1.1                          A bill for an act 
  1.2             relating to insurance; regulating coverages, notice 
  1.3             provisions, enforcement provisions, fees, licensees; 
  1.4             making technical changes; amending Minnesota Statutes 
  1.5             1994, sections 60A.06, subdivision 3; 60A.085; 
  1.6             60A.111, subdivision 2; 60A.124; 60A.23, subdivision 
  1.7             8; 60A.26; 60A.955; 60K.03, subdivision 7; 60K.14, 
  1.8             subdivision 1; 61A.03, subdivision 1; 61A.071; 
  1.9             61A.092, subdivisions 3 and 6; 61B.28, subdivisions 8 
  1.10            and 9; 62A.042; 62A.10; 62A.135; 62A.136; 62A.14; 
  1.11            62A.141; 62A.31, subdivisions 1h and 1i; 62A.46, 
  1.12            subdivision 2, and by adding a subdivision; 62A.48, 
  1.13            subdivisions 1 and 2; 62A.50, subdivision 3; 62C.14, 
  1.14            subdivisions 5 and 14; 62D.02, subdivision 8; 62E.02, 
  1.15            subdivision 7; 62E.12; 62F.02, subdivision 2; 62I.09, 
  1.16            subdivision 2; 62L.02, subdivision 16; 62L.03, 
  1.17            subdivision 5; 65A.01, by adding a subdivision; 
  1.18            65B.06, subdivision 3; 65B.08, subdivision 1; 65B.09, 
  1.19            subdivision 1; 65B.10, subdivision 3; 65B.61, 
  1.20            subdivision 1; 72A.20, by adding a subdivision; 
  1.21            72B.05; 299F.053, subdivision 2; and 515A.3-112; 
  1.22            proposing coding for new law in Minnesota Statutes, 
  1.23            chapters 60A; and 62A; repealing Minnesota Statutes 
  1.24            1994, section 65B.07, subdivision 5. 
  1.25  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.26     Section 1.  Minnesota Statutes 1994, section 60A.06, 
  1.27  subdivision 3, is amended to read: 
  1.28     Subd. 3.  [LIMITATION ON COMBINATION POLICIES.] (a) Unless 
  1.29  specifically authorized by subdivision 1, clause (4), it is 
  1.30  unlawful to combine in one policy coverage permitted by 
  1.31  subdivision 1, clauses (4) and (5)(a).  This subdivision does 
  1.32  not prohibit the simultaneous sale of these products, but the 
  1.33  sale must involve two separate and distinct policies.  
  1.34     (b) This subdivision does not apply to group policies.  
  1.35     (c) This subdivision does not apply to policies permitted 
  2.1   by subdivision 1, clause (4), that contain benefits providing 
  2.2   acceleration of life, endowment, or annuity benefits in advance 
  2.3   of the time they would otherwise be payable, or to long-term 
  2.4   care policies as defined in section 62A.46, subdivision 2.  
  2.5      Sec. 2.  Minnesota Statutes 1994, section 60A.085, is 
  2.6   amended to read: 
  2.7      60A.085 [CANCELLATION OF GROUP COVERAGE; NOTIFICATION TO 
  2.8   COVERED PERSONS.] 
  2.9      (a) No cancellation of any group life, group accidental 
  2.10  death and dismemberment, group disability income, or group 
  2.11  medical expense policy, plan, or contract regulated under 
  2.12  chapter 62A or 62C is effective unless the insurer has made a 
  2.13  good faith effort to notify all covered persons of the 
  2.14  cancellation at least 30 days before the effective cancellation 
  2.15  date.  For purposes of this section, an insurer has made a good 
  2.16  faith effort to notify all covered persons if the insurer has 
  2.17  notified all the persons included on the list required by 
  2.18  paragraph (b) at the home address given and only if the list has 
  2.19  been updated within the last 12 months. 
  2.20     (b) At the time of the application for coverage subject to 
  2.21  paragraph (a), the insurer shall obtain an accurate list of the 
  2.22  names and home addresses of all persons to be covered.  
  2.23     (c) Paragraph (a) does not apply if the group policy, plan, 
  2.24  or contract is replaced, or if the insurer has reasonable 
  2.25  evidence to indicate that it will be replaced, by a 
  2.26  substantially similar policy, plan, or contract. 
  2.27     (d) In no event shall this section extend coverage under a 
  2.28  group policy, plan, or contract more than 120 days beyond the 
  2.29  date coverage would otherwise cancel based on the terms of the 
  2.30  group policy, plan, or contract.  
  2.31     (e) If coverage under the group policy, plan, or contract 
  2.32  is extended by this section, then the time period during which 
  2.33  affected members may exercise any conversion privilege provided 
  2.34  for in the group policy, plan, or contract is extended for the 
  2.35  same length of time, plus 30 days. 
  2.36     Sec. 3.  Minnesota Statutes 1994, section 60A.111, 
  3.1   subdivision 2, is amended to read: 
  3.2      Subd. 2.  [PLAN.] If the commissioner determines that the 
  3.3   required liabilities of any company are greater than its 
  3.4   qualified assets and that the combined financial resources of 
  3.5   the insurance company members of any insurance holding company 
  3.6   system of which the company is a member are not adequate to 
  3.7   counterbalance that fact, the commissioner may require the 
  3.8   company to submit to the commissioner for approval a plan by 
  3.9   which the company undertakes to bring the ratio of its required 
  3.10  liabilities to its qualified assets to its required liabilities, 
  3.11  expressed as a percentage, up to at least 110 percent within a 
  3.12  reasonable period, usually not exceeding five years.  
  3.13     Sec. 4.  Minnesota Statutes 1994, section 60A.124, is 
  3.14  amended to read: 
  3.15     60A.124 [INDEPENDENT AUDIT.] 
  3.16     The audit report of the independent certified public 
  3.17  accountant that performs the audit of an insurer's annual 
  3.18  statement as required under section 60A.13 60A.129, 
  3.19  subdivision 3a 3, paragraph (a), should contain a statement as 
  3.20  to whether anything, in connection with their audit, came to 
  3.21  their attention that caused them to believe that the insurer 
  3.22  failed to adopt and consistently apply the valuation procedure 
  3.23  as required by sections 60A.122 and 60A.123. 
  3.24     Sec. 5.  Minnesota Statutes 1994, section 60A.23, 
  3.25  subdivision 8, is amended to read: 
  3.26     Subd. 8.  [SELF-INSURANCE OR INSURANCE PLAN ADMINISTRATORS 
  3.27  WHO ARE VENDORS OF RISK MANAGEMENT SERVICES.] (1)  [SCOPE.] This 
  3.28  subdivision applies to any vendor of risk management services 
  3.29  and to any entity which administers, for compensation, a 
  3.30  self-insurance or insurance plan.  This subdivision does not 
  3.31  apply (a) to an insurance company authorized to transact 
  3.32  insurance in this state, as defined by section 60A.06, 
  3.33  subdivision 1, clauses (4) and (5); (b) to a service plan 
  3.34  corporation, as defined by section 62C.02, subdivision 6; (c) to 
  3.35  a health maintenance organization, as defined by section 62D.02, 
  3.36  subdivision 4; (d) to an employer directly operating a 
  4.1   self-insurance plan for its employees' benefits; or (e) to an 
  4.2   entity which administers a program of health benefits 
  4.3   established pursuant to a collective bargaining agreement 
  4.4   between an employer, or group or association of employers, and a 
  4.5   union or unions. 
  4.6      (2)  [DEFINITIONS.] For purposes of this subdivision the 
  4.7   following terms have the meanings given them. 
  4.8      (a) "Administering a self-insurance or insurance plan" 
  4.9   means (i) processing, reviewing or paying claims, (ii) 
  4.10  establishing or operating funds and accounts, or (iii) otherwise 
  4.11  providing necessary administrative services in connection with 
  4.12  the operation of a self-insurance or insurance plan. 
  4.13     (b) "Employer" means an employer, as defined by section 
  4.14  62E.02, subdivision 2. 
  4.15     (c) "Entity" means any association, corporation, 
  4.16  partnership, sole proprietorship, trust, or other business 
  4.17  entity engaged in or transacting business in this state. 
  4.18     (d) "Self-insurance or insurance plan" means a plan 
  4.19  providing life, medical or hospital care, accident, sickness or 
  4.20  disability insurance, as an employee fringe benefit for the 
  4.21  benefit of employees or members of an association, or a plan 
  4.22  providing liability coverage for any other risk or hazard, which 
  4.23  is or is not directly insured or provided by a licensed insurer, 
  4.24  service plan corporation, or health maintenance organization. 
  4.25     (e) "Vendor of risk management services" means an entity 
  4.26  providing for compensation actuarial, financial management, 
  4.27  accounting, legal or other services for the purpose of designing 
  4.28  and establishing a self-insurance or insurance plan for an 
  4.29  employer. 
  4.30     (3)  [LICENSE.] No vendor of risk management services or 
  4.31  entity administering a self-insurance or insurance plan may 
  4.32  transact this business in this state unless it is licensed to do 
  4.33  so by the commissioner.  An applicant for a license shall state 
  4.34  in writing the type of activities it seeks authorization to 
  4.35  engage in and the type of services it seeks authorization to 
  4.36  provide.  The license may be granted only when the commissioner 
  5.1   is satisfied that the entity possesses the necessary 
  5.2   organization, background, expertise, and financial integrity to 
  5.3   supply the services sought to be offered.  The commissioner may 
  5.4   issue a license subject to restrictions or limitations upon the 
  5.5   authorization, including the type of services which may be 
  5.6   supplied or the activities which may be engaged in.  The license 
  5.7   fee is $100.  All licenses are for a period of two years. 
  5.8      (4)  [REGULATORY RESTRICTIONS; POWERS OF THE COMMISSIONER.] 
  5.9   To assure that self-insurance or insurance plans are financially 
  5.10  solvent, are administered in a fair and equitable fashion, and 
  5.11  are processing claims and paying benefits in a prompt, fair, and 
  5.12  honest manner, vendors of risk management services and entities 
  5.13  administering insurance or self-insurance plans are subject to 
  5.14  the supervision and examination by the commissioner.  Vendors of 
  5.15  risk management services, entities administering insurance or 
  5.16  self-insurance plans, and insurance or self-insurance plans 
  5.17  established or operated by them are subject to the trade 
  5.18  practice requirements of sections 72A.19 to 72A.30.  In lieu of 
  5.19  an unlimited guarantee from a parent corporation for a vendor of 
  5.20  risk management services or an entity administering insurance or 
  5.21  self-insurance plans, the commissioner may accept a fidelity 
  5.22  surety bond in a form satisfactory to the commissioner in an 
  5.23  amount equal to 120 percent of the total amount of claims 
  5.24  handled by the applicant in the prior year.  If at any time the 
  5.25  total amount of claims handled during a year exceeds the amount 
  5.26  upon which the bond was calculated, the administrator shall 
  5.27  immediately notify the commissioner.  The commissioner may 
  5.28  require that the bond be increased accordingly. 
  5.29     (5)  [RULEMAKING AUTHORITY.] To carry out the purposes of 
  5.30  this subdivision, the commissioner may adopt rules, including 
  5.31  emergency rules, pursuant to sections 14.001 to 14.69.  These 
  5.32  rules may: 
  5.33     (a) establish reporting requirements for administrators of 
  5.34  insurance or self-insurance plans; 
  5.35     (b) establish standards and guidelines to assure the 
  5.36  adequacy of financing, reinsuring, and administration of 
  6.1   insurance or self-insurance plans; 
  6.2      (c) establish bonding requirements or other provisions 
  6.3   assuring the financial integrity of entities administering 
  6.4   insurance or self-insurance plans; or 
  6.5      (d) establish other reasonable requirements to further the 
  6.6   purposes of this subdivision. 
  6.7      Sec. 6.  [60A.235] [STANDARDS FOR DETERMINING WHETHER 
  6.8   CONTRACTS ARE HEALTH PLAN CONTRACTS OR STOP LOSS CONTRACTS.] 
  6.9      Subdivision 1.  [FINDINGS AND PURPOSE.] The purpose of this 
  6.10  section is to establish a standard for the determination of 
  6.11  whether an insurance policy or other evidence or coverage should 
  6.12  be treated as a policy of accident and sickness insurance or a 
  6.13  stop loss policy for the purpose of the regulation of the 
  6.14  business of insurance.  The laws regulating the business of 
  6.15  insurance in Minnesota impose distinctly different requirements 
  6.16  upon accident and sickness insurance policies and stop loss 
  6.17  policies.  In particular, the regulation of accident and 
  6.18  sickness insurance in Minnesota includes measures designed to 
  6.19  reform the health insurance market, to minimize or prohibit 
  6.20  selective rating or rejection of employee groups or individual 
  6.21  group members based upon health conditions, and to provide 
  6.22  access to affordable health insurance coverage regardless of 
  6.23  pre-existing health conditions.  The health care reform 
  6.24  provisions enacted in Minnesota will only be effective if they 
  6.25  are applied to all insurers and health carriers who in 
  6.26  substance, regardless of purported form, engage in the business 
  6.27  of issuing health insurance coverage to employees of an employee 
  6.28  group.  This section applies to insurance companies and health 
  6.29  carriers and the policies or other evidence of coverage that 
  6.30  they issue.  This section does not apply to employers or the 
  6.31  benefit plans they establish for their employees. 
