1.1 	A bill for an act
1.2 	relating to commerce; regulating licensee education; regulating certain insurance 
1.3 	forms and rates, coverages, filings and reportings, utilization reviews, and 
1.4 	claims; amending Minnesota Statutes 2004, sections 60C.02, subdivision 1; 
1.5 	61A.02, subdivision 3; 61A.092, subdivisions 1, 3; 62A.02, subdivision 3; 
1.6 	62A.095, subdivision 1; 62A.17, subdivisions 1, 2, 5; 62A.27; 62A.3093; 
1.7 	62C.14, subdivisions 9, 10; 62E.13, subdivision 3; 62E.14, subdivision 5; 
1.8 	62L.02, subdivision 24; 62M.01, subdivision 2; 62M.09, subdivision 9; 70A.07; 
1.9 	72C.10, subdivision 1; 79.01, by adding subdivisions; 79.251, subdivision 1, by 
1.10 	adding a subdivision; 79.252, by adding subdivisions; 79A.23, subdivision 3; 
1.11 	79A.32; Minnesota Statutes 2005 Supplement, sections 45.22; 45.23; 59B.01; 
1.12 	62Q.75, subdivision 3; 65B.49, subdivision 5a; 72A.201, subdivision 6; 79A.04, 
1.13 	subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 62A; 
1.14 	repealing Minnesota Rules, parts 2781.0100; 2781.0200; 2781.0300; 2781.0400; 
1.15 	2781.0500; 2781.0600.
1.16 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.17 	Section 1. Minnesota Statutes 2005 Supplement, section 45.22, is amended to read:
1.18 	45.22 LICENSE EDUCATION APPROVAL.
1.19 	(a) License education courses must be approved in advance by the commissioner. 
1.20 	Each sponsor who offers a license education course must have at least one coordinator, 
1.21 	approved by the commissioner, be approved by the commissioner. Each approved 
1.22 	sponsor must have at least one coordinator who meets the criteria specified in Minnesota 
1.23 	Rules, chapter 2809, and who is responsible for supervising the educational program 
1.24 	and assuring compliance with all laws and rules. "Sponsor" means any person or entity 
1.25 	offering approved education.
1.26 	(b) For coordinators with an initial approval date before August 1, 2005, approval 
1.27 	will expire on December 31, 2005. For courses with an initial approval date on or before 
1.28 	December 31, 2000, approval will expire on April 30, 2006. For courses with an initial 
2.1 	approval date after January 1, 2001, but before August 1, 2005, approval will expire 
2.2 	on April 30, 2007.

2.3 	Sec. 2. Minnesota Statutes 2005 Supplement, section 45.23, is amended to read:
2.4 	45.23 LICENSE EDUCATION FEES.
2.5 	The following fees must be paid to the commissioner:
2.6 	(1) initial course approval, $10 for each hour or fraction of one hour of education 
2.7 	course approval sought. Initial course approval expires on the last day of the 24th month 
2.8 	after the course is approved;
2.9 	(2) renewal of course approval, $10 per course. Renewal of course approval expires 
2.10 	on the last day of the 24th month after the course is renewed;
2.11 	(3) initial coordinator sponsor approval, $100. Initial coordinator approval expires 
2.12 	on the last day of the 24th month after the coordinator is approved;  Initial sponsor 
2.13 	approval issued under this section is valid for a period not to exceed 24 months and 
2.14 	expires on January 31 of the renewal year assigned by the commissioner. Active sponsors 
2.15 	who have at least one approved coordinator as of the effective date of this section are 
2.16 	deemed to be approved sponsors and are not required to submit an initial application 
2.17 	for sponsor approval; and
2.18 	(4) renewal of coordinator sponsor approval, $10. Renewal of coordinator approval 
2.19 	expires on the last day of the 24th month after the coordinator is renewed. Each renewal 
2.20 	of sponsor approval is valid for a period of 24 months. Active sponsors who have at least 
2.21 	one approved coordinator as of the effective date of this section will have an expiration 
2.22 	date of January 31, 2008.

2.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

2.24 	Sec. 3. Minnesota Statutes 2005 Supplement, section 59B.01, is amended to read:
2.25 	59B.01 SCOPE AND PURPOSE.
2.26 	(a) The purpose of this chapter is to create a legal framework within which service 
2.27 	contracts may be sold in this state.
2.28 	(b) The following are exempt from this chapter:
2.29 	(1) warranties;
2.30 	(2) maintenance agreements;
2.31 	(3) warranties, service contracts, or maintenance agreements offered by public 
2.32 	utilities, as defined in section 216B.02, subdivision 4, or an entity or operating unit owned 
2.33 	by or under common control with a public utility;
3.1 	(4) service contracts sold or offered for sale to persons other than consumers;
3.2 	(5) service contracts on tangible property where the tangible property for which the 
3.3 	service contract is sold has a purchase price of $250 or less, exclusive of sales tax;
3.4 	(6) motor vehicle service contracts as defined in section 65B.29, subdivision 1, 
3.5 	paragraph (1);
3.6 	(7) service contracts for home security equipment installed by a licensed technology 
3.7 	systems contractor; and
3.8 	(8) motor club membership contracts that typically provide roadside assistance 
3.9 	services to motorists stranded for reasons that include, but are not limited to, mechanical 
3.10 	breakdown or adverse road conditions; and
3.11 	(9) home warranties not subject to chapter 327A, 515, 515A, or 515B.
3.12 	(c) Except for the agreements covered by paragraph (b), clause (9), the types of 
3.13 	agreements referred to in paragraph (b) are not subject to chapters 60A to 79A, except 
3.14 	as otherwise specifically provided by law.

3.15 	Sec. 4. Minnesota Statutes 2004, section 60C.02, subdivision 1, is amended to read:
3.16 		Subdivision 1.Scope. This chapter applies to all kinds of direct insurance, except:
3.17 	(1) life;
3.18 	(2) annuity;
3.19 	(3) title;
3.20 	(4) accident and sickness;
3.21 	(5) credit;
3.22 	(6) vendor's single interest or collateral protection or any similar insurance 
3.23 	protecting the interests of a creditor arising out of a creditor debtor transaction;
3.24 	(7) mortgage guaranty;
3.25 	(8) financial guaranty or other forms of insurance offering protection against 
3.26 	investment risks;
3.27 	(9) ocean marine;
3.28 	(10) a transaction or combination of transactions between a person, including 
3.29 	affiliates of the person, and an insurer, including affiliates of the insurer, that involves the 
3.30 	transfer of investment or credit risk unaccompanied by transfer of insurance risk; or
3.31 	(11) insurance provided by or guaranteed by government; or.
3.32 	(12) insurance of warranties or service contracts, including insurance that provides 
3.33 	for the repair, replacement, or services of goods or property, or indemnification for repair, 
3.34 	replacement or service, for the operation or structural failure of the goods or property due 
3.35 	to a defect in materials, workmanship or normal wear and tear, or provides reimbursement 
4.1 	for the liability insured by the user of agreement or service contracts that provide these 
4.2 	benefits.

4.3 	Sec. 5. Minnesota Statutes 2004, section 61A.02, subdivision 3, is amended to read:
4.4 		Subd. 3.Disapproval. (a) The commissioner shall, within 60 days after the filing of 
4.5 	any form, disapprove the form:
4.6 	(1) if the benefits provided are unreasonable in relation to the premium charged;
4.7 	(2) if the safety and soundness of the company would be threatened by the offering 
4.8 	of an excess rate of interest on the policy or contract;
4.9 	(3) if it contains a provision or provisions which are unlawful, unfair, inequitable, 
4.10 	misleading, or encourages misrepresentation of the policy; or
4.11 	(4) if the form, or its provisions, is otherwise not in the public interest. It shall 
4.12 	be unlawful for the company to issue any policy in the form so disapproved. If the 
4.13 	commissioner does not within 60 days after the filing of any form, disapprove or otherwise 
4.14 	object, the form shall be deemed approved.
4.15 	(b) When an insurer or the Minnesota Comprehensive Health Association fails to 
4.16 	respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
4.17 	A resubmission is required if action by the Department of Commerce is subsequently 
4.18 	requested. An additional filing fee is required for the resubmission.
4.19 	(c) For purposes of paragraph (a), clause (2), an excess rate of interest is a rate of 
4.20 	interest exceeding the rate of interest determined by subtracting three percentage points 
4.21 	from Moody's corporate bond yield average as most recently available.

