<a id="pl.1.3"></a><var>1.3</var>and forms; regulating financial planners, motor vehicle retail installment sales, <br/>
<a id="pl.1.4"></a><var>1.4</var>service contracts, real estate appraisers, subdivided lands, domestic mutual <br/>
<a id="pl.1.5"></a><var>1.5</var>insurance companies, and collection agencies; merging certain joint underwriting <br/>
<a id="pl.1.6"></a><var>1.6</var>associations; making technical and clarifying changes;amending Minnesota <br/>
<a id="pl.1.7"></a><var>1.7</var>Statutes 2006, sections 53C.01, subdivision 2; 59B.01; 59B.02, subdivision <br/>
<a id="pl.1.8"></a><var>1.8</var>11, by adding a subdivision; 59B.05, subdivision 5; 60A.71, subdivision 7; <br/>
<a id="pl.1.9"></a><var>1.9</var>61A.57; 62A.149, subdivision 1; 62A.152, subdivision 2; 62A.44, by adding a <br/>
<a id="pl.1.10"></a><var>1.10</var>subdivision; 62E.10, subdivision 2; 62F.02, by adding a subdivision; 62M.02, <br/>
<a id="pl.1.11"></a><var>1.11</var>subdivision 21; 62Q.47; 62Q.64; 62S.01, by adding subdivisions; 62S.13, <br/>
<a id="pl.1.12"></a><var>1.12</var>subdivision 4; 62S.15; 62S.18, subdivision 2; 62S.20, subdivision 6, by adding <br/>
<a id="pl.1.13"></a><var>1.13</var>subdivisions; 62S.26, subdivision 2; 62S.266, subdivisions 4, 10; 62S.29, by <br/>
<a id="pl.1.14"></a><var>1.14</var>adding subdivisions; 65A.37; 66A.02, subdivision 4; 66A.07, subdivision 2, by <br/>
<a id="pl.1.15"></a><var>1.15</var>adding a subdivision; 66A.41, subdivision 1; 67A.31, subdivision 2; 72A.51, <br/>
<a id="pl.1.16"></a><var>1.16</var>subdivision 2; 79A.06, subdivision 5; 79A.22, subdivisions 3, 4; 79A.23, <br/>
<a id="pl.1.17"></a><var>1.17</var>subdivision 2; 82B.23, subdivision 1; 83.25, by adding a subdivision; Minnesota <br/>
<a id="pl.1.18"></a><var>1.18</var>Statutes 2007 Supplement, sections 61A.257, subdivision 1; 62A.30, subdivision <br/>
<a id="pl.1.19"></a><var>1.19</var>2; 62S.23, subdivision 1; 72A.52, subdivision 1; proposing coding for new law <br/>
<a id="pl.1.20"></a><var>1.20</var>in Minnesota Statutes, chapters 62S; 332; repealing Minnesota Statutes 2006, <br/>
<a id="pl.1.21"></a><var>1.21</var>sections 62A.149, subdivision 2; 65B.29; Laws 2006, chapter 255, section 26.<br/>
<a id="pl.1.22"></a><var>1.22</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.23"></a><var>1.23</var>    Section 1. Minnesota Statutes 2006, section 53C.01, subdivision 2, is amended to read:<br/>
<a id="pl.1.24"></a><var>1.24</var>    Subd. 2. <b>Cash sale price.</b> "Cash sale price" means the price at which the seller <br/>
<a id="pl.1.25"></a><var>1.25</var>would in good faith sell to the buyer, and the buyer would in good faith buy from the seller, <br/>
<a id="pl.1.26"></a><var>1.26</var>the motor vehicle which is the subject matter of the retail installment contract, if such sale <br/>
<a id="pl.1.27"></a><var>1.27</var>were a sale for cash, instead of a retail installment sale. The cash sale price may include <br/>
<a id="pl.1.28"></a><var>1.28</var>any taxes, charges for delivery, servicing, repairing, or improving the motor vehicle, <br/>
<a id="pl.1.29"></a><var>1.29</var>including accessories and their installation, and any other charges agreed upon between <br/>
<a id="pl.1.30"></a><var>1.30</var>the parties. The cash price may not include a documentary fee or document administration <br/>
<a id="pl.1.31"></a><var>1.31</var>fee in excess of $50 $75 for services actually rendered to, for, or on behalf of, the retail <br/>
<a id="pl.2.1"></a><var>2.1</var>buyer in preparing, handling, and processing documents relating to the motor vehicle and <br/>
<a id="pl.2.2"></a><var>2.2</var>the closing of the retail sale. "Documentary fee" and "document administration fee" do <br/>
<a id="pl.2.3"></a><var>2.3</var>not include an optional electronic transfer fee as defined under subdivision 14.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.2.4"></a><var>2.4</var>    Sec. 2. Minnesota Statutes 2006, section 59B.01, is amended to read:<br/>
<a id="pl.2.5"></a><var>2.5</var><b>59B.01 SCOPE AND PURPOSE.</b><br/>
<a id="pl.2.6"></a><var>2.6</var>    (a) The purpose of this chapter is to create a legal framework within which service <br/>
<a id="pl.2.7"></a><var>2.7</var>contracts may be sold in this state.<br/>
<a id="pl.2.8"></a><var>2.8</var>    (b) The following are exempt from this chapter:<br/>
<a id="pl.2.9"></a><var>2.9</var>    (1) warranties;<br/>
<a id="pl.2.10"></a><var>2.10</var>    (2) maintenance agreements;<br/>
<a id="pl.2.11"></a><var>2.11</var>    (3) warranties, service contracts, or maintenance agreements offered by public <br/>
<a id="pl.2.12"></a><var>2.12</var>utilities, as defined in section 
         <statute_ref>216B.02, subdivision 4</statute_ref>, or an entity or operating unit owned <br/>
<a id="pl.2.13"></a><var>2.13</var>by or under common control with a public utility;<br/>
<a id="pl.2.14"></a><var>2.14</var>    (4) service contracts sold or offered for sale to persons other than consumers;<br/>
<a id="pl.2.15"></a><var>2.15</var>    (5) service contracts on tangible property where the tangible property for which the <br/>
<a id="pl.2.16"></a><var>2.16</var>service contract is sold has a purchase price of $250 or less, exclusive of sales tax;<br/>
<a id="pl.2.17"></a><var>2.17</var>    (6) motor vehicle service contracts as defined in section 
<statute_ref>65B.29, subdivision 1</statute_ref>, <br/>
<a id="pl.2.18"></a><var>2.18</var>paragraph (1);<br/>
<a id="pl.2.19"></a><var>2.19</var>    (7) (6) service contracts for home security equipment installed by a licensed <br/>
<a id="pl.2.20"></a><var>2.20</var>technology systems contractor; and<br/>
<a id="pl.2.21"></a><var>2.21</var>    (8) (7) motor club membership contracts that typically provide roadside assistance <br/>
<a id="pl.2.22"></a><var>2.22</var>services to motorists stranded for reasons that include, but are not limited to, mechanical <br/>
<a id="pl.2.23"></a><var>2.23</var>breakdown or adverse road conditions.<br/>
<a id="pl.2.24"></a><var>2.24</var>    (c) The types of agreements referred to in paragraph (b) are not subject to chapters <br/>
<a id="pl.2.25"></a><var>2.25</var>60A to 79A, except as otherwise specifically provided by law.<br/>
<a id="pl.2.26"></a><var>2.26</var>    (d) Service contracts issued by motor vehicle manufacturers covering private <br/>
<a id="pl.2.27"></a><var>2.27</var>passenger automobiles are only subject to sections 59B.03, subdivision 5, 59B.05, and <br/>
<a id="pl.2.28"></a><var>2.28</var>59B.07.<br/>
<br/>
<a id="bill.0.3.0"></a><a id="pl.2.29"></a><var>2.29</var>    Sec. 3. Minnesota Statutes 2006, section 59B.02, is amended by adding a subdivision <br/>
<a id="pl.2.30"></a><var>2.30</var>to read:<br/>
<a id="pl.2.31"></a><var>2.31</var>    Subd. 5a. <b>Motor vehicle manufacturer.</b> "Motor vehicle manufacturer" means <br/>
<a id="pl.2.32"></a><var>2.32</var>a person that:<br/>
<a id="pl.2.33"></a><var>2.33</var>    (1) manufactures or produces motor vehicles and sells motor vehicles under its <br/>
<a id="pl.2.34"></a><var>2.34</var>own name or label;<br/>
<a id="pl.3.1"></a><var>3.1</var>    (2) is a wholly owned subsidiary of the person that manufactures or produces motor <br/>
<a id="pl.3.2"></a><var>3.2</var>vehicles;<br/>
<a id="pl.3.3"></a><var>3.3</var>    (3) is a corporation which owns 100 percent of the person that manufactures or <br/>
<a id="pl.3.4"></a><var>3.4</var>produces motor vehicles;<br/>
<a id="pl.3.5"></a><var>3.5</var>    (4) does not manufacture or produce motor vehicles, but sells motor vehicles under <br/>
<a id="pl.3.6"></a><var>3.6</var>the trade name or label of another person that manufactures or produces motor vehicles;<br/>
<a id="pl.3.7"></a><var>3.7</var>    (5) manufactures or produces motor vehicles and sells the motor vehicles under the <br/>
<a id="pl.3.8"></a><var>3.8</var>trade name or label of another person that manufactures or produces motor vehicles; or<br/>
<a id="pl.3.9"></a><var>3.9</var>    (6) does not manufacture or produce motor vehicles but, pursuant to a written <br/>
<a id="pl.3.10"></a><var>3.10</var>contract, licenses the use of its trade name or label to another person that manufactures <br/>
<a id="pl.3.11"></a><var>3.11</var>or produces motor vehicles and that sells motor vehicles under the licensor's trade name <br/>
<a id="pl.3.12"></a><var>3.12</var>or label.<br/>
<br/>
<a id="bill.0.4.0"></a><a id="pl.3.13"></a><var>3.13</var>    Sec. 4. Minnesota Statutes 2006, section 59B.02, subdivision 11, is amended to read:<br/>
<a id="pl.3.14"></a><var>3.14</var>    Subd. 11. <b>Service contract.</b> "Service contract" means a contract or agreement for a <br/>
<a id="pl.3.15"></a><var>3.15</var>separately stated consideration for a specific duration to perform the repair, replacement, <br/>
<a id="pl.3.16"></a><var>3.16</var>or maintenance of property or indemnification for repair, replacement, or maintenance, for <br/>
<a id="pl.3.17"></a><var>3.17</var>the operational or structural failure due to a defect in materials, workmanship, or normal <br/>
<a id="pl.3.18"></a><var>3.18</var>wear and tear, with or without additional provisions for incidental payment of indemnity <br/>
<a id="pl.3.19"></a><var>3.19</var>under limited circumstances, including without limitation, towing, rental, emergency <br/>
<a id="pl.3.20"></a><var>3.20</var>road service, and road hazard protection. Service contracts may provide for the repair, <br/>
<a id="pl.3.21"></a><var>3.21</var>replacement, or maintenance of property for damage resulting from power surges and <br/>
<a id="pl.3.22"></a><var>3.22</var>accidental damage from handling.<br/>
<br/>
<a id="bill.0.5.0"></a><a id="pl.3.23"></a><var>3.23</var>    Sec. 5. Minnesota Statutes 2006, section 59B.05, subdivision 5, is amended to read:<br/>
<a id="pl.3.24"></a><var>3.24</var>    Subd. 5. <b>Coverages, limitations, and exclusions.</b> No particular causes of loss or <br/>
<a id="pl.3.25"></a><var>3.25</var>property are required to be covered, but service contracts must specify the merchandise <br/>
<a id="pl.3.26"></a><var>3.26</var>and services to be provided and, with equal prominence, any limitations, exceptions, or <br/>
<a id="pl.3.27"></a><var>3.27</var>exclusions including, but not limited to, any damage or breakdown not covered by the <br/>
<a id="pl.3.28"></a><var>3.28</var>service contract. Service contracts may cover damage resulting from rust, corrosion, or <br/>
<a id="pl.3.29"></a><var>3.29</var>damage caused by a noncovered part or system.<br/>
<br/>
<a id="bill.0.6.0"></a><a id="pl.3.30"></a><var>3.30</var>    Sec. 6. Minnesota Statutes 2006, section 60A.71, subdivision 7, is amended to read:<br/>
<a id="pl.3.31"></a><var>3.31</var>    Subd. 7. <b>Duration; </b><b>fees.</b> (a) Each applicant for a reinsurance intermediary license <br/>
<a id="pl.3.32"></a><var>3.32</var>shall pay to the commissioner a fee of $200 for an initial two-year license and a fee of <br/>
<a id="pl.4.1"></a><var>4.1</var>$150 for each renewal. Applications shall be submitted on forms prescribed by the <br/>
<a id="pl.4.2"></a><var>4.2</var>commissioner.<br/>
<a id="pl.4.3"></a><var>4.3</var>    (b) Initial licenses issued under this chapter are valid for a period not to exceed 24 <br/>
<a id="pl.4.4"></a><var>4.4</var>months and expire on October 31 of the renewal year assigned by the commissioner. Each <br/>
<a id="pl.4.5"></a><var>4.5</var>renewal reinsurance intermediary license is valid for a period of 24 months. Licensees <br/>
<a id="pl.4.6"></a><var>4.6</var>who submit renewal applications postmarked or delivered on or before October 15 of the <br/>
<a id="pl.4.7"></a><var>4.7</var>renewal year may continue to transact business whether or not the renewal license has been <br/>
<a id="pl.4.8"></a><var>4.8</var>received by November 1. Licensees who submit applications postmarked or delivered <br/>
<a id="pl.4.9"></a><var>4.9</var>after October 15 of the renewal year must not transact business after the expiration date <br/>
<a id="pl.4.10"></a><var>4.10</var>of the license until the renewal license has been received.<br/>
<a id="pl.4.11"></a><var>4.11</var>    (c) All fees are nonreturnable, except that an overpayment of any fee may be <br/>
<a id="pl.4.12"></a><var>4.12</var>refunded upon proper application.<br/>
<br/>
<a id="bill.0.7.0"></a><a id="pl.4.13"></a><var>4.13</var>    Sec. 7. Minnesota Statutes 2007 Supplement, section 61A.257, subdivision 1, is <br/>
<a id="pl.4.14"></a><var>4.14</var>amended to read:<br/>
<a id="pl.4.15"></a><var>4.15</var>    Subdivision 1. <b>Definitions.</b> (a) For the purposes of this section only, the following <br/>
<a id="pl.4.16"></a><var>4.16</var>terms have the meanings given them.<br/>
<a id="pl.4.17"></a><var>4.17</var>    (b) "2001 CSO Mortality Table" means that mortality table, consisting of separate <br/>
<a id="pl.4.18"></a><var>4.18</var>rates of mortality for male and female lives, developed by the American Academy of <br/>
<a id="pl.4.19"></a><var>4.19</var>Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the <br/>
<a id="pl.4.20"></a><var>4.20</var>Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and <br/>
<a id="pl.4.21"></a><var>4.21</var>adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in <br/>
<a id="pl.4.22"></a><var>4.22</var>the Proceedings of the NAIC (2nd Quarter 2002) and supplemented by the 2001 CSO <br/>
<a id="pl.4.23"></a><var>4.23</var>Preferred Class Structure Mortality Table defined in paragraph (c). Unless the context <br/>
<a id="pl.4.24"></a><var>4.24</var>indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of <br/>
<a id="pl.4.25"></a><var>4.25</var>that table and the select and ultimate form of that table and includes both the smoker and <br/>
<a id="pl.4.26"></a><var>4.26</var>nonsmoker mortality tables and the composite mortality tables. It also includes both the <br/>
<a id="pl.4.27"></a><var>4.27</var>age-nearest-birthday and age-last-birthday bases of the mortality tables. Mortality tables <br/>
<a id="pl.4.28"></a><var>4.28</var>in the 2001 CSO Mortality Table include the following:<br/>
<a id="pl.4.29"></a><var>4.29</var>    (1) "2001 CSO Mortality Table (F)" means that mortality table consisting of the rates <br/>
<a id="pl.4.30"></a><var>4.30</var>of mortality for female lives from the 2001 CSO Mortality Table;<br/>
<a id="pl.4.31"></a><var>4.31</var>    (2) "2001 CSO Mortality Table (M)" means that mortality table consisting of the <br/>
<a id="pl.4.32"></a><var>4.32</var>rates of mortality for male lives from the 2001 CSO Mortality Table;<br/>
<a id="pl.4.33"></a><var>4.33</var>    (3) "composite mortality tables" means mortality tables with rates of mortality that <br/>
<a id="pl.4.34"></a><var>4.34</var>do not distinguish between smokers and nonsmokers; and<br/>
<a id="pl.5.1"></a><var>5.1</var>    (4) "smoker and nonsmoker mortality tables" means mortality tables with separate <br/>
<a id="pl.5.2"></a><var>5.2</var>rates of mortality for smokers and nonsmokers.<br/>
<a id="pl.5.3"></a><var>5.3</var>    (c) "2001 CSO Preferred Class Structure Mortality Table" means mortality tables <br/>
<a id="pl.5.4"></a><var>5.4</var>with separate rates of mortality for the super preferred Nonsmokers nonsmoker, preferred <br/>
<a id="pl.5.5"></a><var>5.5</var>Nonsmokers nonsmoker, residual standard Nonsmokers nonsmoker, preferred Smokers <br/>
<a id="pl.5.6"></a><var>5.6</var>smoker, and residual standard smoker splits of the 2001 CSO Nonsmoker and Smoker <br/>
<a id="pl.5.7"></a><var>5.7</var>Mortality Tables as adopted by the NAIC at the September 2006 national meeting and <br/>
<a id="pl.5.8"></a><var>5.8</var>published in the NAIC Proceedings (3rd Quarter 2006). Unless the context indicates <br/>
<a id="pl.5.9"></a><var>5.9</var>otherwise, the "2001 CSO Preferred Class Structure Mortality Table" includes both the <br/>
<a id="pl.5.10"></a><var>5.10</var>ultimate form of that table and the select and ultimate form of that table, the smoker and <br/>
<a id="pl.5.11"></a><var>5.11</var>nonsmoker mortality tables, both the male and female mortality tables and the gender <br/>
<a id="pl.5.12"></a><var>5.12</var>composite mortality tables, and both the age-nearest-birthday and age-last-birthday bases <br/>
<a id="pl.5.13"></a><var>5.13</var>of the mortality table.<br/>
<a id="pl.5.14"></a><var>5.14</var>    (d) "Statistical agent" means an entity with proven systems for protecting the <br/>
<a id="pl.5.15"></a><var>5.15</var>confidentiality of individual insured and insurer information; demonstrated resources <br/>