  6.32     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
  6.33  terms defined in this subdivision have the meanings given. 
  6.34     (a) "Attachment point" means the claims amount beyond which 
  6.35  the insurance company or health carrier incurs a liability for 
  6.36  payment. 
  7.1      (b) "Direct coverage" means coverage under which an 
  7.2   insurance company or health carrier assumes a direct obligation 
  7.3   to an individual, under the policy or evidence of coverage, with 
  7.4   respect to health care expenses incurred by the individual or a 
  7.5   member of the individual's family. 
  7.6      (c) "Expected claims" means the amount of claims that, in 
  7.7   the absence of a stop loss policy or other insurance or evidence 
  7.8   of coverage, are projected to be incurred under an 
  7.9   employer-sponsored plan covering health care expenses. 
  7.10     (d) "Expected plan claims" means the expected claims less 
  7.11  the projected claims in excess of the specific attachment point, 
  7.12  adjusted to be consisted with the employer's aggregate contract 
  7.13  period. 
  7.14     (e) "Health plan" means a health plan as defined in section 
  7.15  62A.011 and includes group coverage regardless of the size of 
  7.16  the group. 
  7.17     (f) "Health carrier" means a health carrier as defined in 
  7.18  section 62A.011. 
  7.19     Subd. 3.  [HEALTH PLAN POLICIES ISSUED AS STOP LOSS 
  7.20  COVERAGE.] (a) An insurance company or health carrier issuing or 
  7.21  renewing an insurance policy or other evidence of coverage, that 
  7.22  provides coverage to an employer for health care expenses 
  7.23  incurred under an employer-sponsored plan provided to the 
  7.24  employer's employees, retired employees, or their dependents, 
  7.25  shall issue the policy or evidence of coverage as a health plan 
  7.26  if the policy or evidence of coverage: 
  7.27     (1) has a specific attachment point for claims incurred per 
  7.28  individual that is lower than $10,000; or 
  7.29     (2) has an aggregate attachment point that is lower than 
  7.30  the sum of: 
  7.31     (i) 150 percent of the first $50,000 of expected plan 
  7.32  claims; 
  7.33     (ii) 120 percent of the next $450,000 of expected plan 
  7.34  claims; and 
  7.35     (iii) 110 percent of the remaining expected plan claims. 
  7.36     (b) Where the insurance policy or evidence of coverage 
  8.1   applies to a contract period of more than one year, the dollar 
  8.2   amounts set forth in paragraph (a), clauses (1) and (2), must be 
  8.3   multiplied by the length of the contract period expressed in 
  8.4   years. 
  8.5      (c) The commissioner may adjust the constant dollar amounts 
  8.6   provided in paragraph (a), clauses (1) and (2), on January 1 of 
  8.7   any year, based upon changes in the medical component of the 
  8.8   Consumer Price Index (CPI).  Adjustments must be in increments 
  8.9   of $100 and must not be made unless at least that amount of 
  8.10  adjustment is required.  The commissioner shall publish any 
  8.11  change in these dollar amounts at least three months before 
  8.12  their effective date. 
  8.13     (d) A policy or evidence of coverage issued by an insurance 
  8.14  company or health carrier that provides direct coverage of 
  8.15  health care expenses of an individual including a policy or 
  8.16  evidence of coverage administered on a group basis is a health 
  8.17  plan regardless of whether the policy or evidence of coverage is 
  8.18  denominated as stop loss coverage. 
  8.19     Subd. 4.  [COMPLIANCE.] (a) An insurance company or health 
  8.20  carrier that is required to issue a policy or evidence of 
  8.21  coverage as a health plan under this section shall, even if the 
  8.22  policy or evidence of coverage is denominated as stop loss 
  8.23  coverage, comply with all the laws of this state that apply to 
  8.24  the health plan, including, but not limited to, chapters 62A, 
  8.25  62C, 62D, 62E, 62L, and 62Q. 
  8.26     (b) With respect to an employer who had been issued a 
  8.27  policy or evidence of coverage denominated as stop loss coverage 
  8.28  before the effective date of this section, compliance with this 
  8.29  section is required as of the first renewal date occurring on or 
  8.30  after the effective date of this section. 
  8.31     Sec. 7.  [60A.236] [STOP LOSS REGULATION.] 
  8.32     A contract providing stop loss coverage, issued or renewed 
  8.33  to a small employer, as defined in section 62L.02, subdivision 
  8.34  26, or to a plan sponsored by a small employer, must include a 
  8.35  claim settlement period no less favorable to the small employer 
  8.36  or plan than coverage of all claims incurred during the contract 
  9.1   period regardless of when the claims are paid. 
  9.2      Sec. 8.  Minnesota Statutes 1994, section 60A.26, is 
  9.3   amended to read: 
  9.4      60A.26 [SUSPENSION OF INSURERS, NOTICE TO OTHER STATES; 
  9.5   NOTIFICATIONS AND REPORTS.] 
  9.6      Subdivision 1.  [OTHER STATES.] The commissioner of 
  9.7   commerce shall notify the insurance departments of all other 
  9.8   states whenever, under any law then in effect, the commissioner 
  9.9   suspends the right of a foreign or domestic insurer to transact 
  9.10  business in this state.  
  9.11     Subd. 2.  [NAIC.] The commissioner of commerce shall report 
  9.12  public regulatory actions, investigative information, and 
  9.13  complaints to the appropriate reporting system or database of 
  9.14  the National Association of Insurance Commissioners. 
  9.15     Sec. 9.  Minnesota Statutes 1994, section 60A.955, is 
  9.16  amended to read: 
  9.17     60A.955 [CLAIM FORMS TO CONTAIN FRAUD WARNING.] 
  9.18     All insurance claim forms issued by an insurer for use in 
  9.19  submitting a claim for payment or a claim for any other benefit 
  9.20  pursuant to a policy shall clearly contain a warning 
  9.21  substantially as follows:  "A person who submits an application 
  9.22  or files a claim with intent to defraud or helps commit a fraud 
  9.23  against an insurer is guilty of a crime."  An insurer may comply 
  9.24  with this section by including the warning on an addendum 
  9.25  attached to the application or claim form.  The absence of the 
  9.26  required warning does not constitute a defense in a prosecution 
  9.27  for a violation of chapter 609 or any other chapter of Minnesota 
  9.28  Statutes. 
  9.29     Sec. 10.  Minnesota Statutes 1994, section 60K.03, 
  9.30  subdivision 7, is amended to read: 
  9.31     Subd. 7.  [EXCEPTIONS.] The following are exempt from the 
  9.32  general licensing requirements prescribed by this section:  
  9.33     (1) agents of township mutuals who are exempted pursuant to 
  9.34  section 60K.04; 
  9.35     (2) fraternal benefit society representatives exempted 
  9.36  pursuant to section 60K.05; 
 10.1      (3) any regular salaried officer or employee of a licensed 
 10.2   insurer, without license or other qualification, may act on 
 10.3   behalf of that licensed insurer in the negotiation of insurance 
 10.4   for that insurer, provided that a licensed agent must 
 10.5   participate in the sale of the insurance; 
 10.6      (4) employers and their officers or employees, and the 
 10.7   trustees or employees of any trust plan, to the extent that the 
 10.8   employers, officers, employees, or trustees are engaged in the 
 10.9   administration or operation of any program of employee benefits 
 10.10  for the employees of the employers or employees of their 
 10.11  subsidiaries or affiliates involving the use of insurance issued 
 10.12  by a licensed insurance company; provided that the activities of 
 10.13  the officers, employees and trustees are incidental to clerical 
 10.14  or administrative duties and their compensation does not vary 
 10.15  with the volume of insurance or applications for insurance; 
 10.16     (5) employees of a creditor who enroll debtors for credit 
 10.17  life, credit accident and health, or credit involuntary 
 10.18  unemployment insurance; provided the employees receive no 
 10.19  commission or fee for it; 
 10.20     (6) clerical or administrative employees of an insurance 
 10.21  agent who take insurance applications or receive premiums in the 
 10.22  office of their employer, if the activities are incidental to 
 10.23  clerical or administrative duties and the employee's 
 10.24  compensation does not vary with the volume of the applications 
 10.25  or premiums; and 
 10.26     (7) rental vehicle companies and their employees in 
 10.27  connection with the offer of rental vehicle personal accident 
 10.28  insurance under section 72A.125; and 
 10.29     (8) employees of a retailer who enroll purchasers for 
 10.30  credit insurance associated with a retail purchase; provided the 
 10.31  employees receive no commission, fee, bonus, or other form of 
 10.32  compensation for it. 
 10.33     Sec. 11.  Minnesota Statutes 1994, section 60K.14, 
 10.34  subdivision 1, is amended to read: 
 10.35     Subdivision 1.  [PERSONAL SOLICITATION OF INSURANCE SALES.] 
 10.36  (a)  [DEFINITIONS.] For the purposes of this section, the 
 11.1   following terms have the meanings given them:  
 11.2      (1) "agent" means a person, copartnership, or corporation 
 11.3   required to be licensed pursuant to section 60K.02; and 
 11.4      (2) "personal solicitation" means any contact by an agent, 
 11.5   or any person acting on behalf of an agent, made for the purpose 
 11.6   of selling or attempting to sell insurance, when either the 
 11.7   agent or a person acting for the agent contacts the buyer by 
 11.8   telephone or in person, except:  (i) an attempted sale in which 
 11.9   the buyer personally knows the identity of the agent, the name 
 11.10  of the general agency, if any, which the agent represents, and 
 11.11  the fact that the agent is an insurance agent; (ii) an attempted 
 11.12  sale in which the prospective purchaser of insurance initiated 
 11.13  the contact; or (iii) a personal contact which takes place at 
 11.14  the agent's place of business.  
 11.15     (b)  [DISCLOSURE REQUIREMENT.] Before a personal 
 11.16  solicitation, the agent or person acting for an agent shall, at 
 11.17  the time of initial personal contact or communication with the 
 11.18  potential buyer, clearly and expressly disclose in writing:  
 11.19     (1) the name and state insurance agent license number of 
 11.20  the person making the contact or communication; 
 11.21     (2) the name of the agent, general agency, or insurer that 
 11.22  person represents; and 
 11.23     (3) the fact that the agent, agency, or insurer is in the 
 11.24  business of selling insurance.  
 11.25     If the initial personal contact is made by telephone, the 
 11.26  disclosures required by this subdivision need not be made in 
 11.27  writing. 
 11.28     (c)  [FALSE REPRESENTATION OF GOVERNMENT AFFILIATION.] No 
 11.29  agent or person acting for an agent shall make any communication 
 11.30  to a potential buyer that indicates or gives the impression that 
 11.31  the agent is acting on behalf of a government agency.  
