemnity reinsurance agreement.
Sec. 18.
Minnesota Statutes 2018, section 61B.24, subdivision 3, is amended to read:
Subd. 3.
Formula for determination.
(a) The amount of a class A assessment shall be
determined by the board and may be made on a pro rata or nonpro rata basis. If pro rata,
the board may provide that it be credited against future class B assessments. deleted text begin A nonpro rata
assessment shall not exceed $500 per member insurer in any one calendar year.
deleted text end
(b) The amount of any class B assessmentnew text begin , except for assessments related to long-term
care insurance,new text end must be allocated for assessment purposes new text begin between the accounts and new text end among
the deleted text begin accounts ordeleted text end subaccounts new text begin of the life insurance and annuity account new text end pursuant to an allocation
formula which may be based on the premiums or reserves of the impaired or insolvent
insurer or any other standard considered by the board in its sole discretion as being fair and
reasonable under the circumstances.
new text begin
(c) The amount of the Class B assessment for long-term care insurance written by the
impaired or insolvent insurer shall be allocated according to a methodology included in the
plan of operation and approved by the commissioner. The methodology shall provide for
50 percent of the assessment to be allocated to health insurance member insurers and 50
percent to be allocated to life and annuity member insurers.
new text end
deleted text begin (c)deleted text end new text begin (d)new text end Class B assessments against member insurers for each subaccount or account
must be in the proportion that the average annual premiums received on business in this
state by each assessed member insurer on policies or contracts covered by each subaccount
or account for the three most recent calendar years for which information is available
preceding the calendar year in which thenew text begin membernew text end insurer became impaired or insolvent, as
the case may be, bears to the average annual premiums received on business in this state
by all assessed member insurers on policies or contracts covered by that subaccount or
account for those same calendar years. If the impaired insurer becomes insolvent, the date
of deleted text begin impairmentdeleted text end new text begin insolvency new text end must be used to determine the assessment. Premiums for purposes
of calculating average annual premium for calendar years prior to 1993 shall be determined
in accordance with Minnesota Statutes 1992, sections 61B.01 to 61B.16.
deleted text begin (d)deleted text end new text begin (e)new text end Assessments for funds to meet the requirements of the association with respect
to an impaired or insolvent insurer must not be made until necessary to implement the
purposes of sections 61B.18 to 61B.32. Classification of assessments under subdivision 2
and computation of assessments under this subdivision must be made with a reasonable
degree of accuracy, recognizing that exact determinations may not always be possible.
Sec. 19.
Minnesota Statutes 2018, section 61B.24, subdivision 5, is amended to read:
Subd. 5.
Maximum assessment.
(a) The total of all assessments upon a member insurer
for each subaccount of the life and annuity account and for the health account shall not in
any one calendar year exceed two percent of that member insurer's average annual premiums
as calculated in subdivision 3, paragraph deleted text begin (c)deleted text end new text begin (d)new text end , on policies or contracts covered by that
account or subaccount. If two or more assessments are made with respect to new text begin member new text end insurers
that become impaired or insolvent in different calendar years, average annual premiums for
purposes of the assessment percentage limitation are based upon the higher of the three-year
averages calculated under subdivision 3, paragraph deleted text begin (c)deleted text end new text begin (d)new text end . If an impaired insurer becomes
insolvent, the date of impairment must be used to determine the assessment. If the maximum
assessment for any subaccount of the life and annuity account in any one calendar year will
not provide an amount sufficient to carry out the responsibilities of the association, then
pursuant to subdivision 3, the board of directors shall assess based on the other subaccounts
of the life and annuity account for the necessary additional amount, subject to the maximum
of two percent stated above for each subaccount.
(b) If the maximum assessment for an account, together with the other assets of the
association in that account, does not provide in any one calendar year in that account an
amount sufficient to carry out the responsibilities of the association, the necessary additional
funds must be assessed as soon as permitted by sections 61B.18 to 61B.32.
(c) The board may adopt general principles in the plan of operation for allocating funds
among claims, whether relating to one or more impaired or insolvent insurers, when the
maximum assessment will be insufficient to cover anticipated claims.
(d) If assessments under this section are inadequate to pay all obligations of the impaired
insurer that are or become due and owing, then the association shall prepare a plan approved
by the commissioner for prioritization of payments. If the association adopts general
principles in the plan of operations, the association shall use the general principles in
preparing the plan required under this paragraph. No formerly impaired or insolvent insurer
may be reinstated until all payments of or on account of the insurer'snew text begin or health maintenance
organization'snew text end contractual obligations by the guaranty association, along with all expenses
thereof and interest on all such payments and expenses, shall have been repaid to the guaranty
association or a plan of repayment by the insurernew text begin or health maintenance organizationnew text end shall
have been approved by the commissioner.
