1998 Minnesota Statutes

     72A.20 Methods, acts, and practices which are defined as 
  unfair or deceptive. 

    Subdivision 1.    Misrepresentations and false advertising 
 of policy contracts.  Making, issuing, circulating, or causing 
 to be made, issued, or circulated, any estimate, illustration, 
 circular, or statement misrepresenting the terms of any policy 
 issued or to be issued or the benefits or advantages promised 
 thereby or the dividends or share of the surplus to be received 
 thereon, or making any false or misleading statement as to the 
 dividends or share of surplus previously paid on similar 
 policies, or making any misleading representation or any 
 misrepresentation as to the financial condition of any insurer, 
 or as to the legal reserve system upon which any life insurer 
 operates, or using any name or title of any policy or class of 
 policies misrepresenting the true nature thereof, or making any 
 misrepresentation to any policyholder insured in any company for 
 the purpose of inducing or tending to induce such policyholder 
 to lapse, forfeit, or surrender insurance, shall constitute an 
 unfair method of competition and an unfair and deceptive act or 
 practice in the business of insurance.  

    Subd. 2.    False information and advertising generally. 
  Making, publishing, disseminating, circulating, or placing 
 before the public, or causing, directly or indirectly, to be 
 made, published, disseminated, circulated, or placed before the 
 public, in a newspaper, magazine, or other publication, or in 
 the form of a notice, circular, pamphlet, letter, or poster, or 
 over any radio station, or in any other way, an advertisement, 
 announcement, or statement, containing any assertion, 
 representation, or statement with respect to the business of 
 insurance, or with respect to any person in the conduct of the 
 person's insurance business, which is untrue, deceptive, or 
 misleading, shall constitute an unfair method of competition and 
 an unfair and deceptive act or practice.  

    Subd. 3.    Defamation.  Making, publishing, 
 disseminating, or circulating, directly or indirectly, or 
 aiding, abetting, or encouraging the making, publishing, 
 disseminating, or circulating of any oral or written statement 
 or any pamphlet, circular, article, or literature which is 
 false, or maliciously critical of or derogatory to the financial 
 condition of an insurer, and which is calculated to injure any 
 person engaged in the business of insurance, shall constitute an 
 unfair method of competition and an unfair and deceptive act or 
 practice.  

    Subd. 4.    Boycott, coercion and intimidation.  
 Entering into any agreement to commit, or by any concerted 
 action committing, any act of boycott, coercion, or 
 intimidation, resulting in or tending to result in unreasonable 
 restraint of, or monopoly in, the business of insurance, shall 
 constitute an unfair method of competition and an unfair and 
 deceptive act or practice.  

    Subd. 4a.  Renumbered 72A.201 subd 4a 

    Subd. 5.    False financial statements.  Filing with any 
 supervisory or other public official, or making, publishing, 
 disseminating, circulating, or delivering to any person, or 
 placing before the public, or causing, directly or indirectly, 
 to be made, published, disseminated, circulated, delivered to 
 any person, or placed before the public, any false statement of 
 financial condition of an insurer with intent to deceive, shall 
 constitute an unfair method of competition and an unfair and 
 deceptive act or practice in the insurance business.  

    Subd. 6.    False entries.  Making any false entry in 
 any book, report, or statement of any insurer with intent to 
 deceive any agent or examiner lawfully appointed to examine into 
 its condition or into any of its affairs, or any public official 
 to whom such insurer is required by law to report, or who has 
 authority by law to examine into its condition or into any of 
 its affairs, or, with like intent, willfully omitting to make a 
 true entry of any material fact pertaining to the business of 
 such insurer in any book, report, or statement of such insurer, 
 shall constitute an unfair method of competition and an unfair 
 and deceptive act or practice.  

    Subd. 7.    Stock operations and advisory board contracts. 
  Issuing or delivering, or permitting agents, officers, or 
 employees to issue or deliver, agency company stock or other 
 capital stock, or benefit certificates or shares in any 
 common-law corporation, or securities or any special or advisory 
 board contracts or other contracts of any kind promising returns 
 and profits as an inducement to insurance, shall constitute an 
 unfair method of competition and an unfair and deceptive act or 
 practice.  

