1.1 	A bill for an act
1.2 	relating to commerce; regulating insurance fees, coverages, contracts, filings, 
1.3 	and forms; regulating financial planners, motor vehicle retail installment sales, 
1.4 	service contracts, real estate appraisers, subdivided lands, domestic mutual 
1.5 	insurance companies, and collection agencies; merging certain joint underwriting 
1.6 	associations; making technical and clarifying changes;amending Minnesota 
1.7 	Statutes 2006, sections 53C.01, subdivision 2; 59B.01; 59B.02, subdivision 
1.8 	11, by adding a subdivision; 59B.05, subdivision 5; 60A.71, subdivision 7; 
1.9 	61A.57; 62A.149, subdivision 1; 62A.152, subdivision 2; 62A.44, by adding a 
1.10 	subdivision; 62E.10, subdivision 2; 62F.02, by adding a subdivision; 62M.02, 
1.11 	subdivision 21; 62Q.47; 62Q.64; 62S.01, by adding subdivisions; 62S.13, 
1.12 	subdivision 4; 62S.15; 62S.18, subdivision 2; 62S.20, subdivision 6, by adding 
1.13 	subdivisions; 62S.26, subdivision 2; 62S.266, subdivisions 4, 10; 62S.29, by 
1.14 	adding subdivisions; 65A.37; 66A.02, subdivision 4; 66A.07, subdivision 2, by 
1.15 	adding a subdivision; 66A.41, subdivision 1; 67A.31, subdivision 2; 72A.51, 
1.16 	subdivision 2; 79A.06, subdivision 5; 79A.22, subdivisions 3, 4; 79A.23, 
1.17 	subdivision 2; 82B.23, subdivision 1; 83.25, by adding a subdivision; Minnesota 
1.18 	Statutes 2007 Supplement, sections 61A.257, subdivision 1; 62A.30, subdivision 
1.19 	2; 62S.23, subdivision 1; 72A.52, subdivision 1; proposing coding for new law 
1.20 	in Minnesota Statutes, chapters 62S; 332; repealing Minnesota Statutes 2006, 
1.21 	sections 62A.149, subdivision 2; 65B.29; Laws 2006, chapter 255, section 26.
1.22 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.23 	Section 1. Minnesota Statutes 2006, section 53C.01, subdivision 2, is amended to read:
1.24 		Subd. 2.Cash sale price. "Cash sale price" means the price at which the seller 
1.25 	would in good faith sell to the buyer, and the buyer would in good faith buy from the seller, 
1.26 	the motor vehicle which is the subject matter of the retail installment contract, if such sale 
1.27 	were a sale for cash, instead of a retail installment sale. The cash sale price may include 
1.28 	any taxes, charges for delivery, servicing, repairing, or improving the motor vehicle, 
1.29 	including accessories and their installation, and any other charges agreed upon between 
1.30 	the parties. The cash price may not include a documentary fee or document administration 
1.31 	fee in excess of $50 $75 for services actually rendered to, for, or on behalf of, the retail 
2.1 	buyer in preparing, handling, and processing documents relating to the motor vehicle and 
2.2 	the closing of the retail sale. "Documentary fee" and "document administration fee" do 
2.3 	not include an optional electronic transfer fee as defined under subdivision 14.

2.4 	Sec. 2. Minnesota Statutes 2006, section 59B.01, is amended to read:
2.5 	59B.01 SCOPE AND PURPOSE.
2.6 	(a) The purpose of this chapter is to create a legal framework within which service 
2.7 	contracts may be sold in this state.
2.8 	(b) The following are exempt from this chapter:
2.9 	(1) warranties;
2.10 	(2) maintenance agreements;
2.11 	(3) warranties, service contracts, or maintenance agreements offered by public 
2.12 	utilities, as defined in section 216B.02, subdivision 4, or an entity or operating unit owned 
2.13 	by or under common control with a public utility;
2.14 	(4) service contracts sold or offered for sale to persons other than consumers;
2.15 	(5) service contracts on tangible property where the tangible property for which the 
2.16 	service contract is sold has a purchase price of $250 or less, exclusive of sales tax;
2.17 	(6) motor vehicle service contracts as defined in section 65B.29, subdivision 1, 
2.18 	paragraph (1);
2.19 	(7) (6) service contracts for home security equipment installed by a licensed 
2.20 	technology systems contractor; and
2.21 	(8) (7) motor club membership contracts that typically provide roadside assistance 
2.22 	services to motorists stranded for reasons that include, but are not limited to, mechanical 
2.23 	breakdown or adverse road conditions.
2.24 	(c) The types of agreements referred to in paragraph (b) are not subject to chapters 
2.25 	60A to 79A, except as otherwise specifically provided by law.
2.26 	(d) Service contracts issued by motor vehicle manufacturers covering private 
2.27 	passenger automobiles are only subject to sections 59B.03, subdivision 5, 59B.05, and 
2.28 	59B.07.

2.29 	Sec. 3. Minnesota Statutes 2006, section 59B.02, is amended by adding a subdivision 
2.30 	to read:
2.31 		Subd. 5a.Motor vehicle manufacturer. "Motor vehicle manufacturer" means 
2.32 	a person that:
2.33 	(1) manufactures or produces motor vehicles and sells motor vehicles under its 
2.34 	own name or label;
3.1 	(2) is a wholly owned subsidiary of the person that manufactures or produces motor 
3.2 	vehicles;
3.3 	(3) is a corporation which owns 100 percent of the person that manufactures or 
3.4 	produces motor vehicles;
3.5 	(4) does not manufacture or produce motor vehicles, but sells motor vehicles under 
3.6 	the trade name or label of another person that manufactures or produces motor vehicles;
3.7 	(5) manufactures or produces motor vehicles and sells the motor vehicles under the 
3.8 	trade name or label of another person that manufactures or produces motor vehicles; or
3.9 	(6) does not manufacture or produce motor vehicles but, pursuant to a written 
3.10 	contract, licenses the use of its trade name or label to another person that manufactures 
3.11 	or produces motor vehicles and that sells motor vehicles under the licensor's trade name 
3.12 	or label.

3.13 	Sec. 4. Minnesota Statutes 2006, section 59B.02, subdivision 11, is amended to read:
3.14 		Subd. 11.Service contract. "Service contract" means a contract or agreement for a 
3.15 	separately stated consideration for a specific duration to perform the repair, replacement, 
3.16 	or maintenance of property or indemnification for repair, replacement, or maintenance, for 
3.17 	the operational or structural failure due to a defect in materials, workmanship, or normal 
3.18 	wear and tear, with or without additional provisions for incidental payment of indemnity 
3.19 	under limited circumstances, including without limitation, towing, rental, emergency 
3.20 	road service, and road hazard protection. Service contracts may provide for the repair, 
3.21 	replacement, or maintenance of property for damage resulting from power surges and 
3.22 	accidental damage from handling.

3.23 	Sec. 5. Minnesota Statutes 2006, section 59B.05, subdivision 5, is amended to read:
3.24 		Subd. 5.Coverages, limitations, and exclusions. No particular causes of loss or 
3.25 	property are required to be covered, but service contracts must specify the merchandise 
3.26 	and services to be provided and, with equal prominence, any limitations, exceptions, or 
3.27 	exclusions including, but not limited to, any damage or breakdown not covered by the 
3.28 	service contract. Service contracts may cover damage resulting from rust, corrosion, or 
3.29 	damage caused by a noncovered part or system.

3.30 	Sec. 6. Minnesota Statutes 2006, section 60A.71, subdivision 7, is amended to read:
3.31 		Subd. 7.Duration; fees. (a) Each applicant for a reinsurance intermediary license 
3.32 	shall pay to the commissioner a fee of $200 for an initial two-year license and a fee of 
4.1 	$150 for each renewal. Applications shall be submitted on forms prescribed by the 
4.2 	commissioner.
4.3 	(b) Initial licenses issued under this chapter are valid for a period not to exceed 24 
4.4 	months and expire on October 31 of the renewal year assigned by the commissioner. Each 
4.5 	renewal reinsurance intermediary license is valid for a period of 24 months. Licensees 
4.6 	who submit renewal applications postmarked or delivered on or before October 15 of the 
4.7 	renewal year may continue to transact business whether or not the renewal license has been 
4.8 	received by November 1. Licensees who submit applications postmarked or delivered 
4.9 	after October 15 of the renewal year must not transact business after the expiration date 
4.10 	of the license until the renewal license has been received.
4.11 	(c) All fees are nonreturnable, except that an overpayment of any fee may be 
4.12 	refunded upon proper application.

4.13 	Sec. 7. Minnesota Statutes 2007 Supplement, section 61A.257, subdivision 1, is 
4.14 	amended to read:
4.15 		Subdivision 1.Definitions. (a) For the purposes of this section only, the following 
4.16 	terms have the meanings given them.
4.17 	(b) "2001 CSO Mortality Table" means that mortality table, consisting of separate 
4.18 	rates of mortality for male and female lives, developed by the American Academy of 
4.19 	Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the 
4.20 	Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and 
4.21 	adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in 
4.22 	the Proceedings of the NAIC (2nd Quarter 2002) and supplemented by the 2001 CSO 
4.23 	Preferred Class Structure Mortality Table defined in paragraph (c). Unless the context 
4.24 	indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of 
4.25 	that table and the select and ultimate form of that table and includes both the smoker and 
4.26 	nonsmoker mortality tables and the composite mortality tables. It also includes both the 
4.27 	age-nearest-birthday and age-last-birthday bases of the mortality tables. Mortality tables 
4.28 	in the 2001 CSO Mortality Table include the following:
4.29 	(1) "2001 CSO Mortality Table (F)" means that mortality table consisting of the rates 
4.30 	of mortality for female lives from the 2001 CSO Mortality Table;
4.31 	(2) "2001 CSO Mortality Table (M)" means that mortality table consisting of the 
4.32 	rates of mortality for male lives from the 2001 CSO Mortality Table;
4.33 	(3) "composite mortality tables" means mortality tables with rates of mortality that 
4.34 	do not distinguish between smokers and nonsmokers; and
5.1 	(4) "smoker and nonsmoker mortality tables" means mortality tables with separate 
5.2 	rates of mortality for smokers and nonsmokers.
5.3 	(c) "2001 CSO Preferred Class Structure Mortality Table" means mortality tables 
5.4 	with separate rates of mortality for the super preferred Nonsmokers nonsmoker, preferred 
5.5 	Nonsmokers nonsmoker, residual standard Nonsmokers nonsmoker, preferred Smokers
5.6 	smoker, and residual standard smoker splits of the 2001 CSO Nonsmoker and Smoker 
5.7 	Mortality Tables as adopted by the NAIC at the September 2006 national meeting and 
5.8 	published in the NAIC Proceedings (3rd Quarter 2006). Unless the context indicates 
5.9 	otherwise, the "2001 CSO Preferred Class Structure Mortality Table" includes both the 
5.10 	ultimate form of that table and the select and ultimate form of that table, the smoker and 
5.11 	nonsmoker mortality tables, both the male and female mortality tables and the gender 
5.12 	composite mortality tables, and both the age-nearest-birthday and age-last-birthday bases 
5.13 	of the mortality table.
5.14 	(d) "Statistical agent" means an entity with proven systems for protecting the 
5.15 	confidentiality of individual insured and insurer information; demonstrated resources 
5.16 	for and history of ongoing electronic communications and data transfer ensuring data 
5.17 	integrity with insurers, which are its members or subscribers; and a history of and means 
5.18 	for aggregation of data and accurate promulgation of the experience modifications in a 
5.19 	timely manner.