Sec. 20.
Minnesota Statutes 2018, section 61B.24, subdivision 6, is amended to read:
Subd. 6.
Refund.
The board may, by an equitable method as established in the plan of
operation, refund to member insurers, in proportion to the contribution of eachnew text begin membernew text end
insurer to that account or subaccount, the amount by which the assets of the account or
subaccount exceed the amount the board finds is necessary to carry out during the coming
year the obligations of the association with regard to that account or subaccount, including
assets accruing from assignment, subrogation, net realized gains, and income from
investments. A reasonable amount may be retained in any account or subaccount to provide
funds for the continuing expenses of the association and for future losses.
Sec. 21.
Minnesota Statutes 2018, section 61B.24, subdivision 7, is amended to read:
Subd. 7.
Premium rates and dividends.
A member insurer may, in determining its
premium rates and policy owner dividends as to any kind of insurance new text begin or health maintenance
organization business new text end within the scope of sections 61B.18 to 61B.32, consider the amount
reasonably necessary to meet its assessment obligations under sections 61B.18 to 61B.32.
Sec. 22.
Minnesota Statutes 2018, section 61B.24, subdivision 8, is amended to read:
Subd. 8.
Certificate of contribution.
The association shall issue to each new text begin member new text end insurer
paying an assessment under sections 61B.18 to 61B.32, other than a class A assessment, a
certificate of contribution, in a form prescribed by the commissioner, for the amount of the
assessment so paid. All outstanding certificates must be of equal dignity and priority without
reference to amounts or dates of issue. A certificate of contribution may be shown by the
new text begin member new text end insurer in its financial statement as an asset in the form and for the amount, if any,
and period of time as the commissioner may approve.
Sec. 23.
Minnesota Statutes 2018, section 61B.24, subdivision 10, is amended to read:
Subd. 10.
Procedure for protests regarding assessments.
(a) A member insurer that
wishes to protest all or part of an assessment shall pay when due the full amount of the
assessment as set forth in the notice provided by the association. The payment is available
to meet association obligations during the pendency of the protest or any subsequent appeal.
Payment must be accompanied by a statement in writing that the payment is made under
protest and setting forth a brief statement of the grounds for the protest.
(b) Within 60 days following the payment of an assessment under protest by a member
insurer, the association shall notify the member insurer in writing of its determination with
respect to the protest unless the association notifies the member insurer that additional time
is required to resolve the issues raised by the protest.
(c) Within 30 days after a final decision has been made, the association shall notify the
protesting member insurer in writing of that final decision. Within 60 days of receipt of
notice of the final decision, the protesting member insurer may appeal that final action to
the commissioner.
(d) In the alternative to rendering a final decision with respect to a protest based on a
question regarding the assessment base, the association may refer the protest to the
commissioner for a final decision, with or without a recommendation from the association.
(e) If the protest or appeal on the assessment is upheld, the amount paid in error or excess
shall be returned to the member deleted text begin companydeleted text end new text begin insurernew text end . Interest on a refund due a protesting
member new text begin insurer new text end shall be paid at the rate actually earned by the association.
Sec. 24.
Minnesota Statutes 2018, section 61B.26, is amended to read:
61B.26 DUTIES AND POWERS OF COMMISSIONER.
(a) In addition to other duties and powers in sections 61B.18 to 61B.32, the commissioner
shall:
(1) notify the board of directors of the existence of an impaired or insolvent insurer
within three days after a determination of impairment or insolvency is made or the
commissioner receives notice of impairment or insolvency;
(2) upon request of the board of directors, provide the association with a statement of
the premiums in this and any other appropriate states for each member insurer;
(3) when an impairment is declared and the amount of the impairment is determined,
serve a demand upon the impaired insurer to make good the impairment within a reasonable
time; notice to the impaired insurer shall constitute notice to its shareholders, if any; the
failure of the new text begin impaired new text end insurer to promptly comply with the commissioner's demand shall
not excuse the association from the performance of its powers and duties under sections
61B.18 to 61B.32; and
(4) in a liquidation, conservation, or rehabilitation proceeding involving a domestic
insurer, be appointed as the liquidator, conservator, or rehabilitator.
(b) The commissioner may suspend or revoke, after notice and hearing, the certificate
of authority to transact deleted text begin insurancedeleted text end new text begin businessnew text end in this state of any member insurer which fails
to pay an assessment when due or fails to comply with the plan of operation. As an
alternative, the commissioner may levy a forfeiture on any member insurer which fails to
pay an assessment when due. A forfeiture shall not exceed five percent of the unpaid
assessment per month, but no forfeiture shall be less than $100 per month.
