1.1                          A bill for an act 
  1.2             relating to insurance; regulating nonrenewals of 
  1.3             homeowner's insurance; prohibiting various 
  1.4             discriminatory practices in automobile and homeowner's 
  1.5             insurance; amending Minnesota Statutes 2000, sections 
  1.6             65A.29, subdivision 8; 65B.28, subdivision 1; 72A.20, 
  1.7             subdivisions 13, 23. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2000, section 65A.29, 
  1.10  subdivision 8, is amended to read: 
  1.11     Subd. 8.  [RULES.] (a) The commissioner may adopt rules 
  1.12  pursuant to chapter 14, to specify the grounds for nonrenewal, 
  1.13  reduction in limits of coverage, or elimination of coverage of a 
  1.14  homeowner's policy.  The rules must limit the grounds to the 
  1.15  following factors:  
  1.16     (1) reasons stated for cancellation in section 65A.01, 
  1.17  subdivision 3a; 
  1.18     (2) reasons stated in section 72A.20, subdivision 13; 
  1.19     (3) insured's loss experience, not to include natural 
  1.20  causes as limited by paragraphs (b) and (c); and 
  1.21     (4) other factors deemed reasonable by the commissioner. 
  1.22     (b) An insurer may not take the action specified in 
  1.23  paragraph (a) because of losses caused by natural causes. 
  1.24     (c) If two or fewer claims are submitted during the 
  1.25  experience period the insurer may not take the action specified 
  1.26  in paragraph (a) on the grounds of a number of claims, but the 
  2.1   insurer may take the action specified in paragraph (a) on the 
  2.2   basis of two claims submitted during the experience period, the 
  2.3   aggregate of which exceeds $3,000, not including deductibles. 
  2.4      (d) The rules may give consideration to the form and 
  2.5   content of the termination notice to the insured, a statement as 
  2.6   to what constitutes receipt of the termination notice, and the 
  2.7   procedure by which the insured may appeal a termination notice.  
  2.8      (e) The rules adopted under this subdivision may provide 
  2.9   for imposition of a monetary penalty not greater than $500 per 
  2.10  occurrence upon insurers who are found to be in violation of the 
  2.11  law or the rules.  
  2.12     (b) (f) In addition to any rules adopted under this 
  2.13  subdivision, an insured may appeal any nonrenewal under this 
  2.14  section to the commissioner of commerce.  If the commissioner 
  2.15  finds that the nonrenewal is unjustified, arbitrary, or 
  2.16  capricious, the commissioner shall order the insurer to 
  2.17  reinstate the insured's policy.  The commissioner's order may be 
  2.18  appealed pursuant to chapter 14.  The insured's policy shall 
  2.19  continue in force pending the conclusion of the appeal to the 
  2.20  commissioner.  The insurer must notify the insured of the 
  2.21  insured's right to appeal the nonrenewal to the commissioner in 
  2.22  the notice of nonrenewal required under subdivision 7. 
  2.23     Sec. 2.  Minnesota Statutes 2000, section 65B.28, 
  2.24  subdivision 1, is amended to read: 
  2.25     Subdivision 1.  [REQUIRED REDUCTION.] An insurer must 
  2.26  provide an appropriate premium reduction of at least ten percent 
  2.27  on its policies of private passenger vehicle insurance, as 
  2.28  defined in section 65B.001, subdivision 2, issued, delivered, or 
  2.29  renewed in this state, to insureds 55 years old and older who 
  2.30  successfully complete an accident prevention course or refresher 
  2.31  course established under subdivisions 2 and 3.  An insurer must 
  2.32  not exclude from eligibility for this premium reduction any 
  2.33  person who is eligible for it under this section and must not 
  2.34  use any offsetting premium surcharge, offsetting loss of a 
  2.35  premium discount, or any other offsetting premium rate 
  2.36  adjustment that applies only to persons eligible for the premium 
  3.1   reduction under this section. 
  3.2      Sec. 3.  Minnesota Statutes 2000, section 72A.20, 
  3.3   subdivision 13, is amended to read: 
  3.4      Subd. 13.  [REFUSAL TO RENEW PROHIBITED UNDERWRITING 
  3.5   PRACTICES; HOMEOWNER'S INSURANCE.] Refusing It is an unfair 
  3.6   method of competition and an unfair and deceptive act or 
  3.7   practice to refuse to renew, declining to decline to offer or 
  3.8   write, or charging to charge differential rates for an 
  3.9   equivalent amount of homeowner's insurance coverage, as defined 
  3.10  by section 65A.27, for property located in a town or statutory 
  3.11  or home rule charter city, in which the insurer offers to sell 
  3.12  or writes homeowner's insurance, solely because:  
  3.13     (a) of the geographic area in which the property is 
  3.14  located; 
  3.15     (b) of the age of the primary structure sought to be 
  3.16  insured; 
  3.17     (c) the insured or prospective insured was denied coverage 
  3.18  of the property by another insurer, whether by cancellation, 
  3.19  nonrenewal or declination to offer coverage, for a reason other 
  3.20  than those specified in section 65A.01, subdivision 3a, clauses 
  3.21  (a) to (e); or 
  3.22     (d) the property of the insured or prospective insured has 
  3.23  been insured under the Minnesota FAIR Plan Act, shall constitute 
  3.24  an unfair method of competition and an unfair and deceptive act 
  3.25  or practice; or 
  3.26     (e) the employment status or residential stability of the 
  3.27  insured or prospective insured.  
