1.1 	A bill for an act
1.2 	relating to commerce; regulating license education; regulating certain insurers, 
1.3 	insurance forms and rates, coverages, filings, utilization reviews, and claims; 
1.4 	regulating the Minnesota uniform health care identification card; amending 
1.5 	Minnesota Statutes 2004, sections 61A.02, subdivision 3; 61A.092, subdivision 
1.6 	3; 62A.02, subdivision 3; 62A.095, subdivision 1; 62A.17, subdivisions 1, 2; 
1.7 	62A.27; 62A.3093; 62C.14, subdivisions 9, 10; 62E.13, subdivision 3; 62E.14, 
1.8 	subdivision 5; 62J.60, subdivisions 2, 3; 62L.02, subdivision 24; 62M.01, 
1.9 	subdivision 2; 62M.09, subdivision 9; 70A.07; 72C.10, subdivision 1; 79.01, by 
1.10 	adding subdivisions; 79.251, subdivision 1, by adding a subdivision; 79.252, by 
1.11 	adding subdivisions; 79A.23, subdivision 3; 79A.32; Minnesota Statutes 2005 
1.12 	Supplement, sections 45.22; 45.23; 62Q.75, subdivision 3; 65B.49, subdivision 
1.13 	5a; 72A.201, subdivision 6; 79A.04, subdivision 2; proposing coding for new law 
1.14 	in Minnesota Statutes, chapter 62A; repealing Minnesota Rules, parts 2781.0100; 
1.15 	2781.0200; 2781.0300; 2781.0400; 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 2004, section 61A.02, subdivision 3, is amended to read:
2.25 		Subd. 3.Disapproval. (a) The commissioner shall, within 60 days after the filing of 
2.26 	any form, disapprove the form:
2.27 	(1) if the benefits provided are unreasonable in relation to the premium charged;
2.28 	(2) if the safety and soundness of the company would be threatened by the offering 
2.29 	of an excess rate of interest on the policy or contract;
2.30 	(3) if it contains a provision or provisions which are unlawful, unfair, inequitable, 
2.31 	misleading, or encourages misrepresentation of the policy; or
2.32 	(4) if the form, or its provisions, is otherwise not in the public interest. It shall 
2.33 	be unlawful for the company to issue any policy in the form so disapproved. If the 
3.1 	commissioner does not within 60 days after the filing of any form, disapprove or otherwise 
3.2 	object, the form shall be deemed approved.
3.3 	(b) When an insurer or the Minnesota Comprehensive Health Association fails to 
3.4 	respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
3.5 	A resubmission is required if action by the Department of Commerce is subsequently 
3.6 	requested. An additional filing fee is required for the resubmission.
3.7 	(c) For purposes of paragraph (a), clause (2), an excess rate of interest is a rate of 
3.8 	interest exceeding the rate of interest determined by subtracting three percentage points 
3.9 	from Moody's corporate bond yield average as most recently available.

3.10 	Sec. 4. Minnesota Statutes 2004, section 61A.092, subdivision 3, is amended to read:
3.11 		Subd. 3.Notice of options. Upon termination of or layoff from employment of a 
3.12 	covered employee, the employer shall inform the employee of:
3.13 	(1) the employee's right to elect to continue the coverage;
3.14 	(2) the amount the employee must pay monthly to the employer to retain the 
3.15 	coverage;
3.16 	(3) the manner in which and the office of the employer to which the payment to 
3.17 	the employer must be made; and
3.18 	(4) the time by which the payments to the employer must be made to retain coverage.
3.19 	The employee has 60 days within which to elect coverage. The 60-day period shall 
3.20 	begin to run on the date coverage would otherwise terminate or on the date upon which 
3.21 	notice of the right to coverage is received, whichever is later.
3.22 	If the covered employee or covered dependent dies during the 60-day election period 
3.23 	and before the covered employee makes an election to continue or reject continuation, then 
3.24 	the covered employee will be considered to have elected continuation of coverage. The 
3.25 	estate ofbeneficiary previously selected by the former employee or covered dependent 
3.26 	would then be entitled to a death benefit equal to the amount of insurance that could have 
3.27 	been continued less any unpaid premium owing as of the date of death.
3.28 	Notice must be in writing and sent by first class mail to the employee's last known 
3.29 	address which the employee has provided to the employer.
3.30 	A notice in substantially the following form is sufficient: "As a terminated or laid 
3.31 	off employee, the law authorizes you to maintain your group insurance benefits, in an 
3.32 	amount equal to the amount of insurance in effect on the date you terminated or were laid 
3.33 	off from employment, for a period of up to 18 months. To do so, you must notify your 
3.34 	former employer within 60 days of your receipt of this notice that you intend to retain this 
4.1 	coverage and must make a monthly payment of $............ at ............. by the ............. of 
4.2 	each month."

4.3 	Sec. 5. Minnesota Statutes 2004, section 62A.02, subdivision 3, is amended to read:
4.4 		Subd. 3.Standards for disapproval. (a) The commissioner shall, within 60 days 
4.5 	after the filing of any form or rate, disapprove the form or rate:
4.6 	(1) if the benefits provided are not reasonable in relation to the premium charged;
4.7 	(2) if it contains a provision or provisions which are unjust, unfair, inequitable, 
4.8 	misleading, deceptive or encourage misrepresentation of the health plan form, or otherwise 
4.9 	does not comply with this chapter, chapter 62L, or chapter 72A;
4.10 	(3) if the proposed premium rate is excessive or not adequate; or
4.11 	(4) the actuarial reasons and data submitted do not justify the rate.
4.12 	The party proposing a rate has the burden of proving by a preponderance of the 
4.13 	evidence that it does not violate this subdivision.
4.14 	In determining the reasonableness of a rate, the commissioner shall also review 
4.15 	all administrative contracts, service contracts, and other agreements to determine the 
4.16 	reasonableness of the cost of the contracts or agreement and effect of the contracts on the 
4.17 	rate. If the commissioner determines that a contract or agreement is not reasonable, the 
4.18 	commissioner shall disapprove any rate that reflects any unreasonable cost arising out 
4.19 	of the contract or agreement. The commissioner may require any information that the 
4.20 	commissioner deems necessary to determine the reasonableness of the cost.
4.21 	For the purposes of this subdivision, the commissioner shall establish by rule a 
4.22 	schedule of minimum anticipated loss ratios which shall be based on (i) the type or types 
4.23 	of coverage provided, (ii) whether the policy is for group or individual coverage, and 
4.24 	(iii) the size of the group for group policies. Except for individual policies of disability 
4.25 	or income protection insurance, the minimum anticipated loss ratio shall not be less 
4.26 	than 50 percent after the first year that a policy is in force. All applicants for a policy 
4.27 	shall be informed in writing at the time of application of the anticipated loss ratio of the 
4.28 	policy. "Anticipated loss ratio" means the ratio at the time of filing, at the time of notice 
4.29 	of withdrawal under subdivision 4a, or at the time of subsequent rate revision of the 
4.30 	present value of all expected future benefits, excluding dividends, to the present value 
4.31 	of all expected future premiums.
4.32 	If the commissioner notifies a health carrier that has filed any form or rate that it 
4.33 	does not comply with this chapter, chapter 62L, or chapter 72A, it shall be unlawful for 
4.34 	the health carrier to issue or use the form or rate. In the notice the commissioner shall 
5.1 	specify the reasons for disapproval and state that a hearing will be granted within 20 days 
5.2 	after request in writing by the health carrier.
5.3 	The 60-day period within which the commissioner is to approve or disapprove the 
5.4 	form or rate does not begin to run until a complete filing of all data and materials required 
5.5 	by statute or requested by the commissioner has been submitted.
5.6 	However, if the supporting data is not filed within 30 days after a request by the 
5.7 	commissioner, the rate is not effective and is presumed to be an excessive rate.
5.8 	(b) When an insurer or the Minnesota Comprehensive Health Association fails to 
5.9 	respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
5.10 	A resubmission is required if action by the Department of Commerce is subsequently 
5.11 	requested. An additional filing fee is required for the resubmission.

5.12 	Sec. 6. Minnesota Statutes 2004, section 62A.095, subdivision 1, is amended to read:
5.13 		Subdivision 1.Applicability. (a) No health plan shall be offered, sold, or issued to a 
5.14 	resident of this state, or to cover a resident of this state, unless the health plan complies 
5.15 	with subdivision 2.
5.16 	(b) Health plans providing benefits under health care programs administered by the 
5.17 	commissioner of human services are not subject to the limits described in subdivision 
5.18 	2 but are subject to the right of subrogation provisions under section  256B.37 and the 
5.19 	lien provisions under section  256.015;  256B.042;  256D.03, subdivision 8; or  256L.03, 
5.20 	subdivision 6. 
5.21 	For purposes of this section, "health plan" includes coverage that is excluded under 
5.22 	section 62A.011, subdivision 3, clauses (4), (7), and (10).

