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, purchases, filings, utilization reviews, 
1.4 	and claims; enacting an interstate insurance product regulation compact and 
1.5 	providing for its administration; regulating the Minnesota uniform health care 
1.6 	identification card; requiring certain reports; amending Minnesota Statutes 2004, 
1.7 	sections 61A.02, subdivision 3; 61A.092, subdivision 3; 62A.02, subdivision 
1.8 	3; 62A.095, subdivision 1; 62A.17, subdivisions 1, 2; 62A.27; 62A.3093; 
1.9 	62C.14, subdivisions 9, 10; 62E.13, subdivision 3; 62E.14, subdivision 5; 
1.10 	62J.60, subdivisions 2, 3; 62L.02, subdivision 24; 62M.01, subdivision 2; 
1.11 	62M.09, subdivision 9; 62S.05, by adding a subdivision; 62S.08, subdivision 3; 
1.12 	62S.081, subdivision 4; 62S.10, subdivision 2; 62S.13, by adding a subdivision; 
1.13 	62S.14, subdivision 2; 62S.15; 62S.20, subdivision 1; 62S.24, subdivisions 1, 
1.14 	3, 4, by adding subdivisions; 62S.25, subdivision 6, by adding a subdivision; 
1.15 	62S.26; 62S.265, subdivision 1; 62S.266, subdivision 2; 62S.29, subdivision 1; 
1.16 	62S.30; 70A.07; 72C.10, subdivision 1; 79.01, by adding subdivisions; 79.251, 
1.17 	subdivision 1, by adding a subdivision; 79.252, by adding subdivisions; 79A.23, 
1.18 	subdivision 3; 79A.32; 123A.21, by adding a subdivision; Minnesota Statutes 
1.19 	2005 Supplement, sections 45.22; 45.23; 62A.316; 65B.49, subdivision 5a; 
1.20 	72A.201, subdivision 6; 79A.04, subdivision 2; 256B.0571; proposing coding 
1.21 	for new law in Minnesota Statutes, chapters 43A; 61A; 62A; 62Q; 62S; repealing 
1.22 	Minnesota Statutes 2005 Supplement, section 256B.0571, subdivisions 2, 5, 
1.23 	11; Minnesota Rules, parts 2781.0100; 2781.0200; 2781.0300; 2781.0400; 
1.24 	2781.0500; 2781.0600.
1.25 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.26 	Section 1. [43A.312] CENTER FOR HEALTH CARE PURCHASING 
1.27 	IMPROVEMENT.
1.28 		Subdivision 1.Establishment; administration. The commissioner shall establish 
1.29 	and administer the Center for Health Care Purchasing Improvement as an administrative 
1.30 	unit within the Department of Employee Relations. The Center for Health Care Purchasing 
1.31 	Improvement shall support the state in its efforts to be a more prudent and efficient 
1.32 	purchaser of quality health care services. The center shall aid the state in developing and 
2.1 	using more common strategies and approaches for health care performance measurement 
2.2 	and health care purchasing. The common strategies and approaches must promote greater 
2.3 	transparency of health care costs and quality, and greater accountability for health 
2.4 	care results and improvement. The center shall also identify barriers to more efficient, 
2.5 	effective, quality health care and options for overcoming the barriers.
2.6 		Subd. 2.Staffing; duties; scope. (a) The commissioner may appoint a director, and 
2.7 	up to three additional senior-level staff or codirectors, and other staff as needed who are 
2.8 	under the direction of the commissioner. The staff of the center are in the unclassified 
2.9 	service.
2.10 	(b) With the authorization of the commissioner of employee relations, and in 
2.11 	consultation or interagency agreement with the appropriate commissioners of state 
2.12 	agencies, the director, or codirectors, may:
2.13 	(1) initiate projects to develop plan designs for state health care purchasing;
2.14 	(2) require reports or surveys to evaluate the performance of current health care 
2.15 	purchasing strategies;
2.16 	(3) calculate fiscal impacts, including net savings and return on investment, of health 
2.17 	care purchasing strategies and initiatives;
2.18 	(4) conduct policy audits of state programs to measure conformity to state statute or 
2.19 	other purchasing initiatives or objectives;
2.20 	(5) support the Administrative Uniformity Committee under section 62J.50 and 
2.21 	other relevant groups or activities to advance agreement on health care administrative 
2.22 	process streamlining;
2.23 	(6) consult with the Health Economics Unit of the Department of Health regarding 
2.24 	reports and assessments of the health care marketplace;
2.25 	(7) consult with the Departments of Health and Commerce regarding health care 
2.26 	regulatory issues and legislative initiatives;
2.27 	(8) work with appropriate Department of Human Services staff and the Centers for 
2.28 	Medicare and Medicaid Services to address federal requirements and conformity issues 
2.29 	for health care purchasing;
2.30 	(9) assist the Minnesota Comprehensive Health Association in health care 
2.31 	purchasing strategies;
2.32 	(10) convene medical directors of agencies engaged in health care purchasing for 
2.33 	advice, collaboration, and exploring possible synergies;
2.34 	(11) contact and participate with other relevant health care task forces, study 
2.35 	activities, and similar efforts with regard to health care performance measurement and 
2.36 	performance-based purchasing; and
3.1 	(12) assist in seeking external funding through appropriate grants or other funding 
3.2 	opportunities and may administer grants and externally funded projects.
3.3 		Subd. 3.Report. The commissioner must report annually to the legislature and the 
3.4 	governor on the operations, activities, and impacts of the center. The report must be 
3.5 	posted on the Department of Employee Relations Web site and must be available to the 
3.6 	public. The report must include a description of the state's efforts to develop and use more 
3.7 	common strategies for health care performance measurement and health care purchasing. 
3.8 	The report must also include an assessment of the impacts of these efforts, especially in 
3.9 	promoting greater transparency of health care costs and quality, and greater accountability 
3.10 	for health care results and improvement.

3.11 	Sec. 2. Minnesota Statutes 2005 Supplement, section 45.22, is amended to read:
3.12 	45.22 LICENSE EDUCATION APPROVAL.
3.13 	(a) License education courses must be approved in advance by the commissioner. 
3.14 	Each sponsor who offers a license education course must have at least one coordinator, 
3.15 	approved by the commissioner, be approved by the commissioner. Each approved 
3.16 	sponsor must have at least one coordinator who meets the criteria specified in Minnesota 
3.17 	Rules, chapter 2809, and who is responsible for supervising the educational program 
3.18 	and assuring compliance with all laws and rules. "Sponsor" means any person or entity 
3.19 	offering approved education.
3.20 	(b) For coordinators with an initial approval date before August 1, 2005, approval 
3.21 	will expire on December 31, 2005. For courses with an initial approval date on or before 
3.22 	December 31, 2000, approval will expire on April 30, 2006. For courses with an initial 
3.23 	approval date after January 1, 2001, but before August 1, 2005, approval will expire 
3.24 	on April 30, 2007.

3.25 	Sec. 3. Minnesota Statutes 2005 Supplement, section 45.23, is amended to read:
3.26 	45.23 LICENSE EDUCATION FEES.
3.27 	The following fees must be paid to the commissioner:
3.28 	(1) initial course approval, $10 for each hour or fraction of one hour of education 
3.29 	course approval sought. Initial course approval expires on the last day of the 24th month 
3.30 	after the course is approved;
3.31 	(2) renewal of course approval, $10 per course. Renewal of course approval expires 
3.32 	on the last day of the 24th month after the course is renewed;
3.33 	(3) initial coordinator sponsor approval, $100. Initial coordinator approval expires 
3.34 	on the last day of the 24th month after the coordinator is approved;  Initial sponsor 
4.1 	approval issued under this section is valid for a period not to exceed 24 months and 
4.2 	expires on January 31 of the renewal year assigned by the commissioner. Active sponsors 
4.3 	who have at least one approved coordinator as of the effective date of this section are 
4.4 	deemed to be approved sponsors and are not required to submit an initial application 
4.5 	for sponsor approval; and
4.6 	(4) renewal of coordinator sponsor approval, $10. Renewal of coordinator approval 
4.7 	expires on the last day of the 24th month after the coordinator is renewed. Each renewal 
4.8 	of sponsor approval is valid for a period of 24 months. Active sponsors who have at least 
4.9 	one approved coordinator as of the effective date of this section will have an expiration 
4.10 	date of January 31, 2008.

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

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

4.31 	Sec. 5. Minnesota Statutes 2004, section 61A.092, subdivision 3, is amended to read:
4.32 		Subd. 3.Notice of options. Upon termination of or layoff from employment of a 
4.33 	covered employee, the employer shall inform the employee of:
4.34 	(1) the employee's right to elect to continue the coverage;
5.1 	(2) the amount the employee must pay monthly to the employer to retain the 
5.2 	coverage;
5.3 	(3) the manner in which and the office of the employer to which the payment to 
5.4 	the employer must be made; and
5.5 	(4) the time by which the payments to the employer must be made to retain coverage.
5.6 	The employee has 60 days within which to elect coverage. The 60-day period shall 
5.7 	begin to run on the date coverage would otherwise terminate or on the date upon which 
5.8 	notice of the right to coverage is received, whichever is later.
5.9 	If the covered employee or covered dependent dies during the 60-day election period 
5.10 	and before the covered employee makes an election to continue or reject continuation, then 
5.11 	the covered employee will be considered to have elected continuation of coverage. The 
5.12 	estate ofbeneficiary previously selected by the former employee or covered dependent 
5.13 	would then be entitled to a death benefit equal to the amount of insurance that could have 
5.14 	been continued less any unpaid premium owing as of the date of death.
5.15 	Notice must be in writing and sent by first class mail to the employee's last known 
5.16 	address which the employee has provided to the employer.
5.17 	A notice in substantially the following form is sufficient: "As a terminated or laid 
5.18 	off employee, the law authorizes you to maintain your group insurance benefits, in an 
5.19 	amount equal to the amount of insurance in effect on the date you terminated or were laid 
5.20 	off from employment, for a period of up to 18 months. To do so, you must notify your 
5.21 	former employer within 60 days of your receipt of this notice that you intend to retain this 
5.22 	coverage and must make a monthly payment of $............ at ............. by the ............. of 
5.23 	each month."