 11.32     Sec. 12.  Minnesota Statutes 1994, section 61A.03, 
 11.33  subdivision 1, is amended to read: 
 11.34     Subdivision 1.  [GENERALLY.] No policy of life insurance 
 11.35  may be issued in this state or by a life insurance company 
 11.36  organized under the laws of this state unless it contains the 
 12.1   following provisions: 
 12.2      (a) [PREMIUM.] A provision that all premiums are payable in 
 12.3   advance either at the home office of the company, or to an agent 
 12.4   of the company, upon delivery of a receipt signed by one or more 
 12.5   officers named in the policy and countersigned by the agent, but 
 12.6   a policy may contain a provision that the policy itself is a 
 12.7   receipt for the first premium; 
 12.8      (b) [GRACE PERIOD.] A provision for a one month grace 
 12.9   period for the payment of every premium after the first, during 
 12.10  which the insurance will continue in force.  The provision may 
 12.11  subject the late payment to a finance charge and contain a 
 12.12  stipulation that if the insured dies during the grace period, 
 12.13  the overdue premium will be deducted in any settlement under the 
 12.14  policy; 
 12.15     (c) [ENTIRE CONTRACT.] A provision that the policy 
 12.16  constitutes the entire contract between the parties and is 
 12.17  incontestable after it has been in force during the lifetime of 
 12.18  the insured for two years from its date, except for nonpayment 
 12.19  of premiums and except for violations of the conditions of the 
 12.20  policy relating to naval and military services in time of war; 
 12.21  that at the option of the company, provisions relative to 
 12.22  benefits in the event of total and permanent disability and 
 12.23  provisions which grant additional insurance specifically against 
 12.24  death by accident, may be excepted; and that a special form of 
 12.25  policy may be issued on the life of a person employed in an 
 12.26  occupation classified by the company as extra hazardous or as 
 12.27  leading to hazardous employment, which provides that service in 
 12.28  certain designated occupations may reduce the company's 
 12.29  liability under the policy to a certain designated amount not 
 12.30  less than the full policy reserve; 
 12.31     (d) [REPRESENTATIONS AND WARRANTIES.] A provision that, in 
 12.32  the absence of fraud, all statements made by the insured are 
 12.33  representations and not warranties, and that no statement voids 
 12.34  the policy unless it is contained in a written application and a 
 12.35  copy of the application is endorsed upon or attached to the 
 12.36  policy when issued; 
 13.1      (e) [MISSTATEMENT OF AGE.] A provision that if the age of 
 13.2   the insured is understated the amount payable under the policy 
 13.3   will be the amount the premium would have purchased at the 
 13.4   correct age; 
 13.5      (f) [DIVIDENDS ON PARTICIPATING POLICIES.] A provision that 
 13.6   the policy will participate in the surplus of the company and 
 13.7   that, beginning not later than the end of the third policy year, 
 13.8   the company will annually determine and account for the portion 
 13.9   of the divisible surplus accruing on the policy, and that the 
 13.10  owner of the policy has the right, each year after the fifth, to 
 13.11  have the current dividend arising from the participation paid in 
 13.12  cash.  If the policy provides other dividend options, it must 
 13.13  specify which option is effective if the owner of the policy 
 13.14  does not elect an option.  The provision may condition any 
 13.15  dividends payable during the first five years of the policy upon 
 13.16  the payment of the next ensuing annual premium.  This provision 
 13.17  is not required in nonparticipating policies, in policies issued 
 13.18  on under-average lives, or in insurance in exchange for lapsed 
 13.19  or surrendered policies; 
 13.20     (g) [POLICY LOANS.] A provision (1) that after three full 
 13.21  years' premiums have been paid, the company at any time while 
 13.22  the policy is in force, will advance, on proper assignment of 
 13.23  the policy, and on the sole security thereof, at a specified 
 13.24  rate of interest, not to exceed eight percent per annum, or at 
 13.25  an adjustable rate of interest as otherwise provided for in this 
 13.26  section, a sum equal to, or, at the option of the owner of the 
 13.27  policy, less than the loan value thereof; (2) that the loan 
 13.28  value is the cash surrender value thereof at the end of the 
 13.29  current policy year; (3) that the loan, unless made to pay 
 13.30  premiums, may be deferred for not more than six months after the 
 13.31  application for it is made; (4) that the company will deduct 
 13.32  from the loan value any existing indebtedness on the policy and 
 13.33  any unpaid balance of the premium for current policy year, and 
 13.34  may collect interest in advance on the loan to the end of the 
 13.35  current policy year; (5) that the failure to repay an advance or 
 13.36  to pay interest does not void the policy unless the total 
 14.1   indebtedness thereon to the company equals or exceeds the loan 
 14.2   value at the time of the failure, nor until one month after 
 14.3   notice has been mailed by the company to the last known address 
 14.4   of the insured and of the assignee of record at the home office 
 14.5   of the company; and (6) that no condition other than those 
 14.6   provided in this section will be exacted as a prerequisite to an 
 14.7   advance.  This provision is not required in term insurance; 
 14.8      (h) [REINSTATEMENT.] A provision that if, in event of 
 14.9   default in premium payments, the nonforfeiture value of the 
 14.10  policy is applied to the purchase of other insurance, and if 
 14.11  that insurance is in force and the original policy has not been 
 14.12  surrendered to the company and canceled, the policy may be 
 14.13  reinstated within three years after the default upon evidence of 
 14.14  insurability satisfactory to the company and payment of arrears 
 14.15  of premiums with interest; 
 14.16     (i) [PAYMENT OF CLAIMS.] A provision that, when a policy 
 14.17  becomes a claim by the death of the insured, settlement will be 
 14.18  made within two months after receipt of due proof of death; 
 14.19     (j) [SETTLEMENT OPTION.] A table showing the amount of 
 14.20  installments in which the policy may provide its proceeds may be 
 14.21  payable; 
 14.22     (k) [DESCRIPTION OF POLICY.] A title on the face and on the 
 14.23  back of the policy briefly and correctly describing the policy 
 14.24  in bold letters stating its general character, dividend periods, 
 14.25  and other particulars, so that the holder will not be able to 
 14.26  mistake the nature and scope of the contract; 
 14.27     (l) [FORM NUMBER.] A form number in the lower left-hand 
 14.28  corner of the first page of each form, including riders and 
 14.29  endorsements. 
 14.30     Any of the foregoing provisions or portions thereof 
 14.31  relating to premiums not applicable to single premium policies 
 14.32  must not be incorporated therein.  
 14.33     Sec. 13.  Minnesota Statutes 1994, section 61A.071, is 
 14.34  amended to read: 
 14.35     61A.071 [APPLICATIONS.] 
 14.36     No individual life insurance policy, except life insurance 
 15.1   marketed on a direct response basis, shall be issued or 
 15.2   delivered in this state to a person age 65 or older unless a 
 15.3   signed and completed copy of the application for insurance is 
 15.4   left with the applicant at the time application is made.  This 
 15.5   requirement will not apply to life insurers who mail a copy of 
 15.6   the signed, completed application to the applicant within 24 
 15.7   hours of receiving the application.  However, where an 
 15.8   individual life policy is marketed on a direct response basis, a 
 15.9   copy of any application signed by the applicant shall be 
 15.10  delivered to the insured along with, or as part of, the policy. 
 15.11     Sec. 14.  Minnesota Statutes 1994, section 61A.092, 
 15.12  subdivision 3, is amended to read: 
 15.13     Subd. 3.  [NOTICE OF OPTIONS.] Upon termination of or 
 15.14  layoff from employment of a covered employee, the employer shall 
 15.15  inform the employee of: 
 15.16     (1) the employee's right to elect to continue the coverage; 
 15.17     (2) the amount the employee must pay monthly to the 
 15.18  employer to retain the coverage; 
 15.19     (3) the manner in which and the office of the employer to 
 15.20  which the payment to the employer must be made; and 
 15.21     (4) the time by which the payments to the employer must be 
 15.22  made to retain coverage. 
 15.23     The employee has 60 days within which to elect coverage.  
 15.24  The 60-day period shall begin to run on the date coverage would 
 15.25  otherwise terminate or on the date upon which notice of the 
 15.26  right to coverage is received, whichever is later. 
 15.27     If the covered employee or covered dependent dies during 
 15.28  the 60-day election period and before the covered employee makes 
 15.29  an election to continue or reject continuation, then the covered 
 15.30  employee will be considered to have elected continuation of 
 15.31  coverage.  The estate of the former employee or covered 
 15.32  dependent would then be entitled to a death benefit equal to the 
 15.33  amount of insurance that could have been continued less any 
 15.34  unpaid premium owing as of the date of death.  
 15.35     Notice must be in writing and sent by first class mail to 
 15.36  the employee's last known address which the employee has 
 16.1   provided to the employer. 
 16.2      A notice in substantially the following form is 
 16.3   sufficient:  "As a terminated or laid off employee, the law 
 16.4   authorizes you to maintain your group insurance benefits, in an 
 16.5   amount equal to the amount of insurance in effect on the date 
 16.6   you terminated or were laid off from employment, for a period of 
 16.7   up to 18 months.  To do so, you must notify your former employer 
 16.8   within 60 days of your receipt of this notice that you intend to 
 16.9   retain this coverage and must make a monthly payment of 
 16.10  $............ at ............. by the ............. of each 
 16.11  month." 
 16.12     Sec. 15.  Minnesota Statutes 1994, section 61A.092, 
 16.13  subdivision 6, is amended to read: 
 16.14     Subd. 6.  [APPLICATION.] This section applies to a policy, 
 16.15  certificate of insurance, or similar evidence of coverage issued 
 16.16  to a Minnesota resident or issued to provide coverage to a 
 16.17  Minnesota resident.  This section does not apply to:  (1) a 
 16.18  certificate of insurance or similar evidence of coverage that 
 16.19  meets the conditions of section 61A.093, subdivision 2; or (2) a 
 16.20  group life insurance policy that contains a provision permitting 
 16.21  the certificate holder, upon termination or layoff from 
 16.22  employment, to retain the coverage provided under the group 
 16.23  policy by paying premiums directly to the insurer, provided that 
 16.24  the employer shall give the employee notice of the employee's 
 16.25  and each related certificate holder's right to continue the 
 16.26  insurance by paying premiums directly to the insurer.  A related 
 16.27  certificate holder is an insured spouse of the employee. 
 16.28     Sec. 16.  Minnesota Statutes 1994, section 61B.28, 
 16.29  subdivision 8, is amended to read: 
 16.30     Subd. 8.  [FORM.] The form of notice referred to in 
 16.31  subdivision 7, paragraph (a), is as follows: 
 16.32                      ".................... 
 16.33                        .................... 
 16.34                       .................... 
 16.35               (insert name, current address, and 
 16.36                   telephone number of insurer) 
 17.1             NOTICE CONCERNING POLICYHOLDER RIGHTS IN AN 
 17.2            INSOLVENCY UNDER THE MINNESOTA LIFE AND HEALTH 
 17.3                  INSURANCE GUARANTY ASSOCIATION LAW
 17.4      If the insurer that issued your life, annuity, or health 
 17.5   insurance policy becomes impaired or insolvent, you are entitled 
 17.6   to compensation for your policy from the assets of that insurer. 
 17.7   The amount you recover will depend on the financial condition of 
 17.8   the insurer. 
 17.9      In addition, residents of Minnesota who purchase life 
 17.10  insurance, annuities, or health insurance from insurance 
 17.11  companies authorized to do business in Minnesota are protected, 
 17.12  SUBJECT TO LIMITS AND EXCLUSIONS, in the event the insurer 
 17.13  becomes financially impaired or insolvent.  This protection is 
 17.14  provided by the Minnesota Life and Health Insurance Guaranty 
 17.15  Association. 
 17.16      Minnesota Life and Health Insurance Guaranty Association
 17.17                          (insert current
 17.18                   address and telephone number)
 17.19     The maximum amount the guaranty association will pay for 
 17.20  all policies issued on one life by the same insurer is limited 
 17.21  to $300,000.  Subject to this $300,000 limit, the guaranty 
 17.22  association will pay up to $300,000 in life insurance death 
 17.23  benefits, $100,000 in net cash surrender and net cash withdrawal 
 17.24  values for life insurance, $300,000 in health insurance 
 17.25  benefits, including any net cash surrender and net cash 
 17.26  withdrawal values, $100,000 in annuity net cash surrender and 
 17.27  net cash withdrawal values, $300,000 in present value of annuity 
 17.28  benefits for annuities which are part of a structured settlement 
 17.29  or for annuities in regard to which periodic annuity benefits, 
 17.30  for a period of not less than the annuitant's lifetime or for a 
 17.31  period certain of not less than ten years, have begun to be paid 
 17.32  on or before the date of impairment or insolvency, or if no 
 17.33  coverage limit has been specified for a covered policy or 
 17.34  benefit, the coverage limit shall be $300,000 in present value.  
 17.35  Unallocated annuity contracts issued to retirement plans, other 
 17.36  than defined benefit plans, established under section 401, 
 18.1   403(b), or 457 of the Internal Revenue Code of 1986, as amended 
 18.2   through December 31, 1992, are covered up to $100,000 in net 
 18.3   cash surrender and net cash withdrawal values, for Minnesota 
 18.4   residents covered by the plan provided, however, that the 
 18.5   association shall not be responsible for more than $7,500,000 in 
 18.6   claims from all Minnesota residents covered by the plan.  If 
 18.7   total claims exceed $7,500,000, the $7,500,000 shall be prorated 
 18.8   among all claimants.  These are the maximum claim amounts.  
 18.9   Coverage by the guaranty association is also subject to other 
 18.10  substantial limitations and exclusions and requires continued 
 18.11  residency in Minnesota.  If your claim exceeds the guaranty 
 18.12  association's limits, you may still recover a part or all of 
 18.13  that amount from the proceeds of the liquidation of the 
 18.14  insolvent insurer, if any exist.  Funds to pay claims may not be 
 18.15  immediately available.  The guaranty association assesses 
 18.16  insurers licensed to sell life and health insurance in Minnesota 
 18.17  after the insolvency occurs.  Claims are paid from this 
 18.18  assessment. 