5.20 	Sec. 8. Minnesota Statutes 2006, section 61A.57, is amended to read:
5.21 	61A.57 DUTIES OF INSURERS THAT USE AGENTS OR BROKERS.
5.22 	Each insurer that uses an agent or broker in a life insurance or annuity sale shall:
5.23 	(a) Require with or as part of each completed application for life insurance or 
5.24 	annuity, a statement signed by the agent or broker as to whether the agent or broker knows 
5.25 	replacement is or may be involved in the transaction.
5.26 	(b) Where a replacement is involved:
5.27 	(1) require from the agent or broker with the application for life insurance or 
5.28 	annuity, a copy of the fully completed and signed replacement notice provided the 
5.29 	applicant under section 61A.55. The existing life insurance or annuity must be identified 
5.30 	by name of insurer, insured, and contract number. If a number has not been assigned by 
5.31 	the existing insurer, alternative identification, such as an application or receipt number, 
5.32 	must be listed; and 
5.33 	(2) send to each existing insurer a written communication advising of the 
5.34 	replacement or proposed replacement and the identification information obtained under 
5.35 	this section. This written communication must be made within five working days of the 
6.1 	date that the application is received in the replacing insurer's home or regional office, or 
6.2 	the date the proposed policy or contract is issued, whichever is sooner.
6.3 	(c) The replacing insurer shall maintain evidence of the "notice regarding 
6.4 	replacement" and a replacement register, cross-indexed, by replacing agent and existing 
6.5 	insurer to be replaced. Evidence that all requirements were met shall be maintained for at 
6.6 	least six years.
6.7 	(d) The replacing insurer shall provide in its policy or contract, or in a separate 
6.8 	written notice that is delivered with the policy or contract, that the applicant has a right 
6.9 	to an unconditional refund of all premiums paid, which right may be exercised within a 
6.10 	period of 20 30 days beginning from the date of delivery of the policy.

6.11 	EFFECTIVE DATE. This section is effective January 1, 2009.

6.12 	Sec. 9. Minnesota Statutes 2006, section 62A.149, subdivision 1, is amended to read:
6.13 		Subdivision 1.Application. The provisions of this section apply to all group 
6.14 	policies of accident and health insurance and group subscriber contracts offered by 
6.15 	nonprofit health service plan corporations regulated under chapter 62C, and to a plan or 
6.16 	policy that is individually underwritten or provided for a specific individual and family 
6.17 	members as a nongroup policy unless the individual elects in writing to refuse benefits 
6.18 	under this subdivision in exchange for an appropriate reduction in premiums or subscriber 
6.19 	charges under the policy or plan, when the policies or subscriber contracts are issued or 
6.20 	delivered in Minnesota or provide benefits to Minnesota residents enrolled thereunder.
6.21 	This section does not apply to policies designed primarily to provide coverage 
6.22 	payable on a per diem, fixed indemnity or nonexpense incurred basis or policies that 
6.23 	provide accident only coverage.
6.24 	Every insurance policy or subscriber contract included within the provisions of this 
6.25 	subdivision, upon issuance or renewal, shall provide for payment of benefits coverage 
6.26 	that complies with the requirements of section 62Q.47, paragraphs (b) and (c),  for the 
6.27 	treatment of alcoholism, chemical dependency or drug addiction to any Minnesota resident 
6.28 	entitled to coverage.thereunder on the same basis as coverage for other benefits when 
6.29 	treatment is rendered in
6.30 	(1) a licensed hospital,
6.31 	(2) a residential treatment program as licensed by the state of Minnesota pursuant 
6.32 	to diagnosis or recommendation by a doctor of medicine,
6.33 	(3) a nonresidential treatment program approved or licensed by the state of 
6.34 	Minnesota.

7.1 	Sec. 10. Minnesota Statutes 2006, section 62A.152, subdivision 2, is amended to read:
7.2 		Subd. 2.Minimum benefits. (a) All group policies and all group subscriber 
7.3 	contracts providing benefits for mental or nervous disorder treatments in a hospital shall 
7.4 	also provide coverage on the same basis as coverage for other benefits for at least 80 
7.5 	percent of the cost of the usual and customary charges of the first ten hours of treatment 
7.6 	incurred over a 12-month benefit period, for mental or nervous disorder consultation, 
7.7 	diagnosis and treatment services delivered while the insured person is not a bed patient 
7.8 	in a hospital, and at least 75 percent of the cost of the usual and customary charges for 
7.9 	any additional hours of treatment during the same 12-month benefit period for serious or 
7.10 	persistent mental or nervous disorders, if the services are furnished by (1) a licensed or 
7.11 	accredited hospital, (2) a community mental health center or mental health clinic approved 
7.12 	or licensed by the commissioner of human services or other authorized state agency, or (3) 
7.13 	a mental health professional, as defined in sections 245.462, subdivision 18, clauses (1) to 
7.14 	(5); and 245.4871, subdivision 27, clauses (1) to (5). Prior authorization from an accident 
7.15 	and health insurance company, or a nonprofit health service corporation, shall be required 
7.16 	for an extension of coverage beyond ten hours of treatment. This prior authorization 
7.17 	must be based upon the severity of the disorder, the patient's risk of deterioration without 
7.18 	ongoing treatment and maintenance, degree of functional impairment, and a concise 
7.19 	treatment plan. Authorization for extended treatment may be limited to a maximum of 30 
7.20 	visit hours during any 12-month benefit period.
7.21 	(b) For purposes of this section, covered treatment for a minor includes treatment for 
7.22 	the family if family therapy is recommended by a provider listed in paragraph (a). For 
7.23 	purposes of determining benefits under this section, "hours of treatment" means treatment 
7.24 	rendered on an individual or single-family basis. If treatment is rendered on a group basis, 
7.25 	the hours of covered group treatment must be provided at a ratio of no less than two group 
7.26 	treatment sessions to one individual treatment hour. that complies with the requirements 
7.27 	of section 62Q.47, paragraphs (b) and (c).

7.28 	Sec. 11. Minnesota Statutes 2007 Supplement, section 62A.30, subdivision 2, is 
7.29 	amended to read:
7.30 		Subd. 2.Required coverage. Every policy, plan, certificate, or contract referred to 
7.31 	in subdivision 1 that provides coverage to a Minnesota resident must provide coverage 
7.32 	for routine screening procedures for cancer and the office or facility visit, including 
7.33 	mammograms, surveillance tests for ovarian cancer for women who are at risk for ovarian 
7.34 	cancer as defined in subdivision 3, pap smears, and colorectal screening tests for men 
8.1 	and women, when ordered or provided by a physician in accordance with the standard 
8.2 	practice of medicine.

8.3 	Sec. 12. Minnesota Statutes 2006, section 62A.44, is amended by adding a subdivision 
8.4 	to read:
8.5 		Subd. 2a.Electronic enrollment. (a) For any Medicare supplement plan as defined 
8.6 	in section 62A.3099, any requirement that a signature of an insured be obtained by 
8.7 	an agent or insurer is satisfied if:
8.8 	(1) the consent is obtained by telephonic or electronic enrollment by the group 
8.9 	policyholder or insured. A verification of the enrollment information must be provided to 
8.10 	the applicant;
8.11 	(2) the telephonic or electronic enrollment provides necessary and reasonable 
8.12 	safeguards to ensure the accuracy, retention, and prompt retrieval of records; and
8.13 	(3) the telephonic or electronic enrollment provides necessary and reasonable 
8.14 	safeguards to ensure that the confidentiality of individual information and privileged 
8.15 	information as defined in section 72A.491, subdivision 19, is maintained.
8.16 	(b) The insurer shall make available, upon request of the commissioner, records that 
8.17 	will demonstrate the insurer's ability to confirm enrollment and coverage.

8.18 	Sec. 13. Minnesota Statutes 2006, section 62E.10, subdivision 2, is amended to read:
8.19 		Subd. 2.Board of directors; organization. The board of directors of the 
8.20 	association shall be made up of eleven members as follows: six directors selected by 
8.21 	contributing members, subject to approval by the commissioner, one of which must be 
8.22 	a health actuary; five public directors selected by the commissioner, at least two of 
8.23 	whom must be plan enrollees, two of whom must be representatives of employers whose 
8.24 	accident and health insurance premiums are part of the association's assessment base, are 
8.25 	covered under an individual plan subject to assessment under section 62E.11 or group 
8.26 	plan offered by an employer subject to assessment under section 62E.11, and one of 
8.27 	whom must be a licensed insurance agent. At least two of the public directors must reside 
8.28 	outside of the seven county metropolitan area. In determining voting rights at members' 
8.29 	meetings, each member shall be entitled to vote in person or proxy. The vote shall be 
8.30 	a weighted vote based upon the member's cost of self-insurance, accident and health 
8.31 	insurance premium, subscriber contract charges, health maintenance contract payment, or 
8.32 	community integrated service network payment derived from or on behalf of Minnesota 
8.33 	residents in the previous calendar year, as determined by the commissioner. In approving 
8.34 	directors of the board, the commissioner shall consider, among other things, whether all 
9.1 	types of members are fairly represented. Directors selected by contributing members 
9.2 	may be reimbursed from the money of the association for expenses incurred by them as 
9.3 	directors, but shall not otherwise be compensated by the association for their services. The 
9.4 	costs of conducting meetings of the association and its board of directors shall be borne 
9.5 	by members of the association.

9.6 	Sec. 14. Minnesota Statutes 2006, section 62F.02, is amended by adding a subdivision 
9.7 	to read:
9.8 		Subd. 3.Merger. Effective January 1, 2008, the association is merged into the joint 
9.9 	underwriting association under chapter 62I.

