1.1                          A bill for an act 
  1.2             relating to insurance; authorizing insurance coverage 
  1.3             for vicarious liability for punitive and exemplary 
  1.4             damages; regulating the terms of certain fraternal 
  1.5             benefit society board members; amending Minnesota 
  1.6             Statutes 1998, section 64B.03; Minnesota Statutes 1999 
  1.7             Supplement, section 60A.06, subdivision 1. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.10  60A.06, subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [STATUTORY LINES.] Insurance corporations 
  1.12  may be authorized to transact in any state or territory in the 
  1.13  United States, in the Dominion of Canada, and in foreign 
  1.14  countries, when specified in their charters or certificates of 
  1.15  incorporation, either as originally granted or as thereafter 
  1.16  amended, any of the following kinds of business, upon the stock 
  1.17  plan, or upon the mutual plan when the formation of such mutual 
  1.18  companies is otherwise authorized by law; and business trusts as 
  1.19  authorized by law of this state shall only be authorized to 
  1.20  transact in this state the following kind of business 
  1.21  hereinafter specified in clause (7) hereof when specified in 
  1.22  their "declaration of trust": 
  1.23     (1) To insure against loss or damage to property on land 
  1.24  and against loss of rents and rental values, leaseholds of 
  1.25  buildings, use and occupancy and direct or consequential loss or 
  1.26  damage caused by fire, smoke or smudge, water or other fluid or 
  2.1   substance, lightning, windstorm, tornado, cyclone, earthquake, 
  2.2   collapse and slippage, rain, hail, frost, snow, freeze, change 
  2.3   of temperature, weather or climatic conditions, excess or 
  2.4   deficiency of moisture, floods, the rising of waters, oceans, 
  2.5   lakes, rivers or their tributaries, bombardment, invasion, 
  2.6   insurrection, riot, civil war or commotion, military or usurped 
  2.7   power, electrical power interruption or electrical breakdown 
  2.8   from any cause, railroad equipment, motor vehicles or aircraft, 
  2.9   accidental injury to sprinklers, pumps, conduits or containers 
  2.10  or other apparatus erected for extinguishing fires, explosion, 
  2.11  whether fire ensues or not, except explosions on risks specified 
  2.12  in clause (3); provided, however, that there may be insured 
  2.13  hereunder the following:  (a) explosion of any kind originating 
  2.14  outside the insured building or outside of the building 
  2.15  containing the property insured, (b) explosion of pressure 
  2.16  vessels which do not contain steam or which are not operated 
  2.17  with steam coils or steam jackets; and (c) risks under home 
  2.18  owners multiple peril policies; 
  2.19     (2)(a) To insure vessels, freight, goods, wares, 
  2.20  merchandise, specie, bullion, jewels, profits, commissions, bank 
  2.21  notes, bills of exchange, and other evidences of debt, bottomry 
  2.22  and respondentia interest, and every insurance appertaining to 
  2.23  or connected with risks of transportation and navigation on and 
  2.24  under water, on land or in the air; 
  2.25     (b) To insure all personal property floater risks; 
  2.26     (3) To insure against any loss from either direct or 
  2.27  indirect damage to any property or interest of the assured or of 
  2.28  another, resulting from the explosion of or injury to (a) any 
  2.29  boiler, heater or other fired pressure vessel; (b) any unfired 
  2.30  pressure vessel; (c) pipes or containers connected with any of 
  2.31  said boilers or vessels; (d) any engine, turbine, compressor, 
  2.32  pump or wheel; (e) any apparatus generating, transmitting or 
  2.33  using electricity; (f) any other machinery or apparatus 
  2.34  connected with or operated by any of the previously named 
  2.35  boilers, vessels or machines; and including the incidental power 
  2.36  to make inspections of and to issue certificates of inspection 
  3.1   upon, any such boilers, apparatus, and machinery, whether 
  3.2   insured or otherwise; 
  3.3      (4) To make contracts of life and endowment insurance, to 
  3.4   grant, purchase, or dispose of annuities or endowments of any 
  3.5   kind; and, in such contracts, or in contracts supplemental 
  3.6   thereto to provide for additional benefits in event of death of 
  3.7   the insured by accidental means, total permanent disability of 
  3.8   the insured, or specific dismemberment or disablement suffered 
  3.9   by the insured, or acceleration of life or endowment or annuity 
  3.10  benefits in advance of the time they would otherwise be payable; 
  3.11     (5)(a) To insure against loss or damage by the sickness, 
  3.12  bodily injury or death by accident of the assured or dependents, 
  3.13  or those for whom the assured has assumed a portion of the 
  3.14  liability for the loss or damage, including liability for 
  3.15  payment of medical care costs or for provision of medical care; 
  3.16     (b) To insure against the legal liability, whether imposed 
  3.17  by common law or by statute or assumed by contract, of employers 
  3.18  for the death or disablement of, or injury to, employees; 
  3.19     (6) To guarantee the fidelity of persons in fiduciary 
  3.20  positions, public or private, or to act as surety on official 
  3.21  and other bonds, and for the performance of official or other 
  3.22  obligations; 
  3.23     (7) To insure owners and others interested in real estate 
  3.24  against loss or damage, by reason of defective titles, 
