HF 2692

as introduced - 88th Legislature (2013 - 2014) Posted on 03/03/2014 03:15pm

A bill for an act
relating to insurance; authorizing the judicial declaration of the validity of a
policy in certain circumstances; amending Minnesota Statutes 2012, section
60A.0789, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 60A.0789, subdivision 3, is amended to
read:

Subd. 3.

Declaratory judgment action.

new text begin (a) new text end If, prior to payment of death benefits,
the insurer believes the policy was initiated by STOLI practices, the insurer may bring a
declaratory judgment action seeking a court order declaring the policy void.

new text begin (b) If an insurer fails to confirm within 90 days of receipt of a verification of
insurable interest request that a life insurance policy is valid and that it will not contest the
policy for lack of insurable interest, the policyholder or its designated representative may
bring a declaratory judgment action seeking a court order that the policy is valid.
new text end

new text begin (c) If the court determines that the life insurance policy is valid, the insurer shall
pay the cost of the action, including attorney fees of the policyholder or its designated
representative.
new text end

new text begin (d) A verification of insurable interest request may only be submitted on policies that
have a death benefit equal to or greater than $1,000,000 and that were issued before the
effective date of sections 60A.078 to 60A.0789. A life insurer is only obligated to respond
to a verification of insurable interest request that includes the following information:
new text end

new text begin (1) the name and address of the owner of the policy;
new text end

new text begin (2) the name and address of all previous owners of the policy and the date that
ownership was acquired by each previous owner;
new text end

new text begin (3) whether or not the insured entered into a binding contract with respect to
financing the insurance policy during the first two years following the date the policy was
issued and, if so, details regarding the financing arrangement; and
new text end

new text begin (4) the name and address of all trusts that acquired or obtained an interest in the
insurance policy since the date the policy was issued, and the name and address of each
trustee and beneficial owner of the trusts.
new text end

new text begin If any of the information in clauses (1) to (4) is unavailable, the policyholder or
its designated representative shall state under penalty of perjury that, to the best of the
policyholder's or the designated representative's knowledge, the person does not have
the information listed in this subdivision.
new text end

new text begin (e) All premium payments due on the policy will be tolled during the pendency of
the declaratory judgment action commenced pursuant to this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to life insurance policies in effect on or issued on or after that date.
new text end