9.10 	Sec. 15. Minnesota Statutes 2006, section 62M.02, subdivision 21, is amended to read:
9.11 		Subd. 21.Utilization review organization. "Utilization review organization" 
9.12 	means an entity including but not limited to an insurance company licensed under chapter 
9.13 	60A to offer, sell, or issue a policy of accident and sickness insurance as defined in section 
9.14 	62A.01; a prepaid limited health service organization issued a certificate of authority 
9.15 	and operating under sections 62A.451 to 62A.4528; a health service plan licensed under 
9.16 	chapter 62C; a health maintenance organization licensed under chapter 62D; a community 
9.17 	integrated service network licensed under chapter 62N; an accountable provider network 
9.18 	operating under chapter 62T; a fraternal benefit society operating under chapter 64B; 
9.19 	a joint self-insurance employee health plan operating under chapter 62H; a multiple 
9.20 	employer welfare arrangement, as defined in section 3 of the Employee Retirement 
9.21 	Income Security Act of 1974 (ERISA), United States Code, title 29, section 1103, as 
9.22 	amended; a third party administrator licensed under section 60A.23, subdivision 8, which 
9.23 	conducts utilization review and determines certification of an admission, extension of stay, 
9.24 	or other health care services for a Minnesota resident; or any entity performing utilization 
9.25 	review that is affiliated with, under contract with, or conducting utilization review on 
9.26 	behalf of, a business entity in this state. Utilization review organization does not include 
9.27 	a clinic or health care system acting pursuant to a written delegation agreement with an 
9.28 	otherwise regulated utilization review organization that contracts with the clinic or health 
9.29 	care system. The regulated utilization review organization is accountable for the delegated 
9.30 	utilization review activities of the clinic or health care system. 

9.31 	Sec. 16. Minnesota Statutes 2006, section 62Q.47, is amended to read:
9.32 	62Q.47 ALCOHOLISM, MENTAL HEALTH, AND CHEMICAL 
9.33 	DEPENDENCY SERVICES.
10.1 	(a) All health plans, as defined in section 62Q.01, that provide coverage for 
10.2 	alcoholism, mental health, or chemical dependency services, must comply with the 
10.3 	requirements of this section. 
10.4 	(b) Cost-sharing requirements and benefit or service limitations for outpatient 
10.5 	mental health and outpatient chemical dependency and alcoholism services, except for 
10.6 	persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 
10.7 	to 9530.6660, must not place a greater financial burden on the insured or enrollee, or be 
10.8 	more restrictive than those requirements and limitations for outpatient medical services.
10.9 	(c) Cost-sharing requirements and benefit or service limitations for inpatient hospital 
10.10 	mental health and inpatient hospital and residential chemical dependency and alcoholism 
10.11 	services, except for persons placed in chemical dependency services under Minnesota 
10.12 	Rules, parts 9530.6600 to 9530.6660, must not place a greater financial burden on the 
10.13 	insured or enrollee, or be more restrictive than those requirements and limitations for 
10.14 	inpatient hospital medical services.

10.15 	Sec. 17. Minnesota Statutes 2006, section 62Q.64, is amended to read:
10.16 	62Q.64 DISCLOSURE OF EXECUTIVE COMPENSATION.
10.17 	(a) Each health plan company doing business in this state whose annual Minnesota 
10.18 	premiums exceed $10,000,000 based on the most recent assessment base of the Minnesota 
10.19 	Comprehensive Health Association shall annually file with the Consumer Advisory Board 
10.20 	created in section 62J.75 either the commissioner of commerce or the commissioner 
10.21 	of health, as appropriate: 
10.22 	(1) a copy of the health plan company's form 990 filed with the federal Internal 
10.23 	Revenue Service; or
10.24 	(2) if the health plan company did not file a form 990 with the federal Internal 
10.25 	Revenue Service, a list of the amount and recipients of the health plan company's five 
10.26 	highest salaries, including all types of compensation, in excess of $50,000.
10.27 	(b) A filing under this section is public data under section 13.03. 

10.28 	Sec. 18. Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision 
10.29 	to read:
10.30 		Subd. 16a.Hands-on assistance. "Hands-on assistance" means minimal, moderate, 
10.31 	or maximal physical assistance without which the individual would not be able to perform 
10.32 	the activity of daily living.

11.1 	Sec. 19. Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision 
11.2 	to read:
11.3 		Subd. 22a.Personal care. "Personal care" means the provision of hands-on services 
11.4 	to assist an individual with activities of daily living.

11.5 	Sec. 20. Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision 
11.6 	to read:
11.7 		Subd. 23b.Providers of services. All providers of services, including but not 
11.8 	limited to "skilled nursing facility," "extended care facility," "convalescent nursing home," 
11.9 	"personal care facility," "specialized care providers," "assisted living facility," and 
11.10 	"home care agency" are defined in relation to the services and facilities required to be 
11.11 	available and the licensure, certification, registration, or degree status of those providing 
11.12 	or supervising the services. When the definition requires that the provider be appropriately 
11.13 	licensed, certified, or registered, it must also state what requirements a provider must 
11.14 	meet in lieu of licensure, certification, or registration when the state in which the service 
11.15 	is to be furnished does not require a provider of these services to be licensed, certified, 
11.16 	or registered, or when the state licenses, certifies, or registers the provider of services 
11.17 	under another name.

11.18 	Sec. 21. Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision 
11.19 	to read:
11.20 		Subd. 25b.Skilled nursing care, personal care, home care, specialized care, 
11.21 	assisted living care, and other services. "Skilled nursing care," "personal care," "home 
11.22 	care," "specialized care," "assisted living care," and other services are defined in relation 
11.23 	to the level of skill required, the nature of the care, and the setting in which care must 
11.24 	be delivered.

11.25 	Sec. 22. Minnesota Statutes 2006, section 62S.13, subdivision 4, is amended to read:
11.26 		Subd. 4.Field issue prohibition. A long-term care insurance policy or certificate 
11.27 	may not be field issued based on medical or health status. For purposes of this section, 
11.28 	"field issued" means a policy or certificate issued by an agent or a third-party administrator 
11.29 	under the underwriting authority granted to the agent or third-party administrator by an 
11.30 	insurer and using the insurer's underwriting guidelines.

11.31 	Sec. 23. Minnesota Statutes 2006, section 62S.15, is amended to read:
11.32 	62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.
12.1 	(a) No policy may be delivered or issued for delivery in this state as long-term care 
12.2 	insurance if the policy limits or excludes coverage by type of illness, treatment, medical 
12.3 	condition, or accident, except as follows:
12.4 	(1) preexisting conditions or diseases;
12.5 	(2) mental or nervous disorders; except that the exclusion or limitation of benefits on 
12.6 	the basis of Alzheimer's disease is prohibited;
12.7 	(3) alcoholism and drug addiction;
12.8 	(4) illness, treatment, or medical condition arising out of war or act of war; 
12.9 	participation in a felony, riot, or insurrection; service in the armed forces or auxiliary 
12.10 	units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying 
12.11 	aviation; 
12.12 	(5) treatment provided in a government facility unless otherwise required by 
12.13 	law, services for which benefits are available under Medicare or other government 
12.14 	program except Medicaid, state or federal workers' compensation, employer's liability 
12.15 	or occupational disease law, motor vehicle no-fault law; services provided by a member 
12.16 	of the covered person's immediate family; and services for which no charge is normally 
12.17 	made in the absence of insurance; and
12.18 	(6) expenses for services or items available or paid under another long-term care 
12.19 	insurance or health insurance policy.; and
12.20 	(7) in the case of a qualified long-term care insurance contract, expenses for services 
12.21 	or items to the extent that the expenses are reimbursable under title XVIII of the Social 
12.22 	Security Act or would be so reimbursable but for the application of a deductible or 
12.23 	coinsurance amount.
12.24 	(b) This subdivision does not prohibit exclusions and limitations by type of provider 
12.25 	or territorial limitations. However, no long-term care issuer may deny a claim because 
12.26 	services are provided in a state other than the state of policy issued under the following 
12.27 	conditions:
12.28 	(1) when the state other than the state of policy issue does not have the provider 
12.29 	licensing, certification, or registration required in the policy, but where the provider 
12.30 	satisfies the policy requirements outlined for providers in lieu of licensure, certification, or 
12.31 	registration; or
12.32 	(2) when the state other than the state of policy issue licenses, certifies, or registers 
12.33 	the provider under another name.
12.34 	For purposes of this paragraph, "state of policy issue" means the state in which the 
12.35 	individual policy or certificate was originally issued.

13.1 	Sec. 24. Minnesota Statutes 2006, section 62S.18, subdivision 2, is amended to read:
13.2 		Subd. 2.Premiums. (a) The premiums charged to an insured for long-term care 
13.3 	insurance replaced under subdivision 1 shall not increase due to either the increasing 
13.4 	age of the insured at ages beyond 65 or the duration the insured has been covered under 
13.5 	this policy.
13.6 	(b) The purchase of additional coverage must not be considered a premium rate 
13.7 	increase, but for purposes of the calculation required under section 62S.291, the portion 
13.8 	of the premium attributable to the additional coverage must be added to and considered 
13.9 	part of the initial annual premium.
13.10 	(c) A reduction in benefits must not be considered a premium change, but for 
13.11 	purpose of the calculation required under section 62S.291, the initial annual premium must 
13.12 	be based on the reduced benefits.

13.13 	Sec. 25. [62S.181] ELECTRONIC ENROLLMENT FOR GROUP POLICIES.
13.14 		Subdivision 1.Employers or labor unions. In the case of a group defined in section 
13.15 	62S.01, subdivision 15, clause (1), any requirement that a signature of an insured be 
13.16 	obtained by an agent or insurer is satisfied if:
13.17 	(1) the consent is obtained by telephonic or electronic enrollment by the group 
13.18 	policyholder or insurer. A verification of enrollment information must be provided to the 
13.19 	enrollee;
13.20 	(2) the telephonic or electronic enrollment provides necessary and reasonable 
13.21 	safeguards to ensure the accuracy, retention, and prompt retrieval of records; and
13.22 	(3) the telephonic or electronic enrollment provides necessary and reasonable 
13.23 	safeguards to ensure that the confidentiality of individually identifiable information and 
13.24 	"privileged information" as defined by section 72A.491, subdivision 19, is maintained.
13.25 		Subd. 2.Availability of insurer records. The insurer shall make available, upon 
13.26 	request of the commissioner, records that will demonstrate the insurer's ability to confirm 
13.27 	enrollment and coverage amounts.

13.28 	Sec. 26. Minnesota Statutes 2006, section 62S.20, is amended by adding a subdivision 
13.29 	to read:
13.30 		Subd. 5a.Disclosure of tax consequences. With regard to life insurance policies 
13.31 	that provide an accelerated benefit for long-term care, a disclosure statement is required 
13.32 	at the time of application for the policy or rider and at the same time the accelerated 
13.33 	benefit payment request is submitted that receipt of these accelerated benefits may be 
13.34 	taxable, and that assistance should be sought from a personal tax advisor. The disclosure 
14.1 	statement must be prominently displayed on the first page of the policy or rider and any 
14.2 	other related documents. This subdivision does not apply to qualified long-term care 
14.3 	insurance contracts.