5.23 	Sec. 7. Minnesota Statutes 2004, section 62A.17, subdivision 1, is amended to read:
5.24 		Subdivision 1.Continuation of coverage. Every group insurance policy, group 
5.25 	subscriber contract, and health care plan included within the provisions of section  62A.16, 
5.26 	except policies, contracts, or health care plans covering employees of an agency of the 
5.27 	federal government, shall contain a provision which permits every covered employee who 
5.28 	is voluntarily or involuntarily terminated or laid off from employment and every covered 
5.29 	dependent of the covered employee, if the policy, contract, or health care plan remains 
5.30 	in force for active employees of the employer, to elect to continue the coverage for the 
5.31 	employee and dependents. 
5.32 	An employee shall be considered to be laid off from employment if there is a 
5.33 	reduction in hours to the point where the employee is no longer eligible under the policy, 
5.34 	contract, or health care plan. Termination shall not include discharge for gross misconduct.
6.1 	Upon request by the terminated or laid off employee or any covered dependent, a 
6.2 	health carrier must provide the instructions necessary to enable the employee or dependent 
6.3 	to elect and receive continuation of coverage through the insurer in place of the former 
6.4 	employer.

6.5 	Sec. 8. Minnesota Statutes 2004, section 62A.17, subdivision 2, is amended to read:
6.6 		Subd. 2.Responsibility of employee. Every covered employee or dependent 
6.7 	electing to continue coverage shall pay the former employer, on a monthly basis, the 
6.8 	cost of the continued coverage. The policy, contract, or plan must require the group 
6.9 	policyholder or contract holder to, upon request, provide the employee or dependent with 
6.10 	written verification from the insurer of the cost of this coverage promptly at the time 
6.11 	of eligibility for this coverage and at any time during the continuation period. If the 
6.12 	policy, contract, or health care plan is administered by a trust, every covered employee 
6.13 	or dependent electing to continue coverage shall pay the trust the cost of continued 
6.14 	coverage according to the eligibility rules established by the trust. In no event shall the 
6.15 	amount of premium charged exceed 102 percent of the cost to the plan for such period 
6.16 	of coverage for similarly situated employees with respect to whom neither termination 
6.17 	nor layoff has occurred, without regard to whether such cost is paid by the employer or 
6.18 	employee. The employee and every covered dependent shall be eligible to continue the 
6.19 	coverage until the employee becomes covered under another group health plan, or for a 
6.20 	period of 18 months after the termination of or lay off from employment, whichever is 
6.21 	shorter. If the employee becomes covered under another group policy, contract, or health 
6.22 	plan that does not include dependent coverage, every covered dependent remains eligible 
6.23 	to continue coverage with the former employer subject to the conditions specified in this 
6.24 	subdivision. If the employee or any covered dependent becomes covered under another 
6.25 	group policy, contract, or health plan and the new group policy, contract, or health plan 
6.26 	contains any preexisting condition limitations, the employee or dependent may, subject to 
6.27 	the 18-month maximum continuation limit, continue coverage with the former employer 
6.28 	until the preexisting condition limitations have been satisfied. The new policy, contract, or 
6.29 	health plan is primary except as to the preexisting condition. In the case of a newborn 
6.30 	child who is a dependent of the employee, the new policy, contract, or health plan is 
6.31 	primary upon the date of birth of the child, regardless of which policy, contract, or health 
6.32 	plan coverage is deemed primary for the mother of the child.

6.33 	Sec. 9. Minnesota Statutes 2004, section 62A.27, is amended to read:
6.34 	62A.27 COVERAGE OF ADOPTED CHILDREN.
7.1 	(a) A health plan that provides coverage to a Minnesota resident must cover adopted 
7.2 	children of the insured, subscriber, participant, or enrollee on the same basis as other 
7.3 	dependents. Consequently, the plan shall not contain any provision concerning preexisting 
7.4 	condition limitations, insurability, eligibility, or health underwriting approval concerning 
7.5 	children placed for adoption with the participant.
7.6 	(b) The coverage required by this section is effective from the date of placement 
7.7 	for adoption. For purposes of this section, placement for adoption means the assumption 
7.8 	and retention by a person of a legal obligation for total or partial support of a child in 
7.9 	anticipation of adoption of the child. The child's placement with a person terminates upon 
7.10 	the termination of the legal obligation for total or partial support.
7.11 	(c) For the purpose of this section, health plan includes:
7.12 	(1) coverage offered by community integrated service networks;
7.13 	(2) coverage that is designed solely to provide dental or vision care; and
7.14 	(3) any plan under the federal Employee Retirement Income Security Act of 1974 
7.15 	(ERISA), United States Code, title 29, sections 1001 to 1461.
7.16 	(d) No policy or contract covered by this section may require notification to a health 
7.17 	carrier as a condition for this dependent coverage. However, if the policy or contract 
7.18 	mandates an additional premium for each dependent, the health carrier is entitled to 
7.19 	all premiums that would have been collected had the health carrier been aware of the 
7.20 	additional dependent. The health carrier may withhold payment of any health benefits 
7.21 	for the new dependent until it has been compensated with the applicable premium 
7.22 	which would have been owed if the health carrier had been informed of the additional 
7.23 	dependent immediately.

7.24 	Sec. 10. Minnesota Statutes 2004, section 62A.3093, is amended to read:
7.25 	62A.3093 COVERAGE FOR DIABETES.
7.26 	A health plan, including a plan providing the coverage specified in section  62A.011, 
7.27 	subdivision 3, clause (10), must provide coverage for: (1) all physician prescribed 
7.28 	medically appropriate and necessary equipment and supplies used in the management and 
7.29 	treatment of diabetes not otherwise covered under Medicare or Medicare Part D; and (2) 
7.30 	diabetes outpatient self-management training and education, including medical nutrition 
7.31 	therapy, that is provided by a certified, registered, or licensed health care professional 
7.32 	working in a program consistent with the national standards of diabetes self-management 
7.33 	education as established by the American Diabetes Association. Coverage must include 
7.34 	persons with gestational, type I or type II diabetes. Coverage required under this section is 
7.35 	subject to the same deductible or coinsurance provisions applicable to the plan's hospital, 
8.1 	medical expense, medical equipment, or prescription drug benefits. A health carrier may 
8.2 	not reduce or eliminate coverage due to this requirement. 

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

8.4 	Sec. 11. [62A.3161] MEDICARE SUPPLEMENT PLAN WITH 50 PERCENT 
8.5 	COVERAGE.
8.6 	The Medicare supplement plan with 50 percent coverage must have a level of 
8.7 	coverage that will provide:
8.8 	(1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for 
8.9 	365 days after Medicare benefits end;
8.10 	(2) coverage for 50 percent of the Medicare Part A inpatient hospital deductible 
8.11 	amount per benefit period until the out-of-pocket limitation is met as described in clause 
8.12 	(8);
8.13 	(3) coverage for 50 percent of the coinsurance amount for each day used from the 
8.14 	21st through the 100th day in a Medicare benefit period for posthospital skilled nursing 
8.15 	care eligible under Medicare Part A until the out-of-pocket limitation is met as described 
8.16 	in clause (8);
8.17 	(4) coverage for 50 percent of cost sharing for all Medicare Part A eligible expenses 
8.18 	and respite care until the out-of-pocket limitation is met as described in clause (8);
8.19 	(5) coverage for 50 percent, under Medicare Part A or B, of the reasonable cost 
8.20 	of the first three pints of blood, or equivalent quantities of packed red blood cells, as 
8.21 	defined under federal regulations, unless replaced according to federal regulations, until 
8.22 	the out-of-pocket limitation is met as described in clause (8);
8.23 	(6) except for coverage provided in this clause, coverage for 50 percent of the 
8.24 	cost sharing otherwise applicable under Medicare Part B, after the policyholder pays 
8.25 	the Medicare Part B deductible, until the out-of-pocket limitation is met as described 
8.26 	in clause (8);
8.27 	(7) coverage of 100 percent of the cost sharing for Medicare Part B preventive 
8.28 	services and diagnostic procedures for cancer screening described in section 62A.30 after 
8.29 	the policyholder pays the Medicare Part B deductible; and
8.30 	(8) coverage of 100 percent of all cost sharing under Medicare Parts A and B for the 
8.31 	balance of the calendar year after the individual has reached the out-of-pocket limitation 
8.32 	on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed 
8.33 	each year by the appropriate inflation adjustment by the secretary of the United States 
8.34 	Department of Health and Human Services.