5.24 	Sec. 6. [61A.65] INTERSTATE INSURANCE PRODUCT REGULATION 
5.25 	COMPACT.
5.26 		Subdivision 1.Enactment and form. The Interstate Insurance Product Regulation 
5.27 	Compact is enacted into law and entered into with all other states legally joining in it in 
5.28 	substantially the following form:
5.29 	Article I. Purposes
5.30 	The purposes of this Compact are, through means of joint and cooperative action 
5.31 	among the Compacting States:
5.32 	1. To promote and protect the interest of consumers of individual and group annuity, 
5.33 	life insurance, disability income and long-term care insurance products;
5.34 	2. To develop uniform standards for insurance products covered under the Compact;
6.1 	3. To establish a central clearinghouse to receive and provide prompt review of 
6.2 	insurance products covered under the Compact and, in certain cases, advertisements related 
6.3 	thereto, submitted by insurers authorized to do business in one or more Compacting States;
6.4 	4. To give appropriate regulatory approval to those product filings and 
6.5 	advertisements satisfying the applicable uniform standard;
6.6 	5. To improve coordination of regulatory resources and expertise between state 
6.7 	insurance departments regarding the setting of uniform standards and review of insurance 
6.8 	products covered under the Compact;
6.9 	6. To create the Interstate Insurance Product Regulation Commission; and
6.10 	7. To perform these and such other related functions as may be consistent with the 
6.11 	state regulation of the business of insurance.
6.12 	Article II. Definitions
6.13 	For purposes of this Compact:
6.14 	1. "Advertisement" means any material designed to create public interest in 
6.15 	a Product, or induce the public to purchase, increase, modify, reinstate, borrow on, 
6.16 	surrender, replace or retain a policy, as more specifically defined in the Rules and 
6.17 	Operating Procedures of the Commission.
6.18 	2. "Bylaws" mean those bylaws established by the Commission for its governance, 
6.19 	or for directing or controlling the Commission's actions or conduct.
6.20 	3. "Compacting State" means any State which has enacted this Compact legislation 
6.21 	and which has not withdrawn pursuant to Article XIV, Section 1, or been terminated 
6.22 	pursuant to Article XIV, Section 2.
6.23 	4. "Commission" means the "Interstate Insurance Product Regulation Commission" 
6.24 	established by this Compact.
6.25 	5. "Commissioner" means the chief insurance regulatory official of a State including, 
6.26 	but not limited to commissioner, superintendent, director or administrator.
6.27 	6. "Domiciliary State" means the state in which an Insurer is incorporated or 
6.28 	organized; or, in the case of an alien Insurer, its state of entry.
6.29 	7. "Insurer" means any entity licensed by a State to issue contracts of insurance for 
6.30 	any of the lines of insurance covered by this Act.
6.31 	8. "Member" means the person chosen by a Compacting State as its representative 
6.32 	to the Commission, or his or her designee.
6.33 	9. "Noncompacting State" means any State which is not at the time a Compacting 
6.34 	State.
6.35 	10. "Operating Procedures" mean procedures promulgated by the Commission 
6.36 	implementing a Rule, Uniform Standard, or a provision of this Compact.
7.1 	11. "Product" means the form of a policy or contract, including any application, 
7.2 	endorsement, or related form which is attached to and made a part of the policy or 
7.3 	contract, and any evidence of coverage or certificate, for an individual or group annuity, 
7.4 	life insurance, disability income or long-term care insurance product that an Insurer is 
7.5 	authorized to issue.
7.6 	12. "Rule" means a statement of general or particular applicability and future effect 
7.7 	promulgated by the Commission, including a Uniform Standard developed pursuant to 
7.8 	Article VII of this Compact, designed to implement, interpret, or prescribe law or policy 
7.9 	or describing the organization, procedure, or practice requirements of the Commission, 
7.10 	which shall have the force and effect of law in the Compacting States.
7.11 	13. "State" means any state, district, or territory of the United States of America.
7.12 	14. "Third Party Filer" means an entity that submits a Product filing to the 
7.13 	Commission on behalf of an Insurer.
7.14 	15. "Uniform Standard" means a standard adopted by the Commission for a 
7.15 	Product line, pursuant to Article VII of this Compact, and shall include all of the Product 
7.16 	requirements in aggregate; provided, that each Uniform Standard shall be construed, 
7.17 	whether express or implied, to prohibit the use of any inconsistent, misleading or 
7.18 	ambiguous provisions in a Product and the form of the Product made available to the public 
7.19 	shall not be unfair, inequitable or against public policy as determined by the Commission.
7.20 	Article III. Establishment of the Commission and Venue
7.21 	1. The Compacting States hereby create and establish a joint public agency known 
7.22 	as the "Interstate Insurance Product Regulation Commission." Pursuant to Article IV, 
7.23 	the Commission will have the power to develop Uniform Standards for Product lines, 
7.24 	receive and provide prompt review of Products filed therewith, and give approval to those 
7.25 	Product filings satisfying applicable Uniform Standards; provided, it is not intended for 
7.26 	the Commission to be the exclusive entity for receipt and review of insurance product 
7.27 	filings. Nothing herein shall prohibit any Insurer from filing its product in any State 
7.28 	wherein the Insurer is licensed to conduct the business of insurance; and any such filing 
7.29 	shall be subject to the laws of the State where filed.
7.30 	2. The Commission is a body corporate and politic, and an instrumentality of the 
7.31 	Compacting States.
7.32 	3. The Commission is solely responsible for its liabilities except as otherwise 
7.33 	specifically provided in this Compact.
7.34 	4. Venue is proper and judicial proceedings by or against the Commission shall be 
7.35 	brought solely and exclusively in a Court of competent jurisdiction where the principal 
7.36 	office of the Commission is located.
8.1 	Article IV. Powers of the Commission
8.2 	The Commission shall have the following powers:
8.3 	1. To promulgate Rules, pursuant to Article VII of this Compact, which shall have 
8.4 	the force and effect of law and shall be binding in the Compacting States to the extent and 
8.5 	in the manner provided in this Compact;
8.6 	2. To exercise its rule-making authority and establish reasonable Uniform Standards 
8.7 	for Products covered under the Compact, and Advertisement related thereto, which 
8.8 	shall have the force and effect of law and shall be binding in the Compacting States, 
8.9 	but only for those Products filed with the Commission, provided, that a Compacting 
8.10 	State shall have the right to opt out of such Uniform Standard pursuant to Article VII, to 
8.11 	the extent and in the manner provided in this Compact, and, provided further, that any 
8.12 	Uniform Standard established by the Commission for long-term care insurance products 
8.13 	may provide the same or greater protections for consumers as, but shall not provide less 
8.14 	than, those protections set forth in the National Association of Insurance Commissioners' 
8.15 	Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, 
8.16 	respectively, adopted as of 2001. The Commission shall consider whether any subsequent 
8.17 	amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care 
8.18 	Insurance Model Regulation adopted by the NAIC require amending of the Uniform 
8.19 	Standards established by the Commission for long-term care insurance products;
8.20 	3. To receive and review in an expeditious manner Products filed with the 
8.21 	Commission, and rate filings for disability income and long-term care insurance Products, 
8.22 	and give approval of those Products and rate filings that satisfy the applicable Uniform 
8.23 	Standard, where such approval shall have the force and effect of law and be binding on the 
8.24 	Compacting States to the extent and in the manner provided in the Compact;
8.25 	4. To receive and review in an expeditious manner Advertisement relating to 
8.26 	long-term care insurance products for which Uniform Standards have been adopted by 
8.27 	the Commission, and give approval to all Advertisement that satisfies the applicable 
8.28 	Uniform Standard. For any product covered under this Compact, other than long-term 
8.29 	care insurance products, the Commission shall have the authority to require an insurer 
8.30 	to submit all or any part of its Advertisement with respect to that product for review or 
8.31 	approval prior to use, if the Commission determines that the nature of the product is such 
8.32 	that an Advertisement of the product could have the capacity or tendency to mislead the 
8.33 	public. The actions of the Commission as provided in this section shall have the force 
8.34 	and effect of law and shall be binding in the Compacting States to the extent and in the 
8.35 	manner provided in the Compact;
9.1 	5. To exercise its rule-making authority and designate Products and Advertisement 
9.2 	that may be subject to a self-certification process without the need for prior approval 
9.3 	by the Commission;
9.4 	6. To promulgate Operating Procedures, pursuant to Article VII of this Compact, 
9.5 	which shall be binding in the Compacting States to the extent and in the manner provided 
9.6 	in this compact;
9.7 	7. To bring and prosecute legal proceedings or actions in its name as the 
9.8 	Commission; provided, that the standing of any state insurance department to sue or be 
9.9 	sued under applicable law shall not be affected;
9.10 	8. To issue subpoenas requiring the attendance and testimony of witnesses and the 
9.11 	production of evidence;
9.12 	9. To establish and maintain offices;
9.13 	10. To purchase and maintain insurance and bonds;
9.14 	11. To borrow, accept or contract for services of personnel, including, but not limited 
9.15 	to, employees of a Compacting State;
9.16 	12. To hire employees, professionals or specialists, and elect or appoint officers, and 
9.17 	to fix their compensation, define their duties and give them appropriate authority to carry 
9.18 	out the purposes of the Compact, and determine their qualifications; and to establish the 
9.19 	Commission's personnel policies and programs relating to, among other things, conflicts 
9.20 	of interest, rates of compensation and qualifications of personnel;
9.21 	13. To accept any and all appropriate donations and grants of money, equipment, 
9.22 	supplies, materials and services, and to receive, utilize and dispose of the same; provided 
9.23 	that at all times the Commission shall strive to avoid any appearance of impropriety;
9.24 	14. To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, 
9.25 	hold, improve or use, any property, real, personal or mixed; provided that at all times the 
9.26 	Commission shall strive to avoid any appearance of impropriety;
9.27 	15. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise 
9.28 	dispose of any property, real, personal or mixed;
9.29 	16. To remit filing fees to Compacting States as may be set forth in the Bylaws, 
9.30 	Rules or Operating Procedures;
9.31 	17. To enforce compliance by Compacting States with Rules, Uniform Standards, 
9.32 	Operating Procedures and Bylaws;
9.33 	18. To provide for dispute resolution among Compacting States;
9.34 	19. To advise Compacting States on issues relating to Insurers domiciled or doing 
9.35 	business in Noncompacting jurisdictions, consistent with the purposes of this Compact;
10.1 	20. To provide advice and training to those personnel in state insurance departments 
10.2 	responsible for product review, and to be a resource for state insurance departments;
10.3 	21. To establish a budget and make expenditures;
10.4 	22. To borrow money;
10.5 	23. To appoint committees, including advisory committees comprising Members, 
10.6 	state insurance regulators, state legislators or their representatives, insurance industry 
10.7 	and consumer representatives, and such other interested persons as may be designated 
10.8 	in the Bylaws;
10.9 	24. To provide and receive information from, and to cooperate with law enforcement 
10.10 	agencies;
10.11 	25. To adopt and use a corporate seal; and
10.12 	26. To perform such other functions as may be necessary or appropriate to achieve 
10.13 	the purposes of this Compact consistent with the state regulation of the business of 
10.14 	insurance.
10.15 	Article V. Organization of the Commission
10.16 	1. Membership, Voting and Bylaws
10.17 	a. Each Compacting State shall have and be limited to one Member. Each Member 
10.18 	shall be qualified to serve in that capacity pursuant to applicable law of the Compacting 
10.19 	State. Any Member may be removed or suspended from office as provided by the law 
10.20 	of the State from which he or she shall be appointed. Any vacancy occurring in the 
10.21 	Commission shall be filled in accordance with the laws of the Compacting State wherein 
10.22 	the vacancy exists. Nothing herein shall be construed to affect the manner in which a 
10.23 	Compacting State determines the election or appointment and qualification of its own 
10.24 	Commissioner.
10.25 	b. Each Member shall be entitled to one vote and shall have an opportunity 
10.26 	to participate in the governance of the Commission in accordance with the Bylaws. 
10.27 	Notwithstanding any provision herein to the contrary, no action of the Commission with 
10.28 	respect to the promulgation of a Uniform Standard shall be effective unless two-thirds of 
10.29 	the Members vote in favor thereof.
10.30 	c. The Commission shall, by a majority of the Members, prescribe Bylaws to govern 
10.31 	its conduct as may be necessary or appropriate to carry out the purposes, and exercise the 
10.32 	powers, of the Compact, including, but not limited to:
10.33 	i. Establishing the fiscal year of the Commission;
10.34 	ii. Providing reasonable procedures for appointing and electing members, as well as 
10.35 	holding meetings, of the Management Committee;
11.1 	iii. Providing reasonable standards and procedures: (i) for the establishment and 
11.2 	meetings of other committees, and (ii) governing any general or specific delegation of any 
11.3 	authority or function of the Commission;
11.4 	iv. Providing reasonable procedures for calling and conducting meetings of the 
11.5 	Commission that consist of a majority of Commission members, ensuring reasonable 
11.6 	advance notice of each such meeting and providing for the right of citizens to attend each 
11.7 	such meeting with enumerated exceptions designed to protect the public's interest, the 
11.8 	privacy of individuals, and insurers' proprietary information, including trade secrets. The 
11.9 	Commission may meet in camera only after a majority of the entire membership votes to 
11.10 	close a meeting en toto or in part. As soon as practicable, the Commission must make 
11.11 	public (i) a copy of the vote to close the meeting revealing the vote of each Member with 
11.12 	no proxy votes allowed, and (ii) votes taken during such meeting;
11.13 	v. Establishing the titles, duties and authority and reasonable procedures for the 
11.14 	election of the officers of the Commission;
11.15 	vi. Providing reasonable standards and procedures for the establishment of the 
11.16 	personnel policies and programs of the Commission. Notwithstanding any civil service 
11.17 	or other similar laws of any Compacting State, the Bylaws shall exclusively govern the 
11.18 	personnel policies and programs of the Commission;
11.19 	vii. Promulgating a code of ethics to address permissible and prohibited activities of 
11.20 	commission members and employees; and 
11.21 	viii. Providing a mechanism for winding up the operations of the Commission and 
11.22 	the equitable disposition of any surplus funds that may exist after the termination of the 
11.23 	Compact after the payment and/or reserving of all of its debts and obligations.
11.24 	d. The Commission shall publish its bylaws in a convenient form and file a copy 
11.25 	thereof and a copy of any amendment thereto, with the appropriate agency or officer in 
11.26 	each of the Compacting States.
11.27 	2. Management Committee, Officers and Personnel
11.28 	a. A Management Committee comprising no more than 14 members shall be 
11.29 	established as follows:
11.30 	i. One member from each of the six Compacting States with the largest premium 
11.31 	volume for individual and group annuities, life, disability income and long-term care 
11.32 	insurance products, determined from the records of the NAIC for the prior year;
11.33 	ii. Four members from those Compacting States with at least two percent of the 
11.34 	market based on the premium volume described above, other than the six Compacting 
11.35 	States with the largest premium volume, selected on a rotating basis as provided in the 
11.36 	Bylaws; and
12.1 	iii. Four members from those Compacting States with less than two percent of the 
12.2 	market, based on the premium volume described above, with one selected from each of 
12.3 	the four zone regions of the NAIC as provided in the Bylaws.
12.4 	b. The Management Committee shall have such authority and duties as may be set 
12.5 	forth in the Bylaws, including but not limited to:
12.6 	i. Managing the affairs of the Commission in a manner consistent with the Bylaws 
12.7 	and purposes of the Commission;
12.8 	ii. Establishing and overseeing an organizational structure within, and appropriate 
12.9 	procedures for, the Commission to provide for the creation of Uniform Standards and 
12.10 	other Rules, receipt and review of product filings, administrative and technical support 
12.11 	functions, review of decisions regarding the disapproval of a product filing, and the review 
12.12 	of elections made by a Compacting State to opt out of a Uniform Standard; provided that a 
12.13 	Uniform Standard shall not be submitted to the Compacting States for adoption unless 
12.14 	approved by two-thirds of the members of the Management Committee;
12.15 	iii. Overseeing the offices of the Commission; and
12.16 	iv. Planning, implementing, and coordinating communications and activities with 
12.17 	other state, federal and local government organizations in order to advance the goals 
12.18 	of the Commission.
12.19 	c. The Commission shall elect annually officers from the Management Committee, 
12.20 	with each having such authority and duties, as may be specified in the Bylaws.
12.21 	d. The Management Committee may, subject to the approval of the Commission, 
12.22 	appoint or retain an executive director for such period, upon such terms and conditions 
12.23 	and for such compensation as the Commission may deem appropriate. The executive 
12.24 	director shall serve as secretary to the Commission, but shall not be a Member of the 
12.25 	Commission. The executive director shall hire and supervise such other staff as may be 
12.26 	authorized by the Commission.
12.27 	3. Legislative and Advisory Committees
12.28 	a. A legislative committee comprising state legislators or their designees shall be 
12.29 	established to monitor the operations of, and make recommendations to, the Commission, 
12.30 	including the Management Committee; provided that the manner of selection and term of 
12.31 	any legislative committee member shall be as set forth in the Bylaws. Prior to the adoption 
12.32 	by the Commission of any Uniform Standard, revision to the Bylaws, annual budget or 
12.33 	other significant matter as may be provided in the Bylaws, the Management Committee 
12.34 	shall consult with and report to the legislative committee.
13.1 	b. The Commission shall establish two advisory committees, one of which shall 
13.2 	comprise consumer representatives independent of the insurance industry, and the other 
13.3 	comprising insurance industry representatives.
13.4 	c. The Commission may establish additional advisory committees as its Bylaws may 
13.5 	provide for the carrying out of its functions.
13.6 	4. Corporate Records of the Commission
13.7 	The Commission shall maintain its corporate books and records in accordance 
13.8 	with the Bylaws.
13.9 	5. Qualified Immunity, Defense, and Indemnification
13.10 	a. The Members, officers, executive director, employees, and representatives of 
13.11 	the Commission shall be immune from suit and liability, either personally or in their 
13.12 	official capacity, for any claim for damage to or loss of property or personal injury or 
13.13 	other civil liability caused by or arising out of any actual or alleged act, error or omission 
13.14 	that occurred, or that the person against whom the claim is made had a reasonable 
13.15 	basis for believing occurred within the scope of Commission employment, duties or 
13.16 	responsibilities; provided, that nothing in this paragraph shall be construed to protect any 
13.17 	such person from suit and/or liability for any damage, loss, injury or liability caused by 
13.18 	the intentional or willful and wanton misconduct of that person.
13.19 	b. The Commission shall defend any Member, officer, executive director, employee, 
13.20 	or representative of the Commission in any civil action seeking to impose liability arising 
13.21 	out of any actual or alleged act, error, or omission that occurred within the scope of 
13.22 	Commission employment, duties, or responsibilities, or that the person against whom 
13.23 	the claim is made had a reasonable basis for believing occurred within the scope of 
13.24 	Commission employment, duties, or responsibilities; provided, that nothing herein shall 
13.25 	be construed to prohibit that person from retaining his or her own counsel; and provided 
13.26 	further, that the actual or alleged act, error, or omission did not result from that person's 
13.27 	intentional or willful and wanton misconduct.
13.28 	c. The Commission shall indemnify and hold harmless any Member, officer, 
13.29 	executive director, employee, or representative of the Commission for the amount of any 
13.30 	settlement or judgment obtained against that person arising out of any actual or alleged 
13.31 	act, error, or omission that occurred within the scope of Commission employment, duties, 
13.32 	or responsibilities, or that such person had a reasonable basis for believing occurred 
13.33 	within the scope of Commission employment, duties, or responsibilities, provided, that the 
13.34 	actual or alleged act, error, or omission did not result from the intentional or willful and 
13.35 	wanton misconduct of that person.
13.36 	Article VI. Meetings and Acts of the Commission
14.1 	1. The Commission shall meet and take such actions as are consistent with the 
14.2 	provisions of this Compact and the Bylaws.
14.3 	2. Each Member of the Commission shall have the right and power to cast a vote to 
14.4 	which that Compacting State is entitled and to participate in the business and affairs of the 
14.5 	Commission. A Member shall vote in person or by such other means as provided in the 
14.6 	Bylaws. The Bylaws may provide for Members' participation in meetings by telephone or 
14.7 	other means of communication.
14.8 	3. The Commission shall meet at least once during each calendar year. Additional 
14.9 	meeting shall be held as set forth in the Bylaws.
14.10 	Article VII. Rules and Operating Procedures: Rulemaking Functions
14.11 	of the Commission and Opting Out of Uniform Standards
14.12 	1. Rulemaking Authority. The Commission shall promulgate reasonable Rules, 
14.13 	including Uniform Standards, and Operating Procedures in order to effectively and 
14.14 	efficiently achieve the purposes of this Compact. Notwithstanding the foregoing, in the 
14.15 	event the Commission exercises its rulemaking authority in a manner that is beyond the 
14.16 	scope of the purposes of this Act, or the powers granted hereunder, then such an action by 
14.17 	the Commission shall be invalid and have no force and effect.
14.18 	2. Rulemaking Procedure. Rules and Operating Procedures shall be made pursuant 
14.19 	to a rulemaking process that conforms to the Model State Administrative Procedure Act of 
14.20 	1981 as amended, as may be appropriate to the operations of the Commission. Before 
14.21 	the Commission adopts a Uniform Standard, the Commission shall give written notice 
14.22 	to the relevant state legislative committee(s) in each Compacting State responsible for 
14.23 	insurance issues of its intention to adopt the Uniform Standard. The Commission in 
14.24 	adopting a Uniform Standard shall consider fully all submitted materials and issue a 
14.25 	concise explanation of its decision.
14.26 	3. Effective Date and Opt Out of a Uniform Standard. A Uniform Standard shall 
14.27 	become effective 90 days after its promulgation by the Commission or such later date 
14.28 	as the Commission may determine; provided, however, that a Compacting State may 
14.29 	opt out of a Uniform Standard as provided in this Article. "Opt out" shall be defined as 
14.30 	any action by a Compacting State to decline to adopt or participate in a promulgated 
14.31 	Uniform Standard. All other Rules and Operating Procedures, and amendments thereto, 
14.32 	shall become effective as of the date specified in each Rule, Operating Procedure, or 
14.33 	amendment.
14.34 	4. Opt Out Procedure. A Compacting State may opt out of a Uniform Standard, 
14.35 	either by legislation or regulation duly promulgated by the Insurance Department under 
14.36 	the Compacting State's Administrative Procedure Act. If a Compacting State elects to opt 
15.1 	out of a Uniform Standard by regulation, it must (a) give written notice to the Commission 
15.2 	no later than ten business days after the Uniform Standard is promulgated, or at the time 
15.3 	the State becomes a Compacting State and (b) find that the Uniform Standard does not 
15.4 	provide reasonable protections to the citizens of the State, given the conditions in the State. 
15.5 	The Commissioner shall make specific findings of fact and conclusions of law, based on a 
15.6 	preponderance of the evidence, detailing the conditions in the State which warrant a 
15.7 	departure from the Uniform Standard and determining that the Uniform Standard would 
15.8 	not reasonably protect the citizens of the State. The Commissioner must consider and 
15.9 	balance the following factors and find that the conditions in the State and needs of the 
15.10 	citizens of the State outweigh: (i) the intent of the legislature to participate in, and the 
15.11 	benefits of, an interstate agreement to establish national uniform consumer protections for 
15.12 	the Products subject to this Act; and (ii) the presumption that a Uniform Standard adopted 
15.13 	by the Commission provides reasonable protections to consumers of the relevant Product.
15.14 	Notwithstanding the foregoing, a Compacting State may, at the time of its enactment 
15.15 	of this Compact, prospectively opt out of all Uniform Standards involving long-term care 
15.16 	insurance products by expressly providing for such opt out in the enacted Compact, and 
15.17 	such an opt out shall not be treated as a material variance in the offer or acceptance of 
15.18 	any State to participate in this Compact. Such an opt out shall be effective at the time 
15.19 	of enactment of this Compact by the Compacting State and shall apply to all existing 
15.20 	Uniform Standards involving long-term care insurance products and those subsequently 
15.21 	promulgated.
15.22 	5. Effect of Opt Out. If a Compacting State elects to opt out of a Uniform Standard, 
15.23 	the Uniform Standard shall remain applicable in the Compacting State electing to opt out 
15.24 	until such time the opt out legislation is enacted into law or the regulation opting out 
15.25 	becomes effective.
15.26 	Once the opt out of a Uniform Standard by a Compacting State becomes effective 
15.27 	as provided under the laws of that State, the Uniform Standard shall have no further 
15.28 	force and effect in that State unless and until the legislation or regulation implementing 
15.29 	the opt out is repealed or otherwise becomes ineffective under the laws of the State. If a 
15.30 	Compacting State opts out of a Uniform Standard after the Uniform Standard has been 
15.31 	made effective in that State, the opt out shall have the same prospective effect as provided 
15.32 	under Article XIV for withdrawals.
15.33 	6. Stay of Uniform Standard. If a Compacting State has formally initiated the 
15.34 	process of opting out of a Uniform Standard by regulation, and while the regulatory 
15.35 	opt out is pending, the Compacting State may petition the Commission, at least 15 days 
15.36 	before the effective date of the Uniform Standard, to stay the effectiveness of the Uniform 
16.1 	Standard in that State. The Commission may grant a stay if it determines the regulatory 
16.2 	opt out is being pursued in a reasonable manner and there is a likelihood of success. If a 
16.3 	stay is granted or extended by the Commission, the stay or extension thereof may postpone 
16.4 	the effective date by up to 90 days, unless affirmatively extended by the Commission; 
16.5 	provided, a stay may not be permitted to remain in effect for more than one year unless the 
16.6 	Compacting State can show extraordinary circumstances which warrant a continuance of 
16.7 	the stay, including, but not limited to, the existence of a legal challenge which prevents the 
16.8 	Compacting State from opting out. A stay may be terminated by the Commission upon 
16.9 	notice that the rulemaking process has been terminated.
16.10 	7. Not later than 30 days after a Rule or Operating Procedure is promulgated, 
16.11 	any person may file a petition for judicial review of the Rule or Operating Procedure; 
16.12 	provided, that the filing of such a petition shall not stay or otherwise prevent the Rule or 
16.13 	Operating Procedure from becoming effective unless the court finds that the petitioner 
16.14 	has a substantial likelihood of success. The court shall give deference to the actions of 
16.15 	the Commission consistent with applicable law and shall not find the Rule or Operating 
16.16 	Procedure to be unlawful if the Rule or Operating Procedure represents a reasonable 
16.17 	exercise of the Commission's authority.
16.18 	Article VIII. Commission Records and Enforcement
16.19 	1. The Commission shall promulgate Rules establishing conditions and procedures 
16.20 	for public inspection and copying of its information and official records, except such 
16.21 	information and records involving the privacy of individuals and insurers' trade secrets. 
16.22 	The Commission may promulgate additional Rules under which it may make available to 
16.23 	federal and state agencies, including law enforcement agencies, records and information 
16.24 	otherwise exempt from disclosure, and may enter into agreements with such agencies to 
16.25 	receive or exchange information or records subject to nondisclosure and confidentiality 
16.26 	provisions.
16.27 	2. Except as to privileged records, data and information, the laws of any Compacting 
16.28 	State pertaining to confidentiality or nondisclosure shall not relieve any Compacting 
16.29 	State Commissioner of the duty to disclose any relevant records, data or information to 
16.30 	the Commission; provided, that disclosure to the Commission shall not be deemed to 
16.31 	waive or otherwise affect any confidentiality requirement; and further provided, that, 
16.32 	except as otherwise expressly provided in this Act, the Commission shall not be subject 
16.33 	to the Compacting State's laws pertaining to confidentiality and nondisclosure with 
16.34 	respect to records, data and information in its possession. Confidential information 
16.35 	of the Commission shall remain confidential after such information is provided to any 
16.36 	Commissioner.
17.1 	3. The Commission shall monitor Compacting States for compliance with duly 
17.2 	adopted Bylaws, Rules, including Uniform Standards, and Operating Procedures. 
17.3 	The Commission shall notify any noncomplying Compacting State in writing of 
17.4 	its noncompliance with Commission Bylaws, Rules or Operating Procedures. If a 
17.5 	noncomplying Compacting State fails to remedy its noncompliance within the time 
17.6 	specified in the notice of noncompliance, the Compacting State shall be deemed to be in 
17.7 	default as set forth in Article XIV.
17.8 	4. The Commissioner of any State in which an Insurer is authorized to do business, 
17.9 	or is conducting the business of insurance, shall continue to exercise his or her authority 
17.10 	to oversee the market regulation of the activities of the Insurer in accordance with the 
17.11 	provisions of the State's law. The Commissioner's enforcement of compliance with the 
17.12 	Compact is governed by the following provisions:
17.13 	a. With respect to the Commissioner's market regulation of a Product or 
17.14 	Advertisement that is approved or certified to the Commission, the content of the 
17.15 	Product or Advertisement shall not constitute a violation of the provisions, standards or 
17.16 	requirements of the Compact except upon a final order of the Commission, issued at the 
17.17 	request of a Commissioner after prior notice to the Insurer and an opportunity for hearing 
17.18 	before the Commission.
17.19 	b. Before a Commissioner may bring an action for violation of any provision, 
17.20 	standard or requirement of the Compact relating to the content of an Advertisement not 
17.21 	approved or certified to the Commission, the Commission, or an authorized Commission 
17.22 	officer or employee, must authorize the action. However, authorization pursuant to this 
17.23 	paragraph does not require notice to the Insurer, opportunity for hearing or disclosure of 
17.24 	requests for authorization or records of the Commission's action on such requests.
17.25 	Article IX. Dispute Resolution
17.26 	The Commission shall attempt, upon the request of a Member, to resolve any 
17.27 	disputes or other issues that are subject to this Compact and which may arise between two 
17.28 	or more Compacting States, or between Compacting States and Noncompacting States, 
17.29 	and the Commission shall promulgate an Operating Procedure providing for resolution of 
17.30 	such disputes.
17.31 	Article X. Product Filing and Approval
17.32 	1. Insurers and Third Party Filers seeking to have a Product approved by the 
17.33 	Commission shall file the Product with, and pay applicable filing fees to, the Commission. 
17.34 	Nothing in this Act shall be construed to restrict or otherwise prevent an insurer from 
17.35 	filing its Product with the insurance department in any State wherein the insurer is licensed 
18.1 	to conduct the business of insurance, and such filing shall be subject to the laws of the 
18.2 	States where filed.
18.3 	2. The Commission shall establish appropriate filing and review processes and 
18.4 	procedures pursuant to Commission Rules and Operating Procedures. Notwithstanding 
18.5 	any provision herein to the contrary, the Commission shall promulgate Rules to establish 
18.6 	conditions and procedures under which the Commission will provide public access to 
18.7 	Product filing information. In establishing such Rules, the Commission shall consider 
18.8 	the interests of the public in having access to such information, as well as protection of 
18.9 	personal medical and financial information and trade secrets, that may be contained in a 
18.10 	Product filing or supporting information.
18.11 	3. Any Product approved by the Commission may be sold or otherwise issued in 
18.12 	those Compacting States for which the Insurer is legally authorized to do business.
18.13 	Article XI. Review of Commission Decisions Regarding Filings
18.14 	1. Not later than 30 days after the Commission has given notice of a disapproved 
18.15 	Product or Advertisement filed with the Commission, the Insurer or Third Party Filer 
18.16 	whose filing was disapproved may appeal the determination to a review panel appointed 
18.17 	by the Commission. The Commission shall promulgate Rules to establish procedures for 
18.18 	appointing such review panels and provide for notice and hearing. An allegation that the 
18.19 	Commission, in disapproving a Product or Advertisement filed with the Commission, 
18.20 	acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise 
18.21 	not in accordance with the law, is subject to judicial review in accordance with Article 
18.22 	III, Section 4.
18.23 	2. The Commission shall have authority to monitor, review and reconsider Products 
18.24 	and Advertisement subsequent to their filing or approval upon a finding that the product 
18.25 	does not meet the relevant Uniform Standard. Where appropriate, the Commission may 
18.26 	withdraw or modify its approval after proper notice and hearing, subject to the appeal 
18.27 	process in Section 1 above.
18.28 	Article XII. Finance
18.29 	1. The Commission shall pay or provide for the payment of the reasonable expenses 
18.30 	of its establishment and organization. To fund the cost of its initial operations, the 
18.31 	Commission may accept contributions and other forms of funding from the National 
18.32 	Association of Insurance Commissioners, Compacting States, and other sources. 
18.33 	Contributions and other forms of funding from other sources shall be of such a nature 
18.34 	that the independence of the Commission concerning the performance of its duties shall 
18.35 	not be compromised.
19.1 	2. The Commission shall collect a filing fee from each Insurer and Third Party Filer 
19.2 	filing a product with the Commission to cover the cost of the operations and activities 
19.3 	of the Commission and its staff in a total amount sufficient to cover the Commission's 
19.4 	annual budget.
19.5 	3. The Commission's budget for a fiscal year shall not be approved until it has been 
19.6 	subject to notice and comment as set forth in Article VII of this Compact.
19.7 	4. The Commission shall be exempt from all taxation in and by the Compacting 
19.8 	states.
19.9 	5. The Commission shall not pledge the credit of any Compacting State, except by 
19.10 	and with the appropriate legal authority of that Compacting State.
19.11 	6. The Commission shall keep complete and accurate accounts of all its internal 
19.12 	receipts, including grants and donations, and disbursements of all funds under its control. 
19.13 	The internal financial accounts of the Commission shall be subject to the accounting 
19.14 	procedures established under its Bylaws. The financial accounts and reports including the 
19.15 	system of internal controls and procedures of the Commission shall be audited annually by 
19.16 	an independent certified public accountant. Upon the determination of the Commission, 
19.17 	but no less frequently than every three years, the review of the independent auditor shall 
19.18 	include a management and performance audit of the Commission. The Commission shall 
19.19 	make an Annual Report to the Governor and legislature of the Compacting States, which 
19.20 	shall include a report of the independent audit. The Commission's internal accounts shall 
19.21 	not be confidential and such materials may be shared with the Commissioner of any 
19.22 	Compacting State upon request provided, however, that any work papers related to any 
19.23 	internal or independent audit and any information regarding the privacy of individuals and 
19.24 	insurers' proprietary information, including trade secrets, shall remain confidential.
19.25 	7. No Compacting State shall have any claim to or ownership of any property 
19.26 	held by or vested in the Commission or to any Commission funds held pursuant to the 
19.27 	provisions of this Compact.
19.28 	Article XIII. Compacting States, Effective Date and Amendment
19.29 	1. Any State is eligible to become a Compacting State.
19.30 	2. The Compact shall become effective and binding upon legislative enactment 
19.31 	of the Compact into law by two Compacting States; provided, the Commission shall 
19.32 	become effective for purposes of adopting Uniform Standards for, reviewing, and giving 
19.33 	approval or disapproval of, Products filed with the Commission that satisfy applicable 
19.34 	Uniform Standards only after 26 States are Compacting States or, alternatively, by States 
19.35 	representing greater than 40 percent of the premium volume for life insurance, annuity, 
19.36 	disability income and long-term care insurance products, based on records of the NAIC 
20.1 	for the prior year. Thereafter, it shall become effective and binding as to any other 
20.2 	Compacting State upon enactment of the Compact into law by that State.
20.3 	3. Amendments to the Compact may be proposed by the Commission for enactment 
20.4 	by the Compacting States. No amendment shall become effective and binding upon the 
20.5 	Commission and the Compacting States unless and until all Compacting States enact 
20.6 	the amendment into law.
20.7 	Article XIV. Withdrawal, Default and Termination
20.8 	1. Withdrawal
20.9 	a. Once effective, the Compact shall continue in force and remain binding upon each 
20.10 	and every Compacting State; provided, that a Compacting State may withdraw from the 
20.11 	Compact ("Withdrawing State") by enacting a statute specifically repealing the statute 
20.12 	which enacted the Compact into law.
20.13 	b. The effective date of withdrawal is the effective date of the repealing statute. 
20.14 	However, the withdrawal shall not apply to any product filings approved or self-certified, 
20.15 	or any Advertisement of such products, on the date the repealing statute becomes effective, 
20.16 	except by mutual agreement of the Commission and the Withdrawing State unless the 
20.17 	approval is rescinded by the Withdrawing State as provided in Paragraph e of this section.
20.18 	c. The Commissioner of the Withdrawing State shall immediately notify the 
20.19 	Management Committee in writing upon the introduction of legislation repealing this 
20.20 	Compact in the Withdrawing State.
20.21 	d. The Commission shall notify the other Compacting States of the introduction of 
20.22 	such legislation within ten days after its receipt of notice thereof.
20.23 	e. The Withdrawing State is responsible for all obligations, duties and liabilities 
20.24 	incurred through the effective date of withdrawal, including any obligations, the 
20.25 	performance of which extend beyond the effective date of withdrawal, except to the extent 
20.26 	those obligations may have been released or relinquished by mutual agreement of the 
20.27 	Commission and the Withdrawing State. The Commission's approval of Products and 
20.28 	Advertisement prior to the effective date of withdrawal shall continue to be effective and 
20.29 	be given full force and effect in the Withdrawing State, unless formally rescinded by 
20.30 	the Withdrawing State in the same manner as provided by the laws of the Withdrawing 
20.31 	State for the prospective disapproval of products or advertisement previously approved 
20.32 	under state law.
20.33 	f. Reinstatement following withdrawal of any Compacting State shall occur upon 
20.34 	the effective date of the Withdrawing State reenacting the Compact.
20.35 	2. Default
21.1 	a. If the Commission determines that any Compacting State has at any time defaulted 
21.2 	("Defaulting State") in the performance of any of its obligations or responsibilities under 
21.3 	this Compact, the Bylaws or duly promulgated Rules or Operating Procedures, then, after 
21.4 	notice and hearing as set forth in the Bylaws, all rights, privileges and benefits conferred 
21.5 	by this Compact on the Defaulting State shall be suspended from the effective date of 
21.6 	default as fixed by the Commission. The grounds for default include, but are not limited 
21.7 	to, failure of a Compacting State to perform its obligations or responsibilities, and any 
21.8 	other grounds designated in Commission Rules. The Commission shall immediately 
21.9 	notify the Defaulting State in writing of the Defaulting State's suspension pending a cure 
21.10 	of the default. The Commission shall stipulate the conditions and the time period within 
21.11 	which the Defaulting State must cure its default. If the Defaulting State fails to cure the 
21.12 	default within the time period specified by the Commission, the Defaulting State shall 
21.13 	be terminated form the Compact and all rights, privileges and benefits conferred by this 
21.14 	Compact shall be terminated from the effective date of termination.
21.15 	b. Product approvals by the Commission or product self-certifications, or any 
21.16 	Advertisement in connection with such product, that are in force on the effective date of 
21.17 	termination shall remain in force in the Defaulting State in the same manner as if the 
21.18 	Defaulting State had withdrawn voluntarily pursuant to Section 1 of this article.
21.19 	c. Reinstatement following termination of any Compacting State requires a 
21.20 	reenactment of the Compact.
21.21 	3. Dissolution of Compact
21.22 	a. The Compact dissolves effective upon the date of the withdrawal or default of the 
21.23 	Compacting State which reduces membership in the Compact to one Compacting State.
21.24 	b. Upon the dissolution of this Compact, the Compact becomes null and void and 
21.25 	shall be of no further force or effect, and the business and affairs of the Commission shall 
21.26 	be wound up and any surplus funds shall be distributed in accordance with the Bylaws.
21.27 	Article XV. Severability and Construction
21.28 	1. The provisions of this Compact shall be severable; and if any phrase, clause, 
21.29 	sentence, or provision is deemed unenforceable, the remaining provisions of the Compact 
21.30 	shall be enforceable.
21.31 	2. The provisions of this Compact shall be liberally construed to effectuate its 
21.32 	purposes.
21.33 	Article XVI. Binding Effect of Compact and Other Laws
21.34 	1. Other Laws
21.35 	a. Nothing herein prevents the enforcement of any other law of a Compacting State, 
21.36 	except as provided in Paragraph b of this section.
22.1 	b. For any Product approved or certified to the Commission, the Rules, Uniform 
22.2 	Standards, and any other requirements of the Commission shall constitute the exclusive 
22.3 	provisions applicable to the content, approval, and certification of such Products. For 
22.4 	Advertisement that is subject to the Commission's authority, any Rule, Uniform Standard, 
22.5 	or other requirement of the Commission which governs the content of the Advertisement 
22.6 	shall constitute the exclusive provision that a Commissioner may apply to the content of 
22.7 	the Advertisement. Notwithstanding the foregoing, no action taken by the Commission 
22.8 	shall abrogate or restrict: (i) the access of any person to state courts; (ii) remedies available 
22.9 	under state law related to breach of contract, tort, or other laws not specifically directed 
22.10 	to the content of the Product; (iii) state law relating to the construction of insurance 
22.11 	contracts; or (iv) the authority of the attorney general of the state, including but not limited 
22.12 	to maintaining any actions or proceedings, as authorized by law.
22.13 	c. All insurance products filed with individual States shall be subject to the laws 
22.14 	of those States.
22.15 	2. Binding Effect of this Compact
22.16 	a. All lawful actions of the Commission, including all Rules and Operating 
22.17 	Procedures promulgated by the Commission, are binding upon the Compacting States.
22.18 	b. All agreements between the Commission and the Compacting States are binding 
22.19 	in accordance with their terms.
22.20 	c. Upon the request of a party to a conflict over the meaning or interpretation of 
22.21 	Commission actions, and upon a majority vote of the Compacting States, the Commission 
22.22 	may issue advisory opinions regarding the meaning or interpretation in dispute.
22.23 	d. In the event any provision of this Compact exceeds the constitutional limits 
22.24 	imposed on the legislature of any Compacting State, the obligations, duties, powers 
22.25 	or jurisdiction sought to be conferred by that provision upon the Commission shall 
22.26 	be ineffective as to that Compacting State, and those obligations, duties, powers, or 
22.27 	jurisdiction shall remain in the Compacting State and shall be exercised by the agency 
22.28 	thereof to which those obligations, duties, powers, or jurisdiction are delegated by law in 
22.29 	effect at the time this Compact becomes effective.
22.30 		Subd. 2.Commission representative. The commissioner of commerce is the 
22.31 	representative of this state to the commission.