14.4 	Sec. 27. Minnesota Statutes 2006, section 62S.20, is amended by adding a subdivision 
14.5 	to read:
14.6 		Subd. 5b.Benefit triggers. Activities of daily living and cognitive impairment 
14.7 	must be used to measure an insured's need for long-term care and must be described 
14.8 	in the policy or certificate in a separate paragraph and must be labeled "Eligibility for 
14.9 	the Payment of Benefits." Any additional benefit triggers must also be explained in this 
14.10 	section. If these triggers differ for different benefits, explanation of the trigger must 
14.11 	accompany each benefit description. If an attending physician or other specified person 
14.12 	must certify a certain level of functional dependency in order to be eligible for benefits, 
14.13 	this too shall be specified.

14.14 	Sec. 28. Minnesota Statutes 2006, section 62S.20, subdivision 6, is amended to read:
14.15 		Subd. 6.Qualified long-term care insurance policy. A qualified long-term care 
14.16 	insurance policy must include a disclosure statement in the policy that the policy is 
14.17 	intended to be a qualified long-term care insurance policy under section 7702B(b) of the 
14.18 	Internal Revenue Code of 1986, as amended.

14.19 	Sec. 29. Minnesota Statutes 2007 Supplement, section 62S.23, subdivision 1, is 
14.20 	amended to read:
14.21 		Subdivision 1.Inflation protection feature. (a) No insurer may offer a long-term 
14.22 	care insurance policy unless the insurer also offers to the policyholder, in addition to any 
14.23 	other inflation protection, the option to purchase a policy that provides for benefit levels to 
14.24 	increase with benefit maximums or reasonable durations which are meaningful to account 
14.25 	for reasonably anticipated increases in the costs of long-term care services covered by 
14.26 	the policy. In addition to other options that may be offered, insurers must offer to each 
14.27 	policyholder, at the time of purchase, the option to purchase a policy with an inflation 
14.28 	protection feature no less favorable than one of the following:
14.29 	(1) increases benefit levels annually in a manner so that the increases are 
14.30 	compounded annually at a rate not less than five percent;
14.31 	(2) guarantees the insured individual the right to periodically increase benefit levels 
14.32 	without providing evidence of insurability or health status so long as the option for the 
14.33 	previous period has not been declined. The amount of the additional benefit shall be no 
15.1 	less than the difference between the existing policy benefit and that benefit compounded 
15.2 	annually at a rate of at least five percent for the period beginning with the purchase of the 
15.3 	existing benefit and extending until the year in which the offer is made; or
15.4 	(3) covers a specified percentage of actual or reasonable charges and does not 
15.5 	include a maximum specified indemnity amount or limit.
15.6 	(b) A long-term care partnership policy must provide the inflation protection 
15.7 	described in this subdivision. If the policy is sold to an individual who:
15.8 	(1) has not attained age 61 as of the date of purchase, the policy must provide 
15.9 	compound annual inflation protection;
15.10 	(2) has attained age 61, but has not attained age 76 as of such date, the policy must 
15.11 	provide some level of inflation protection; and
15.12 	(3) has attained the age of 76 as of such date, the policy may, but is not required to, 
15.13 	provide some level of inflation protection.
15.14 	Inflation protection for a long-term care partnership policy may not be less than 
15.15 	three percent per year or a rate based on changes in the Consumer Price Index. The 
15.16 	commissioner, however, may approve other types of inflation protection that comply with 
15.17 	this section and further the goals of the partnership program.

15.18 	Sec. 30. [62S.251] RESERVE STANDARDS.
15.19 		Subdivision 1.Benefits provided through acceleration of benefits under life 
15.20 	policies. When long-term care benefits are provided through the acceleration of benefits 
15.21 	under group or individual life policies or riders to these policies, policy reserves for the 
15.22 	benefits must be determined in accordance with section 61A.25. Claim reserves must also 
15.23 	be established in the case when the policy or rider is in claim status.
15.24 	Reserves for policies and riders subject to this section must be based on the multiple 
15.25 	decrement model utilizing all relevant decrements except for voluntary termination rates. 
15.26 	Single decrement approximations are acceptable if the calculation produces essentially 
15.27 	similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. 
15.28 	The calculations may take into account the reduction in life insurance benefits due to 
15.29 	the payment of long-term care benefits. However, in no event must the reserves for the 
15.30 	long-term care benefit and the life insurance benefit be less than the reserves for the life 
15.31 	insurance benefit assuming no long-term care benefit.
15.32 	In the development and calculation of reserves for policies and riders subject to this 
15.33 	subdivision, due regard must be given to the applicable policy provisions, marketing 
15.34 	methods, administrative procedures, and all other considerations which have an impact on 
15.35 	projected claim costs, including, but not limited to, the following:
16.1 	(1) definition of insured events;
16.2 	(2) covered long-term care facilities;
16.3 	(3) existence of home convalescence care coverage;
16.4 	(4) definition of facilities;
16.5 	(5) existence or absence of barriers to eligibility;
16.6 	(6) premium waiver provision;
16.7 	(7) renewability;
16.8 	(8) ability to raise premiums;
16.9 	(9) marketing method;
16.10 	(10) underwriting procedures;
16.11 	(11) claims adjustment procedures;
16.12 	(12) waiting period;
16.13 	(13) maximum benefit;
16.14 	(14) availability of eligible facilities;
16.15 	(15) margins in claim costs;
16.16 	(16) optional nature of benefit;
16.17 	(17) delay in eligibility for benefit;
16.18 	(18) inflation protection provisions; and
16.19 	(19) guaranteed insurability option.
16.20 	Any applicable valuation morbidity table shall be certified as appropriate as a 
16.21 	statutory valuation table by a member of the American Academy of Actuaries.
16.22 		Subd. 2.Benefits provided otherwise. When long-term care benefits are provided 
16.23 	other than as in subdivision 1, reserves must be determined in accordance with sections 
16.24 	60A.76 to 60A.768.

16.25 	Sec. 31. Minnesota Statutes 2006, section 62S.26, subdivision 2, is amended to read:
16.26 		Subd. 2.Life insurance policies. Subdivision 1 shall not apply to life insurance 
16.27 	policies that accelerate benefits for long-term care. A life insurance policy that funds 
16.28 	long-term care benefits entirely by accelerating the death benefit is considered to provide 
16.29 	reasonable benefits in relation to premiums paid, if the policy complies with all of the 
16.30 	following provisions:
16.31 	(1) the interest credited internally to determine cash value accumulations, including 
16.32 	long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest 
16.33 	rate for cash value accumulations without long-term care set forth in the policy;
16.34 	(2) the portion of the policy that provides life insurance benefits meets the 
16.35 	nonforfeiture requirements of section 61A.24;
17.1 	(3) the policy meets the disclosure requirements of sections 62S.09, 62S.10, and 
17.2 	62S.11; and
17.3 	(4) any policy illustration that meets the applicable requirements of the NAIC Life 
17.4 	Insurance Illustrations Model Regulation; and
17.5 	(4)(5) an actuarial memorandum is filed with the commissioner that includes:
17.6 	(i) a description of the basis on which the long-term care rates were determined;
17.7 	(ii) a description of the basis for the reserves;
17.8 	(iii) a summary of the type of policy, benefits, renewability, general marketing 
17.9 	method, and limits on ages of issuance;
17.10 	(iv) a description and a table of each actuarial assumption used. For expenses, 
17.11 	an insurer must include percentage of premium dollars per policy and dollars per unit 
17.12 	of benefits, if any;
17.13 	(v) a description and a table of the anticipated policy reserves and additional reserves 
17.14 	to be held in each future year for active lives;
17.15 	(vi) the estimated average annual premium per policy and the average issue age; 
17.16 	(vii) a statement as to whether underwriting is performed at the time of application. 
17.17 	The statement shall indicate whether underwriting is used and, if used, the statement 
17.18 	shall include a description of the type or types of underwriting used, such as medical 
17.19 	underwriting or functional assessment underwriting. Concerning a group policy, the 
17.20 	statement shall indicate whether the enrollee or any dependent will be underwritten and 
17.21 	when underwriting occurs; and
17.22 	(viii) a description of the effect of the long-term care policy provision on the required 
17.23 	premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both 
17.24 	for active lives and those in long-term care claim status.

17.25 	Sec. 32. Minnesota Statutes 2006, section 62S.266, subdivision 4, is amended to read:
17.26 		Subd. 4.Contingent benefit upon lapse. (a) After rejection of the offer required 
17.27 	under subdivision 2, for individual and group policies without nonforfeiture benefits 
17.28 	issued after July 1, 2001, the insurer shall provide a contingent benefit upon lapse.
17.29 	(b)  If a group policyholder elects to make the nonforfeiture benefit an option to 
17.30 	the certificate holder, a certificate shall provide either the nonforfeiture benefit or the 
17.31 	contingent benefit upon lapse.
17.32 	(c) The contingent benefit on lapse must be triggered every time an insurer increases 
17.33 	the premium rates to a level which results in a cumulative increase of the annual premium 
17.34 	equal to or exceeding the percentage of the insured's initial annual premium based on 
17.35 	the insured's issue age provided in this paragraph, and the policy or certificate lapses 
18.1 	within 120 days of the due date of the premium increase. Unless otherwise required, 
18.2 	policyholders shall be notified at least 30 days prior to the due date of the premium 
18.3 	reflecting the rate increase.
18.4 	Triggers for a Substantial Premium Increase

18.5
18.6		Issue Age
		Percent Increase Over 
Initial Premium

18.7		29 and Under
		200
	
18.8		30-34
		190
	
18.9		35-39
		170
	
18.10		40-44
		150
	
18.11		45-49
		130
	
18.12		50-54
		110
	
18.13		55-59
		90
	
18.14		60
		70
	
18.15		61
		66
	
18.16		62
		62
	
18.17		63
		58
	
18.18		64
		54
	
18.19		65
		50
	
18.20		66
		48
	
18.21		67
		46
	
18.22		68
		44
	
18.23		69
		42
	
18.24		70
		40
	
18.25		71
		38
	
18.26		72
		36
	
18.27		73
		34
	
18.28		74
		32
	
18.29		75
		30
	
18.30		76
		28
	
18.31		77
		26
	
18.32		78
		24
	
18.33		79
		22
	
18.34		80
		20
	
18.35		81
		19
	
18.36		82
		18
	
18.37		83
		17
	
18.38		84
		16
	
18.39		85
		15
	
18.40		86
		14
	
18.41		87
		13
	
18.42		88
		12
	
19.1		89
		11
	
19.2		90 and over
		10
	
19.3 	(d) A contingent benefit on lapse must also be triggered for policies with a fixed 
19.4 	or limited premium paying period every time an insurer increases the premium rates to a 
19.5 	level that results in a cumulative increase of the annual premium equal to or exceeding the 
19.6 	percentage of the insured's initial annual premium set forth below based on the insured's 
19.7 	issue age, the policy or certificate lapses within 120 days of the due date of the premium 
19.8 	so increased, and the ratio in paragraph (e), clause (2), is 40 percent or more. Unless 
19.9 	otherwise required, policyholders shall be notified at least 30 days prior to the due date of 
19.10 	the premium reflecting the rate increase.