9.1 	Sec. 12. [62A.3162] MEDICARE SUPPLEMENT PLAN WITH 75 PERCENT 
9.2 	COVERAGE.
9.3 	The basic Medicare supplement plan with 75 percent coverage must have a level of 
9.4 	coverage that will provide:
9.5 	(1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for 
9.6 	365 days after Medicare benefits end;
9.7 	(2) coverage for 75 percent of the Medicare Part A inpatient hospital deductible 
9.8 	amount per benefit period until the out-of-pocket limitation is met as described in clause 
9.9 	(8);
9.10 	(3) coverage for 75 percent of the coinsurance amount for each day used from the 
9.11 	21st through the 100th day in a Medicare benefit period for posthospital skilled nursing 
9.12 	care eligible under Medicare Part A until the out-of-pocket limitation is met as described 
9.13 	in clause (8); 
9.14 	(4) coverage for 75 percent of cost sharing for all Medicare Part A eligible expenses 
9.15 	and respite care until the out-of-pocket limitation is met as described in clause (8);
9.16 	(5) coverage for 75 percent, under Medicare Part A or B, of the reasonable cost 
9.17 	of the first three pints of blood, or equivalent quantities of packed red blood cells, as 
9.18 	defined under federal regulations, unless replaced according to federal regulations until 
9.19 	the out-of-pocket limitation is met as described in clause (8);
9.20 	(6) except for coverage provided in this clause, coverage for 75 percent of the 
9.21 	cost sharing otherwise applicable under Medicare Part B after the policyholder pays 
9.22 	the Medicare Part B deductible until the out-of-pocket limitation is met as described 
9.23 	in clause (8);
9.24 	(7) coverage of 100 percent of the cost sharing for Medicare Part B preventive 
9.25 	services and diagnostic procedures for cancer screening described in section 62A.30 after 
9.26 	the policyholder pays the Medicare Part B deductible; and
9.27 	(8) coverage of 100 percent of all cost sharing under Medicare Parts A and B for the 
9.28 	balance of the calendar year after the individual has reached the out-of-pocket limitation 
9.29 	on annual expenditures under Medicare Parts A and B of $2,000 in 2006, indexed 
9.30 	each year by the appropriate inflation adjustment by the Secretary of the United States 
9.31 	Department of Health and Human Services.

9.32 	Sec. 13. Minnesota Statutes 2004, section 62C.14, subdivision 9, is amended to read:
9.33 		Subd. 9.Required filing. No service plan corporation shall deliver or issue 
9.34 	for delivery in this state any subscriber contract, endorsement, rider, amendment or 
9.35 	application until a copy of the form thereof has been filed with the commissioner, subject 
10.1 	to disapproval by the commissioner. Any such form issued or in use on August 1, 1971, if 
10.2 	filed with the commissioner within 60 days after August 1, 1971, shall be deemed filed 
10.3 	upon receipt by the commissioner. When an insurer, service plan corporation, or the 
10.4 	Minnesota Comprehensive Health Association fails to respond to an objection or inquiry 
10.5 	within 60 days, the filing is automatically disapproved. A resubmission is required if 
10.6 	action by the Department of Commerce is subsequently requested. An additional filing 
10.7 	fee is required for the resubmission. The commissioner also may by regulation exempt 
10.8 	from filing those subscriber contracts issued to a group of not less than 300 subscribers, 
10.9 	or to other groups upon such reasonable conditions and restrictions as the commissioner 
10.10 	may require.

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

10.22 	Sec. 15. Minnesota Statutes 2004, section 62E.13, subdivision 3, is amended to read:
10.23 		Subd. 3.Duties of writing carrier. The writing carrier shall perform all 
10.24 	administrative and claims payment functions required by this section. The writing carrier 
10.25 	shall provide these services for a period of three five years, unless a request to terminate 
10.26 	is approved by the commissioner. The commissioner shall approve or deny a request to 
10.27 	terminate within 90 days of its receipt. A failure to make a final decision on a request to 
10.28 	terminate within the specified period shall be deemed to be an approval. Six months 
10.29 	prior to the expiration of each three-year five-year period, the association shall invite 
10.30 	submissions of policy forms from members of the association, including the writing 
10.31 	carrier. The association shall follow the provisions of subdivision 2 in selecting a writing 
10.32 	carrier for the subsequent three-year five-year period.

10.33 	Sec. 16. Minnesota Statutes 2004, section 62E.14, subdivision 5, is amended to read:
11.1 		Subd. 5.Terminated employees. An employee who is voluntarily or involuntarily 
11.2 	terminated or laid off from employment and unable to exercise the option to continue 
11.3 	coverage under section  62A.17, and who is a Minnesota resident and who is otherwise 
11.4 	eligible, may enroll in the comprehensive health insurance plan, by submitting an 
11.5 	application that is received by the writing carrier no later than 90 days after termination or 
11.6 	layoff, with a waiver of the preexisting condition limitation set forth in subdivision 3 and a 
11.7 	waiver of the evidence of rejection set forth in subdivision 1, paragraph (c). 

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

11.9 	Sec. 17. Minnesota Statutes 2004, section 62J.60, subdivision 2, is amended to read:
11.10 		Subd. 2.General characteristics. (a) The Minnesota uniform health care 
11.11 	identification card must be a preprinted card constructed of plastic, paper, or any other 
11.12 	medium that conforms with ANSI and ISO 7810 physical characteristics standards. The 
11.13 	card dimensions must also conform to ANSI and ISO 7810 physical characteristics 
11.14 	standard. The use of a signature panel is optional. The uniform prescription drug 
11.15 	information contained on the card must conform with the format adopted by the NCPDP 
11.16 	and, except as provided in subdivision 3, paragraph (a), clause (2), must include all of 
11.17 	the fields required to submit a claim in conformance with the most recent pharmacy 
11.18 	identification card implementation guide produced by the NCPDP. All information 
11.19 	required to submit a prescription drug claim, exclusive of information provided on a 
11.20 	prescription that is required by law, must be included on the card in a clear, readable, and 
11.21 	understandable manner. If a health benefit plan requires a conditional or situational field, 
11.22 	as defined by the NCPDP, the conditional or situational field must conform to the most 
11.23 	recent pharmacy information card implementation guide produced by the NCPDP.
11.24 	(b) The Minnesota uniform health care identification card must have an essential 
11.25 	information window on the front side with the following data elements left justified in 
11.26 	the following top to bottom sequence: card issuer name, electronic transaction routing 
11.27 	information, card issuer identification number, cardholder (insured) identification number, 
11.28 	and cardholder (insured) identification name. No optional data may be interspersed 
11.29 	between these data elements. The window must be left justified.
11.30 	(c) Standardized labels are required next to human readable data elements and must 
11.31 	come before the human readable data elements.