22.32 	Sec. 7. [61A.66] INTERSTATE INSURANCE PRODUCT REGULATION 
22.33 	COMPACT OPT OUT ADMINISTRATION.
22.34 		Subdivision 1.Access to courts. The commissioner must opt out by regulation of 
22.35 	any uniform standard that permits a product to deny a consumer's access to the courts to 
23.1 	resolve a dispute related to the product. In addition to opting out, the commissioner must 
23.2 	petition the commission for a stay of the effective date of the standard.
23.3 		Subd. 2.Effect of opt out on prior product approval. (a) The commission's 
23.4 	approval of a product pursuant to a uniform standard shall have no force and effect 
23.5 	after the effective date of a legislative opt out by this state and that approval is formally 
23.6 	rescinded in advance as permitted under article XIV of the compact.
23.7 	(b) The commissioner shall adopt procedures for implementing the rescission of 
23.8 	approval for products affected by paragraph (a).
23.9 		Subd. 3.Deference by courts. A decision by the commissioner to opt out by 
23.10 	regulation shall be given deference by the courts.

23.11 	Sec. 8. Minnesota Statutes 2004, section 62A.02, subdivision 3, is amended to read:
23.12 		Subd. 3.Standards for disapproval. (a) The commissioner shall, within 60 days 
23.13 	after the filing of any form or rate, disapprove the form or rate:
23.14 	(1) if the benefits provided are not reasonable in relation to the premium charged;
23.15 	(2) if it contains a provision or provisions which are unjust, unfair, inequitable, 
23.16 	misleading, deceptive or encourage misrepresentation of the health plan form, or otherwise 
23.17 	does not comply with this chapter, chapter 62L, or chapter 72A;
23.18 	(3) if the proposed premium rate is excessive or not adequate; or
23.19 	(4) the actuarial reasons and data submitted do not justify the rate.
23.20 	The party proposing a rate has the burden of proving by a preponderance of the 
23.21 	evidence that it does not violate this subdivision.
23.22 	In determining the reasonableness of a rate, the commissioner shall also review 
23.23 	all administrative contracts, service contracts, and other agreements to determine the 
23.24 	reasonableness of the cost of the contracts or agreement and effect of the contracts on the 
23.25 	rate. If the commissioner determines that a contract or agreement is not reasonable, the 
23.26 	commissioner shall disapprove any rate that reflects any unreasonable cost arising out 
23.27 	of the contract or agreement. The commissioner may require any information that the 
23.28 	commissioner deems necessary to determine the reasonableness of the cost.
23.29 	For the purposes of this subdivision, the commissioner shall establish by rule a 
23.30 	schedule of minimum anticipated loss ratios which shall be based on (i) the type or types 
23.31 	of coverage provided, (ii) whether the policy is for group or individual coverage, and 
23.32 	(iii) the size of the group for group policies. Except for individual policies of disability 
23.33 	or income protection insurance, the minimum anticipated loss ratio shall not be less 
23.34 	than 50 percent after the first year that a policy is in force. All applicants for a policy 
23.35 	shall be informed in writing at the time of application of the anticipated loss ratio of the 
24.1 	policy. "Anticipated loss ratio" means the ratio at the time of filing, at the time of notice 
24.2 	of withdrawal under subdivision 4a, or at the time of subsequent rate revision of the 
24.3 	present value of all expected future benefits, excluding dividends, to the present value 
24.4 	of all expected future premiums.
24.5 	If the commissioner notifies a health carrier that has filed any form or rate that it 
24.6 	does not comply with this chapter, chapter 62L, or chapter 72A, it shall be unlawful for 
24.7 	the health carrier to issue or use the form or rate. In the notice the commissioner shall 
24.8 	specify the reasons for disapproval and state that a hearing will be granted within 20 days 
24.9 	after request in writing by the health carrier.
24.10 	The 60-day period within which the commissioner is to approve or disapprove the 
24.11 	form or rate does not begin to run until a complete filing of all data and materials required 
24.12 	by statute or requested by the commissioner has been submitted.
24.13 	However, if the supporting data is not filed within 30 days after a request by the 
24.14 	commissioner, the rate is not effective and is presumed to be an excessive rate.
24.15 	(b) When an insurer or the Minnesota Comprehensive Health Association fails to 
24.16 	respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
24.17 	A resubmission is required if action by the Department of Commerce is subsequently 
24.18 	requested. An additional filing fee is required for the resubmission.

24.19 	Sec. 9. Minnesota Statutes 2004, section 62A.095, subdivision 1, is amended to read:
24.20 		Subdivision 1.Applicability. (a) No health plan shall be offered, sold, or issued to a 
24.21 	resident of this state, or to cover a resident of this state, unless the health plan complies 
24.22 	with subdivision 2.
24.23 	(b) Health plans providing benefits under health care programs administered by the 
24.24 	commissioner of human services are not subject to the limits described in subdivision 
24.25 	2 but are subject to the right of subrogation provisions under section  256B.37 and the 
24.26 	lien provisions under section  256.015;  256B.042;  256D.03, subdivision 8; or  256L.03, 
24.27 	subdivision 6. 
24.28 	For purposes of this section, "health plan" includes coverage that is excluded under 
24.29 	section 62A.011, subdivision 3, clauses (4), (7), and (10).

24.30 	Sec. 10. Minnesota Statutes 2004, section 62A.17, subdivision 1, is amended to read:
24.31 		Subdivision 1.Continuation of coverage. Every group insurance policy, group 
24.32 	subscriber contract, and health care plan included within the provisions of section  62A.16, 
24.33 	except policies, contracts, or health care plans covering employees of an agency of the 
24.34 	federal government, shall contain a provision which permits every covered employee who 
25.1 	is voluntarily or involuntarily terminated or laid off from employment and every covered 
25.2 	dependent of the covered employee, if the policy, contract, or health care plan remains 
25.3 	in force for active employees of the employer, to elect to continue the coverage for the 
25.4 	employee and dependents. 
25.5 	An employee shall be considered to be laid off from employment if there is a 
25.6 	reduction in hours to the point where the employee is no longer eligible under the policy, 
25.7 	contract, or health care plan. Termination shall not include discharge for gross misconduct.
25.8 	Upon request by the terminated or laid off employee or any covered dependent, a 
25.9 	health carrier must provide the instructions necessary to enable the employee or dependent 
25.10 	to elect and receive continuation of coverage through the insurer in place of the former 
25.11 	employer.

25.12 	Sec. 11. Minnesota Statutes 2004, section 62A.17, subdivision 2, is amended to read:
25.13 		Subd. 2.Responsibility of employee. Every covered employee or dependent 
25.14 	electing to continue coverage shall pay the former employer, on a monthly basis, the 
25.15 	cost of the continued coverage. The policy, contract, or plan must require the group 
25.16 	policyholder or contract holder to, upon request, provide the employee or dependent with 
25.17 	written verification from the insurer of the cost of this coverage promptly at the time 
25.18 	of eligibility for this coverage and at any time during the continuation period. If the 
25.19 	policy, contract, or health care plan is administered by a trust, every covered employee 
25.20 	or dependent electing to continue coverage shall pay the trust the cost of continued 
25.21 	coverage according to the eligibility rules established by the trust. In no event shall the 
25.22 	amount of premium charged exceed 102 percent of the cost to the plan for such period 
25.23 	of coverage for similarly situated employees with respect to whom neither termination 
25.24 	nor layoff has occurred, without regard to whether such cost is paid by the employer or 
25.25 	employee. The employee and every covered dependent shall be eligible to continue the 
25.26 	coverage until the employee becomes covered under another group health plan, or for a 
25.27 	period of 18 months after the termination of or lay off from employment, whichever is 
25.28 	shorter. If the employee becomes covered under another group policy, contract, or health 
25.29 	plan that does not include dependent coverage, every covered dependent remains eligible 
25.30 	to continue coverage with the former employer subject to the conditions specified in this 
25.31 	subdivision. If the employee or any covered dependent becomes covered under another 
25.32 	group policy, contract, or health plan and the new group policy, contract, or health plan 
25.33 	contains any preexisting condition limitations, the employee or dependent may, subject to 
25.34 	the 18-month maximum continuation limit, continue coverage with the former employer 
25.35 	until the preexisting condition limitations have been satisfied. The new policy, contract, or 
26.1 	health plan is primary except as to the preexisting condition. In the case of a newborn 
26.2 	child who is a dependent of the employee, the new policy, contract, or health plan is 
26.3 	primary upon the date of birth of the child, regardless of which policy, contract, or health 
26.4 	plan coverage is deemed primary for the mother of the child.

26.5 	Sec. 12. Minnesota Statutes 2004, section 62A.27, is amended to read:
26.6 	62A.27 COVERAGE OF ADOPTED CHILDREN.
26.7 	(a) A health plan that provides coverage to a Minnesota resident must cover adopted 
26.8 	children of the insured, subscriber, participant, or enrollee on the same basis as other 
26.9 	dependents. Consequently, the plan shall not contain any provision concerning preexisting 
26.10 	condition limitations, insurability, eligibility, or health underwriting approval concerning 
26.11 	children placed for adoption with the participant.
26.12 	(b) The coverage required by this section is effective from the date of placement 
26.13 	for adoption. For purposes of this section, placement for adoption means the assumption 
26.14 	and retention by a person of a legal obligation for total or partial support of a child in 
26.15 	anticipation of adoption of the child. The child's placement with a person terminates upon 
26.16 	the termination of the legal obligation for total or partial support.
26.17 	(c) For the purpose of this section, health plan includes:
26.18 	(1) coverage offered by community integrated service networks;
26.19 	(2) coverage that is designed solely to provide dental or vision care; and
26.20 	(3) any plan under the federal Employee Retirement Income Security Act of 1974 
26.21 	(ERISA), United States Code, title 29, sections 1001 to 1461.
26.22 	(d) No policy or contract covered by this section may require notification to a health 
26.23 	carrier as a condition for this dependent coverage. However, if the policy or contract 
26.24 	mandates an additional premium for each dependent, the health carrier is entitled to 
26.25 	all premiums that would have been collected had the health carrier been aware of the 
26.26 	additional dependent. The health carrier may withhold payment of any health benefits 
26.27 	for the new dependent until it has been compensated with the applicable premium 
26.28 	which would have been owed if the health carrier had been informed of the additional 
26.29 	dependent immediately.

26.30 	Sec. 13. Minnesota Statutes 2004, section 62A.3093, is amended to read:
26.31 	62A.3093 COVERAGE FOR DIABETES.
26.32 		Subdivision 1.Required coverage. A health plan, including a plan providing the 
26.33 	coverage specified in section  62A.011, subdivision 3, clause (10), must provide coverage 
26.34 	for: (1) all physician prescribed medically appropriate and necessary equipment and 
27.1 	supplies used in the management and treatment of diabetes; and (2) diabetes outpatient 
27.2 	self-management training and education, including medical nutrition therapy, that is 
27.3 	provided by a certified, registered, or licensed health care professional working in a 
27.4 	program consistent with the national standards of diabetes self-management education as 
27.5 	established by the American Diabetes Association. Coverage must include persons with 
27.6 	gestational, type I or type II diabetes. Coverage required under this section is subject to 
27.7 	the same deductible or coinsurance provisions applicable to the plan's hospital, medical 
27.8 	expense, medical equipment, or prescription drug benefits. A health carrier may not 
27.9 	reduce or eliminate coverage due to this requirement. 
27.10 		Subd. 2.Medicare Part D exception. A health plan providing the coverage 
27.11 	specified in section 62A.011, subdivision 3, clause (10), is not subject to the requirements 
27.12 	of subdivision 1, clause (1), with respect to equipment and supplies covered under the 
27.13 	Medicare Part D Prescription Drug program, whether or not the covered person is enrolled 
27.14 	in a Medicare Part D plan.
27.15 	This subdivision does not apply to a health plan providing the coverage specified in 
27.16 	section 62A.011, subdivision 3, clause (10), that was in effect on December 31, 2005, if the 
27.17 	covered person remains enrolled in the plan and does not enroll in a Medicare Part D plan.

27.18 	EFFECTIVE DATE. This section is effective retroactive to January 1, 2006.

27.19 	Sec. 14. Minnesota Statutes 2005 Supplement, section 62A.316, is amended to read:
27.20 	62A.316 BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.
27.21 	(a) The basic Medicare supplement plan must have a level of coverage that will 
27.22 	provide:
27.23 	(1) coverage for all of the Medicare Part A inpatient hospital coinsurance amounts, 
27.24 	and 100 percent of all Medicare part A eligible expenses for hospitalization not covered 
27.25 	by Medicare, after satisfying the Medicare Part A deductible;
27.26 	(2) coverage for the daily co-payment amount of Medicare Part A eligible expenses 
27.27 	for the calendar year incurred for skilled nursing facility care;
27.28 	(3) coverage for the coinsurance amount, or in the case of outpatient department 
27.29 	services paid under a prospective payment system, the co-payment amount, of Medicare 
27.30 	eligible expenses under Medicare Part B regardless of hospital confinement, subject to 
27.31 	the Medicare Part B deductible amount;
27.32 	(4) 80 percent of the hospital and medical expenses and supplies incurred during 
27.33 	travel outside the United States as a result of a medical emergency;
28.1 	(5) coverage for the reasonable cost of the first three pints of blood, or equivalent 
28.2 	quantities of packed red blood cells as defined under federal regulations under Medicare 
28.3 	Parts A and B, unless replaced in accordance with federal regulations;
28.4 	(6) 100 percent of the cost of immunizations not otherwise covered under Part D of 
28.5 	the Medicare program and routine screening procedures for cancer screening including 
28.6 	mammograms and pap smears; and
28.7 	(7) 80 percent of coverage for all physician prescribed medically appropriate and 
28.8 	necessary equipment and supplies used in the management and treatment of diabetes 
28.9 	not otherwise covered under Part D of the Medicare program. Coverage must include 
28.10 	persons with gestational, type I, or type II diabetes. Coverage under this clause is subject 
28.11 	to section 62A.3093, subdivision 2. 
28.12 	(b) Only the following optional benefit riders may be added to this plan:
28.13 	(1) coverage for all of the Medicare Part A inpatient hospital deductible amount;
28.14 	(2) a minimum of 80 percent of eligible medical expenses and supplies not covered 
28.15 	by Medicare Part B, not to exceed any charge limitation established by the Medicare 
28.16 	program or state law;
28.17 	(3) coverage for all of the Medicare Part B annual deductible;
28.18 	(4) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and 
28.19 	customary prescription drug expenses. An outpatient prescription drug benefit must not 
28.20 	be included for sale or issuance in a Medicare policy or certificate issued on or after 
28.21 	January 1, 2006;
28.22 	(5) preventive medical care benefit coverage for the following preventative health 
28.23 	services not covered by Medicare:
28.24 	(i) an annual clinical preventive medical history and physical examination that may 
28.25 	include tests and services from clause (ii) and patient education to address preventive 
28.26 	health care measures;
28.27 	(ii) preventive screening tests or preventive services, the selection and frequency of 
28.28 	which is determined to be medically appropriate by the attending physician.
28.29 	Reimbursement shall be for the actual charges up to 100 percent of the 
28.30 	Medicare-approved amount for each service, as if Medicare were to cover the service as 
28.31 	identified in American Medical Association current procedural terminology (AMA CPT) 
28.32 	codes, to a maximum of $120 annually under this benefit. This benefit shall not include 
28.33 	payment for a procedure covered by Medicare;
28.34 	(6) coverage for services to provide short-term at-home assistance with activities of 
28.35 	daily living for those recovering from an illness, injury, or surgery:
28.36 	(i) For purposes of this benefit, the following definitions apply:
29.1 	(A) "activities of daily living" include, but are not limited to, bathing, dressing, 
29.2 	personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally 
29.3 	self-administered, and changing bandages or other dressings;
29.4 	(B) "care provider" means a duly qualified or licensed home health aide/homemaker, 
29.5 	personal care aid, or nurse provided through a licensed home health care agency or 
29.6 	referred by a licensed referral agency or licensed nurses registry;
29.7 	(C) "home" means a place used by the insured as a place of residence, provided 
29.8 	that the place would qualify as a residence for home health care services covered by 
29.9 	Medicare. A hospital or skilled nursing facility shall not be considered the insured's 
29.10 	place of residence;
29.11 	(D) "at-home recovery visit" means the period of a visit required to provide at-home 
29.12 	recovery care, without limit on the duration of the visit, except each consecutive four 
29.13 	hours in a 24-hour period of services provided by a care provider is one visit;
29.14 	(ii) Coverage requirements and limitations:
29.15 	(A) at-home recovery services provided must be primarily services that assist in 
29.16 	activities of daily living;
29.17 	(B) the insured's attending physician must certify that the specific type and 
29.18 	frequency of at-home recovery services are necessary because of a condition for which a 
29.19 	home care plan of treatment was approved by Medicare;
29.20 	(C) coverage is limited to:
29.21 	(I) no more than the number and type of at-home recovery visits certified as 
29.22 	necessary by the insured's attending physician. The total number of at-home recovery 
29.23 	visits shall not exceed the number of Medicare-approved home care visits under a 
29.24 	Medicare-approved home care plan of treatment;
29.25 	(II) the actual charges for each visit up to a maximum reimbursement of $40 per visit;
29.26 	(III) $1,600 per calendar year;
29.27 	(IV) seven visits in any one week;
29.28 	(V) care furnished on a visiting basis in the insured's home;
29.29 	(VI) services provided by a care provider as defined in this section;
29.30 	(VII) at-home recovery visits while the insured is covered under the policy or 
29.31 	certificate and not otherwise excluded;
29.32 	(VIII) at-home recovery visits received during the period the insured is receiving 
29.33 	Medicare-approved home care services or no more than eight weeks after the service date 
29.34 	of the last Medicare-approved home health care visit;
29.35 	(iii) Coverage is excluded for:
29.36 	(A) home care visits paid for by Medicare or other government programs; and
30.1 	(B) care provided by family members, unpaid volunteers, or providers who are 
30.2 	not care providers;
30.3 	(7) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and 
30.4 	customary prescription drug expenses to a maximum of $1,200 paid by the issuer annually 
30.5 	under this benefit. An issuer of Medicare supplement insurance policies that elects to 
30.6 	offer this benefit rider shall also make available coverage that contains the rider specified 
30.7 	in clause (4). An outpatient prescription drug benefit must not be included for sale or 
30.8 	issuance in a Medicare policy or certificate issued on or after January 1, 2006.