<a id="pl.5.16"></a><var>5.16</var>for and history of ongoing electronic communications and data transfer ensuring data <br/>
<a id="pl.5.17"></a><var>5.17</var>integrity with insurers, which are its members or subscribers; and a history of and means <br/>
<a id="pl.5.18"></a><var>5.18</var>for aggregation of data and accurate promulgation of the experience modifications in a <br/>
<a id="pl.5.19"></a><var>5.19</var>timely manner.<br/>
<br/>
<a id="bill.0.8.0"></a><a id="pl.5.20"></a><var>5.20</var>    Sec. 8. Minnesota Statutes 2006, section 61A.57, is amended to read:<br/>
<a id="pl.5.21"></a><var>5.21</var><b>61A.57 DUTIES OF INSURERS THAT USE AGENTS OR BROKERS.</b><br/>
<a id="pl.5.22"></a><var>5.22</var>    Each insurer that uses an agent or broker in a life insurance or annuity sale shall:<br/>
<a id="pl.5.23"></a><var>5.23</var>    (a) Require with or as part of each completed application for life insurance or <br/>
<a id="pl.5.24"></a><var>5.24</var>annuity, a statement signed by the agent or broker as to whether the agent or broker knows <br/>
<a id="pl.5.25"></a><var>5.25</var>replacement is or may be involved in the transaction.<br/>
<a id="pl.5.26"></a><var>5.26</var>    (b) Where a replacement is involved:<br/>
<a id="pl.5.27"></a><var>5.27</var>    (1) require from the agent or broker with the application for life insurance or <br/>
<a id="pl.5.28"></a><var>5.28</var>annuity, a copy of the fully completed and signed replacement notice provided the <br/>
<a id="pl.5.29"></a><var>5.29</var>applicant under section 
         <statute_ref>61A.55</statute_ref>. The existing life insurance or annuity must be identified <br/>
<a id="pl.5.30"></a><var>5.30</var>by name of insurer, insured, and contract number. If a number has not been assigned by <br/>
<a id="pl.5.31"></a><var>5.31</var>the existing insurer, alternative identification, such as an application or receipt number, <br/>
<a id="pl.5.32"></a><var>5.32</var>must be listed; and <br/>
<a id="pl.5.33"></a><var>5.33</var>    (2) send to each existing insurer a written communication advising of the <br/>
<a id="pl.5.34"></a><var>5.34</var>replacement or proposed replacement and the identification information obtained under <br/>
<a id="pl.5.35"></a><var>5.35</var>this section. This written communication must be made within five working days of the <br/>
<a id="pl.6.1"></a><var>6.1</var>date that the application is received in the replacing insurer's home or regional office, or <br/>
<a id="pl.6.2"></a><var>6.2</var>the date the proposed policy or contract is issued, whichever is sooner.<br/>
<a id="pl.6.3"></a><var>6.3</var>    (c) The replacing insurer shall maintain evidence of the "notice regarding <br/>
<a id="pl.6.4"></a><var>6.4</var>replacement" and a replacement register, cross-indexed, by replacing agent and existing <br/>
<a id="pl.6.5"></a><var>6.5</var>insurer to be replaced. Evidence that all requirements were met shall be maintained for at <br/>
<a id="pl.6.6"></a><var>6.6</var>least six years.<br/>
<a id="pl.6.7"></a><var>6.7</var>    (d) The replacing insurer shall provide in its policy or contract, or in a separate <br/>
<a id="pl.6.8"></a><var>6.8</var>written notice that is delivered with the policy or contract, that the applicant has a right <br/>
<a id="pl.6.9"></a><var>6.9</var>to an unconditional refund of all premiums paid, which right may be exercised within a <br/>
<a id="pl.6.10"></a><var>6.10</var>period of 20 30 days beginning from the date of delivery of the policy.<br/>
<a id="pl.6.11"></a><var>6.11</var><b>EFFECTIVE DATE.</b>This section is effective January 1, 2009.<br/>
<br/>
<a id="bill.0.9.0"></a><a id="pl.6.12"></a><var>6.12</var>    Sec. 9. Minnesota Statutes 2006, section 62A.149, subdivision 1, is amended to read:<br/>
<a id="pl.6.13"></a><var>6.13</var>    Subdivision 1. <b>Application.</b> The provisions of this section apply to all group <br/>
<a id="pl.6.14"></a><var>6.14</var>policies of accident and health insurance and group subscriber contracts offered by <br/>
<a id="pl.6.15"></a><var>6.15</var>nonprofit health service plan corporations regulated under chapter 62C, and to a plan or <br/>
<a id="pl.6.16"></a><var>6.16</var>policy that is individually underwritten or provided for a specific individual and family <br/>
<a id="pl.6.17"></a><var>6.17</var>members as a nongroup policy unless the individual elects in writing to refuse benefits <br/>
<a id="pl.6.18"></a><var>6.18</var>under this subdivision in exchange for an appropriate reduction in premiums or subscriber <br/>
<a id="pl.6.19"></a><var>6.19</var>charges under the policy or plan, when the policies or subscriber contracts are issued or <br/>
<a id="pl.6.20"></a><var>6.20</var>delivered in Minnesota or provide benefits to Minnesota residents enrolled thereunder.<br/>
<a id="pl.6.21"></a><var>6.21</var>    This section does not apply to policies designed primarily to provide coverage <br/>
<a id="pl.6.22"></a><var>6.22</var>payable on a per diem, fixed indemnity or nonexpense incurred basis or policies that <br/>
<a id="pl.6.23"></a><var>6.23</var>provide accident only coverage.<br/>
<a id="pl.6.24"></a><var>6.24</var>    Every insurance policy or subscriber contract included within the provisions of this <br/>
<a id="pl.6.25"></a><var>6.25</var>subdivision, upon issuance or renewal, shall provide for payment of benefits coverage <br/>
<a id="pl.6.26"></a><var>6.26</var>that complies with the requirements of section 62Q.47, paragraphs (b) and (c),  for the <br/>
<a id="pl.6.27"></a><var>6.27</var>treatment of alcoholism, chemical dependency or drug addiction to any Minnesota resident <br/>
<a id="pl.6.28"></a><var>6.28</var>entitled to coverage. thereunder on the same basis as coverage for other benefits when <br/>
<a id="pl.6.29"></a><var>6.29</var>treatment is rendered in<br/>
<a id="pl.6.30"></a><var>6.30</var>    (1) a licensed hospital,<br/>
<a id="pl.6.31"></a><var>6.31</var>    (2) a residential treatment program as licensed by the state of Minnesota pursuant <br/>
<a id="pl.6.32"></a><var>6.32</var>to diagnosis or recommendation by a doctor of medicine,<br/>
<a id="pl.6.33"></a><var>6.33</var>    (3) a nonresidential treatment program approved or licensed by the state of <br/>
<a id="pl.6.34"></a><var>6.34</var>Minnesota.<br/>
<br/>
<a id="bill.0.10.0"></a><a id="pl.7.1"></a><var>7.1</var>    Sec. 10. Minnesota Statutes 2006, section 62A.152, subdivision 2, is amended to read:<br/>
<a id="pl.7.2"></a><var>7.2</var>    Subd. 2. <b>Minimum benefits.</b> (a) All group policies and all group subscriber <br/>
<a id="pl.7.3"></a><var>7.3</var>contracts providing benefits for mental or nervous disorder treatments in a hospital shall <br/>
<a id="pl.7.4"></a><var>7.4</var>also provide coverage on the same basis as coverage for other benefits for at least 80 <br/>
<a id="pl.7.5"></a><var>7.5</var>percent of the cost of the usual and customary charges of the first ten hours of treatment <br/>
<a id="pl.7.6"></a><var>7.6</var>incurred over a 12-month benefit period, for mental or nervous disorder consultation, <br/>
<a id="pl.7.7"></a><var>7.7</var>diagnosis and treatment services delivered while the insured person is not a bed patient <br/>
<a id="pl.7.8"></a><var>7.8</var>in a hospital, and at least 75 percent of the cost of the usual and customary charges for <br/>
<a id="pl.7.9"></a><var>7.9</var>any additional hours of treatment during the same 12-month benefit period for serious or <br/>
<a id="pl.7.10"></a><var>7.10</var>persistent mental or nervous disorders, if the services are furnished by (1) a licensed or <br/>
<a id="pl.7.11"></a><var>7.11</var>accredited hospital, (2) a community mental health center or mental health clinic approved <br/>
<a id="pl.7.12"></a><var>7.12</var>or licensed by the commissioner of human services or other authorized state agency, or (3) <br/>
<a id="pl.7.13"></a><var>7.13</var>a mental health professional, as defined in sections 
<statute_ref>245.462, subdivision 18</statute_ref>, clauses (1) to <br/>
<a id="pl.7.14"></a><var>7.14</var>(5); and 
<statute_ref>245.4871, subdivision 27</statute_ref>, clauses (1) to (5). Prior authorization from an accident <br/>
<a id="pl.7.15"></a><var>7.15</var>and health insurance company, or a nonprofit health service corporation, shall be required <br/>
<a id="pl.7.16"></a><var>7.16</var>for an extension of coverage beyond ten hours of treatment. This prior authorization <br/>
<a id="pl.7.17"></a><var>7.17</var>must be based upon the severity of the disorder, the patient's risk of deterioration without <br/>
<a id="pl.7.18"></a><var>7.18</var>ongoing treatment and maintenance, degree of functional impairment, and a concise <br/>
<a id="pl.7.19"></a><var>7.19</var>treatment plan. Authorization for extended treatment may be limited to a maximum of 30 <br/>
<a id="pl.7.20"></a><var>7.20</var>visit hours during any 12-month benefit period. <br/>
<a id="pl.7.21"></a><var>7.21</var>    (b) For purposes of this section, covered treatment for a minor includes treatment for <br/>
<a id="pl.7.22"></a><var>7.22</var>the family if family therapy is recommended by a provider listed in paragraph (a). For <br/>
<a id="pl.7.23"></a><var>7.23</var>purposes of determining benefits under this section, "hours of treatment" means treatment <br/>
<a id="pl.7.24"></a><var>7.24</var>rendered on an individual or single-family basis. If treatment is rendered on a group basis, <br/>
<a id="pl.7.25"></a><var>7.25</var>the hours of covered group treatment must be provided at a ratio of no less than two group <br/>
<a id="pl.7.26"></a><var>7.26</var>treatment sessions to one individual treatment hour. that complies with the requirements <br/>
<a id="pl.7.27"></a><var>7.27</var>of section 62Q.47, paragraphs (b) and (c).<br/>
<br/>
<a id="bill.0.11.0"></a><a id="pl.7.28"></a><var>7.28</var>    Sec. 11. Minnesota Statutes 2007 Supplement, section 62A.30, subdivision 2, is <br/>
<a id="pl.7.29"></a><var>7.29</var>amended to read:<br/>
<a id="pl.7.30"></a><var>7.30</var>    Subd. 2. <b>Required coverage.</b> Every policy, plan, certificate, or contract referred to <br/>
<a id="pl.7.31"></a><var>7.31</var>in subdivision 1 that provides coverage to a Minnesota resident must provide coverage <br/>
<a id="pl.7.32"></a><var>7.32</var>for routine screening procedures for cancer and the office or facility visit, including <br/>
<a id="pl.7.33"></a><var>7.33</var>mammograms, surveillance tests for ovarian cancer for women who are at risk for ovarian <br/>
<a id="pl.7.34"></a><var>7.34</var>cancer as defined in subdivision 3, pap smears, and colorectal screening tests for men <br/>
<a id="pl.8.1"></a><var>8.1</var>and women, when ordered or provided by a physician in accordance with the standard <br/>
<a id="pl.8.2"></a><var>8.2</var>practice of medicine.<br/>
<br/>
<a id="bill.0.12.0"></a><a id="pl.8.3"></a><var>8.3</var>    Sec. 12. Minnesota Statutes 2006, section 62A.44, is amended by adding a subdivision <br/>
<a id="pl.8.4"></a><var>8.4</var>to read:<br/>
<a id="pl.8.5"></a><var>8.5</var>    Subd. 2a. <b>Electronic enrollment.</b> (a) For any Medicare supplement plan as defined <br/>
<a id="pl.8.6"></a><var>8.6</var>in section 62A.3099, any requirement that a signature of an insured be obtained by <br/>
<a id="pl.8.7"></a><var>8.7</var>an agent or insurer is satisfied if:<br/>
<a id="pl.8.8"></a><var>8.8</var>    (1) the consent is obtained by telephonic or electronic enrollment by the group <br/>
<a id="pl.8.9"></a><var>8.9</var>policyholder or insured. A verification of the enrollment information must be provided to <br/>
<a id="pl.8.10"></a><var>8.10</var>the applicant;<br/>
<a id="pl.8.11"></a><var>8.11</var>    (2) the telephonic or electronic enrollment provides necessary and reasonable <br/>
<a id="pl.8.12"></a><var>8.12</var>safeguards to ensure the accuracy, retention, and prompt retrieval of records; and<br/>
<a id="pl.8.13"></a><var>8.13</var>    (3) the telephonic or electronic enrollment provides necessary and reasonable <br/>
<a id="pl.8.14"></a><var>8.14</var>safeguards to ensure that the confidentiality of individual information and privileged <br/>
<a id="pl.8.15"></a><var>8.15</var>information as defined in section 72A.491, subdivision 19, is maintained.<br/>
<a id="pl.8.16"></a><var>8.16</var>    (b) The insurer shall make available, upon request of the commissioner, records that <br/>
<a id="pl.8.17"></a><var>8.17</var>will demonstrate the insurer's ability to confirm enrollment and coverage.<br/>
<br/>
<a id="bill.0.13.0"></a><a id="pl.8.18"></a><var>8.18</var>    Sec. 13. Minnesota Statutes 2006, section 62E.10, subdivision 2, is amended to read:<br/>
<a id="pl.8.19"></a><var>8.19</var>    Subd. 2. <b>Board of directors; organization.</b> The board of directors of the <br/>
<a id="pl.8.20"></a><var>8.20</var>association shall be made up of eleven members as follows: six directors selected by <br/>
<a id="pl.8.21"></a><var>8.21</var>contributing members, subject to approval by the commissioner, one of which must be <br/>
<a id="pl.8.22"></a><var>8.22</var>a health actuary; five public directors selected by the commissioner, at least two of <br/>
<a id="pl.8.23"></a><var>8.23</var>whom must be plan enrollees, two of whom must be representatives of employers whose <br/>
<a id="pl.8.24"></a><var>8.24</var>accident and health insurance premiums are part of the association's assessment base, are <br/>
<a id="pl.8.25"></a><var>8.25</var>covered under an individual plan subject to assessment under section 62E.11 or group <br/>
<a id="pl.8.26"></a><var>8.26</var>plan offered by an employer subject to assessment under section 62E.11, and one of <br/>
<a id="pl.8.27"></a><var>8.27</var>whom must be a licensed insurance agent. At least two of the public directors must reside <br/>
<a id="pl.8.28"></a><var>8.28</var>outside of the seven county metropolitan area. In determining voting rights at members' <br/>
<a id="pl.8.29"></a><var>8.29</var>meetings, each member shall be entitled to vote in person or proxy. The vote shall be <br/>
<a id="pl.8.30"></a><var>8.30</var>a weighted vote based upon the member's cost of self-insurance, accident and health <br/>
<a id="pl.8.31"></a><var>8.31</var>insurance premium, subscriber contract charges, health maintenance contract payment, or <br/>
<a id="pl.8.32"></a><var>8.32</var>community integrated service network payment derived from or on behalf of Minnesota <br/>
<a id="pl.8.33"></a><var>8.33</var>residents in the previous calendar year, as determined by the commissioner. In approving <br/>
<a id="pl.8.34"></a><var>8.34</var>directors of the board, the commissioner shall consider, among other things, whether all <br/>
<a id="pl.9.1"></a><var>9.1</var>types of members are fairly represented. Directors selected by contributing members <br/>
<a id="pl.9.2"></a><var>9.2</var>may be reimbursed from the money of the association for expenses incurred by them as <br/>
<a id="pl.9.3"></a><var>9.3</var>directors, but shall not otherwise be compensated by the association for their services. The <br/>
<a id="pl.9.4"></a><var>9.4</var>costs of conducting meetings of the association and its board of directors shall be borne <br/>
<a id="pl.9.5"></a><var>9.5</var>by members of the association.<br/>
<br/>
<a id="bill.0.14.0"></a><a id="pl.9.6"></a><var>9.6</var>    Sec. 14. Minnesota Statutes 2006, section 62F.02, is amended by adding a subdivision <br/>
<a id="pl.9.7"></a><var>9.7</var>to read:<br/>
<a id="pl.9.8"></a><var>9.8</var>    Subd. 3. <b>Merger.</b> Effective January 1, 2008, the association is merged into the joint <br/>
<a id="pl.9.9"></a><var>9.9</var>underwriting association under chapter 62I.<br/>
<br/>
<a id="bill.0.15.0"></a><a id="pl.9.10"></a><var>9.10</var>    Sec. 15. Minnesota Statutes 2006, section 62M.02, subdivision 21, is amended to read:<br/>
<a id="pl.9.11"></a><var>9.11</var>    Subd. 21. <b>Utilization review organization.</b> "Utilization review organization" <br/>
<a id="pl.9.12"></a><var>9.12</var>means an entity including but not limited to an insurance company licensed under chapter <br/>
<a id="pl.9.13"></a><var>9.13</var>60A to offer, sell, or issue a policy of accident and sickness insurance as defined in section <br/>
<statute_ref><a id="pl.9.14"></a><var>9.14</var>62A.01
         </statute_ref>; a prepaid limited health service organization issued a certificate of authority <br/>
<a id="pl.9.15"></a><var>9.15</var>and operating under sections 62A.451 to 62A.4528; a health service plan licensed under <br/>
<a id="pl.9.16"></a><var>9.16</var>chapter 62C; a health maintenance organization licensed under chapter 62D; a community <br/>