 18.19     THE COVERAGE PROVIDED BY THE GUARANTY ASSOCIATION IS NOT A 
 18.20  SUBSTITUTE FOR USING CARE IN SELECTING INSURANCE COMPANIES THAT 
 18.21  ARE WELL MANAGED AND FINANCIALLY STABLE.  IN SELECTING AN 
 18.22  INSURANCE COMPANY OR POLICY, YOU SHOULD NOT RELY ON COVERAGE BY 
 18.23  THE GUARANTY ASSOCIATION. 
 18.24     THIS NOTICE IS REQUIRED BY MINNESOTA STATE LAW TO ADVISE 
 18.25  POLICYHOLDERS OF LIFE, ANNUITY, OR HEALTH INSURANCE POLICIES OF 
 18.26  THEIR RIGHTS IN THE EVENT THEIR INSURANCE CARRIER BECOMES 
 18.27  FINANCIALLY INSOLVENT.  THIS NOTICE IN NO WAY IMPLIES THAT THE 
 18.28  COMPANY CURRENTLY HAS ANY TYPE OF FINANCIAL PROBLEMS.  ALL LIFE, 
 18.29  ANNUITY, AND HEALTH INSURANCE POLICIES ARE REQUIRED TO PROVIDE 
 18.30  THIS NOTICE." 
 18.31     Additional language may be added to the notice if approved 
 18.32  by the commissioner prior to its use in the form.  This section 
 18.33  does not apply to fraternal benefit societies regulated under 
 18.34  chapter 64B. 
 18.35     Sec. 17.  Minnesota Statutes 1994, section 61B.28, 
 18.36  subdivision 9, is amended to read: 
 19.1      Subd. 9.  [COMBINATION FIXED-VARIABLE POLICY.] The notice 
 19.2   required in subdivision 8 must clearly describe what portions of 
 19.3   a combination fixed-variable policy are not covered by the 
 19.4   Minnesota life and health insurance guaranty association.  The 
 19.5   notice requirements specified in subdivision 8 7, paragraph (c), 
 19.6   do not apply to a combination fixed-variable policy. 
 19.7      Sec. 18.  [62A.023] [NOTICE OF RATE CHANGE.] 
 19.8      A health insurer or service plan corporation must send 
 19.9   written notice to its policyholders and contract holders at 
 19.10  their last known address at least 30 days in advance of the 
 19.11  effective date of a proposed rate change.  This notice 
 19.12  requirement does not apply to individual certificate holders 
 19.13  covered by group insurance policies or group subscriber 
 19.14  contracts.  
 19.15     Sec. 19.  Minnesota Statutes 1994, section 62A.042, is 
 19.16  amended to read: 
 19.17     62A.042 [FAMILY COVERAGE; COVERAGE OF NEWBORN INFANTS.] 
 19.18     Subdivision 1.  [INDIVIDUAL FAMILY POLICIES; RENEWALS.] (a) 
 19.19  No policy of individual accident and sickness insurance which 
 19.20  provides for insurance for more than one person under section 
 19.21  62A.03, subdivision 1, clause (3), and no individual health 
 19.22  maintenance contract which provides for coverage for more than 
 19.23  one person under chapter 62D, shall be renewed to insure or 
 19.24  cover any person in this state or be delivered or issued for 
 19.25  delivery to any person in this state unless the policy or 
 19.26  contract includes as insured or covered members of the family 
 19.27  any newborn infants, including dependent grandchildren who 
 19.28  reside with a covered grandparent, immediately from the moment 
 19.29  of birth and thereafter which insurance or contract shall 
 19.30  provide coverage for illness, injury, congenital malformation, 
 19.31  or premature birth. 
 19.32     (b) The coverage under paragraph (a) includes benefits for 
 19.33  inpatient or outpatient expenses arising from medical and dental 
 19.34  treatment up to age 18, including orthodontic and oral surgery 
 19.35  treatment, involved in the management of birth defects known as 
 19.36  cleft lip and cleft palate.  If orthodontic services are 
 20.1   eligible for coverage under a dental insurance plan and another 
 20.2   policy or contract, the dental plan shall be primary and the 
 20.3   other policy or contract shall be secondary in regard to the 
 20.4   coverage required under paragraph (a).  Payment for dental or 
 20.5   orthodontic treatment not related to the management of the 
 20.6   congenital condition of cleft lip and cleft palate shall not be 
 20.7   covered under this provision.  
 20.8      Subd. 2.  [GROUP POLICIES; RENEWALS.] (a) No group accident 
 20.9   and sickness insurance policy and no group health maintenance 
 20.10  contract which provide for coverage of family members or other 
 20.11  dependents of an employee or other member of the covered group 
 20.12  shall be renewed to cover members of a group located in this 
 20.13  state or delivered or issued for delivery to any person in this 
 20.14  state unless the policy or contract includes as insured or 
 20.15  covered family members or dependents any newborn infants, 
 20.16  including dependent grandchildren who reside with a covered 
 20.17  grandparent, immediately from the moment of birth and thereafter 
 20.18  which insurance or contract shall provide coverage for illness, 
 20.19  injury, congenital malformation, or premature birth.  
 20.20     (b) The coverage under paragraph (a) includes benefits for 
 20.21  inpatient or outpatient expenses arising from medical and dental 
 20.22  treatment up to age 18, including orthodontic and oral surgery 
 20.23  treatment, involved in the management of birth defects known as 
 20.24  cleft lip and cleft palate.  If orthodontic services are 
 20.25  eligible for coverage under a dental insurance plan and another 
 20.26  policy or contract, the dental plan shall be primary and the 
 20.27  other policy or contract shall be secondary in regard to the 
 20.28  coverage required under paragraph (a).  Payment for dental or 
 20.29  orthodontic treatment not related to the management of the 
 20.30  congenital condition of cleft lip and cleft palate shall not be 
 20.31  covered under this provision. 
 20.32     Sec. 20.  Minnesota Statutes 1994, section 62A.10, is 
 20.33  amended to read: 
 20.34     62A.10 [GROUP INSURANCE.] 
 20.35     Subdivision 1.  [REQUIREMENTS.] Group accident and health 
 20.36  insurance is hereby declared to be that form of accident and 
 21.1   health insurance covering may be issued to cover groups of not 
 21.2   less than two employees nor less than ten members, and which may 
 21.3   include the employee's or member's dependents, consisting of 
 21.4   husband, wife, children, and actual dependents residing in the 
 21.5   household, written under a.  The master policy may be issued to 
 21.6   any governmental corporation, unit, agency, or department 
 21.7   thereof, or to any corporation, copartnership, individual, 
 21.8   employer, or to any association as defined by section 60A.02, 
 21.9   subdivision 1a, where officers, members, employees, or classes 
 21.10  or divisions thereof, may be insured for their individual 
 21.11  benefit. 
 21.12     Subd. 2.  [GROUP ACCIDENTAL DEATH AND GROUP DISABILITY 
 21.13  INCOME POLICIES.] Group accidental death insurance and group 
 21.14  disability income insurance policies may be issued in connection 
 21.15  with first real estate mortgage loans to cover groups of not 
 21.16  less than ten debtors of a creditor written under a master 
 21.17  policy issued to a creditor to insure its debtors in connection 
 21.18  with first real estate mortgage loans, in amounts not to exceed 
 21.19  the actual or scheduled amount of their indebtedness.  No other 
 21.20  accident and health coverages may be issued in connection with 
 21.21  first real estate mortgage loans on a group basis to a 
 21.22  debtor-creditor group. 
 21.23     Subd. 3.  [AUTHORITY TO ISSUE.] Any insurer authorized to 
 21.24  write accident and health insurance in this state shall have 
 21.25  power to issue group accident and health policies. 
 21.26     Subd. 2 4.  [POLICY FORMS.] No policy of group accident and 
 21.27  health insurance may be issued or delivered in this state unless 
 21.28  the same has been approved by the commissioner in accordance 
 21.29  with section 62A.02, subdivisions 1 to 6.  These forms shall 
 21.30  contain the standard provisions relating and applicable to 
 21.31  health and accident insurance and shall conform with the other 
 21.32  requirements of law relating to the contents and terms of 
 21.33  policies of accident and sickness insurance in so far as they 
 21.34  may be applicable to group accident and health insurance, and 
 21.35  also the following provisions: 
 21.36     (1) [ENTIRE CONTRACT.] A provision that the policy and the 
 22.1   application of the creditor, employer, or executive officer or 
 22.2   trustee of any association, and the individual applications, if 
 22.3   any, of the debtors, employees, or members, insured, shall 
 22.4   constitute the entire contract between the parties, and that all 
 22.5   statements made by the creditor, employer, or any executive 
 22.6   officer or trustee in on behalf of the group to be insured, 
 22.7   shall, in the absence of fraud, be deemed representations and 
 22.8   not warranties, and that no such statement shall be used in 
 22.9   defense to a claim under the policy, unless it is contained in 
 22.10  the written application; 
 22.11     (2) [MASTER POLICY-CERTIFICATES.] A provision that the 
 22.12  insurer will issue a master policy to the creditor, employer, or 
 22.13  to the executive officer or trustee of the association; and the 
 22.14  insurer shall also issue to the creditor, the employer, or to 
 22.15  the executive officer or trustee of the association, for 
 22.16  delivery to the debtor, employee, or member, who is insured 
 22.17  under the policy, an individual certificate setting forth a 
 22.18  statement as to the insurance protection to which the debtor, 
 22.19  employee, or member is entitled and to whom payable, together 
 22.20  with a statement as to when and where the master policy, or a 
 22.21  copy thereof, may be seen for inspection by the individual 
 22.22  insured; this.  The individual certificate may contain the names 
 22.23  of, and insure the dependents of, the employee, or member, as 
 22.24  provided for herein; 
 22.25     (3) [NEW INSUREDS.] A provision that to the group or class 
 22.26  thereof originally insured may be added, from time to time, all 
 22.27  new employees of the employer or, members of the association, or 
 22.28  debtors of the creditor eligible to and applying for insurance 
 22.29  in that group or class and covered or to be covered by the 
 22.30  master policy. 
 22.31     (4) [CONVERSION PRIVILEGE.] In the case of accidental death 
 22.32  insurance and disability income insurance issued to debtors of a 
 22.33  creditor, the policy must contain a conversion privilege 
 22.34  permitting an insured debtor to convert, without evidence of 
 22.35  insurability, to an individual policy within 30 days of the date 
 22.36  the insured debtor's group coverage is terminated, and not 
 23.1   replaced with other group coverage, for any reason other than 
 23.2   nonpayment of premiums.  The individual policy must provide the 
 23.3   same amount of insurance and be subject to the same terms and 
 23.4   conditions as the group policy and the initial premium for the 
 23.5   individual policy must be the same premium the insured debtor 
 23.6   was paying under the group policy.  This provision does not 
 23.7   apply to a group policy which provides that the certificate 
 23.8   holder may, upon termination of coverage under the group policy 
 23.9   for any reason other than nonpayment of premium, retain coverage 
 23.10  provided under the group policy by paying premiums directly to 
 23.11  the insurer. 
 23.12     Sec. 21.  Minnesota Statutes 1994, section 62A.135, is 
 23.13  amended to read: 
 23.14     62A.135 [NONCOMPREHENSIVE FIXED INDEMNITY POLICIES; MINIMUM 
 23.15  LOSS RATIOS.] 
 23.16     (a) This section applies to individual or group policies, 
 23.17  certificates, or other evidence of coverage designed primarily 
 23.18  to provide coverage for hospital or medical expenses on a per 
 23.19  diem, fixed indemnity, or nonexpense incurred basis offered, 
 23.20  issued, or renewed, to provide coverage to a Minnesota resident. 
 23.21     (b) Notwithstanding section 62A.02, subdivision 3, relating 
 23.22  to loss ratios, policies must return to Minnesota policyholders 
 23.23  in the form of aggregate benefits under the policy, for each 
 23.24  year, on the basis of incurred claims experience and earned 
 23.25  premiums in Minnesota and in accordance with accepted actuarial 
 23.26  principles and practices:  
 23.27     (1) at least 75 percent of the aggregate amount of premiums 
 23.28  earned in the case of group policies; and 
 23.29     (2) at least 65 percent of the aggregate amount of premiums 
 23.30  earned in the case of individual policies.  
 23.31     (c) An insurer may only issue or renew an individual policy 
 23.32  on a guaranteed renewable or noncancelable basis. 
 23.33     (d) Noncomprehensive policies, certificates, or other 
 23.34  evidence of coverage subject to the provisions of this section 
 23.35  are also subject to the requirements, penalties, and remedies 
 23.36  applicable to medicare supplement policies, as set forth in 
 24.1   section 62A.36, subdivisions 1a, 1b, and 2. 
 24.2      The first supplement to the annual statement required to be 
 24.3   filed pursuant to this paragraph must be for the annual 
 24.4   statement required to be submitted on or after January 1, 1993. 
