1.1 	A bill for an act
1.2 	relating to insurance; repealing the Minnesota
1.3 	No-Fault Automobile Insurance Act; providing an
1.4 	appropriate premium reduction; requiring liability
1.5 	coverage; proposing coding for new law in Minnesota
1.6 	Statutes, chapter 65B; repealing Minnesota Statutes
1.7 	2004, sections 65B.41; 65B.42; 65B.43; 65B.44; 65B.45;
1.8 	65B.46; 65B.47; 65B.48; 65B.482; 65B.49; 65B.50;
1.9 	65B.51; 65B.525; 65B.53; 65B.54; 65B.55; 65B.56;
1.10 	65B.57; 65B.58; 65B.59; 65B.60; 65B.61; 65B.63;
1.11 	65B.64; 65B.65; 65B.66; 65B.685; 65B.71.
1.12 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13 	Section 1. [65B.30] COMPULSORY INSURANCE.
1.14 		Subdivision 1.General requirement and coverages. Every
1.15 	owner of a motor vehicle of a type which is required to be
1.16 	registered or licensed or is principally garaged in this state
1.17 	shall maintain during the period in which operation or use is
1.18 	contemplated insurance under provisions approved by the
1.19 	commissioner, insuring against loss resulting from liability
1.20 	imposed by law for injury and property damage sustained by any
1.21 	person arising out of the ownership, maintenance, operation, or
1.22 	use of the vehicle.  The nonresident owner of a motor vehicle
1.23 	which is not required to be registered or licensed, or which is
1.24 	not principally garaged in this state, shall maintain such
1.25 	insurance in effect continuously throughout the period of the
1.26 	operation, maintenance, or use of such motor vehicle within this
1.27 	state with respect to accidents occurring in this state.
1.28 		Subd. 2.Types of insurance. The insurance required by
2.1 	subdivision 1 may be provided by a policy of insurance which is
2.2 	issued by or on behalf of an insurer authorized to transact
2.3 	business in this state or, if the vehicle is registered in
2.4 	another state, by a policy of insurance issued by or on behalf
2.5 	of an insurer authorized to transact business in either this
2.6 	state or the state in which the vehicle is registered or by
2.7 	qualifying as a self-insurer.
2.8 		Subd. 3.Self-insurance. Self-insurance, subject to
2.9 	approval of the commissioner, is effected by filing with the
2.10 	commissioner in satisfactory form:
2.11 	(1) a continuing undertaking by the owner or other
2.12 	appropriate person to pay tort liabilities and to perform all
2.13 	other obligations imposed by law;
2.14 	(2) evidence that appropriate provision exists for prompt
2.15 	administration of all claims, benefits, and obligations;
2.16 	(3) evidence that reliable financial arrangements,
2.17 	deposits, or commitments exist providing assurance for payment
2.18 	of tort liabilities and all other obligations imposed by law;
2.19 	and 
2.20 	(4) a nonrefundable initial application fee of $1,500 and
2.21 	an annual renewal fee of $400 for political subdivisions and
2.22 	$500 for nonpolitical entities.
2.23 		Subd. 3a.Rulemaking. To carry out the purposes of
2.24 	subdivision 3, the commissioner may adopt rules pursuant to
2.25 	chapter 14.  These rules may:
2.26 	(1) establish reporting requirements;
2.27 	(2) establish standards or guidelines to assure the
2.28 	adequacy of the financing and administration of self-insurance
2.29 	plans;
2.30 	(3) establish bonding requirements or other provisions
2.31 	assuring the financial integrity of entities that self-insure
2.32 	other than bonding requirements for self-insuring political
2.33 	subdivisions; and 
2.34 	(4) establish other reasonable requirements to further the
2.35 	purposes of this section.
2.36 		Subd. 4.State or political subdivisions to provide
3.1 	insurance. The state of Minnesota or any agency thereof and any
3.2 	political subdivision of the state or agency thereof shall
3.3 	provide insurance, either as a self-insurer pursuant to
3.4 	subdivision 3, or through purchase of a policy of insurance.
3.5 		Subd. 5.Motorcycle coverage. Every owner of a
3.6 	motorcycle registered or required to be registered in this state
3.7 	or operated in this state by the owner or with the owner's
3.8 	permission shall provide and maintain insurance for the payment
3.9 	of tort liabilities arising out of the maintenance or use of the
3.10 	motorcycle in this state.  Insurance may be provided by a policy
3.11 	of insurance or by qualifying as a self-insurer in the manner
3.12 	provided in subdivision 3.

3.13 	Sec. 2. PREMIUM REDUCTION.
 3.14 	An insurer must provide an appropriate premium reduction of
3.15 	at least 20 percent on each policy, plan, or contract issued or
3.16 	renewed on or after January 1, 2006, insuring against loss
3.17 	resulting from liability imposed by law for injury or property
3.18 	damage sustained by any person arising out of the operation,
3.19 	maintenance, or use of a motor vehicle of a type that is
3.20 	required to be registered or licensed or is principally garaged
3.21 	in this state.

3.22 	Sec. 3. CONFORMING LEGISLATION.
 3.23 	The revisor of statutes shall place a bill before the
3.24 	legislature no later than January 1, 2006, making all changes in
3.25 	Minnesota Statutes necessary to conform other provisions of
3.26 	Minnesota Statutes to this act.

3.27 	Sec. 4. REPEALER.
 3.28 	Minnesota Statutes 2004, sections 65B.41; 65B.42; 65B.43;
3.29 	65B.44; 65B.45; 65B.46; 65B.47; 65B.48; 65B.482; 65B.49; 65B.50;
3.30 	65B.51; 65B.525; 65B.53; 65B.54; 65B.55; 65B.56; 65B.57; 65B.58;
3.31 	65B.59; 65B.60; 65B.61; 65B.63; 65B.64; 65B.65; 65B.66; 65B.685;
3.32 	and 65B.71, are repealed effective January 1, 2006.

3.33 	Sec. 5. EFFECTIVE DATE; APPLICABILITY.
 3.34 	This act is effective January 1, 2006, and applies to
3.35 	accidents occurring on or after that date.