4.22 	Sec. 6. Minnesota Statutes 2004, section 61A.092, subdivision 1, is amended to read:
4.23 		Subdivision 1.Continuation of coverage. Every group insurance policy issued 
4.24 	or renewed within this state after August 1, 1987, providing coverage for life insurance 
4.25 	benefits shall contain a provision that permits covered employees who are voluntarily or 
4.26 	involuntarily terminated or laid off from their employment, if the policy remains in force 
4.27 	for any active employee of the employer, to elect to continue the coverage for themselves 
4.28 	and their dependents. If the policy includes other benefits, the election provided by this 
4.29 	section extends to those other benefits.
4.30 	An employee is considered to be laid off from employment if there is a reduction in 
4.31 	hours to the point where the employee is no longer eligible for coverage under the group 
4.32 	life insurance policy. Termination does not include discharge for gross misconduct.

4.33 	Sec. 7. Minnesota Statutes 2004, section 61A.092, subdivision 3, is amended to read:
5.1 		Subd. 3.Notice of options. Upon termination of or layoff from employment of a 
5.2 	covered employee, the employer shall inform the employee of:
5.3 	(1) the employee's right to elect to continue the coverage;
5.4 	(2) the amount the employee must pay monthly to the employer to retain the 
5.5 	coverage;
5.6 	(3) the manner in which and the office of the employer to which the payment to 
5.7 	the employer must be made; and
5.8 	(4) the time by which the payments to the employer must be made to retain coverage.
5.9 	The employee has 60 days within which to elect coverage. The 60-day period shall 
5.10 	begin to run on the date coverage would otherwise terminate or on the date upon which 
5.11 	notice of the right to coverage is received, whichever is later.
5.12 	If the covered employee or covered dependent dies during the 60-day election period 
5.13 	and before the covered employee makes an election to continue or reject continuation, then 
5.14 	the covered employee will be considered to have elected continuation of coverage. The 
5.15 	estate ofbeneficiary previously selected by the former employee or covered dependent 
5.16 	would then be entitled to a death benefit equal to the amount of insurance that could have 
5.17 	been continued less any unpaid premium owing as of the date of death.
5.18 	Notice must be in writing and sent by first class mail to the employee's last known 
5.19 	address which the employee has provided to the employer.
5.20 	A notice in substantially the following form is sufficient: "As a terminated or laid 
5.21 	off employee, the law authorizes you to maintain your group insurance benefits, in an 
5.22 	amount equal to the amount of insurance in effect on the date you terminated or were laid 
5.23 	off from employment, for a period of up to 18 months. To do so, you must notify your 
5.24 	former employer within 60 days of your receipt of this notice that you intend to retain this 
5.25 	coverage and must make a monthly payment of $............ at ............. by the ............. of 
5.26 	each month."

5.27 	Sec. 8. Minnesota Statutes 2004, section 62A.02, subdivision 3, is amended to read:
5.28 		Subd. 3.Standards for disapproval. (a) The commissioner shall, within 60 days 
5.29 	after the filing of any form or rate, disapprove the form or rate:
5.30 	(1) if the benefits provided are not reasonable in relation to the premium charged;
5.31 	(2) if it contains a provision or provisions which are unjust, unfair, inequitable, 
5.32 	misleading, deceptive or encourage misrepresentation of the health plan form, or otherwise 
5.33 	does not comply with this chapter, chapter 62L, or chapter 72A;
5.34 	(3) if the proposed premium rate is excessive or not adequate; or
5.35 	(4) the actuarial reasons and data submitted do not justify the rate.
6.1 	The party proposing a rate has the burden of proving by a preponderance of the 
6.2 	evidence that it does not violate this subdivision.
6.3 	In determining the reasonableness of a rate, the commissioner shall also review 
6.4 	all administrative contracts, service contracts, and other agreements to determine the 
6.5 	reasonableness of the cost of the contracts or agreement and effect of the contracts on the 
6.6 	rate. If the commissioner determines that a contract or agreement is not reasonable, the 
6.7 	commissioner shall disapprove any rate that reflects any unreasonable cost arising out 
6.8 	of the contract or agreement. The commissioner may require any information that the 
6.9 	commissioner deems necessary to determine the reasonableness of the cost.
6.10 	For the purposes of this subdivision, the commissioner shall establish by rule a 
6.11 	schedule of minimum anticipated loss ratios which shall be based on (i) the type or types 
6.12 	of coverage provided, (ii) whether the policy is for group or individual coverage, and 
6.13 	(iii) the size of the group for group policies. Except for individual policies of disability 
6.14 	or income protection insurance, the minimum anticipated loss ratio shall not be less 
6.15 	than 50 percent after the first year that a policy is in force. All applicants for a policy 
6.16 	shall be informed in writing at the time of application of the anticipated loss ratio of the 
6.17 	policy. "Anticipated loss ratio" means the ratio at the time of filing, at the time of notice 
6.18 	of withdrawal under subdivision 4a, or at the time of subsequent rate revision of the 
6.19 	present value of all expected future benefits, excluding dividends, to the present value 
6.20 	of all expected future premiums.
6.21 	If the commissioner notifies a health carrier that has filed any form or rate that it 
6.22 	does not comply with this chapter, chapter 62L, or chapter 72A, it shall be unlawful for 
6.23 	the health carrier to issue or use the form or rate. In the notice the commissioner shall 
6.24 	specify the reasons for disapproval and state that a hearing will be granted within 20 days 
6.25 	after request in writing by the health carrier.
6.26 	The 60-day period within which the commissioner is to approve or disapprove the 
6.27 	form or rate does not begin to run until a complete filing of all data and materials required 
6.28 	by statute or requested by the commissioner has been submitted.
6.29 	However, if the supporting data is not filed within 30 days after a request by the 
6.30 	commissioner, the rate is not effective and is presumed to be an excessive rate.
6.31 	(b) When an insurer or the Minnesota Comprehensive Health Association fails to 
6.32 	respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
6.33 	A resubmission is required if action by the Department of Commerce is subsequently 
6.34 	requested. An additional filing fee is required for the resubmission.

6.35 	Sec. 9. Minnesota Statutes 2004, section 62A.095, subdivision 1, is amended to read:
7.1 		Subdivision 1.Applicability. (a) No health plan shall be offered, sold, or issued to a 
7.2 	resident of this state, or to cover a resident of this state, unless the health plan complies 
7.3 	with subdivision 2.
7.4 	(b) Health plans providing benefits under health care programs administered by the 
7.5 	commissioner of human services are not subject to the limits described in subdivision 
7.6 	2 but are subject to the right of subrogation provisions under section  256B.37 and the 
7.7 	lien provisions under section  256.015;  256B.042;  256D.03, subdivision 8; or  256L.03, 
7.8 	subdivision 6. 
7.9 	For purposes of this section, "health plan" includes coverage that is excluded under 
7.10 	section 62A.011, subdivision 3, clauses (4), (7), and (10).

7.11 	Sec. 10. Minnesota Statutes 2004, section 62A.17, subdivision 1, is amended to read:
7.12 		Subdivision 1.Continuation of coverage. Every group insurance policy, group 
7.13 	subscriber contract, and health care plan included within the provisions of section  62A.16, 
7.14 	except policies, contracts, or health care plans covering employees of an agency of the 
7.15 	federal government, shall contain a provision which permits every covered employee who 
7.16 	is voluntarily or involuntarily terminated or laid off from employment and every covered 
7.17 	dependent of the covered employee, if the policy, contract, or health care plan remains 
7.18 	in force for active employees of the employer, to elect to continue the coverage for the 
7.19 	employee and dependents. 
7.20 	An employee shall be considered to be laid off from employment if there is a 
7.21 	reduction in hours to the point where the employee is no longer eligible under the policy, 
7.22 	contract, or health care plan. Termination shall not include discharge for gross misconduct.
7.23 	Upon request by the terminated or laid off employee or any covered dependent, a 
7.24 	health carrier must provide the instructions necessary to enable the employee or dependent 
7.25 	to elect and receive continuation of coverage through the insurer in place of the former 
7.26 	employer.