(c) A final action of the board of directors or the association may be appealed to the
commissioner if the appeal is taken within 60 days of the aggrieved party's receipt of notice
of the final action being appealed. Any final action or order of the commissioner is subject
to judicial review in a court of competent jurisdiction, in the manner provided by chapter
14. A determination or decision by the commissioner under sections 61B.18 to 61B.32 is
not subject to the contested case or rulemaking provisions of chapter 14.
(d) The liquidator, rehabilitator, or conservator of an impaired insurer may notify all
interested persons of the effect of sections 61B.18 to 61B.32.
(e) For the purposes of sections 61B.18 to 61B.32, the commissioner may delegate any
of the powers conferred by law.
(f) Nonperformance of any of the acts specified in this section or failure to meet the
specific time limits does not affect the association, its members, or any other person as to
the person's duties and obligations.
Sec. 25.
Minnesota Statutes 2018, section 61B.27, is amended to read:
61B.27 PREVENTION OF INSOLVENCIES.
(a) To aid in the detection and prevention ofnew text begin membernew text end insurer insolvencies or impairments
the commissioner shall notify the commissioners of insurance of all the other states, territories
of the United States, and the District of Columbia when the commissioner takes one of the
following actions against a member insurer:
(i) revocation of license; or
(ii) suspension of license.
The notice must be mailed to all commissioners within 30 days following the action.
(b) If the commissioner deems it appropriate, the commissioner may:
(1) Report to the board of directors when the commissioner has taken any of the actions
specified in paragraph (a) or has received a report from another commissioner indicating
that an action specified in paragraph (a) has been taken in another state. The report to the
board of directors must contain all significant details of the action taken or the report received
from another commissioner.
(2) Report to the board of directors when the commissioner has reasonable cause to
believe from an examination, whether completed or in process, of a member company that
the company may be an impaired or insolvent insurer.
(3) Furnish to the board of directors the National Association of Insurance Commissioners
insurance regulatory information system ratios and listings of companies not included in
the ratios developed by the National Association of Insurance Commissioners, and the board
may use the information in carrying out its duties and responsibilities under this section.
The report and the information contained in it must be kept confidential by the board of
directors until it has been made public by the commissioner or other lawful authority.
Nothing in this provision supersedes other requirements of law.
(4) Notify the board if the commissioner makes a formal order requiring the deleted text begin companydeleted text end new text begin
member insurernew text end to restrict its premium writing, obtain additional contributions to surplus,
withdraw from this state, reinsure all or any part of its business, or increase capital, surplus,
or any other account for the security of policyholdersnew text begin , contract holders, certificate holders,new text end
or creditors.
(c) The commissioner may seek the advice and recommendations of the board of directors
concerning any matter affecting the commissioner's duties and responsibilities regarding
the financial condition of member insurers and of deleted text begin companiesdeleted text end new text begin insurers or health maintenance
organizationsnew text end seeking admission to transact deleted text begin insurancedeleted text end business in this state.
(d) The board of directors may, upon majority vote, make reports and recommendations
to the commissioner upon matters germane to the solvency, liquidation, rehabilitation, or
conservation of any member insurer or germane to the solvency of deleted text begin a companydeleted text end new text begin an insurer
or health maintenance organization new text end seeking to do deleted text begin an insurancedeleted text end business in this state. Those
reports and recommendations shall not be considered public documents.
(e) The board of directors, upon majority vote, may notify the commissioner of
information indicating that a member insurer may be an impaired or insolvent insurer.
(f) The board of directors may, upon majority vote, make recommendations to the
commissioner for the detection and prevention of new text begin member new text end insurer insolvencies.
(g) The board of directors may, at the conclusion of an insurer insolvency in which the
association was obligated to pay covered claims, prepare a report to the commissioner
containing the information it may have in its possession bearing on the history and causes
of the insolvency. The board shall cooperate with the boards of directors of guaranty
associations in other states in preparing a report on the history and causes of insolvency of
a particular insurernew text begin or health maintenance organizationnew text end , and may adopt by reference any
report prepared by those other associations.
(h) Nonperformance by the commissioner of any of the acts specified in this section or
failure to meet the specified time limits does not affect the association, its members, or any
other person as to the person's duties and obligations.
Nothing in this section supersedes other requirements of law.
Sec. 26.
Minnesota Statutes 2018, section 61B.28, subdivision 3, is amended to read:
Subd. 3.