  3.25  encumbrances, or otherwise; 
  3.26     (8) To insure against loss or damage by breakage of glass, 
  3.27  located or in transit; 
  3.28     (9)(a) To insure against loss by burglary, theft, or 
  3.29  forgery; 
  3.30     (b) To insure against loss of or damage to moneys, coins, 
  3.31  bullion, securities, notes, drafts, acceptance or any other 
  3.32  valuable paper or document, resulting from any cause, except 
  3.33  while in the custody or possession of and being transported by 
  3.34  any carrier for hire or in the mail; 
  3.35     (c) To insure individuals by means of an all risk type of 
  3.36  policy commonly known as the "personal property floater" against 
  4.1   any kind and all kinds of loss of or damage to, or loss of use 
  4.2   of, any personal property other than merchandise; 
  4.3      (d) To insure against loss or damage by water or other 
  4.4   fluid or substance; 
  4.5      (10) To insure against loss from death of domestic animals 
  4.6   and to furnish veterinary service; 
  4.7      (11) To guarantee merchants and those engaged in business, 
  4.8   and giving credit, from loss by reason of giving credit to those 
  4.9   dealing with them; this shall be known as credit insurance; 
  4.10     (12) To insure against loss or damage to automobiles or 
  4.11  other vehicles or aircraft and their contents, by collision, 
  4.12  fire, burglary, or theft, and other perils of operation, and 
  4.13  against liability for damage to persons, or property of others, 
  4.14  by collision with such vehicles or aircraft, and to insure 
  4.15  against any loss or hazard incident to the ownership, operation, 
  4.16  or use of motor or other vehicles or aircraft; 
  4.17     (13) To insure against liability for loss or damage to the 
  4.18  property or person of another caused by the insured or by those 
  4.19  for whom the insured is responsible, including insurance of 
  4.20  medical, hospital, surgical, funeral or other related expense of 
  4.21  the insured or other person injured, irrespective of legal 
  4.22  liability of the insured, when issued with or supplemental to 
  4.23  policies of liability insurance; 
  4.24     (14) To insure against loss of or damage to any property of 
  4.25  the insured, resulting from the ownership, maintenance or use of 
  4.26  elevators, except loss or damage by fire; 
  4.27     (15) To insure against attorneys fees, court costs, witness 
  4.28  fees and incidental expenses incurred in connection with the use 
  4.29  of the professional services of attorneys at law.; 
  4.30     (16) To insure against vicarious liability for punitive or 
  4.31  exemplary damages.  
  4.32     Sec. 2.  Minnesota Statutes 1998, section 64B.03, is 
  4.33  amended to read: 
  4.34     64B.03 [REPRESENTATIVE FORM OF GOVERNMENT.] 
  4.35     (a) A society has a representative form of government when 
  4.36  it has a supreme governing body constituted in one of the 
  5.1   following ways: 
  5.2      (1) The supreme governing body is an assembly composed of 
  5.3   delegates elected directly by the members or at intermediate 
  5.4   assemblies or conventions of members or their representatives, 
  5.5   together with other delegates as may be prescribed in the 
  5.6   society's laws.  A society may provide for election of delegates 
  5.7   by mail.  The elected delegates shall constitute a majority in 
  5.8   number and shall not have less than two-thirds of the votes and 
  5.9   not less than the number of votes required to amend the 
  5.10  society's laws.  The assembly shall be elected and shall meet at 
  5.11  least once every four years and shall elect a board of directors 
  5.12  to conduct the business of the society between meetings of the 
  5.13  assembly.  Vacancies on the board of directors between elections 
  5.14  may be filled in the manner prescribed by the society's laws. 
  5.15     (2) The supreme governing body is a board composed of 
  5.16  persons elected by the members, either directly or by their 
  5.17  representatives in intermediate assemblies, and any other 
  5.18  persons prescribed in the society's laws.  A society may provide 
  5.19  for election of the board by mail.  Each term of a board member 
  5.20  may not exceed four years, except that the commissioner has the 
  5.21  discretion to approve completion of a term of office exceeding 
  5.22  four years where the board member completing the term was 
  5.23  elected pursuant to clause (1).  Vacancies on the board between 
  5.24  elections may be filled in the manner prescribed by the 
  5.25  society's laws.  Those persons elected to the board shall 
  5.26  constitute a majority in number and not less than the number of 
  5.27  votes required to amend the society's laws.  A person filling 
  5.28  the unexpired term of an elected board member shall be 
  5.29  considered to be an elected member.  The board shall meet at 
  5.30  least quarterly to conduct the business of the society. 
  5.31     (b) A society has a representative form of government when 
  5.32  the officers of the society are elected either by the supreme 
  5.33  governing body or by the board of directors. 
  5.34     (c) A society has a representative form of government when 
  5.35  only benefit members are eligible for election to the supreme 
  5.36  governing body and the board of directors. 
  6.1      (d) A society has a representative form of government when 
  6.2   each voting member shall have one vote and no vote may be cast 
  6.3   by proxy. 
  6.4      Sec. 3.  [EFFECTIVE DATE.] 
  6.5      Sections 1 and 2 are effective the day following final 
  6.6   enactment.