19.11	Triggers for a Substantial Premium Increase

19.12	Issue Age
	Percent Increase Over Initial Premium

19.13	Under 65
	50%
	
19.14	65-80
	30%
	
19.15	Over 80
	10%
	
19.16 	This provision shall be in addition to the contingent benefit provided by paragraph 
19.17 	(c) and where both are triggered, the benefit provided must be at the option of the insured.
19.18 	(e) On or before the effective date of a substantial premium increase as defined in 
19.19 	paragraph (c), the insurer shall:
19.20 	(1)  offer to reduce policy benefits provided by the current coverage without the 
19.21 	requirement of additional underwriting so that required premium payments are not 
19.22 	increased;
19.23 	(2) offer to convert the coverage to a paid-up status with a shortened benefit period 
19.24 	according to the terms of subdivision 5. This option may be elected at any time during the 
19.25 	120-day period referenced in paragraph (c); and
19.26 	(3) notify the policyholder or certificate holder that a default or lapse at any time 
19.27 	during the 120-day period referenced in paragraph (c) is deemed to be the election of 
19.28 	the offer to convert in clause (2).
19.29 	(f) On or before the effective date of a substantial premium increase as defined in 
19.30 	paragraph (d), the insurer shall:
19.31 	(1) offer to reduce policy benefits provided by the current coverage without the 
19.32 	requirement of additional underwriting so that required premium payments are not 
19.33 	increased;
19.34 	(2) offer to convert the coverage to a paid-up status where the amount payable for 
19.35 	each benefit is 90 percent of the amount payable in effect immediately prior to lapse times 
20.1 	the ratio of the number of completed months of paid premiums divided by the number of 
20.2 	months in the premium paying period. This option may be elected at any time during the 
20.3 	120-day period referenced in paragraph (d); and
20.4 	(3) notify the policyholder or certificate holder that a default or lapse at any time 
20.5 	during the 120-day period referenced in paragraph (d) shall be deemed to be the election 
20.6 	of the offer to convert in clause (2) if the ratio is 40 percent or more.

20.7 	Sec. 33. Minnesota Statutes 2006, section 62S.266, subdivision 10, is amended to read:
20.8 		Subd. 10.Purchased blocks of business. To determine whether contingent 
20.9 	nonforfeiture upon lapse provisions are triggered under subdivision 4, paragraph (c) or (d), 
20.10 	a replacing insurer that purchased or otherwise assumed a block or blocks of long-term 
20.11 	care insurance policies from another insurer shall calculate the percentage increase based 
20.12 	on the initial annual premium paid by the insured when the policy was first purchased 
20.13 	from the original insurer.

20.14 	Sec. 34. [62S.267] STANDARDS FOR BENEFIT TRIGGERS.
20.15 		Subdivision 1.Benefit payment determinations. A long-term care insurance 
20.16 	policy must condition the payment of benefits on a determination of the insured's ability 
20.17 	to perform activities of daily living and on cognitive impairment. Eligibility for the 
20.18 	payment of benefits must not be more restrictive than requiring either a deficiency in 
20.19 	the ability to perform not more than two of the activities of daily living or the presence 
20.20 	of cognitive impairment.
20.21 	Activities of daily living include at least the following as defined in section 62S.01 
20.22 	and in the policy: bathing, continence, dressing, eating, toileting, and transferring.
20.23 	Insurers may use activities of daily living to trigger covered benefits in addition to 
20.24 	those contained in this subdivision as long as they are defined in the policy.
20.25 		Subd. 2.Additional provisions for determining benefit payments. An insurer 
20.26 	may use additional provisions for the determination of when benefits are payable under a 
20.27 	policy or certificate if the provisions do not restrict, and are not in lieu of, the requirements 
20.28 	contained in subdivision 1.
20.29 		Subd. 3.Deficiency determination. For purposes of this section, the determination 
20.30 	of a deficiency must not be more restrictive than requiring the hands-on assistance of 
20.31 	another person to perform the prescribed activities of daily living, or of the deficiency is 
20.32 	due to the presence of a cognitive impairment, supervision or verbal cueing by another 
20.33 	person is needed in order to protect the insured or others.
21.1 		Subd. 4.Assessments. Assessments of activities if daily living and cognitive 
21.2 	impairment must be performed by licensed or certified professionals, such as physicians, 
21.3 	nurses, or social workers.
21.4 		Subd. 5.Appeal process. Long-term care insurance policies must include a clear 
21.5 	description of the process for appealing and resolving benefit determinations.

21.6 	EFFECTIVE DATE. This section is effective and applies to a long-term care 
21.7 	policy issued in this state on or after the effective date of this section. This section does 
21.8 	not apply to certificates issued on or after the effective date of this section, under a group 
21.9 	long-term care insurance policy as defined in section 62S.01, subdivision 15, that was in 
21.10 	force at the time this section became effective.

21.11 	Sec. 35. [62S.268] ADDITIONAL STANDARDS FOR BENEFIT TRIGGERS 
21.12 	FOR QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.
21.13 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
21.14 	the meanings given them:
21.15 	(a) "Qualified long-term care services" means services that meet the requirements 
21.16 	of section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, as follows: 
21.17 	necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation, and 
21.18 	rehabilitative services, and maintenance or personal care services which are required by 
21.19 	a chronically ill individual, and are provided pursuant to a plan of care prescribed by a 
21.20 	licensed health care practitioner.
21.21 	(b) "Chronically ill individual" has the meaning prescribed for this term by section 
21.22 	7702B(c)(2) of the Internal Revenue Code of 1986, as amended. Under this provision, a 
21.23 	chronically ill individual means any individual who has been certified by a licensed health 
21.24 	care practitioner as being unable to perform, without substantial assistance from another 
21.25 	individual, at least two activities of daily living for a period of at least 90 days due to a 
21.26 	loss of functional capacity, or requiring substantial supervision to protect the individual 
21.27 	from threats to health and safety due to severe cognitive impairment.
21.28 	The term "chronically ill individual" does not include an individual otherwise 
21.29 	meeting these requirements unless within the preceding 12-month period a licensed health 
21.30 	care practitioner has certified that the individual meets these requirements.
21.31 	(c) "Licensed health care practitioner" means a physician, as defined in section 
21.32 	1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social 
21.33 	worker, or other individual who meets requirements prescribed by the Secretary of the 
21.34 	Treasury.
22.1 	(d) "Maintenance or personal care services" means any care the primary purpose 
22.2 	of which is the provision of needed assistance with any of the disabilities as a result of 
22.3 	which the individual is a chronically ill individual, including the protection from threats 
22.4 	to health and safety due to severe cognitive impairment.
22.5 		Subd. 2.Services. A qualified long-term care insurance contract shall pay only for 
22.6 	qualified long-term care services received by a chronically ill individual provided pursuant 
22.7 	to a plan of care prescribed by a licensed health care practitioner.
22.8 		Subd. 3.Payment of benefits. A qualified long-term care insurance contract 
22.9 	shall condition the payment of benefits on a determination of the insured's inability to 
22.10 	perform activities of daily living for an expected period of at least 90 days due to a loss 
22.11 	of functional capacity or to severe cognitive impairment.
22.12 		Subd. 4.Certifications. (a) Certifications regarding activities of daily living 
22.13 	and cognitive impairment required pursuant to subdivision 3 shall be performed by the 
22.14 	following licensed or certified professionals: physicians, registered professional nurses, 
22.15 	licensed social workers, or other individuals who meet requirements prescribed by the 
22.16 	Secretary of the Treasury.
22.17 	(b) Certifications required pursuant to subdivision 3 may be performed by a licensed 
22.18 	health care professional at the direction of the carrier as is reasonably necessary with 
22.19 	respect to a specific claim, except that when a licensed health care practitioner has certified 
22.20 	that an insured is unable to perform activities of daily living for an expected period of at 
22.21 	least 90 days due to a loss of functional capacity and the insured is in claim status, the 
22.22 	certification may not be rescinded and additional certifications may not be performed until 
22.23 	after the expiration of the 90-day period.
22.24 		Subd. 5.Dispute resolution. Qualified long-term care insurance contracts shall 
22.25 	include a clear description of the process for appealing and resolving disputes with respect 
22.26 	to benefit determinations.

22.27 	Sec. 36. Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision 
22.28 	to read:
22.29 		Subd. 2a.Associations to educate members. With respect to the obligations set 
22.30 	forth in this section, the primary responsibility of an association, as defined in section 
22.31 	62S.01, subdivision 15, clause (2), when endorsing or selling long-term care insurance is 
22.32 	to educate its members concerning long-term care issues in general so that its members 
22.33 	can make informed decisions. Associations shall provide objective information regarding 
22.34 	long-term care insurance policies or certificates endorsed or sold by the associations to 
23.1 	ensure that members of such associations receive a balanced and complete explanation of 
23.2 	the features in the policies or certificates that are being endorsed or sold.

23.3 	Sec. 37. Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision 
23.4 	to read:
23.5 		Subd. 6a.Additional association duties. An association shall also at the time of 
23.6 	the association's decision to endorse, engage the services of a person with expertise in 
23.7 	long-term care insurance not affiliated with the insurer to conduct an examination of the 
23.8 	policies, including its benefits, features, and rates and update the examination thereafter in 
23.9 	the event of material change; actively monitor the marketing efforts of the insurer and its 
23.10 	agents; and review and approve all marketing materials or other insurance communications 
23.11 	used to promote sales or sent to members regarding the policies or certificates. This 
23.12 	subdivision does not apply to qualified long-term care insurance contracts.

23.13 	Sec. 38. Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision 
23.14 	to read:
23.15 		Subd. 9.Unfair trade practices. Failure to comply with the filing and certification 
23.16 	requirements of this section constitutes an unfair trade practice in violation of sections 
23.17 	72A.17 to 72A.32.