 24.5      Subdivision 1.  [DEFINITIONS.] For purposes of this 
 24.6   section, the following terms have the meanings given them: 
 24.7      (a) "fixed indemnity policy" is a policy form, other than a 
 24.8   long-term care policy as defined in section 62A.46, subdivision 
 24.9   2, that pays a predetermined, specified, fixed benefit for 
 24.10  services provided.  Claim costs under these forms are generally 
 24.11  not subject to inflation, although they may be subject to 
 24.12  changes in the utilization of health care services.  For policy 
 24.13  forms providing both expense-incurred and fixed benefits, the 
 24.14  policy form is a fixed indemnity policy if 50 percent or more of 
 24.15  the total claims are for predetermined, specified, fixed 
 24.16  benefits; 
 24.17     (b) "guaranteed renewable" means that, during the renewal 
 24.18  period (to a specified age) renewal cannot be declined nor 
 24.19  coverage changed by the insurer for any reason other than 
 24.20  nonpayment of premiums, fraud, or misrepresentation, but the 
 24.21  insurer can revise rates on a class basis upon approval by the 
 24.22  commissioner; 
 24.23     (c) "noncancelable" means that, during the renewal period 
 24.24  (to a specified age) renewal cannot be declined nor coverage 
 24.25  changed by the insurer for any reason other than nonpayment of 
 24.26  premiums, fraud, or misrepresentation and that rates cannot be 
 24.27  revised by the insurer.  This includes policies that are 
 24.28  guaranteed renewable to a specified age, such as 60 or 65, at 
 24.29  guaranteed rates; and 
 24.30     (d) "average annualized premium" means the average of the 
 24.31  estimated annualized premium per covered person based on the 
 24.32  anticipated distribution of business using all significant 
 24.33  criteria having a price difference, such as age, sex, amount, 
 24.34  dependent status, mode of payment, and rider frequency.  For 
 24.35  filing of rate revisions, the amount is the anticipated average 
 24.36  assuming the revised rates have fully taken effect. 
 25.1      Subd. 2.  [APPLICABILITY.] This section applies to 
 25.2   individual or group policies, certificates, or other evidence of 
 25.3   coverage meeting the definition of a fixed indemnity policy, 
 25.4   offered, issued, or renewed, to provide coverage to a Minnesota 
 25.5   resident. 
 25.6      Subd. 3.  [MINIMUM LOSS RATIO STANDARDS.] Notwithstanding 
 25.7   section 62A.02, subdivision 3, relating to loss ratios, the 
 25.8   minimum loss ratios for fixed indemnity policies are: 
 25.9      (1) as shown in the following table: 
 25.10     Type of Coverage               Renewal Provision
 25.11                            Guaranteed Renewable   Noncancelable
 25.12         Group                      75%                 70%
 25.13       Individual                   65%                 60%
 25.14  or 
 25.15     (2) for policies or certificates where the average 
 25.16  annualized premium is less than $1,000, the average annualized 
 25.17  premium less $30, multiplied by the required loss ratio in 
 25.18  clause (1), divided by the average annualized premium.  However, 
 25.19  in no event may the minimum loss ratio be less than the required 
 25.20  loss ratio from clause (1) minus ten percent. 
 25.21     The commissioner of commerce may adjust the constant dollar 
 25.22  amounts provided in clause (2) on January 1 of any year, based 
 25.23  upon changes in the CPI-U, the consumer price index for all 
 25.24  urban consumers, published by the United States Department of 
 25.25  Labor, Bureau of Labor Statistics.  Adjustments must be in 
 25.26  increments of $5 and must not be made unless at least that 
 25.27  amount of adjustment is required to each amount. 
 25.28     All rate filings must include a demonstration that the 
 25.29  rates are not excessive.  Rates are not excessive if the 
 25.30  anticipated loss ratio and the lifetime anticipated loss ratio 
 25.31  meet or exceed the minimum loss ratio standard in this 
 25.32  subdivision. 
 25.33     Subd. 4.  [RENEWAL PROVISION.] An insurer may only issue or 
 25.34  renew an individual policy on a guaranteed renewable or 
 25.35  noncancelable basis. 
 25.36     Subd. 5.  [SUPPLEMENT TO ANNUAL STATEMENTS.] Each insurer 
 26.1   that has fixed indemnity policies in force in this state shall, 
 26.2   as a supplement to the annual statement required by section 
 26.3   60A.13, submit, in a form prescribed by the commissioner, the 
 26.4   experience data for the calendar year showing its incurred 
 26.5   claims, earned premiums, incurred to earned loss ratio, and the 
 26.6   ratio of the actual loss ratio to the expected loss ratio for 
 26.7   each fixed indemnity policy form in force in Minnesota.  The 
 26.8   experience data must be provided on both a Minnesota only and a 
 26.9   national basis.  If in the opinion of the company's actuary, the 
 26.10  deviation of the actual loss ratio from the expected loss ratio 
 26.11  for a policy form is due to unusual reserve fluctuations, 
 26.12  economic conditions, or other nonrecurring conditions, the 
 26.13  insurer should also file that opinion with appropriate 
 26.14  justification.  
 26.15     If the data submitted does not confirm that the insurer has 
 26.16  satisfied the loss ratio requirements of this section, the 
 26.17  commissioner shall notify the insurer in writing of the 
 26.18  deficiency.  The insurer shall have 30 days from the date of 
 26.19  receipt of the commissioner's notice to file amended rates that 
 26.20  comply with this section or a request for an exemption with 
 26.21  appropriate justification.  If the insurer fails to file amended 
 26.22  rates within the prescribed time and the commissioner does not 
 26.23  exempt the policy form from the need for a rate revision, the 
 26.24  commissioner shall order that the insurer's filed rates for the 
 26.25  nonconforming policy be reduced to an amount that would have 
 26.26  resulted in a loss ratio that complied with this section had it 
 26.27  been in effect for the reporting period of the supplement.  The 
 26.28  insurer's failure to file amended rates within the specified 
 26.29  time of the issuance of the commissioner's order amending the 
 26.30  rates does not preclude the insurer from filing an amendment of 
 26.31  its rates at a later time. 
 26.32     Subd. 6.  [PENALTIES.] Each sale of a policy that does not 
 26.33  comply with the loss ratio requirements of this section is 
 26.34  subject to the penalties in sections 72A.17 to 72A.32. 
 26.35     Sec. 22.  Minnesota Statutes 1994, section 62A.136, is 
 26.36  amended to read: 
 27.1      62A.136 [DENTAL AND VISION PLANS PLAN COVERAGE.] 
 27.2      The following provisions do not apply to health plans 
 27.3   providing dental or vision coverage only:  sections 62A.041,; 
 27.4   62A.047,; 62A.149,; 62A.151,; 62A.152,; 62A.154,; 
 27.5   62A.155,; 62A.21, subdivision 2b; 62A.26,; 62A.28,; and 
 27.6   62A.30. 
 27.7      Sec. 23.  Minnesota Statutes 1994, section 62A.14, is 
 27.8   amended to read: 
 27.9      62A.14 [HANDICAPPED CHILDREN.] 
 27.10     Subdivision 1.  [INDIVIDUAL FAMILY POLICIES.] An individual 
 27.11  hospital or medical expense insurance policy delivered or issued 
 27.12  for delivery in this state more than 120 days after May 16, 
 27.13  1969, or an individual health maintenance contract delivered or 
 27.14  issued for delivery in this state after August 1, 1984, which 
 27.15  provides that coverage of a dependent child shall terminate upon 
 27.16  attainment of the limiting age for dependent children specified 
 27.17  in the policy or contract shall also provide in substance that 
 27.18  attainment of such limiting age shall not operate to terminate 
 27.19  the coverage of such child while the child is and continues to 
 27.20  be both (a) incapable of self-sustaining employment by reason of 
 27.21  mental retardation, mental illness, or physical handicap and (b) 
 27.22  chiefly dependent upon the policyholder for support and 
 27.23  maintenance, provided proof of such incapacity and dependency is 
 27.24  furnished to the insurer or health maintenance organization by 
 27.25  the policyholder or enrollee within 31 days of the child's 
 27.26  attainment of the limiting age and subsequently as may be 
 27.27  required by the insurer or organization but not more frequently 
 27.28  than annually after the two-year period following the child's 
 27.29  attainment of the limiting age.  
 27.30     Subd. 2.  [GROUP POLICIES.] A group hospital or medical 
 27.31  expense insurance policy delivered or issued for delivery in 
 27.32  this state more than 120 days after May 16, 1969, or a group 
 27.33  health maintenance contract delivered or issued for delivery in 
 27.34  this state after August 1, 1984, which provides that coverage of 
 27.35  a dependent child of an employee or other member of the covered 
 27.36  group shall terminate upon attainment of the limiting age for 
 28.1   dependent children specified in the policy or contract shall 
 28.2   also provide in substance that attainment of such limiting age 
 28.3   shall not operate to terminate the coverage of such child while 
 28.4   the child is and continues to be both (a) incapable of 
 28.5   self-sustaining employment by reason of mental retardation, 
 28.6   mental illness, or physical handicap and (b) chiefly dependent 
 28.7   upon the employee or member for support and maintenance, 
 28.8   provided proof of such incapacity and dependency is furnished to 
 28.9   the insurer or organization by the employee or member within 31 
 28.10  days of the child's attainment of the limiting age and 
 28.11  subsequently as may be required by the insurer or organization 
 28.12  but not more frequently than annually after the two-year period 
 28.13  following the child's attainment of the limiting age. 
 28.14     Sec. 24.  Minnesota Statutes 1994, section 62A.141, is 
 28.15  amended to read: 
 28.16     62A.141 [COVERAGE FOR HANDICAPPED DEPENDENTS.] 
 28.17     No group policy or group plan of health and accident 
 28.18  insurance regulated under this chapter, chapter 62C, or 62D, 
 28.19  which provides for dependent coverage may be issued or renewed 
 28.20  in this state after August 1, 1983, unless it covers the 
 28.21  handicapped dependents of the insured, subscriber, or enrollee 
 28.22  of the policy or plan.  For purposes of this section, a 
 28.23  handicapped dependent is a person that is and continues to be 
 28.24  both:  (1) incapable of self-sustaining employment by reason of 
 28.25  mental retardation, mental illness, or physical handicap; and (2)
 28.26  chiefly dependent upon the policyholder for support and 
 28.27  maintenance.  Consequently, the policy or plan shall not contain 
 28.28  any provision concerning preexisting condition limitations, 
 28.29  insurability, eligibility, or health underwriting approval 
 28.30  concerning handicapped dependents. 
 28.31     If ordered by the commissioner of commerce, the insurer of 
 28.32  a Minnesota-domiciled nonprofit association which is composed 
 28.33  solely of agricultural members may restrict coverage under this 
 28.34  section to apply only to Minnesota residents. 
 28.35     Sec. 25.  Minnesota Statutes 1994, section 62A.31, 
 28.36  subdivision 1h, is amended to read: 
 29.1      Subd. 1h.  [LIMITATIONS ON DENIALS, CONDITIONS, AND PRICING 
 29.2   OF COVERAGE.] No issuer of Medicare supplement policies, 
 29.3   including policies that supplement Medicare issued by health 
 29.4   maintenance organizations or those policies governed by section 
 29.5   1833 or 1876 of the federal Social Security Act, United States 
 29.6   Code, title 42, section 1395, et seq., in this state may impose 
 29.7   preexisting condition limitations or otherwise deny or condition 
 29.8   the issuance or effectiveness of any Medicare supplement 
 29.9   insurance policy form available for sale in this state, nor may 
 29.10  it discriminate in the pricing of such a policy, because of the 
 29.11  health status, claims experience, receipt of health care, or 
 29.12  medical condition, or age of an applicant where an application 
 29.13  for such insurance is submitted during the six-month period 
 29.14  beginning with the first month in which an individual first 
 29.15  enrolled for benefits under Medicare Part B.  This paragraph 
 29.16  applies regardless of whether the individual has attained the 
 29.17  age of 65 years.  If an individual who is enrolled in Medicare 
 29.18  Part B due to disability status is involuntarily disenrolled due 
 29.19  to loss of disability status, the individual is eligible for the 
 29.20  six-month enrollment period provided under this subdivision if 
 29.21  the individual later becomes eligible for and enrolls again in 
 29.22  Medicare Part B. 
 29.23     Sec. 26.  Minnesota Statutes 1994, section 62A.31, 
 29.24  subdivision 1i, is amended to read: 
 29.25     Subd. 1i.  [REPLACEMENT COVERAGE.] If a Medicare supplement 
 29.26  policy replaces another Medicare supplement policy, including a 
 29.27  policy that supplements Medicare issued by a health maintenance 
 29.28  organization, the issuer of the replacing policy shall waive any 
 29.29  time periods applicable to preexisting conditions, waiting 
 29.30  periods, elimination periods, and probationary periods in the 
 29.31  new Medicare supplement policy for benefits to the extent the 
 29.32  time was spent under the original policy. 