<a id="pl.9.17"></a><var>9.17</var>integrated service network licensed under chapter 62N; an accountable provider network <br/>
<a id="pl.9.18"></a><var>9.18</var>operating under chapter 62T; a fraternal benefit society operating under chapter 64B; <br/>
<a id="pl.9.19"></a><var>9.19</var>a joint self-insurance employee health plan operating under chapter 62H; a multiple <br/>
<a id="pl.9.20"></a><var>9.20</var>employer welfare arrangement, as defined in section 3 of the Employee Retirement <br/>
<a id="pl.9.21"></a><var>9.21</var>Income Security Act of 1974 (ERISA), United States Code, title 29, section 1103, as <br/>
<a id="pl.9.22"></a><var>9.22</var>amended; a third party administrator licensed under section 
         <statute_ref>60A.23, subdivision 8</statute_ref>, which <br/>
<a id="pl.9.23"></a><var>9.23</var>conducts utilization review and determines certification of an admission, extension of stay, <br/>
<a id="pl.9.24"></a><var>9.24</var>or other health care services for a Minnesota resident; or any entity performing utilization <br/>
<a id="pl.9.25"></a><var>9.25</var>review that is affiliated with, under contract with, or conducting utilization review on <br/>
<a id="pl.9.26"></a><var>9.26</var>behalf of, a business entity in this state. Utilization review organization does not include <br/>
<a id="pl.9.27"></a><var>9.27</var>a clinic or health care system acting pursuant to a written delegation agreement with an <br/>
<a id="pl.9.28"></a><var>9.28</var>otherwise regulated utilization review organization that contracts with the clinic or health <br/>
<a id="pl.9.29"></a><var>9.29</var>care system. The regulated utilization review organization is accountable for the delegated <br/>
<a id="pl.9.30"></a><var>9.30</var>utilization review activities of the clinic or health care system. <br/>
<br/>
<a id="bill.0.16.0"></a><a id="pl.9.31"></a><var>9.31</var>    Sec. 16. Minnesota Statutes 2006, section 62Q.47, is amended to read:<br/>
<a id="pl.9.32"></a><var>9.32</var><b>62Q.47 </b><b>ALCOHOLISM, </b><b>MENTAL HEALTH</b><b>,</b><b> AND CHEMICAL </b><br/>
<a id="pl.9.33"></a><var>9.33</var><b>DEPENDENCY SERVICES.</b><br/>
<a id="pl.10.1"></a><var>10.1</var>    (a) All health plans, as defined in section 
         <statute_ref>62Q.01</statute_ref>, that provide coverage for <br/>
<a id="pl.10.2"></a><var>10.2</var>alcoholism, mental health, or chemical dependency services, must comply with the <br/>
<a id="pl.10.3"></a><var>10.3</var>requirements of this section. <br/>
<a id="pl.10.4"></a><var>10.4</var>    (b) Cost-sharing requirements and benefit or service limitations for outpatient <br/>
<a id="pl.10.5"></a><var>10.5</var>mental health and outpatient chemical dependency and alcoholism services, except for <br/>
<a id="pl.10.6"></a><var>10.6</var>persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 <br/>
<a id="pl.10.7"></a><var>10.7</var>to 9530.6660, must not place a greater financial burden on the insured or enrollee, or be <br/>
<a id="pl.10.8"></a><var>10.8</var>more restrictive than those requirements and limitations for outpatient medical services.<br/>
<a id="pl.10.9"></a><var>10.9</var>    (c) Cost-sharing requirements and benefit or service limitations for inpatient hospital <br/>
<a id="pl.10.10"></a><var>10.10</var>mental health and inpatient hospital and residential chemical dependency and alcoholism <br/>
<a id="pl.10.11"></a><var>10.11</var>services, except for persons placed in chemical dependency services under Minnesota <br/>
<a id="pl.10.12"></a><var>10.12</var>Rules, parts 9530.6600 to 9530.6660, must not place a greater financial burden on the <br/>
<a id="pl.10.13"></a><var>10.13</var>insured or enrollee, or be more restrictive than those requirements and limitations for <br/>
<a id="pl.10.14"></a><var>10.14</var>inpatient hospital medical services.<br/>
<br/>
<a id="bill.0.17.0"></a><a id="pl.10.15"></a><var>10.15</var>    Sec. 17. Minnesota Statutes 2006, section 62Q.64, is amended to read:<br/>
<a id="pl.10.16"></a><var>10.16</var><b>62Q.64 DISCLOSURE OF EXECUTIVE COMPENSATION.</b><br/>
<a id="pl.10.17"></a><var>10.17</var>    (a) Each health plan company doing business in this state whose annual Minnesota <br/>
<a id="pl.10.18"></a><var>10.18</var>premiums exceed $10,000,000 based on the most recent assessment base of the Minnesota <br/>
<a id="pl.10.19"></a><var>10.19</var>Comprehensive Health Association shall annually file with the Consumer Advisory Board <br/>
<a id="pl.10.20"></a><var>10.20</var>created in section 
<statute_ref>62J.75</statute_ref> either the commissioner of commerce or the commissioner <br/>
<a id="pl.10.21"></a><var>10.21</var>of health, as appropriate: <br/>
<a id="pl.10.22"></a><var>10.22</var>    (1) a copy of the health plan company's form 990 filed with the federal Internal <br/>
<a id="pl.10.23"></a><var>10.23</var>Revenue Service; or<br/>
<a id="pl.10.24"></a><var>10.24</var>    (2) if the health plan company did not file a form 990 with the federal Internal <br/>
<a id="pl.10.25"></a><var>10.25</var>Revenue Service, a list of the amount and recipients of the health plan company's five <br/>
<a id="pl.10.26"></a><var>10.26</var>highest salaries, including all types of compensation, in excess of $50,000.<br/>
<a id="pl.10.27"></a><var>10.27</var>    (b) A filing under this section is public data under section 
         <statute_ref>13.03</statute_ref>. <br/>
<br/>
<a id="bill.0.18.0"></a><a id="pl.10.28"></a><var>10.28</var>    Sec. 18. Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision <br/>
<a id="pl.10.29"></a><var>10.29</var>to read:<br/>
<a id="pl.10.30"></a><var>10.30</var>    Subd. 16a. <b>Hands-on assistance.</b> "Hands-on assistance" means minimal, moderate, <br/>
<a id="pl.10.31"></a><var>10.31</var>or maximal physical assistance without which the individual would not be able to perform <br/>
<a id="pl.10.32"></a><var>10.32</var>the activity of daily living.<br/>
<br/>
<a id="bill.0.19.0"></a><a id="pl.11.1"></a><var>11.1</var>    Sec. 19. Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision <br/>
<a id="pl.11.2"></a><var>11.2</var>to read:<br/>
<a id="pl.11.3"></a><var>11.3</var>    Subd. 22a. <b>Personal care.</b> "Personal care" means the provision of hands-on services <br/>
<a id="pl.11.4"></a><var>11.4</var>to assist an individual with activities of daily living.<br/>
<br/>
<a id="bill.0.20.0"></a><a id="pl.11.5"></a><var>11.5</var>    Sec. 20. Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision <br/>
<a id="pl.11.6"></a><var>11.6</var>to read:<br/>
<a id="pl.11.7"></a><var>11.7</var>    Subd. 23b. <b>Providers of services.</b> All providers of services, including but not <br/>
<a id="pl.11.8"></a><var>11.8</var>limited to "skilled nursing facility," "extended care facility," "convalescent nursing home," <br/>
<a id="pl.11.9"></a><var>11.9</var>"personal care facility," "specialized care providers," "assisted living facility," and <br/>
<a id="pl.11.10"></a><var>11.10</var>"home care agency" are defined in relation to the services and facilities required to be <br/>
<a id="pl.11.11"></a><var>11.11</var>available and the licensure, certification, registration, or degree status of those providing <br/>
<a id="pl.11.12"></a><var>11.12</var>or supervising the services. When the definition requires that the provider be appropriately <br/>
<a id="pl.11.13"></a><var>11.13</var>licensed, certified, or registered, it must also state what requirements a provider must <br/>
<a id="pl.11.14"></a><var>11.14</var>meet in lieu of licensure, certification, or registration when the state in which the service <br/>
<a id="pl.11.15"></a><var>11.15</var>is to be furnished does not require a provider of these services to be licensed, certified, <br/>
<a id="pl.11.16"></a><var>11.16</var>or registered, or when the state licenses, certifies, or registers the provider of services <br/>
<a id="pl.11.17"></a><var>11.17</var>under another name.<br/>
<br/>
<a id="bill.0.21.0"></a><a id="pl.11.18"></a><var>11.18</var>    Sec. 21. Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision <br/>
<a id="pl.11.19"></a><var>11.19</var>to read:<br/>
<a id="pl.11.20"></a><var>11.20</var>    Subd. 25b. <b>Skilled nursing care, personal care, home care, specialized care, </b><br/>
<a id="pl.11.21"></a><var>11.21</var><b>assisted living care, and other services.</b> "Skilled nursing care," "personal care," "home <br/>
<a id="pl.11.22"></a><var>11.22</var>care," "specialized care," "assisted living care," and other services are defined in relation <br/>
<a id="pl.11.23"></a><var>11.23</var>to the level of skill required, the nature of the care, and the setting in which care must <br/>
<a id="pl.11.24"></a><var>11.24</var>be delivered.<br/>
<br/>
<a id="bill.0.22.0"></a><a id="pl.11.25"></a><var>11.25</var>    Sec. 22. Minnesota Statutes 2006, section 62S.13, subdivision 4, is amended to read:<br/>
<a id="pl.11.26"></a><var>11.26</var>    Subd. 4. <b>Field issue prohibition.</b> A long-term care insurance policy or certificate <br/>
<a id="pl.11.27"></a><var>11.27</var>may not be field issued based on medical or health status. For purposes of this section, <br/>
<a id="pl.11.28"></a><var>11.28</var>"field issued" means a policy or certificate issued by an agent or a third-party administrator <br/>
<a id="pl.11.29"></a><var>11.29</var>under the underwriting authority granted to the agent or third-party administrator by an <br/>
<a id="pl.11.30"></a><var>11.30</var>insurer and using the insurer's underwriting guidelines.<br/>
<br/>
<a id="bill.0.23.0"></a><a id="pl.11.31"></a><var>11.31</var>    Sec. 23. Minnesota Statutes 2006, section 62S.15, is amended to read:<br/>
<a id="pl.11.32"></a><var>11.32</var><b>62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.</b><br/>
<a id="pl.12.1"></a><var>12.1</var>    (a) No policy may be delivered or issued for delivery in this state as long-term care <br/>
<a id="pl.12.2"></a><var>12.2</var>insurance if the policy limits or excludes coverage by type of illness, treatment, medical <br/>
<a id="pl.12.3"></a><var>12.3</var>condition, or accident, except as follows:<br/>
<a id="pl.12.4"></a><var>12.4</var>    (1) preexisting conditions or diseases;<br/>
<a id="pl.12.5"></a><var>12.5</var>    (2) mental or nervous disorders; except that the exclusion or limitation of benefits on <br/>
<a id="pl.12.6"></a><var>12.6</var>the basis of Alzheimer's disease is prohibited;<br/>
<a id="pl.12.7"></a><var>12.7</var>    (3) alcoholism and drug addiction;<br/>
<a id="pl.12.8"></a><var>12.8</var>    (4) illness, treatment, or medical condition arising out of war or act of war; <br/>
<a id="pl.12.9"></a><var>12.9</var>participation in a felony, riot, or insurrection; service in the armed forces or auxiliary <br/>
<a id="pl.12.10"></a><var>12.10</var>units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying <br/>
<a id="pl.12.11"></a><var>12.11</var>aviation; <br/>
<a id="pl.12.12"></a><var>12.12</var>    (5) treatment provided in a government facility unless otherwise required by <br/>
<a id="pl.12.13"></a><var>12.13</var>law, services for which benefits are available under Medicare or other government <br/>
<a id="pl.12.14"></a><var>12.14</var>program except Medicaid, state or federal workers' compensation, employer's liability <br/>
<a id="pl.12.15"></a><var>12.15</var>or occupational disease law, motor vehicle no-fault law; services provided by a member <br/>
<a id="pl.12.16"></a><var>12.16</var>of the covered person's immediate family; and services for which no charge is normally <br/>
<a id="pl.12.17"></a><var>12.17</var>made in the absence of insurance; and<br/>
<a id="pl.12.18"></a><var>12.18</var>    (6) expenses for services or items available or paid under another long-term care <br/>
<a id="pl.12.19"></a><var>12.19</var>insurance or health insurance policy.; and<br/>
<a id="pl.12.20"></a><var>12.20</var>    (7) in the case of a qualified long-term care insurance contract, expenses for services <br/>
<a id="pl.12.21"></a><var>12.21</var>or items to the extent that the expenses are reimbursable under title XVIII of the Social <br/>
<a id="pl.12.22"></a><var>12.22</var>Security Act or would be so reimbursable but for the application of a deductible or <br/>
<a id="pl.12.23"></a><var>12.23</var>coinsurance amount.<br/>
<a id="pl.12.24"></a><var>12.24</var>    (b) This subdivision does not prohibit exclusions and limitations by type of provider <br/>
<a id="pl.12.25"></a><var>12.25</var>or territorial limitations. However, no long-term care issuer may deny a claim because <br/>
<a id="pl.12.26"></a><var>12.26</var>services are provided in a state other than the state of policy issued under the following <br/>
<a id="pl.12.27"></a><var>12.27</var>conditions:<br/>
<a id="pl.12.28"></a><var>12.28</var>    (1) when the state other than the state of policy issue does not have the provider <br/>
<a id="pl.12.29"></a><var>12.29</var>licensing, certification, or registration required in the policy, but where the provider <br/>
<a id="pl.12.30"></a><var>12.30</var>satisfies the policy requirements outlined for providers in lieu of licensure, certification, or <br/>
<a id="pl.12.31"></a><var>12.31</var>registration; or<br/>
<a id="pl.12.32"></a><var>12.32</var>    (2) when the state other than the state of policy issue licenses, certifies, or registers <br/>
<a id="pl.12.33"></a><var>12.33</var>the provider under another name.<br/>
<a id="pl.12.34"></a><var>12.34</var>    For purposes of this paragraph, "state of policy issue" means the state in which the <br/>
<a id="pl.12.35"></a><var>12.35</var>individual policy or certificate was originally issued.<br/>
<br/>
<a id="bill.0.24.0"></a><a id="pl.13.1"></a><var>13.1</var>    Sec. 24. Minnesota Statutes 2006, section 62S.18, subdivision 2, is amended to read:<br/>
<a id="pl.13.2"></a><var>13.2</var>    Subd. 2. <b>Premiums.</b> (a) The premiums charged to an insured for long-term care <br/>
<a id="pl.13.3"></a><var>13.3</var>insurance replaced under subdivision 1 shall not increase due to either the increasing <br/>
<a id="pl.13.4"></a><var>13.4</var>age of the insured at ages beyond 65 or the duration the insured has been covered under <br/>
<a id="pl.13.5"></a><var>13.5</var>this policy.<br/>
<a id="pl.13.6"></a><var>13.6</var>    (b) The purchase of additional coverage must not be considered a premium rate <br/>
<a id="pl.13.7"></a><var>13.7</var>increase, but for purposes of the calculation required under section 62S.291, the portion <br/>
<a id="pl.13.8"></a><var>13.8</var>of the premium attributable to the additional coverage must be added to and considered <br/>
<a id="pl.13.9"></a><var>13.9</var>part of the initial annual premium.<br/>
<a id="pl.13.10"></a><var>13.10</var>    (c) A reduction in benefits must not be considered a premium change, but for <br/>
<a id="pl.13.11"></a><var>13.11</var>purpose of the calculation required under section 62S.291, the initial annual premium must <br/>
<a id="pl.13.12"></a><var>13.12</var>be based on the reduced benefits.<br/>
<br/>
<a id="bill.0.25.0"></a><a id="pl.13.13"></a><var>13.13</var>    Sec. 25. <b>[62S.181] ELECTRONIC ENROLLMENT FOR GROUP POLICIES.</b><br/>
<a id="pl.13.14"></a><var>13.14</var>    Subdivision 1. <b>Employers or labor unions.</b> In the case of a group defined in section <br/>
<a id="pl.13.15"></a><var>13.15</var>62S.01, subdivision 15, clause (1), any requirement that a signature of an insured be <br/>
<a id="pl.13.16"></a><var>13.16</var>obtained by an agent or insurer is satisfied if:<br/>
<a id="pl.13.17"></a><var>13.17</var>    (1) the consent is obtained by telephonic or electronic enrollment by the group <br/>
<a id="pl.13.18"></a><var>13.18</var>policyholder or insurer. A verification of enrollment information must be provided to the <br/>
<a id="pl.13.19"></a><var>13.19</var>enrollee;<br/>
<a id="pl.13.20"></a><var>13.20</var>    (2) the telephonic or electronic enrollment provides necessary and reasonable <br/>
<a id="pl.13.21"></a><var>13.21</var>safeguards to ensure the accuracy, retention, and prompt retrieval of records; and<br/>
<a id="pl.13.22"></a><var>13.22</var>    (3) the telephonic or electronic enrollment provides necessary and reasonable <br/>
<a id="pl.13.23"></a><var>13.23</var>safeguards to ensure that the confidentiality of individually identifiable information and <br/>
<a id="pl.13.24"></a><var>13.24</var>"privileged information" as defined by section 72A.491, subdivision 19, is maintained.<br/>
<a id="pl.13.25"></a><var>13.25</var>    Subd. 2. <b>Availability of insurer records.</b> The insurer shall make available, upon <br/>