  3.28     This subdivision prohibits an insurer from filing or 
  3.29  charging different rates for different zip code areas within the 
  3.30  same town or statutory or home rule charter city. 
  3.31     This subdivision shall not prohibit the insurer from 
  3.32  applying underwriting or rating standards which the insurer 
  3.33  applies generally in all other locations in the state and which 
  3.34  are not specifically prohibited by clauses (a) to (d) (e).  Such 
  3.35  underwriting or rating standards shall specifically include but 
  3.36  not be limited to standards based upon the proximity of the 
  4.1   insured property to an extraordinary hazard or based upon the 
  4.2   quality or availability of fire protection services or based 
  4.3   upon the density or concentration of the insurer's risks.  
  4.4   Clause (b) shall not prohibit the use of rating standards based 
  4.5   upon the age of the insured structure's plumbing, electrical, 
  4.6   heating or cooling system or other part of the structure, the 
  4.7   age of which affects the risk of loss.  Any insurer's failure to 
  4.8   comply with section 65A.29, subdivisions 2 to 4, either (1) by 
  4.9   failing to give an insured or applicant the required notice or 
  4.10  statement or (2) by failing to state specifically a bona fide 
  4.11  underwriting or other reason for the refusal to write shall 
  4.12  create a presumption that the insurer has violated this 
  4.13  subdivision.  
  4.14     Sec. 4.  Minnesota Statutes 2000, section 72A.20, 
  4.15  subdivision 23, is amended to read: 
  4.16     Subd. 23.  [DISCRIMINATION IN AUTOMOBILE INSURANCE 
  4.17  POLICIES.] (a) No insurer that offers an automobile insurance 
  4.18  policy in this state shall: 
  4.19     (1) use the employment status of the applicant as an 
  4.20  underwriting standard or guideline; or 
  4.21     (2) deny coverage to a policyholder for the same reason. 
  4.22     (b) No insurer that offers an automobile insurance policy 
  4.23  in this state shall: 
  4.24     (1) use the applicant's status as a residential tenant, as 
  4.25  the term is defined in section 504B.001, subdivision 12, as an 
  4.26  underwriting standard or guideline; or 
  4.27     (2) deny coverage to a policyholder for the same reason; or 
  4.28     (3) make any discrimination in offering or establishing 
  4.29  rates, premiums, dividends, or benefits of any kind, or by way 
  4.30  of rebate, for the same reason.  
  4.31     (c) No insurer that offers an automobile insurance policy 
  4.32  in this state shall: 
  4.33     (1) use the failure of the insured or applicant to have an 
  4.34  automobile policy in force during any period of time before the 
  4.35  application is made as an underwriting standard or guideline, 
  4.36  including eligibility for premium rates or premium discounts; or 
  5.1      (2) deny coverage to a policyholder for the same reason. 
  5.2      Paragraph (c) does not apply if the insured or applicant 
  5.3   was required by law to maintain automobile insurance coverage 
  5.4   and failed to do so. 
  5.5      An insurer may require reasonable proof that the insured or 
  5.6   applicant did not fail to maintain this coverage.  The insurer 
  5.7   is not required to accept the mere lack of a conviction or 
  5.8   citation for failure to maintain this coverage as proof of 
  5.9   failure to maintain coverage.  The insurer must provide 
  5.10  the insured or applicant with information identifying the 
  5.11  documentation that is required to establish reasonable proof 
  5.12  that the insured or applicant did not fail to maintain the 
  5.13  coverage. 
  5.14     (d) No insurer that offers an automobile insurance policy 
  5.15  in this state shall use an insured's or applicant's prior claims 
  5.16  for benefits paid under section 65B.44 or prior claims for 
  5.17  collision losses as an underwriting standard or guideline if the 
  5.18  insured or applicant was 50 percent or less negligent in the 
  5.19  accident or accidents causing the claims. 
  5.20     (e) No insurer shall refuse to issue any standard or 
  5.21  preferred policy of motor vehicle insurance or make any 
  5.22  discrimination in the acceptance of risks, in rates, premiums, 
  5.23  dividends, or benefits of any kind, or by way of rebate:  
  5.24     (1) between persons of the same class, or 
  5.25     (2) on account of race, or 
  5.26     (3) on account of physical handicap if the handicap is 
  5.27  compensated for by special training, equipment, prosthetic 
  5.28  device, corrective lenses, or medication and if the physically 
  5.29  handicapped person: 
  5.30     (i) is licensed by the department of public safety to 
  5.31  operate a motor vehicle in this state, and 
  5.32     (ii) operates only vehicles that are equipped with 
  5.33  auxiliary devices and equipment necessary for safe and effective 
  5.34  operation by the handicapped person, or 
  5.35     (4) on account of marital dissolution.  
  5.36     Sec. 5.  [EFFECTIVE DATE.] 
  6.1      Sections 2 to 4 are effective January 1, 2002, and apply to 
  6.2   coverage applied for, issued, or renewed on or after that date.  
  6.3   Section 1 is effective January 1, 2002, and applies to losses 
  6.4   occurring on or after that date, regardless of whether the 
  6.5   commissioner has as of that date amended Minnesota Rules to 
  6.6   comply with that section.