7.27 	Sec. 11. Minnesota Statutes 2004, section 62A.17, subdivision 2, is amended to read:
7.28 		Subd. 2.Responsibility of employee. Every covered employee or dependent 
7.29 	electing to continue coverage shall pay the former employer, on a monthly basis, the 
7.30 	cost of the continued coverage. The policy, contract, or plan must require the group 
7.31 	policyholder or contract holder to, upon request, provide the employee or dependent with 
7.32 	written verification from the insurer of the cost of this coverage promptly at the time 
7.33 	of eligibility for this coverage and at any time during the continuation period. If the 
7.34 	policy, contract, or health care plan is administered by a trust, every covered employee 
8.1 	or dependent electing to continue coverage shall pay the trust the cost of continued 
8.2 	coverage according to the eligibility rules established by the trust. In no event shall the 
8.3 	amount of premium charged exceed 102 percent of the cost to the plan for such period 
8.4 	of coverage for similarly situated employees with respect to whom neither termination 
8.5 	nor layoff has occurred, without regard to whether such cost is paid by the employer or 
8.6 	employee. The employee and every covered dependent shall be eligible to continue the 
8.7 	coverage until the employee becomes covered under another group health plan, or for a 
8.8 	period of 18 months after the termination of or lay off from employment, whichever is 
8.9 	shorter. If the employee becomes covered under another group policy, contract, or health 
8.10 	plan that does not include dependent coverage, every covered dependent remains eligible 
8.11 	to continue coverage with the former employer subject to the conditions specified in this 
8.12 	subdivision. If the employee or any covered dependent becomes covered under another 
8.13 	group policy, contract, or health plan and the new group policy, contract, or health plan 
8.14 	contains any preexisting condition limitations, the employee or dependent may, subject to 
8.15 	the 18-month maximum continuation limit, continue coverage with the former employer 
8.16 	until the preexisting condition limitations have been satisfied. The new policy, contract, or 
8.17 	health plan is primary except as to the preexisting condition. In the case of a newborn 
8.18 	child who is a dependent of the employee, the new policy, contract, or health plan is 
8.19 	primary upon the date of birth of the child, regardless of which policy, contract, or health 
8.20 	plan coverage is deemed primary for the mother of the child.

8.21 	Sec. 12. Minnesota Statutes 2004, section 62A.17, subdivision 5, is amended to read:
8.22 		Subd. 5.Notice of options. Upon the termination of or lay off from employment 
8.23 	of an eligible employee, the employer shall inform the employee within ten days after 
8.24 	termination or lay off of:
8.25 	(a) the right to elect to continue the coverage;
8.26 	(b) the amount the employee must pay monthly to the employer or health carrier to 
8.27 	retain the coverage;
8.28 	(c) the manner in which and the office of the employer or health carrier to which the 
8.29 	payment to the employer or health carrier must be made; and
8.30 	(d) the time by which the payments to the employer or health carrier must be made 
8.31 	to retain coverage.
8.32 	If the policy, contract, or health care plan is administered by a trust, the employer 
8.33 	is relieved of the obligation imposed by clauses (a) to (d). The trust shall inform the 
8.34 	employee of the information required by clauses (a) to (d).
9.1 	The employee shall have 60 days within which to elect coverage. The 60-day period 
9.2 	shall begin to run on the date plan coverage would otherwise terminate or on the date upon 
9.3 	which notice of the right to coverage is received, whichever is later.
9.4 	Notice must be in writing and sent by first class mail to the employee's last known 
9.5 	address which the employee has provided the employer or trust.
9.6 	A notice in substantially the following form shall be sufficient: "As a terminated or 
9.7 	laid off employee, the law authorizes you to maintain your group medical insurance for 
9.8 	a period of up to 18 months. To do so you must notify your former employer or health 
9.9 	carrier within 60 days of your receipt of this notice that you intend to retain this coverage 
9.10 	and must make a monthly payment of $.......... to ........... at .......... by the ............... of 
9.11 	each month."

9.12 	Sec. 13. Minnesota Statutes 2004, section 62A.27, is amended to read:
9.13 	62A.27 COVERAGE OF ADOPTED CHILDREN.
9.14 	(a) A health plan that provides coverage to a Minnesota resident must cover adopted 
9.15 	children of the insured, subscriber, participant, or enrollee on the same basis as other 
9.16 	dependents. Consequently, the plan shall not contain any provision concerning preexisting 
9.17 	condition limitations, insurability, eligibility, or health underwriting approval concerning 
9.18 	children placed for adoption with the participant.
9.19 	(b) The coverage required by this section is effective from the date of placement 
9.20 	for adoption. For purposes of this section, placement for adoption means the assumption 
9.21 	and retention by a person of a legal obligation for total or partial support of a child in 
9.22 	anticipation of adoption of the child. The child's placement with a person terminates upon 
9.23 	the termination of the legal obligation for total or partial support.
9.24 	(c) For the purpose of this section, health plan includes:
9.25 	(1) coverage offered by community integrated service networks;
9.26 	(2) coverage that is designed solely to provide dental or vision care; and
9.27 	(3) any plan under the federal Employee Retirement Income Security Act of 1974 
9.28 	(ERISA), United States Code, title 29, sections 1001 to 1461.
9.29 	(d) No policy or contract covered by this section may require notification to a health 
9.30 	carrier as a condition for this dependent coverage. However, if the policy or contract 
9.31 	mandates an additional premium for each dependent, the health carrier is entitled to 
9.32 	all premiums that would have been collected had the health carrier been aware of the 
9.33 	additional dependent. The health carrier may withhold payment of any health benefits 
9.34 	for the new dependent until it has been compensated with the applicable premium 
10.1 	which would have been owed if the health carrier had been informed of the additional 
10.2 	dependent immediately.

10.3 	Sec. 14. Minnesota Statutes 2004, section 62A.3093, is amended to read:
10.4 	62A.3093 COVERAGE FOR DIABETES.
10.5 	A health plan, including a plan providing the coverage specified in section  62A.011, 
10.6 	subdivision 3, clause (10), must provide coverage for: (1) all physician prescribed 
10.7 	medically appropriate and necessary equipment and supplies used in the management 
10.8 	and treatment of diabetes not otherwise covered for that person under Medicare or 
10.9 	Medicare Part D; and (2) diabetes outpatient self-management training and education, 
10.10 	including medical nutrition therapy, that is provided by a certified, registered, or licensed 
10.11 	health care professional working in a program consistent with the national standards of 
10.12 	diabetes self-management education as established by the American Diabetes Association. 
10.13 	Coverage must include persons with gestational, type I or type II diabetes. Coverage 
10.14 	required under this section is subject to the same deductible or coinsurance provisions 
10.15 	applicable to the plan's hospital, medical expense, medical equipment, or prescription drug 
10.16 	benefits. A health carrier may not reduce or eliminate coverage due to this requirement. 

10.17 	EFFECTIVE DATE. This section is effective January 1, 2006.

10.18 	Sec. 15. [62A.3161] MEDICARE SUPPLEMENT PLAN WITH 50 PERCENT 
10.19 	COVERAGE.
10.20 	The Medicare supplement plan with 50 percent coverage must have a level of 
10.21 	coverage that will provide:
10.22 	(1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for 
10.23 	365 days after Medicare benefits end;
10.24 	(2) coverage for 50 percent of the Medicare Part A inpatient hospital deductible 
10.25 	amount per benefit period until the out-of-pocket limitation is met as described in clause 
10.26 	(8);
10.27 	(3) coverage for 50 percent of the coinsurance amount for each day used from the 
10.28 	21st through the 100th day in a Medicare benefit period for posthospital skilled nursing 
10.29 	care eligible under Medicare Part A until the out-of-pocket limitation is met as described 
10.30 	in clause (8);
10.31 	(4) coverage for 50 percent of cost sharing for all Medicare Part A eligible expenses 
10.32 	and respite care until the out-of-pocket limitation is met as described in clause (8);
11.1 	(5) coverage for 50 percent, under Medicare Part A or B, of the reasonable cost 
11.2 	of the first three pints of blood, or equivalent quantities of packed red blood cells, as 
11.3 	defined under federal regulations, unless replaced according to federal regulations, until 
11.4 	the out-of-pocket limitation is met as described in clause (8);
11.5 	(6) except for coverage provided in this clause, coverage for 50 percent of the 
11.6 	cost sharing otherwise applicable under Medicare Part B, after the policyholder pays 
11.7 	the Medicare Part B deductible, until the out-of-pocket limitation is met as described 
11.8 	in clause (8);
11.9 	(7) coverage of 100 percent of the cost sharing for Medicare Part B preventive 
11.10 	services and diagnostic procedures for cancer screening described in section 62A.30 after 
11.11 	the policyholder pays the Medicare Part B deductible; and
11.12 	(8) coverage of 100 percent of all cost sharing under Medicare Parts A and B for the 
11.13 	balance of the calendar year after the individual has reached the out-of-pocket limitation 
11.14 	on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed 
11.15 	each year by the appropriate inflation adjustment by the secretary of the United States 
11.16 	Department of Health and Human Services.