    Subd. 8.    Discrimination.  (a) Making or permitting 
 any unfair discrimination between individuals of the same class 
 and equal expectation of life in the rates charged for any 
 contract of life insurance or of annuity or in the dividends or 
 other benefits payable thereon, or in any other of the terms and 
 conditions of such contract or in making or permitting the 
 rejection of an individual's application for life insurance 
 coverage, as well as the determination of the rate class for 
 such individual, on the basis of a disability, shall constitute 
 an unfair method of competition and an unfair and deceptive act 
 or practice, unless the claims experience and actuarial 
 projections and other data establish significant and substantial 
 differences in class rates because of the disability. 

    (b) Refusing to insure or refusing to continue to insure 
 the life of a member of a reserve component of the armed forces 
 of the United States, or the national guard due to that person's 
 status as a member, or duty assignment while a member of any of 
 these military organizations, constitutes an unfair method of 
 competition and an unfair and deceptive act or practice unless 
 the individual has received an order for active duty. 

    (c) Refusing to reinstate coverage for the insured or any 
 covered dependents under an individual or group life or health 
 insurance policy or contract of a member of a reserve component 
 of the armed forces of the United States or the national guard 
 whose coverage or dependent coverage was terminated, canceled, 
 or nonrenewed while that person was on active duty constitutes 
 an unfair method of competition and an unfair and deceptive act 
 or practice.  For purposes of paragraphs (a) to (c), "health 
 insurance policy or contract" means any policy, contract, or 
 certificate providing benefits regulated under chapter 62A, 62C, 
 62D, or 64B. 

    For purposes of reinstatement of an individual policy, the 
 person shall apply for reinstatement within 90 days after 
 removal from active duty. 

    The reinstated coverage must not contain any new 
 preexisting condition or other exclusion or limitation, except a 
 condition determined by the Veterans Administration to be a 
 disability incurred or aggravated in the line of duty.  The 
 remainder of a preexisting condition limitation that was not 
 satisfied before the coverage was terminated may be applied once 
 the person returns and coverage is reinstated.  Reinstatement is 
 effective upon the payment of any required premiums. 

    (d) Refusing to offer, sell, or renew coverage; limiting 
 coverage; or charging a rate different from that normally 
 charged for the same coverage under a life insurance policy or 
 health plan because the applicant who is also the proposed 
 insured has been or is a victim of domestic abuse is an unfair 
 method of competition and an unfair and deceptive act or 
 practice. 

    Nothing in this paragraph prevents an insurer from 
 underwriting a risk on the basis of the physical or mental 
 history of an individual if the insurer does not take into 
 consideration whether the individual's condition was caused by 
 an act of domestic abuse. 

    For purposes of this paragraph, "domestic abuse" has the 
 meaning given in section 518B.01, subdivision 2; and "health 
 plan" has the meaning given in section 62Q.01, subdivision 3, 
 and includes the coverages referred to in section 62A.011, 
 subdivision 3, clauses (1), (7), (9), and (10). 

    Subd. 9.    Discrimination between individuals of the same 
 class.  Making or permitting any unfair discrimination between 
 individuals of the same class and of essentially the same hazard 
 in the amount of premium, policy fees, or rates charged for any 
 policy or contract of accident or health insurance or in the 
 benefits payable thereunder, or in any of the terms or 
 conditions of such contract, or in any other manner whatever, or 
 in making or permitting the rejection of an individual's 
 application for accident or health insurance coverage, as well 
 as the determination of the rate class for such individual, on 
 the basis of a disability, shall constitute an unfair method of 
 competition and an unfair and deceptive act or practice, unless 
 the claims experience and actuarial projections and other data 
 establish significant and substantial differences in class rates 
 because of the disability.  