Association as creditor.
For the purpose of carrying out its obligations under
sections 61B.18 to 61B.32, the association is considered to be a creditor of the impaired or
insolvent insurer to the extent of assets attributable to covered policies, reduced by amounts
which the association recovers from the assets of the impaired or insolvent insurer as subrogee
under section 61B.23, subdivision 12. Recoveries by the association as subrogee under
section 61B.23, subdivision 12, from assets other than from assets of the impaired or insolvent
insurer shall not reduce or act as an offset to the association's claim as creditor of the impaired
or insolvent insurer. Assets of the impaired or insolvent insurer attributable to covered
policies new text begin or contracts new text end must be used to continue all covered policiesnew text begin or contractsnew text end and pay all
contractual obligations of the impaired or insolvent insurer as required by sections 61B.18
to 61B.32. Assets attributable to covered policiesnew text begin or contractsnew text end , as used in this subdivision,
are that proportion of the assets which the reserves that should have been established for
those policies bear to the reserves that should have been established for all policies of
insurance written by the impaired or insolvent insurer.
Sec. 27.
Minnesota Statutes 2018, section 61B.28, subdivision 3a, is amended to read:
Subd. 3a.
Association access to insolvent insurer's assets.
As a creditor of the impaired
or insolvent insurer as established in subdivision 3 of this section and consistent with section
60B.46, the association and other similar associations is entitled to receive a disbursement
of assets out of the marshalled assets, from time to time as the assets become available to
reimburse it, as a credit against contractual obligations under sections 61B.18 to 61B.32. If
the liquidator has not, within 120 days of a final determination of insolvency of deleted text begin andeleted text end new text begin a membernew text end
insurer by the receivership court, made an application to the court for the approval of a
proposal to disburse assets out of marshalled assets to guaranty associations having
obligations because of the insolvency, then the association shall be entitled to make
application to the receivership court for approval of its own proposal to disburse these assets.
Sec. 28.
Minnesota Statutes 2018, section 61B.28, subdivision 4, is amended to read:
Subd. 4.
Prohibited sales practice.
No person, including deleted text begin andeleted text end new text begin a membernew text end insurer, agent,
or affiliate of deleted text begin andeleted text end new text begin a member new text end insurer, shall make, publish, disseminate, circulate, or place
before the public, or cause directly or indirectly, to be made, published, disseminated,
circulated, or placed before the public, in any newspaper, magazine, or other publication,
or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or
television station, or in any other way, an advertisement, announcement, or statement,
written or oral, which uses the existence of the Minnesota Life and Health Insurance Guaranty
Association for the purpose of sales, solicitation, or inducement to purchase any form of
insurance new text begin or other coverage new text end covered by sections 61B.18 to 61B.32. The notice required by
subdivision 8 is not a violation of this subdivision nor is it a violation of this subdivision
to explain verbally to an applicant or potential applicant the coverage provided by the
Minnesota Life and Health Insurance Guaranty Association at any time during the application
process or thereafter. This subdivision does not apply to the Minnesota Life and Health
Insurance Guaranty Association or an entity that does not sell or solicit insurancenew text begin or coverage
by a health maintenance organizationnew text end .
Sec. 29.
Minnesota Statutes 2018, section 61B.28, subdivision 6, is amended to read:
Subd. 6.
Reinstatement.
Nonew text begin membernew text end insurer may be reinstated to do business in this
state until all payments of or on account of the impaired insurer's contractual obligations
by the guaranty association, along with all expenses thereof and interest on all such payments
and expenses, shall have been repaid to the guaranty association or a plan of repayment by
the impaired insurer shall have been approved by the association.
Sec. 30.
Minnesota Statutes 2018, section 61B.28, subdivision 7, is amended to read:
Subd. 7.
Notice concerning limitations and exclusions.
(a) No person, including deleted text begin andeleted text end new text begin a
membernew text end insurer, agent, or affiliate of deleted text begin andeleted text end new text begin a member new text end insurer or agent, shall offer for sale in
this state a covered life insurance, annuity, or health insurance policy or contract without
delivering, either at the time of application for that policy or contract or at the time of
delivery of the policy or contract, a notice in the form specified in subdivision 8, or in a
form approved by the commissioner under paragraph (b), relating to coverage provided by
the Minnesota Life and Health Insurance Guaranty Association. The notice may be part of
the application. A copy of the notice must be given to the applicant or the deleted text begin policyholderdeleted text end new text begin
policy owner, contract owner, certificate holder, or enrolleenew text end . The person offering the policy
or contract shall document the fact that the notice was given at the time of application or
the fact that the notice was delivered at the time the policy or contract was delivered. This
does not require that the receipt of the notice be acknowledged by the applicant.