11.17 	Sec. 16. [62A.3162] MEDICARE SUPPLEMENT PLAN WITH 75 PERCENT 
11.18 	COVERAGE.
11.19 	The basic Medicare supplement plan with 75 percent coverage must have a level of 
11.20 	coverage that will provide:
11.21 	(1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for 
11.22 	365 days after Medicare benefits end;
11.23 	(2) coverage for 75 percent of the Medicare Part A inpatient hospital deductible 
11.24 	amount per benefit period until the out-of-pocket limitation is met as described in clause 
11.25 	(8);
11.26 	(3) coverage for 75 percent of the coinsurance amount for each day used from the 
11.27 	21st through the 100th day in a Medicare benefit period for posthospital skilled nursing 
11.28 	care eligible under Medicare Part A until the out-of-pocket limitation is met as described 
11.29 	in clause (8); 
11.30 	(4) coverage for 75 percent of cost sharing for all Medicare Part A eligible expenses 
11.31 	and respite care until the out-of-pocket limitation is met as described in clause (8);
11.32 	(5) coverage for 75 percent, under Medicare Part A or B, of the reasonable cost 
11.33 	of the first three pints of blood, or equivalent quantities of packed red blood cells, as 
11.34 	defined under federal regulations, unless replaced according to federal regulations until 
11.35 	the out-of-pocket limitation is met as described in clause (8);
12.1 	(6) except for coverage provided in this clause, coverage for 75 percent of the 
12.2 	cost sharing otherwise applicable under Medicare Part B after the policyholder pays 
12.3 	the Medicare Part B deductible until the out-of-pocket limitation is met as described 
12.4 	in clause (8);
12.5 	(7) coverage of 100 percent of the cost sharing for Medicare Part B preventive 
12.6 	services and diagnostic procedures for cancer screening described in section 62A.30 after 
12.7 	the policyholder pays the Medicare Part B deductible; and
12.8 	(8) coverage of 100 percent of all cost sharing under Medicare Parts A and B for the 
12.9 	balance of the calendar year after the individual has reached the out-of-pocket limitation 
12.10 	on annual expenditures under Medicare Parts A and B of $2,000 in 2006, indexed 
12.11 	each year by the appropriate inflation adjustment by the Secretary of the United States 
12.12 	Department of Health and Human Services.

12.13 	Sec. 17. Minnesota Statutes 2004, section 62C.14, subdivision 9, is amended to read:
12.14 		Subd. 9.Required filing. No service plan corporation shall deliver or issue 
12.15 	for delivery in this state any subscriber contract, endorsement, rider, amendment or 
12.16 	application until a copy of the form thereof has been filed with the commissioner, subject 
12.17 	to disapproval by the commissioner. Any such form issued or in use on August 1, 1971, if 
12.18 	filed with the commissioner within 60 days after August 1, 1971, shall be deemed filed 
12.19 	upon receipt by the commissioner. When an insurer, service plan corporation, or the 
12.20 	Minnesota Comprehensive Health Association fails to respond to an objection or inquiry 
12.21 	within 60 days, the filing is automatically disapproved. A resubmission is required if 
12.22 	action by the Department of Commerce is subsequently requested. An additional filing 
12.23 	fee is required for the resubmission. The commissioner also may by regulation exempt 
12.24 	from filing those subscriber contracts issued to a group of not less than 300 subscribers, 
12.25 	or to other groups upon such reasonable conditions and restrictions as the commissioner 
12.26 	may require.

12.27 	Sec. 18. Minnesota Statutes 2004, section 62C.14, subdivision 10, is amended to read:
12.28 		Subd. 10.Filing or disapproval. Except as otherwise provided in subdivision 9, 
12.29 	all forms received by the commissioner shall be deemed filed 60 days after received 
12.30 	unless disapproved by order transmitted to the corporation stating that the form used in a 
12.31 	specified respect is contrary to law, contains a provision or provisions which are unfair, 
12.32 	inequitable, misleading, inconsistent or ambiguous, or is in part illegible. It shall be 
12.33 	unlawful to issue or use a document disapproved by the commissioner. When an insurer, 
12.34 	service plan corporation, or the Minnesota Comprehensive Health Association fails to 
13.1 	respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
13.2 	A resubmission is required if action by the Department of Commerce is subsequently 
13.3 	requested. An additional filing fee is required for the resubmission.

13.4 	Sec. 19. Minnesota Statutes 2004, section 62E.13, subdivision 3, is amended to read:
13.5 		Subd. 3.Duties of writing carrier. The writing carrier shall perform all 
13.6 	administrative and claims payment functions required by this section. The writing carrier 
13.7 	shall provide these services for a period of three five years, unless a request to terminate 
13.8 	is approved by the commissioner. The commissioner shall approve or deny a request to 
13.9 	terminate within 90 days of its receipt. A failure to make a final decision on a request to 
13.10 	terminate within the specified period shall be deemed to be an approval. Six months 
13.11 	prior to the expiration of each three-year five-year period, the association shall invite 
13.12 	submissions of policy forms from members of the association, including the writing 
13.13 	carrier. The association shall follow the provisions of subdivision 2 in selecting a writing 
13.14 	carrier for the subsequent three-year five-year period.

13.15 	Sec. 20. Minnesota Statutes 2004, section 62E.14, subdivision 5, is amended to read:
13.16 		Subd. 5.Terminated employees. An employee who is voluntarily or involuntarily 
13.17 	terminated or laid off from employment and unable to exercise the option to continue 
13.18 	coverage under section  62A.17, and who is a Minnesota resident and who is otherwise 
13.19 	eligible, may enroll in the comprehensive health insurance plan, by submitting an 
13.20 	application that is received by the writing carrier no later than 90 days after termination 
13.21 	or layoff, with a waiver of the preexisting condition limitation set forth in subdivision 3 
13.22 	and a waiver of the evidence of rejection set forth in subdivision 1, paragraph (c). 

13.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

13.24 	Sec. 21. Minnesota Statutes 2004, section 62L.02, subdivision 24, is amended to read:
13.25 		Subd. 24.Qualifying coverage. "Qualifying coverage" means health benefits or 
13.26 	health coverage provided under:
13.27 	(1) a health benefit plan, as defined in this section, but without regard to whether it is 
13.28 	issued to a small employer and including blanket accident and sickness insurance, other 
13.29 	than accident-only coverage, as defined in section  62A.11; 
13.30 	(2) part A or part B of Medicare;
13.31 	(3) medical assistance under chapter 256B;
13.32 	(4) general assistance medical care under chapter 256D;
13.33 	(5) MCHA;
14.1 	(6) a self-insured health plan;
14.2 	(7) the MinnesotaCare program established under section  256L.02; 
14.3 	(8) a plan provided under section  43A.316,  43A.317, or  471.617; 
14.4 	(9) the Civilian Health and Medical Program of the Uniformed Services 
14.5 	(CHAMPUS) or other coverage provided under United States Code, title 10, chapter 55;
14.6 	(10) coverage provided by a health care network cooperative under chapter 62R;
14.7 	(11) a medical care program of the Indian Health Service or of a tribal organization;
14.8 	(12) the federal Employees Health Benefits Plan, or other coverage provided under 
14.9 	United States Code, title 5, chapter 89;
14.10 	(13) a health benefit plan under section 5(e) of the Peace Corps Act, codified as 
14.11 	United States Code, title 22, section 2504(e);
14.12 	(14) a health plan; or
14.13 	(15) a plan similar to any of the above plans provided in this state or in another 
14.14 	state as determined by the commissioner.;
14.15 	(16) any plan established or maintained by a state, the United States government, or 
14.16 	a foreign country, or any political subdivision of a state, the United States government, or a 
14.17 	foreign country that provides health coverage to individuals who are enrolled in the plan; or
14.18 	(17) the State Children's Health Insurance Program (SCHIP).

14.19 	Sec. 22. Minnesota Statutes 2004, section 62M.01, subdivision 2, is amended to read:
14.20 		Subd. 2.Jurisdiction. Sections  62M.01 to  62M.16 apply to any insurance company 
14.21 	licensed under chapter 60A to offer, sell, or issue a policy of accident and sickness 
14.22 	insurance as defined in section  62A.01; a health service plan licensed under chapter 
14.23 	62C; a health maintenance organization licensed under chapter 62D; the Minnesota 
14.24 	Comprehensive Health Association created under chapter 62E; a community integrated 
14.25 	service network licensed under chapter 62N; an accountable provider network operating 
14.26 	under chapter 62T; a fraternal benefit society operating under chapter 64B; a joint 
14.27 	self-insurance employee health plan operating under chapter 62H; a multiple employer 
14.28 	welfare arrangement, as defined in section 3 of the Employee Retirement Income Security 
14.29 	Act of 1974 (ERISA), United States Code, title 29, section 1103, as amended; a third 
14.30 	party administrator licensed under section  60A.23, subdivision 8, that provides utilization 
14.31 	review services for the administration of benefits under a health benefit plan as defined in 
14.32 	section  62M.02; or any entity performing utilization review on behalf of a business entity 
14.33 	in this state pursuant to a health benefit plan covering a Minnesota resident. 