 29.33     Sec. 27.  Minnesota Statutes 1994, section 62A.46, 
 29.34  subdivision 2, is amended to read: 
 29.35     Subd. 2.  [LONG-TERM CARE POLICY.] "Long-term care policy" 
 29.36  means an individual or group policy, certificate, subscriber 
 30.1   contract, or other evidence of coverage that provides benefits 
 30.2   for prescribed long-term care, including nursing facility 
 30.3   services and home care services, pursuant to the requirements of 
 30.4   sections 62A.46 to 62A.56.  A long-term care policy must contain 
 30.5   a designation specifying whether the policy is a long-term care 
 30.6   policy AA or A and a caption stating that the commissioner has 
 30.7   established two categories of long-term care insurance and the 
 30.8   minimum standards for each. 
 30.9      Sections 62A.46, 62A.48, and 62A.52 to 62A.56 do not apply 
 30.10  to a long-term care policy issued to (a) an employer or 
 30.11  employers or to the trustee of a fund established by an employer 
 30.12  where only employees or retirees, and dependents of employees or 
 30.13  retirees, are eligible for coverage or (b) to a labor union or 
 30.14  similar employee organization.  The associations exempted from 
 30.15  the requirements of sections 62A.31 to 62A.44 under 62A.31, 
 30.16  subdivision 1, clause (c) shall not be subject to the provisions 
 30.17  of sections 62A.46 to 62A.56 until July 1, 1988. 
 30.18     Sec. 28.  Minnesota Statutes 1994, section 62A.46, is 
 30.19  amended by adding a subdivision to read: 
 30.20     Subd. 13.  [BENEFIT DAY.] "Benefit day" means each day of 
 30.21  confinement in a nursing facility or each day for home care 
 30.22  services.  For purposes of section 62A.48, subdivision 1, if the 
 30.23  policyholder receives more than one home care service visit 
 30.24  within a 24-hour period, that period constitutes one benefit day.
 30.25     Sec. 29.  Minnesota Statutes 1994, section 62A.48, 
 30.26  subdivision 1, is amended to read: 
 30.27     Subdivision 1.  [POLICY REQUIREMENTS.] No individual or 
 30.28  group policy, certificate, subscriber contract, or other 
 30.29  evidence of coverage of nursing home care or other long-term 
 30.30  care services shall be offered, issued, delivered, or renewed in 
 30.31  this state, whether or not the policy is issued in this state, 
 30.32  unless the policy is offered, issued, delivered, or renewed by a 
 30.33  qualified insurer and the policy satisfies the requirements of 
 30.34  sections 62A.46 to 62A.56.  A long-term care policy must cover 
 30.35  prescribed long-term care in nursing facilities and at least the 
 30.36  prescribed long-term home care services in section 62A.46, 
 31.1   subdivision 4, clauses (1) to (5), provided by a home health 
 31.2   agency.  Coverage under a long-term care policy AA must 
 31.3   include:  a maximum lifetime benefit limit of at least $100,000 
 31.4   for services, and nursing facility and home care coverages must 
 31.5   not be subject to separate lifetime maximums.  Coverage under a 
 31.6   long-term care policy A must include:  a maximum minimum 
 31.7   lifetime benefit limit of at least $50,000 $25,000 for services, 
 31.8   and nursing facility and home care coverages must not be subject 
 31.9   to separate lifetime maximums.  Prior hospitalization may not be 
 31.10  required under a long-term care policy. 
 31.11     Coverage under either The policy designation must cover 
 31.12  preexisting conditions during the first six months of coverage 
 31.13  if the insured was not diagnosed or treated for the particular 
 31.14  condition during the 90 days immediately preceding the effective 
 31.15  date of coverage.  Coverage under either the policy designation 
 31.16  may include a waiting period of up to 90 days before benefits 
 31.17  are paid, but there must be no more than one waiting period per 
 31.18  benefit period; for purposes of this sentence, "days" means can 
 31.19  mean calendar or benefit days.  If benefit days are used, an 
 31.20  appropriate premium reduction and disclosure must be made.  No 
 31.21  policy may exclude coverage for mental or nervous disorders 
 31.22  which have a demonstrable organic cause, such as Alzheimer's and 
 31.23  related dementias.  No policy may require the insured to be 
 31.24  homebound or house confined to receive home care services.  The 
 31.25  policy must include a provision that the plan will not be 
 31.26  canceled or renewal refused except on the grounds of nonpayment 
 31.27  of the premium, provided that the insurer may change the premium 
 31.28  rate on a class basis on any policy anniversary date.  A 
 31.29  provision that the policyholder may elect to have the premium 
 31.30  paid in full at age 65 by payment of a higher premium up to age 
 31.31  65 may be offered.  A provision that the premium would be waived 
 31.32  during any period in which benefits are being paid to the 
 31.33  insured during confinement in a nursing facility must be 
 31.34  included.  A nongroup policyholder may return a policy within 30 
 31.35  days of its delivery and have the premium refunded in full, less 
 31.36  any benefits paid under the policy, if the policyholder is not 
 32.1   satisfied for any reason. 
 32.2      No individual long-term care policy shall be offered or 
 32.3   delivered in this state until the insurer has received from the 
 32.4   insured a written designation of at least one person, in 
 32.5   addition to the insured, who is to receive notice of 
 32.6   cancellation of the policy for nonpayment of premium.  The 
 32.7   insured has the right to designate up to a total of three 
 32.8   persons who are to receive the notice of cancellation, in 
 32.9   addition to the insured.  The form used for the written 
 32.10  designation must inform the insured that designation of one 
 32.11  person is required and that designation of up to two additional 
 32.12  persons is optional and must provide space clearly designated 
 32.13  for listing between one and three persons.  The designation 
 32.14  shall include each person's full name, home address, and 
 32.15  telephone number.  Each time an individual policy is renewed or 
 32.16  continued, the insurer shall notify the insured of the right to 
 32.17  change this written designation. 
 32.18     The insurer may file a policy form that utilizes a plan of 
 32.19  care prepared as provided under section 62A.46, subdivision 5, 
 32.20  clause (1) or (2). 
 32.21     Sec. 30.  Minnesota Statutes 1994, section 62A.48, 
 32.22  subdivision 2, is amended to read: 
 32.23     Subd. 2.  [PER DIEM COVERAGE.] If benefits are provided on 
 32.24  a per diem basis, the minimum daily benefit for care in a 
 32.25  nursing facility must be the lesser of $60 or actual charges 
 32.26  under a long-term care policy AA or the lesser of $40 or actual 
 32.27  charges under a long-term care policy A and the minimum benefit 
 32.28  per visit for home care under a long-term care policy AA or A 
 32.29  must be the lesser of $25 or actual charges.  The home care 
 32.30  services benefit must cover at least seven paid visits per week. 
 32.31     Sec. 31.  Minnesota Statutes 1994, section 62A.50, 
 32.32  subdivision 3, is amended to read: 
 32.33     Subd. 3.  [DISCLOSURES.] No long-term care policy shall be 
 32.34  offered or delivered in this state, whether or not the policy is 
 32.35  issued in this state, and no certificate of coverage under a 
 32.36  group long-term care policy shall be offered or delivered in 
 33.1   this state, unless a statement containing at least the following 
 33.2   information is delivered to the applicant at the time the 
 33.3   application is made: 
 33.4      (1) a description of the benefits and coverage provided by 
 33.5   the policy and the differences between this policy, a 
 33.6   supplemental Medicare policy and the benefits to which an 
 33.7   individual is entitled under parts A and B of Medicare and the 
 33.8   differences between policy designations A and AA; 
 33.9      (2) a statement of the exceptions and limitations in the 
 33.10  policy including the following language, as applicable, in bold 
 33.11  print:  "THIS POLICY DOES NOT COVER ALL NURSING CARE FACILITIES 
 33.12  OR NURSING HOME, HOME CARE, OR ADULT DAY CARE EXPENSES AND DOES 
 33.13  NOT COVER RESIDENTIAL CARE.  READ YOUR POLICY CAREFULLY TO 
 33.14  DETERMINE WHICH FACILITIES AND EXPENSES ARE COVERED BY YOUR 
 33.15  POLICY."; 
 33.16     (3) a statement of the renewal provisions including any 
 33.17  reservation by the insurer of the right to change premiums; 
 33.18     (4) a statement that the outline of coverage is a summary 
 33.19  of the policy issued or applied for and that the policy should 
 33.20  be consulted to determine governing contractual provisions; 
 33.21     (5) an explanation of the policy's loss ratio including at 
 33.22  least the following language:  "This means that, on the average, 
 33.23  policyholders may expect that $........ of every $100 in premium 
 33.24  will be returned as benefits to policyholders over the life of 
 33.25  the contract."; 
 33.26     (6) a statement of the out-of-pocket expenses, including 
 33.27  deductibles and copayments for which the insured is responsible, 
 33.28  and an explanation of the specific out-of-pocket expenses that 
 33.29  may be accumulated toward any out-of-pocket maximum as specified 
 33.30  in the policy; 
 33.31     (7) the following language, in bold print:  "YOUR PREMIUMS 
 33.32  CAN BE INCREASED IN THE FUTURE.  THE RATE SCHEDULE THAT LISTS 
 33.33  YOUR PREMIUM NOW CAN CHANGE."; 
 33.34     (8) the following language, if applicable, in bold print:  
 33.35  "IF YOU ARE NOT HOSPITALIZED PRIOR TO ENTERING A NURSING HOME OR 
 33.36  NEEDING HOME CARE, YOU WILL NOT BE ABLE TO COLLECT ANY BENEFITS 
 34.1   UNDER THIS PARTICULAR POLICY."; and 
 34.2      (9) a signed and completed copy of the application for 
 34.3   insurance is left with the applicant at the time the application 
 34.4   is made. 
 34.5      Sec. 32.  Minnesota Statutes 1994, section 62C.14, 
 34.6   subdivision 5, is amended to read: 
 34.7      Subd. 5.  [HANDICAPPED DEPENDENTS.] A subscriber's 
 34.8   individual contract or any group contract delivered or issued 
 34.9   for delivery in this state and providing that coverage of a 
 34.10  dependent child of the subscriber or a dependent child of a 
 34.11  covered group member shall terminate upon attainment of a 
 34.12  specified age shall also provide in substance that attainment of 
 34.13  that age shall not terminate coverage while the child is (a) 
 34.14  incapable of self-sustaining employment by reason of mental 
 34.15  retardation, mental illness, or physical handicap, and (b) 
 34.16  chiefly dependent upon the subscriber or employee for support 
 34.17  and maintenance, provided proof of incapacity and dependency is 
 34.18  furnished by the subscriber within 31 days of attainment of the 
 34.19  age, and subsequently as required by the corporation, but not 
 34.20  more frequently than annually after a two year period following 
 34.21  attainment of the age. 
 34.22     Sec. 33.  Minnesota Statutes 1994, section 62C.14, 
 34.23  subdivision 14, is amended to read: 
 34.24     Subd. 14.  No subscriber's individual contract or any group 
 34.25  contract which provides for coverage of family members or other 
 34.26  dependents of a subscriber or of an employee or other group 
 34.27  member of a group subscriber, shall be renewed, delivered, or 
 34.28  issued for delivery in this state unless such contract includes 
 34.29  as covered family members or dependents any newborn infants, 
 34.30  including dependent grandchildren, immediately from the moment 
 34.31  of birth and thereafter which insurance shall provide coverage 
 34.32  for illness, injury, congenital malformation or premature birth. 
 34.33     Sec. 34.  Minnesota Statutes 1994, section 62D.02, 
 34.34  subdivision 8, is amended to read: 
 34.35     Subd. 8.  "Health maintenance contract" means any contract 
 34.36  whereby a health maintenance organization agrees to provide 
 35.1   comprehensive health maintenance services to enrollees, provided 
 35.2   that the contract may contain reasonable enrollee copayment 
 35.3   provisions.  An individual or group health maintenance contract 
 35.4   may contain the copayment and deductible provisions specified in 
 35.5   this subdivision.  Copayment and deductible provisions in group 
 35.6   contracts shall not discriminate on the basis of age, sex, race, 
 35.7   length of enrollment in the plan, or economic status; and during 
 35.8   every open enrollment period in which all offered health benefit 
 35.9   plans, including those subject to the jurisdiction of the 
 35.10  commissioners of commerce or health, fully participate without 
 35.11  any underwriting restrictions, copayment and deductible 
 35.12  provisions shall not discriminate on the basis of preexisting 
 35.13  health status.  In no event shall the sum of the annual 
 35.14  copayment copayments and deductible exceed the maximum 
 35.15  out-of-pocket expenses allowable for a number three 
 35.16  qualified insurance policy plan under section 62E.06, nor shall 
 35.17  that sum exceed $5,000 per family.  The annual deductible must 
 35.18  not exceed $1,000 per person.  The annual deductible must not 
 35.19  apply to preventive health services as described in Minnesota 
 35.20  Rules, part 4685.0801, subpart 8.  Where sections 62D.01 to 
 35.21  62D.30 permit a health maintenance organization to contain 
 35.22  reasonable copayment provisions for preexisting health status, 
 35.23  these provisions may vary with respect to length of enrollment 
 35.24  in the plan.  Any contract may provide for health care services 
 35.25  in addition to those set forth in subdivision 7. 