30.9 	EFFECTIVE DATE. This section is effective retroactive to January 1, 2006.

30.10 	Sec. 15. [62A.3161] MEDICARE SUPPLEMENT PLAN WITH 50 PERCENT 
30.11 	COVERAGE.
30.12 	The Medicare supplement plan with 50 percent coverage must have a level of 
30.13 	coverage that will provide:
30.14 	(1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for 
30.15 	365 days after Medicare benefits end;
30.16 	(2) coverage for 50 percent of the Medicare Part A inpatient hospital deductible 
30.17 	amount per benefit period until the out-of-pocket limitation is met as described in clause 
30.18 	(8);
30.19 	(3) coverage for 50 percent of the coinsurance amount for each day used from the 
30.20 	21st through the 100th day in a Medicare benefit period for posthospital skilled nursing 
30.21 	care eligible under Medicare Part A until the out-of-pocket limitation is met as described 
30.22 	in clause (8);
30.23 	(4) coverage for 50 percent of cost sharing for all Medicare Part A eligible expenses 
30.24 	and respite care until the out-of-pocket limitation is met as described in clause (8);
30.25 	(5) coverage for 50 percent, under Medicare Part A or B, of the reasonable cost 
30.26 	of the first three pints of blood, or equivalent quantities of packed red blood cells, as 
30.27 	defined under federal regulations, unless replaced according to federal regulations, until 
30.28 	the out-of-pocket limitation is met as described in clause (8);
30.29 	(6) except for coverage provided in this clause, coverage for 50 percent of the 
30.30 	cost sharing otherwise applicable under Medicare Part B, after the policyholder pays 
30.31 	the Medicare Part B deductible, until the out-of-pocket limitation is met as described 
30.32 	in clause (8);
30.33 	(7) coverage of 100 percent of the cost sharing for Medicare Part B preventive 
30.34 	services and diagnostic procedures for cancer screening described in section 62A.30 after 
30.35 	the policyholder pays the Medicare Part B deductible; and
31.1 	(8) coverage of 100 percent of all cost sharing under Medicare Parts A and B for the 
31.2 	balance of the calendar year after the individual has reached the out-of-pocket limitation 
31.3 	on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed 
31.4 	each year by the appropriate inflation adjustment by the secretary of the United States 
31.5 	Department of Health and Human Services.

31.6 	Sec. 16. [62A.3162] MEDICARE SUPPLEMENT PLAN WITH 75 PERCENT 
31.7 	COVERAGE.
31.8 	The basic Medicare supplement plan with 75 percent coverage must have a level of 
31.9 	coverage that will provide:
31.10 	(1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for 
31.11 	365 days after Medicare benefits end;
31.12 	(2) coverage for 75 percent of the Medicare Part A inpatient hospital deductible 
31.13 	amount per benefit period until the out-of-pocket limitation is met as described in clause 
31.14 	(8);
31.15 	(3) coverage for 75 percent of the coinsurance amount for each day used from the 
31.16 	21st through the 100th day in a Medicare benefit period for posthospital skilled nursing 
31.17 	care eligible under Medicare Part A until the out-of-pocket limitation is met as described 
31.18 	in clause (8); 
31.19 	(4) coverage for 75 percent of cost sharing for all Medicare Part A eligible expenses 
31.20 	and respite care until the out-of-pocket limitation is met as described in clause (8);
31.21 	(5) coverage for 75 percent, under Medicare Part A or B, of the reasonable cost 
31.22 	of the first three pints of blood, or equivalent quantities of packed red blood cells, as 
31.23 	defined under federal regulations, unless replaced according to federal regulations until 
31.24 	the out-of-pocket limitation is met as described in clause (8);
31.25 	(6) except for coverage provided in this clause, coverage for 75 percent of the 
31.26 	cost sharing otherwise applicable under Medicare Part B after the policyholder pays 
31.27 	the Medicare Part B deductible until the out-of-pocket limitation is met as described 
31.28 	in clause (8);
31.29 	(7) coverage of 100 percent of the cost sharing for Medicare Part B preventive 
31.30 	services and diagnostic procedures for cancer screening described in section 62A.30 after 
31.31 	the policyholder pays the Medicare Part B deductible; and
31.32 	(8) coverage of 100 percent of all cost sharing under Medicare Parts A and B for the 
31.33 	balance of the calendar year after the individual has reached the out-of-pocket limitation 
31.34 	on annual expenditures under Medicare Parts A and B of $2,000 in 2006, indexed 
32.1 	each year by the appropriate inflation adjustment by the Secretary of the United States 
32.2 	Department of Health and Human Services.

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

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

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

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

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

33.15 	Sec. 21. Minnesota Statutes 2004, section 62J.60, subdivision 2, is amended to read:
33.16 		Subd. 2.General characteristics. (a) The Minnesota uniform health care 
33.17 	identification card must be a preprinted card constructed of plastic, paper, or any other 
33.18 	medium that conforms with ANSI and ISO 7810 physical characteristics standards. The 
33.19 	card dimensions must also conform to ANSI and ISO 7810 physical characteristics 
33.20 	standard. The use of a signature panel is optional. The uniform prescription drug 
33.21 	information contained on the card must conform with the format adopted by the NCPDP 
33.22 	and, except as provided in subdivision 3, paragraph (a), clause (2), must include all of 
33.23 	the fields required to submit a claim in conformance with the most recent pharmacy 
33.24 	identification card implementation guide produced by the NCPDP. All information 
33.25 	required to submit a prescription drug claim, exclusive of information provided on a 
33.26 	prescription that is required by law, must be included on the card in a clear, readable, and 
33.27 	understandable manner. If a health benefit plan requires a conditional or situational field, 
33.28 	as defined by the NCPDP, the conditional or situational field must conform to the most 
33.29 	recent pharmacy information card implementation guide produced by the NCPDP.
33.30 	(b) The Minnesota uniform health care identification card must have an essential 
33.31 	information window on the front side with the following data elements left justified in 
33.32 	the following top to bottom sequence: card issuer name, electronic transaction routing 
33.33 	information, card issuer identification number, cardholder (insured) identification number, 
34.1 	and cardholder (insured) identification name. No optional data may be interspersed 
34.2 	between these data elements. The window must be left justified.
34.3 	(c) Standardized labels are required next to human readable data elements and must 
34.4 	come before the human readable data elements.

34.5 	Sec. 22. Minnesota Statutes 2004, section 62J.60, subdivision 3, is amended to read:
34.6 		Subd. 3.Human readable data elements. (a) The following are the minimum 
34.7 	human readable data elements that must be present on the front side of the Minnesota 
34.8 	uniform health care identification card:
34.9 	(1) card issuer name or logo, which is the name or logo that identifies the card issuer. 
34.10 	The card issuer name or logo may be located at the top of the card. No standard label 
34.11 	is required for this data element;
34.12 	(2) complete electronic transaction routing information including, at a minimum, 
34.13 	the international identification number. The standardized label of this data element 
34.14 	is "RxBIN." Processor control numbers and group numbers are required if needed to 
34.15 	electronically process a prescription drug claim. The standardized label for the process 
34.16 	control numbers data element is "RxPCN" and the standardized label for the group 
34.17 	numbers data element is "RxGrp," except that if the group number data element is a 
34.18 	universal element to be used by all health care providers, the standardized label may be 
34.19 	"Grp." To conserve vertical space on the card, the international identification number and 
34.20 	the processor control number may be printed on the same line;
34.21 	(3) card issuer identification number. The standardized label for this element is 
34.22 	"Issuer";
34.23 	(4) cardholder (insured) identification number, which is the unique identification 
34.24 	number of the individual card holder established and defined under this section. The 
34.25 	standardized label for the data element is "ID";
34.26 	(5)(4) cardholder (insured) identification name, which is the name of the individual 
34.27 	card holder. The identification name must be formatted as follows: first name, space, 
34.28 	optional middle initial, space, last name, optional space and name suffix. The standardized 
34.29 	label for this data element is "Name";
34.30 	(6)(5) care type, which is the description of the group purchaser's plan product 
34.31 	under which the beneficiary is covered. The description shall include the health plan 
34.32 	company name and the plan or product name. The standardized label for this data element 
34.33 	is "Care Type";
35.1 	(7)(6) service type, which is the description of coverage provided such as hospital, 
35.2 	dental, vision, prescription, or mental health. The standard label for this data element 
35.3 	is "Svc Type"; and
35.4 	(8)(7) provider/clinic name, which is the name of the primary care clinic the card 
35.5 	holder is assigned to by the health plan company. The standard label for this field is 
35.6 	"PCP." This information is mandatory only if the health plan company assigns a specific 
35.7 	primary care provider to the card holder.
35.8 	(b) The following human readable data elements shall be present on the back side 
35.9 	of the Minnesota uniform health care identification card. These elements must be left 
35.10 	justified, and no optional data elements may be interspersed between them:
35.11 	(1) claims submission names and addresses, which are the names and addresses of 
35.12 	the entity or entities to which claims should be submitted. If different destinations are 
35.13 	required for different types of claims, this must be labeled;
35.14 	(2) telephone numbers and names that pharmacies and other health care providers 
35.15 	may call for assistance. These telephone numbers and names are required on the back 
35.16 	side of the card only if one of the contacts listed in clause (3) cannot provide pharmacies 
35.17 	or other providers with assistance or with the telephone numbers and names of contacts 
35.18 	for assistance; and
35.19 	(3) telephone numbers and names; which are the telephone numbers and names of the 
35.20 	following contacts with a standardized label describing the service function as applicable:
35.21 	(i) eligibility and benefit information;
35.22 	(ii) utilization review;
35.23 	(iii) precertification; or
35.24 	(iv) customer services.
35.25 	(c) The following human readable data elements are mandatory on the back 
35.26 	side of the Minnesota uniform health care identification card for health maintenance 
35.27 	organizations:
35.28 	(1) emergency care authorization telephone number or instruction on how to receive 
35.29 	authorization for emergency care. There is no standard label required for this information; 
35.30 	and
35.31 	(2) one of the following:
35.32 	(i) telephone number to call to appeal to or file a complaint with the commissioner of 
35.33 	health; or
35.34 	(ii) for persons enrolled under section  256B.69,  256D.03, or  256L.12, the telephone 
35.35 	number to call to file a complaint with the ombudsperson designated by the commissioner 
36.1 	of human services under section  256B.69 and the address to appeal to the commissioner of 
36.2 	human services. There is no standard label required for this information. 
36.3 	(d) All human readable data elements not required under paragraphs (a) to (c) are 
36.4 	optional and may be used at the issuer's discretion.

36.5 	Sec. 23. Minnesota Statutes 2004, section 62L.02, subdivision 24, is amended to read:
36.6 		Subd. 24.Qualifying coverage. "Qualifying coverage" means health benefits or 
36.7 	health coverage provided under:
36.8 	(1) a health benefit plan, as defined in this section, but without regard to whether it is 
36.9 	issued to a small employer and including blanket accident and sickness insurance, other 
36.10 	than accident-only coverage, as defined in section  62A.11; 
36.11 	(2) part A or part B of Medicare;
36.12 	(3) medical assistance under chapter 256B;
36.13 	(4) general assistance medical care under chapter 256D;
36.14 	(5) MCHA;
36.15 	(6) a self-insured health plan;
36.16 	(7) the MinnesotaCare program established under section  256L.02; 
36.17 	(8) a plan provided under section  43A.316,  43A.317, or  471.617; 
36.18 	(9) the Civilian Health and Medical Program of the Uniformed Services 
36.19 	(CHAMPUS) or other coverage provided under United States Code, title 10, chapter 55;
36.20 	(10) coverage provided by a health care network cooperative under chapter 62R;
36.21 	(11) a medical care program of the Indian Health Service or of a tribal organization;
36.22 	(12) the federal Employees Health Benefits Plan, or other coverage provided under 
36.23 	United States Code, title 5, chapter 89;
36.24 	(13) a health benefit plan under section 5(e) of the Peace Corps Act, codified as 
36.25 	United States Code, title 22, section 2504(e);
36.26 	(14) a health plan; or
36.27 	(15) a plan similar to any of the above plans provided in this state or in another 
36.28 	state as determined by the commissioner.;
36.29 	(16) any plan established or maintained by a state, the United States government, or 
36.30 	a foreign country, or any political subdivision of a state, the United States government, or a 
36.31 	foreign country that provides health coverage to individuals who are enrolled in the plan; or
36.32 	(17) the State Children's Health Insurance Program (SCHIP).

36.33 	Sec. 24. Minnesota Statutes 2004, section 62M.01, subdivision 2, is amended to read:
37.1 		Subd. 2.Jurisdiction. Sections  62M.01 to  62M.16 apply to any insurance company 
37.2 	licensed under chapter 60A to offer, sell, or issue a policy of accident and sickness 
37.3 	insurance as defined in section  62A.01; a health service plan licensed under chapter 
37.4 	62C; a health maintenance organization licensed under chapter 62D; the Minnesota 
37.5 	Comprehensive Health Association created under chapter 62E; a community integrated 
37.6 	service network licensed under chapter 62N; an accountable provider network operating 
37.7 	under chapter 62T; a fraternal benefit society operating under chapter 64B; a joint 
37.8 	self-insurance employee health plan operating under chapter 62H; a multiple employer 
37.9 	welfare arrangement, as defined in section 3 of the Employee Retirement Income Security 
37.10 	Act of 1974 (ERISA), United States Code, title 29, section 1103, as amended; a third 
37.11 	party administrator licensed under section  60A.23, subdivision 8, that provides utilization 
37.12 	review services for the administration of benefits under a health benefit plan as defined in 
37.13 	section  62M.02; or any entity performing utilization review on behalf of a business entity 
37.14 	in this state pursuant to a health benefit plan covering a Minnesota resident. 

37.15 	Sec. 25. Minnesota Statutes 2004, section 62M.09, subdivision 9, is amended to read:
37.16 		Subd. 9.Annual report. A utilization review organization shall file an annual 
37.17 	report with the annual financial statement it submits to the commissioner of commerce 
37.18 	that includes:
37.19 	(1) per 1,000 claims utilization reviews, the number and rate of claims denied
37.20 	determinations not to certify based on medical necessity for each procedure or service; and
37.21 	(2) the number and rate of denials overturned on appeal.
37.22 	A utilization review organization that is not a licensed health carrier must submit the 
37.23 	annual report required by this subdivision on April 1 of each year.

37.24 	Sec. 26. [62Q.80] COMMUNITY-BASED HEALTH CARE COVERAGE 
37.25 	PROGRAM.
37.26 		Subdivision 1.Scope. (a) A community-based health care initiative may develop and 
37.27 	operate a community-based health care coverage program that offers to eligible individuals 
37.28 	and their dependents the option of purchasing through their employer health care coverage 
37.29 	on a fixed prepaid basis without meeting the requirements of chapter 60A, 62A, 62C, 62D, 
37.30 	62Q, or 62T, or any other law or rule that applies to entities licensed under these chapters.
37.31 	(b) The initiative shall establish health outcomes to be achieved through the program 
37.32 	and performance measurements in order to determine whether these outcomes have been 
37.33 	met. The outcomes must include, but are not limited to:
38.1 	(1) a reduction in uncompensated care provided by providers participating in the 
38.2 	community-based health network; 
38.3 	(2) an increase in the delivery of preventive health care services; and
38.4 	(3) health improvement for enrollees with chronic health conditions through the 
38.5 	management of these conditions.
38.6 	In establishing performance measurements, the initiative shall use measures that are 
38.7 	consistent with measures published by nonprofit Minnesota or national organizations that 
38.8 	produce and disseminate health care quality measures.
38.9 	(c) Any program established under this section shall not constitute a financial 
38.10 	liability for the state, in that any financial risk involved in the operation or termination 
38.11 	of the program shall be borne by the community-based initiative and the participating 
38.12 	health care providers.
38.13 		Subd. 2.Definitions.  For purposes of this section, the following definitions apply: 
38.14 	(a) "Community-based" means located in or primarily relating to the community 
38.15 	of geographically contiguous political subdivisions, as determined by the board of a 
38.16 	community-based health initiative that is served by the community-based health care 
38.17 	coverage program. 
38.18 	(b) "Community-based health care coverage program" or "program" means a 
38.19 	program administered by a community-based health initiative that provides health care 
38.20 	services through provider members of a community-based health network or combination 
38.21 	of networks to eligible individuals and their dependents who are enrolled in the program. 
38.22 	(c) "Community-based health initiative" means a nonprofit corporation that is 
38.23 	governed by a board that has at least 80 percent of its members residing in the community 
38.24 	and includes representatives of the participating network providers and employers. 
38.25 	(d) "Community-based health network" means a contract-based network of health 
38.26 	care providers organized by the community-based health initiative to provide or support 
38.27 	the delivery of health care services to enrollees of the community-based health care 
38.28 	coverage program on a risk-sharing or nonrisk-sharing basis. 
38.29 	(e) "Dependent" means an eligible employee's spouse or unmarried child who is 
38.30 	under the age of 19 years. 
38.31 		Subd. 3.Approval.  (a) Prior to the operation of a community-based health care 
38.32 	coverage program, a community-based health initiative shall submit to the commissioner 
38.33 	of health for approval the community-based health care coverage program developed by 
38.34 	the initiative. The commissioner shall only approve a program that has been awarded 
38.35 	a community access program grant from the United States Department of Health and 
38.36 	Human Services. The commissioner shall ensure that the program meets the federal grant 
39.1 	requirements and any requirements described in this section and is actuarially sound based 
39.2 	on a review of appropriate records and methods utilized by the community-based health 
39.3 	initiative in establishing premium rates for the community-based health care coverage 
39.4 	program. 
39.5 	(b) Prior to approval, the commissioner shall also ensure that:
39.6 	(1) the benefits offered comply with subdivision 8 and that there are adequate 
39.7 	numbers of health care providers participating in the community-based health network to 
39.8 	deliver the benefits offered under the program;
39.9 	(2) the activities of the program are limited to activities that are exempt under this 
39.10 	section or otherwise from regulation by the commissioner of commerce;
39.11 	(3) the complaint resolution process meets the requirements of subdivision 10; and 
39.12 	(4) the data privacy policies and procedures comply with state and federal law.
39.13 		Subd. 4.Establishment.  (a) The initiative shall establish and operate upon approval 
39.14 	by the commissioner of health a community-based health care coverage program. The 
39.15 	operational structure established by the initiative shall include, but is not limited to: 
39.16 	(1) establishing a process for enrolling eligible individuals and their dependents; 
39.17 	(2) collecting and coordinating premiums from enrollees and employers of enrollees;
39.18 	(3) providing payment to participating providers; 
39.19 	(4) establishing a benefit set according to subdivision 8 and establishing premium 
39.20 	rates and cost-sharing requirements; 
39.21 	(5) creating incentives to encourage primary care and wellness services; and 
39.22 	(6) initiating disease management services, as appropriate. 
39.23 	(b) The payments collected under paragraph (a), clause (2), may be used to capture 
39.24 	available federal funds.
39.25 		Subd. 5.Qualifying employees.  To be eligible for the community-based health 
39.26 	care coverage program, an individual must: 
39.27 	(1) reside in or work within the designated community-based geographic area 
39.28 	served by the program; 
39.29 	(2) be employed by a qualifying employer or be an employee's dependent; 
39.30 	(3) not be enrolled in or have currently available health coverage; and 
39.31 	(4) not be enrolled in medical assistance, general assistance medical care, 
39.32 	MinnesotaCare, or Medicare.
39.33 		Subd. 6.Qualifying employers.  (a) To qualify for participation in the 
39.34 	community-based health care coverage program, an employer must: 
39.35 	(1) employ at least one but no more than 50 employees at the time of initial 
39.36 	enrollment in the program; 
40.1 	(2) pay its employees a median wage of $12.50 per hour or less; and 
40.2 	(3) not have offered employer-subsidized health coverage to its employees for 
40.3 	at least 12 months prior to the initial enrollment in the program. For purposes of this 
40.4 	section, "employer-subsidized health coverage" means health care coverage for which the 
40.5 	employer pays at least 50 percent of the cost of coverage for the employee.
40.6 	(b) To participate in the program, a qualifying employer agrees to: 
40.7 	(1) offer health care coverage through the program to all eligible employees and 
40.8 	their dependents regardless of health status; 
40.9 	(2) participate in the program for an initial term of at least one year; 
40.10 	(3) pay a percentage of the premium established by the initiative for the employee; 
40.11 	and 
40.12 	(4) provide the initiative with any employee information deemed necessary by the 
40.13 	initiative to determine eligibility and premium payments. 
40.14 		Subd. 7.Participating providers. Any health care provider participating in the 
40.15 	community-based health network must accept as payment in full the payment rate 
40.16 	established by the initiative and may not charge to or collect from an enrollee any amount 
40.17 	in access of this amount for any service covered under the program.
40.18 		Subd. 8.Coverage.  (a) The initiative shall establish the health care benefits offered 
40.19 	through the community-based health care coverage program. The benefits established 
40.20 	shall include, at a minimum: 
40.21 	(1) child health supervision services up to age 18, as defined under section 62A.047; 
40.22 	and 
40.23 	(2) preventive services, including: 
40.24 	(i) health education and wellness services; 
40.25 	(ii) health supervision, evaluation, and follow-up; 
40.26 	(iii) immunizations; and 
40.27 	(iv) early disease detection. 
40.28 	(b) Coverage of health care services offered by the program may be limited to 
40.29 	participating health care providers or health networks. All services covered under the 
40.30 	program must be services that are offered within the scope of practice of the participating 
40.31 	health care providers. 
40.32 	(c) The initiative may establish cost-sharing requirements. Any co-payment or 
40.33 	deductible provisions established may not discriminate on the basis of age, sex, race, 
40.34 	disability, economic status, or length of enrollment in the program. 
41.1 	(d) If the initiative amends or alters the benefits offered through the program from 
41.2 	the initial offering, the initiative must notify the commissioner of health and all enrollees 
41.3 	of the benefit change.
41.4 		Subd. 9.Enrollee information. (a) The initiative must provide an individual or 
41.5 	family who enrolls in the program a clear and concise written statement that includes 
41.6 	the following information: 
41.7 	(1) health care services that are provided under the program; 
41.8 	(2) any exclusions or limitations on the health care services offered, including any 
41.9 	cost-sharing arrangements or prior authorization requirements; 
41.10 	(3) a list of where the health care services can be obtained and that all health 
41.11 	care services must be provided by or through a participating health care provider or 
41.12 	community-based health network; 
41.13 	(4) a description of the program's complaint resolution process, including how to 
41.14 	submit a complaint; how to file a complaint with the commissioner of health; and how to 
41.15 	obtain an external review of any adverse decisions as provided under subdivision 10; 
41.16 	(5) the conditions under which the program or coverage under the program may 
41.17 	be canceled or terminated; and 
41.18 	(6) a precise statement specifying that this program is not an insurance product and, 
41.19 	as such, is exempt from state regulation of insurance products.
41.20 	(b) The commissioner of health must approve a copy of the written statement prior 
41.21 	to the operation of the program. 
41.22 		Subd. 10.Complaint resolution process. (a) The initiative must establish a 
41.23 	complaint resolution process. The process must make reasonable efforts to resolve 
41.24 	complaints and to inform complainants in writing of the initiative's decision within 60 
41.25 	days of receiving the complaint. Any decision that is adverse to the enrollee shall include 
41.26 	a description of the right to an external review as provided in paragraph (c) and how to 
41.27 	exercise this right.
41.28 	(b) The initiative must report any complaint that is not resolved within 60 days to the 
41.29 	commissioner of health. 
41.30 	(c) The initiative must include in the complaint resolution process the ability of an 
41.31 	enrollee to pursue the external review process provided under section 62Q.73 with any 
41.32 	decision rendered under this external review process binding on the initiative.
41.33 		Subd. 11.Data privacy. The initiative shall establish data privacy policies and 
41.34 	procedures for the program that comply with state and federal data privacy laws. 
41.35 		Subd. 12.Limitations on enrollment. (a) The initiative may limit enrollment in the 
41.36 	program. If enrollment is limited, a waiting list must be established. 
42.1 	(b) The initiative shall not restrict or deny enrollment in the program except for 
42.2 	nonpayment of premiums, fraud or misrepresentation, or as otherwise permitted under 
42.3 	this section. 
42.4 	(c) The initiative may require a certain percentage of participation from eligible 
42.5 	employees of a qualifying employer before coverage can be offered through the program. 
42.6 		Subd. 13.Report.  (a) The initiative shall submit quarterly status reports to the 
42.7 	commissioner of health on January 15, April 15, July 15, and October 15 of each year, 
42.8 	with the first report due January 15, 2007. The status report shall include:
42.9 	(1) the financial status of the program, including the premium rates, cost per member 
42.10 	per month, claims paid out, premiums received, and administrative expenses; 
42.11 	(2) a description of the health care benefits offered and the services utilized; 
42.12 	(3) the number of employers participating, the number of employees and dependents 
42.13 	covered under the program, and the number of health care providers participating; 
42.14 	(4) a description of the health outcomes to be achieved by the program and a status 
42.15 	report on the performance measurements to be used and collected; and 
42.16 	(5) any other information requested by the commissioner of health or commerce or 
42.17 	the legislature. 
42.18 	(b) The initiative shall contract with an independent entity to conduct an evaluation 
42.19 	of the program to be submitted to the commissioners of health and commerce and the 
42.20 	legislature by January 15, 2009. The evaluation shall include:
42.21 	(1) an analysis of the health outcomes established by the initiative and the 
42.22 	performance measurements to determine whether the outcomes are being achieved;
42.23 	(2) an analysis of the financial status of the program, including the claims to 
42.24 	premiums loss ratio and utilization and cost experience; 
42.25 	(3) the demographics of the enrollees, including their age, gender, family income, 
42.26 	and the number of dependents; 
42.27 	(4) the number of employers and employees who have been denied access to the 
42.28 	program and the basis for the denial; 
42.29 	(5) specific analysis on enrollees who have aggregate medical claims totaling over 
42.30 	$5,000 per year, including data on the enrollee's main diagnosis and whether all the 
42.31 	medical claims were covered by the program; 
42.32 	(6) number of enrollees referred to state public assistance programs; 
42.33 	(7) a comparison of employer-subsidized health coverage provided in a comparable 
42.34 	geographic area to the designated community-based geographic area served by the 
42.35 	program, including, to the extent available: 
43.1 	(i) the difference in the number of employers with 50 or fewer employees offering 
43.2 	employer-subsidized health coverage; 
43.3 	(ii) the difference in uncompensated care being provided in each area; and
43.4 	(iii) a comparison of health care outcomes and measurements established by the 
43.5 	initiative; and 
43.6 	(8) any other information requested by the commissioner of health or commerce.
43.7 		Subd. 14.Sunset. This section expires December 31, 2011.