14.34 	Sec. 23. Minnesota Statutes 2004, section 62M.09, subdivision 9, is amended to read:
15.1 		Subd. 9.Annual report. A utilization review organization shall file an annual 
15.2 	report with the annual financial statement it submits to the commissioner of commerce 
15.3 	that includes:
15.4 	(1) per 1,000 claims utilization reviews, the number and rate of claims denied
15.5 	determinations not to certify based on medical necessity for each procedure or service; and
15.6 	(2) the number and rate of denials overturned on appeal.
15.7 	A utilization review organization that is not a licensed health carrier must submit the 
15.8 	annual report required by this subdivision on April 1 of each year.

15.9 	Sec. 24. Minnesota Statutes 2005 Supplement, section 62Q.75, subdivision 3, is 
15.10 	amended to read:
15.11 		Subd. 3.Claims filing. Unless otherwise provided by contract, by section 16A.124, 
15.12 	subdivision 4a, or by federal law, or unless the contract provides for a shorter time period, 
15.13 	the health care providers and facilities specified in subdivision 2 must submit their charges 
15.14 	to a health plan company or third-party administrator within six months from the date of 
15.15 	service or the date the health care provider knew or was informed of the correct name and 
15.16 	address of the responsible health plan company or third-party administrator, whichever 
15.17 	is later. A health care provider or facility that does not make an initial submission of 
15.18 	charges within the six-month period shall not be reimbursed for the charge and may not 
15.19 	collect the charge from the recipient of the service or any other payer. The six-month 
15.20 	submission requirement may be extended to 12 months in cases where a health care 
15.21 	provider or facility specified in subdivision 2 has determined and can substantiate that 
15.22 	it has experienced a significant disruption to normal operations that materially affects 
15.23 	the ability to conduct business in a normal manner and to submit claims on a timely 
15.24 	basis. This subdivision also applies to all health care providers and facilities that submit 
15.25 	charges to workers' compensation payers for treatment of a workers' compensation injury 
15.26 	compensable under chapter 176, or to reparation obligors for treatment of an injury 
15.27 	compensable under chapter 65B.

15.28 	Sec. 25. Minnesota Statutes 2005 Supplement, section 65B.49, subdivision 5a, is 
15.29 	amended to read:
15.30 		Subd. 5a.Rental vehicles. (a) Every plan of reparation security insuring a natural 
15.31 	person as named insured, covering private passenger vehicles as defined under section 
15.32 	65B.001, subdivision 3, and pickup trucks and vans as defined under section 168.011 must 
15.33 	provide that all of the obligation for damage and loss of use to a rented private passenger 
15.34 	vehicle, including pickup trucks and vans as defined under section 168.011, and rented 
16.1 	trucks with a registered gross vehicle weight of 26,000 pounds or less would be covered 
16.2 	by the property damage liability portion of the plan. This subdivision does not apply to 
16.3 	plans of reparation security covering only motor vehicles registered under section 168.10, 
16.4 	subdivision 1a, 1b, 1c, or 1d, or recreational equipment as defined under section 168.011. 
16.5 	The obligation of the plan must not be contingent on fault or negligence. In all cases 
16.6 	where the plan's property damage liability coverage is less than $35,000, the coverage 
16.7 	available under the subdivision must be $35,000. Other than as described in this paragraph 
16.8 	or in paragraph (j), nothing in this section amends or alters the provisions of the plan of 
16.9 	reparation security as to primacy of the coverages in this section.
16.10 	(b) A vehicle is rented for purposes of this subdivision:
16.11 	(1) if the rate for the use of the vehicle is determined on a monthly, weekly, or 
16.12 	daily basis; or
16.13 	(2) during the time that a vehicle is loaned as a replacement for a vehicle being 
16.14 	serviced or repaired regardless of whether the customer is charged a fee for the use 
16.15 	of the vehicle.
16.16 	A vehicle is not rented for the purposes of this subdivision if the rate for the vehicle's 
16.17 	use is determined on a period longer than one month or if the term of the rental agreement 
16.18 	is longer than one month. A vehicle is not rented for purposes of this subdivision if the 
16.19 	rental agreement has a purchase or buyout option or otherwise functions as a substitute for 
16.20 	purchase of the vehicle.
16.21 	(c) The policy or certificate issued by the plan must inform the insured of the 
16.22 	application of the plan to private passenger rental vehicles, including pickup trucks and 
16.23 	vans as defined under section 168.011, and that the insured may not need to purchase 
16.24 	additional coverage from the rental company.
16.25 	(d) Where an insured has two or more vehicles covered by a plan or plans of 
16.26 	reparation security containing the rented motor vehicle coverage required under paragraph 
16.27 	(a), the insured may select the plan the insured wishes to collect from and that plan is 
16.28 	entitled to a pro rata contribution from the other plan or plans based upon the property 
16.29 	damage limits of liability. If the person renting the motor vehicle is also covered by the 
16.30 	person's employer's insurance policy or the employer's automobile self-insurance plan, 
16.31 	the reparation obligor under the employer's policy or self-insurance plan has primary 
16.32 	responsibility to pay claims arising from use of the rented vehicle.
16.33 	(e) A notice advising the insured of rental vehicle coverage must be given by the 
16.34 	reparation obligor to each current insured with the first renewal notice after January 1, 
16.35 	1989. The notice must be approved by the commissioner of commerce. The commissioner 
16.36 	may specify the form of the notice.
17.1 	(f) When a motor vehicle is rented in this state, there must be attached to the rental 
17.2 	contract a separate form containing a written notice in at least 10-point bold type, if 
17.3 	printed, or in capital letters, if typewritten, which states:
17.4 	Under Minnesota law, a personal automobile insurance policy issued in Minnesota 
17.5 	must cover the rental of this motor vehicle against damage to the vehicle and against 
17.6 	loss of use of the vehicle. Therefore, purchase of any collision damage waiver 
17.7 	or similar insurance affected in this rental contract is not necessary if your policy 
17.8 	was issued in Minnesota.
17.9 	No collision damage waiver or other insurance offered as part of or in conjunction with 
17.10 	a rental of a motor vehicle may be sold unless the person renting the vehicle provides a 
17.11 	written acknowledgment that the above consumer protection notice has been read and 
17.12 	understood.
17.13 	(g) When damage to a rented vehicle is covered by a plan of reparation security as 
17.14 	provided under paragraph (a), the rental contract must state that payment by the reparation 
17.15 	obligor within the time limits of section 72A.201 is acceptable, and prior payment by 
17.16 	the renter is not required.
17.17 	(h) Compensation for the loss of use of a damaged rented motor vehicle is limited to 
17.18 	a period no longer than 14 days.
17.19 	(i)(1) For purposes of this paragraph, "rented motor vehicle" means a rented vehicle 
17.20 	described in paragraph (a), using the definition of "rented" provided in paragraph (b).
17.21 	(2) Notwithstanding section 169.09, subdivision 5a, an owner of a rented motor 
17.22 	vehicle is not vicariously liable for legal damages resulting from the operation of the 
17.23 	rented motor vehicle in an amount greater than $100,000 because of bodily injury to one 
17.24 	person in any one accident and, subject to the limit for one person, $300,000 because of 
17.25 	injury to two or more persons in any one accident, and $50,000 because of injury to or 
17.26 	destruction of property of others in any one accident, if the owner of the rented motor 
17.27 	vehicle has in effect, at the time of the accident, a policy of insurance or self-insurance, as 
17.28 	provided in section 65B.48, subdivision 3, covering losses up to at least the amounts set 
17.29 	forth in this paragraph. Nothing in this paragraph alters or affects the obligations of an 
17.30 	owner of a rented motor vehicle to comply with the requirements of compulsory insurance 
17.31 	through a policy of insurance as provided in section 65B.48, subdivision 2, or through 
17.32 	self-insurance as provided in section 65B.48, subdivision 3; or with the obligations arising 
17.33 	from section 72A.125 for products sold in conjunction with the rental of a motor vehicle. 
17.34 	Nothing in this paragraph alters or affects liability, other than vicarious liability, of an 
17.35 	owner of a rented motor vehicle.
18.1 	(3) (2) The dollar amounts stated in this paragraph shall be adjusted for inflation 
18.2 	based upon the Consumer Price Index for all urban consumers, known as the CPI-U, 
18.3 	published by the United States Bureau of Labor Statistics. The dollar amounts stated 
18.4 	in this paragraph are based upon the value of that index for July 1995, which is the 
18.5 	reference base index for purposes of this paragraph. The dollar amounts in this paragraph 
18.6 	shall change effective January 1 of each odd-numbered year based upon the percentage 
18.7 	difference between the index for July of the preceding year and the reference base index, 
18.8 	calculated to the nearest whole percentage point. The commissioner shall announce and 
18.9 	publish, on or before September 30 of the preceding year, the changes in the dollar 
18.10 	amounts required by this paragraph to take effect on January 1 of each odd-numbered 
18.11 	year. The commissioner shall use the most recent revision of the July index available as 
18.12 	of September 1. Changes in the dollar amounts must be in increments of $5,000, and no 
18.13 	change shall be made in a dollar amount until the change in the index requires at least 
18.14 	a $5,000 change. If the United States Bureau of Labor Statistics changes the base year 
18.15 	upon which the CPI-U is based, the commissioner shall make the calculations necessary 
18.16 	to convert from the old base year to the new base year. If the CPI-U is discontinued, the 
18.17 	commissioner shall use the available index that is most similar to the CPI-U.
18.18 	(j) The plan of reparation security covering the owner of a rented motor vehicle is 
18.19 	excess of any residual liability coverage insuring an operator of a rented motor vehicle if 
18.20 	the vehicle is loaned as a replacement for a vehicle being serviced or repaired, regardless 
18.21 	of whether a fee is charged for use of the vehicle, provided that the vehicle so loaned is 
18.22 	owned by the service or repair business.