11.32 	Sec. 18. Minnesota Statutes 2004, section 62J.60, subdivision 3, is amended to read:
12.1 		Subd. 3.Human readable data elements. (a) The following are the minimum 
12.2 	human readable data elements that must be present on the front side of the Minnesota 
12.3 	uniform health care identification card:
12.4 	(1) card issuer name or logo, which is the name or logo that identifies the card issuer. 
12.5 	The card issuer name or logo may be located at the top of the card. No standard label 
12.6 	is required for this data element;
12.7 	(2) complete electronic transaction routing information including, at a minimum, 
12.8 	the international identification number. The standardized label of this data element 
12.9 	is "RxBIN." Processor control numbers and group numbers are required if needed to 
12.10 	electronically process a prescription drug claim. The standardized label for the process 
12.11 	control numbers data element is "RxPCN" and the standardized label for the group 
12.12 	numbers data element is "RxGrp," except that if the group number data element is a 
12.13 	universal element to be used by all health care providers, the standardized label may be 
12.14 	"Grp." To conserve vertical space on the card, the international identification number and 
12.15 	the processor control number may be printed on the same line;
12.16 	(3) card issuer identification number. The standardized label for this element is 
12.17 	"Issuer";
12.18 	(4) cardholder (insured) identification number, which is the unique identification 
12.19 	number of the individual card holder established and defined under this section. The 
12.20 	standardized label for the data element is "ID";
12.21 	(5)(4) cardholder (insured) identification name, which is the name of the individual 
12.22 	card holder. The identification name must be formatted as follows: first name, space, 
12.23 	optional middle initial, space, last name, optional space and name suffix. The standardized 
12.24 	label for this data element is "Name";
12.25 	(6)(5) care type, which is the description of the group purchaser's plan product 
12.26 	under which the beneficiary is covered. The description shall include the health plan 
12.27 	company name and the plan or product name. The standardized label for this data element 
12.28 	is "Care Type";
12.29 	(7)(6) service type, which is the description of coverage provided such as hospital, 
12.30 	dental, vision, prescription, or mental health. The standard label for this data element 
12.31 	is "Svc Type"; and
12.32 	(8)(7) provider/clinic name, which is the name of the primary care clinic the card 
12.33 	holder is assigned to by the health plan company. The standard label for this field is 
12.34 	"PCP." This information is mandatory only if the health plan company assigns a specific 
12.35 	primary care provider to the card holder.
13.1 	(b) The following human readable data elements shall be present on the back side 
13.2 	of the Minnesota uniform health care identification card. These elements must be left 
13.3 	justified, and no optional data elements may be interspersed between them:
13.4 	(1) claims submission names and addresses, which are the names and addresses of 
13.5 	the entity or entities to which claims should be submitted. If different destinations are 
13.6 	required for different types of claims, this must be labeled;
13.7 	(2) telephone numbers and names that pharmacies and other health care providers 
13.8 	may call for assistance. These telephone numbers and names are required on the back 
13.9 	side of the card only if one of the contacts listed in clause (3) cannot provide pharmacies 
13.10 	or other providers with assistance or with the telephone numbers and names of contacts 
13.11 	for assistance; and
13.12 	(3) telephone numbers and names; which are the telephone numbers and names of the 
13.13 	following contacts with a standardized label describing the service function as applicable:
13.14 	(i) eligibility and benefit information;
13.15 	(ii) utilization review;
13.16 	(iii) precertification; or
13.17 	(iv) customer services.
13.18 	(c) The following human readable data elements are mandatory on the back 
13.19 	side of the Minnesota uniform health care identification card for health maintenance 
13.20 	organizations:
13.21 	(1) emergency care authorization telephone number or instruction on how to receive 
13.22 	authorization for emergency care. There is no standard label required for this information; 
13.23 	and
13.24 	(2) one of the following:
13.25 	(i) telephone number to call to appeal to or file a complaint with the commissioner of 
13.26 	health; or
13.27 	(ii) for persons enrolled under section  256B.69,  256D.03, or  256L.12, the telephone 
13.28 	number to call to file a complaint with the ombudsperson designated by the commissioner 
13.29 	of human services under section  256B.69 and the address to appeal to the commissioner of 
13.30 	human services. There is no standard label required for this information. 
13.31 	(d) All human readable data elements not required under paragraphs (a) to (c) are 
13.32 	optional and may be used at the issuer's discretion.

13.33 	Sec. 19. Minnesota Statutes 2004, section 62L.02, subdivision 24, is amended to read:
13.34 		Subd. 24.Qualifying coverage. "Qualifying coverage" means health benefits or 
13.35 	health coverage provided under:
14.1 	(1) a health benefit plan, as defined in this section, but without regard to whether it is 
14.2 	issued to a small employer and including blanket accident and sickness insurance, other 
14.3 	than accident-only coverage, as defined in section  62A.11; 
14.4 	(2) part A or part B of Medicare;
14.5 	(3) medical assistance under chapter 256B;
14.6 	(4) general assistance medical care under chapter 256D;
14.7 	(5) MCHA;
14.8 	(6) a self-insured health plan;
14.9 	(7) the MinnesotaCare program established under section  256L.02; 
14.10 	(8) a plan provided under section  43A.316,  43A.317, or  471.617; 
14.11 	(9) the Civilian Health and Medical Program of the Uniformed Services 
14.12 	(CHAMPUS) or other coverage provided under United States Code, title 10, chapter 55;
14.13 	(10) coverage provided by a health care network cooperative under chapter 62R;
14.14 	(11) a medical care program of the Indian Health Service or of a tribal organization;
14.15 	(12) the federal Employees Health Benefits Plan, or other coverage provided under 
14.16 	United States Code, title 5, chapter 89;
14.17 	(13) a health benefit plan under section 5(e) of the Peace Corps Act, codified as 
14.18 	United States Code, title 22, section 2504(e);
14.19 	(14) a health plan; or
14.20 	(15) a plan similar to any of the above plans provided in this state or in another 
14.21 	state as determined by the commissioner.;
14.22 	(16) any plan established or maintained by a state, the United States government, or 
14.23 	a foreign country, or any political subdivision of a state, the United States government, or a 
14.24 	foreign country that provides health coverage to individuals who are enrolled in the plan; or
14.25 	(17) the State Children's Health Insurance Program (SCHIP).

14.26 	Sec. 20. Minnesota Statutes 2004, section 62M.01, subdivision 2, is amended to read:
14.27 		Subd. 2.Jurisdiction. Sections  62M.01 to  62M.16 apply to any insurance company 
14.28 	licensed under chapter 60A to offer, sell, or issue a policy of accident and sickness 
14.29 	insurance as defined in section  62A.01; a health service plan licensed under chapter 
14.30 	62C; a health maintenance organization licensed under chapter 62D; the Minnesota 
14.31 	Comprehensive Health Association created under chapter 62E; a community integrated 
14.32 	service network licensed under chapter 62N; an accountable provider network operating 
14.33 	under chapter 62T; a fraternal benefit society operating under chapter 64B; a joint 
14.34 	self-insurance employee health plan operating under chapter 62H; a multiple employer 
14.35 	welfare arrangement, as defined in section 3 of the Employee Retirement Income Security 
15.1 	Act of 1974 (ERISA), United States Code, title 29, section 1103, as amended; a third 
15.2 	party administrator licensed under section  60A.23, subdivision 8, that provides utilization 
15.3 	review services for the administration of benefits under a health benefit plan as defined in 
15.4 	section  62M.02; or any entity performing utilization review on behalf of a business entity 
15.5 	in this state pursuant to a health benefit plan covering a Minnesota resident. 

15.6 	Sec. 21. Minnesota Statutes 2004, section 62M.09, subdivision 9, is amended to read:
15.7 		Subd. 9.Annual report. A utilization review organization shall file an annual 
15.8 	report with the annual financial statement it submits to the commissioner of commerce 
15.9 	that includes:
15.10 	(1) per 1,000 claims utilization reviews, the number and rate of claims denied
15.11 	determinations not to certify based on medical necessity for each procedure or service; and
15.12 	(2) the number and rate of denials overturned on appeal.
15.13 	A utilization review organization that is not a licensed health carrier must submit the 
15.14 	annual report required by this subdivision on April 1 of each year.

15.15 	Sec. 22. Minnesota Statutes 2005 Supplement, section 62Q.75, subdivision 3, is 
15.16 	amended to read:
15.17 		Subd. 3.Claims filing. Unless otherwise provided by contract, by section 16A.124, 
15.18 	subdivision 4a, or by federal law, or unless the contract provides for a shorter time period, 
15.19 	the health care providers and facilities specified in subdivision 2 must submit their charges 
15.20 	to a health plan company or third-party administrator within six months from the date of 
15.21 	service or the date the health care provider knew or was informed of the correct name and 
15.22 	address of the responsible health plan company or third-party administrator, whichever is 
15.23 	later. A health care provider or facility that does not make an initial submission of charges 
15.24 	within the six-month period shall not be reimbursed for the charge and may not collect the 
15.25 	charge from the recipient of the service or any other payer. The six-month submission 
15.26 	requirement may be extended to 12 months in cases where a health care provider or facility 
15.27 	specified in subdivision 2 has determined and can substantiate that it has experienced a 
15.28 	significant disruption to normal operations that materially affects the ability to conduct 
15.29 	business in a normal manner and to submit claims on a timely basis. This subdivision 
15.30 	also applies to all health care providers and facilities that submit charges to workers' 
15.31 	compensation payers for treatment of a workers' compensation injury compensable under 
15.32 	chapter 176, or to reparation obligors for treatment of an injury compensable under 
15.33 	chapter 65B. This section may be implemented as the contracts for health care providers 
15.34 	and facilities renew as long as it is fully implemented by January 1, 2008.