    Subd. 10.    Rebates.  Except as otherwise expressly 
 provided by law, knowingly permitting or offering to make or 
 making any contract of life insurance, annuity, or accident and 
 health insurance, or agreement as to such contract, other than 
 as plainly expressed in the contract issued thereon, or paying 
 or allowing or giving, or offering to pay, allow, or give, 
 directly or indirectly, as inducement to such insurance or 
 annuity, any rebate of premiums payable on the contract, or any 
 special favor or advantage in the dividends or other benefits 
 thereon, or any valuable consideration or inducement whatever 
 not specified in the contract; or giving or selling or 
 purchasing, or offering to give, sell, or purchase, as 
 inducement to such insurance or annuity, or in connection 
 therewith, any stocks, bonds, or other securities of any 
 insurance company or other corporation, association, or 
 partnership, or any dividends or profits accrued thereon, or 
 anything of value whatsoever not specified in the contract, 
 shall constitute an unfair method of competition and an unfair 
 and deceptive act or practice.  

    Subd. 11.    Application to certain sections.  Violating 
 any provision of the following sections of this chapter not set 
 forth in this section shall constitute an unfair method of 
 competition and an unfair and deceptive act or practice:  
 sections 72A.12, subdivisions 2, 3, and 4, 72A.16, subdivision 
 2, 72A.03 and 72A.04, 72A.08, subdivision 1, as modified by 
 sections 72A.08, subdivision 4, 72A.201, sections 72A.49 to 
 72A.505, and 65B.13.  

    Subd. 12.    Unfair service.  Causing or permitting with 
 such frequency to indicate a general business practice any 
 unfair, deceptive, or fraudulent act concerning any claim or 
 complaint of an insured or claimant including, but not limited 
 to, the following practices:  

    (1) misrepresenting pertinent facts or insurance policy 
 provisions relating to coverages at issue; 

    (2) failing to acknowledge and act reasonably promptly upon 
 communications with respect to claims arising under insurance 
 policies; 

    (3) failing to adopt and implement reasonable standards for 
 the prompt investigation of claims arising under insurance 
 policies; 

    (4) refusing to pay claims without conducting a reasonable 
 investigation based upon all available information; 

    (5) failing to affirm or deny coverage of claims within a 
 reasonable time after proof of loss statements have been 
 completed; 

    (6) not attempting in good faith to effectuate prompt, 
 fair, and equitable settlements of claims in which liability has 
 become reasonably clear; 

    (7) compelling insureds to institute litigation to recover 
 amounts due under an insurance policy by offering substantially 
 less than the amounts ultimately recovered in actions brought by 
 the insureds; 

    (8) attempting to settle a claim for less than the amount 
 to which reasonable persons would have believed they were 
 entitled by reference to written or printed advertising material 
 accompanying or made part of an application; 

    (9) attempting to settle claims on the basis of an 
 application which was altered without notice to, or knowledge or 
 consent of, the insured; 

    (10) making claims payments to insureds or beneficiaries 
 not accompanied by a statement setting forth the coverage under 
 which the payments are being made; 

    (11) making known to insureds or claimants a policy of 
 appealing from arbitration awards in favor of insureds or 
 claimants for the purpose of compelling them to accept 
 settlements or compromises less than the amount awarded in 
 arbitration; 

    (12) delaying the investigation or payment of claims by 
 requiring an insured, claimant, or the physician of either to 
 submit a preliminary claim report and then requiring the 
 subsequent submission of formal proof of loss forms, both of 
 which submissions contain substantially the same information; 

    (13) failing to promptly settle claims, where liability has 
 become reasonably clear, under one portion of the insurance 
 policy coverage in order to influence settlements under other 
 portions of the insurance policy coverage; 

    (14) failing to promptly provide a reasonable explanation 
 of the basis in the insurance policy in relation to the facts or 
 applicable law for denial of a claim or for the offer of a 
 compromise settlement; 

    (15) requiring an insured to provide information or 
 documentation that is or would be dated more than five years 
 prior to or five years after the date of a fire loss, except for 
 proof of ownership of the damaged property. 