18.23 	Sec. 26. Minnesota Statutes 2004, section 70A.07, is amended to read:
18.24 	70A.07 RATES AND FORMS OPEN TO INSPECTION.
18.25 	All rates, supplementary rate information, and forms furnished to the commissioner 
18.26 	under this chapter shall, as soon as the commissioner's review has been completed within 
18.27 	ten days of their effective date, be open to public inspection at any reasonable time.

18.28 	Sec. 27. Minnesota Statutes 2005 Supplement, section 72A.201, subdivision 6, is 
18.29 	amended to read:
18.30 		Subd. 6.Standards for automobile insurance claims handling, settlement offers, 
18.31 	and agreements. In addition to the acts specified in subdivisions 4, 5, 7, 8, and 9, the 
18.32 	following acts by an insurer, adjuster, or a self-insured or self-insurance administrator 
18.33 	constitute unfair settlement practices:
19.1 	(1) if an automobile insurance policy provides for the adjustment and settlement 
19.2 	of an automobile total loss on the basis of actual cash value or replacement with like 
19.3 	kind and quality and the insured is not an automobile dealer, failing to offer one of the 
19.4 	following methods of settlement:
19.5 	(a) comparable and available replacement automobile, with all applicable taxes, 
19.6 	license fees, at least pro rata for the unexpired term of the replaced automobile's license, 
19.7 	and other fees incident to the transfer or evidence of ownership of the automobile paid, at 
19.8 	no cost to the insured other than the deductible amount as provided in the policy;
19.9 	(b) a cash settlement based upon the actual cost of purchase of a comparable 
19.10 	automobile, including all applicable taxes, license fees, at least pro rata for the unexpired 
19.11 	term of the replaced automobile's license, and other fees incident to transfer of evidence 
19.12 	of ownership, less the deductible amount as provided in the policy. The costs must be 
19.13 	determined by:
19.14 	(i) the cost of a comparable automobile, adjusted for mileage, condition, and options, 
19.15 	in the local market area of the insured, if such an automobile is available in that area; or
19.16 	(ii) one of two or more quotations obtained from two or more qualified sources 
19.17 	located within the local market area when a comparable automobile is not available in 
19.18 	the local market area. The insured shall be provided the information contained in all 
19.19 	quotations prior to settlement; or
19.20 	(iii) any settlement or offer of settlement which deviates from the procedure above 
19.21 	must be documented and justified in detail. The basis for the settlement or offer of 
19.22 	settlement must be explained to the insured;
19.23 	(2) if an automobile insurance policy provides for the adjustment and settlement 
19.24 	of an automobile partial loss on the basis of repair or replacement with like kind and 
19.25 	quality and the insured is not an automobile dealer, failing to offer one of the following 
19.26 	methods of settlement:
19.27 	(a) to assume all costs, including reasonable towing costs, for the satisfactory repair 
19.28 	of the motor vehicle. Satisfactory repair includes repair of both obvious and hidden 
19.29 	damage as caused by the claim incident. This assumption of cost may be reduced by 
19.30 	applicable policy provision; or
19.31 	(b) to offer a cash settlement sufficient to pay for satisfactory repair of the vehicle. 
19.32 	Satisfactory repair includes repair of obvious and hidden damage caused by the claim 
19.33 	incident, and includes reasonable towing costs;
19.34 	(3) regardless of whether the loss was total or partial, in the event that a damaged 
19.35 	vehicle of an insured cannot be safely driven, failing to exercise the right to inspect 
20.1 	automobile damage prior to repair within five business days following receipt of 
20.2 	notification of claim. In other cases the inspection must be made in 15 days;
20.3 	(4) regardless of whether the loss was total or partial, requiring unreasonable travel 
20.4 	of a claimant or insured to inspect a replacement automobile, to obtain a repair estimate, 
20.5 	to allow an insurer to inspect a repair estimate, to allow an insurer to inspect repairs made 
20.6 	pursuant to policy requirements, or to have the automobile repaired;
20.7 	(5) regardless of whether the loss was total or partial, if loss of use coverage 
20.8 	exists under the insurance policy, failing to notify an insured at the time of the insurer's 
20.9 	acknowledgment of claim, or sooner if inquiry is made, of the fact of the coverage, 
20.10 	including the policy terms and conditions affecting the coverage and the manner in which 
20.11 	the insured can apply for this coverage;
20.12 	(6) regardless of whether the loss was total or partial, failing to include the insured's 
20.13 	deductible in the insurer's demands under its subrogation rights. Subrogation recovery 
20.14 	must be shared at least on a proportionate basis with the insured, unless the deductible 
20.15 	amount has been otherwise recovered by the insured, except that when an insurer is 
20.16 	recovering directly from an uninsured third party by means of installments, the insured 
20.17 	must receive the full deductible share as soon as that amount is collected and before any 
20.18 	part of the total recovery is applied to any other use. No deduction for expenses may be 
20.19 	made from the deductible recovery unless an attorney is retained to collect the recovery, in 
20.20 	which case deduction may be made only for a pro rata share of the cost of retaining the 
20.21 	attorney. An insured is not bound by any settlement of its insurer's subrogation claim with 
20.22 	respect to the deductible amount, unless the insured receives, as a result of the subrogation 
20.23 	settlement, the full amount of the deductible. Recovery by the insurer and receipt by the 
20.24 	insured of less than all of the insured's deductible amount does not affect the insured's 
20.25 	rights to recover any unreimbursed portion of the deductible from parties liable for the loss;
20.26 	(7) requiring as a condition of payment of a claim that repairs to any damaged 
20.27 	vehicle must be made by a particular contractor or repair shop or that parts, other than 
20.28 	window glass, must be replaced with parts other than original equipment parts or engaging 
20.29 	in any act or practice of intimidation, coercion, threat, incentive, or inducement for or 
20.30 	against an insured to use a particular contractor or repair shop. Consumer benefits included 
20.31 	within preferred vendor programs must not be considered an incentive or inducement. 
20.32 	At the time a claim is reported, the insurer must provide the following advisory to the 
20.33 	insured or claimant:
20.34 	"Minnesota law gives You have the right to choose a repair shop to fix your vehicle. 
20.35 	Your policy will cover the reasonable costs of repairing your vehicle to its pre-accident 
21.1 	condition no matter where you have repairs made. Have you selected a repair shop or 
21.2 	would you like a referral?"
21.3 	After an insured has indicated that the insured has selected a repair shop, the insurer 
21.4 	must cease all efforts to influence the insured's or claimant's choice of repair shop;
21.5 	(8) where liability is reasonably clear, failing to inform the claimant in an automobile 
21.6 	property damage liability claim that the claimant may have a claim for loss of use of 
21.7 	the vehicle;
21.8 	(9) failing to make a good faith assignment of comparative negligence percentages 
21.9 	in ascertaining the issue of liability;
21.10 	(10) failing to pay any interest required by statute on overdue payment for an 
21.11 	automobile personal injury protection claim;
21.12 	(11) if an automobile insurance policy contains either or both of the time limitation 
21.13 	provisions as permitted by section 65B.55, subdivisions 1 and 2, failing to notify the 
21.14 	insured in writing of those limitations at least 60 days prior to the expiration of that time 
21.15 	limitation;
21.16 	(12) if an insurer chooses to have an insured examined as permitted by section 
21.17 	65B.56, subdivision 1, failing to notify the insured of all of the insured's rights and 
21.18 	obligations under that statute, including the right to request, in writing, and to receive 
21.19 	a copy of the report of the examination;
21.20 	(13) failing to provide, to an insured who has submitted a claim for benefits 
21.21 	described in section 65B.44, a complete copy of the insurer's claim file on the insured, 
21.22 	excluding internal company memoranda, all materials that relate to any insurance fraud 
21.23 	investigation, materials that constitute attorney work-product or that qualify for the 
21.24 	attorney-client privilege, and medical reviews that are subject to section 145.64, within ten 
21.25 	business days of receiving a written request from the insured. The insurer may charge 
21.26 	the insured a reasonable copying fee. This clause supersedes any inconsistent provisions 
21.27 	of sections 72A.49 to 72A.505;
21.28 	(14) if an automobile policy provides for the adjustment or settlement of an 
21.29 	automobile loss due to damaged window glass, failing to provide payment to the insured's 
21.30 	chosen vendor based on a competitive price that is fair and reasonable within the local 
21.31 	industry at large.
21.32 	Where facts establish that a different rate in a specific geographic area actually served 
21.33 	by the vendor is required by that market, that geographic area must be considered. This 
21.34 	clause does not prohibit an insurer from recommending a vendor to the insured or from 
21.35 	agreeing with a vendor to perform work at an agreed-upon price, provided, however, 
21.36 	that before recommending a vendor, the insurer shall offer its insured the opportunity to 
22.1 	choose the vendor. If the insurer recommends a vendor, the insurer must also provide 
22.2 	the following advisory:
22.3 	"Minnesota law gives you the right to go to any glass vendor you choose, and 
22.4 	prohibits me from pressuring you to choose a particular vendor.";
22.5 	(15) requiring that the repair or replacement of motor vehicle glass and related 
22.6 	products and services be made in a particular place or shop or by a particular entity, or by 
22.7 	otherwise limiting the ability of the insured to select the place, shop, or entity to repair or 
22.8 	replace the motor vehicle glass and related products and services; or
22.9 	(16) engaging in any act or practice of intimidation, coercion, threat, incentive, or 
22.10 	inducement for or against an insured to use a particular company or location to provide 
22.11 	the motor vehicle glass repair or replacement services or products. For purposes of this 
22.12 	section, a warranty shall not be considered an inducement or incentive.