<a id="pl.13.26"></a><var>13.26</var>request of the commissioner, records that will demonstrate the insurer's ability to confirm <br/>
<a id="pl.13.27"></a><var>13.27</var>enrollment and coverage amounts.<br/>
<br/>
<a id="bill.0.26.0"></a><a id="pl.13.28"></a><var>13.28</var>    Sec. 26. Minnesota Statutes 2006, section 62S.20, is amended by adding a subdivision <br/>
<a id="pl.13.29"></a><var>13.29</var>to read:<br/>
<a id="pl.13.30"></a><var>13.30</var>    Subd. 5a. <b>Disclosure of tax consequences.</b> With regard to life insurance policies <br/>
<a id="pl.13.31"></a><var>13.31</var>that provide an accelerated benefit for long-term care, a disclosure statement is required <br/>
<a id="pl.13.32"></a><var>13.32</var>at the time of application for the policy or rider and at the same time the accelerated <br/>
<a id="pl.13.33"></a><var>13.33</var>benefit payment request is submitted that receipt of these accelerated benefits may be <br/>
<a id="pl.13.34"></a><var>13.34</var>taxable, and that assistance should be sought from a personal tax advisor. The disclosure <br/>
<a id="pl.14.1"></a><var>14.1</var>statement must be prominently displayed on the first page of the policy or rider and any <br/>
<a id="pl.14.2"></a><var>14.2</var>other related documents. This subdivision does not apply to qualified long-term care <br/>
<a id="pl.14.3"></a><var>14.3</var>insurance contracts.<br/>
<br/>
<a id="bill.0.27.0"></a><a id="pl.14.4"></a><var>14.4</var>    Sec. 27. Minnesota Statutes 2006, section 62S.20, is amended by adding a subdivision <br/>
<a id="pl.14.5"></a><var>14.5</var>to read:<br/>
<a id="pl.14.6"></a><var>14.6</var>    Subd. 5b. <b>Benefit triggers.</b> Activities of daily living and cognitive impairment <br/>
<a id="pl.14.7"></a><var>14.7</var>must be used to measure an insured's need for long-term care and must be described <br/>
<a id="pl.14.8"></a><var>14.8</var>in the policy or certificate in a separate paragraph and must be labeled "Eligibility for <br/>
<a id="pl.14.9"></a><var>14.9</var>the Payment of Benefits." Any additional benefit triggers must also be explained in this <br/>
<a id="pl.14.10"></a><var>14.10</var>section. If these triggers differ for different benefits, explanation of the trigger must <br/>
<a id="pl.14.11"></a><var>14.11</var>accompany each benefit description. If an attending physician or other specified person <br/>
<a id="pl.14.12"></a><var>14.12</var>must certify a certain level of functional dependency in order to be eligible for benefits, <br/>
<a id="pl.14.13"></a><var>14.13</var>this too shall be specified.<br/>
<br/>
<a id="bill.0.28.0"></a><a id="pl.14.14"></a><var>14.14</var>    Sec. 28. Minnesota Statutes 2006, section 62S.20, subdivision 6, is amended to read:<br/>
<a id="pl.14.15"></a><var>14.15</var>    Subd. 6. <b>Qualified long-term care insurance policy.</b> A qualified long-term care <br/>
<a id="pl.14.16"></a><var>14.16</var>insurance policy must include a disclosure statement in the policy that the policy is <br/>
<a id="pl.14.17"></a><var>14.17</var>intended to be a qualified long-term care insurance policy under section 7702B(b) of the <br/>
<a id="pl.14.18"></a><var>14.18</var>Internal Revenue Code of 1986, as amended.<br/>
<br/>
<a id="bill.0.29.0"></a><a id="pl.14.19"></a><var>14.19</var>    Sec. 29. Minnesota Statutes 2007 Supplement, section 62S.23, subdivision 1, is <br/>
<a id="pl.14.20"></a><var>14.20</var>amended to read:<br/>
<a id="pl.14.21"></a><var>14.21</var>    Subdivision 1. <b>Inflation protection feature.</b> (a) No insurer may offer a long-term <br/>
<a id="pl.14.22"></a><var>14.22</var>care insurance policy unless the insurer also offers to the policyholder, in addition to any <br/>
<a id="pl.14.23"></a><var>14.23</var>other inflation protection, the option to purchase a policy that provides for benefit levels to <br/>
<a id="pl.14.24"></a><var>14.24</var>increase with benefit maximums or reasonable durations which are meaningful to account <br/>
<a id="pl.14.25"></a><var>14.25</var>for reasonably anticipated increases in the costs of long-term care services covered by <br/>
<a id="pl.14.26"></a><var>14.26</var>the policy. In addition to other options that may be offered, insurers must offer to each <br/>
<a id="pl.14.27"></a><var>14.27</var>policyholder, at the time of purchase, the option to purchase a policy with an inflation <br/>
<a id="pl.14.28"></a><var>14.28</var>protection feature no less favorable than one of the following:<br/>
<a id="pl.14.29"></a><var>14.29</var>    (1) increases benefit levels annually in a manner so that the increases are <br/>
<a id="pl.14.30"></a><var>14.30</var>compounded annually at a rate not less than five percent;<br/>
<a id="pl.14.31"></a><var>14.31</var>    (2) guarantees the insured individual the right to periodically increase benefit levels <br/>
<a id="pl.14.32"></a><var>14.32</var>without providing evidence of insurability or health status so long as the option for the <br/>
<a id="pl.14.33"></a><var>14.33</var>previous period has not been declined. The amount of the additional benefit shall be no <br/>
<a id="pl.15.1"></a><var>15.1</var>less than the difference between the existing policy benefit and that benefit compounded <br/>
<a id="pl.15.2"></a><var>15.2</var>annually at a rate of at least five percent for the period beginning with the purchase of the <br/>
<a id="pl.15.3"></a><var>15.3</var>existing benefit and extending until the year in which the offer is made; or<br/>
<a id="pl.15.4"></a><var>15.4</var>    (3) covers a specified percentage of actual or reasonable charges and does not <br/>
<a id="pl.15.5"></a><var>15.5</var>include a maximum specified indemnity amount or limit.<br/>
<a id="pl.15.6"></a><var>15.6</var>    (b) A long-term care partnership policy must provide the inflation protection <br/>
<a id="pl.15.7"></a><var>15.7</var>described in this subdivision. If the policy is sold to an individual who:<br/>
<a id="pl.15.8"></a><var>15.8</var>    (1) has not attained age 61 as of the date of purchase, the policy must provide <br/>
<a id="pl.15.9"></a><var>15.9</var>compound annual inflation protection;<br/>
<a id="pl.15.10"></a><var>15.10</var>    (2) has attained age 61, but has not attained age 76 as of such date, the policy must <br/>
<a id="pl.15.11"></a><var>15.11</var>provide some level of inflation protection; and<br/>
<a id="pl.15.12"></a><var>15.12</var>    (3) has attained the age of 76 as of such date, the policy may, but is not required to, <br/>
<a id="pl.15.13"></a><var>15.13</var>provide some level of inflation protection.<br/>
<a id="pl.15.14"></a><var>15.14</var>    Inflation protection for a long-term care partnership policy may not be less than <br/>
<a id="pl.15.15"></a><var>15.15</var>three percent per year or a rate based on changes in the Consumer Price Index. The <br/>
<a id="pl.15.16"></a><var>15.16</var>commissioner, however, may approve other types of inflation protection that comply with <br/>
<a id="pl.15.17"></a><var>15.17</var>this section and further the goals of the partnership program.<br/>
<br/>
<a id="bill.0.30.0"></a><a id="pl.15.18"></a><var>15.18</var>    Sec. 30. <b>[62S.251] RESERVE STANDARDS.</b><br/>
<a id="pl.15.19"></a><var>15.19</var>    Subdivision 1. <b>Benefits provided through acceleration of benefits under life </b><br/>
<a id="pl.15.20"></a><var>15.20</var><b>policies.</b> When long-term care benefits are provided through the acceleration of benefits <br/>
<a id="pl.15.21"></a><var>15.21</var>under group or individual life policies or riders to these policies, policy reserves for the <br/>
<a id="pl.15.22"></a><var>15.22</var>benefits must be determined in accordance with section 61A.25. Claim reserves must also <br/>
<a id="pl.15.23"></a><var>15.23</var>be established in the case when the policy or rider is in claim status.<br/>
<a id="pl.15.24"></a><var>15.24</var>    Reserves for policies and riders subject to this section must be based on the multiple <br/>
<a id="pl.15.25"></a><var>15.25</var>decrement model utilizing all relevant decrements except for voluntary termination rates. <br/>
<a id="pl.15.26"></a><var>15.26</var>Single decrement approximations are acceptable if the calculation produces essentially <br/>
<a id="pl.15.27"></a><var>15.27</var>similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. <br/>
<a id="pl.15.28"></a><var>15.28</var>The calculations may take into account the reduction in life insurance benefits due to <br/>
<a id="pl.15.29"></a><var>15.29</var>the payment of long-term care benefits. However, in no event must the reserves for the <br/>
<a id="pl.15.30"></a><var>15.30</var>long-term care benefit and the life insurance benefit be less than the reserves for the life <br/>
<a id="pl.15.31"></a><var>15.31</var>insurance benefit assuming no long-term care benefit.<br/>
<a id="pl.15.32"></a><var>15.32</var>    In the development and calculation of reserves for policies and riders subject to this <br/>
<a id="pl.15.33"></a><var>15.33</var>subdivision, due regard must be given to the applicable policy provisions, marketing <br/>
<a id="pl.15.34"></a><var>15.34</var>methods, administrative procedures, and all other considerations which have an impact on <br/>
<a id="pl.15.35"></a><var>15.35</var>projected claim costs, including, but not limited to, the following:<br/>
<a id="pl.16.1"></a><var>16.1</var>    (1) definition of insured events;<br/>
<a id="pl.16.2"></a><var>16.2</var>    (2) covered long-term care facilities;<br/>
<a id="pl.16.3"></a><var>16.3</var>    (3) existence of home convalescence care coverage;<br/>
<a id="pl.16.4"></a><var>16.4</var>    (4) definition of facilities;<br/>
<a id="pl.16.5"></a><var>16.5</var>    (5) existence or absence of barriers to eligibility;<br/>
<a id="pl.16.6"></a><var>16.6</var>    (6) premium waiver provision;<br/>
<a id="pl.16.7"></a><var>16.7</var>    (7) renewability;<br/>
<a id="pl.16.8"></a><var>16.8</var>    (8) ability to raise premiums;<br/>
<a id="pl.16.9"></a><var>16.9</var>    (9) marketing method;<br/>
<a id="pl.16.10"></a><var>16.10</var>    (10) underwriting procedures;<br/>
<a id="pl.16.11"></a><var>16.11</var>    (11) claims adjustment procedures;<br/>
<a id="pl.16.12"></a><var>16.12</var>    (12) waiting period;<br/>
<a id="pl.16.13"></a><var>16.13</var>    (13) maximum benefit;<br/>
<a id="pl.16.14"></a><var>16.14</var>    (14) availability of eligible facilities;<br/>
<a id="pl.16.15"></a><var>16.15</var>    (15) margins in claim costs;<br/>
<a id="pl.16.16"></a><var>16.16</var>    (16) optional nature of benefit;<br/>
<a id="pl.16.17"></a><var>16.17</var>    (17) delay in eligibility for benefit;<br/>
<a id="pl.16.18"></a><var>16.18</var>    (18) inflation protection provisions; and<br/>
<a id="pl.16.19"></a><var>16.19</var>    (19) guaranteed insurability option.<br/>
<a id="pl.16.20"></a><var>16.20</var>    Any applicable valuation morbidity table shall be certified as appropriate as a <br/>
<a id="pl.16.21"></a><var>16.21</var>statutory valuation table by a member of the American Academy of Actuaries.<br/>
<a id="pl.16.22"></a><var>16.22</var>    Subd. 2. <b>Benefits provided otherwise.</b> When long-term care benefits are provided <br/>
<a id="pl.16.23"></a><var>16.23</var>other than as in subdivision 1, reserves must be determined in accordance with sections <br/>
<a id="pl.16.24"></a><var>16.24</var>60A.76 to 60A.768.<br/>
<br/>
<a id="bill.0.31.0"></a><a id="pl.16.25"></a><var>16.25</var>    Sec. 31. Minnesota Statutes 2006, section 62S.26, subdivision 2, is amended to read:<br/>
<a id="pl.16.26"></a><var>16.26</var>    Subd. 2. <b>Life insurance policies.</b> Subdivision 1 shall not apply to life insurance <br/>
<a id="pl.16.27"></a><var>16.27</var>policies that accelerate benefits for long-term care. A life insurance policy that funds <br/>
<a id="pl.16.28"></a><var>16.28</var>long-term care benefits entirely by accelerating the death benefit is considered to provide <br/>
<a id="pl.16.29"></a><var>16.29</var>reasonable benefits in relation to premiums paid, if the policy complies with all of the <br/>
<a id="pl.16.30"></a><var>16.30</var>following provisions:<br/>
<a id="pl.16.31"></a><var>16.31</var>    (1) the interest credited internally to determine cash value accumulations, including <br/>
<a id="pl.16.32"></a><var>16.32</var>long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest <br/>
<a id="pl.16.33"></a><var>16.33</var>rate for cash value accumulations without long-term care set forth in the policy;<br/>
<a id="pl.16.34"></a><var>16.34</var>    (2) the portion of the policy that provides life insurance benefits meets the <br/>
<a id="pl.16.35"></a><var>16.35</var>nonforfeiture requirements of section 
         <statute_ref>61A.24</statute_ref>;<br/>
<a id="pl.17.1"></a><var>17.1</var>    (3) the policy meets the disclosure requirements of sections 
         <statute_ref>62S.09</statute_ref>, 
         <statute_ref>62S.10</statute_ref>, and <br/>
<statute_ref><a id="pl.17.2"></a><var>17.2</var>62S.11
         </statute_ref>; and <br/>
<a id="pl.17.3"></a><var>17.3</var>    (4) any policy illustration that meets the applicable requirements of the NAIC Life <br/>
<a id="pl.17.4"></a><var>17.4</var>Insurance Illustrations Model Regulation; and<br/>
<a id="pl.17.5"></a><var>17.5</var>    (4) (5) an actuarial memorandum is filed with the commissioner that includes:<br/>
<a id="pl.17.6"></a><var>17.6</var>    (i) a description of the basis on which the long-term care rates were determined;<br/>
<a id="pl.17.7"></a><var>17.7</var>    (ii) a description of the basis for the reserves;<br/>
<a id="pl.17.8"></a><var>17.8</var>    (iii) a summary of the type of policy, benefits, renewability, general marketing <br/>
<a id="pl.17.9"></a><var>17.9</var>method, and limits on ages of issuance;<br/>
<a id="pl.17.10"></a><var>17.10</var>    (iv) a description and a table of each actuarial assumption used. For expenses, <br/>
<a id="pl.17.11"></a><var>17.11</var>an insurer must include percentage of premium dollars per policy and dollars per unit <br/>
<a id="pl.17.12"></a><var>17.12</var>of benefits, if any;<br/>
<a id="pl.17.13"></a><var>17.13</var>    (v) a description and a table of the anticipated policy reserves and additional reserves <br/>
<a id="pl.17.14"></a><var>17.14</var>to be held in each future year for active lives;<br/>
<a id="pl.17.15"></a><var>17.15</var>    (vi) the estimated average annual premium per policy and the average issue age; <br/>
<a id="pl.17.16"></a><var>17.16</var>    (vii) a statement as to whether underwriting is performed at the time of application. <br/>
<a id="pl.17.17"></a><var>17.17</var>The statement shall indicate whether underwriting is used and, if used, the statement <br/>
<a id="pl.17.18"></a><var>17.18</var>shall include a description of the type or types of underwriting used, such as medical <br/>
<a id="pl.17.19"></a><var>17.19</var>underwriting or functional assessment underwriting. Concerning a group policy, the <br/>
<a id="pl.17.20"></a><var>17.20</var>statement shall indicate whether the enrollee or any dependent will be underwritten and <br/>
<a id="pl.17.21"></a><var>17.21</var>when underwriting occurs; and<br/>
<a id="pl.17.22"></a><var>17.22</var>    (viii) a description of the effect of the long-term care policy provision on the required <br/>
<a id="pl.17.23"></a><var>17.23</var>premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both <br/>
<a id="pl.17.24"></a><var>17.24</var>for active lives and those in long-term care claim status.<br/>
<br/>
<a id="bill.0.32.0"></a><a id="pl.17.25"></a><var>17.25</var>    Sec. 32. Minnesota Statutes 2006, section 62S.266, subdivision 4, is amended to read:<br/>
<a id="pl.17.26"></a><var>17.26</var>    Subd. 4. <b>Contingent benefit upon lapse.</b> (a) After rejection of the offer required <br/>
<a id="pl.17.27"></a><var>17.27</var>under subdivision 2, for individual and group policies without nonforfeiture benefits <br/>
<a id="pl.17.28"></a><var>17.28</var>issued after July 1, 2001, the insurer shall provide a contingent benefit upon lapse.<br/>
<a id="pl.17.29"></a><var>17.29</var>    (b)  If a group policyholder elects to make the nonforfeiture benefit an option to <br/>
<a id="pl.17.30"></a><var>17.30</var>the certificate holder, a certificate shall provide either the nonforfeiture benefit or the <br/>
<a id="pl.17.31"></a><var>17.31</var>contingent benefit upon lapse.<br/>
<a id="pl.17.32"></a><var>17.32</var>    (c) The contingent benefit on lapse must be triggered every time an insurer increases <br/>