43.8 	Sec. 27. Minnesota Statutes 2004, section 62S.05, is amended by adding a subdivision 
43.9 	to read:
43.10 		Subd. 4.Extension of limitation periods. The commissioner may extend the 
43.11 	limitation periods set forth in subdivisions 1 and 2 as to specific age group categories in 
43.12 	specific policy forms upon finding that the extension is in the best interest of the public.

43.13 	EFFECTIVE DATE. This section is effective July 1, 2006.

43.14 	Sec. 28. Minnesota Statutes 2004, section 62S.08, subdivision 3, is amended to read:
43.15 		Subd. 3.Mandatory format. The following standard format outline of coverage 
43.16 	must be used, unless otherwise specifically indicated:
43.17 	COMPANY NAME
43.18 	ADDRESS - CITY AND STATE
43.19 	TELEPHONE NUMBER
43.20 	LONG-TERM CARE INSURANCE
43.21 	OUTLINE OF COVERAGE
43.22 	Policy Number or Group Master Policy and Certificate Number
43.23 	(Except for policies or certificates which are guaranteed issue, the following caution 
43.24 	statement, or language substantially similar, must appear as follows in the outline of 
43.25 	coverage.)
43.26 	CAUTION: The issuance of this long-term care insurance (policy) (certificate) 
43.27 	is based upon your responses to the questions on your application. A copy of your 
43.28 	(application) (enrollment form) (is enclosed) (was retained by you when you applied). 
43.29 	If your answers are incorrect or untrue, the company has the right to deny benefits or 
43.30 	rescind your policy. The best time to clear up any questions is now, before a claim 
43.31 	arises. If, for any reason, any of your answers are incorrect, contact the company at this 
43.32 	address: (insert address).
43.33 	(1) This policy is (an individual policy of insurance) (a group policy) which was 
43.34 	issued in the (indicate jurisdiction in which group policy was issued).
44.1 	(2) PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides 
44.2 	a very brief description of the important features of the policy. You should compare 
44.3 	this outline of coverage to outlines of coverage for other policies available to you. This 
44.4 	is not an insurance contract, but only a summary of coverage. Only the individual or 
44.5 	group policy contains governing contractual provisions. This means that the policy or 
44.6 	group policy sets forth in detail the rights and obligations of both you and the insurance 
44.7 	company. Therefore, if you purchase this coverage, or any other coverage, it is important 
44.8 	that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY.
44.9 	(3) THIS PLAN IS INTENDED TO BE A QUALIFIED LONG-TERM CARE 
44.10 	INSURANCE CONTRACT AS DEFINED UNDER SECTION 7702(B)(b) OF THE 
44.11 	INTERNAL REVENUE CODE OF 1986.
44.12 	(4) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE 
44.13 	CONTINUED IN FORCE OR DISCONTINUED.
44.14 	(a) (For long-term care health insurance policies or certificates describe one of the 
44.15 	following permissible policy renewability provisions:)
44.16 	(1) (Policies and certificates that are guaranteed renewable shall contain the 
44.17 	following statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS 
44.18 	GUARANTEED RENEWABLE. This means you have the right, subject to the terms of 
44.19 	your policy, (certificate) to continue this policy as long as you pay your premiums on time. 
44.20 	(Company name) cannot change any of the terms of your policy on its own, except that, in 
44.21 	the future, IT MAY INCREASE THE PREMIUM YOU PAY.
44.22 	(2) (Policies and certificates that are noncancelable shall contain the following 
44.23 	statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS NONCANCELABLE. 
44.24 	This means that you have the right, subject to the terms of your policy, to continue this 
44.25 	policy as long as you pay your premiums on time. (Company name) cannot change any 
44.26 	of the terms of your policy on its own and cannot change the premium you currently 
44.27 	pay. However, if your policy contains an inflation protection feature where you choose 
44.28 	to increase your benefits, (company name) may increase your premium at that time for 
44.29 	those additional benefits.
44.30 	(b) (For group coverage, specifically describe continuation/conversion provisions 
44.31 	applicable to the certificate and group policy.)
44.32 	(c) (Describe waiver of premium provisions or state that there are not such 
44.33 	provisions.)
44.34 	(5) TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS. 
44.35 	(In bold type larger than the maximum type required to be used for the other 
44.36 	provisions of the outline of coverage, state whether or not the company has a right to 
45.1 	change the premium and, if a right exists, describe clearly and concisely each circumstance 
45.2 	under which the premium may change.)
45.3 	(6) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE 
45.4 	RETURNED AND PREMIUM REFUNDED.
45.5 	(a) (Provide a brief description of the right to return -- "free look" provision of 
45.6 	the policy.)
45.7 	(b) (Include a statement that the policy either does or does not contain provisions 
45.8 	providing for a refund or partial refund of premium upon the death of an insured or 
45.9 	surrender of the policy or certificate. If the policy contains such provisions, include a 
45.10 	description of them.)
45.11 	(5)(7) THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are 
45.12 	eligible for Medicare, review the Medicare Supplement Buyer's Guide available from 
45.13 	the insurance company.
45.14 	(a) (For agents) neither (insert company name) nor its agents represent Medicare, the 
45.15 	federal government, or any state government.
45.16 	(b) (For direct response) (insert company name) is not representing Medicare, the 
45.17 	federal government, or any state government.
45.18 	(6)(8) LONG-TERM CARE COVERAGE. Policies of this category are designed to 
45.19 	provide coverage for one or more necessary or medically necessary diagnostic, preventive, 
45.20 	therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting 
45.21 	other than an acute care unit of a hospital, such as in a nursing home, in the community, 
45.22 	or in the home.
45.23 	This policy provides coverage in the form of a fixed dollar indemnity benefit for 
45.24 	covered long-term care expenses, subject to policy (limitations), (waiting periods), and 
45.25 	(coinsurance) requirements. (Modify this paragraph if the policy is not an indemnity 
45.26 	policy.)
45.27 	(7)(9) BENEFITS PROVIDED BY THIS POLICY.
45.28 	(a) (Covered services, related deductible(s), waiting periods, elimination periods, 
45.29 	and benefit maximums.)
45.30 	(b) (Institutional benefits, by skill level.)
45.31 	(c) (Noninstitutional benefits, by skill level.)
45.32 	(d) (Eligibility for payment of benefits.)
45.33 	(Activities of daily living and cognitive impairment shall be used to measure an 
45.34 	insured's need for long-term care and must be defined and described as part of the outline 
45.35 	of coverage.)
46.1 	(Any benefit screens must be explained in this section. If these screens differ for 
46.2 	different benefits, explanation of the screen should accompany each benefit description. If 
46.3 	an attending physician or other specified person must certify a certain level of functional 
46.4 	dependency in order to be eligible for benefits, this too must be specified. If activities of 
46.5 	daily living (ADLs) are used to measure an insured's need for long-term care, then these 
46.6 	qualifying criteria or screens must be explained.)
46.7 	(8)(10) LIMITATIONS AND EXCLUSIONS:
46.8 	Describe:
46.9 	(a) preexisting conditions;
46.10 	(b) noneligible facilities/provider;
46.11 	(c) noneligible levels of care (e.g., unlicensed providers, care or treatment provided 
46.12 	by a family member, etc.);
46.13 	(d) exclusions/exceptions; and
46.14 	(e) limitations.
46.15 	(This section should provide a brief specific description of any policy provisions 
46.16 	which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify 
46.17 	payment of the benefits described in paragraph (6) (8).)
46.18 	THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH 
46.19 	YOUR LONG-TERM CARE NEEDS.
46.20 	(9)(11) RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs 
46.21 	of long-term care services will likely increase over time, you should consider whether and 
46.22 	how the benefits of this plan may be adjusted. As applicable, indicate the following:
46.23 	(a) that the benefit level will not increase over time;
46.24 	(b) any automatic benefit adjustment provisions;
46.25 	(c) whether the insured will be guaranteed the option to buy additional benefits and 
46.26 	the basis upon which benefits will be increased over time if not by a specified amount 
46.27 	or percentage;
46.28 	(d) if there is such a guarantee, include whether additional underwriting or health 
46.29 	screening will be required, the frequency and amounts of the upgrade options, and any 
46.30 	significant restrictions or limitations; and
46.31 	(e) whether there will be any additional premium charge imposed and how that 
46.32 	is to be calculated.
46.33 	(10)(12) ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN 
46.34 	DISORDERS. (State that the policy provides coverage for insureds clinically diagnosed as 
46.35 	having Alzheimer's disease or related degenerative and dementing illnesses. Specifically, 
47.1 	describe each benefit screen or other policy provision which provides preconditions to the 
47.2 	availability of policy benefits for such an insured.)
47.3 	(11)(13) PREMIUM.
47.4 	(a) State the total annual premium for the policy.
47.5 	(b) If the premium varies with an applicant's choice among benefit options, indicate 
47.6 	the portion of annual premium which corresponds to each benefit option.
47.7 	(12)(14) ADDITIONAL FEATURES.
47.8 	(a) Indicate if medical underwriting is used.
47.9 	(b) Describe other important features.
47.10 	(15) CONTACT THE STATE DEPARTMENT OF COMMERCE OR SENIOR 
47.11 	LINKAGE LINE IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM 
47.12 	CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE 
47.13 	SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE 
47.14 	POLICY OR CERTIFICATE.

47.15 	EFFECTIVE DATE. This section is effective July 1, 2006.

47.16 	Sec. 29. Minnesota Statutes 2004, section 62S.081, subdivision 4, is amended to read:
47.17 		Subd. 4.Forms. An insurer shall use the forms in Appendices B (Personal 
47.18 	Worksheet) and F (Potential Rate Increase Disclosure Form) of the Long-term Care 
47.19 	Insurance Model Regulation adopted by the National Association of Insurance 
47.20 	Commissioners to comply with the requirements of subdivisions 1 and 2.

47.21 	EFFECTIVE DATE. This section is effective July 1, 2006.

47.22 	Sec. 30. Minnesota Statutes 2004, section 62S.10, subdivision 2, is amended to read:
47.23 		Subd. 2.Contents. The summary must include the following information:
47.24 	(1) an explanation of how the long-term care benefit interacts with other components 
47.25 	of the policy, including deductions from death benefits;
47.26 	(2) an illustration of the amount of benefits, the length of benefits, and the guaranteed 
47.27 	lifetime benefits, if any, for each covered person; and
47.28 	(3) any exclusions, reductions, and limitations on benefits of long-term care; and
47.29 	(4) a statement that any long-term care inflation protection option required by section 
47.30 	62S.23 is not available under this policy. 

47.31 	EFFECTIVE DATE. This section is effective July 1, 2006.

48.1 	Sec. 31. Minnesota Statutes 2004, section 62S.13, is amended by adding a subdivision 
48.2 	to read:
48.3 		Subd. 6.Death of insured. In the event of the death of the insured, this section shall 
48.4 	not apply to the remaining death benefit of a life insurance policy that accelerates benefits 
48.5 	for long-term care. In this situation, the remaining death benefits under these policies shall 
48.6 	be governed by section 61A.03, subdivision 1, paragraph (c). In all other situations, this 
48.7 	section shall apply to life insurance policies that accelerate benefits for long-term care.

48.8 	EFFECTIVE DATE. This section is effective July 1, 2006.

48.9 	Sec. 32. Minnesota Statutes 2004, section 62S.14, subdivision 2, is amended to read:
48.10 		Subd. 2.Terms. The terms "guaranteed renewable" and "noncancelable" may not 
48.11 	be used in an individual long-term care insurance policy without further explanatory 
48.12 	language that complies with the disclosure requirements of section  62S.20. The term 
48.13 	"level premium" may only be used when the insurer does not have the right to change 
48.14 	the premium.

48.15 	EFFECTIVE DATE. This section is effective July 1, 2006.

48.16 	Sec. 33. Minnesota Statutes 2004, section 62S.15, is amended to read:
48.17 	62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.
48.18 	No policy may be delivered or issued for delivery in this state as long-term care 
48.19 	insurance if the policy limits or excludes coverage by type of illness, treatment, medical 
48.20 	condition, or accident, except as follows:
48.21 	(1) preexisting conditions or diseases;
48.22 	(2) mental or nervous disorders; except that the exclusion or limitation of benefits on 
48.23 	the basis of Alzheimer's disease is prohibited;
48.24 	(3) alcoholism and drug addiction;
48.25 	(4) illness, treatment, or medical condition arising out of war or act of war; 
48.26 	participation in a felony, riot, or insurrection; service in the armed forces or auxiliary 
48.27 	units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying 
48.28 	aviation; and
48.29 	(5) treatment provided in a government facility unless otherwise required by 
48.30 	law, services for which benefits are available under Medicare or other government 
48.31 	program except Medicaid, state or federal workers' compensation, employer's liability 
48.32 	or occupational disease law, motor vehicle no-fault law; services provided by a member 
49.1 	of the covered person's immediate family; and services for which no charge is normally 
49.2 	made in the absence of insurance; and
49.3 	(6) expenses for services or items available or paid under another long-term care 
49.4 	insurance or health insurance policy.
49.5 	This subdivision does not prohibit exclusions and limitations by type of provider or 
49.6 	territorial limitations.

49.7 	EFFECTIVE DATE. This section is effective July 1, 2006.

49.8 	Sec. 34. Minnesota Statutes 2004, section 62S.20, subdivision 1, is amended to read:
49.9 		Subdivision 1.Renewability. (a) Individual long-term care insurance policies 
49.10 	must contain a renewability provision that is appropriately captioned, appears on the first 
49.11 	page of the policy, and clearly states the duration, where limited, of renewability and the 
49.12 	duration of the term of coverage for which the policy is issued and for which it may be 
49.13 	renewed that the coverage is guaranteed renewable or noncancelable. This subdivision 
49.14 	does not apply to policies which are part of or combined with life insurance policies 
49.15 	which do not contain a renewability provision and under which the right to nonrenew is 
49.16 	reserved solely to the policyholder.
49.17 	(b) A long-term care insurance policy or certificate, other than one where the insurer 
49.18 	does not have the right to change the premium, shall include a statement that premium 
49.19 	rates may change.

49.20 	EFFECTIVE DATE. This section is effective July 1, 2006.

49.21 	Sec. 35. Minnesota Statutes 2004, section 62S.24, subdivision 1, is amended to read:
49.22 		Subdivision 1.Required questions. An application form must include the following 
49.23 	questions designed to elicit information as to whether, as of the date of the application, the 
49.24 	applicant has another long-term care insurance policy or certificate in force or whether a 
49.25 	long-term care policy or certificate is intended to replace any other accident and sickness 
49.26 	or long-term care policy or certificate presently in force. A supplementary application 
49.27 	or other form to be signed by the applicant and agent, except where the coverage is sold 
49.28 	without an agent, containing the following questions may be used. If a replacement policy 
49.29 	is issued to a group as defined under section   62S.01, subdivision 15, clause (1), the 
49.30 	following questions may be modified only to the extent necessary to elicit information 
49.31 	about long-term care insurance policies other than the group policy being replaced; 
49.32 	provided, however, that the certificate holder has been notified of the replacement: 
50.1 	(1)  do you have another long-term care insurance policy or certificate in force
50.2 	(including health care service contract or health maintenance organization contract)?;
50.3 	(2) did you have another long-term care insurance policy or certificate in force 
50.4 	during the last 12 months?;
50.5 	(i) if so, with which company?; and
50.6 	(ii) if that policy lapsed, when did it lapse?; and
50.7 	(3) are you covered by Medicaid?; and 
50.8 	(4) do you intend to replace any of your medical or health insurance coverage with 
50.9 	this policy (certificate)?

50.10 	EFFECTIVE DATE. This section is effective July 1, 2006.

50.11 	Sec. 36. Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
50.12 	to read:
50.13 		Subd. 1a.Other health insurance policies sold by agent. Agents shall list all other 
50.14 	health insurance policies they have sold to the applicant that are still in force or were sold 
50.15 	in the past five years and are no longer in force.

50.16 	EFFECTIVE DATE. This section is effective July 1, 2006.

50.17 	Sec. 37. Minnesota Statutes 2004, section 62S.24, subdivision 3, is amended to read:
50.18 		Subd. 3.Solicitations other than direct response. After determining that a 
50.19 	sale will involve replacement, an insurer, other than an insurer using direct response 
50.20 	solicitation methods or its agent, shall furnish the applicant, before issuance or delivery of 
50.21 	the individual long-term care insurance policy, a notice regarding replacement of accident 
50.22 	and sickness or long-term care coverage. One copy of the notice must be retained by the 
50.23 	applicant and an additional copy signed by the applicant must be retained by the insurer. 
50.24 	The required notice must be provided in the following manner:
50.25 	NOTICE TO APPLICANT REGARDING REPLACEMENT OF
50.26 	INDIVIDUAL ACCIDENT AND SICKNESS OR LONG-TERM 
50.27 	CARE INSURANCE
50.28 	(Insurance company's name and address)
50.29 	SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
50.30 	According to (your application) (information you have furnished), you intend to 
50.31 	lapse or otherwise terminate existing accident and sickness or long-term care insurance 
50.32 	and replace it with an individual long-term care insurance policy to be issued by (company 
50.33 	name) insurance company. Your new policy provides 30 days within which you may 
50.34 	decide, without cost, whether you desire to keep the policy. For your own information and 
51.1 	protection, you should be aware of and seriously consider certain factors which may affect 
51.2 	the insurance protection available to you under the new policy.
51.3 	You should review this new coverage carefully, comparing it with all accident 
51.4 	and sickness or long-term care insurance coverage you now have, and terminate your 
51.5 	present policy only if, after due consideration, you find that purchase of this long-term 
51.6 	care coverage is a wise decision.
51.7 	STATEMENT TO APPLICANT BY AGENT
51.8 	(BROKER OR OTHER REPRESENTATIVE):
51.9 	(Use additional sheets, as necessary.)
51.10 	I have reviewed your current medical health insurance coverage. I believe the 
51.11 	replacement of insurance involved in this transaction materially improves your position. 
51.12 	My conclusion has taken into account the following considerations, which I call to your 
51.13 	attention:
51.14 	(a) Health conditions which you presently have (preexisting conditions) may not 
51.15 	be immediately or fully covered under the new policy. This could result in denial or 
51.16 	delay in payment of benefits under the new policy, whereas a similar claim might have 
51.17 	been payable under your present policy.
51.18 	(b) State law provides that your replacement policy or certificate may not contain 
51.19 	new preexisting conditions or probationary periods. The insurer will waive any time 
51.20 	periods applicable to preexisting conditions or probationary periods in the new policy (or 
51.21 	coverage) for similar benefits to the extent such time was spent (depleted) under the 
51.22 	original policy.
51.23 	(c)  If you are replacing existing long-term care insurance coverage, you may wish to 
51.24 	secure the advice of your present insurer or its agent regarding the proposed replacement of 
51.25 	your present policy. This is not only your right, but it is also in your best interest to make 
51.26 	sure you understand all the relevant factors involved in replacing your present coverage.
51.27 	(d)  If, after due consideration, you still wish to terminate your present policy and 
51.28 	replace it with new coverage, be certain to truthfully and completely answer all questions 
51.29 	on the application concerning your medical health history. Failure to include all material 
51.30 	medical information on an application may provide a basis for the company to deny any 
51.31 	future claims and to refund your premium as though your policy had never been in force. 
51.32 	After the application has been completed and before you sign it, reread it carefully to be 
51.33 	certain that all information has been properly recorded.
51.34 	........
51.35 	(Signature of Agent, Broker, or Other Representative)
51.36 	(Typed Name and Address of Agency or Broker)
51.37 	The  above "Notice to Applicant" was delivered to me on:

52.1		........
	