16.1 	Sec. 23. Minnesota Statutes 2005 Supplement, section 65B.49, subdivision 5a, is 
16.2 	amended to read:
16.3 		Subd. 5a.Rental vehicles. (a) Every plan of reparation security, wherever issued,
16.4 	insuring a natural person as named insured, covering private passenger vehicles as defined 
16.5 	under section 65B.001, subdivision 3, and pickup trucks and vans as defined under section 
16.6 	168.011 must: (1) provide that all of the obligation for damage and loss of use to a rented 
16.7 	private passenger vehicle, including pickup trucks and vans as defined under section 
16.8 	168.011, and rented trucks with a registered gross vehicle weight of 26,000 pounds or less 
16.9 	would be covered by the property damage liability portion of the plan; and (2) extend 
16.10 	the plan's basic economic loss benefits, residual liability insurance, and uninsured and 
16.11 	underinsured motorist coverages to the operation or use of the rented motor vehicle. This 
16.12 	subdivision does not apply to plans of reparation security covering only motor vehicles 
16.13 	registered under section 168.10, subdivision 1a, 1b, 1c, or 1d, or recreational equipment 
16.14 	as defined under section 168.011. The obligation of the plan must not be contingent on 
16.15 	fault or negligence. In all cases where the plan's property damage liability coverage is less 
16.16 	than $35,000, the coverage available under the subdivision must be $35,000. Other than 
16.17 	as described in this paragraph or in; paragraph (i), clause (2); or  paragraph (j), nothing 
16.18 	in this section amends or alters the provisions of the plan of reparation security as to 
16.19 	primacy of the coverages in this section.
16.20 	(b) A vehicle is rented for purposes of this subdivision:
16.21 	(1) if the rate for the use of the vehicle is determined on a monthly, weekly, or 
16.22 	daily basis; or
16.23 	(2) during the time that a vehicle is loaned as a replacement for a vehicle being 
16.24 	serviced or repaired regardless of whether the customer is charged a fee for the use 
16.25 	of the vehicle.
16.26 	A vehicle is not rented for the purposes of this subdivision if the rate for the vehicle's 
16.27 	use is determined on a period longer than one month or if the term of the rental agreement 
16.28 	is longer than one month. A vehicle is not rented for purposes of this subdivision if the 
16.29 	rental agreement has a purchase or buyout option or otherwise functions as a substitute for 
16.30 	purchase of the vehicle.
16.31 	(c) The policy or certificate issued by the plan must inform the insured of the 
16.32 	application of the plan to private passenger rental vehicles, including pickup trucks and 
16.33 	vans as defined under section 168.011, and that the insured may not need to purchase 
16.34 	additional coverage from the rental company.
16.35 	(d) Where an insured has two or more vehicles covered by a plan or plans of 
16.36 	reparation security containing the rented motor vehicle coverage required under paragraph 
17.1 	(a), the insured may select the plan the insured wishes to collect from and that plan is 
17.2 	entitled to a pro rata contribution from the other plan or plans based upon the property 
17.3 	damage limits of liability. If the person renting the motor vehicle is also covered by the 
17.4 	person's employer's insurance policy or the employer's automobile self-insurance plan, 
17.5 	the reparation obligor under the employer's policy or self-insurance plan has primary 
17.6 	responsibility to pay claims arising from use of the rented vehicle.
17.7 	(e) A notice advising the insured of rental vehicle coverage must be given by the 
17.8 	reparation obligor to each current insured with the first renewal notice after January 1, 
17.9 	1989. The notice must be approved by the commissioner of commerce. The commissioner 
17.10 	may specify the form of the notice.
17.11 	(f) When a motor vehicle is rented in this state, there must be attached to the rental 
17.12 	contract a separate form containing must contain a written notice in at least 10-point bold 
17.13 	type, if printed, or in capital letters, if typewritten, which states:
17.14 	Under Minnesota law, a personal automobile insurance policy issued in Minnesota
17.15 	must: (1) cover the rental of this motor vehicle against damage to the vehicle and 
17.16 	against loss of use of the vehicle; and (2) extend the policy's basic economic loss 
17.17 	benefits, residual liability insurance, and uninsured and underinsured motorist 
17.18 	coverages to the operation or use of a rented motor vehicle. Therefore, purchase of 
17.19 	any collision damage waiver or similar insurance affected in this rental contract is 
17.20 	not necessary if your policy was issued in Minnesota. In addition, purchase of any 
17.21 	additional liability insurance is not necessary if your policy was issued in Minnesota 
17.22 	unless you wish to have coverage for liability that exceeds the amount specified in 
17.23 	your personal automobile insurance policy.
17.24 	No collision damage waiver or other insurance offered as part of or in conjunction with 
17.25 	a rental of a motor vehicle may be sold unless the person renting the vehicle provides a 
17.26 	written acknowledgment that the above consumer protection notice has been read and 
17.27 	understood.
17.28 	(g) When damage to a rented vehicle is covered by a plan of reparation security as 
17.29 	provided under paragraph (a), the rental contract must state that payment by the reparation 
17.30 	obligor within the time limits of section 72A.201 is acceptable, and prior payment by 
17.31 	the renter is not required.
17.32 	(h) Compensation for the loss of use of a damaged rented motor vehicle is limited to 
17.33 	a period no longer than 14 days.
17.34 	(i)(1) For purposes of this paragraph subdivision, "rented motor vehicle" means a 
17.35 	rented vehicle described in paragraph (a), using the definition of "rented" provided in 
17.36 	paragraph (b).
18.1 	(2) Notwithstanding section 169.09, subdivision 5a, an owner of a rented motor 
18.2 	vehicle is not vicariously liable for legal damages resulting from the operation of the 
18.3 	rented motor vehicle in an amount greater than $100,000 because of bodily injury to one 
18.4 	person in any one accident and, subject to the limit for one person, $300,000 because of 
18.5 	injury to two or more persons in any one accident, and $50,000 because of injury to or 
18.6 	destruction of property of others in any one accident, if the owner of the rented motor 
18.7 	vehicle has in effect, at the time of the accident, a policy of insurance or self-insurance, as 
18.8 	provided in section 65B.48, subdivision 3, covering losses up to at least the amounts set 
18.9 	forth in this paragraph. Nothing in this paragraph alters or affects the obligations of an 
18.10 	owner of a rented motor vehicle to comply with the requirements of compulsory insurance 
18.11 	through a policy of insurance as provided in section 65B.48, subdivision 2, or through 
18.12 	self-insurance as provided in section 65B.48, subdivision 3, which policy of insurance or 
18.13 	self-insurance must apply whenever the operator is not covered by a plan of reparation 
18.14 	security as provided under paragraph (a); or with the obligations arising from section 
18.15 	72A.125 for products sold in conjunction with the rental of a motor vehicle. Nothing in 
18.16 	this paragraph alters or affects liability, other than vicarious liability, of an owner of 
18.17 	a rented motor vehicle.
18.18 	(3) The dollar amounts stated in this paragraph shall be adjusted for inflation 
18.19 	based upon the Consumer Price Index for all urban consumers, known as the CPI-U, 
18.20 	published by the United States Bureau of Labor Statistics. The dollar amounts stated 
18.21 	in this paragraph are based upon the value of that index for July 1995, which is the 
18.22 	reference base index for purposes of this paragraph. The dollar amounts in this paragraph 
18.23 	shall change effective January 1 of each odd-numbered year based upon the percentage 
18.24 	difference between the index for July of the preceding year and the reference base index, 
18.25 	calculated to the nearest whole percentage point. The commissioner shall announce and 
18.26 	publish, on or before September 30 of the preceding year, the changes in the dollar 
18.27 	amounts required by this paragraph to take effect on January 1 of each odd-numbered 
18.28 	year. The commissioner shall use the most recent revision of the July index available as 
18.29 	of September 1. Changes in the dollar amounts must be in increments of $5,000, and no 
18.30 	change shall be made in a dollar amount until the change in the index requires at least 
18.31 	a $5,000 change. If the United States Bureau of Labor Statistics changes the base year 
18.32 	upon which the CPI-U is based, the commissioner shall make the calculations necessary 
18.33 	to convert from the old base year to the new base year. If the CPI-U is discontinued, the 
18.34 	commissioner shall use the available index that is most similar to the CPI-U.
18.35 	(j) The plan of reparation security covering the owner of a rented motor vehicle is 
18.36 	excess of any residual liability coverage insuring an operator of a rented motor vehicle if 
19.1 	the vehicle is loaned as a replacement for a vehicle being serviced or repaired, regardless 
19.2 	of whether a fee is charged for use of the vehicle, provided that the vehicle so loaned is 
19.3 	owned by the service or repair business.
19.4 	(k) Notwithstanding any other law to the contrary, the owner of a rented private 
19.5 	passenger vehicle is responsible for all damages and loss of use to a rented private 
19.6 	passenger vehicle, which is caused directly by weather-related natural phenomena.