    Subd. 12a. Renumbered 72A.201 

    Subd. 13.    Refusal to renew.  Refusing to renew, 
 declining to offer or write, or charging differential rates for 
 an equivalent amount of homeowner's insurance coverage, as 
 defined by section 65A.27, for property located in a town or 
 statutory or home rule charter city, in which the insurer offers 
 to sell or writes homeowner's insurance, solely because:  

    (a) of the geographic area in which the property is 
 located; 

    (b) of the age of the primary structure sought to be 
 insured; 

    (c) the insured or prospective insured was denied coverage
 of the property by another insurer, whether by cancellation, 
 nonrenewal or declination to offer coverage, for a reason other 
 than those specified in section 65A.01, subdivision 3a, clauses 
 (a) to (e); or 

    (d) the property of the insured or prospective insured has
 been insured under the Minnesota FAIR Plan Act, shall constitute 
 an unfair method of competition and an unfair and deceptive act 
 or practice.  

    This subdivision prohibits an insurer from filing or 
 charging different rates for different zip code areas within the 
 same town or statutory or home rule charter city. 

    This subdivision shall not prohibit the insurer from 
 applying underwriting or rating standards which the insurer 
 applies generally in all other locations in the state and which 
 are not specifically prohibited by clauses (a) to (d).  Such 
 underwriting or rating standards shall specifically include but 
 not be limited to standards based upon the proximity of the 
 insured property to an extraordinary hazard or based upon the 
 quality or availability of fire protection services or based 
 upon the density or concentration of the insurer's risks.  
 Clause (b) shall not prohibit the use of rating standards based 
 upon the age of the insured structure's plumbing, electrical, 
 heating or cooling system or other part of the structure, the 
 age of which affects the risk of loss.  Any insurer's failure to 
 comply with section 65A.29, subdivisions 2 to 4, either (1) by 
 failing to give an insured or applicant the required notice or 
 statement or (2) by failing to state specifically a bona fide 
 underwriting or other reason for the refusal to write shall 
 create a presumption that the insurer has violated this 
 subdivision.  

    Subd. 14.    Application form refusal.  An insurance 
 agent refusing to supply a requested application form for 
 homeowner's insurance with any insurer whom the agent represents 
 or refusing to transmit forthwith any completed application form 
 to the insurer, shall constitute an unfair method of competition 
 and an unfair and deceptive act or practice.  

    Subd. 15.    Practices not held to be discrimination or 
 rebates.  Nothing in subdivision 8, 9, or 10, or in section 
 72A.12, subdivisions 3 and 4, shall be construed as including 
 within the definition of discrimination or rebates any of the 
 following practices: 

    (1) in the case of any contract of life insurance or 
 annuity, paying bonuses to policyholders or otherwise abating 
 their premiums in whole or in part out of surplus accumulated 
 from nonparticipating insurance, provided that any bonuses or 
 abatement of premiums shall be fair and equitable to 
 policyholders and for the best interests of the company and its 
 policyholders; 

    (2) in the case of life insurance policies issued on the 
 industrial debit plan, making allowance, to policyholders who 
 have continuously for a specified period made premium payments 
 directly to an office of the insurer, in an amount which fairly 
 represents the saving in collection expense; 

    (3) readjustment of the rate of premium for a group 
 insurance policy based on the loss or expense experienced 
 thereunder, at the end of the first or any subsequent policy 
 year of insurance thereunder, which may be made retroactive only 
 for such policy year; 

    (4) in the case of an individual or group health insurance 
 policy, the payment of differing amounts of reimbursement to 
 insureds who elect to receive health care goods or services from 
 providers designated by the insurer, provided that each insurer 
 shall on or before August 1 of each year file with the 
 commissioner summary data regarding the financial reimbursement 
 offered to providers so designated.  

    Any insurer which proposes to offer an arrangement 
 authorized under this clause shall disclose prior to its initial 
 offering and on or before August 1 of each year thereafter as a 
 supplement to its annual statement submitted to the commissioner 
 pursuant to section 60A.13, subdivision 1, the following 
 information:  

    (a) the name which the arrangement intends to use and its 
 business address; 

    (b) the name, address, and nature of any separate 
 organization which administers the arrangement on the behalf of 
 the insurers; and 

    (c) the names and addresses of all providers designated by 
 the insurer under this clause and the terms of the agreements 
 with designated health care providers.  

    The commissioner shall maintain a record of arrangements 
 proposed under this clause, including a record of any complaints 
 submitted relative to the arrangements. 