23.18 	Sec. 39. [62S.291] AVAILABILITY OF NEW SERVICES OR PROVIDERS.
23.19 		Subdivision 1.Requirement. An insurer shall notify policyholders of the 
23.20 	availability of a new long-term policy series that provides coverage for new long-term 
23.21 	care services or providers material in nature and not previously available through the 
23.22 	insurer to the general public. The notice must be provided within 12 months of the date 
23.23 	that the new policy series is made available for sale in this state.
23.24 		Subd. 2.Exception. (a) Notwithstanding subdivision 1, notification is not required 
23.25 	for any policy issued before the effective date of this section or to any policyholder or 
23.26 	certificate holder who is currently eligible for benefits, within an elimination period or on 
23.27 	a claim, or who previously had been in claim status, or who would not be eligible to apply 
23.28 	for coverage due to issue age limitations under the new policy. The insurer may require 
23.29 	that policyholders meet all eligibility requirements, including underwriting and payment 
23.30 	of the required premium to add such new services or providers.
23.31 	(b) An insurer is not required to notify policyholders of a new proprietary policy 
23.32 	series created and filed for use in a limited distribution channel. For purposes of this 
23.33 	subdivision, "limited distribution channel" means through a discrete entity, such as a 
24.1 	financial institution or brokerage, for which specialized products are available that are 
24.2 	not available for sale to the general public. Policyholders that purchased such a new 
24.3 	proprietary policy shall be notified when a new long-term care policy series that provides 
24.4 	coverage for new long-term care services or providers material in nature is made available 
24.5 	to that limited distribution channel.
24.6 		Subd. 3.Compliance. An insurer shall make the new coverage available in one of 
24.7 	the following ways:
24.8 	(1) by adding a rider to the existing policy and charging a separate premium for the 
24.9 	new rider based in the insured's attained age;
24.10 	(2) by exchanging the existing policy or certificate for one with an issue age based 
24.11 	on the present age of the insured and recognizing past insured status by granting premium 
24.12 	credits toward the premiums for the new policy or certificate. The premium credits must 
24.13 	be based on premiums paid or reserves held for the prior policy or certificate;
24.14 	(3) by exchanging the existing policy or certificate for a new policy or certificate in 
24.15 	which consideration for past insured status is recognized by setting the premium for the 
24.16 	new policy or certificate at the issue age of the policy or certificate being exchanged. The 
24.17 	cost for the new policy or certificate may recognize the difference in reserves between the 
24.18 	new policy or certificate and the original policy or certificate; or
24.19 	(4) by an alternative program developed by the insurer that meets the intent of this 
24.20 	section if the program is filed with and approved by the commissioner.
24.21 		Subd. 4.Policies considered exchanges. Policies issued pursuant to this section 
24.22 	shall be considered exchanges and not replacements. These exchanges are not subject 
24.23 	to sections 62S.24 and 62S.30, and the reporting requirements of section 62S.25, 
24.24 	subdivisions 1 to 6.
24.25 		Subd. 5.Notification to certain groups. Where the policy is offered through 
24.26 	an employer, labor organization, professional, trade, or occupational organization, the 
24.27 	required notification in subdivision 1 must be made to the offering entity. However, if 
24.28 	the policy is issued to a group defined in section 62S.01, subdivision 15, clause (4), the 
24.29 	notification shall be made to each certificate holder.
24.30 		Subd. 6.Effect on coverage offers and requests for coverage. Nothing in this 
24.31 	section prohibits an insurer from offering any policy, rider, certificate, or coverage change 
24.32 	to any policyholder or certificate holder. However, upon request any policyholder may 
24.33 	apply for currently available coverage that includes the new services or providers. 
24.34 	The insurer may require that policyholders meet all eligibility requirements, including 
24.35 	underwriting and payment of the required premium to add such new services or providers.
25.1 		Subd. 7.Life policies or riders. This section does not apply to life insurance 
25.2 	policies or riders containing accelerated long-term care benefits.

25.3 	Sec. 40. [62S.292] RIGHT TO REDUCE COVERAGE AND LOWER 
25.4 	PREMIUMS.
25.5 		Subdivision 1.Required policy or certificate provision. Every long-term care 
25.6 	insurance policy and certificate shall include a provision that allows the policyholder or 
25.7 	certificate holder to reduce coverage and lower the policy or certificate premium in at 
25.8 	least one of the following ways:
25.9 	(1) reducing the maximum benefit; or
25.10 	(2) reducing the daily, weekly, or monthly benefit amount.
25.11 	The insurer may also offer other reduction options that are consistent with the policy 
25.12 	or certificate design or the carrier's administrative processes.
25.13 	The provision shall include a description of the ways in which coverage may be 
25.14 	reduced and the process for requesting and implementing a reduction in coverage.
25.15 		Subd. 2.Age determination. The age to determine the premium for the reduced 
25.16 	coverage shall be based on the age used to determine the premiums for the coverage 
25.17 	currently in force.
25.18 		Subd. 3.Limitation. The insurer may limit any reduction in coverage to plans or 
25.19 	options available for that policy form and to those for which benefits will be available 
25.20 	after consideration of claims paid or payable.
25.21 		Subd. 4.Written reminder. If a policy or certificate is about to lapse, the insurer 
25.22 	shall provide a written reminder to the policyholder or certificate holder of his or her right 
25.23 	to reduce coverage and premiums in the notice required by section 7A(3) of this regulation.
25.24 		Subd. 5.Nonapplication. This section does not apply to life insurance policies or 
25.25 	riders containing accelerated long-term care benefits.

25.26 	EFFECTIVE DATE. This section applies to any long-term care policy issued in 
25.27 	this state on or after August 1, 2008.

25.28 	Sec. 41. Minnesota Statutes 2006, section 65A.37, is amended to read:
25.29 	65A.37 POLICY FORMS.
25.30 	All policies must be on standard policy forms published by Insurance Services 
25.31 	Office, issued for a term of one year, and approved by the commissioner.

25.32 	Sec. 42. Minnesota Statutes 2006, section 66A.02, subdivision 4, is amended to read:
26.1 		Subd. 4.Exceptions. The following provisions of chapter 302A do not apply 
26.2 	to domestic mutual insurance companies: sections 302A.011, subdivisions 2, 6, 6a, 7, 
26.3 	10, 20, 21, 25, 26, 27, 28, 29, 31, 32, and 37 to 59; 302A.105; 302A.137; 302A.161, 
26.4 	subdivision 19; 302A.201, subdivision 2; 302A.401 to 302A.429; 302A.433, subdivisions 
26.5 	1, paragraphs (a), (b), (c), and (e), and 2; 302A.437, subdivision 2; 302A.443;302A.445, 
26.6 	subdivisions 3 to 6; 302A.449, subdivision 7; 302A.453 to 302A.457; 302A.461; 
26.7 	302A.463; 302A.471 to 302A.473; 302A.553; 302A.601 to 302A.651; 302A.671 to 
26.8 	302A.675; 302A.681 to 302A.691; and 302A.701 to 302A.791. Those clauses of section 
26.9 	302A.111 that refer to any of the sections previously referenced in this subdivision do 
26.10 	not apply to domestic mutual insurance companies. The following sections of chapter 
26.11 	302A are modified in their application to domestic mutual insurance companies in the 
26.12 	manner indicated:
26.13 	(1) with regard to section 302A.133, the articles may be amended pursuant to section 
26.14 	302A.171 by the incorporators or by the board before the issuance of any policies by 
26.15 	the company;
26.16 	(2) with regard to section 302A.135, subdivision 2, a resolution proposing an 
26.17 	amendment to the certificate of authority must be filed with the corporate secretary no less 
26.18 	than 30 days before the meeting to consider the proposed amendment;
26.19 	(3) with regard to section 302A.161, subdivision 19 of that section does not apply, 
26.20 	except this must not be construed to limit the power of a mutual insurance company 
26.21 	from issuing securities other than stock;
26.22 	(4) with regard to section 302A.201, the references in subdivision 1 of that section 
26.23 	to "subdivision 2" and "section 302A.457" do not apply;
26.24 	(5) with regard to section 302A.203, the board shall consist of no less than five 
26.25 	directors;
26.26 	(6) with regard to section 302A.215, subdivisions 2 and 3 of that section only apply 
26.27 	if the corporation's certificate of incorporation provides cumulative voting;
26.28 	(7) with regard to section 302A.433, subdivision 1 of that section, special meetings of 
26.29 	the members may be called for any purpose or purposes at any time by a person or persons 
26.30 	authorized in the articles or bylaws to call special meetings, and with regard to subdivision 
26.31 	3 of that section, special meetings must be held on the date and at the time and place fixed 
26.32 	by a person or persons authorized by the articles or bylaws to call a meeting; and
26.33 	(8) with regard to section 302A.435, if the company complies substantially and in 
26.34 	good faith with the notice requirements of section 302A.435, the company's failure to give 
26.35 	any member or members the required notice does not impair the validity of any action 
26.36 	taken at the members' meeting.

27.1 	EFFECTIVE DATE. This section is effective January 1, 2008.

27.2 	Sec. 43. Minnesota Statutes 2006, section 66A.07, subdivision 2, is amended to read:
27.3 		Subd. 2.Life insurance companies. (a) Unless otherwise approved by the 
27.4 	commissioner of commerce, a domestic mutual life insurance company member is any 
27.5 	person who is listed on the records of the company as the owner of an in-force policy, 
27.6 	and each member is entitled to one vote regardless of the number of policies owned by 
27.7 	the member or the amounts of coverage provided to the member. For purposes of this 
27.8 	section, "policy" means a policy or contract of insurance, including an annuity contract 
27.9 	issued by the company, but excluding individual noncontributory insurance policies for 
27.10 	which the premiums are paid by a financial institution, association, employer, or other 
27.11 	institutional entity. Except as otherwise provided in the company's certificate or bylaws, a 
27.12 	person covered under a group policy is not a member by virtue of such coverage, except 
27.13 	that a person insured under a group life insurance policy is a member if: (1) the person 
27.14 	is insured under a group life policy under which cash value has accumulated and been
27.15 	some cash value is allocated to the insured persons person; and (2) the group policyholder 
27.16 	makes no contribution to the premiums or deposits for the policy.
27.17 	(b) Every member of a mutual life insurance company must be notified of its annual 
27.18 	meetings by a written notice mailed to the member's address, or by an imprint on the front 
27.19 	or back of the policy, premium notice, receipt, or certificate of renewal, substantially 
27.20 	as follows:
27.21 	"The policyowner is hereby notified that by virtue of his or her ownership of this 
27.22 	policy, the policyowner is a member of the .......... Insurance Company, and that the annual 
27.23 	meetings of said company are held at its home office on the .... day of .... in each year, 
27.24 	at .... o'clock."
27.25 	For mutual life insurance holding companies, the notice of the annual meeting may 
27.26 	be modified to reflect that the policyowner, by virtue of his or her ownership of a policy 
27.27 	issued by a subsidiary insurance company reorganized under section 66A.40, is a member 
27.28 	of the mutual insurance holding company. Notice given in this manner is deemed to 
27.29 	comply with the requirements of section 302A.435.