(b) The association may prepare, and file with the commissioner for approval, a form
of notice as an alternative to the form of notice specified in subdivision 8 describing the
general purposes and limitations of this chapter. The form of notice shall:
(1) state the name, address, and telephone number of the Minnesota Life and Health
Insurance Guaranty Association;
(2) prominently warn the policy deleted text begin ordeleted text end new text begin owner,new text end contract new text begin owner, certificate new text end holdernew text begin , or enrolleenew text end
that the Minnesota Life and Health Insurance Guaranty Association may not cover the policy
or, if coverage is available, it will be subject to substantial limitations and exclusions and
conditioned on continued residence in the state;
(3) state that the new text begin member new text end insurer and its agents are prohibited by law from using the
existence of the Minnesota Life and Health Insurance Guaranty Association for the purpose
of sales, solicitation, or inducement to purchase any form of insurancenew text begin or health maintenance
organization coveragenew text end ;
(4) emphasize that the policy deleted text begin ordeleted text end new text begin owner,new text end contractnew text begin , owner, certificatenew text end holdernew text begin , or enrolleenew text end
should not rely on coverage under the Minnesota Life and Health Insurance Guaranty
Association when selecting an insurernew text begin or health maintenance organizationnew text end ;
(5) provide other information as directed by the commissioner. The commissioner may
approve any form of notice proposed by the association and, as to the approved form of
notice, the association may notify all member insurers by mailnew text begin or other electronic meansnew text end
that the form of notice is available as an alternative to the notice specified in subdivision 8.
(c) A policy or contract not covered by the Minnesota Life and Health Insurance Guaranty
Association or the Minnesota Insurance Guaranty Association must contain the following
notice in ten-point type, stamped in red ink or contrasting type on the policy or contract and
the application:
"THIS POLICY OR CONTRACT IS NOT PROTECTED BY THE MINNESOTA LIFE
AND HEALTH INSURANCE GUARANTY ASSOCIATION OR THE MINNESOTA
INSURANCE GUARANTY ASSOCIATION. IN THE CASE OF INSOLVENCY,
PAYMENT OF CLAIMS IS NOT GUARANTEED. ONLY THE ASSETS OF THIS
INSURER new text begin OR HEALTH MAINTENANCE ORGANIZATION new text end WILL BE AVAILABLE
TO PAY YOUR CLAIM."
This section does not apply to fraternal benefit societies regulated under chapter 64B.
Sec. 31.
Minnesota Statutes 2018, section 61B.28, subdivision 8, is amended to read:
Subd. 8.
Form.
The form of notice referred to in subdivision 7, paragraph (a), is as
follows:
"........................................
.........................................
.........................................
(insert name, current address, and
telephone number ofnew text begin membernew text end insurer)
NOTICE CONCERNING POLICYHOLDER RIGHTS IN AN
INSOLVENCY UNDER THE MINNESOTA LIFE AND HEALTH
INSURANCE GUARANTY ASSOCIATION LAW
If the insurernew text begin or health maintenance organizationnew text end that issued your life, annuity, or health
insurance policy becomes impaired or insolvent, you are entitled to compensation for your
policynew text begin or contractnew text end from the assets of that insurer. The amount you recover will depend on
the financial condition of the insurernew text begin or health maintenance organizationnew text end .
In addition, residents of Minnesota who purchase life insurance, annuities, deleted text begin ordeleted text end health
insurancenew text begin , or health maintenance organization coveragenew text end from insurance companies authorized
to do business in Minnesota are protected, SUBJECT TO LIMITS AND EXCLUSIONS,
in the event the insurernew text begin or health maintenance organizationnew text end becomes financially impaired
or insolvent. This protection is provided by the Minnesota Life and Health Insurance
Guaranty Association.
new text begin
For purposes of this notice, the terms "insurance company" and "insurer" include health
maintenance organizations.