    If the commissioner requests copies of contracts with a 
 provider under this clause and the provider requests a 
 determination, all information contained in the contracts that 
 the commissioner determines may place the provider or health 
 care plan at a competitive disadvantage is nonpublic data.  

    Subd. 16.    Discrimination based on sex or marital 
 status.  Refusing to insure, refusing to continue to insure, 
 refusing to offer or submit an application for coverage, or 
 limiting the amount of coverage available to an individual 
 because of the sex or marital status of the individual; however, 
 nothing in this subsection prohibits an insurer from taking 
 marital status into account for the purpose of defining persons 
 eligible for dependents' benefits.  

    Subd. 17.    Return of premiums.  (a) Refusing, upon 
 surrender of an individual policy of life insurance in the case 
 of the insured's death, or in the case of a surrender prior to 
 death, of an individual insurance policy not covered by the 
 standard nonforfeiture laws under section 61A.24, to refund to 
 the owner all unearned premiums paid on the policy covering the 
 insured as of the time of the insured's death or surrender if 
 the unearned premium is for a period of more than one month.  

    (b) Refusing, upon termination or cancellation of a policy 
 of automobile insurance under section 65B.14, subdivision 2, or 
 a policy of homeowner's insurance under section 65A.27, 
 subdivision 4, or a policy of accident and sickness insurance 
 under section 62A.01, or a policy of comprehensive health 
 insurance under chapter 62E, to refund to the insured all 
 unearned premiums paid on the policy covering the insured as of 
 the time of the termination or cancellation if the unearned 
 premium is for a period of more than one month.  The return of 
 unearned premium must be delivered to the insured within 30 days 
 following receipt by the insurer of the insured's request for 
 cancellation. 

    (c) This subdivision does not apply to policies of 
 insurance providing coverage only for motorcycles or other 
 seasonally rated or limited use vehicles where the rate is 
 reduced to reflect seasonal or limited use. 

    (d) For purposes of this section, a premium is unearned 
 during the period of time the insurer has not been exposed to 
 any risk of loss.  Except for premiums for motorcycle coverage 
 or other seasonally rated or limited use vehicles where the rate 
 is reduced to reflect seasonal or limited use, the unearned 
 premium is determined by multiplying the premium by the fraction 
 that results from dividing the period of time from the date of 
 termination to the date the next scheduled premium is due by the 
 period of time for which the premium was paid. 

    (e) The owner may cancel a policy referred to in this 
 section at any time during the policy period.  This provision 
 supersedes any inconsistent provision of law or any inconsistent 
 policy provision. 

    Subd. 18.    Improper business practices.  (a) 
 Improperly withholding, misappropriating, or converting any 
 money belonging to a policyholder, beneficiary, or other person 
 when received in the course of the insurance business; or (b) 
 engaging in fraudulent, coercive, or dishonest practices in 
 connection with the insurance business, shall constitute an 
 unfair method of competition and an unfair and deceptive act or 
 practice. 

    Subd. 19.    Support for underwriting standards.  No 
 life or health insurance company doing business in this state 
 shall engage in any selection or underwriting process unless the 
 insurance company establishes beforehand substantial data, 
 actuarial projections, or claims experience which support the 
 underwriting standards used by the insurance company.  The data, 
 projections, or claims experience used to support the selection 
 or underwriting process is not limited to only that of the 
 company.  The experience, projections, or data of other 
 companies or a rate service organization may be used as well.  

    Subd. 20.    Contact with government.  An insurance 
 company may not terminate or otherwise penalize an insurance 
 agent solely because the agent contacted any government 
 department or agency regarding a problem that the agent or an 
 insured may be having with an insurance company.  For purposes 
 of this section, "government department or agency" includes the 
 executive, legislative, and judicial branches of government as 
 stated in article III of the Constitution. 

    Subd. 21.  No insurance company doing business in this 
 state shall engage in any selection or underwriting practice 
 that is arbitrary, capricious, or unfairly discriminatory.  