19.7 	Sec. 24. Minnesota Statutes 2004, section 70A.07, is amended to read:
19.8 	70A.07 RATES AND FORMS OPEN TO INSPECTION.
19.9 	All rates, supplementary rate information, and forms furnished to the commissioner 
19.10 	under this chapter shall, as soon as the commissioner's review has been completed within 
19.11 	ten days of their effective date, be open to public inspection at any reasonable time.

19.12 	Sec. 25. Minnesota Statutes 2005 Supplement, section 72A.201, subdivision 6, is 
19.13 	amended to read:
19.14 		Subd. 6.Standards for automobile insurance claims handling, settlement offers, 
19.15 	and agreements. In addition to the acts specified in subdivisions 4, 5, 7, 8, and 9, the 
19.16 	following acts by an insurer, adjuster, or a self-insured or self-insurance administrator 
19.17 	constitute unfair settlement practices:
19.18 	(1) if an automobile insurance policy provides for the adjustment and settlement 
19.19 	of an automobile total loss on the basis of actual cash value or replacement with like 
19.20 	kind and quality and the insured is not an automobile dealer, failing to offer one of the 
19.21 	following methods of settlement:
19.22 	(a) comparable and available replacement automobile, with all applicable taxes, 
19.23 	license fees, at least pro rata for the unexpired term of the replaced automobile's license, 
19.24 	and other fees incident to the transfer or evidence of ownership of the automobile paid, at 
19.25 	no cost to the insured other than the deductible amount as provided in the policy;
19.26 	(b) a cash settlement based upon the actual cost of purchase of a comparable 
19.27 	automobile, including all applicable taxes, license fees, at least pro rata for the unexpired 
19.28 	term of the replaced automobile's license, and other fees incident to transfer of evidence 
19.29 	of ownership, less the deductible amount as provided in the policy. The costs must be 
19.30 	determined by:
19.31 	(i) the cost of a comparable automobile, adjusted for mileage, condition, and options, 
19.32 	in the local market area of the insured, if such an automobile is available in that area; or
19.33 	(ii) one of two or more quotations obtained from two or more qualified sources 
19.34 	located within the local market area when a comparable automobile is not available in 
20.1 	the local market area. The insured shall be provided the information contained in all 
20.2 	quotations prior to settlement; or
20.3 	(iii) any settlement or offer of settlement which deviates from the procedure above 
20.4 	must be documented and justified in detail. The basis for the settlement or offer of 
20.5 	settlement must be explained to the insured;
20.6 	(2) if an automobile insurance policy provides for the adjustment and settlement 
20.7 	of an automobile partial loss on the basis of repair or replacement with like kind and 
20.8 	quality and the insured is not an automobile dealer, failing to offer one of the following 
20.9 	methods of settlement:
20.10 	(a) to assume all costs, including reasonable towing costs, for the satisfactory repair 
20.11 	of the motor vehicle. Satisfactory repair includes repair of both obvious and hidden 
20.12 	damage as caused by the claim incident. This assumption of cost may be reduced by 
20.13 	applicable policy provision; or
20.14 	(b) to offer a cash settlement sufficient to pay for satisfactory repair of the vehicle. 
20.15 	Satisfactory repair includes repair of obvious and hidden damage caused by the claim 
20.16 	incident, and includes reasonable towing costs;
20.17 	(3) regardless of whether the loss was total or partial, in the event that a damaged 
20.18 	vehicle of an insured cannot be safely driven, failing to exercise the right to inspect 
20.19 	automobile damage prior to repair within five business days following receipt of 
20.20 	notification of claim. In other cases the inspection must be made in 15 days;
20.21 	(4) regardless of whether the loss was total or partial, requiring unreasonable travel 
20.22 	of a claimant or insured to inspect a replacement automobile, to obtain a repair estimate, 
20.23 	to allow an insurer to inspect a repair estimate, to allow an insurer to inspect repairs made 
20.24 	pursuant to policy requirements, or to have the automobile repaired;
20.25 	(5) regardless of whether the loss was total or partial, if loss of use coverage 
20.26 	exists under the insurance policy, failing to notify an insured at the time of the insurer's 
20.27 	acknowledgment of claim, or sooner if inquiry is made, of the fact of the coverage, 
20.28 	including the policy terms and conditions affecting the coverage and the manner in which 
20.29 	the insured can apply for this coverage;
20.30 	(6) regardless of whether the loss was total or partial, failing to include the insured's 
20.31 	deductible in the insurer's demands under its subrogation rights. Subrogation recovery 
20.32 	must be shared at least on a proportionate basis with the insured, unless the deductible 
20.33 	amount has been otherwise recovered by the insured, except that when an insurer is 
20.34 	recovering directly from an uninsured third party by means of installments, the insured 
20.35 	must receive the full deductible share as soon as that amount is collected and before any 
20.36 	part of the total recovery is applied to any other use. No deduction for expenses may be 
21.1 	made from the deductible recovery unless an attorney is retained to collect the recovery, in 
21.2 	which case deduction may be made only for a pro rata share of the cost of retaining the 
21.3 	attorney. An insured is not bound by any settlement of its insurer's subrogation claim with 
21.4 	respect to the deductible amount, unless the insured receives, as a result of the subrogation 
21.5 	settlement, the full amount of the deductible. Recovery by the insurer and receipt by the 
21.6 	insured of less than all of the insured's deductible amount does not affect the insured's 
21.7 	rights to recover any unreimbursed portion of the deductible from parties liable for the loss;
21.8 	(7) requiring as a condition of payment of a claim that repairs to any damaged 
21.9 	vehicle must be made by a particular contractor or repair shop or that parts, other than 
21.10 	window glass, must be replaced with parts other than original equipment parts or engaging 
21.11 	in any act or practice of intimidation, coercion, threat, incentive, or inducement for or 
21.12 	against an insured to use a particular contractor or repair shop. Consumer benefits included 
21.13 	within preferred vendor programs must not be considered an incentive or inducement. 
21.14 	At the time a claim is reported, the insurer must provide the following advisory to the 
21.15 	insured or claimant:
21.16 	"Minnesota law gives You have the legal right to choose a repair shop to fix your 
21.17 	vehicle. Your policy will cover the reasonable costs of repairing your vehicle to its 
21.18 	pre-accident condition no matter where you have repairs made. Have you selected a 
21.19 	repair shop or would you like a referral?"
21.20 	After an insured has indicated that the insured has selected a repair shop, the insurer 
21.21 	must cease all efforts to influence the insured's or claimant's choice of repair shop;
21.22 	(8) where liability is reasonably clear, failing to inform the claimant in an automobile 
21.23 	property damage liability claim that the claimant may have a claim for loss of use of 
21.24 	the vehicle;
21.25 	(9) failing to make a good faith assignment of comparative negligence percentages 
21.26 	in ascertaining the issue of liability;
21.27 	(10) failing to pay any interest required by statute on overdue payment for an 
21.28 	automobile personal injury protection claim;
21.29 	(11) if an automobile insurance policy contains either or both of the time limitation 
21.30 	provisions as permitted by section 65B.55, subdivisions 1 and 2, failing to notify the 
21.31 	insured in writing of those limitations at least 60 days prior to the expiration of that time 
21.32 	limitation;
21.33 	(12) if an insurer chooses to have an insured examined as permitted by section 
21.34 	65B.56, subdivision 1, failing to notify the insured of all of the insured's rights and 
21.35 	obligations under that statute, including the right to request, in writing, and to receive 
21.36 	a copy of the report of the examination;
22.1 	(13) failing to provide, to an insured who has submitted a claim for benefits 
22.2 	described in section 65B.44, a complete copy of the insurer's claim file on the insured, 
22.3 	excluding internal company memoranda, all materials that relate to any insurance fraud 
22.4 	investigation, materials that constitute attorney work-product or that qualify for the 
22.5 	attorney-client privilege, and medical reviews that are subject to section 145.64, within ten 
22.6 	business days of receiving a written request from the insured. The insurer may charge 
22.7 	the insured a reasonable copying fee. This clause supersedes any inconsistent provisions 
22.8 	of sections 72A.49 to 72A.505;
22.9 	(14) if an automobile policy provides for the adjustment or settlement of an 
22.10 	automobile loss due to damaged window glass, failing to provide payment to the insured's 
22.11 	chosen vendor based on a competitive price that is fair and reasonable within the local 
22.12 	industry at large.
22.13 	Where facts establish that a different rate in a specific geographic area actually served 
22.14 	by the vendor is required by that market, that geographic area must be considered. This 
22.15 	clause does not prohibit an insurer from recommending a vendor to the insured or from 
22.16 	agreeing with a vendor to perform work at an agreed-upon price, provided, however, 
22.17 	that before recommending a vendor, the insurer shall offer its insured the opportunity to 
22.18 	choose the vendor. If the insurer recommends a vendor, the insurer must also provide 
22.19 	the following advisory:
22.20 	"Minnesota law gives you the right to go to any glass vendor you choose, and 
22.21 	prohibits me from pressuring you to choose a particular vendor.";
22.22 	(15) requiring that the repair or replacement of motor vehicle glass and related 
22.23 	products and services be made in a particular place or shop or by a particular entity, or by 
22.24 	otherwise limiting the ability of the insured to select the place, shop, or entity to repair or 
22.25 	replace the motor vehicle glass and related products and services; or
22.26 	(16) engaging in any act or practice of intimidation, coercion, threat, incentive, or 
22.27 	inducement for or against an insured to use a particular company or location to provide 
22.28 	the motor vehicle glass repair or replacement services or products. For purposes of this 
22.29 	section, a warranty shall not be considered an inducement or incentive.