new text end
Minnesota Life and Health Insurance Guaranty Association
(insert current
address and telephone number)
The maximum amount the guaranty association will pay for all policiesnew text begin or contractsnew text end
issued on one life by the same insurernew text begin or health maintenance organizationnew text end is limited to
$500,000. Subject to this $500,000 limit, the guaranty association will pay up to $500,000
in life insurance death benefits, $130,000 in net cash surrender and net cash withdrawal
values for life insurance, $500,000 in health insurancenew text begin , health maintenance organization,
and long-term carenew text end benefits, including any net cash surrender and net cash withdrawal
values,new text begin $500,000 in disability income insurance,new text end $250,000 in annuity net cash surrender
and net cash withdrawal values, $410,000 in present value of annuity benefits for annuities
which are part of a structured settlement or for annuities in regard to which periodic annuity
benefits, for a period of not less than the annuitant's lifetime or for a period certain of not
less than ten years, have begun to be paid on or before the date of impairment or insolvency,
or if no coverage limit has been specified for a covered policy or benefit, the coverage limit
shall be $500,000 in present value. Unallocated annuity contracts issued to retirement plans,
other than defined benefit plans, established under section 401, 403(b), or 457 of the Internal
Revenue Code of 1986, as amended through December 31, 1992, are covered up to $250,000
in net cash surrender and net cash withdrawal values, for Minnesota residents covered by
the plan provided, however, that the association shall not be responsible for more than
$10,000,000 in claims from all Minnesota residents covered by the plan. If total claims
exceed $10,000,000, the $10,000,000 shall be prorated among all claimants. These are the
maximum claim amounts. Coverage by the guaranty association is also subject to other
substantial limitations and exclusions and requires continued residency in Minnesota. If
your claim exceeds the guaranty association's limits, you may still recover a part or all of
that amount from the proceeds of the liquidation of the insolvent insurer, if any exist. Funds
to pay claims may not be immediately available. The guaranty association assesses insurersnew text begin
and health maintenance organizationsnew text end licensed to sell life and health insurance in Minnesota
after the insolvency occurs. Claims are paid from this assessment.
new text begin
Benefits provided by a long-term care rider to a life insurance policy or annuity contract
shall be considered the same type of benefits as the base life insurance policy or annuity
contract to which it relates.
new text end
THE COVERAGE PROVIDED BY THE GUARANTY ASSOCIATION IS NOT A
SUBSTITUTE FOR USING CARE IN SELECTING INSURANCE COMPANIES THAT
ARE WELL MANAGED AND FINANCIALLY STABLE. IN SELECTING AN
INSURANCE COMPANYnew text begin , CONTRACT,new text end OR POLICY, YOU SHOULD NOT RELY ON
COVERAGE BY THE GUARANTY ASSOCIATION.
THIS NOTICE IS REQUIRED BY MINNESOTA STATE LAW TO ADVISE
POLICYHOLDERS OF LIFE, ANNUITY, deleted text begin ORdeleted text end HEALTH INSURANCEnew text begin , OR HEALTH
MAINTENANCE ORGANIZATIONnew text end POLICIESnew text begin AND CONTRACTSnew text end OF THEIR RIGHTS
IN THE EVENT THEIR INSURANCE CARRIER BECOMES FINANCIALLYnew text begin IMPAIRED
ORnew text end INSOLVENT. THIS NOTICE IN NO WAY IMPLIES THAT THE COMPANY
CURRENTLY HAS ANY TYPE OF FINANCIAL PROBLEMS. ALL LIFE, ANNUITY,
deleted text begin ANDdeleted text end HEALTH INSURANCEnew text begin , AND HEALTH MAINTENANCE ORGANIZATIONnew text end
POLICIESnew text begin AND CONTRACTSnew text end ARE REQUIRED TO PROVIDE THIS NOTICE."
Additional language may be added to the notice if approved by the commissioner prior
to its use in the form. This section does not apply to fraternal benefit societies regulated
under chapter 64B.
Sec. 32.
new text begin
[61B.33] RIGHTS AND OBLIGATIONS OF ASSOCIATION.
new text end
new text begin
Notwithstanding any other provision of law, the provisions of the Minnesota Life and
Health Insurance Guaranty Association Act in effect on the date the association first becomes
obligated for the policies or contracts of an insolvent or impaired member insurer govern
the association's rights or obligations to the policy owners, contract owners, or enrollees of
the insolvent or impaired member insurer.
new text end
Sec. 33.
Minnesota Statutes 2018, section 62D.18, subdivision 1, is amended to read:
Subdivision 1.
Commissioner of health; order.
The commissioner of health may apply
by verified petition to the district court of Ramsey County or the county in which the principal
office of the health maintenance organization is located for an order directing the
commissioner of health to rehabilitate or liquidate a health maintenance organization. The
rehabilitation or liquidation of a health maintenance organization shall be conducted under
the supervision of the commissioner of health under the procedures, and with the powers
granted to a rehabilitator or liquidator, in chapter 60B, except to the extent that the nature
of health maintenance organizations renders the procedures or powers clearly inappropriate
and as provided in this subdivision or in chapter 60B. A health maintenance organization
shall be considered an insurance company for the purposes of rehabilitation or liquidation
as provided in subdivisions 4, 6, and 7.new text begin For health maintenance organizations that will be
liquidated on or after August 1, 2020, chapters 60B and 61B apply.
new text end
Sec. 34.