<a id="pl.17.33"></a><var>17.33</var>the premium rates to a level which results in a cumulative increase of the annual premium <br/>
<a id="pl.17.34"></a><var>17.34</var>equal to or exceeding the percentage of the insured's initial annual premium based on <br/>
<a id="pl.17.35"></a><var>17.35</var>the insured's issue age provided in this paragraph, and the policy or certificate lapses <br/>
<a id="pl.18.1"></a><var>18.1</var>within 120 days of the due date of the premium increase. Unless otherwise required, <br/>
<a id="pl.18.2"></a><var>18.2</var>policyholders shall be notified at least 30 days prior to the due date of the premium <br/>
<a id="pl.18.3"></a><var>18.3</var>reflecting the rate increase.<br/>

<table>
<col width="50px"/>
<col width="84px"/>
<col width="189px"/>
<col width="105px"/>
<col width="168px"/>
<tr>
<td><a id="pl.18.5"></a><var>18.5</var><br/>
<a id="pl.18.6"></a><var>18.6</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">Issue Age<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="center" valign="bottom">Percent Increase Over <br/>
                  		Initial Premium<br/>
</td>
</tr>
</table>
<table>
<col width="50px"/>
<col width="84px"/>
<col width="105px"/>
<col width="252px"/>
<col width="42px"/>
<tr>
<td><a id="pl.18.7"></a><var>18.7</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">29 and Under<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">200<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.8"></a><var>18.8</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">30-34<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">190<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.9"></a><var>18.9</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">35-39<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">170<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.10"></a><var>18.10</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">40-44<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">150<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.11"></a><var>18.11</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">45-49<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">130<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.12"></a><var>18.12</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">50-54<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">110<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.13"></a><var>18.13</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">55-59<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">90<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.14"></a><var>18.14</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">60<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">70<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.15"></a><var>18.15</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">61<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">66<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.16"></a><var>18.16</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">62<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">62<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.17"></a><var>18.17</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">63<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">58<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.18"></a><var>18.18</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">64<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">54<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.19"></a><var>18.19</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">65<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">50<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.20"></a><var>18.20</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">66<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">48<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.21"></a><var>18.21</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">67<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">46<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.22"></a><var>18.22</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">68<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">44<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.23"></a><var>18.23</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">69<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">42<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.24"></a><var>18.24</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">70<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">40<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.25"></a><var>18.25</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">71<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">38<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.26"></a><var>18.26</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">72<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">36<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.27"></a><var>18.27</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">73<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">34<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.28"></a><var>18.28</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">74<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">32<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.29"></a><var>18.29</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">75<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">30<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.30"></a><var>18.30</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">76<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">28<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.31"></a><var>18.31</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">77<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">26<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.32"></a><var>18.32</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">78<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">24<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.33"></a><var>18.33</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">79<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">22<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.34"></a><var>18.34</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">80<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">20<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.35"></a><var>18.35</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">81<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">19<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.36"></a><var>18.36</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">82<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">18<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.37"></a><var>18.37</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">83<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">17<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.38"></a><var>18.38</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">84<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">16<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.39"></a><var>18.39</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">85<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">15<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.40"></a><var>18.40</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">86<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">14<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.41"></a><var>18.41</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">87<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">13<br/>
</td>
</tr>
<tr>
<td><a id="pl.18.42"></a><var>18.42</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">88<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">12<br/>
</td>
</tr>
<tr>
<td><a id="pl.19.1"></a><var>19.1</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">89<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">11<br/>
</td>
</tr>
<tr>
<td><a id="pl.19.2"></a><var>19.2</var><br/>
</td>
<td align="left" valign="bottom"></td>
<td align="left" valign="bottom">90 and over<br/>
</td>
<td align="left" valign="bottom"></td>
<td align="right" valign="bottom">10<br/>
</td>
</tr>
</table><a id="pl.19.3"></a><var>19.3</var>    (d) A contingent benefit on lapse must also be triggered for policies with a fixed <br/>
<a id="pl.19.4"></a><var>19.4</var>or limited premium paying period every time an insurer increases the premium rates to a <br/>
<a id="pl.19.5"></a><var>19.5</var>level that results in a cumulative increase of the annual premium equal to or exceeding the <br/>
<a id="pl.19.6"></a><var>19.6</var>percentage of the insured's initial annual premium set forth below based on the insured's <br/>
<a id="pl.19.7"></a><var>19.7</var>issue age, the policy or certificate lapses within 120 days of the due date of the premium <br/>
<a id="pl.19.8"></a><var>19.8</var>so increased, and the ratio in paragraph (e), clause (2), is 40 percent or more. Unless <br/>
<a id="pl.19.9"></a><var>19.9</var>otherwise required, policyholders shall be notified at least 30 days prior to the due date of <br/>
<a id="pl.19.10"></a><var>19.10</var>the premium reflecting the rate increase.<br/>
<table>
<col width="50px"/>
<col width=""/>
<col width=""/>
<tr>
<td><a id="pl.19.11"></a><var>19.11</var><br/>
</td>
<td align="center" colspan="2" valign="bottom">Triggers for a Substantial Premium Increase<br/>
</td>
</tr>
<tr>
<td></td>
<td align="left" colspan="2" valign="bottom"></td>
</tr>
<tr>
<td><a id="pl.19.12"></a><var>19.12</var><br/>
</td>
<td align="center" valign="bottom">Issue Age<br/>
</td>
<td align="center" valign="bottom">Percent Increase Over Initial Premium<br/>
</td>
</tr>
<tr>
<td></td>
<td align="center" valign="bottom"></td>
<td align="center" valign="bottom"></td>
</tr>
<tr>
<td><a id="pl.19.13"></a><var>19.13</var><br/>
</td>
<td align="center" valign="bottom">Under 65<br/>
</td>
<td align="center" valign="bottom">50%<br/>
</td>
</tr>
<tr>
<td><a id="pl.19.14"></a><var>19.14</var><br/>
</td>
<td align="center" valign="bottom">65-80<br/>
</td>
<td align="center" valign="bottom">30%<br/>
</td>
</tr>
<tr>
<td><a id="pl.19.15"></a><var>19.15</var><br/>
</td>
<td align="center" valign="bottom">Over 80<br/>
</td>
<td align="center" valign="bottom">10%<br/>
</td>
</tr>
</table><a id="pl.19.16"></a><var>19.16</var>    This provision shall be in addition to the contingent benefit provided by paragraph <br/>
<a id="pl.19.17"></a><var>19.17</var>(c) and where both are triggered, the benefit provided must be at the option of the insured.<br/>
<a id="pl.19.18"></a><var>19.18</var>    (e) On or before the effective date of a substantial premium increase as defined in <br/>
<a id="pl.19.19"></a><var>19.19</var>paragraph (c), the insurer shall:<br/>
<a id="pl.19.20"></a><var>19.20</var>    (1)  offer to reduce policy benefits provided by the current coverage without the <br/>
<a id="pl.19.21"></a><var>19.21</var>requirement of additional underwriting so that required premium payments are not <br/>
<a id="pl.19.22"></a><var>19.22</var>increased;<br/>
<a id="pl.19.23"></a><var>19.23</var>    (2) offer to convert the coverage to a paid-up status with a shortened benefit period <br/>
<a id="pl.19.24"></a><var>19.24</var>according to the terms of subdivision 5. This option may be elected at any time during the <br/>
<a id="pl.19.25"></a><var>19.25</var>120-day period referenced in paragraph (c); and<br/>
<a id="pl.19.26"></a><var>19.26</var>    (3) notify the policyholder or certificate holder that a default or lapse at any time <br/>
<a id="pl.19.27"></a><var>19.27</var>during the 120-day period referenced in paragraph (c) is deemed to be the election of <br/>
<a id="pl.19.28"></a><var>19.28</var>the offer to convert in clause (2).<br/>
<a id="pl.19.29"></a><var>19.29</var>    (f) On or before the effective date of a substantial premium increase as defined in <br/>
<a id="pl.19.30"></a><var>19.30</var>paragraph (d), the insurer shall:<br/>
<a id="pl.19.31"></a><var>19.31</var>    (1) offer to reduce policy benefits provided by the current coverage without the <br/>
<a id="pl.19.32"></a><var>19.32</var>requirement of additional underwriting so that required premium payments are not <br/>
<a id="pl.19.33"></a><var>19.33</var>increased;<br/>
<a id="pl.19.34"></a><var>19.34</var>    (2) offer to convert the coverage to a paid-up status where the amount payable for <br/>
<a id="pl.19.35"></a><var>19.35</var>each benefit is 90 percent of the amount payable in effect immediately prior to lapse times <br/>
<a id="pl.20.1"></a><var>20.1</var>the ratio of the number of completed months of paid premiums divided by the number of <br/>
<a id="pl.20.2"></a><var>20.2</var>months in the premium paying period. This option may be elected at any time during the <br/>
<a id="pl.20.3"></a><var>20.3</var>120-day period referenced in paragraph (d); and<br/>
<a id="pl.20.4"></a><var>20.4</var>    (3) notify the policyholder or certificate holder that a default or lapse at any time <br/>
<a id="pl.20.5"></a><var>20.5</var>during the 120-day period referenced in paragraph (d) shall be deemed to be the election <br/>
<a id="pl.20.6"></a><var>20.6</var>of the offer to convert in clause (2) if the ratio is 40 percent or more.<br/>
<br/>
<a id="bill.0.33.0"></a><a id="pl.20.7"></a><var>20.7</var>    Sec. 33. Minnesota Statutes 2006, section 62S.266, subdivision 10, is amended to read:<br/>
<a id="pl.20.8"></a><var>20.8</var>    Subd. 10. <b>Purchased blocks of business.</b> To determine whether contingent <br/>
<a id="pl.20.9"></a><var>20.9</var>nonforfeiture upon lapse provisions are triggered under subdivision 4, paragraph (c) or (d), <br/>
<a id="pl.20.10"></a><var>20.10</var>a replacing insurer that purchased or otherwise assumed a block or blocks of long-term <br/>
<a id="pl.20.11"></a><var>20.11</var>care insurance policies from another insurer shall calculate the percentage increase based <br/>
<a id="pl.20.12"></a><var>20.12</var>on the initial annual premium paid by the insured when the policy was first purchased <br/>
<a id="pl.20.13"></a><var>20.13</var>from the original insurer.<br/>
<br/>
<a id="bill.0.34.0"></a><a id="pl.20.14"></a><var>20.14</var>    Sec. 34. <b>[62S.267] STANDARDS FOR BENEFIT TRIGGERS.</b><br/>
<a id="pl.20.15"></a><var>20.15</var>    Subdivision 1. <b>Benefit payment determinations.</b> A long-term care insurance <br/>
<a id="pl.20.16"></a><var>20.16</var>policy must condition the payment of benefits on a determination of the insured's ability <br/>
<a id="pl.20.17"></a><var>20.17</var>to perform activities of daily living and on cognitive impairment. Eligibility for the <br/>
<a id="pl.20.18"></a><var>20.18</var>payment of benefits must not be more restrictive than requiring either a deficiency in <br/>
<a id="pl.20.19"></a><var>20.19</var>the ability to perform not more than two of the activities of daily living or the presence <br/>
<a id="pl.20.20"></a><var>20.20</var>of cognitive impairment.<br/>
<a id="pl.20.21"></a><var>20.21</var>    Activities of daily living include at least the following as defined in section 62S.01 <br/>
<a id="pl.20.22"></a><var>20.22</var>and in the policy: bathing, continence, dressing, eating, toileting, and transferring.<br/>
<a id="pl.20.23"></a><var>20.23</var>    Insurers may use activities of daily living to trigger covered benefits in addition to <br/>
<a id="pl.20.24"></a><var>20.24</var>those contained in this subdivision as long as they are defined in the policy.<br/>
<a id="pl.20.25"></a><var>20.25</var>    Subd. 2. <b>Additional provisions for determining benefit payments.</b> An insurer <br/>
<a id="pl.20.26"></a><var>20.26</var>may use additional provisions for the determination of when benefits are payable under a <br/>
<a id="pl.20.27"></a><var>20.27</var>policy or certificate if the provisions do not restrict, and are not in lieu of, the requirements <br/>
<a id="pl.20.28"></a><var>20.28</var>contained in subdivision 1.<br/>
<a id="pl.20.29"></a><var>20.29</var>    Subd. 3. <b>Deficiency determination.</b> For purposes of this section, the determination <br/>
<a id="pl.20.30"></a><var>20.30</var>of a deficiency must not be more restrictive than requiring the hands-on assistance of <br/>
<a id="pl.20.31"></a><var>20.31</var>another person to perform the prescribed activities of daily living, or of the deficiency is <br/>