 35.26     Sec. 35.  Minnesota Statutes 1994, section 62E.02, 
 35.27  subdivision 7, is amended to read: 
 35.28     Subd. 7.  [DEPENDENT.] "Dependent" means a spouse or 
 35.29  unmarried child under the age of 19 years, a dependent child who 
 35.30  is a student under the age of 25 and financially dependent upon 
 35.31  the parent, or a dependent child of any age who is disabled. 
 35.32     Sec. 36.  Minnesota Statutes 1994, section 62E.12, is 
 35.33  amended to read: 
 35.34     62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE 
 35.35  PLAN.] 
 35.36     The association through its comprehensive health insurance 
 36.1   plan shall offer policies which provide the benefits of a number 
 36.2   one qualified plan and a number two qualified plan, except that 
 36.3   the maximum lifetime benefit on these plans shall be 
 36.4   $1,000,000 $1,500,000, and an extended basic plan and a basic 
 36.5   Medicare plan as described in sections 62A.31 to 62A.44 and 
 36.6   62E.07.  The requirement that a policy issued by the association 
 36.7   must be a qualified plan is satisfied if the association 
 36.8   contracts with a preferred provider network and the level of 
 36.9   benefits for services provided within the network satisfies the 
 36.10  requirements of a qualified plan.  If the association uses a 
 36.11  preferred provider network, payments to nonparticipating 
 36.12  providers must meet the minimum requirements of section 72A.20, 
 36.13  subdivision 15.  They shall offer health maintenance 
 36.14  organization contracts in those areas of the state where a 
 36.15  health maintenance organization has agreed to make the coverage 
 36.16  available and has been selected as a writing carrier.  
 36.17  Notwithstanding the provisions of section 62E.06 the state plan 
 36.18  shall exclude coverage of services of a private duty nurse other 
 36.19  than on an inpatient basis and any charges for treatment in a 
 36.20  hospital located outside of the state of Minnesota in which the 
 36.21  covered person is receiving treatment for a mental or nervous 
 36.22  disorder, unless similar treatment for the mental or nervous 
 36.23  disorder is medically necessary, unavailable in Minnesota and 
 36.24  provided upon referral by a licensed Minnesota medical 
 36.25  practitioner. 
 36.26     Sec. 37.  Minnesota Statutes 1994, section 62F.02, 
 36.27  subdivision 2, is amended to read: 
 36.28     Subd. 2.  [DIRECTORS.] The association shall have a board 
 36.29  of directors composed of 11 persons chosen annually for a term 
 36.30  of four years as follows:  five persons elected by members of 
 36.31  the association at a meeting called by the commissioner; three 
 36.32  members who are health care providers appointed by the 
 36.33  commissioner prior to the election by the association; and three 
 36.34  public members, as defined in section 214.02, appointed by the 
 36.35  governor prior to the election by the association. 
 36.36     Sec. 38.  Minnesota Statutes 1994, section 62I.09, 
 37.1   subdivision 2, is amended to read: 
 37.2      Subd. 2.  [TERMS AND VACANCIES.] In the event of a member's 
 37.3   inability to continue to serve, the commissioner shall appoint a 
 37.4   replacement.  The committee shall elect a chair and vice-chair 
 37.5   from among the members.  The term of each member is one year 
 37.6   commencing four years beginning on June 1, except that the first 
 37.7   members to be appointed to the committee shall serve from the 
 37.8   date of their appointment until June 1 immediately following 
 37.9   their appointment. 
 37.10     Sec. 39.  Minnesota Statutes 1994, section 62L.02, 
 37.11  subdivision 16, is amended to read: 
 37.12     Subd. 16.  [HEALTH CARRIER.] "Health carrier" means an 
 37.13  insurance company licensed under chapter 60A to offer, sell, or 
 37.14  issue a policy of accident and sickness insurance as defined in 
 37.15  section 62A.01; a health service plan licensed under chapter 
 37.16  62C; a health maintenance organization licensed under chapter 
 37.17  62D; a community integrated services network and an integrated 
 37.18  service network operating under chapter 62N; a fraternal benefit 
 37.19  society operating under chapter 64B; a joint self-insurance 
 37.20  employee health plan operating under chapter 62H; and a multiple 
 37.21  employer welfare arrangement, as defined in United States Code, 
 37.22  title 29, section 1002(40), as amended.  For purposes of 
 37.23  sections 62L.01 to 62L.12, but not for purposes of sections 
 37.24  62L.13 to 62L.22, "health carrier" includes a community 
 37.25  integrated service network or integrated service network 
 37.26  licensed under chapter 62N.  Any use of this definition in 
 37.27  another chapter by reference does not include a community 
 37.28  integrated service network or integrated service network, unless 
 37.29  otherwise specified.  For the purpose of this chapter, companies 
 37.30  that are affiliated companies or that are eligible to file a 
 37.31  consolidated tax return must be treated as one health carrier, 
 37.32  except that any insurance company or health service plan 
 37.33  corporation that is an affiliate of a health maintenance 
 37.34  organization located in Minnesota, or any health maintenance 
 37.35  organization located in Minnesota that is an affiliate of an 
 37.36  insurance company or health service plan corporation, or any 
 38.1   health maintenance organization that is an affiliate of another 
 38.2   health maintenance organization in Minnesota, may treat the 
 38.3   health maintenance organization as a separate health carrier. 
 38.4      Sec. 40.  Minnesota Statutes 1994, section 62L.03, 
 38.5   subdivision 5, is amended to read: 
 38.6      Subd. 5.  [CANCELLATIONS AND FAILURES TO RENEW.] (a) No 
 38.7   health carrier shall cancel, decline to issue, or fail to renew 
 38.8   a health benefit plan as a result of the claim experience or 
 38.9   health status of the persons covered or to be covered by the 
 38.10  health benefit plan.  A health carrier may cancel or fail to 
 38.11  renew a health benefit plan: 
 38.12     (1) for nonpayment of the required premium; 
 38.13     (2) for fraud or misrepresentation by the small employer, 
 38.14  or, with respect to coverage of an individual eligible employee 
 38.15  or dependent, fraud or misrepresentation by the eligible 
 38.16  employee or dependent, with respect to eligibility for coverage 
 38.17  or any other material fact; 
 38.18     (3) if eligible employee participation during the preceding 
 38.19  calendar year declines to less than 75 percent, subject to the 
 38.20  waiver of coverage provision in subdivision 3; 
 38.21     (4) if the employer fails to comply with the minimum 
 38.22  contribution percentage required under subdivision 3; 
 38.23     (5) if the health carrier ceases to do business in the 
 38.24  small employer market under section 62L.09; 
 38.25     (6) if a failure to renew is based upon the health 
 38.26  carrier's decision to discontinue the health benefit plan form 
 38.27  previously issued to the small employer, but only if the health 
 38.28  carrier permits each small employer covered under the prior form 
 38.29  to switch to its choice of any other health benefit plan offered 
 38.30  by the health carrier, without any underwriting restrictions 
 38.31  that would not have been permitted for renewal purposes; or 
 38.32     (7) for any other reasons or grounds expressly permitted by 
 38.33  the respective licensing laws and regulations governing a health 
 38.34  carrier, including, but not limited to, service area 
 38.35  restrictions imposed on health maintenance organizations under 
 38.36  section 62D.03, subdivision 4, paragraph (m), to the extent that 
 39.1   these grounds are not expressly inconsistent with this chapter. 
 39.2      (b) A health carrier need not renew a health benefit plan, 
 39.3   and shall not renew a small employer plan, if an employer ceases 
 39.4   to qualify as a small employer as defined in section 62L.02.  If 
 39.5   a health benefit plan, other than a small employer plan, 
 39.6   provides terms of renewal that do not exclude an employer that 
 39.7   is no longer a small employer, the health benefit plan may be 
 39.8   renewed according to its own terms.  If a health carrier issues 
 39.9   or renews a health plan to an employer that is no longer a small 
 39.10  employer, without interruption of coverage, the health plan is 
 39.11  subject to section 60A.082.  Between July 1, 1994, and June 30, 
 39.12  1995, a health benefit plan in force during this time may be 
 39.13  renewed, if the number of employees exceeds two, but does not 
 39.14  exceed 49 employees. 
 39.15     Sec. 41.  Minnesota Statutes 1994, section 65A.01, is 
 39.16  amended by adding a subdivision to read: 
 39.17     Subd. 3b.  [RESCISSION AND VOIDABILITY.] This policy must 
 39.18  not be rescinded or voided except where the insured has 
 39.19  willfully and with intent to defraud concealed or misrepresented 
 39.20  a material fact or circumstance concerning this insurance or the 
 39.21  subject of this insurance or the interests of the insured in 
 39.22  this insurance.  This provision must not operate to defeat a 
 39.23  claim by a third party or a minor child of the named insured for 
 39.24  damage or loss for which the policy provides coverage. 
 39.25     Sec. 42.  Minnesota Statutes 1994, section 65B.06, 
 39.26  subdivision 3, is amended to read: 
 39.27     Subd. 3.  With respect to all automobiles not included in 
 39.28  subdivisions 1 and 2, the facility shall provide: 
 39.29     (1) Only the insurance the minimum limits of coverage 
 39.30  required by law section 65B.49, subdivisions 2, 3, 3a, and 4a, 
 39.31  or higher limits of liability coverage as recommended by the 
 39.32  governing committee and approved by the commissioner; 
 39.33     (2) for the equitable distribution of qualified applicants 
 39.34  for this coverage among the members in accord with the 
 39.35  applicable participation ratio, or among these insurance 
 39.36  companies as selected under the provisions of the plan of 
 40.1   operation; and 
 40.2      (3) for a school district or contractor transporting school 
 40.3   children under contract with a school district, that amount of 
 40.4   automobile liability insurance coverage, not to exceed 
 40.5   $1,000,000, required by the school district by resolution or 
 40.6   contract, or that portion of such $1,000,000 of coverage for 
 40.7   which the school district or contractor applies and for which it 
 40.8   is eligible under section 65B.10. 
 40.9      Sec. 43.  Minnesota Statutes 1994, section 65B.08, 
 40.10  subdivision 1, is amended to read: 
 40.11     Subdivision 1.  [FILING.] As agent for members, the 
 40.12  facility shall file with the commissioner all manuals of 
 40.13  classification, all manuals of rules and rates, all rating 
 40.14  plans, and any modifications of same, proposed for use for 
 40.15  private passenger nonfleet automobile insurance placed through 
 40.16  the facility.  The classifications, rules and rates and any 
 40.17  amendments thereto shall be subject to prior written approval by 
 40.18  the commissioner.  Rates, surcharge points, and increased limits 
 40.19  factors filed by the facility shall not be excessive, 
 40.20  inadequate, or unfairly discriminatory.  No other entity, 
 40.21  service or organization shall make filings for the facility or 
 40.22  the members to apply to insurance placed through the facility. 
 40.23     Sec. 44.  Minnesota Statutes 1994, section 65B.09, 
 40.24  subdivision 1, is amended to read: 
 40.25     Subdivision 1.  [AGENTS' RESPONSIBILITY.] Every person 
 40.26  licensed under chapter 60K sections 60K.02 and 60K.03 who is 
 40.27  authorized to solicit, negotiate or effect automobile insurance 
 40.28  on behalf of any member shall: 
 40.29     (1) offer to place coverage through the facility for any 
 40.30  qualified applicant who is ineligible or unacceptable for 
 40.31  coverage in the insurer or insurers for whom the agent is 
 40.32  authorized to solicit, negotiate or effect automobile 
 40.33  insurance.  Provided, that the failure of an agent to make such 
 40.34  an offer to a qualified applicant shall not subject the agent to 
 40.35  any liability to the applicant; 
 40.36     (2) forward to the facility all applications and any 
 41.1   deposit premiums which are required by the plan of operation, 
 41.2   rules and procedures of the facility, if the qualified applicant 
 41.3   accepts the offer to have coverage placed through the facility; 
 41.4      (3) be entitled to receive compensation for placing 
 41.5   insurance through the facility at the uniform rates of 
 41.6   compensation as provided in the plan of operation, and all 
 41.7   members shall pay such compensation. 