Minnesota Statutes 2018, section 297I.20, subdivision 1, is amended to read:
Subdivision 1.
Guaranty association assessment offsets.
(a) An insurance company
new text begin or health maintenance organization new text end may offset against its premium tax liability to this state
any amount paid for assessments made for insolvencies deleted text begin which occur after July 31, 1994,deleted text end
under sections 60C.01 to 60C.22; and any amount paid for assessments deleted text begin made after July 31,
1994,deleted text end under Minnesota Statutes 1992, sections 61B.01 to 61B.16, or under sections 61B.18
to 61B.32 as follows:
(1) Each such assessment shall give rise to an amount of offset equal to 20 percent of
the amount of the assessment for each of the five calendar years following the year in which
the assessment was paid.
(2) The amount of offset initially determined for each taxable year is the sum of the
amounts determined under clause (1) for that taxable year.
(b)(1) Each year the commissioner shall compare total guaranty association assessments
levied over the preceding five calendar years to the sum of all premium tax and corporate
franchise tax revenues collected from insurance companiesnew text begin and health maintenance
organizationsnew text end , without reduction for any guaranty association assessment offset in the
preceding calendar year, referred to in this subdivision as "preceding year insurance tax
revenues."
(2) If total guaranty association assessments levied over the preceding five years exceed
the preceding year insurance tax revenues, insurance companiesnew text begin and health maintenance
organizationsnew text end must be allowed only a proportionate part of the premium tax offset calculated
under paragraph (a) for the current calendar year.
(3) The proportionate part of the premium tax offset allowed in the current calendar year
is determined by multiplying the amount calculated under paragraph (a) by a fraction. The
numerator of the fraction equals the preceding year insurance tax revenues, and its
denominator equals total guaranty association assessments levied over the preceding five-year
period.
(4) The proportionate part of the premium tax offset that is not allowed must be carried
forward to subsequent tax years and added to the amount of premium tax offset calculated
under paragraph (a) prior to application of the limitation imposed by this paragraph.
(5) Any amount carried forward from prior years must be allowed before allowance of
the offset for the current year calculated under paragraph (a).
(6) The premium tax offset limitation must be calculated separately for (i) insurance
companies subject to assessment under sections 60C.01 to 60C.22, and (ii) insurance
companiesnew text begin or health maintenance organizationsnew text end subject to assessment under deleted text begin Minnesota
Statutes 1992,deleted text end sections 61B.01 to 61B.16, or 61B.18 to 61B.32.
(7) When the premium tax offset is limited by this provision, the commissioner shall
notify affected insurance companiesnew text begin or health maintenance organizationsnew text end on a timely basis
for purposes of completing premium and corporate franchise tax returns.
(8) The guaranty associations created under sections 60C.01 to 60C.22, deleted text begin Minnesota
Statutes 1992, sectionsdeleted text end 61B.01 to 61B.16, and 61B.18 to 61B.32, shall provide the
commissioner with the necessary information on guaranty association assessments.
(c)(1) If the offset determined by the application of paragraphs (a) and (b) exceeds the
insurance company'snew text begin or health maintenance organization'snew text end premium tax liability under this
section prior to allowance of the credit for premium taxes, then the insurance companynew text begin or
health maintenance organizationnew text end may carry forward the excess, referred to in this subdivision
as the "carryforward credit" to subsequent taxable years.
(2) The carryforward credit is allowed as an offset against premium tax liability for the
first succeeding year to the extent that the premium tax liability for that year exceeds the
amount of the allowable offset for the year determined under paragraphs (a) and (b).
(3) The carryforward credit must be reduced, but not below zero, by the amount of the
carryforward credit allowed as an offset against the premium tax under this paragraph. The
remainder, if any, of the carryforward credit must be carried forward to succeeding taxable
years until the entire carryforward credit has been credited against the insurance company'snew text begin
or health maintenance organization'snew text end liability for premium tax under this chapter if applicable
for that taxable year.
(d) When an insurernew text begin or health maintenance organizationnew text end has offset against taxes its
payment of an assessment of the Minnesota Life and Health Guaranty Association, and the
association pays the insurernew text begin or health maintenance organizationnew text end a refund with respect to the
assessment under deleted text begin Minnesota Statutes 1992,deleted text end section 61B.07, subdivision 6, or 61B.24,
subdivision 6, then the refund reduces the insurer's new text begin or health maintenance organization's
new text end carryforward credit under paragraph (c). If the refund exceeds the amount of the carryforward
credit, the excess amount must be repaid to the state by the insurersnew text begin or health maintenance
organizationsnew text end to the extent of the offset in the manner the commissioner requires.