22.30 	Sec. 26. Minnesota Statutes 2004, section 72C.10, subdivision 1, is amended to read:
22.31 		Subdivision 1.Readability compliance; filing and approval. No insurer shall 
22.32 	make, issue, amend, or renew any policy or contract after the dates specified in section  
22.33 	72C.11 for the applicable type of policy unless the contract is in compliance with the 
22.34 	requirements of sections  72C.06 to  72C.09 and unless the contract is filed with the 
22.35 	commissioner for approval. The contract shall be deemed approved 90 60 days after filing 
23.1 	unless disapproved by the commissioner within the 90-day 60-day period. When an 
23.2 	insurer, service plan corporation, or the Minnesota Comprehensive Health Association 
23.3 	fails to respond to an objection or inquiry within 60 days, the filing is automatically 
23.4 	disapproved. A resubmission is required if action by the Department of Commerce 
23.5 	is subsequently requested. An additional filing fee is required for the resubmission. 
23.6 	The commissioner shall not unreasonably withhold approval. Any disapproval shall be 
23.7 	delivered to the insurer in writing, stating the grounds therefor. Any policy filed with the 
23.8 	commissioner shall be accompanied by a Flesch scale readability analysis and test score 
23.9 	and by the insurer's certification that the policy or contract is in its judgment readable 
23.10 	based on the factors specified in sections  72C.06 to  72C.08. 

23.11 	Sec. 27. Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision 
23.12 	to read:
23.13 		Subd. 1a.Assigned risk plan. "Assigned risk plan" means:
23.14 	(1) the method to provide workers' compensation coverage to employers unable to 
23.15 	obtain coverage through licensed workers' compensation companies; and
23.16 	(2) the procedures established by the commissioner to implement that method of 
23.17 	providing coverage including administration of all assigned risk losses and reserves.

23.18 	Sec. 28. Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision 
23.19 	to read:
23.20 		Subd. 1b.Employer. "Employer" has the meaning given in section 176.011, 
23.21 	subdivision 10.

23.22 	Sec. 29. Minnesota Statutes 2004, section 79.251, subdivision 1, is amended to read:
23.23 		Subdivision 1.General duties of commissioner. (a)(1) The commissioner shall 
23.24 	have all the usual powers and authorities necessary for the discharge of the commissioner's 
23.25 	duties under this section and may contract with individuals in discharge of those duties. 
23.26 	The commissioner shall audit the reserves established (a) for individual cases arising 
23.27 	under policies and contracts of coverage issued under subdivision 4 and (b) for the total 
23.28 	book of business issued under subdivision 4. If the commissioner determines on the basis 
23.29 	of an audit that there is an excess surplus in the assigned risk plan, the commissioner must 
23.30 	notify the commissioner of finance who shall transfer assets of the plan equal to the excess 
23.31 	surplus to the budget reserve account in the general fund.
24.1 	(2) The commissioner shall monitor the operations of section  79.252 and this section 
24.2 	and shall periodically make recommendations to the governor and legislature when 
24.3 	appropriate, for improvement in the operation of those sections. 
24.4 	(3) All insurers and self-insurance administrators issuing policies or contracts under 
24.5 	subdivision 4 shall pay to the commissioner a .25 percent assessment on premiums for 
24.6 	policies and contracts of coverage issued under subdivision 4 for the purpose of defraying 
24.7 	the costs of performing the duties under clauses (1) and (2). Proceeds of the assessment 
24.8 	shall be deposited in the state treasury and credited to the general fund.
24.9 	(4) The assigned risk plan shall not be deemed a state agency.
24.10 	(5) The commissioner shall monitor and have jurisdiction over all reserves 
24.11 	maintained for assigned risk plan losses.
24.12 	(b) As used in this subdivision, "excess surplus" means the amount of assigned 
24.13 	risk plan assets in excess of the amount needed to pay all current liabilities of the plan, 
24.14 	including, but not limited to:
24.15 	(1) administrative expenses;
24.16 	(2) benefit claims; and
24.17 	(3) if the assigned risk plan is dissolved under subdivision 8, the amounts that would 
24.18 	be due insurers who have paid assessments to the plan.

24.19 	Sec. 30. Minnesota Statutes 2004, section 79.251, is amended by adding a subdivision 
24.20 	to read:
24.21 		Subd. 2a.Assigned risk rating plan. (a) Employers insured through the assigned 
24.22 	risk plan are subject to paragraphs (b) and (c).
24.23 	(b) Classifications must be assigned according to a uniform classification system 
24.24 	approved by the commissioner.
24.25 	(c) Rates must be modified according to an experience rating plan approved by the 
24.26 	commissioner. Any experience rating plan is subject to Minnesota Rules, parts 2700.2800 
24.27 	and 2700.2900.

24.28 	Sec. 31. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
24.29 	to read:
24.30 		Subd. 2a.Minimum qualifications. Any employer that (1) is required to carry 
24.31 	workers' compensation insurance pursuant to chapter 176 and (2) has a current written 
24.32 	notice of refusal to insure pursuant to subdivision 2, is entitled to coverage upon making 
24.33 	written application to the assigned risk plan, and paying the applicable premium.

25.1 	Sec. 32. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
25.2 	to read:
25.3 		Subd. 3a.Disqualifying factors. An employer may be denied or terminated from 
25.4 	coverage through the assigned risk plan if the employer:
25.5 	(1) applies for coverage for only a portion of the employer's statutory liability under 
25.6 	chapter 176, excluding wrap-up policies;
25.7 	(2) has an outstanding debt due and owing to the assigned risk plan at the time of 
25.8 	renewal arising from a prior policy;
25.9 	(3) persistently refuses to permit completion of an adequate payroll audit;
25.10 	(4) repeatedly submits misleading or erroneous payroll information; or
25.11 	(5) flagrantly disregards safety or loss control recommendations. Cancellation for 
25.12 	nonpayment of premium may be initiated by the service contractor upon 60 days' written 
25.13 	notice to the employer pursuant to section 176.185, subdivision 1. 

25.14 	Sec. 33. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
25.15 	to read:
25.16 		Subd. 3b.Occupational disease exposure. An employer having a significant 
25.17 	occupational disease exposure, as determined by the commissioner, to be entitled to 
25.18 	coverage shall have physical examinations made:
25.19 	(a) of employees who have not been examined within one year of the date of 
25.20 	application for assignment;
25.21 	(b) of new employees before hiring; and
25.22 	(c) of terminated employees. Upon request, the findings and reports of doctors 
25.23 	making examinations, together with x-rays and other original exhibits, must be furnished 
25.24 	to the assigned risk plan or the Department of Labor and Industry.