27.30 	Sec. 44. Minnesota Statutes 2006, section 66A.07, is amended by adding a subdivision 
27.31 	to read:
27.32 		Subd. 5.Quorum. The number of members present in person or by proxy at a 
27.33 	member meeting are a quorum for the transaction of business, unless a larger proportion 
27.34 	or number is provided in the articles or bylaws. If a quorum is present when a duly called 
28.1 	or held meeting is convened, the members present may continue to transact business until 
28.2 	adjournment, even though the withdrawal of members originally present leaves less than 
28.3 	the proportion or number otherwise required for a quorum.

28.4 	EFFECTIVE DATE. This section is effective January 1, 2008.

28.5 	Sec. 45. Minnesota Statutes 2006, section 66A.41, subdivision 1, is amended to read:
28.6 		Subdivision 1.Definitions. (a) For the purposes of this section, the terms in this 
28.7 	subdivision have the meanings given them.
28.8 	(b) "Converting mutual insurer" means a Minnesota domestic mutual insurance 
28.9 	company seeking to reorganize according to this section.
28.10 	(c) "Converting mutual holding company" means a Minnesota domestic mutual 
28.11 	insurance holding company seeking to reorganize according to this section.
28.12 	(d) "Converting mutual company" means a converting mutual insurer or a converting 
28.13 	mutual holding company seeking to convert according to this section.
28.14 	(e) "Reorganized company" means a converting mutual insurer or a converting 
28.15 	mutual holding company, as the case may be, that has reorganized according to this section.
28.16 	(f) "Eligible member" means:
28.17 	(1) for converting mutual insurers, a policyholder whose policy is in force as of the 
28.18 	record date. Unless otherwise provided in the plan, a person covered under a group policy 
28.19 	is not an eligible member, except that a person insured under a group life insurance policy 
28.20 	is an eligible member if, on the record date:
28.21 	(i) the person is insured under a group life policy under which cash value has 
28.22 	accumulated and been some cash value is allocated to the insured persons person; and
28.23 	(ii) the group policyholder makes no contribution to the premiums for the group 
28.24 	policy; and
28.25 	(2) for converting mutual holding companies, a person who is a member of the 
28.26 	converting mutual holding company, as defined by the converting mutual holding 
28.27 	company's articles of incorporation and bylaws, determined as of the record date.
28.28 	(g) "Plan of conversion" or "plan" means a plan adopted by a converting mutual 
28.29 	company's board of directors under this section.
28.30 	(h) "Policy" means a policy or contract of insurance, including an annuity contract, 
28.31 	issued by a converting mutual insurer or issued by a reorganized insurance company 
28.32 	subsidiary of a mutual holding company, but excluding individual noncontributory 
28.33 	insurance policies for which the premiums are paid by a financial institution, association, 
28.34 	employer, or other institutional entity.
29.1 	(i) "Active participating policy" means an individual policy of a converting mutual 
29.2 	company or its subsidiary that: (1) is a participating policy; (2) is among a class of similar 
29.3 	policies that have been credited with policy dividends at any time within the 12 months 
29.4 	preceding the effective date of the conversion or that will, under the then current dividend 
29.5 	scale, be credited with policy dividends if in force on a future policy anniversary; (3) gives 
29.6 	rise to membership interests in the converting mutual company; and (4) is in force on the 
29.7 	effective date or some other reasonable date identified in the plan.
29.8 	(j) "Commissioner" means the commissioner of commerce.
29.9 	(k) "Effective date of a conversion" means the date determined according to 
29.10 	subdivision 6.
29.11 	(l) "Record date" means the date that the converting mutual company's board 
29.12 	of directors adopts a plan of conversion, unless another date is specified in the plan of 
29.13 	conversion and approved by the commissioner.
29.14 	(m) "Membership interests" means all rights as members of the converting 
29.15 	mutual company, including, but not limited to, the rights to vote and to participate in 
29.16 	any distributions of distributable net worth, whether or not incident to the company's 
29.17 	liquidation.
29.18 	(n) "Distributable net worth" means the value of the converting mutual company 
29.19 	as of the record date of the conversion, or other date approved by the commissioner, 
29.20 	determined as set forth in the plan and approved by the commissioner. The commissioner 
29.21 	may approve a valuation method based on any of the following: (1) the surplus as regards 
29.22 	policyholders of a converting mutual insurer determined according to statutory accounting 
29.23 	principles, which may be adjusted to reflect the current market values of assets and 
29.24 	liabilities, together with any other adjustments that are appropriate in the circumstances; 
29.25 	(2) the net equity of a converting mutual holding company or a converting mutual insurer 
29.26 	determined according to generally accepted accounting principles, which may be adjusted 
29.27 	to reflect the current market values of assets and liabilities, together with any other 
29.28 	adjustments that are appropriate in the circumstances; (3) the fair market value of the 
29.29 	converting mutual company determined by an independent, qualified person; or (4) any 
29.30 	other reasonable valuation method.
29.31 	(o) "Permitted issuer" means: (1) a corporation organized and owned by the 
29.32 	converting mutual company or by any other insurance company or insurance holding 
29.33 	company for the purpose of purchasing and holding securities representing a majority of 
29.34 	voting control of the reorganized company; (2) a stock insurance company owned by the 
29.35 	converting mutual company or by any other insurance company or insurance holding 
30.1 	company into which the converting mutual company will be merged; or (3) any other 
30.2 	corporation approved by the commissioner.

30.3 	Sec. 46. Minnesota Statutes 2006, section 67A.31, subdivision 2, is amended to read:
30.4 		Subd. 2.Insurable property in cities. They may also insure churches and 
30.5 	dwellings, together with the usual outbuildings and the usual contents of both those 
30.6 	dwellings and churches and outbuildings, in any city except a city of the first or second
30.7 	class, or a city of the second class only with approval granted by the commissioner.

30.8 	Sec. 47. Minnesota Statutes 2006, section 72A.51, subdivision 2, is amended to read:
30.9 		Subd. 2.Return of policy or contract; notice. Any individual person may cancel 
30.10 	an individual policy of insurance against loss or damage by reason of the sickness of the 
30.11 	assured or the assured's dependents, a nonprofit health service plan contract providing 
30.12 	benefits for hospital, surgical and medical care, a health maintenance organization 
30.13 	subscriber contract, or a policy of insurance authorized by section 60A.06, subdivision 1, 
30.14 	clause (4), by returning the policy or contract and by giving written notice of cancellation 
30.15 	any time before midnight of the tenth day following the date of purchase. Notice of 
30.16 	cancellation may be given personally, or by mail, or by telegram. The policy or contract 
30.17 	may be returned personally or by mail. If by mail, the notice or return of the policy or 
30.18 	contract is effective upon being postmarked, properly addressed and postage prepaid.

30.19 	EFFECTIVE DATE. This section is effective January 1, 2009.

30.20 	Sec. 48. Minnesota Statutes 2007 Supplement, section 72A.52, subdivision 1, is 
30.21 	amended to read:
30.22 		Subdivision 1.Contents. In addition to all other legal requirements a policy or 
30.23 	contract of insurance described in section 72A.51 shall show the name and address of the 
30.24 	insurer and the seller of the policy or contract and shall state include a notice, clearly and 
30.25 	conspicuously in boldface type of a minimum size of ten points, a right to cancel notice
30.26 	which shall include the following elements:
30.27 	(1) a minimum of ten days to cancel the policy beginning on the date the policy 
30.28 	is received by the owner;
30.29 	(2) if the policy is a replacement policy, a minimum of 30 days beginning on the 
30.30 	date the policy is received by the owner if the policy is a replacement policy. Pursuant to 
30.31 	section 61A.57, this requirement may also be provided in a separate written notice that 
30.32 	is delivered with the policy or contract;
31.1 	(3) a requirement for the return of the policy to the company or an agent of the 
31.2 	company;
31.3 	(4) a statement that the policy is considered void from the beginning and the parties 
31.4 	shall be in the same position as if no policy had been issued;
31.5 	(5) a for policies or contracts other than a variable annuity or a variable life policy, a 
31.6 	statement that the insurer will refund of all premiums paid, including any fees or charges, 
31.7 	if the policy is returned; and
31.8 	(6) a statement that notice given by mail and return of the policy or contract by mail 
31.9 	are effective on being postmarked, properly addressed, and postage prepaid describing 
31.10 	when the cancellation becomes effective.
31.11 	The insurer must return all payments made for this policy within ten days after it 
31.12 	receives notice of cancellation and the returned policy. For variable annuity contracts 
31.13 	issued pursuant to sections 61A.13 to 61A.21, this notice shall be suitably modified so as 
31.14 	to notify the purchaser that the purchaser is entitled to a refund of the amount calculated 
31.15 	in accordance with the provisions of section 72A.51, subdivision 3. For variable life 
31.16 	insurance policies, this notice must be suitably modified so as to notify the purchaser that 
31.17 	the purchaser is entitled to a refund of: (i) the premiums paid; or (ii) the variable account 
31.18 	value plus any amount deducted from the portion of the premium applied to the account.