<a id="pl.20.32"></a><var>20.32</var>due to the presence of a cognitive impairment, supervision or verbal cueing by another <br/>
<a id="pl.20.33"></a><var>20.33</var>person is needed in order to protect the insured or others.<br/>
<a id="pl.21.1"></a><var>21.1</var>    Subd. 4. <b>Assessments.</b> Assessments of activities if daily living and cognitive <br/>
<a id="pl.21.2"></a><var>21.2</var>impairment must be performed by licensed or certified professionals, such as physicians, <br/>
<a id="pl.21.3"></a><var>21.3</var>nurses, or social workers.<br/>
<a id="pl.21.4"></a><var>21.4</var>    Subd. 5. <b>Appeal process.</b> Long-term care insurance policies must include a clear <br/>
<a id="pl.21.5"></a><var>21.5</var>description of the process for appealing and resolving benefit determinations.<br/>
<a id="pl.21.6"></a><var>21.6</var><b>EFFECTIVE DATE.</b>This section is effective and applies to a long-term care <br/>
<a id="pl.21.7"></a><var>21.7</var>policy issued in this state on or after the effective date of this section. This section does <br/>
<a id="pl.21.8"></a><var>21.8</var>not apply to certificates issued on or after the effective date of this section, under a group <br/>
<a id="pl.21.9"></a><var>21.9</var>long-term care insurance policy as defined in section 62S.01, subdivision 15, that was in <br/>
<a id="pl.21.10"></a><var>21.10</var>force at the time this section became effective.<br/>
<br/>
<a id="bill.0.35.0"></a><a id="pl.21.11"></a><var>21.11</var>    Sec. 35. <b>[62S.268] ADDITIONAL STANDARDS FOR BENEFIT TRIGGERS </b><br/>
<a id="pl.21.12"></a><var>21.12</var><b>FOR QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.</b><br/>
<a id="pl.21.13"></a><var>21.13</var>    Subdivision 1. <b>Definitions.</b> For purposes of this section, the following terms have <br/>
<a id="pl.21.14"></a><var>21.14</var>the meanings given them:<br/>
<a id="pl.21.15"></a><var>21.15</var>    (a) "Qualified long-term care services" means services that meet the requirements <br/>
<a id="pl.21.16"></a><var>21.16</var>of section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, as follows: <br/>
<a id="pl.21.17"></a><var>21.17</var>necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation, and <br/>
<a id="pl.21.18"></a><var>21.18</var>rehabilitative services, and maintenance or personal care services which are required by <br/>
<a id="pl.21.19"></a><var>21.19</var>a chronically ill individual, and are provided pursuant to a plan of care prescribed by a <br/>
<a id="pl.21.20"></a><var>21.20</var>licensed health care practitioner.<br/>
<a id="pl.21.21"></a><var>21.21</var>    (b) "Chronically ill individual" has the meaning prescribed for this term by section <br/>
<a id="pl.21.22"></a><var>21.22</var>7702B(c)(2) of the Internal Revenue Code of 1986, as amended. Under this provision, a <br/>
<a id="pl.21.23"></a><var>21.23</var>chronically ill individual means any individual who has been certified by a licensed health <br/>
<a id="pl.21.24"></a><var>21.24</var>care practitioner as being unable to perform, without substantial assistance from another <br/>
<a id="pl.21.25"></a><var>21.25</var>individual, at least two activities of daily living for a period of at least 90 days due to a <br/>
<a id="pl.21.26"></a><var>21.26</var>loss of functional capacity, or requiring substantial supervision to protect the individual <br/>
<a id="pl.21.27"></a><var>21.27</var>from threats to health and safety due to severe cognitive impairment.<br/>
<a id="pl.21.28"></a><var>21.28</var>    The term "chronically ill individual" does not include an individual otherwise <br/>
<a id="pl.21.29"></a><var>21.29</var>meeting these requirements unless within the preceding 12-month period a licensed health <br/>
<a id="pl.21.30"></a><var>21.30</var>care practitioner has certified that the individual meets these requirements.<br/>
<a id="pl.21.31"></a><var>21.31</var>    (c) "Licensed health care practitioner" means a physician, as defined in section <br/>
<a id="pl.21.32"></a><var>21.32</var>1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social <br/>
<a id="pl.21.33"></a><var>21.33</var>worker, or other individual who meets requirements prescribed by the Secretary of the <br/>
<a id="pl.21.34"></a><var>21.34</var>Treasury.<br/>
<a id="pl.22.1"></a><var>22.1</var>    (d) "Maintenance or personal care services" means any care the primary purpose <br/>
<a id="pl.22.2"></a><var>22.2</var>of which is the provision of needed assistance with any of the disabilities as a result of <br/>
<a id="pl.22.3"></a><var>22.3</var>which the individual is a chronically ill individual, including the protection from threats <br/>
<a id="pl.22.4"></a><var>22.4</var>to health and safety due to severe cognitive impairment.<br/>
<a id="pl.22.5"></a><var>22.5</var>    Subd. 2. <b>Services.</b> A qualified long-term care insurance contract shall pay only for <br/>
<a id="pl.22.6"></a><var>22.6</var>qualified long-term care services received by a chronically ill individual provided pursuant <br/>
<a id="pl.22.7"></a><var>22.7</var>to a plan of care prescribed by a licensed health care practitioner.<br/>
<a id="pl.22.8"></a><var>22.8</var>    Subd. 3. <b>Payment of benefits.</b> A qualified long-term care insurance contract <br/>
<a id="pl.22.9"></a><var>22.9</var>shall condition the payment of benefits on a determination of the insured's inability to <br/>
<a id="pl.22.10"></a><var>22.10</var>perform activities of daily living for an expected period of at least 90 days due to a loss <br/>
<a id="pl.22.11"></a><var>22.11</var>of functional capacity or to severe cognitive impairment.<br/>
<a id="pl.22.12"></a><var>22.12</var>    Subd. 4. <b>Certifications.</b> (a) Certifications regarding activities of daily living <br/>
<a id="pl.22.13"></a><var>22.13</var>and cognitive impairment required pursuant to subdivision 3 shall be performed by the <br/>
<a id="pl.22.14"></a><var>22.14</var>following licensed or certified professionals: physicians, registered professional nurses, <br/>
<a id="pl.22.15"></a><var>22.15</var>licensed social workers, or other individuals who meet requirements prescribed by the <br/>
<a id="pl.22.16"></a><var>22.16</var>Secretary of the Treasury.<br/>
<a id="pl.22.17"></a><var>22.17</var>    (b) Certifications required pursuant to subdivision 3 may be performed by a licensed <br/>
<a id="pl.22.18"></a><var>22.18</var>health care professional at the direction of the carrier as is reasonably necessary with <br/>
<a id="pl.22.19"></a><var>22.19</var>respect to a specific claim, except that when a licensed health care practitioner has certified <br/>
<a id="pl.22.20"></a><var>22.20</var>that an insured is unable to perform activities of daily living for an expected period of at <br/>
<a id="pl.22.21"></a><var>22.21</var>least 90 days due to a loss of functional capacity and the insured is in claim status, the <br/>
<a id="pl.22.22"></a><var>22.22</var>certification may not be rescinded and additional certifications may not be performed until <br/>
<a id="pl.22.23"></a><var>22.23</var>after the expiration of the 90-day period.<br/>
<a id="pl.22.24"></a><var>22.24</var>    Subd. 5. <b>Dispute resolution.</b> Qualified long-term care insurance contracts shall <br/>
<a id="pl.22.25"></a><var>22.25</var>include a clear description of the process for appealing and resolving disputes with respect <br/>
<a id="pl.22.26"></a><var>22.26</var>to benefit determinations.<br/>
<br/>
<a id="bill.0.36.0"></a><a id="pl.22.27"></a><var>22.27</var>    Sec. 36. Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision <br/>
<a id="pl.22.28"></a><var>22.28</var>to read:<br/>
<a id="pl.22.29"></a><var>22.29</var>    Subd. 2a. <b>Associations to educate members.</b> With respect to the obligations set <br/>
<a id="pl.22.30"></a><var>22.30</var>forth in this section, the primary responsibility of an association, as defined in section <br/>
<a id="pl.22.31"></a><var>22.31</var>62S.01, subdivision 15, clause (2), when endorsing or selling long-term care insurance is <br/>
<a id="pl.22.32"></a><var>22.32</var>to educate its members concerning long-term care issues in general so that its members <br/>
<a id="pl.22.33"></a><var>22.33</var>can make informed decisions. Associations shall provide objective information regarding <br/>
<a id="pl.22.34"></a><var>22.34</var>long-term care insurance policies or certificates endorsed or sold by the associations to <br/>
<a id="pl.23.1"></a><var>23.1</var>ensure that members of such associations receive a balanced and complete explanation of <br/>
<a id="pl.23.2"></a><var>23.2</var>the features in the policies or certificates that are being endorsed or sold.<br/>
<br/>
<a id="bill.0.37.0"></a><a id="pl.23.3"></a><var>23.3</var>    Sec. 37. Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision <br/>
<a id="pl.23.4"></a><var>23.4</var>to read:<br/>
<a id="pl.23.5"></a><var>23.5</var>    Subd. 6a. <b>Additional association duties.</b> An association shall also at the time of <br/>
<a id="pl.23.6"></a><var>23.6</var>the association's decision to endorse, engage the services of a person with expertise in <br/>
<a id="pl.23.7"></a><var>23.7</var>long-term care insurance not affiliated with the insurer to conduct an examination of the <br/>
<a id="pl.23.8"></a><var>23.8</var>policies, including its benefits, features, and rates and update the examination thereafter in <br/>
<a id="pl.23.9"></a><var>23.9</var>the event of material change; actively monitor the marketing efforts of the insurer and its <br/>
<a id="pl.23.10"></a><var>23.10</var>agents; and review and approve all marketing materials or other insurance communications <br/>
<a id="pl.23.11"></a><var>23.11</var>used to promote sales or sent to members regarding the policies or certificates. This <br/>
<a id="pl.23.12"></a><var>23.12</var>subdivision does not apply to qualified long-term care insurance contracts.<br/>
<br/>
<a id="bill.0.38.0"></a><a id="pl.23.13"></a><var>23.13</var>    Sec. 38. Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision <br/>
<a id="pl.23.14"></a><var>23.14</var>to read:<br/>
<a id="pl.23.15"></a><var>23.15</var>    Subd. 9. <b>Unfair trade practices.</b> Failure to comply with the filing and certification <br/>
<a id="pl.23.16"></a><var>23.16</var>requirements of this section constitutes an unfair trade practice in violation of sections <br/>
<a id="pl.23.17"></a><var>23.17</var>72A.17 to 72A.32.<br/>
<br/>
<a id="bill.0.39.0"></a><a id="pl.23.18"></a><var>23.18</var>    Sec. 39. <b>[62S.291] AVAILABILITY OF NEW SERVICES OR PROVIDERS.</b><br/>
<a id="pl.23.19"></a><var>23.19</var>    Subdivision 1. <b>Requirement.</b> An insurer shall notify policyholders of the <br/>
<a id="pl.23.20"></a><var>23.20</var>availability of a new long-term policy series that provides coverage for new long-term <br/>
<a id="pl.23.21"></a><var>23.21</var>care services or providers material in nature and not previously available through the <br/>
<a id="pl.23.22"></a><var>23.22</var>insurer to the general public. The notice must be provided within 12 months of the date <br/>
<a id="pl.23.23"></a><var>23.23</var>that the new policy series is made available for sale in this state.<br/>
<a id="pl.23.24"></a><var>23.24</var>    Subd. 2. <b>Exception.</b> (a) Notwithstanding subdivision 1, notification is not required <br/>
<a id="pl.23.25"></a><var>23.25</var>for any policy issued before the effective date of this section or to any policyholder or <br/>
<a id="pl.23.26"></a><var>23.26</var>certificate holder who is currently eligible for benefits, within an elimination period or on <br/>
<a id="pl.23.27"></a><var>23.27</var>a claim, or who previously had been in claim status, or who would not be eligible to apply <br/>
<a id="pl.23.28"></a><var>23.28</var>for coverage due to issue age limitations under the new policy. The insurer may require <br/>
<a id="pl.23.29"></a><var>23.29</var>that policyholders meet all eligibility requirements, including underwriting and payment <br/>
<a id="pl.23.30"></a><var>23.30</var>of the required premium to add such new services or providers.<br/>
<a id="pl.23.31"></a><var>23.31</var>    (b) An insurer is not required to notify policyholders of a new proprietary policy <br/>
<a id="pl.23.32"></a><var>23.32</var>series created and filed for use in a limited distribution channel. For purposes of this <br/>
<a id="pl.23.33"></a><var>23.33</var>subdivision, "limited distribution channel" means through a discrete entity, such as a <br/>
<a id="pl.24.1"></a><var>24.1</var>financial institution or brokerage, for which specialized products are available that are <br/>
<a id="pl.24.2"></a><var>24.2</var>not available for sale to the general public. Policyholders that purchased such a new <br/>
<a id="pl.24.3"></a><var>24.3</var>proprietary policy shall be notified when a new long-term care policy series that provides <br/>
<a id="pl.24.4"></a><var>24.4</var>coverage for new long-term care services or providers material in nature is made available <br/>
<a id="pl.24.5"></a><var>24.5</var>to that limited distribution channel.<br/>
<a id="pl.24.6"></a><var>24.6</var>    Subd. 3. <b>Compliance.</b> An insurer shall make the new coverage available in one of <br/>
<a id="pl.24.7"></a><var>24.7</var>the following ways:<br/>
<a id="pl.24.8"></a><var>24.8</var>    (1) by adding a rider to the existing policy and charging a separate premium for the <br/>
<a id="pl.24.9"></a><var>24.9</var>new rider based in the insured's attained age;<br/>
<a id="pl.24.10"></a><var>24.10</var>    (2) by exchanging the existing policy or certificate for one with an issue age based <br/>
<a id="pl.24.11"></a><var>24.11</var>on the present age of the insured and recognizing past insured status by granting premium <br/>
<a id="pl.24.12"></a><var>24.12</var>credits toward the premiums for the new policy or certificate. The premium credits must <br/>
<a id="pl.24.13"></a><var>24.13</var>be based on premiums paid or reserves held for the prior policy or certificate;<br/>
<a id="pl.24.14"></a><var>24.14</var>    (3) by exchanging the existing policy or certificate for a new policy or certificate in <br/>
<a id="pl.24.15"></a><var>24.15</var>which consideration for past insured status is recognized by setting the premium for the <br/>
<a id="pl.24.16"></a><var>24.16</var>new policy or certificate at the issue age of the policy or certificate being exchanged. The <br/>
<a id="pl.24.17"></a><var>24.17</var>cost for the new policy or certificate may recognize the difference in reserves between the <br/>
<a id="pl.24.18"></a><var>24.18</var>new policy or certificate and the original policy or certificate; or<br/>
<a id="pl.24.19"></a><var>24.19</var>    (4) by an alternative program developed by the insurer that meets the intent of this <br/>
<a id="pl.24.20"></a><var>24.20</var>section if the program is filed with and approved by the commissioner.<br/>
<a id="pl.24.21"></a><var>24.21</var>    Subd. 4. <b>Policies considered exchanges.</b> Policies issued pursuant to this section <br/>
<a id="pl.24.22"></a><var>24.22</var>shall be considered exchanges and not replacements. These exchanges are not subject <br/>
<a id="pl.24.23"></a><var>24.23</var>to sections 62S.24 and 62S.30, and the reporting requirements of section 62S.25, <br/>
<a id="pl.24.24"></a><var>24.24</var>subdivisions 1 to 6.<br/>
<a id="pl.24.25"></a><var>24.25</var>    Subd. 5. <b>Notification to certain groups.</b> Where the policy is offered through <br/>
<a id="pl.24.26"></a><var>24.26</var>an employer, labor organization, professional, trade, or occupational organization, the <br/>
<a id="pl.24.27"></a><var>24.27</var>required notification in subdivision 1 must be made to the offering entity. However, if <br/>
<a id="pl.24.28"></a><var>24.28</var>the policy is issued to a group defined in section 62S.01, subdivision 15, clause (4), the <br/>
<a id="pl.24.29"></a><var>24.29</var>notification shall be made to each certificate holder.<br/>
<a id="pl.24.30"></a><var>24.30</var>    Subd. 6. <b>Effect on coverage offers and requests for coverage.</b> Nothing in this <br/>
<a id="pl.24.31"></a><var>24.31</var>section prohibits an insurer from offering any policy, rider, certificate, or coverage change <br/>
<a id="pl.24.32"></a><var>24.32</var>to any policyholder or certificate holder. However, upon request any policyholder may <br/>
<a id="pl.24.33"></a><var>24.33</var>apply for currently available coverage that includes the new services or providers. <br/>