52.2		(Date)
	
52.3		........
	
52.4		(Applicant's Signature)

52.5 	EFFECTIVE DATE. This section is effective July 1, 2006.

52.6 	Sec. 38. Minnesota Statutes 2004, section 62S.24, subdivision 4, is amended to read:
52.7 		Subd. 4.Direct response solicitations. Insurers using direct response solicitation 
52.8 	methods shall deliver a notice regarding replacement of long-term care coverage to 
52.9 	the applicant upon issuance of the policy. The required notice must be provided in the 
52.10 	following manner:
52.11 	NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT 
52.12 	AND SICKNESS OR LONG-TERM CARE INSURANCE
52.13 	(Insurance  company's name and address)
52.14 	SAVE THIS NOTICE! IT MAY BE
52.15 	IMPORTANT TO YOU IN THE FUTURE.
52.16 	According to (your application) (information you have furnished), you intend to 
52.17 	lapse or otherwise terminate existing accident and sickness or long-term care insurance 
52.18 	and replace it with the long-term care insurance policy delivered herewith issued by 
52.19 	(company name) insurance company.
52.20 	Your new policy provides 30 days within which you may decide, without cost, 
52.21 	whether you desire to keep the policy. For your own information and protection, you 
52.22 	should be aware of and seriously consider certain factors which may affect the insurance 
52.23 	protection available to you under the new policy.
52.24 	You should review this new coverage carefully, comparing it with all long-term care 
52.25 	insurance coverage you now have, and terminate your present policy only if, after due 
52.26 	consideration, you find that purchase of this long-term care coverage is a wise decision.
52.27 	(a) Health conditions which you presently have (preexisting conditions) may not 
52.28 	be immediately or fully covered under the new policy. This could result in denial or 
52.29 	delay in payment of benefits under the new policy, whereas a similar claim might have 
52.30 	been payable under your present policy.
52.31 	(b) State law provides that your replacement policy or certificate may not contain 
52.32 	new preexisting conditions or probationary periods. Your insurer will waive any time 
52.33 	periods applicable to preexisting conditions or probationary periods in the new policy (or 
52.34 	coverage) for similar benefits to the extent such time was spent (depleted) under the 
52.35 	original policy.
53.1 	(c) If you are replacing existing long-term care insurance coverage, you may wish to 
53.2 	secure the advice of your present insurer or its agent regarding the proposed replacement of 
53.3 	your present policy. This is not only your right, but it is also in your best interest to make 
53.4 	sure you understand all the relevant factors involved in replacing your present coverage.
53.5 	(d) (To be included only if the application is attached to the policy.)
53.6 	If,  after due consideration, you still wish to terminate your present policy and replace 
53.7 	it with new coverage, read the copy of the application attached to your new policy and be 
53.8 	sure that all questions are answered fully and correctly. Omissions or misstatements in 
53.9 	the application could cause an otherwise valid claim to be denied. Carefully check the 
53.10 	application and write to (company name and address) within 30 days if any information is 
53.11 	not correct and complete, or if any past medical history has been left out of the application.

53.12		........
	
53.13		(Company Name)

53.14 	EFFECTIVE DATE. This section is effective July 1, 2006.

53.15 	Sec. 39. Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
53.16 	to read:
53.17 		Subd. 7.Life insurance policies. Life insurance policies that accelerate benefits for 
53.18 	long-term care shall comply with this section if the policy being replaced is a long-term 
53.19 	care insurance policy. If the policy being replaced is a life insurance policy, the insurer 
53.20 	shall comply with the replacement requirements of sections 61A.53 to 61A.60. If a 
53.21 	life insurance policy that accelerates benefits for long-term care is replaced by another 
53.22 	such policy, the replacing insurer shall comply with both the long-term care and the life 
53.23 	insurance replacement requirements.

53.24 	EFFECTIVE DATE. This section is effective July 1, 2006.

53.25 	Sec. 40.  Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
53.26 	to read:
53.27 		Subd. 8.Exchange for long-term care partnership policy; addition of policy 
53.28 	rider. (a) If authorized by federal law or a federal waiver is granted with respect to the 
53.29 	long-term care partnership program referenced in section 256B.0571, issuers of long-term 
53.30 	care policies may voluntarily exchange a current long-term care insurance policy for a 
53.31 	long-term care partnership policy that meets the requirements of Public Law 109-171, 
53.32 	section 6021, after the effective date of the state plan amendment implementing the 
53.33 	partnership program in this state.
54.1 	(b) If authorized by federal law or a federal waiver is granted with respect to the 
54.2 	long-term care partnership program referenced in section 256B.0571 allowing an existing 
54.3 	long-term care insurance policy to qualify as a partnership policy by addition of a policy 
54.4 	rider, the issuer of the policy is authorized to add the rider to the policy after the effective 
54.5 	date of the state plan amendment implementing the partnership program in this state.
54.6 	(c) The commissioner, in cooperation with the commissioner of human services, 
54.7 	shall pursue any federal law changes or waivers necessary to allow the implementation 
54.8 	of paragraphs (a) and (b).

54.9 	EFFECTIVE DATE. This section is effective July 1, 2006.

54.10 	Sec. 41. Minnesota Statutes 2004, section 62S.25, subdivision 6, is amended to read:
54.11 		Subd. 6.Claims denied. Each insurer shall report annually by June 30 the number 
54.12 	of claims denied for any reason during the reporting period for each class of business, 
54.13 	expressed as a percentage of claims denied, other than claims denied for failure to meet 
54.14 	the waiting period or because of any applicable preexisting condition. For purposes of 
54.15 	this subdivision, "claim" means a request for payment of benefits under an in-force policy 
54.16 	regardless of whether the benefit claimed is covered under the policy or any terms or 
54.17 	conditions of the policy have been met.

54.18 	EFFECTIVE DATE. This section is effective July 1, 2006.

54.19 	Sec. 42. Minnesota Statutes 2004, section 62S.25, is amended by adding a subdivision 
54.20 	to read:
54.21 		Subd. 7.Reports.  Reports under this section shall be done on a statewide basis and 
54.22 	filed with the commissioner. They shall include, at a minimum, the information in the 
54.23 	format contained in Appendix E (Claim Denial Reporting Form) and in Appendix G 
54.24 	(Replacement and Lapse Reporting Form) of the Long-Term Care Model Regulation 
54.25 	adopted by the National Association of Insurance Commissioners.

54.26 	EFFECTIVE DATE. This section is effective July 1, 2006.

54.27 	Sec. 43. Minnesota Statutes 2004, section 62S.26, is amended to read:
54.28 	62S.26 LOSS RATIO.
54.29 		Subdivision 1.Minimum loss ratio. (a) The minimum loss ratio must be at least 60 
54.30 	percent, calculated in a manner which provides for adequate reserving of the long-term 
55.1 	care insurance risk. In evaluating the expected loss ratio, the commissioner shall give 
55.2 	consideration to all relevant factors, including:
55.3 	(1) statistical credibility of incurred claims experience and earned premiums;
55.4 	(2) the period for which rates are computed to provide coverage;
55.5 	(3) experienced and projected trends;
55.6 	(4) concentration of experience within early policy duration;
55.7 	(5) expected claim fluctuation;
55.8 	(6) experience refunds, adjustments, or dividends;
55.9 	(7) renewability features;
55.10 	(8) all appropriate expense factors;
55.11 	(9) interest;
55.12 	(10) experimental nature of the coverage;
55.13 	(11) policy reserves;
55.14 	(12) mix of business by risk classification; and
55.15 	(13) product features such as long elimination periods, high deductibles, and high 
55.16 	maximum limits.
55.17 		Subd. 2.Life insurance policies. Subdivision 1 shall not apply to life insurance 
55.18 	policies that accelerate benefits for long-term care. A life insurance policy that funds 
55.19 	long-term care benefits entirely by accelerating the death benefit is considered to provide 
55.20 	reasonable benefits in relation to premiums paid, if the policy complies with all of the 
55.21 	following provisions:
55.22 	(1) the interest credited internally to determine cash value accumulations, including 
55.23 	long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest 
55.24 	rate for cash value accumulations without long-term care set forth in the policy;
55.25 	(2) the portion of the policy that provides life insurance benefits meets the 
55.26 	nonforfeiture requirements of section 61A.24;
55.27 	(3) the policy meets the disclosure requirements of sections 62S.09, 62S.10, and 
55.28 	62S.11; and 
55.29 	(4) an actuarial memorandum is filed with the commissioner that includes:
55.30 	(i) a description of the basis on which the long-term care rates were determined;
55.31 	(ii) a description of the basis for the reserves;
55.32 	(iii) a summary of the type of policy, benefits, renewability, general marketing 
55.33 	method, and limits on ages of issuance;
55.34 	(iv) a description and a table of each actuarial assumption used. For expenses, 
55.35 	an insurer must include percentage of premium dollars per policy and dollars per unit 
55.36 	of benefits, if any;
56.1 	(v) a description and a table of the anticipated policy reserves and additional reserves 
56.2 	to be held in each future year for active lives;
56.3 	(vi) the estimated average annual premium per policy and the average issue age; 
56.4 	(vii) a statement as to whether underwriting is performed at the time of application. 
56.5 	The statement shall indicate whether underwriting is used and, if used, the statement 
56.6 	shall include a description of the type or types of underwriting used, such as medical 
56.7 	underwriting or functional assessment underwriting. Concerning a group policy, the 
56.8 	statement shall indicate whether the enrollee or any dependent will be underwritten and 
56.9 	when underwriting occurs; and
56.10 	(viii) a description of the effect of the long-term care policy provision on the required 
56.11 	premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both 
56.12 	for active lives and those in long-term care claim status.
56.13 		Subd. 3.Nonapplication.  (b) This section does not apply to policies or certificates 
56.14 	that are subject to sections  62S.021,  62S.081, and  62S.265, and that comply with those 
56.15 	sections. 

56.16 	EFFECTIVE DATE. This section is effective July 1, 2006.

56.17 	Sec. 44. Minnesota Statutes 2004, section 62S.265, subdivision 1, is amended to read:
56.18 		Subdivision 1.Applicability. (a) Except as provided in paragraph (b), This section 
56.19 	applies to any long-term care policy or certificate issued in this state on or after January 
56.20 	1, 2002, under this chapter or sections  62A.46 to  62A.56. 
56.21 	(b) For certificates issued on or after July 1, 2001, under a group long-term care 
56.22 	insurance policy as defined in section  62S.01, subdivision 15, issued under this chapter, 
56.23 	that was in force on July 1, 2001, this section applies on the policy anniversary following 
56.24 	June 30, 2002.

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

56.26 	Sec. 45. Minnesota Statutes 2004, section 62S.266, subdivision 2, is amended to read:
56.27 		Subd. 2.Requirement. (a) An insurer must offer each prospective policyholder a 
56.28 	nonforfeiture benefit in compliance with the following requirements:
56.29 	(1) a policy or certificate offered with nonforfeiture benefits must have coverage 
56.30 	elements, eligibility, benefit triggers, and benefit length that are the same as coverage to be 
56.31 	issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer must 
56.32 	be the benefit described in subdivision 5; and
57.1 	(2)  the offer must be in writing if the nonforfeiture benefit is not otherwise described 
57.2 	in the outline of coverage or other materials given to the prospective policyholder.
57.3 	(b) When a group long-term care insurance policy is issued, the offer required in 
57.4 	paragraph (a) shall be made to the group policy holder. However, if the policy is issued as 
57.5 	group long-term care insurance as defined in section 62S.01, subdivision 15, clause (4), 
57.6 	other than to a continuing care retirement community or other similar entity, the offering 
57.7 	shall be made to each proposed certificate holder. 

57.8 	EFFECTIVE DATE. This section is effective July 1, 2006.

57.9 	Sec. 46. Minnesota Statutes 2004, section 62S.29, subdivision 1, is amended to read:
57.10 		Subdivision 1.Requirements. An insurer or other entity marketing long-term care 
57.11 	insurance coverage in this state, directly or through its producers, shall:
57.12 	(1) establish marketing procedures and agent training requirements to assure that a
57.13 	any marketing activities, including any comparison of policies by its agents or other 
57.14 	producers, are fair and accurate;
57.15 	(2) establish marketing procedures to assure excessive insurance is not sold or issued;
57.16 	(3) display prominently by type, stamp, or other appropriate means, on the first page 
57.17 	of the outline of coverage and policy, the following:
57.18 	"Notice to buyer: This policy may not cover all of the costs associated with 
57.19 	long-term care incurred by the buyer during the period of coverage. The buyer is advised 
57.20 	to review carefully all policy limitations.";
57.21 	(4) provide copies of the disclosure forms required in section 62S.081, subdivision 
57.22 	4, to the applicant;
57.23 	(5) inquire and otherwise make every reasonable effort to identify whether a 
57.24 	prospective applicant or enrollee for long-term care insurance already has long-term care 
57.25 	insurance and the types and amounts of the insurance;
57.26 	(5)(6) establish auditable procedures for verifying compliance with this subdivision; 
57.27 	and
57.28 	(6)(7) if applicable, provide written notice to the prospective policyholder and 
57.29 	certificate holder, at solicitation, that a senior insurance counseling program approved 
57.30 	by the commissioner is available and the name, address, and telephone number of the 
57.31 	program;
57.32 	(8) use the terms "noncancelable" or "level premium" only when the policy or 
57.33 	certificate conforms to section 62S.14; and
57.34 	(9) provide an explanation of contingent benefit upon lapse provided for in section 
57.35 	62S.266.

58.1 	EFFECTIVE DATE. This section is effective July 1, 2006.

58.2 	Sec. 47. Minnesota Statutes 2004, section 62S.30, is amended to read:
58.3 	62S.30 APPROPRIATENESS OF RECOMMENDED PURCHASE
58.4 	SUITABILITY.
58.5 	In recommending the purchase or replacement of a long-term care insurance policy 
58.6 	or certificate, an agent shall comply with section  60K.46, subdivision 4. 
58.7 		Subdivision 1.Standards. Every insurer or other entity marketing long-term care 
58.8 	insurance shall:
58.9 	(1) develop and use suitability standards to determine whether the purchase or 
58.10 	replacement of long-term care insurance is appropriate for the needs of the applicant; 
58.11 	(2) train its agents in the use of its suitability standards; and 
58.12 	(3) maintain a copy of its suitability standards and make them available for 
58.13 	inspection upon request by the commissioner.
58.14 		Subd. 2.Procedures. (a) To determine whether the applicant meets the standards 
58.15 	developed by the insurer or other entity marketing long-term care insurance, the agent 
58.16 	and insurer or other entity marketing long-term care insurance shall develop procedures 
58.17 	that take the following into consideration:
58.18 	(1) the ability to pay for the proposed coverage and other pertinent financial 
58.19 	information related to the purchase of the coverage;
58.20 	(2) the applicant's goals or needs with respect to long-term care and the advantages 
58.21 	and disadvantages of insurance to meet those goals or needs; and 
58.22 	(3) the values, benefits, and costs of the applicant's existing insurance, if any, when 
58.23 	compared to the values, benefits, and costs of the recommended purchase or replacement.
58.24 	(b) The insurer or other entity marketing long-term care insurance, and the agent, 
58.25 	where an agent is involved, shall make reasonable efforts to obtain the information set 
58.26 	forth in paragraph (a). The efforts shall include presentation to the applicant, at or prior 
58.27 	to application, of the "Long-Term Care Insurance Personal Worksheet." The personal 
58.28 	worksheet used by the insurer or other entity marketing long-term care insurance shall 
58.29 	contain, at a minimum, the information in the format contained in Appendix B of the 
58.30 	Long-Term Care Model Regulation adopted by the National Association of Insurance 
58.31 	Commissioners, in not less than 12-point type. The insurer or other entity marketing 
58.32 	long-term care insurance may request the applicant to provide additional information to 
58.33 	comply with its suitability standards. The insurer or other entity marketing long-term care 
58.34 	insurance shall file a copy of its personal worksheet with the commissioner.
59.1 	(c) A completed personal worksheet shall be returned to the insurer or other entity 
59.2 	marketing long-term care insurance prior to consideration of the applicant for coverage, 
59.3 	except the personal worksheet need not be returned for sales of employer group long-term 
59.4 	care insurance to employees and their spouses. The sale or dissemination by the insurer 
59.5 	or other entity marketing long-term care insurance, or the agent, of information obtained 
59.6 	through the personal worksheet is prohibited.
59.7 	(d) The insurer or other entity marketing long-term care insurance shall use the 
59.8 	suitability standards it has developed under this section in determining whether issuing 
59.9 	long-term care insurance coverage to an applicant is appropriate. Agents shall use the 
59.10 	suitability standards developed by the insurer or other entity marketing long-term care 
59.11 	insurance in marketing long-term care insurance.
59.12 	(e) At the same time as the personal worksheet is provided to the applicant, the 
59.13 	disclosure form entitled "Things You Should Know Before You Buy Long-Term Care 
59.14 	Insurance" shall be provided. The form shall be in the format contained in Appendix C of 
59.15 	the Long-Term Care Insurance Model Regulation adopted by the National Association of 
59.16 	Insurance Commissioners in not less than 12-point type.
59.17 	(f) If the insurer or other entity marketing long-term care insurance determines 
59.18 	that the applicant does not meet its financial suitability standards, or if the applicant has 
59.19 	declined to provide the information, the insurer or other entity marketing long-term 
59.20 	care insurance may reject the application. In the alternative, the insurer or other entity 
59.21 	marketing long-term care insurance shall send the applicant a letter similar to Appendix D 
59.22 	of the Long-Term Care Insurance Model Regulation adopted by the National Association 
59.23 	of Insurance Commissioners. However, if the applicant has declined to provide financial 
59.24 	information, the insurer or other entity marketing long-term care insurance may use some 
59.25 	other method to verify the applicant's intent. The applicant's returned letter or a record of 
59.26 	the alternative method of verification shall be made part of the applicant's file.
59.27 		Subd. 3.Reports. The insurer or other entity marketing long-term care insurance 
59.28 	shall report annually to the commissioner the total number of applications received from 
59.29 	residents of this state, the number of those who declined to provide information on the 
59.30 	personal worksheet, the number of applicants who did not meet the suitability standards, 
59.31 	and the number of those who chose to confirm after receiving a suitability letter.
59.32 		Subd. 4.Application. This section shall not apply to life insurance policies that 
59.33 	accelerate benefits for long-term care.

59.34 	EFFECTIVE DATE. This section is effective July 1, 2006.

59.35 	Sec. 48. [62S.315] PRODUCER TRAINING.
60.1 	The commissioner shall approve insurer and producer training requirements 
60.2 	according to the NAIC Long-Term Care Insurance Model Act provisions. The 
60.3 	commissioner of human services shall provide technical assistance and information to the 
60.4 	commissioner according to Public Law 109-171, section 6021.

60.5 	EFFECTIVE DATE. This section is effective July 1, 2006.

60.6 	Sec. 49. Minnesota Statutes 2005 Supplement, section 65B.49, subdivision 5a, is 
60.7 	amended to read:
60.8 		Subd. 5a.Rental vehicles. (a) Every plan of reparation security, wherever issued,
60.9 	insuring a natural person as named insured, covering private passenger vehicles as defined 
60.10 	under section 65B.001, subdivision 3, and pickup trucks and vans as defined under section 
60.11 	168.011 must: (1) provide that all of the obligation for damage and loss of use to a rented 
60.12 	private passenger vehicle, including pickup trucks and vans as defined under section 
60.13 	168.011, and rented trucks with a registered gross vehicle weight of 26,000 pounds or less 
60.14 	would be covered by the property damage liability portion of the plan; and (2) extend 
60.15 	the plan's basic economic loss benefits, residual liability insurance, and uninsured and 
60.16 	underinsured motorist coverages to the operation or use of the rented motor vehicle. This 
60.17 	subdivision does not apply to plans of reparation security covering only motor vehicles 
60.18 	registered under section 168.10, subdivision 1a, 1b, 1c, or 1d, or recreational equipment 
60.19 	as defined under section 168.011. The obligation of the plan must not be contingent on 
60.20 	fault or negligence. In all cases where the plan's property damage liability coverage is less 
60.21 	than $35,000, the coverage available under the subdivision must be $35,000. Other than 
60.22 	as described in this paragraph or in; paragraph (i), clause (2); or  paragraph (j), nothing 
60.23 	in this section amends or alters the provisions of the plan of reparation security as to 
60.24 	primacy of the coverages in this section.
60.25 	(b) A vehicle is rented for purposes of this subdivision:
60.26 	(1) if the rate for the use of the vehicle is determined on a monthly, weekly, or 
60.27 	daily basis; or
60.28 	(2) during the time that a vehicle is loaned as a replacement for a vehicle being 
60.29 	serviced or repaired regardless of whether the customer is charged a fee for the use 
60.30 	of the vehicle.
60.31 	A vehicle is not rented for the purposes of this subdivision if the rate for the vehicle's 
60.32 	use is determined on a period longer than one month or if the term of the rental agreement 
60.33 	is longer than one month. A vehicle is not rented for purposes of this subdivision if the 
60.34 	rental agreement has a purchase or buyout option or otherwise functions as a substitute for 
60.35 	purchase of the vehicle.
61.1 	(c) The policy or certificate issued by the plan must inform the insured of the 
61.2 	application of the plan to private passenger rental vehicles, including pickup trucks and 
61.3 	vans as defined under section 168.011, and that the insured may not need to purchase 
61.4 	additional coverage from the rental company.
61.5 	(d) Where an insured has two or more vehicles covered by a plan or plans of 
61.6 	reparation security containing the rented motor vehicle coverage required under paragraph 
61.7 	(a), the insured may select the plan the insured wishes to collect from and that plan is 
61.8 	entitled to a pro rata contribution from the other plan or plans based upon the property 
61.9 	damage limits of liability. If the person renting the motor vehicle is also covered by the 
61.10 	person's employer's insurance policy or the employer's automobile self-insurance plan, 
61.11 	the reparation obligor under the employer's policy or self-insurance plan has primary 
61.12 	responsibility to pay claims arising from use of the rented vehicle.
61.13 	(e) A notice advising the insured of rental vehicle coverage must be given by the 
61.14 	reparation obligor to each current insured with the first renewal notice after January 1, 
61.15 	1989. The notice must be approved by the commissioner of commerce. The commissioner 
61.16 	may specify the form of the notice.
61.17 	(f) When a motor vehicle is rented in this state, there must be attached to the rental 
61.18 	contract a separate form containing must contain a written notice in at least 10-point bold 
61.19 	type, if printed, or in capital letters, if typewritten, which states:
61.20 	Under Minnesota law, a personal automobile insurance policy issued in Minnesota
61.21 	must: (1) cover the rental of this motor vehicle against damage to the vehicle and 
61.22 	against loss of use of the vehicle; and (2) extend the policy's basic economic loss 
61.23 	benefits, residual liability insurance, and uninsured and underinsured motorist 
61.24 	coverages to the operation or use of a rented motor vehicle. Therefore, purchase of 
61.25 	any collision damage waiver or similar insurance affected in this rental contract is 
61.26 	not necessary if your policy was issued in Minnesota. In addition, purchase of any 
61.27 	additional liability insurance is not necessary if your policy was issued in Minnesota 
61.28 	unless you wish to have coverage for liability that exceeds the amount specified in 
61.29 	your personal automobile insurance policy.
61.30 	No collision damage waiver or other insurance offered as part of or in conjunction with 
61.31 	a rental of a motor vehicle may be sold unless the person renting the vehicle provides a 
61.32 	written acknowledgment that the above consumer protection notice has been read and 
61.33 	understood.
61.34 	(g) When damage to a rented vehicle is covered by a plan of reparation security as 
61.35 	provided under paragraph (a), the rental contract must state that payment by the reparation 
62.1 	obligor within the time limits of section 72A.201 is acceptable, and prior payment by 
62.2 	the renter is not required.
62.3 	(h) Compensation for the loss of use of a damaged rented motor vehicle is limited to 
62.4 	a period no longer than 14 days.
62.5 	(i)(1) For purposes of this paragraph subdivision, "rented motor vehicle" means a 
62.6 	rented vehicle described in paragraph (a), using the definition of "rented" provided in 
62.7 	paragraph (b).
62.8 	(2) Notwithstanding section 169.09, subdivision 5a, an owner of a rented motor 
62.9 	vehicle is not vicariously liable for legal damages resulting from the operation of the 
62.10 	rented motor vehicle in an amount greater than $100,000 because of bodily injury to one 
62.11 	person in any one accident and, subject to the limit for one person, $300,000 because of 
62.12 	injury to two or more persons in any one accident, and $50,000 because of injury to or 
62.13 	destruction of property of others in any one accident, if the owner of the rented motor 
62.14 	vehicle has in effect, at the time of the accident, a policy of insurance or self-insurance, as 
62.15 	provided in section 65B.48, subdivision 3, covering losses up to at least the amounts set 
62.16 	forth in this paragraph. Nothing in this paragraph alters or affects the obligations of an 
62.17 	owner of a rented motor vehicle to comply with the requirements of compulsory insurance 
62.18 	through a policy of insurance as provided in section 65B.48, subdivision 2, or through 
62.19 	self-insurance as provided in section 65B.48, subdivision 3, which policy of insurance or 
62.20 	self-insurance must apply whenever the operator is not covered by a plan of reparation 
62.21 	security as provided under paragraph (a); or with the obligations arising from section 
62.22 	72A.125 for products sold in conjunction with the rental of a motor vehicle. Nothing in 
62.23 	this paragraph alters or affects liability, other than vicarious liability, of an owner of 
62.24 	a rented motor vehicle.
62.25 	(3) The dollar amounts stated in this paragraph shall be adjusted for inflation 
62.26 	based upon the Consumer Price Index for all urban consumers, known as the CPI-U, 
62.27 	published by the United States Bureau of Labor Statistics. The dollar amounts stated 
62.28 	in this paragraph are based upon the value of that index for July 1995, which is the 
62.29 	reference base index for purposes of this paragraph. The dollar amounts in this paragraph 
62.30 	shall change effective January 1 of each odd-numbered year based upon the percentage 
62.31 	difference between the index for July of the preceding year and the reference base index, 
62.32 	calculated to the nearest whole percentage point. The commissioner shall announce and 
62.33 	publish, on or before September 30 of the preceding year, the changes in the dollar 
62.34 	amounts required by this paragraph to take effect on January 1 of each odd-numbered 
62.35 	year. The commissioner shall use the most recent revision of the July index available as 
62.36 	of September 1. Changes in the dollar amounts must be in increments of $5,000, and no 
63.1 	change shall be made in a dollar amount until the change in the index requires at least 
63.2 	a $5,000 change. If the United States Bureau of Labor Statistics changes the base year 
63.3 	upon which the CPI-U is based, the commissioner shall make the calculations necessary 
63.4 	to convert from the old base year to the new base year. If the CPI-U is discontinued, the 
63.5 	commissioner shall use the available index that is most similar to the CPI-U.
63.6 	(j) The plan of reparation security covering the owner of a rented motor vehicle is 
63.7 	excess of any residual liability coverage insuring an operator of a rented motor vehicle if 
63.8 	the vehicle is loaned as a replacement for a vehicle being serviced or repaired, regardless 
63.9 	of whether a fee is charged for use of the vehicle, provided that the vehicle so loaned is 
63.10 	owned by the service or repair business.