22.13 	Sec. 28. Minnesota Statutes 2004, section 72C.10, subdivision 1, is amended to read:
22.14 		Subdivision 1.Readability compliance; filing and approval. No insurer shall 
22.15 	make, issue, amend, or renew any policy or contract after the dates specified in section  
22.16 	72C.11 for the applicable type of policy unless the contract is in compliance with the 
22.17 	requirements of sections  72C.06 to  72C.09 and unless the contract is filed with the 
22.18 	commissioner for approval. The contract shall be deemed approved 90 60 days after filing 
22.19 	unless disapproved by the commissioner within the 90-day 60-day period. When an 
22.20 	insurer, service plan corporation, or the Minnesota Comprehensive Health Association 
22.21 	fails to respond to an objection or inquiry within 60 days, the filing is automatically 
22.22 	disapproved. A resubmission is required if action by the Department of Commerce 
22.23 	is subsequently requested. An additional filing fee is required for the resubmission. 
22.24 	The commissioner shall not unreasonably withhold approval. Any disapproval shall be 
22.25 	delivered to the insurer in writing, stating the grounds therefor. Any policy filed with the 
22.26 	commissioner shall be accompanied by a Flesch scale readability analysis and test score 
22.27 	and by the insurer's certification that the policy or contract is in its judgment readable 
22.28 	based on the factors specified in sections  72C.06 to  72C.08. 

22.29 	Sec. 29. Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision 
22.30 	to read:
22.31 		Subd. 1a.Assigned risk plan. "Assigned risk plan" means:
22.32 	(1) the method to provide workers' compensation coverage to employers unable to 
22.33 	obtain coverage through licensed workers' compensation companies; and
23.1 	(2) the procedures established by the commissioner to implement that method of 
23.2 	providing coverage including administration of all assigned risk losses and reserves.

23.3 	Sec. 30. Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision 
23.4 	to read:
23.5 		Subd. 1b.Employer. "Employer" has the meaning given in section 176.011, 
23.6 	subdivision 10.

23.7 	Sec. 31. Minnesota Statutes 2004, section 79.251, subdivision 1, is amended to read:
23.8 		Subdivision 1.General duties of commissioner. (a)(1) The commissioner shall 
23.9 	have all the usual powers and authorities necessary for the discharge of the commissioner's 
23.10 	duties under this section and may contract with individuals in discharge of those duties. 
23.11 	The commissioner shall audit the reserves established (a) for individual cases arising 
23.12 	under policies and contracts of coverage issued under subdivision 4 and (b) for the total 
23.13 	book of business issued under subdivision 4. If the commissioner determines on the basis 
23.14 	of an audit that there is an excess surplus in the assigned risk plan, the commissioner must 
23.15 	notify the commissioner of finance who shall transfer assets of the plan equal to the excess 
23.16 	surplus to the budget reserve account in the general fund.
23.17 	(2) The commissioner shall monitor the operations of section  79.252 and this section 
23.18 	and shall periodically make recommendations to the governor and legislature when 
23.19 	appropriate, for improvement in the operation of those sections. 
23.20 	(3) All insurers and self-insurance administrators issuing policies or contracts under 
23.21 	subdivision 4 shall pay to the commissioner a .25 percent assessment on premiums for 
23.22 	policies and contracts of coverage issued under subdivision 4 for the purpose of defraying 
23.23 	the costs of performing the duties under clauses (1) and (2). Proceeds of the assessment 
23.24 	shall be deposited in the state treasury and credited to the general fund.
23.25 	(4) The assigned risk plan shall not be deemed a state agency.
23.26 	(5) The commissioner shall monitor and have jurisdiction over all reserves 
23.27 	maintained for assigned risk plan losses.
23.28 	(b) As used in this subdivision, "excess surplus" means the amount of assigned 
23.29 	risk plan assets in excess of the amount needed to pay all current liabilities of the plan, 
23.30 	including, but not limited to:
23.31 	(1) administrative expenses;
23.32 	(2) benefit claims; and
23.33 	(3) if the assigned risk plan is dissolved under subdivision 8, the amounts that would 
23.34 	be due insurers who have paid assessments to the plan.

24.1 	Sec. 32. Minnesota Statutes 2004, section 79.251, is amended by adding a subdivision 
24.2 	to read:
24.3 		Subd. 2a.Assigned risk rating plan. (a) Employers insured through the assigned 
24.4 	risk plan are subject to paragraphs (b) and (c).
24.5 	(b) Classifications must be assigned according to a uniform classification system 
24.6 	approved by the commissioner.
24.7 	(c) Rates must be modified according to an experience rating plan approved by the 
24.8 	commissioner. Any experience rating plan is subject to Minnesota Rules, parts 2700.2800 
24.9 	and 2700.2900.

24.10 	Sec. 33. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
24.11 	to read:
24.12 		Subd. 2a.Minimum qualifications. Any employer that (1) is required to carry 
24.13 	workers' compensation insurance pursuant to chapter 176 and (2) has a current written 
24.14 	notice of refusal to insure pursuant to subdivision 2, is entitled to coverage upon making 
24.15 	written application to the assigned risk plan, and paying the applicable premium.

24.16 	Sec. 34. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
24.17 	to read:
24.18 		Subd. 3a.Disqualifying factors. An employer may be denied or terminated from 
24.19 	coverage through the assigned risk plan if the employer:
24.20 	(1) applies for coverage for only a portion of the employer's statutory liability under 
24.21 	chapter 176, excluding wrap-up policies;
24.22 	(2) has an outstanding debt due and owing to the assigned risk plan at the time of 
24.23 	renewal arising from a prior policy;
24.24 	(3) persistently refuses to permit completion of an adequate payroll audit;
24.25 	(4) repeatedly submits misleading or erroneous payroll information; or
24.26 	(5) flagrantly disregards safety or loss control recommendations. Cancellation for 
24.27 	nonpayment of premium may be initiated by the service contractor upon 60 days' written 
24.28 	notice to the employer pursuant to section 176.185, subdivision 1. 

24.29 	Sec. 35. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
24.30 	to read:
24.31 		Subd. 3b.Occupational disease exposure. An employer having a significant 
24.32 	occupational disease exposure, as determined by the commissioner, to be entitled to 
24.33 	coverage shall have physical examinations made:
25.1 	(a) of employees who have not been examined within one year of the date of 
25.2 	application for assignment;
25.3 	(b) of new employees before hiring; and
25.4 	(c) of terminated employees. Upon request, the findings and reports of doctors 
25.5 	making examinations, together with x-rays and other original exhibits, must be furnished 
25.6 	to the assigned risk plan or the Department of Labor and Industry.