<a id="pl.24.34"></a><var>24.34</var>The insurer may require that policyholders meet all eligibility requirements, including <br/>
<a id="pl.24.35"></a><var>24.35</var>underwriting and payment of the required premium to add such new services or providers.<br/>
<a id="pl.25.1"></a><var>25.1</var>    Subd. 7. <b>Life policies or riders.</b> This section does not apply to life insurance <br/>
<a id="pl.25.2"></a><var>25.2</var>policies or riders containing accelerated long-term care benefits.<br/>
<br/>
<a id="bill.0.40.0"></a><a id="pl.25.3"></a><var>25.3</var>    Sec. 40. <b>[62S.292] RIGHT TO REDUCE COVERAGE AND LOWER </b><br/>
<a id="pl.25.4"></a><var>25.4</var><b>PREMIUMS.</b><br/>
<a id="pl.25.5"></a><var>25.5</var>    Subdivision 1. <b>Required policy or certificate provision.</b> Every long-term care <br/>
<a id="pl.25.6"></a><var>25.6</var>insurance policy and certificate shall include a provision that allows the policyholder or <br/>
<a id="pl.25.7"></a><var>25.7</var>certificate holder to reduce coverage and lower the policy or certificate premium in at <br/>
<a id="pl.25.8"></a><var>25.8</var>least one of the following ways:<br/>
<a id="pl.25.9"></a><var>25.9</var>    (1) reducing the maximum benefit; or<br/>
<a id="pl.25.10"></a><var>25.10</var>    (2) reducing the daily, weekly, or monthly benefit amount.<br/>
<a id="pl.25.11"></a><var>25.11</var>    The insurer may also offer other reduction options that are consistent with the policy <br/>
<a id="pl.25.12"></a><var>25.12</var>or certificate design or the carrier's administrative processes.<br/>
<a id="pl.25.13"></a><var>25.13</var>    The provision shall include a description of the ways in which coverage may be <br/>
<a id="pl.25.14"></a><var>25.14</var>reduced and the process for requesting and implementing a reduction in coverage.<br/>
<a id="pl.25.15"></a><var>25.15</var>    Subd. 2. <b>Age determination.</b> The age to determine the premium for the reduced <br/>
<a id="pl.25.16"></a><var>25.16</var>coverage shall be based on the age used to determine the premiums for the coverage <br/>
<a id="pl.25.17"></a><var>25.17</var>currently in force.<br/>
<a id="pl.25.18"></a><var>25.18</var>    Subd. 3. <b>Limitation.</b> The insurer may limit any reduction in coverage to plans or <br/>
<a id="pl.25.19"></a><var>25.19</var>options available for that policy form and to those for which benefits will be available <br/>
<a id="pl.25.20"></a><var>25.20</var>after consideration of claims paid or payable.<br/>
<a id="pl.25.21"></a><var>25.21</var>    Subd. 4. <b>Written reminder.</b> If a policy or certificate is about to lapse, the insurer <br/>
<a id="pl.25.22"></a><var>25.22</var>shall provide a written reminder to the policyholder or certificate holder of his or her right <br/>
<a id="pl.25.23"></a><var>25.23</var>to reduce coverage and premiums in the notice required by section 7A(3) of this regulation.<br/>
<a id="pl.25.24"></a><var>25.24</var>    Subd. 5. <b>Nonapplication.</b> This section does not apply to life insurance policies or <br/>
<a id="pl.25.25"></a><var>25.25</var>riders containing accelerated long-term care benefits.<br/>
<a id="pl.25.26"></a><var>25.26</var><b>EFFECTIVE DATE.</b>This section applies to any long-term care policy issued in <br/>
<a id="pl.25.27"></a><var>25.27</var>this state on or after August 1, 2008.<br/>
<br/>
<a id="bill.0.41.0"></a><a id="pl.25.28"></a><var>25.28</var>    Sec. 41. Minnesota Statutes 2006, section 65A.37, is amended to read:<br/>
<a id="pl.25.29"></a><var>25.29</var><b>65A.37 POLICY FORMS.</b><br/>
<a id="pl.25.30"></a><var>25.30</var>    All policies must be on standard policy forms published by Insurance Services <br/>
<a id="pl.25.31"></a><var>25.31</var>Office, issued for a term of one year, and approved by the commissioner.<br/>
<br/>
<a id="bill.0.42.0"></a><a id="pl.25.32"></a><var>25.32</var>    Sec. 42. Minnesota Statutes 2006, section 66A.02, subdivision 4, is amended to read:<br/>
<a id="pl.26.1"></a><var>26.1</var>    Subd. 4. <b>Exceptions.</b> The following provisions of chapter 302A do not apply <br/>
<a id="pl.26.2"></a><var>26.2</var>to domestic mutual insurance companies: sections 
         <statute_ref>302A.011, subdivisions 2, 6, 6a, 7, <br/>
<a id="pl.26.3"></a><var>26.3</var>10, 20, 21, 25, 26, 27, 28, 29, 31, 32, and 37
         </statute_ref> to 59; 
         <statute_ref>302A.105</statute_ref>; 
         <statute_ref>302A.137</statute_ref>; 
         <statute_ref>302A.161, <br/>
<a id="pl.26.4"></a><var>26.4</var>subdivision 19
         </statute_ref>; 
         <statute_ref>302A.201, subdivision 2</statute_ref>; 
         <statute_ref>302A.401</statute_ref> to 
         <statute_ref>302A.429</statute_ref>; 
         <statute_ref>302A.433, subdivisions <br/>
<a id="pl.26.5"></a><var>26.5</var>1, paragraphs (a), (b), (c), and (e), and 2
         </statute_ref>; 
         <statute_ref>302A.437, subdivision 2</statute_ref>; 302A.443;
<statute_ref>302A.445, <br/>
<a id="pl.26.6"></a><var>26.6</var>subdivisions 3 to 6
         </statute_ref>; 
         <statute_ref>302A.449, subdivision 7</statute_ref>; 
         <statute_ref>302A.453</statute_ref> to 
         <statute_ref>302A.457</statute_ref>; 
         <statute_ref>302A.461</statute_ref>; <br/>
<statute_ref><a id="pl.26.7"></a><var>26.7</var>302A.463
         </statute_ref>; 
         <statute_ref>302A.471</statute_ref> to 
         <statute_ref>302A.473</statute_ref>; 
         <statute_ref>302A.553</statute_ref>; 
         <statute_ref>302A.601</statute_ref> to 
         <statute_ref>302A.651</statute_ref>; 
         <statute_ref>302A.671</statute_ref> to <br/>
<statute_ref><a id="pl.26.8"></a><var>26.8</var>302A.675
         </statute_ref>; 
         <statute_ref>302A.681</statute_ref> to 
         <statute_ref>302A.691</statute_ref>; and 
         <statute_ref>302A.701</statute_ref> to 
         <statute_ref>302A.791</statute_ref>. Those clauses of section <br/>
<statute_ref><a id="pl.26.9"></a><var>26.9</var>302A.111
         </statute_ref> that refer to any of the sections previously referenced in this subdivision do <br/>
<a id="pl.26.10"></a><var>26.10</var>not apply to domestic mutual insurance companies. The following sections of chapter <br/>
<a id="pl.26.11"></a><var>26.11</var>302A are modified in their application to domestic mutual insurance companies in the <br/>
<a id="pl.26.12"></a><var>26.12</var>manner indicated:<br/>
<a id="pl.26.13"></a><var>26.13</var>    (1) with regard to section 
         <statute_ref>302A.133</statute_ref>, the articles may be amended pursuant to section <br/>
<statute_ref><a id="pl.26.14"></a><var>26.14</var>302A.171
         </statute_ref> by the incorporators or by the board before the issuance of any policies by <br/>
<a id="pl.26.15"></a><var>26.15</var>the company;<br/>
<a id="pl.26.16"></a><var>26.16</var>    (2) with regard to section 
         <statute_ref>302A.135, subdivision 2</statute_ref>, a resolution proposing an <br/>
<a id="pl.26.17"></a><var>26.17</var>amendment to the certificate of authority must be filed with the corporate secretary no less <br/>
<a id="pl.26.18"></a><var>26.18</var>than 30 days before the meeting to consider the proposed amendment;<br/>
<a id="pl.26.19"></a><var>26.19</var>    (3) with regard to section 
         <statute_ref>302A.161, subdivision 19</statute_ref> of that section does not apply, <br/>
<a id="pl.26.20"></a><var>26.20</var>except this must not be construed to limit the power of a mutual insurance company <br/>
<a id="pl.26.21"></a><var>26.21</var>from issuing securities other than stock;<br/>
<a id="pl.26.22"></a><var>26.22</var>    (4) with regard to section 
         <statute_ref>302A.201</statute_ref>, the references in subdivision 1 of that section <br/>
<a id="pl.26.23"></a><var>26.23</var>to "subdivision 2" and "section 
         <statute_ref>302A.457</statute_ref>" do not apply;<br/>
<a id="pl.26.24"></a><var>26.24</var>    (5) with regard to section 
         <statute_ref>302A.203</statute_ref>, the board shall consist of no less than five <br/>
<a id="pl.26.25"></a><var>26.25</var>directors;<br/>
<a id="pl.26.26"></a><var>26.26</var>    (6) with regard to section 
         <statute_ref>302A.215, subdivisions 2 and 3</statute_ref> of that section only apply <br/>
<a id="pl.26.27"></a><var>26.27</var>if the corporation's certificate of incorporation provides cumulative voting;<br/>
<a id="pl.26.28"></a><var>26.28</var>    (7) with regard to section 
         <statute_ref>302A.433, subdivision 1</statute_ref> of that section, special meetings of <br/>
<a id="pl.26.29"></a><var>26.29</var>the members may be called for any purpose or purposes at any time by a person or persons <br/>
<a id="pl.26.30"></a><var>26.30</var>authorized in the articles or bylaws to call special meetings, and with regard to subdivision <br/>
<a id="pl.26.31"></a><var>26.31</var>3 of that section, special meetings must be held on the date and at the time and place fixed <br/>
<a id="pl.26.32"></a><var>26.32</var>by a person or persons authorized by the articles or bylaws to call a meeting; and<br/>
<a id="pl.26.33"></a><var>26.33</var>    (8) with regard to section 
         <statute_ref>302A.435</statute_ref>, if the company complies substantially and in <br/>
<a id="pl.26.34"></a><var>26.34</var>good faith with the notice requirements of section 
         <statute_ref>302A.435</statute_ref>, the company's failure to give <br/>
<a id="pl.26.35"></a><var>26.35</var>any member or members the required notice does not impair the validity of any action <br/>
<a id="pl.26.36"></a><var>26.36</var>taken at the members' meeting.<br/>
<a id="pl.27.1"></a><var>27.1</var><b>EFFECTIVE DATE.</b>This section is effective January 1, 2008.<br/>
<br/>
<a id="bill.0.43.0"></a><a id="pl.27.2"></a><var>27.2</var>    Sec. 43. Minnesota Statutes 2006, section 66A.07, subdivision 2, is amended to read:<br/>
<a id="pl.27.3"></a><var>27.3</var>    Subd. 2. <b>Life insurance companies.</b> (a) Unless otherwise approved by the <br/>
<a id="pl.27.4"></a><var>27.4</var>commissioner of commerce, a domestic mutual life insurance company member is any <br/>
<a id="pl.27.5"></a><var>27.5</var>person who is listed on the records of the company as the owner of an in-force policy, <br/>
<a id="pl.27.6"></a><var>27.6</var>and each member is entitled to one vote regardless of the number of policies owned by <br/>
<a id="pl.27.7"></a><var>27.7</var>the member or the amounts of coverage provided to the member. For purposes of this <br/>
<a id="pl.27.8"></a><var>27.8</var>section, "policy" means a policy or contract of insurance, including an annuity contract <br/>
<a id="pl.27.9"></a><var>27.9</var>issued by the company, but excluding individual noncontributory insurance policies for <br/>
<a id="pl.27.10"></a><var>27.10</var>which the premiums are paid by a financial institution, association, employer, or other <br/>
<a id="pl.27.11"></a><var>27.11</var>institutional entity. Except as otherwise provided in the company's certificate or bylaws, a <br/>
<a id="pl.27.12"></a><var>27.12</var>person covered under a group policy is not a member by virtue of such coverage, except <br/>
<a id="pl.27.13"></a><var>27.13</var>that a person insured under a group life insurance policy is a member if: (1) the person <br/>
<a id="pl.27.14"></a><var>27.14</var>is insured under a group life policy under which cash value has accumulated and been <br/>
<a id="pl.27.15"></a><var>27.15</var>some cash value is allocated to the insured persons person; and (2) the group policyholder <br/>
<a id="pl.27.16"></a><var>27.16</var>makes no contribution to the premiums or deposits for the policy.<br/>
<a id="pl.27.17"></a><var>27.17</var>    (b) Every member of a mutual life insurance company must be notified of its annual <br/>
<a id="pl.27.18"></a><var>27.18</var>meetings by a written notice mailed to the member's address, or by an imprint on the front <br/>
<a id="pl.27.19"></a><var>27.19</var>or back of the policy, premium notice, receipt, or certificate of renewal, substantially <br/>
<a id="pl.27.20"></a><var>27.20</var>as follows:<br/>
<a id="pl.27.21"></a><var>27.21</var>    "The policyowner is hereby notified that by virtue of his or her ownership of this <br/>
<a id="pl.27.22"></a><var>27.22</var>policy, the policyowner is a member of the .......... Insurance Company, and that the annual <br/>
<a id="pl.27.23"></a><var>27.23</var>meetings of said company are held at its home office on the .... day of .... in each year, <br/>
<a id="pl.27.24"></a><var>27.24</var>at .... o'clock."<br/>
<a id="pl.27.25"></a><var>27.25</var>    For mutual life insurance holding companies, the notice of the annual meeting may <br/>
<a id="pl.27.26"></a><var>27.26</var>be modified to reflect that the policyowner, by virtue of his or her ownership of a policy <br/>
<a id="pl.27.27"></a><var>27.27</var>issued by a subsidiary insurance company reorganized under section 
         <statute_ref>66A.40</statute_ref>, is a member <br/>
<a id="pl.27.28"></a><var>27.28</var>of the mutual insurance holding company. Notice given in this manner is deemed to <br/>
<a id="pl.27.29"></a><var>27.29</var>comply with the requirements of section 
         <statute_ref>302A.435</statute_ref>.<br/>
<br/>
<a id="bill.0.44.0"></a><a id="pl.27.30"></a><var>27.30</var>    Sec. 44. Minnesota Statutes 2006, section 66A.07, is amended by adding a subdivision <br/>
<a id="pl.27.31"></a><var>27.31</var>to read:<br/>
<a id="pl.27.32"></a><var>27.32</var>    Subd. 5. <b>Quorum.</b> The number of members present in person or by proxy at a <br/>
<a id="pl.27.33"></a><var>27.33</var>member meeting are a quorum for the transaction of business, unless a larger proportion <br/>
<a id="pl.27.34"></a><var>27.34</var>or number is provided in the articles or bylaws. If a quorum is present when a duly called <br/>
<a id="pl.28.1"></a><var>28.1</var>or held meeting is convened, the members present may continue to transact business until <br/>
<a id="pl.28.2"></a><var>28.2</var>adjournment, even though the withdrawal of members originally present leaves less than <br/>
<a id="pl.28.3"></a><var>28.3</var>the proportion or number otherwise required for a quorum.<br/>
<a id="pl.28.4"></a><var>28.4</var><b>EFFECTIVE DATE.</b>This section is effective January 1, 2008.<br/>
<br/>
<a id="bill.0.45.0"></a><a id="pl.28.5"></a><var>28.5</var>    Sec. 45. Minnesota Statutes 2006, section 66A.41, subdivision 1, is amended to read:<br/>
<a id="pl.28.6"></a><var>28.6</var>    Subdivision 1. <b>Definitions.</b> (a) For the purposes of this section, the terms in this <br/>
<a id="pl.28.7"></a><var>28.7</var>subdivision have the meanings given them.<br/>
<a id="pl.28.8"></a><var>28.8</var>    (b) "Converting mutual insurer" means a Minnesota domestic mutual insurance <br/>
<a id="pl.28.9"></a><var>28.9</var>company seeking to reorganize according to this section.<br/>
<a id="pl.28.10"></a><var>28.10</var>    (c) "Converting mutual holding company" means a Minnesota domestic mutual <br/>
<a id="pl.28.11"></a><var>28.11</var>insurance holding company seeking to reorganize according to this section.<br/>
<a id="pl.28.12"></a><var>28.12</var>    (d) "Converting mutual company" means a converting mutual insurer or a converting <br/>
<a id="pl.28.13"></a><var>28.13</var>mutual holding company seeking to convert according to this section.<br/>
<a id="pl.28.14"></a><var>28.14</var>    (e) "Reorganized company" means a converting mutual insurer or a converting <br/>
<a id="pl.28.15"></a><var>28.15</var>mutual holding company, as the case may be, that has reorganized according to this section.<br/>
<a id="pl.28.16"></a><var>28.16</var>    (f) "Eligible member" means:<br/>
<a id="pl.28.17"></a><var>28.17</var>    (1) for converting mutual insurers, a policyholder whose policy is in force as of the <br/>
<a id="pl.28.18"></a><var>28.18</var>record date. Unless otherwise provided in the plan, a person covered under a group policy <br/>
<a id="pl.28.19"></a><var>28.19</var>is not an eligible member, except that a person insured under a group life insurance policy <br/>
<a id="pl.28.20"></a><var>28.20</var>is an eligible member if, on the record date:<br/>
<a id="pl.28.21"></a><var>28.21</var>    (i) the person is insured under a group life policy under which cash value has <br/>
<a id="pl.28.22"></a><var>28.22</var>accumulated and been some cash value is allocated to the insured persons person; and<br/>
<a id="pl.28.23"></a><var>28.23</var>    (ii) the group policyholder makes no contribution to the premiums for the group <br/>
<a id="pl.28.24"></a><var>28.24</var>policy; and<br/>