63.11 	Sec. 50. Minnesota Statutes 2004, section 70A.07, is amended to read:
63.12 	70A.07 RATES AND FORMS OPEN TO INSPECTION.
63.13 	All rates, supplementary rate information, and forms furnished to the commissioner 
63.14 	under this chapter shall, as soon as the commissioner's review has been completed within 
63.15 	ten days of their effective date, be open to public inspection at any reasonable time.

63.16 	Sec. 51. Minnesota Statutes 2005 Supplement, section 72A.201, subdivision 6, is 
63.17 	amended to read:
63.18 		Subd. 6.Standards for automobile insurance claims handling, settlement offers, 
63.19 	and agreements. In addition to the acts specified in subdivisions 4, 5, 7, 8, and 9, the 
63.20 	following acts by an insurer, adjuster, or a self-insured or self-insurance administrator 
63.21 	constitute unfair settlement practices:
63.22 	(1) if an automobile insurance policy provides for the adjustment and settlement 
63.23 	of an automobile total loss on the basis of actual cash value or replacement with like 
63.24 	kind and quality and the insured is not an automobile dealer, failing to offer one of the 
63.25 	following methods of settlement:
63.26 	(a) comparable and available replacement automobile, with all applicable taxes, 
63.27 	license fees, at least pro rata for the unexpired term of the replaced automobile's license, 
63.28 	and other fees incident to the transfer or evidence of ownership of the automobile paid, at 
63.29 	no cost to the insured other than the deductible amount as provided in the policy;
63.30 	(b) a cash settlement based upon the actual cost of purchase of a comparable 
63.31 	automobile, including all applicable taxes, license fees, at least pro rata for the unexpired 
63.32 	term of the replaced automobile's license, and other fees incident to transfer of evidence 
63.33 	of ownership, less the deductible amount as provided in the policy. The costs must be 
63.34 	determined by:
64.1 	(i) the cost of a comparable automobile, adjusted for mileage, condition, and options, 
64.2 	in the local market area of the insured, if such an automobile is available in that area; or
64.3 	(ii) one of two or more quotations obtained from two or more qualified sources 
64.4 	located within the local market area when a comparable automobile is not available in 
64.5 	the local market area. The insured shall be provided the information contained in all 
64.6 	quotations prior to settlement; or
64.7 	(iii) any settlement or offer of settlement which deviates from the procedure above 
64.8 	must be documented and justified in detail. The basis for the settlement or offer of 
64.9 	settlement must be explained to the insured;
64.10 	(2) if an automobile insurance policy provides for the adjustment and settlement 
64.11 	of an automobile partial loss on the basis of repair or replacement with like kind and 
64.12 	quality and the insured is not an automobile dealer, failing to offer one of the following 
64.13 	methods of settlement:
64.14 	(a) to assume all costs, including reasonable towing costs, for the satisfactory repair 
64.15 	of the motor vehicle. Satisfactory repair includes repair of both obvious and hidden 
64.16 	damage as caused by the claim incident. This assumption of cost may be reduced by 
64.17 	applicable policy provision; or
64.18 	(b) to offer a cash settlement sufficient to pay for satisfactory repair of the vehicle. 
64.19 	Satisfactory repair includes repair of obvious and hidden damage caused by the claim 
64.20 	incident, and includes reasonable towing costs;
64.21 	(3) regardless of whether the loss was total or partial, in the event that a damaged 
64.22 	vehicle of an insured cannot be safely driven, failing to exercise the right to inspect 
64.23 	automobile damage prior to repair within five business days following receipt of 
64.24 	notification of claim. In other cases the inspection must be made in 15 days;
64.25 	(4) regardless of whether the loss was total or partial, requiring unreasonable travel 
64.26 	of a claimant or insured to inspect a replacement automobile, to obtain a repair estimate, 
64.27 	to allow an insurer to inspect a repair estimate, to allow an insurer to inspect repairs made 
64.28 	pursuant to policy requirements, or to have the automobile repaired;
64.29 	(5) regardless of whether the loss was total or partial, if loss of use coverage 
64.30 	exists under the insurance policy, failing to notify an insured at the time of the insurer's 
64.31 	acknowledgment of claim, or sooner if inquiry is made, of the fact of the coverage, 
64.32 	including the policy terms and conditions affecting the coverage and the manner in which 
64.33 	the insured can apply for this coverage;
64.34 	(6) regardless of whether the loss was total or partial, failing to include the insured's 
64.35 	deductible in the insurer's demands under its subrogation rights. Subrogation recovery 
64.36 	must be shared at least on a proportionate basis with the insured, unless the deductible 
65.1 	amount has been otherwise recovered by the insured, except that when an insurer is 
65.2 	recovering directly from an uninsured third party by means of installments, the insured 
65.3 	must receive the full deductible share as soon as that amount is collected and before any 
65.4 	part of the total recovery is applied to any other use. No deduction for expenses may be 
65.5 	made from the deductible recovery unless an attorney is retained to collect the recovery, in 
65.6 	which case deduction may be made only for a pro rata share of the cost of retaining the 
65.7 	attorney. An insured is not bound by any settlement of its insurer's subrogation claim with 
65.8 	respect to the deductible amount, unless the insured receives, as a result of the subrogation 
65.9 	settlement, the full amount of the deductible. Recovery by the insurer and receipt by the 
65.10 	insured of less than all of the insured's deductible amount does not affect the insured's 
65.11 	rights to recover any unreimbursed portion of the deductible from parties liable for the loss;
65.12 	(7) requiring as a condition of payment of a claim that repairs to any damaged 
65.13 	vehicle must be made by a particular contractor or repair shop or that parts, other than 
65.14 	window glass, must be replaced with parts other than original equipment parts or engaging 
65.15 	in any act or practice of intimidation, coercion, threat, incentive, or inducement for or 
65.16 	against an insured to use a particular contractor or repair shop. Consumer benefits included 
65.17 	within preferred vendor programs must not be considered an incentive or inducement. 
65.18 	At the time a claim is reported, the insurer must provide the following advisory to the 
65.19 	insured or claimant:
65.20 	"Minnesota law gives You have the legal right to choose a repair shop to fix your 
65.21 	vehicle. Your policy will cover the reasonable costs of repairing your vehicle to its 
65.22 	pre-accident condition no matter where you have repairs made. Have you selected a 
65.23 	repair shop or would you like a referral?"
65.24 	After an insured has indicated that the insured has selected a repair shop, the insurer 
65.25 	must cease all efforts to influence the insured's or claimant's choice of repair shop;
65.26 	(8) where liability is reasonably clear, failing to inform the claimant in an automobile 
65.27 	property damage liability claim that the claimant may have a claim for loss of use of 
65.28 	the vehicle;
65.29 	(9) failing to make a good faith assignment of comparative negligence percentages 
65.30 	in ascertaining the issue of liability;
65.31 	(10) failing to pay any interest required by statute on overdue payment for an 
65.32 	automobile personal injury protection claim;
65.33 	(11) if an automobile insurance policy contains either or both of the time limitation 
65.34 	provisions as permitted by section 65B.55, subdivisions 1 and 2, failing to notify the 
65.35 	insured in writing of those limitations at least 60 days prior to the expiration of that time 
65.36 	limitation;
66.1 	(12) if an insurer chooses to have an insured examined as permitted by section 
66.2 	65B.56, subdivision 1, failing to notify the insured of all of the insured's rights and 
66.3 	obligations under that statute, including the right to request, in writing, and to receive 
66.4 	a copy of the report of the examination;
66.5 	(13) failing to provide, to an insured who has submitted a claim for benefits 
66.6 	described in section 65B.44, a complete copy of the insurer's claim file on the insured, 
66.7 	excluding internal company memoranda, all materials that relate to any insurance fraud 
66.8 	investigation, materials that constitute attorney work-product or that qualify for the 
66.9 	attorney-client privilege, and medical reviews that are subject to section 145.64, within ten 
66.10 	business days of receiving a written request from the insured. The insurer may charge 
66.11 	the insured a reasonable copying fee. This clause supersedes any inconsistent provisions 
66.12 	of sections 72A.49 to 72A.505;
66.13 	(14) if an automobile policy provides for the adjustment or settlement of an 
66.14 	automobile loss due to damaged window glass, failing to provide payment to the insured's 
66.15 	chosen vendor based on a competitive price that is fair and reasonable within the local 
66.16 	industry at large.
66.17 	Where facts establish that a different rate in a specific geographic area actually served 
66.18 	by the vendor is required by that market, that geographic area must be considered. This 
66.19 	clause does not prohibit an insurer from recommending a vendor to the insured or from 
66.20 	agreeing with a vendor to perform work at an agreed-upon price, provided, however, 
66.21 	that before recommending a vendor, the insurer shall offer its insured the opportunity to 
66.22 	choose the vendor. If the insurer recommends a vendor, the insurer must also provide 
66.23 	the following advisory:
66.24 	"Minnesota law gives you the right to go to any glass vendor you choose, and 
66.25 	prohibits me from pressuring you to choose a particular vendor.";
66.26 	(15) requiring that the repair or replacement of motor vehicle glass and related 
66.27 	products and services be made in a particular place or shop or by a particular entity, or by 
66.28 	otherwise limiting the ability of the insured to select the place, shop, or entity to repair or 
66.29 	replace the motor vehicle glass and related products and services; or
66.30 	(16) engaging in any act or practice of intimidation, coercion, threat, incentive, or 
66.31 	inducement for or against an insured to use a particular company or location to provide 
66.32 	the motor vehicle glass repair or replacement services or products. For purposes of this 
66.33 	section, a warranty shall not be considered an inducement or incentive.

66.34 	Sec. 52. Minnesota Statutes 2004, section 72C.10, subdivision 1, is amended to read:
67.1 		Subdivision 1.Readability compliance; filing and approval. No insurer shall 
67.2 	make, issue, amend, or renew any policy or contract after the dates specified in section  
67.3 	72C.11 for the applicable type of policy unless the contract is in compliance with the 
67.4 	requirements of sections  72C.06 to  72C.09 and unless the contract is filed with the 
67.5 	commissioner for approval. The contract shall be deemed approved 90 60 days after filing 
67.6 	unless disapproved by the commissioner within the 90-day 60-day period. When an 
67.7 	insurer, service plan corporation, or the Minnesota Comprehensive Health Association 
67.8 	fails to respond to an objection or inquiry within 60 days, the filing is automatically 
67.9 	disapproved. A resubmission is required if action by the Department of Commerce 
67.10 	is subsequently requested. An additional filing fee is required for the resubmission. 
67.11 	The commissioner shall not unreasonably withhold approval. Any disapproval shall be 
67.12 	delivered to the insurer in writing, stating the grounds therefor. Any policy filed with the 
67.13 	commissioner shall be accompanied by a Flesch scale readability analysis and test score 
67.14 	and by the insurer's certification that the policy or contract is in its judgment readable 
67.15 	based on the factors specified in sections  72C.06 to  72C.08. 

67.16 	Sec. 53. Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision 
67.17 	to read:
67.18 		Subd. 1a.Assigned risk plan. "Assigned risk plan" means:
67.19 	(1) the method to provide workers' compensation coverage to employers unable to 
67.20 	obtain coverage through licensed workers' compensation companies; and
67.21 	(2) the procedures established by the commissioner to implement that method of 
67.22 	providing coverage including administration of all assigned risk losses and reserves.

67.23 	Sec. 54. Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision 
67.24 	to read:
67.25 		Subd. 1b.Employer. "Employer" has the meaning given in section 176.011, 
67.26 	subdivision 10.

67.27 	Sec. 55. Minnesota Statutes 2004, section 79.251, subdivision 1, is amended to read:
67.28 		Subdivision 1.General duties of commissioner. (a)(1) The commissioner shall 
67.29 	have all the usual powers and authorities necessary for the discharge of the commissioner's 
67.30 	duties under this section and may contract with individuals in discharge of those duties. 
67.31 	The commissioner shall audit the reserves established (a) for individual cases arising 
67.32 	under policies and contracts of coverage issued under subdivision 4 and (b) for the total 
67.33 	book of business issued under subdivision 4. If the commissioner determines on the basis 
68.1 	of an audit that there is an excess surplus in the assigned risk plan, the commissioner must 
68.2 	notify the commissioner of finance who shall transfer assets of the plan equal to the excess 
68.3 	surplus to the budget reserve account in the general fund.
68.4 	(2) The commissioner shall monitor the operations of section  79.252 and this section 
68.5 	and shall periodically make recommendations to the governor and legislature when 
68.6 	appropriate, for improvement in the operation of those sections. 
68.7 	(3) All insurers and self-insurance administrators issuing policies or contracts under 
68.8 	subdivision 4 shall pay to the commissioner a .25 percent assessment on premiums for 
68.9 	policies and contracts of coverage issued under subdivision 4 for the purpose of defraying 
68.10 	the costs of performing the duties under clauses (1) and (2). Proceeds of the assessment 
68.11 	shall be deposited in the state treasury and credited to the general fund.
68.12 	(4) The assigned risk plan shall not be deemed a state agency.
68.13 	(5) The commissioner shall monitor and have jurisdiction over all reserves 
68.14 	maintained for assigned risk plan losses.
68.15 	(b) As used in this subdivision, "excess surplus" means the amount of assigned 
68.16 	risk plan assets in excess of the amount needed to pay all current liabilities of the plan, 
68.17 	including, but not limited to:
68.18 	(1) administrative expenses;
68.19 	(2) benefit claims; and
68.20 	(3) if the assigned risk plan is dissolved under subdivision 8, the amounts that would 
68.21 	be due insurers who have paid assessments to the plan.

68.22 	Sec. 56. Minnesota Statutes 2004, section 79.251, is amended by adding a subdivision 
68.23 	to read:
68.24 		Subd. 2a.Assigned risk rating plan. (a) Employers insured through the assigned 
68.25 	risk plan are subject to paragraphs (b) and (c).
68.26 	(b) Classifications must be assigned according to a uniform classification system 
68.27 	approved by the commissioner.
68.28 	(c) Rates must be modified according to an experience rating plan approved by the 
68.29 	commissioner. Any experience rating plan is subject to Minnesota Rules, parts 2700.2800 
68.30 	and 2700.2900.

68.31 	Sec. 57. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
68.32 	to read:
68.33 		Subd. 2a.Minimum qualifications. Any employer that (1) is required to carry 
68.34 	workers' compensation insurance pursuant to chapter 176 and (2) has a current written 
69.1 	notice of refusal to insure pursuant to subdivision 2, is entitled to coverage upon making 
69.2 	written application to the assigned risk plan, and paying the applicable premium.

69.3 	Sec. 58. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
69.4 	to read:
69.5 		Subd. 3a.Disqualifying factors. An employer may be denied or terminated from 
69.6 	coverage through the assigned risk plan if the employer:
69.7 	(1) applies for coverage for only a portion of the employer's statutory liability under 
69.8 	chapter 176, excluding wrap-up policies;
69.9 	(2) has an outstanding debt due and owing to the assigned risk plan at the time of 
69.10 	renewal arising from a prior policy;
69.11 	(3) persistently refuses to permit completion of an adequate payroll audit;
69.12 	(4) repeatedly submits misleading or erroneous payroll information; or
69.13 	(5) flagrantly disregards safety or loss control recommendations. Cancellation for 
69.14 	nonpayment of premium may be initiated by the service contractor upon 60 days' written 
69.15 	notice to the employer pursuant to section 176.185, subdivision 1. 

69.16 	Sec. 59. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
69.17 	to read:
69.18 		Subd. 3b.Occupational disease exposure. An employer having a significant 
69.19 	occupational disease exposure, as determined by the commissioner, to be entitled to 
69.20 	coverage shall have physical examinations made:
69.21 	(a) of employees who have not been examined within one year of the date of 
69.22 	application for assignment;
69.23 	(b) of new employees before hiring; and
69.24 	(c) of terminated employees. Upon request, the findings and reports of doctors 
69.25 	making examinations, together with x-rays and other original exhibits, must be furnished 
69.26 	to the assigned risk plan or the Department of Labor and Industry.

69.27 	Sec. 60. Minnesota Statutes 2005 Supplement, section 79A.04, subdivision 2, is 
69.28 	amended to read:
69.29 		Subd. 2.Minimum deposit. The minimum deposit is 110 percent of the private 
69.30 	self-insurer's estimated future liability. The deposit may be used to secure payment of 
69.31 	all administrative and legal costs, and unpaid assessments required by section 79A.12, 
69.32 	subdivision 2, relating to or arising from its or other employers' self-insuring. As used 
69.33 	in this section, "private self-insurer" includes both current and former members of the 
70.1 	self-insurers' security fund; and "private self-insurers' estimated future liability" means 
70.2 	the private self-insurers' total of estimated future liability as determined by an Associate 
70.3 	or Fellow of the Casualty Actuarial Society every year for group member private 
70.4 	self-insurers and, for a nongroup member private self-insurer's authority to self-insure, 
70.5 	every year for the first five years. After the first five years, the nongroup member's total 
70.6 	shall be as determined by an Associate or Fellow of the Casualty Actuarial Society at least 
70.7 	every two years, and each such actuarial study shall include a projection of future losses 
70.8 	during the period until the next scheduled actuarial study, less payments anticipated to 
70.9 	be made during that time.
70.10 	All data and information furnished by a private self-insurer to an Associate or 
70.11 	Fellow of the Casualty Actuarial Society for purposes of determining private self-insurers' 
70.12 	estimated future liability must be certified by an officer of the private self-insurer to be 
70.13 	true and correct with respect to payroll and paid losses, and must be certified, upon 
70.14 	information and belief, to be true and correct with respect to reserves. The certification 
70.15 	must be made by sworn affidavit. In addition to any other remedies provided by law, 
70.16 	the certification of false data or information pursuant to this subdivision may result in a 
70.17 	fine imposed by the commissioner of commerce on the private self-insurer up to the 
70.18 	amount of $5,000, and termination of the private self-insurers' authority to self-insure. 
70.19 	The determination of private self-insurers' estimated future liability by an Associate or 
70.20 	Fellow of the Casualty Actuarial Society shall be conducted in accordance with standards 
70.21 	and principles for establishing loss and loss adjustment expense reserves by the Actuarial 
70.22 	Standards Board, an affiliate of the American Academy of Actuaries. The commissioner 
70.23 	may reject an actuarial report that does not meet the standards and principles of the 
70.24 	Actuarial Standards Board, and may further disqualify the actuary who prepared the report 
70.25 	from submitting any future actuarial reports pursuant to this chapter. Within 30 days after 
70.26 	the actuary has been served by the commissioner with a notice of disqualification, an 
70.27 	actuary who is aggrieved by the disqualification may request a hearing to be conducted in 
70.28 	accordance with chapter 14. Based on a review of the actuarial report, the commissioner 
70.29 	of commerce may require an increase in the minimum security deposit in an amount the 
70.30 	commissioner considers sufficient.
70.31 	In addition, the Minnesota self-insurers' security fund may, at its sole discretion 
70.32 	and cost, undertake an independent actuarial review or an actuarial study of a private 
70.33 	self-insurers' estimated future liability as defined herein. The review or study must be 
70.34 	conducted by an associate or fellow of the Casualty Actuarial Society. The actuary has 
70.35 	the right to receive and review data and information of the self-insurer necessary for 
71.1 	the actuary to complete its review or study. A copy of this report must be filed with the 
71.2 	commissioner and a copy must be furnished to the self-insurer.
71.3 	Estimated future liability is determined by first taking the total amount of the 
71.4 	self-insured's future liability of workers' compensation claims and then deducting the 
71.5 	total amount which is estimated to be returned to the self-insurer from any specific 
71.6 	excess insurance coverage, aggregate excess insurance coverage, and any supplementary 
71.7 	benefits or second injury benefits which are estimated to be reimbursed by the special 
71.8 	compensation fund. However, in the determination of estimated future liability, the 
71.9 	actuary for the self-insurer shall not take a credit for any excess insurance or reinsurance 
71.10 	which is provided by a captive insurance company which is wholly owned by the 
71.11 	self-insurer. Supplementary benefits or second injury benefits will not be reimbursed by 
71.12 	the special compensation fund unless the special compensation fund assessment pursuant 
71.13 	to section 176.129 is paid and the reports required thereunder are filed with the special 
71.14 	compensation fund. In the case of surety bonds, bonds shall secure administrative and 
71.15 	legal costs in addition to the liability for payment of compensation reflected on the face of 
71.16 	the bond. In no event shall the security be less than the last retention limit selected by the 
71.17 	self-insurer with the Workers' Compensation Reinsurance Association, provided that the 
71.18 	commissioner may allow former members to post less than the Workers' Compensation 
71.19 	Reinsurance Association retention level if that amount is adequate to secure payment 
71.20 	of the self-insurers' estimated future liability, as defined in this subdivision, including 
71.21 	payment of claims, administrative and legal costs, and unpaid assessments required by 
71.22 	section 79A.12, subdivision 2. The posting or depositing of security pursuant to this 
71.23 	section shall release all previously posted or deposited security from any obligations under 
71.24 	the posting or depositing and any surety bond so released shall be returned to the surety. 
71.25 	Any other security shall be returned to the depositor or the person posting the bond.
71.26 	As a condition for the granting or renewing of a certificate to self-insure, the 
71.27 	commissioner may require a private self-insurer to furnish any additional security the 
71.28 	commissioner considers sufficient to insure payment of all claims under chapter 176.