Sec. 35. new text begin EFFECTIVE DATE.
new text end
new text begin
Sections 1 to 34 are effective the day following final enactment.
new text end
APPENDIX
Repealed Minnesota Statutes: S4091-1
53B.27 MONEY TRANSMITTERS; COOPERATION REQUIRED IN COMBATTING FRAUD.
Subd. 3.
No transmit list.
(a) The commissioner shall create and maintain an electronic list of individuals for whom money transmitters may not make money transmissions. The commissioner may contract with a third-party vendor to create and maintain the list. The electronic list must include sufficient identifying information about individuals on the list to allow for money transmitters to match names on the "No Transmit List" with the names of individuals seeking to utilize the money transmitter's services to make money transmissions.
(b) The "No Transmit List" shall be populated in the following ways:
(1) an individual may request that the commissioner put the individual's name on the "No Transmit List;"
(2) persons with the legal authority to act on behalf of an individual may request that the commissioner put the individual's name on the "No Transmit List;"
(3) money transmitters shall request that the commissioner put the names of individuals on the "No Transmit List" that the money transmitter, their employees, their authorized delegates, or their authorized delegates' employees have detected are victims of a scheme to defraud and the names of individuals they have detected are participants in a scheme to defraud individuals residing in Minnesota;
(4) state and local law enforcement agencies and departments may request that the commissioner put the names of individuals residing in Minnesota who have been victims of a scheme to defraud on the "No Transmit List"; and
(5) money transmitters shall request that the commissioner put the names of individuals on the "No Transmit List" who have made a request directly to the money transmitter to be prohibited from making or receiving money transmissions.
(c) An individual on the "No Transmit List" shall remain on the list for a minimum of one year. After the expiration of one year, the individual may at any time request that his or her name be removed from the "No Transmit List," otherwise the name will remain on the list. An individual whose name was put on the "No Transmit List" by a person authorized to act on an individual's behalf shall remain on the list for a minimum of one year. After the expiration of one year, the person authorized to act on the individual's behalf may at any time request that the commissioner remove the individual's name from the "No Transmit List," otherwise the name will remain on the list.
(d) An individual who requests that the individual's name be put on the "No Transmit List" may indicate at the time of the request that the name shall not be removed from the "No Transmit List" unless both the individual and at least one of two designated individuals requests the individual's name be removed from the list.
(e) The commissioner shall create request forms and establish procedures for submission of requests under this subdivision. The commissioner's forms and procedures shall include necessary requirements for verifying the identity and authority of individuals submitting requests. All requests must be submitted to the commissioner on the forms created by the commissioner and in accordance with the procedures established by the commissioner.
(f) Except as otherwise provided in this paragraph, data on individuals in the "No Transmit List" and in requests to have names put on or removed from the list are private data on individuals as defined in section 13.02, subdivision 12. The name of an individual on the "No Transmit List" may be provided to the individual or a person authorized to act on the individual's behalf and shall be provided to a money transmitter through a matching process for the purpose of determining whether it may initiate a money transmission. Data classified under this paragraph may be disclosed to requesting law enforcement agencies for law enforcement purposes or to other government agencies for purposes related to the regulation of money transmissions.
Subd. 4.
Suspicious activity report.
Each time a money transmitter requests that the commissioner put the name of an individual on the "No Transmit List" pursuant to subdivision 3, paragraph (b), clause (3), the money transmitter shall also submit a suspicious activity report pursuant to the federal Bank Secrecy Act.
60A.07 AUTHORIZATION AND REQUIREMENTS.
Subd. 1a.
Filing.
The certificate of an insurance corporation must be filed for record with the secretary of state. If the secretary of state finds that it conforms to law and that the required fee has been paid, the secretary of state must record it and certify that fact on it. The secretary of state may not accept a certificate for filing unless the certificate also contains the endorsement of the commissioner of commerce.
72B.14 VIOLATIONS.
A person who violates sections 72B.01 to 72B.14, or the terms of any license or permit under sections 72B.01 to 72B.14, or any lawful order of the commissioner in accordance with sections 72B.01 to 72B.14, shall be subject to a fine imposed by the commissioner, not in excess of $500, which may be imposed in addition to the penalties prescribed in the provisions dealing with the suspension or revocation of licenses or permits.