    Subd. 22.    Limitations on health care providers.  (a) 
 No insurer providing benefits under the Minnesota No-Fault 
 Automobile Insurance Act or a plan authorized by sections 
 471.617 or 471.98 to 471.982 may limit the type of licensed 
 health care provider who may provide treatment for covered 
 conditions under a policy so long as the services provided are 
 within the scope of licensure for the provider.  The insurer may 
 not exclude a specific method of treatment for a covered 
 condition if that exclusion has the effect of excluding a 
 specific type of licensed health care provider from treating a 
 covered condition.  

    (b) This subdivision does not limit the right of an insurer 
 to contract with individual members of any type of licensed 
 health care provider to the exclusion of other members of the 
 group, nor shall it limit the right to the insurer to exclude 
 coverage for a type of treatment if the insurer can show the 
 treatment is not medically necessary or is not medically 
 appropriate. 

    Subd. 23.    Discrimination in automobile insurance 
 policies.  (a) No insurer that offers an automobile insurance 
 policy in this state shall: 

    (1) use the employment status of the applicant as an 
 underwriting standard or guideline; or 

    (2) deny coverage to a policyholder for the same reason. 

    (b) No insurer that offers an automobile insurance policy 
 in this state shall: 

    (1) use the applicant's status as a tenant, as the term is 
 defined in section 566.18, subdivision 2, as an underwriting 
 standard or guideline; or 

    (2) deny coverage to a policyholder for the same reason; or 

    (3) make any discrimination in offering or establishing 
 rates, premiums, dividends, or benefits of any kind, or by way 
 of rebate, for the same reason.  

    (c) No insurer that offers an automobile insurance policy 
 in this state shall: 

    (1) use the failure of the applicant to have an automobile 
 policy in force during any period of time before the application 
 is made as an underwriting standard or guideline; or 

    (2) deny coverage to a policyholder for the same reason. 

    This provision does not apply if the applicant was required 
 by law to maintain automobile insurance coverage and failed to 
 do so. 

    An insurer may require reasonable proof that the applicant 
 did not fail to maintain this coverage.  The insurer is not 
 required to accept the mere lack of a conviction or citation for 
 failure to maintain this coverage as proof of failure to 
 maintain coverage.  The insurer must provide the applicant with 
 information identifying the documentation that is required to 
 establish reasonable proof that the applicant did not fail to 
 maintain the coverage. 

    (d) No insurer that offers an automobile insurance policy 
 in this state shall use an applicant's prior claims for benefits 
 paid under section 65B.44 as an underwriting standard or 
 guideline if the applicant was 50 percent or less negligent in 
 the accident or accidents causing the claims. 

    Subd. 24.    Cancellations and nonrenewals.  No insurer 
 shall cancel or fail to renew an individual life or individual 
 health policy or an individual nonprofit health service plan 
 subscriber contract for nonpayment of premium unless it mails or 
 delivers to the named insured, at the address shown on the 
 policy or subscriber contract at least 30 days before lapse, 
 final notice of the cancellation or nonrenewal and the effective 
 date of the cancellation or nonrenewal. 

    If the named insured is not the policy or subscriber 
 contract owner, the notice required by this subdivision must be 
 sent to the insured's last known address, if any, and to the 
 owner's last known address. 

    Proof of mailing of the notice of lapse for failure to pay 
 the premium before the expiration of the grace period is 
 sufficient proof that notice required in this subdivision has 
 been given. 

    This subdivision does not apply to a life or health 
 insurance policy or contract upon which premiums are paid at a 
 monthly interval or less and that contains any grace period 
 required by statute for the payment of premiums during which 
 time the insurance continues in force. 

    Subd. 25.    Use of statements of a minor.  No statement 
 of a minor or information obtained by an insurer or a 
 representative of an insurer from a minor may be used in any 
 manner in regard to a claim unless the parent or guardian of the 
 minor has granted permission for the minor to be interviewed or 
 the minor's statement to be taken. 

    Subd. 26.    Loss experience.  An insurer shall without 
 cost to the insured provide an insured with the loss or claims 
 experience of that insured for the current policy period and for 
 the two policy periods preceding the current one for which the 
 insurer has provided coverage, within 30 days of a request for 
 the information by the policyholder.  Claims experience data 
 must be provided to the insured in accordance with state and 
 federal requirements regarding the confidentiality of medical 
 data.  The insurer shall not be responsible for providing 
 information without cost more often than once in a 12-month 
 period.  The insurer is not required to provide the information 
 if the policy covers the employee of more than one employer and 
 the information is not maintained separately for each employer 
 and not all employers request the data. 