25.25 	Sec. 34. Minnesota Statutes 2005 Supplement, section 79A.04, subdivision 2, is 
25.26 	amended to read:
25.27 		Subd. 2.Minimum deposit. The minimum deposit is 110 percent of the private 
25.28 	self-insurer's estimated future liability. The deposit may be used to secure payment of 
25.29 	all administrative and legal costs, and unpaid assessments required by section 79A.12, 
25.30 	subdivision 2, relating to or arising from its or other employers' self-insuring. As used 
25.31 	in this section, "private self-insurer" includes both current and former members of the 
25.32 	self-insurers' security fund; and "private self-insurers' estimated future liability" means 
25.33 	the private self-insurers' total of estimated future liability as determined by an Associate 
25.34 	or Fellow of the Casualty Actuarial Society every year for group member private 
26.1 	self-insurers and, for a nongroup member private self-insurer's authority to self-insure, 
26.2 	every year for the first five years. After the first five years, the nongroup member's total 
26.3 	shall be as determined by an Associate or Fellow of the Casualty Actuarial Society at least 
26.4 	every two years, and each such actuarial study shall include a projection of future losses 
26.5 	during the period until the next scheduled actuarial study, less payments anticipated to 
26.6 	be made during that time.
26.7 	All data and information furnished by a private self-insurer to an Associate or 
26.8 	Fellow of the Casualty Actuarial Society for purposes of determining private self-insurers' 
26.9 	estimated future liability must be certified by an officer of the private self-insurer to be 
26.10 	true and correct with respect to payroll and paid losses, and must be certified, upon 
26.11 	information and belief, to be true and correct with respect to reserves. The certification 
26.12 	must be made by sworn affidavit. In addition to any other remedies provided by law, 
26.13 	the certification of false data or information pursuant to this subdivision may result in a 
26.14 	fine imposed by the commissioner of commerce on the private self-insurer up to the 
26.15 	amount of $5,000, and termination of the private self-insurers' authority to self-insure. 
26.16 	The determination of private self-insurers' estimated future liability by an Associate or 
26.17 	Fellow of the Casualty Actuarial Society shall be conducted in accordance with standards 
26.18 	and principles for establishing loss and loss adjustment expense reserves by the Actuarial 
26.19 	Standards Board, an affiliate of the American Academy of Actuaries. The commissioner 
26.20 	may reject an actuarial report that does not meet the standards and principles of the 
26.21 	Actuarial Standards Board, and may further disqualify the actuary who prepared the report 
26.22 	from submitting any future actuarial reports pursuant to this chapter. Within 30 days after 
26.23 	the actuary has been served by the commissioner with a notice of disqualification, an 
26.24 	actuary who is aggrieved by the disqualification may request a hearing to be conducted in 
26.25 	accordance with chapter 14. Based on a review of the actuarial report, the commissioner 
26.26 	of commerce may require an increase in the minimum security deposit in an amount the 
26.27 	commissioner considers sufficient.
26.28 	In addition, the Minnesota self-insurers' security fund may, at its sole discretion 
26.29 	and cost, undertake an independent actuarial review or an actuarial study of a private 
26.30 	self-insurers' estimated future liability as defined herein. The review or study must be 
26.31 	conducted by an associate or fellow of the Casualty Actuarial Society. The actuary has 
26.32 	the right to receive and review data and information of the self-insurer necessary for 
26.33 	the actuary to complete its review or study. A copy of this report must be filed with the 
26.34 	commissioner and a copy must be furnished to the self-insurer.
26.35 	Estimated future liability is determined by first taking the total amount of the 
26.36 	self-insured's future liability of workers' compensation claims and then deducting the 
27.1 	total amount which is estimated to be returned to the self-insurer from any specific 
27.2 	excess insurance coverage, aggregate excess insurance coverage, and any supplementary 
27.3 	benefits or second injury benefits which are estimated to be reimbursed by the special 
27.4 	compensation fund. However, in the determination of estimated future liability, the 
27.5 	actuary for the self-insurer shall not take a credit for any excess insurance or reinsurance 
27.6 	which is provided by a captive insurance company which is wholly owned by the 
27.7 	self-insurer. Supplementary benefits or second injury benefits will not be reimbursed by 
27.8 	the special compensation fund unless the special compensation fund assessment pursuant 
27.9 	to section 176.129 is paid and the reports required thereunder are filed with the special 
27.10 	compensation fund. In the case of surety bonds, bonds shall secure administrative and 
27.11 	legal costs in addition to the liability for payment of compensation reflected on the face of 
27.12 	the bond. In no event shall the security be less than the last retention limit selected by the 
27.13 	self-insurer with the Workers' Compensation Reinsurance Association, provided that the 
27.14 	commissioner may allow former members to post less than the Workers' Compensation 
27.15 	Reinsurance Association retention level if that amount is adequate to secure payment 
27.16 	of the self-insurers' estimated future liability, as defined in this subdivision, including 
27.17 	payment of claims, administrative and legal costs, and unpaid assessments required by 
27.18 	section 79A.12, subdivision 2. The posting or depositing of security pursuant to this 
27.19 	section shall release all previously posted or deposited security from any obligations under 
27.20 	the posting or depositing and any surety bond so released shall be returned to the surety. 
27.21 	Any other security shall be returned to the depositor or the person posting the bond.
27.22 	As a condition for the granting or renewing of a certificate to self-insure, the 
27.23 	commissioner may require a private self-insurer to furnish any additional security the 
27.24 	commissioner considers sufficient to insure payment of all claims under chapter 176.

27.25 	Sec. 35. Minnesota Statutes 2004, section 79A.23, subdivision 3, is amended to read:
27.26 		Subd. 3.Operational audit. (a) The commissioner, prior to authorizing surplus 
27.27 	distribution of a commercial self-insurance group's first fund year or no later than after 
27.28 	the third anniversary of the group's authority to self-insure, may conduct an operational 
27.29 	audit of the commercial self-insurance group's claim handling and reserve practices as 
27.30 	well as its underwriting procedures to determine if they adhere to the group's business 
27.31 	plan and sound business practices. The commissioner may select outside consultants to 
27.32 	assist in conducting the audit. After completion of the audit, the commissioner shall either 
27.33 	renew or revoke the commercial self-insurance group's authority to self-insure. The 
27.34 	commissioner may also order any changes deemed necessary in the claims handling, 
27.35 	reserving practices, or underwriting procedures of the group.
28.1 	(b) The cost of the operational audit shall be borne by the commercial self-insurance 
28.2 	group.

28.3 	Sec. 36. Minnesota Statutes 2004, section 79A.32, is amended to read:
28.4 	79A.32 REPORTING TO MINNESOTA WORKERS' COMPENSATION 
28.5 	INSURERS' ASSOCIATION LICENSED DATA SERVICE ORGANIZATIONS.
28.6 		Subdivision 1.Required activity. Each self-insurer shall perform the following 
28.7 	activities:
28.8 	(1) maintain membership in and report loss experience data to the Minnesota 
28.9 	Workers' Compensation Insurers Association, or a licensed data service organization, 
28.10 	in accordance with the statistical plan and rules of the organization as approved by the 
28.11 	commissioner;
28.12 	(2) establish a plan for merit rating which shall be consistently applied to all 
28.13 	insureds, provided that members of a data service organization may use merit rating plans 
28.14 	developed by that data service organization;
28.15 	(3) provide an annual report to the commissioner containing the information and 
28.16 	prepared in the form required by the commissioner; and
28.17 	(4) keep a record of the losses paid by the self-insurers and premiums for the 
28.18 	group self-insurers.
28.19 		Subd. 2.Permitted activity. In addition to any other activities not prohibited by 
28.20 	this chapter, self-insurers may Through data service organizations licensed under chapter 
28.21 	79, self insurers may:
28.22 	(1) through licensed data service organizations, individually, or with self-insurers 
28.23 	commonly owned, managed, or controlled, conduct research and collect statistics to 
28.24 	investigate, identify, and classify information relating to causes or prevention of losses; and
28.25 	(2) at the request of a private self insurer or self insurer group, submit and collect 
28.26 	data, including payroll and loss data; and perform calculations, including calculations of 
28.27 	experience modifications of individual self-insured employers.
28.28 	(2) develop and use classification plans and rates based upon any reasonable factors; 
28.29 	and
28.30 	(3) develop rules for the assignment of risks to classifications.
28.31 		Subd. 3.Delayed reporting. Private self-insurers established under sections  
28.32 	79A.01 to  79A.18 prior to August 1, 1995, need not begin filing the reports required 
28.33 	under subdivision 1 until January 1, 1998.

28.34 	Sec. 37.  REPEALER.
 29.1 	Minnesota Rules, parts 2781.0100; 2781.0200; 2781.0300; 2781.0400; 2781.0500; 
29.2 	and 2781.0600, are repealed.