31.19 	EFFECTIVE DATE. This section is effective January 1, 2009.

31.20 	Sec. 49. Minnesota Statutes 2006, section 79A.06, subdivision 5, is amended to read:
31.21 		Subd. 5.Private employers who have ceased to be self-insured. (a) Private 
31.22 	employers who have ceased to be private self-insurers shall discharge their continuing 
31.23 	obligations to secure the payment of compensation which is accrued during the period of 
31.24 	self-insurance, for purposes of Laws 1988, chapter 674, sections 1 to 21, by compliance 
31.25 	with all of the following obligations of current certificate holders:
31.26 	(1) Filing reports with the commissioner to carry out the requirements of this chapter;
31.27 	(2) Depositing and maintaining a security deposit for accrued liability for the 
31.28 	payment of any compensation which may become due, pursuant to chapter 176. However, 
31.29 	if a private employer who has ceased to be a private self-insurer purchases an insurance 
31.30 	policy from an insurer authorized to transact workers' compensation insurance in this state 
31.31 	which provides coverage of all claims for compensation arising out of injuries occurring 
31.32 	during the entire period the employer was self-insured, whether or not reported during 
31.33 	that period, the policy will:
31.34 	(i) discharge the obligation of the employer to maintain a security deposit for the 
31.35 	payment of the claims covered under the policy;
32.1 	(ii) discharge any obligation which the self-insurers' security fund has or may have 
32.2 	for payment of all claims for compensation arising out of injuries occurring during the 
32.3 	period the employer was self-insured, whether or not reported during that period; and
32.4 	(iii) discharge the obligations of the employer to pay any future assessments to 
32.5 	the self-insurers' security fund.
32.6 	A private employer who has ceased to be a private self-insurer may instead buy an 
32.7 	insurance policy described above, except that it covers only a portion of the period of time 
32.8 	during which the private employer was self-insured; purchase of such a policy discharges 
32.9 	any obligation that the self-insurers' security fund has or may have for payment of all 
32.10 	claims for compensation arising out of injuries occurring during the period for which the 
32.11 	policy provides coverage, whether or not reported during that period.
32.12 	A policy described in this clause may not be issued by an insurer unless it has 
32.13 	previously been approved as to form and substance by the commissioner; and
32.14 	(3) Paying within 30 days all assessments of which notice is sent by the security 
32.15 	fund, for a period of seven years from the last day its certificate of self-insurance was in 
32.16 	effect. Thereafter, the private employer who has ceased to be a private self-insurer may 
32.17 	either: (i) continue to pay within 30 days all assessments of which notice is sent by the 
32.18 	security fund until it has no incurred liabilities for the payment of compensation arising 
32.19 	out of injuries during the period of self-insurance; or (ii) pay the security fund a cash 
32.20 	payment equal to four percent of the net present value of all remaining incurred liabilities 
32.21 	for the payment of compensation under sections 176.101 and 176.111 as certified by a 
32.22 	member of the casualty actuarial society. Assessments shall be based on the benefits paid 
32.23 	by the employer during the calendar year immediately preceding the calendar year in 
32.24 	which the employer's right to self-insure is terminated or withdrawn.
32.25 	(b) With respect to a self-insurer who terminates its self-insurance authority after 
32.26 	April 1, 1998, that member shall obtain and file with the commissioner an actuarial 
32.27 	opinion of its outstanding liabilities as determined by an associate or fellow of the 
32.28 	Casualty Actuarial Society within 120 days of the date of its termination. If the actuarial 
32.29 	opinion is not timely filed, the self-insurers' security fund may, at its discretion, engage 
32.30 	the services of an actuary for this purpose. The expense of this actuarial opinion must 
32.31 	be assessed against and be the obligation of the self-insurer. The commissioner may 
32.32 	issue a certificate of default against the self-insurer for failure to pay this assessment 
32.33 	to the self-insurers' security fund as provided by section 79A.04, subdivision 9. The 
32.34 	opinion must separate liability for indemnity benefits from liability from medical benefits, 
32.35 	and must discount each up to four percent per annum to net present value. Within 30 
32.36 	days after notification of approval of the actuarial opinion by the commissioner, the 
33.1 	member shall pay to the security fund an amount equal to 120 percent of that discounted 
33.2 	outstanding indemnity liability, multiplied by the greater of the average annualized 
33.3 	assessment rate since inception of the security fund or the annual rate at the time of the 
33.4 	most recent assessment before termination. If the payment is not made within 30 days of 
33.5 	the notification, interest on it at the rate prescribed by section 549.09 must be paid by the 
33.6 	former member to the security fund until the principal amount is paid in full.
33.7 	(c) A former member who terminated its self-insurance authority before April 1, 
33.8 	1998, who has paid assessments to the self-insurers' security fund for seven years, and 
33.9 	whose annualized assessment is $500 $15,000 or less, may buy out of its outstanding 
33.10 	liabilities to the self-insurers' security fund by an amount calculated as follows: 1.35
33.11 	multiplied by the indemnity case reserves at the time of the calculation, multiplied by the 
33.12 	then current self-insurers' security fund annualized assessment rate.
33.13 	(d) A former member who terminated its self-insurance authority before April 1, 
33.14 	1998, and who is paying assessments within the first seven years after ceasing to be 
33.15 	self-insured under paragraph (a), clause (3), may elect to buy out its outstanding liabilities 
33.16 	to the self-insurers' security fund by obtaining and filing with the commissioner an 
33.17 	actuarial opinion of its outstanding liabilities as determined by an associate or fellow of 
33.18 	the Casualty Actuarial Society. The opinion must separate liability for indemnity benefits 
33.19 	from liability for medical benefits, and must discount each up to four percent per annum to 
33.20 	net present value. Within 30 days after notification of approval of the actuarial opinion 
33.21 	by the commissioner, the member shall pay to the security fund an amount equal to 120 
33.22 	percent of that discounted outstanding indemnity liability, multiplied by the greater of the 
33.23 	average annualized assessment rate since inception of the security fund or the annual rate 
33.24 	at the time of the most recent assessment.
33.25 	(e) A former member who has paid the security fund according to paragraphs (b) to 
33.26 	(d) and subsequently receives authority from the commissioner to again self-insure shall be 
33.27 	assessed under section 79A.12, subdivision 2, only on indemnity benefits paid on injuries 
33.28 	that occurred after the former member received authority to self-insure again; provided 
33.29 	that the member furnishes verified data regarding those benefits to the security fund.
33.30 	(f) In addition to proceedings to establish liabilities and penalties otherwise 
33.31 	provided, a failure to comply may be the subject of a proceeding before the commissioner. 
33.32 	An appeal from the commissioner's determination may be taken pursuant to the contested 
33.33 	case procedures of chapter 14 within 30 days of the commissioner's written determination.
33.34 	Any current or past member of the self-insurers' security fund is subject to service of 
33.35 	process on any claim arising out of chapter 176 or this chapter in the manner provided by 
33.36 	section 5.25, or as otherwise provided by law. The issuance of a certificate to self-insure 
34.1 	to the private self-insured employer shall be deemed to be the agreement that any process 
34.2 	which is served in accordance with this section shall be of the same legal force and effect 
34.3 	as if served personally within this state.

34.4 	Sec. 50. Minnesota Statutes 2006, section 79A.22, subdivision 3, is amended to read:
34.5 		Subd. 3.New membership. The commercial self-insurance group shall file with 
34.6 	the commissioner the name of any new employer that has been accepted in the group 
34.7 	prior to the initiation date of membership within five business days of the initiation date 
34.8 	of membership along with the member's signed indemnity agreement and evidence the 
34.9 	member has deposited sufficient premiums with the group as required by the commercial 
34.10 	self-insurance group's bylaws or plan of operation. The security deposit of the group shall 
34.11 	be increased quarterly to an amount equal to 50 percent of the new members' premiums 
34.12 	for that quarter. If the total increase of new members' premiums for the first quarter is 
34.13 	less than five percent of the total annual premium of the group, no quarterly increase 
34.14 	is necessary until the cumulative quarterly increases for that calendar year exceed five 
34.15 	percent of the total premium of the group. The commissioner may, at the commissioner's 
34.16 	option, review the financial statement of any applicant whose premium equals 25 percent 
34.17 	or more of the group's total premium.

34.18 	Sec. 51. Minnesota Statutes 2006, section 79A.22, subdivision 4, is amended to read:
34.19 		Subd. 4.Commercial self-insurance group common claims fund. (a) Each 
34.20 	commercial self-insurance group shall establish a common claims fund.
34.21 	(b) Each commercial self-insurance group shall, not less than ten days prior to the 
34.22 	proposed effective date of the group, collect cash premiums from each member equal to 
34.23 	not less than 20 percent of the member's annual workers' compensation premium to be 
34.24 	paid into a common claims fund, maintained by the group in a designated depository. The 
34.25 	remaining balance of the member's premium shall be paid to the group in a reasonable 
34.26 	manner over the remainder of the year. Payments in subsequent years shall be made 
34.27 	according to the business plan.
34.28 	(c) Each commercial self-insurance group shall initiate proceedings against a 
34.29 	member when that member becomes more than 15 30 days delinquent in any payment 
34.30 	of premium to the fund.
34.31 	(d) There shall be no commingling of any assets of the common claims fund with the 
34.32 	assets of any individual member or with any other account of the service company or fiscal 
34.33 	agent unrelated to the payment of workers' compensation liabilities incurred by the group.

35.1 	Sec. 52. Minnesota Statutes 2006, section 79A.23, subdivision 2, is amended to read:
35.2 		Subd. 2.Required reports from members to group. (a) Each member of the 
35.3 	commercial self-insurance group shall, by September 15, submit to the group its most 
35.4 	recent annual financial statement, together with other financial information the group may 
35.5 	require. These financial statements submitted must not have a fiscal year end date older 
35.6 	than January 15 of the group's calendar year end. Individual group members constituting 
35.7 	at least 25 percent of the group's annual premium shall submit to the group reviewed or 
35.8 	audited financial statements. The remaining members must submit compilation level 
35.9 	statements.
35.10 	(b) For groups that have been in existence for at least three years, individual group 
35.11 	members may satisfy the requirements of paragraph (a) by submitting compiled, reviewed, 
35.12 	or audited statements or the most recent federal income tax return filed by the member.
35.13 	(c) Groups that have been in existence for at least five years may satisfy the 
35.14 	requirement of paragraph (a) through submissions from members representing at least 
35.15 	50 percent of the group's total earned premium. Of those submissions, those from 
35.16 	members representing at least 25 percent of the entire group's total earned premium must 
35.17 	be audited or reviewed financial statements. The remainder of the submissions may be 
35.18 	compiled, reviewed, or audited financial statements or the most recent tax return filed by 
35.19 	the members.

35.20 	Sec. 53. Minnesota Statutes 2006, section 82B.23, subdivision 1, is amended to read:
35.21 		Subdivision 1.Requirement. The commissioner shall certify and transmit to the 
35.22 	appraisal subcommittee established pursuant to the Federal Institutions Reform, Recovery, 
35.23 	and Enforcement Act of 1989, Public Law 100-73, the names of those licensees who 
35.24 	have satisfied the requirements for certification and licensure established by the appraisal 
35.25 	subcommittee and to collect and transmit any required fees.

35.26 	Sec. 54. Minnesota Statutes 2006, section 83.25, is amended by adding a subdivision 
35.27 	to read:
35.28 		Subd. 4.Limited broker licensee. An individual acting on behalf of a limited 
35.29 	broker licensee issued a license under section 82.34, subdivision 13, is not required to be 
35.30 	an officer of a corporation or a partner of a partnership if:
35.31 	(1) the individual is solely engaged in the business of selling a timeshare interest as 
35.32 	defined in section 83.20, subdivision 13;
35.33 	(2) the individual is adequately supervised by the limited broker licensee; and
36.1 	(3) the limited broker licensee maintains a roster of individuals selling a timeshare 
36.2 	interest including the date the individual started selling. This roster must be made 
36.3 	available to the commissioner upon demand within three days of the request.

36.4 	Sec. 55. [332.345] SEGREGATED ACCOUNTS.
36.5 	A payment collected by a collector or collection agency on behalf of a customer 
36.6 	shall be held by the collector or collection agency in a separate trust account clearly 
36.7 	designated for customer funds. The account must be in a bank or other depository 
36.8 	institution authorized or chartered under the laws of any state or of the United States.

36.9 	Sec. 56. REPEALER.
 36.10 	(a) Minnesota Statutes 2006, sections 62A.149, subdivision 2; and 65B.29, are 
36.11 	repealed.
36.12 	(b) Laws 2006, chapter 255, section 26, is repealed.