    An insurer, health maintenance organization, or a 
 third-party administrator may not request more than three years 
 of loss or claims experience as a condition of submitting an 
 application or providing coverage. 

    This subdivision only applies to group life policies and 
 group health policies. 

    Subd. 27.    Solicitations and sales of insurance products 
 to borrowers.  (a) A loan officer, a loan representative, or 
 other person involved in taking or processing a loan may not 
 solicit an insurance product, except for credit life, credit 
 disability, credit involuntary unemployment, mortgage life, 
 mortgage accidental death, or mortgage disability, and except 
 for life insurance when offered in lieu of credit life 
 insurance, from the completion of the initial loan application, 
 as defined in the federal Equal Credit Opportunity Act, United 
 States Code, title 15, sections 1691 to 1691f, and any 
 regulations adopted under those sections, until after the 
 closing of the loan transaction.  

    (b) This subdivision applies only to loan transactions 
 covered by the federal Truth-in-Lending Act, United States Code, 
 title 15, sections 1601 to 1666j, and any regulations adopted 
 under those sections.  

    (c) This subdivision does not apply to sales of title 
 insurance, homeowner's insurance, a package 
 homeowner's-automobile insurance product, automobile insurance, 
 or a similar insurance product, required to perfect title to, or 
 protect, property for which a security interest will be taken if 
 the product is required as a condition of the loan. 

    (d) Nothing in this subdivision prohibits the solicitation 
 or sale of any insurance product by means of mass communication. 

    Subd. 28.    Conversion fees prohibited.  An issuer 
 providing health coverage through conversion policies, plans, or 
 contracts shall not impose a fee or charge, other than the 
 premium, for issuing these policies, plans, or contracts. 

    Subd. 29.    HIV tests; crime victims.  No insurer 
 regulated under chapter 61A or 62B, or providing health, 
 medical, hospitalization, or accident and sickness insurance 
 regulated under chapter 62A, or nonprofit health services 
 corporation regulated under chapter 62C, health maintenance 
 organization regulated under chapter 62D, or fraternal benefit 
 society regulated under chapter 64B, may: 

    (1) obtain or use the performance of or the results of a 
 test to determine the presence of the human immunodeficiency 
 virus (HIV) antibody performed on an offender under section 
 611A.19 or performed on a crime victim who was exposed to or had 
 contact with an offender's bodily fluids during commission of a 
 crime that was reported to law enforcement officials, in order 
 to make an underwriting decision, cancel, fail to renew, or take 
 any other action with respect to a policy, plan, certificate, or 
 contract; 

    (2) obtain or use the performance of or the results of a 
 test to determine the presence of the human immunodeficiency 
 virus (HIV) antibody performed on a patient pursuant to sections 
 144.761 to 144.7691, or performed on emergency medical services 
 personnel pursuant to the protocol under section 144.762, 
 subdivision 2, in order to make an underwriting decision, 
 cancel, fail to renew, or take any other action with respect to 
 a policy, plan, certificate, or contract; for purposes of this 
 clause, "patient" and "emergency medical services personnel" 
 have the meanings given in section 144.761; or 

    (3) ask an applicant for coverage or a person already 
 covered whether the person has:  (i) had a test performed for 
 the reason set forth in clause (1) or (2); or (ii) been the 
 victim of an assault or any other crime which involves bodily 
 contact with the offender. 

    A question that purports to require an answer that would 
 provide information regarding a test performed for the reason 
 set forth in clause (1) or (2) may be interpreted as excluding 
 this test.  An answer that does not mention the test is 
 considered to be a truthful answer for all purposes.  An 
 authorization for the release of medical records for insurance 
 purposes must specifically exclude any test performed for the 
 purpose set forth in clause (1) or (2) and must be read as 
 providing this exclusion regardless of whether the exclusion is 
 expressly stated.  This subdivision does not affect tests 
 conducted for purposes other than those described in clause (1) 
 or (2), including any test to determine the presence of the 
 human immunodeficiency virus (HIV) antibody if such test was 
 performed at the insurer's direction as part of the insurer's 
 normal underwriting requirements. 