25.7 	Sec. 36. Minnesota Statutes 2005 Supplement, section 79A.04, subdivision 2, is 
25.8 	amended to read:
25.9 		Subd. 2.Minimum deposit. The minimum deposit is 110 percent of the private 
25.10 	self-insurer's estimated future liability. The deposit may be used to secure payment of 
25.11 	all administrative and legal costs, and unpaid assessments required by section 79A.12, 
25.12 	subdivision 2, relating to or arising from its or other employers' self-insuring. As used 
25.13 	in this section, "private self-insurer" includes both current and former members of the 
25.14 	self-insurers' security fund; and "private self-insurers' estimated future liability" means 
25.15 	the private self-insurers' total of estimated future liability as determined by an Associate 
25.16 	or Fellow of the Casualty Actuarial Society every year for group member private 
25.17 	self-insurers and, for a nongroup member private self-insurer's authority to self-insure, 
25.18 	every year for the first five years. After the first five years, the nongroup member's total 
25.19 	shall be as determined by an Associate or Fellow of the Casualty Actuarial Society at least 
25.20 	every two years, and each such actuarial study shall include a projection of future losses 
25.21 	during the period until the next scheduled actuarial study, less payments anticipated to 
25.22 	be made during that time.
25.23 	All data and information furnished by a private self-insurer to an Associate or 
25.24 	Fellow of the Casualty Actuarial Society for purposes of determining private self-insurers' 
25.25 	estimated future liability must be certified by an officer of the private self-insurer to be 
25.26 	true and correct with respect to payroll and paid losses, and must be certified, upon 
25.27 	information and belief, to be true and correct with respect to reserves. The certification 
25.28 	must be made by sworn affidavit. In addition to any other remedies provided by law, 
25.29 	the certification of false data or information pursuant to this subdivision may result in a 
25.30 	fine imposed by the commissioner of commerce on the private self-insurer up to the 
25.31 	amount of $5,000, and termination of the private self-insurers' authority to self-insure. 
25.32 	The determination of private self-insurers' estimated future liability by an Associate or 
25.33 	Fellow of the Casualty Actuarial Society shall be conducted in accordance with standards 
25.34 	and principles for establishing loss and loss adjustment expense reserves by the Actuarial 
25.35 	Standards Board, an affiliate of the American Academy of Actuaries. The commissioner 
26.1 	may reject an actuarial report that does not meet the standards and principles of the 
26.2 	Actuarial Standards Board, and may further disqualify the actuary who prepared the report 
26.3 	from submitting any future actuarial reports pursuant to this chapter. Within 30 days after 
26.4 	the actuary has been served by the commissioner with a notice of disqualification, an 
26.5 	actuary who is aggrieved by the disqualification may request a hearing to be conducted in 
26.6 	accordance with chapter 14. Based on a review of the actuarial report, the commissioner 
26.7 	of commerce may require an increase in the minimum security deposit in an amount the 
26.8 	commissioner considers sufficient.
26.9 	In addition, the Minnesota self-insurers' security fund may, at its sole discretion 
26.10 	and cost, undertake an independent actuarial review or an actuarial study of a private 
26.11 	self-insurers' estimated future liability as defined herein. The review or study must be 
26.12 	conducted by an associate or fellow of the Casualty Actuarial Society. The actuary has 
26.13 	the right to receive and review data and information of the self-insurer necessary for 
26.14 	the actuary to complete its review or study. A copy of this report must be filed with the 
26.15 	commissioner and a copy must be furnished to the self-insurer.
26.16 	Estimated future liability is determined by first taking the total amount of the 
26.17 	self-insured's future liability of workers' compensation claims and then deducting the 
26.18 	total amount which is estimated to be returned to the self-insurer from any specific 
26.19 	excess insurance coverage, aggregate excess insurance coverage, and any supplementary 
26.20 	benefits or second injury benefits which are estimated to be reimbursed by the special 
26.21 	compensation fund. However, in the determination of estimated future liability, the 
26.22 	actuary for the self-insurer shall not take a credit for any excess insurance or reinsurance 
26.23 	which is provided by a captive insurance company which is wholly owned by the 
26.24 	self-insurer. Supplementary benefits or second injury benefits will not be reimbursed by 
26.25 	the special compensation fund unless the special compensation fund assessment pursuant 
26.26 	to section 176.129 is paid and the reports required thereunder are filed with the special 
26.27 	compensation fund. In the case of surety bonds, bonds shall secure administrative and 
26.28 	legal costs in addition to the liability for payment of compensation reflected on the face of 
26.29 	the bond. In no event shall the security be less than the last retention limit selected by the 
26.30 	self-insurer with the Workers' Compensation Reinsurance Association, provided that the 
26.31 	commissioner may allow former members to post less than the Workers' Compensation 
26.32 	Reinsurance Association retention level if that amount is adequate to secure payment 
26.33 	of the self-insurers' estimated future liability, as defined in this subdivision, including 
26.34 	payment of claims, administrative and legal costs, and unpaid assessments required by 
26.35 	section 79A.12, subdivision 2. The posting or depositing of security pursuant to this 
26.36 	section shall release all previously posted or deposited security from any obligations under 
27.1 	the posting or depositing and any surety bond so released shall be returned to the surety. 
27.2 	Any other security shall be returned to the depositor or the person posting the bond.
27.3 	As a condition for the granting or renewing of a certificate to self-insure, the 
27.4 	commissioner may require a private self-insurer to furnish any additional security the 
27.5 	commissioner considers sufficient to insure payment of all claims under chapter 176.

27.6 	Sec. 37. Minnesota Statutes 2004, section 79A.23, subdivision 3, is amended to read:
27.7 		Subd. 3.Operational audit. (a) The commissioner, prior to authorizing surplus 
27.8 	distribution of a commercial self-insurance group's first fund year or no later than after 
27.9 	the third anniversary of the group's authority to self-insure, may conduct an operational 
27.10 	audit of the commercial self-insurance group's claim handling and reserve practices as 
27.11 	well as its underwriting procedures to determine if they adhere to the group's business 
27.12 	plan and sound business practices. The commissioner may select outside consultants to 
27.13 	assist in conducting the audit. After completion of the audit, the commissioner shall either 
27.14 	renew or revoke the commercial self-insurance group's authority to self-insure. The 
27.15 	commissioner may also order any changes deemed necessary in the claims handling, 
27.16 	reserving practices, or underwriting procedures of the group.
27.17 	(b) The cost of the operational audit shall be borne by the commercial self-insurance 
27.18 	group.

27.19 	Sec. 38. Minnesota Statutes 2004, section 79A.32, is amended to read:
27.20 	79A.32 REPORTING TO MINNESOTA WORKERS' COMPENSATION 
27.21 	INSURERS' ASSOCIATION LICENSED DATA SERVICE ORGANIZATIONS.
27.22 		Subdivision 1.Required activity. Each self-insurer shall perform the following 
27.23 	activities:
27.24 	(1) maintain membership in and report loss experience data to the Minnesota 
27.25 	Workers' Compensation Insurers Association, or a licensed data service organization, 
27.26 	in accordance with the statistical plan and rules of the organization as approved by the 
27.27 	commissioner;
27.28 	(2) establish a plan for merit rating which shall be consistently applied to all 
27.29 	insureds, provided that members of a data service organization may use merit rating plans 
27.30 	developed by that data service organization;
27.31 	(3) provide an annual report to the commissioner containing the information and 
27.32 	prepared in the form required by the commissioner; and
27.33 	(4) keep a record of the losses paid by the self-insurers and premiums for the 
27.34 	group self-insurers.
28.1 		Subd. 2.Permitted activity. In addition to any other activities not prohibited by 
28.2 	this chapter, self-insurers may Through data service organizations licensed under chapter 
28.3 	79, self-insurers may:
28.4 	(1) through licensed data service organizations, individually, or with self-insurers 
28.5 	commonly owned, managed, or controlled, conduct research and collect statistics to 
28.6 	investigate, identify, and classify information relating to causes or prevention of losses; and
28.7 	(2) develop and use classification plans and rates based upon any reasonable factors; 
28.8 	and at the request of a private self-insurer or self-insurer group, submit and collect data, 
28.9 	including payroll and loss data; and perform calculations, including calculations of 
28.10 	experience modifications of individual self-insured employers.
28.11 	(3) develop rules for the assignment of risks to classifications.
28.12 		Subd. 3.Delayed reporting. Private self-insurers established under sections  
28.13 	79A.01 to  79A.18 prior to August 1, 1995, need not begin filing the reports required 
28.14 	under subdivision 1 until January 1, 1998.

28.15 	Sec. 39.  REPEALER.
 28.16 	Minnesota Rules, parts 2781.0100; 2781.0200; 2781.0300; 2781.0400; 2781.0500; 
28.17 	and 2781.0600, are repealed.