71.29 	Sec. 61. Minnesota Statutes 2004, section 79A.23, subdivision 3, is amended to read:
71.30 		Subd. 3.Operational audit. (a) The commissioner, prior to authorizing surplus 
71.31 	distribution of a commercial self-insurance group's first fund year or no later than after 
71.32 	the third anniversary of the group's authority to self-insure, may conduct an operational 
71.33 	audit of the commercial self-insurance group's claim handling and reserve practices as 
71.34 	well as its underwriting procedures to determine if they adhere to the group's business 
71.35 	plan and sound business practices. The commissioner may select outside consultants to 
72.1 	assist in conducting the audit. After completion of the audit, the commissioner shall either 
72.2 	renew or revoke the commercial self-insurance group's authority to self-insure. The 
72.3 	commissioner may also order any changes deemed necessary in the claims handling, 
72.4 	reserving practices, or underwriting procedures of the group.
72.5 	(b) The cost of the operational audit shall be borne by the commercial self-insurance 
72.6 	group.

72.7 	Sec. 62. Minnesota Statutes 2004, section 79A.32, is amended to read:
72.8 	79A.32 REPORTING TO MINNESOTA WORKERS' COMPENSATION 
72.9 	INSURERS' ASSOCIATION LICENSED DATA SERVICE ORGANIZATIONS.
72.10 		Subdivision 1.Required activity. Each self-insurer shall perform the following 
72.11 	activities:
72.12 	(1) maintain membership in and report loss experience data to the Minnesota 
72.13 	Workers' Compensation Insurers Association, or a licensed data service organization, 
72.14 	in accordance with the statistical plan and rules of the organization as approved by the 
72.15 	commissioner;
72.16 	(2) establish a plan for merit rating which shall be consistently applied to all 
72.17 	insureds, provided that members of a data service organization may use merit rating plans 
72.18 	developed by that data service organization;
72.19 	(3) provide an annual report to the commissioner containing the information and 
72.20 	prepared in the form required by the commissioner; and
72.21 	(4) keep a record of the losses paid by the self-insurers and premiums for the 
72.22 	group self-insurers.
72.23 		Subd. 2.Permitted activity. In addition to any other activities not prohibited by 
72.24 	this chapter, self-insurers may Through data service organizations licensed under chapter 
72.25 	79, self insurers may:
72.26 	(1) through licensed data service organizations, individually, or with self-insurers 
72.27 	commonly owned, managed, or controlled, conduct research and collect statistics to 
72.28 	investigate, identify, and classify information relating to causes or prevention of losses; and
72.29 	(2) at the request of a private self insurer or self insurer group, submit and collect 
72.30 	data, including payroll and loss data; and perform calculations, including calculations of 
72.31 	experience modifications of individual self-insured employers.
72.32 	(2) develop and use classification plans and rates based upon any reasonable factors; 
72.33 	and
72.34 	(3) develop rules for the assignment of risks to classifications.
73.1 		Subd. 3.Delayed reporting. Private self-insurers established under sections  
73.2 	79A.01 to  79A.18 prior to August 1, 1995, need not begin filing the reports required 
73.3 	under subdivision 1 until January 1, 1998.

73.4 	Sec. 63. Minnesota Statutes 2004, section 123A.21, is amended by adding a 
73.5 	subdivision to read:
73.6 		Subd. 12.Health Coverage Pool Comparison Shopping. (a) Service cooperatives 
73.7 	must permit school districts and other political subdivisions participating in a service 
73.8 	cooperative health coverage pool to solicit bids and other information from competing 
73.9 	sources of health coverage at any time other than within five months prior to the end of a 
73.10 	master agreement.
73.11 	(b) A service cooperative must not impose a fine or other penalty against an enrolled 
73.12 	entity for soliciting a bid or other information during the allowed period. The service 
73.13 	cooperative may prohibit the entity from participating in service cooperative coverage for 
73.14 	a period of up to one year, if the entity leaves the service cooperative pool and obtains 
73.15 	other health coverage.
73.16 	(c) A service cooperative must provide each enrolled entity with the entity's monthly 
73.17 	claims data. This paragraph applies notwithstanding section 13.203.

73.18 	Sec. 64. Minnesota Statutes 2005 Supplement, section 256B.0571, is amended to read:
73.19 	256B.0571 LONG-TERM CARE PARTNERSHIP PROGRAM.
73.20 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
73.21 	the meanings given them.
73.22 		Subd. 2.Home care service. "Home care service" means care described in section 
73.23 	144A.43.
73.24 		Subd. 3.Long-term care insurance. "Long-term care insurance" means a policy 
73.25 	described in section 62S.01.
73.26 		Subd. 4.Medical assistance. "Medical assistance" means the program of medical 
73.27 	assistance established under section 256B.01.
73.28 		Subd. 5.Nursing home. "Nursing home" means a nursing home as described 
73.29 	in section 144A.01.
73.30 		Subd. 6.Partnership policy. "Partnership policy" means a long-term care insurance 
73.31 	policy that meets the requirements under subdivision 10 or 11, regardless of when the 
73.32 	policy and was first issued on or after the effective date of the state plan amendment 
73.33 	implementing the partnership program in Minnesota.
74.1 		Subd. 7.Partnership program. "Partnership program" means the Minnesota 
74.2 	partnership for long-term care program established under this section.
74.3 		Subd. 7a.Protected assets. "Protected assets" means assets or proceeds of assets 
74.4 	that are protected from recovery under subdivisions 13 and 15.
74.5 		Subd. 8.Program established. (a) The commissioner, in cooperation with the 
74.6 	commissioner of commerce, shall establish the Minnesota partnership for long-term care 
74.7 	program to provide for the financing of long-term care through a combination of private 
74.8 	insurance and medical assistance.
74.9 	(b) An individual who meets the requirements in this paragraph is eligible to 
74.10 	participate in the partnership program. The individual must:
74.11 	(1) be a Minnesota resident at the time coverage first became effective under the 
74.12 	partnership policy;
74.13 	(2) purchase a partnership policy that is delivered, issued for delivery, or renewed on 
74.14 	or after the effective date of Laws 2005, First Special Session chapter 4, article 7, section 
74.15 	5, and maintain the partnership policy in effect throughout the period of participation 
74.16 	in the partnership program be a beneficiary of a partnership policy  that (i) is issued on 
74.17 	or after the effective date of the state plan amendment implementing the partnership 
74.18 	program in Minnesota, or (ii) qualifies as a partnership policy under the provisions of 
74.19 	subdivision 8a; and
74.20 	(3) exhaust the minimumhave exhausted all of the benefits under the partnership 
74.21 	policy as described in this section. Benefits received under a long-term care insurance 
74.22 	policy before the effective date of Laws 2005, First Special Session chapter 4, article 7, 
74.23 	section 5 July 1, 2006, do not count toward the exhaustion of benefits required in this 
74.24 	subdivision.
74.25 		Subd. 8a.Exchange for long-term care partnership policy; addition of policy 
74.26 	rider. (a) If authorized by federal law or if federal approval is granted with respect to 
74.27 	the partnership program established in this section, a long-term care insurance policy 
74.28 	that was issued before the effective date of the state plan amendment implementing the 
74.29 	partnership program in Minnesota that was exchanged after the effective date of the state 
74.30 	plan amendment for a long-term care partnership policy that meets the requirements of 
74.31 	Public Law 109-171, section 6021, qualifies as a long-term care partnership policy under 
74.32 	this section, unless the policy is paying benefits on the date the policy is exchanged.
74.33 	(b) If authorized by federal law or if federal approval is granted with respect to the 
74.34 	partnership program established in this section, a long-term care insurance policy that was 
74.35 	issued before the effective date of the state plan amendment implementing the partnership 
74.36 	program in Minnesota that has a rider added after the effective date of the state plan 
75.1 	amendment that meets the requirements of Public Law 109-171, section 6021, qualifies 
75.2 	as a long-term care partnership policy under this section, unless the policy is paying 
75.3 	benefits on the date the rider is added.
75.4 		Subd. 9.Medical assistance eligibility. (a) Upon application offor medical 
75.5 	assistance program payment of long-term care services by an individual who meets the 
75.6 	requirements described in subdivision 8, the commissioner shall determine the individual's 
75.7 	eligibility for medical assistance according to paragraphs (b) and (c) to (i).
75.8 	(b) After disregarding financialdetermining assets exempted under medical 
75.9 	assistance eligibility requirements subject to the asset limit under section 256B.056, 
75.10 	subdivision 3 or 3c, or 256B.057, subdivision 9 or 10, the commissioner shall disregard an 
75.11 	additional amount of financial assets equalallow the individual to designate assets to be 
75.12 	protected from recovery under subdivisions 13 and 15 up to the dollar amount of coverage
75.13 	the benefits utilized under the partnership policy. Designated assets shall be disregarded 
75.14 	for purposes of determining eligibility for payment of long-term care services.
75.15 	(c) The commissioner shall consider the individual's income according to medical 
75.16 	assistance eligibility requirements. The individual shall identify the designated assets and 
75.17 	the full fair market value of those assets and designate them as assets to be protected at 
75.18 	the time of initial application for medical assistance. The full fair market value of real 
75.19 	property or interests in real property shall be based on the most recent full assessed value 
75.20 	for property tax purposes for the real property, unless the individual provides a complete 
75.21 	professional appraisal by a licensed appraiser to establish the full fair market value. The 
75.22 	extent of a life estate in real property shall be determined using the life estate table in the 
75.23 	health care program's manual. Ownership of any asset in joint tenancy shall be treated as 
75.24 	ownership as tenants in common for purposes of its designation as a disregarded asset. 
75.25 	The unprotected value of any protected asset is subject to estate recovery according to 
75.26 	subdivisions 13 and 15.
75.27 	(d) The right to designate assets to be protected is personal to the individual and 
75.28 	ends when the individual dies, except as otherwise provided in subdivisions 13 and 
75.29 	15. It does not include the increase in the value of the protected asset and the income, 
75.30 	dividends, or profits from the asset. It may be exercised by the individual or by anyone 
75.31 	with the legal authority to do so on the individual's behalf. It shall not be sold, assigned, 
75.32 	transferred, or given away.
75.33 	(e) If the dollar amount of the benefits utilized under a partnership policy is greater 
75.34 	than the full fair market value of all assets protected at the time of the application for 
75.35 	medical assistance long-term care services, the individual may designate additional assets 
75.36 	that become available during the individual's lifetime for protection under this section. 
76.1 	The individual must make the designation in writing to the county agency no later than 
76.2 	the last date on which the individual must report a change in circumstances to the county 
76.3 	agency, as provided for under the medical assistance program. Any excess used for this 
76.4 	purpose shall not be available to the individual's estate to protect assets in the estate from 
76.5 	recovery under section 256B.15 or 524.3-1202, or otherwise.
76.6 	(f) This section applies only to estate recovery under United States Code, title 42, 
76.7 	section 1396p, subsections (a) and (b), and does not apply to recovery authorized by other 
76.8 	provisions of federal law, including, but not limited to, recovery from trusts under United 
76.9 	States Code, title 42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from 
76.10 	annuities, or similar legal instruments, subject to section 6012, subsections (a) and (b), of 
76.11 	the Deficit Reduction Act of 2005, Public Law 109-171.
76.12 	(g) An individual's protected assets owned by the individual's spouse who applies 
76.13 	for payment of medical assistance long-term care services shall not be protected assets or 
76.14 	disregarded for purposes of eligibility of the individual's spouse solely because they were 
76.15 	protected assets of the individual.
76.16 	(h) Assets designated under this subdivision shall not be subject to penalty under 
76.17 	section 256B.0595.
76.18 	(i) The commissioner shall otherwise determine the individual's eligibility 
76.19 	for payment of long-term care services according to medical assistance eligibility 
76.20 	requirements.
76.21 		Subd. 10.Dollar-for-dollar asset protection policiesLong-term care partnership 
76.22 	policy inflation protection. (a) A dollar-for-dollar asset protection policy must meet all 
76.23 	of the requirements in paragraphs (b) to (e).
76.24 	(b) The policy must satisfy the requirements of chapter 62S.
76.25 	(c) The policy must offer an elimination period of not more than 180 days for an 
76.26 	adjusted premium.
76.27 	(d) The policy must satisfy the requirements established by the commissioner of 
76.28 	human services under subdivision 14.
76.29 	(e) Minimum daily benefits shall be $130 for nursing home care or $65 for home 
76.30 	care, with inflation protection provided in the policy as described in section 62S.23, 
76.31 	subdivision 1, clause (1). These minimum daily benefit amounts shall be adjusted by the 
76.32 	commissioner on October 1 of each year by a percentage equal to the inflation protection 
76.33 	feature described in section 62S.23, subdivision 1, clause (1), for purposes of setting 
76.34 	minimum requirements that a policy must meet in future years in order to initially qualify 
76.35 	as an approved policy under this subdivision. Adjusted minimum daily benefit amounts 
76.36 	shall be rounded to the nearest whole dollar.A long-term care partnership policy must 
77.1 	provide the inflation protection described in this subdivision. If the policy is sold to an 
77.2 	individual who:
77.3 	(1) has not attained age 61 as of the date of purchase, the policy must provide 
77.4 	compound annual inflation protection;
77.5 	(2) has attained age 61, but has not attained age 76 as of such date, the policy must 
77.6 	provide some level of inflation protection; and
77.7 	(3) has attained age 76 as of such date, the policy may, but is not required to, provide 
77.8 	some level of inflation protection.
77.9 		Subd. 11.Total asset protection policies. (a) A total asset protection policy must 
77.10 	meet all of the requirements in subdivision 10, paragraphs (b) to (d), and this subdivision.
77.11 	(b) Minimum coverage shall be for a period of not less than three years and for a 
77.12 	dollar amount equal to 36 months of nursing home care at the minimum daily benefit rate 
77.13 	determined and adjusted under paragraph (c).
77.14 	(c) Minimum daily benefits shall be $150 for nursing home care or $75 for home 
77.15 	care, with inflation protection provided in the policy as described in section 62S.23, 
77.16 	subdivision 1, clause (1). These minimum daily benefit amounts shall also be adjusted 
77.17 	by the commissioner on October 1 of each year by a percentage equal to the inflation 
77.18 	protection feature described in section 62S.23, subdivision 1, clause (1), for purposes of 
77.19 	setting minimum requirements that a policy must meet in future years in order to initially 
77.20 	qualify as an approved policy under this subdivision. Adjusted minimum daily benefit 
77.21 	amounts shall be rounded to the nearest whole dollar.
77.22 	(d) The policy must cover all of the following services:
77.23 	(1) nursing home stay;
77.24 	(2) home care service; and
77.25 	(3) care management.
77.26 		Subd. 12.Compliance with federal law. An issuer of a partnership policy must 
77.27 	comply with any federal law authorizing partnership policies in Minnesota Public Law 
77.28 	109-171, section 6021, including any federal regulations, as amended, adopted under that 
77.29 	law. This subdivision does not require compliance with any provision of this federal 
77.30 	law until the date upon which the law requires compliance with the provision. The 
77.31 	commissioner has authority to enforce this subdivision.
77.32 		Subd. 13.Limitations on estate recovery. (a) For an individual who exhausts the 
77.33 	minimum benefits of adollar-for-dollar asset protectionpolicy under subdivision 10, and 
77.34 	is determined eligible for medical assistance under subdivision 9, the state shall limit 
77.35 	recovery under the provisions of section 256B.15 against the estate of the individual or 
77.36 	individual's spouse for medical assistance benefits received by that individual to an amount 
78.1 	that exceeds the dollar amount of coverage utilized under the partnership policy. Protected 
78.2 	assets of the individual shall not be subject to recovery under section 256B.15 or section 
78.3 	524.3-1201 for medical assistance or alternative care paid on behalf of the individual. 
78.4 	Protected assets of the individual in the estate of the individual's surviving spouse shall 
78.5 	not be liable to pay a claim for recovery of medical assistance paid for the predeceased 
78.6 	individual that is filed in the estate of the surviving spouse under section 256B.15. 
78.7 	Protected assets of the individual shall not be protected assets in the surviving spouse's 
78.8 	estate by reason of the preceding sentence and shall be subject to recovery under section 
78.9 	256B.15 or 524.3-1201 for medical assistance paid on behalf of the surviving spouse.
78.10 	(b) For an individual who exhausts the minimum benefits of a total asset protection 
78.11 	policy under subdivision 11, and is determined eligible for medical assistance under 
78.12 	subdivision 9, the state shall not seek recovery under the provisions of section 256B.15
78.13 	against the estate of the individual or individual's spouse for medical assistance benefits 
78.14 	received by that individual. The personal representative may protect the full fair market 
78.15 	value of an individual's unprotected assets in the individual's estate in an amount equal 
78.16 	to the unused amount of asset protection the individual had on the date of death. The 
78.17 	personal representative shall apply the asset protection so that the full fair market value of 
78.18 	any unprotected asset in the estate is protected. When or if the asset protection available 
78.19 	to the personal representative is or becomes less than the full fair market value of any 
78.20 	remaining unprotected asset, it shall be applied to partially protect one unprotected asset.
78.21 	(c) The asset protection described in paragraph (a) terminates with respect to an asset 
78.22 	includable in the individual's estate under chapter 524 or section 256B.15:
78.23 	(1) when the estate distributes the asset; or
78.24 	(2) if the estate of the individual has not been probated within one year from the 
78.25 	date of death.
78.26 	(d) If an individual owns a protected asset on the date of death and the estate is 
78.27 	opened for probate more than one year after death, the state or a county agency may file 
78.28 	and collect claims in the estate under section 256B.15, and no statute of limitations in 
78.29 	chapter 524 that would otherwise limit or bar the claim shall apply.
78.30 	(e) Except as otherwise provided, nothing in this section shall limit or prevent 
78.31 	recovery of medical assistance.
78.32 		Subd. 14.Implementation. (a) If federal law is amended or a federal waiver is 
78.33 	granted to permit implementation of this section, the commissioner, in consultation with 
78.34 	the commissioner of commerce, may alter the requirements of subdivisions 10 and 11, 
78.35 	and may establish additional requirements for approved policies in order to conform with 
78.36 	federal law or waiver authority. In establishing these requirements, the commissioner shall 
79.1 	seek to maximize purchase of qualifying policies by Minnesota residents while controlling 
79.2 	medical assistance costs.
79.3 	(b) The commissioner is authorized to suspend implementation of this section 
79.4 	until the next session of the legislature if the commissioner, in consultation with the 
79.5 	commissioner of commerce, determines that the federal legislation or federal waiver 
79.6 	authorizing a partnership program in Minnesota is likely to impose substantial unforeseen 
79.7 	costs on the state budget.
79.8 	(c) The commissioner must take action under paragraph (a) or (b) within 45 days of 
79.9 	final federal action authorizing a partnership policy in Minnesota.
79.10 	(d) The commissioner must notify the appropriate legislative committees of 
79.11 	action taken under this subdivision within 50 days of final federal action authorizing a 
79.12 	partnership policy in Minnesota.
79.13 	(e) The commissioner must publish a notice in the State Register of implementation 
79.14 	decisions made under this subdivision as soon as practicable.
79.15 	(a) The commissioner, in cooperation with the commissioner of commerce, may alter 
79.16 	the requirements of this section so as to be in compliance with forthcoming requirements 
79.17 	of the Department of Health and Human Services and the National Association of 
79.18 	Insurance Commissioners necessary to implement the long-term care partnership program 
79.19 	requirements of Public Law 109-171, section 6021.
79.20 	(b) The commissioner shall submit a state plan amendment to the federal government 
79.21 	to implement the long-term care partnership program in accordance with this section.
79.22 		Subd. 15.Limitation on liens. (a) An individual's interest in real property shall 
79.23 	not be subject to a medical assistance lien or a notice of potential claim while and to the 
79.24 	extent it is protected under subdivision 9.
79.25 	(b) Medical assistance liens or liens arising under notices of potential claims against 
79.26 	an individual's interests in real property in the individual's estate that are designated as 
79.27 	protected under subdivision 13, paragraph (b), shall be released to the extent of the dollar 
79.28 	value of the protection applied to the interest.
79.29 	(c) If an interest in real property is protected from a lien for recovery of medical 
79.30 	assistance paid on behalf of the individual under paragraph (a) or (b), no lien for recovery 
79.31 	of medical assistance paid on behalf of that individual shall be filed against the protected 
79.32 	interest in real property after it is distributed to the individual's heirs or devisees.
79.33 		Subd. 16.Burden of proof. Any individual or the personal representative of the 
79.34 	individual's estate who asserts that an asset is a disregarded or protected asset under 
79.35 	this section in connection with any determination of eligibility for benefits under the 
80.1 	medical assistance program or any appeal, case, controversy, or other proceedings, shall 
80.2 	have the initial burden of:
80.3 	(1) documenting and proving by clear and convincing evidence that the asset or 
80.4 	source of funds for the asset in question was designated as disregarded or protected;
80.5 	(2) tracing the asset and the proceeds of the asset from that time forward; and 
80.6 	(3) documenting that the asset or proceeds of the asset remained disregarded or 
80.7 	protected at all relevant times.

80.8 	EFFECTIVE DATE. This section is effective July 1, 2006.

80.9 	Sec. 65.  REPEALER.
 80.10 	(a) Minnesota Statutes 2005 Supplement, section 256B.0571, subdivisions 2, 5, 
80.11 	and 11, are repealed.
80.12 	(b) Minnesota Rules, parts 2781.0100; 2781.0200; 2781.0300; 2781.0400; 
80.13 	2781.0500; and 2781.0600, are repealed.

80.14 	EFFECTIVE DATE. This section is effective July 1, 2006.