 41.8      Sec. 45.  Minnesota Statutes 1994, section 65B.10, 
 41.9   subdivision 3, is amended to read: 
 41.10     Subd. 3.  [REVIEW OF INSUREDS.] At least annually, every 
 41.11  member shall review every private passenger nonfleet applicant 
 41.12  which it insures through the facility and determine whether or 
 41.13  not such applicant is acceptable for voluntary insurance at a 
 41.14  rate lower than the facility rate.  If such applicant is 
 41.15  acceptable, the member shall make an offer to insure the 
 41.16  applicant under voluntary coverage at such lower rate.  
 41.17     Sec. 46.  Minnesota Statutes 1994, section 65B.61, 
 41.18  subdivision 1, is amended to read: 
 41.19     Subdivision 1.  Basic economic loss benefits shall be 
 41.20  primary with respect to benefits, except for those paid or 
 41.21  payable under a workers' compensation law, which any person 
 41.22  receives or is entitled to receive from any other source as a 
 41.23  result of injury arising out of the maintenance or use of a 
 41.24  motor vehicle.  Where workers' compensation benefits paid or 
 41.25  payable are primary, the reparation obligor shall make an 
 41.26  appropriate rebate or reduction in the premiums of the plan of 
 41.27  reparation security.  The amount of the rebate or rate reduction 
 41.28  shall be not less than the amount of the projected reduction in 
 41.29  benefits and claims for which the reparation obligor will be 
 41.30  liable on that class of risks.  The projected reduction or 
 41.31  rebate in benefits and claims shall be based upon sound 
 41.32  actuarial principles.  
 41.33     Sec. 47.  Minnesota Statutes 1994, section 72A.20, is 
 41.34  amended by adding a subdivision to read: 
 41.35     Subd. 32.  [SUITABILITY OF INSURANCE FOR CUSTOMER.] In 
 41.36  recommending or issuing life, endowment, individual accident and 
 42.1   sickness, long-term care, annuity, life-endowment, or Medicare 
 42.2   supplement insurance to a customer, an insurer, either directly 
 42.3   or through its agent, must have reasonable grounds for believing 
 42.4   that the recommendation is suitable for the customer.  
 42.5      In the case of group insurance marketed on a direct 
 42.6   response basis without the use of direct agent contact, this 
 42.7   subdivision is satisfied if the insurer has reasonable grounds 
 42.8   to believe that the insurance offered is generally suitable for 
 42.9   the group to whom the offer is made. 
 42.10     Sec. 48.  Minnesota Statutes 1994, section 72B.05, is 
 42.11  amended to read: 
 42.12     72B.05 [NONRESIDENTS.] 
 42.13     A nonresident person may become licensed under sections 
 42.14  72B.01 to 72B.14, provided that the person meets all of the 
 42.15  requirements of sections 72B.01 to 72B.14, and complies with 
 42.16  their provisions, and, on a form prescribed by the commissioner, 
 42.17  appoints the commissioner as the attorney upon whom may be 
 42.18  served all legal process issued in connection with any action or 
 42.19  proceeding brought or pending in this state against or involving 
 42.20  the licensee and relating to transactions under the license; the 
 42.21  appointment shall be irrevocable and shall continue so long as 
 42.22  any such action or proceeding could arise or exist.  
 42.23     Duplicate copies Service of process shall be served upon 
 42.24  the commissioner, accompanied by payment of the fee specified in 
 42.25  section 60A.14, subdivision 1(3)(d).  Upon receiving such 
 42.26  service, the commissioner shall promptly forward a copy thereof 
 42.27  by registered or certified mail, with return receipt requested, 
 42.28  to the nonresident licensee at that person's last known 
 42.29  address.  Process served upon the commissioner in this manner 
 42.30  shall for all purposes constitute personal service thereof upon 
 42.31  the licensee must be made in compliance with section 45.028, 
 42.32  subdivision 2.  
 42.33     Sec. 49.  Minnesota Statutes 1994, section 299F.053, 
 42.34  subdivision 2, is amended to read: 
 42.35     Subd. 2.  [AUTHORIZED PERSON.] "Authorized person" means:  
 42.36     (a) the state fire marshal when authorized or charged with 
 43.1   the investigation of fires at the place where the fire actually 
 43.2   took place; 
 43.3      (b) superintendent of the bureau of criminal apprehension; 
 43.4      (c) the prosecuting attorney responsible for prosecutions 
 43.5   in the county where the fire occurred; 
 43.6      (d) the sheriff or chief of police responsible for 
 43.7   investigation in the county where the fire occurred; 
 43.8      (e) the county attorney responsible for the prosecution in 
 43.9   the county where the fire occurred; 
 43.10     (f) the Federal Bureau of Investigation or any other 
 43.11  federal agency; 
 43.12     (g) the United States attorney's office when authorized or 
 43.13  charged with investigation or prosecution of a case involving a 
 43.14  fire loss; or 
 43.15     (h) the chief administrative officer of the municipal arson 
 43.16  squad; or 
 43.17     (i) the commissioner of commerce. 
 43.18     Sec. 50.  Minnesota Statutes 1994, section 515A.3-112, is 
 43.19  amended to read: 
 43.20     515A.3-112 [INSURANCE.] 
 43.21     (a) Commencing not later than the time of the first 
 43.22  conveyance of a unit to a unit owner other than a declarant, the 
 43.23  association shall maintain, to the extent reasonably available: 
 43.24     (1) Property insurance on the common elements and units, 
 43.25  exclusive of land, excavations, foundations, and other items 
 43.26  normally excluded from property policies, insuring against all 
 43.27  risks of direct physical loss.  The total amount of insurance 
 43.28  after application of any deductibles shall be not less than 80 
 43.29  percent of the full insurable replacement cost of the insured 
 43.30  property.  The association or its authorized agent may enter a 
 43.31  unit at reasonable times upon reasonable notice for the purpose 
 43.32  of making appraisals for insurance purposes.  
 43.33     (2) Comprehensive general liability insurance, in an amount 
 43.34  determined by the board of directors but not less than any 
 43.35  amount specified in the declaration, covering all occurrences 
 43.36  commonly insured against for death, bodily injury, and property 
 44.1   damage arising out of or in connection with the use, ownership, 
 44.2   or maintenance of the common elements. 
 44.3      (b) If the insurance described in subsection (a) is not 
 44.4   maintained, the association shall immediately cause notice of 
 44.5   that fact to be sent postage prepaid by United States mail to 
 44.6   all unit owners at their respective units and other addresses 
 44.7   provided to the association.  The declaration may require the 
 44.8   association to carry any other insurance, and the association in 
 44.9   any event may carry any other insurance it deems appropriate to 
 44.10  protect the association or the unit owners. 
 44.11     (c) Insurance policies carried pursuant to subsection (a) 
 44.12  shall provide that: 
 44.13     (1) Each unit owner and holder of a vendor's interest in a 
 44.14  contract for deed is an insured person under the policy with 
 44.15  respect to liability arising out of ownership of an undivided 
 44.16  interest in the common elements; 
 44.17     (2) The insurer waives its right to subrogation under the 
 44.18  policy against any unit owner of the condominium or members of 
 44.19  the unit owner's household and against the association and 
 44.20  members of the board of directors; 
 44.21     (3) No act or omission by any unit owner or holder of an 
 44.22  interest as security for an obligation, unless acting within the 
 44.23  scope of authority on behalf of the association, shall void the 
 44.24  policy or be a condition to recovery under the policy; and 
 44.25     (4) If, at the time of a loss under the policy, there is 
 44.26  other insurance in the name of a unit owner covering the same 
 44.27  property covered by the policy, the policy is primary insurance 
 44.28  not contributing with the other insurance. 
 44.29     (d) Any loss covered by the property policy under 
 44.30  subsection (a)(1) shall be adjusted with the association, but 
 44.31  the insurance proceeds for that loss shall be payable to any 
 44.32  insurance trustee designated for that purpose, or otherwise to 
 44.33  the association.  The insurance trustee or the association shall 
 44.34  hold any insurance proceeds in trust for unit owners and holders 
 44.35  of an interest as security for an obligation as their interests 
 44.36  may appear.  The proceeds shall be disbursed first for the 
 45.1   repair or restoration of the damaged common elements and units, 
 45.2   and unit owners and holders of an interest as security for an 
 45.3   obligation are not entitled to receive payment of any portion of 
 45.4   the proceeds unless there is a surplus of proceeds after the 
 45.5   common elements and units have been completely repaired or 
 45.6   restored, or the condominium is terminated. 
 45.7      (e) An insurance policy issued to the association does not 
 45.8   prevent a unit owner from obtaining insurance for personal 
 45.9   benefit. 
 45.10     (f) An insurer that has issued an insurance policy under 
 45.11  this section shall issue certificates or memoranda of insurance, 
 45.12  upon request, to any unit owner, or holder of an interest as 
 45.13  security for an obligation.  The insurance may not be canceled 
 45.14  until 30 60 days after notice of the proposed cancellation has 
 45.15  been mailed to the association and to each unit owner and holder 
 45.16  of an interest as security for an obligation to whom 
 45.17  certificates of insurance have been issued. 
 45.18     (g) Any portion of the condominium damaged or destroyed 
 45.19  shall be promptly repaired or replaced by the association unless 
 45.20  (1) the condominium is terminated and the association votes not 
 45.21  to repair or replace all or part thereof, (2) repair or 
 45.22  replacement would be illegal under any state or local health or 
 45.23  safety statute or ordinance, or (3) 80 percent of the unit 
 45.24  owners, including every owner and first mortgagee of a unit or 
 45.25  assigned limited common element which will not be rebuilt, vote 
 45.26  not to rebuild.  The cost of repair or replacement of a unit or 
 45.27  the common area in excess of insurance proceeds and reserves 
 45.28  shall be a common expense.  If less than the entire condominium 
 45.29  is repaired or replaced, (1) the insurance proceeds attributable 
 45.30  to the damaged common elements shall be used to restore the 
 45.31  damaged area to a condition compatible with the remainder of the 
 45.32  condominium, (2) the insurance proceeds attributable to units 
 45.33  and limited common elements which are not rebuilt shall be 
 45.34  distributed to the owners of those units and the holders of an 
 45.35  interest as security for an obligation of those units and the 
 45.36  owners and holders of an interest as security for an obligation 
 46.1   of the units to which those limited common elements were 
 46.2   assigned, as their interests may appear, and (3) the remainder 
 46.3   of the proceeds shall be distributed to all the unit owners and 
 46.4   holders of an interest as security for an obligation as their 
 46.5   interests may appear in proportion to their common element 
 46.6   interest.  In the event the unit owners vote not to rebuild a 
 46.7   unit, that unit's entire common element interest, votes in the 
 46.8   association, and common expense liability are automatically 
 46.9   reallocated upon the vote as if the unit had been condemned 
 46.10  under section 515A.1-107(a), and the association shall promptly 
 46.11  prepare, execute and record an amendment to the declaration 
 46.12  reflecting the reallocations.  Notwithstanding the provisions of 
 46.13  this subsection, if the condominium is terminated, insurance 
 46.14  proceeds not used for repair or replacement shall be distributed 
 46.15  in the same manner as sales proceeds pursuant to section 
 46.16  515A.2-120.  
 46.17     (h) The provisions of this section may be varied or waived 
 46.18  in the case of a condominium all of the units of which are 
 46.19  restricted to nonresidential use. 
 46.20     Sec. 51.  [REPORT ON MANDATED INSURANCE DISCLOSURES AND 
 46.21  NOTICES.] 
 46.22     The commissioner of commerce shall report to the 
 46.23  legislature by February 1, 1996, on the status of insurance 
 46.24  disclosures and notices that are required by law to be 
 46.25  distributed with insurance applications, marketing materials, or 
 46.26  claim forms.  The report shall include recommendations on the 
 46.27  disclosures or notices that are no longer necessary and a 
 46.28  recommendation for consolidation of all legally required 
 46.29  disclosures or notices on a single disclosure form. 
 46.30     Sec. 52.  [REPEALER.] 
 46.31     Minnesota Statutes 1994, section 65B.07, subdivision 5, is 
 46.32  repealed. 
 46.33     Sec. 53.  [EFFECTIVE DATES.] 
 46.34     Sections 1 to 4, 6 to 10, 13 to 15, 17, 19 to 22, 25, 27 to 
 46.35  31, 33, 35, 37, 38, 40, 41, 47, 48, 49, and 52 are effective the 
 46.36  day following final enactment. 
 47.1      Section 39 is effective January 1, 1995. 
 47.2      Section 34 is effective July 1, 1995. 
 47.3      Section 36 is effective July 1, 1995, and applies to 
 47.4   coverage issued or renewed on or after that date. 
 47.5      Section 11 is effective January 1, 1996. 
 47.6      Sections 23, 24, and 32 are effective January 1, 1996, and 
 47.7   apply to coverage issued or renewed on or after that date.