    Subd. 30.    Records retention.  An insurer shall retain 
 copies of all underwriting documents, policy forms, and 
 applications for three years from the effective date of the 
 policy.  An insurer shall retain all claim files and 
 documentation related to a claim for three years from the date 
 the claim was paid or denied.  This subdivision does not relieve 
 the insurer of its obligation to produce these documents to the 
 department after the retention period has expired in connection 
 with an enforcement action or administrative proceeding against 
 the insurer from whom the documents are requested, if the 
 insurer has retained the documents.  Records required to be 
 retained by this section may be retained in paper, photograph, 
 microprocess, magnetic, mechanical, or electronic media, or by 
 any process which accurately reproduces or forms a durable 
 medium for the reproduction of a record. 

    Subd. 31.    Reasonable, adequate, and not predatory 
 premiums.  Premiums charged by a health plan company, as 
 defined in section 62Q.01, shall be reasonable, adequate, and 
 not predatory in relation to the benefits, considering actuarial 
 projection of the cost of providing or paying for the covered 
 health services, considering the costs of administration, and in 
 relation to the reserves and surplus required by law. 

    Subd. 32.    Unfair health risk avoidance.  No insurer 
 or health plan company may design a network of providers, 
 policies on access to providers, or marketing strategy in such a 
 way as to discourage enrollment by individuals or groups whose 
 health care needs are perceived as likely to be more expensive 
 than the average.  This subdivision does not prohibit 
 underwriting and rating practices that comply with Minnesota law.

    Subd. 33.    Prohibition of inappropriate incentives.  
 No insurer or health plan company may give any financial 
 incentive to a health care provider based solely on the number 
 of services denied or referrals not authorized by the provider.  
 This subdivision does not prohibit capitation or other 
 compensation methods that serve to hold health care providers 
 financially accountable for the cost of caring for a patient 
 population. 

    Subd. 34.    Suitability of insurance for customer.  In 
 recommending or issuing life, endowment, individual accident and 
 sickness, long-term care, annuity, life-endowment, or Medicare 
 supplement insurance to a customer, an insurer, either directly 
 or through its agent, must have reasonable grounds for believing 
 that the recommendation is suitable for the customer.  

    In the case of group insurance marketed on a direct 
 response basis without the use of direct agent contact, this 
 subdivision is satisfied if the insurer has reasonable grounds 
 to believe that the insurance offered is generally suitable for 
 the group to whom the offer is made. 

    Subd. 35.    Determination of health plan policy limits. 
  Any health plan that includes a specific policy limit within 
 its insurance policy, certificate, or subscriber agreement shall 
 calculate the policy limit by using the amount actually paid on 
 behalf of the insured, subscriber, or dependents for services 
 covered under the policy, subscriber agreement, or certificate 
 unless the amount paid is greater than the billed charge. 

    HIST: 1967 c 395 art 12 s 20; 1973 c 474 s 1; 1975 c 139 s 1; 
 1979 c 207 s 6; 1Sp1981 c 4 art 2 s 7; 1983 c 285 s 1; 1984 c 
 555 s 1-3; 1984 c 592 s 73; 1Sp1985 c 10 s 71; 1986 c 444; 1987 
 c 113 s 1; 1987 c 337 s 116-119; 1989 c 170 s 3; 1989 c 260 s 
 17-20; 1989 c 316 s 1; 1989 c 330 s 27-32; 1990 c 467 s 1; 1991 
 c 188 s 1; 1992 c 524 s 1; 1992 c 564 art 1 s 46,54; art 4 s 14; 
 1992 c 569 s 6; 1993 c 343 s 26; 1994 c 475 s 1; 1994 c 485 s 
 54,55,65; 1994 c 625 art 3 s 20; 1995 c 186 s 17; 1995 c 234 art 
 8 s 21,22; 1995 c 258 s 52,53; 1996 c 278 s 1; 1996 c 433 s 1; 
 1996 c 446 art 1 s 61-65; 1997 c 77 s 3