<a id="pl.28.25"></a><var>28.25</var>    (2) for converting mutual holding companies, a person who is a member of the <br/>
<a id="pl.28.26"></a><var>28.26</var>converting mutual holding company, as defined by the converting mutual holding <br/>
<a id="pl.28.27"></a><var>28.27</var>company's articles of incorporation and bylaws, determined as of the record date.<br/>
<a id="pl.28.28"></a><var>28.28</var>    (g) "Plan of conversion" or "plan" means a plan adopted by a converting mutual <br/>
<a id="pl.28.29"></a><var>28.29</var>company's board of directors under this section.<br/>
<a id="pl.28.30"></a><var>28.30</var>    (h) "Policy" means a policy or contract of insurance, including an annuity contract, <br/>
<a id="pl.28.31"></a><var>28.31</var>issued by a converting mutual insurer or issued by a reorganized insurance company <br/>
<a id="pl.28.32"></a><var>28.32</var>subsidiary of a mutual holding company, but excluding individual noncontributory <br/>
<a id="pl.28.33"></a><var>28.33</var>insurance policies for which the premiums are paid by a financial institution, association, <br/>
<a id="pl.28.34"></a><var>28.34</var>employer, or other institutional entity.<br/>
<a id="pl.29.1"></a><var>29.1</var>    (i) "Active participating policy" means an individual policy of a converting mutual <br/>
<a id="pl.29.2"></a><var>29.2</var>company or its subsidiary that: (1) is a participating policy; (2) is among a class of similar <br/>
<a id="pl.29.3"></a><var>29.3</var>policies that have been credited with policy dividends at any time within the 12 months <br/>
<a id="pl.29.4"></a><var>29.4</var>preceding the effective date of the conversion or that will, under the then current dividend <br/>
<a id="pl.29.5"></a><var>29.5</var>scale, be credited with policy dividends if in force on a future policy anniversary; (3) gives <br/>
<a id="pl.29.6"></a><var>29.6</var>rise to membership interests in the converting mutual company; and (4) is in force on the <br/>
<a id="pl.29.7"></a><var>29.7</var>effective date or some other reasonable date identified in the plan.<br/>
<a id="pl.29.8"></a><var>29.8</var>    (j) "Commissioner" means the commissioner of commerce.<br/>
<a id="pl.29.9"></a><var>29.9</var>    (k) "Effective date of a conversion" means the date determined according to <br/>
<a id="pl.29.10"></a><var>29.10</var>subdivision 6.<br/>
<a id="pl.29.11"></a><var>29.11</var>    (l) "Record date" means the date that the converting mutual company's board <br/>
<a id="pl.29.12"></a><var>29.12</var>of directors adopts a plan of conversion, unless another date is specified in the plan of <br/>
<a id="pl.29.13"></a><var>29.13</var>conversion and approved by the commissioner.<br/>
<a id="pl.29.14"></a><var>29.14</var>    (m) "Membership interests" means all rights as members of the converting <br/>
<a id="pl.29.15"></a><var>29.15</var>mutual company, including, but not limited to, the rights to vote and to participate in <br/>
<a id="pl.29.16"></a><var>29.16</var>any distributions of distributable net worth, whether or not incident to the company's <br/>
<a id="pl.29.17"></a><var>29.17</var>liquidation.<br/>
<a id="pl.29.18"></a><var>29.18</var>    (n) "Distributable net worth" means the value of the converting mutual company <br/>
<a id="pl.29.19"></a><var>29.19</var>as of the record date of the conversion, or other date approved by the commissioner, <br/>
<a id="pl.29.20"></a><var>29.20</var>determined as set forth in the plan and approved by the commissioner. The commissioner <br/>
<a id="pl.29.21"></a><var>29.21</var>may approve a valuation method based on any of the following: (1) the surplus as regards <br/>
<a id="pl.29.22"></a><var>29.22</var>policyholders of a converting mutual insurer determined according to statutory accounting <br/>
<a id="pl.29.23"></a><var>29.23</var>principles, which may be adjusted to reflect the current market values of assets and <br/>
<a id="pl.29.24"></a><var>29.24</var>liabilities, together with any other adjustments that are appropriate in the circumstances; <br/>
<a id="pl.29.25"></a><var>29.25</var>(2) the net equity of a converting mutual holding company or a converting mutual insurer <br/>
<a id="pl.29.26"></a><var>29.26</var>determined according to generally accepted accounting principles, which may be adjusted <br/>
<a id="pl.29.27"></a><var>29.27</var>to reflect the current market values of assets and liabilities, together with any other <br/>
<a id="pl.29.28"></a><var>29.28</var>adjustments that are appropriate in the circumstances; (3) the fair market value of the <br/>
<a id="pl.29.29"></a><var>29.29</var>converting mutual company determined by an independent, qualified person; or (4) any <br/>
<a id="pl.29.30"></a><var>29.30</var>other reasonable valuation method.<br/>
<a id="pl.29.31"></a><var>29.31</var>    (o) "Permitted issuer" means: (1) a corporation organized and owned by the <br/>
<a id="pl.29.32"></a><var>29.32</var>converting mutual company or by any other insurance company or insurance holding <br/>
<a id="pl.29.33"></a><var>29.33</var>company for the purpose of purchasing and holding securities representing a majority of <br/>
<a id="pl.29.34"></a><var>29.34</var>voting control of the reorganized company; (2) a stock insurance company owned by the <br/>
<a id="pl.29.35"></a><var>29.35</var>converting mutual company or by any other insurance company or insurance holding <br/>
<a id="pl.30.1"></a><var>30.1</var>company into which the converting mutual company will be merged; or (3) any other <br/>
<a id="pl.30.2"></a><var>30.2</var>corporation approved by the commissioner.<br/>
<br/>
<a id="bill.0.46.0"></a><a id="pl.30.3"></a><var>30.3</var>    Sec. 46. Minnesota Statutes 2006, section 67A.31, subdivision 2, is amended to read:<br/>
<a id="pl.30.4"></a><var>30.4</var>    Subd. 2. <b>Insurable property in cities.</b> They may also insure churches and <br/>
<a id="pl.30.5"></a><var>30.5</var>dwellings, together with the usual outbuildings and the usual contents of both those <br/>
<a id="pl.30.6"></a><var>30.6</var>dwellings and churches and outbuildings, in any city except a city of the first or second <br/>
<a id="pl.30.7"></a><var>30.7</var>class, or a city of the second class only with approval granted by the commissioner.<br/>
<br/>
<a id="bill.0.47.0"></a><a id="pl.30.8"></a><var>30.8</var>    Sec. 47. Minnesota Statutes 2006, section 72A.51, subdivision 2, is amended to read:<br/>
<a id="pl.30.9"></a><var>30.9</var>    Subd. 2. <b>Return of policy or contract; notice.</b> Any individual person may cancel <br/>
<a id="pl.30.10"></a><var>30.10</var>an individual policy of insurance against loss or damage by reason of the sickness of the <br/>
<a id="pl.30.11"></a><var>30.11</var>assured or the assured's dependents, a nonprofit health service plan contract providing <br/>
<a id="pl.30.12"></a><var>30.12</var>benefits for hospital, surgical and medical care, a health maintenance organization <br/>
<a id="pl.30.13"></a><var>30.13</var>subscriber contract, or a policy of insurance authorized by section 
         <statute_ref>60A.06, subdivision 1</statute_ref>, <br/>
<a id="pl.30.14"></a><var>30.14</var>clause (4), by returning the policy or contract and by giving written notice of cancellation <br/>
<a id="pl.30.15"></a><var>30.15</var>any time before midnight of the tenth day following the date of purchase. Notice of <br/>
<a id="pl.30.16"></a><var>30.16</var>cancellation may be given personally, or by mail, or by telegram. The policy or contract <br/>
<a id="pl.30.17"></a><var>30.17</var>may be returned personally or by mail. If by mail, the notice or return of the policy or <br/>
<a id="pl.30.18"></a><var>30.18</var>contract is effective upon being postmarked, properly addressed and postage prepaid.<br/>
<a id="pl.30.19"></a><var>30.19</var><b>EFFECTIVE DATE.</b>This section is effective January 1, 2009.<br/>
<br/>
<a id="bill.0.48.0"></a><a id="pl.30.20"></a><var>30.20</var>    Sec. 48. Minnesota Statutes 2007 Supplement, section 72A.52, subdivision 1, is <br/>
<a id="pl.30.21"></a><var>30.21</var>amended to read:<br/>
<a id="pl.30.22"></a><var>30.22</var>    Subdivision 1. <b>Contents.</b> In addition to all other legal requirements a policy or <br/>
<a id="pl.30.23"></a><var>30.23</var>contract of insurance described in section 
         <statute_ref>72A.51</statute_ref> shall show the name and address of the <br/>
<a id="pl.30.24"></a><var>30.24</var>insurer and the seller of the policy or contract and shall state include a notice, clearly and <br/>
<a id="pl.30.25"></a><var>30.25</var>conspicuously in boldface type of a minimum size of ten points, a right to cancel notice <br/>
<a id="pl.30.26"></a><var>30.26</var>which shall include the following elements:<br/>
<a id="pl.30.27"></a><var>30.27</var>    (1) a minimum of ten days to cancel the policy beginning on the date the policy <br/>
<a id="pl.30.28"></a><var>30.28</var>is received by the owner;<br/>
<a id="pl.30.29"></a><var>30.29</var>    (2) if the policy is a replacement policy, a minimum of 30 days beginning on the <br/>
<a id="pl.30.30"></a><var>30.30</var>date the policy is received by the owner if the policy is a replacement policy. Pursuant to <br/>
<a id="pl.30.31"></a><var>30.31</var>section 61A.57, this requirement may also be provided in a separate written notice that <br/>
<a id="pl.30.32"></a><var>30.32</var>is delivered with the policy or contract;<br/>
<a id="pl.31.1"></a><var>31.1</var>    (3) a requirement for the return of the policy to the company or an agent of the <br/>
<a id="pl.31.2"></a><var>31.2</var>company;<br/>
<a id="pl.31.3"></a><var>31.3</var>    (4) a statement that the policy is considered void from the beginning and the parties <br/>
<a id="pl.31.4"></a><var>31.4</var>shall be in the same position as if no policy had been issued;<br/>
<a id="pl.31.5"></a><var>31.5</var>    (5) a for policies or contracts other than a variable annuity or a variable life policy, a <br/>
<a id="pl.31.6"></a><var>31.6</var>statement that the insurer will refund of all premiums paid, including any fees or charges, <br/>
<a id="pl.31.7"></a><var>31.7</var>if the policy is returned; and<br/>
<a id="pl.31.8"></a><var>31.8</var>    (6) a statement that notice given by mail and return of the policy or contract by mail <br/>
<a id="pl.31.9"></a><var>31.9</var>are effective on being postmarked, properly addressed, and postage prepaid describing <br/>
<a id="pl.31.10"></a><var>31.10</var>when the cancellation becomes effective.<br/>
<a id="pl.31.11"></a><var>31.11</var>    The insurer must return all payments made for this policy within ten days after it <br/>
<a id="pl.31.12"></a><var>31.12</var>receives notice of cancellation and the returned policy. For variable annuity contracts <br/>
<a id="pl.31.13"></a><var>31.13</var>issued pursuant to sections 
         <statute_ref>61A.13</statute_ref> to 
         <statute_ref>61A.21</statute_ref>, this notice shall be suitably modified so as <br/>
<a id="pl.31.14"></a><var>31.14</var>to notify the purchaser that the purchaser is entitled to a refund of the amount calculated <br/>
<a id="pl.31.15"></a><var>31.15</var>in accordance with the provisions of section 
         <statute_ref>72A.51, subdivision 3</statute_ref>. For variable life <br/>
<a id="pl.31.16"></a><var>31.16</var>insurance policies, this notice must be suitably modified so as to notify the purchaser that <br/>
<a id="pl.31.17"></a><var>31.17</var>the purchaser is entitled to a refund of: (i) the premiums paid; or (ii) the variable account <br/>
<a id="pl.31.18"></a><var>31.18</var>value plus any amount deducted from the portion of the premium applied to the account.<br/>
<a id="pl.31.19"></a><var>31.19</var><b>EFFECTIVE DATE.</b>This section is effective January 1, 2009.<br/>
<br/>
<a id="bill.0.49.0"></a><a id="pl.31.20"></a><var>31.20</var>    Sec. 49. Minnesota Statutes 2006, section 79A.06, subdivision 5, is amended to read:<br/>
<a id="pl.31.21"></a><var>31.21</var>    Subd. 5. <b>Private employers who have ceased to be self-insured.</b> (a) Private <br/>
<a id="pl.31.22"></a><var>31.22</var>employers who have ceased to be private self-insurers shall discharge their continuing <br/>
<a id="pl.31.23"></a><var>31.23</var>obligations to secure the payment of compensation which is accrued during the period of <br/>
<a id="pl.31.24"></a><var>31.24</var>self-insurance, for purposes of Laws 1988, chapter 674, sections 1 to 21, by compliance <br/>
<a id="pl.31.25"></a><var>31.25</var>with all of the following obligations of current certificate holders:<br/>
<a id="pl.31.26"></a><var>31.26</var>    (1) Filing reports with the commissioner to carry out the requirements of this chapter;<br/>
<a id="pl.31.27"></a><var>31.27</var>    (2) Depositing and maintaining a security deposit for accrued liability for the <br/>
<a id="pl.31.28"></a><var>31.28</var>payment of any compensation which may become due, pursuant to chapter 176. However, <br/>
<a id="pl.31.29"></a><var>31.29</var>if a private employer who has ceased to be a private self-insurer purchases an insurance <br/>
<a id="pl.31.30"></a><var>31.30</var>policy from an insurer authorized to transact workers' compensation insurance in this state <br/>
<a id="pl.31.31"></a><var>31.31</var>which provides coverage of all claims for compensation arising out of injuries occurring <br/>
<a id="pl.31.32"></a><var>31.32</var>during the entire period the employer was self-insured, whether or not reported during <br/>
<a id="pl.31.33"></a><var>31.33</var>that period, the policy will:<br/>
<a id="pl.31.34"></a><var>31.34</var>    (i) discharge the obligation of the employer to maintain a security deposit for the <br/>
<a id="pl.31.35"></a><var>31.35</var>payment of the claims covered under the policy;<br/>
<a id="pl.32.1"></a><var>32.1</var>    (ii) discharge any obligation which the self-insurers' security fund has or may have <br/>
<a id="pl.32.2"></a><var>32.2</var>for payment of all claims for compensation arising out of injuries occurring during the <br/>
<a id="pl.32.3"></a><var>32.3</var>period the employer was self-insured, whether or not reported during that period; and<br/>
<a id="pl.32.4"></a><var>32.4</var>    (iii) discharge the obligations of the employer to pay any future assessments to <br/>
<a id="pl.32.5"></a><var>32.5</var>the self-insurers' security fund.<br/>
<a id="pl.32.6"></a><var>32.6</var>    A private employer who has ceased to be a private self-insurer may instead buy an <br/>
<a id="pl.32.7"></a><var>32.7</var>insurance policy described above, except that it covers only a portion of the period of time <br/>
<a id="pl.32.8"></a><var>32.8</var>during which the private employer was self-insured; purchase of such a policy discharges <br/>
<a id="pl.32.9"></a><var>32.9</var>any obligation that the self-insurers' security fund has or may have for payment of all <br/>
<a id="pl.32.10"></a><var>32.10</var>claims for compensation arising out of injuries occurring during the period for which the <br/>
<a id="pl.32.11"></a><var>32.11</var>policy provides coverage, whether or not reported during that period.<br/>
<a id="pl.32.12"></a><var>32.12</var>    A policy described in this clause may not be issued by an insurer unless it has <br/>
<a id="pl.32.13"></a><var>32.13</var>previously been approved as to form and substance by the commissioner; and<br/>
<a id="pl.32.14"></a><var>32.14</var>    (3) Paying within 30 days all assessments of which notice is sent by the security <br/>
<a id="pl.32.15"></a><var>32.15</var>fund, for a period of seven years from the last day its certificate of self-insurance was in <br/>
<a id="pl.32.16"></a><var>32.16</var>effect. Thereafter, the private employer who has ceased to be a private self-insurer may <br/>
<a id="pl.32.17"></a><var>32.17</var>either: (i) continue to pay within 30 days all assessments of which notice is sent by the <br/>
<a id="pl.32.18"></a><var>32.18</var>security fund until it has no incurred liabilities for the payment of compensation arising <br/>
<a id="pl.32.19"></a><var>32.19</var>out of injuries during the period of self-insurance; or (ii) pay the security fund a cash <br/>
<a id="pl.32.20"></a><var>32.20</var>payment equal to four percent of the net present value of all remaining incurred liabilities <br/>
<a id="pl.32.21"></a><var>32.21</var>for the payment of compensation under sections 
         <statute_ref>176.101</statute_ref> and 
         <statute_ref>176.111</statute_ref> as certified by a <br/>
<a id="pl.32.22"></a><var>32.22</var>member of the casualty actuarial society. Assessments shall be based on the benefits paid <br/>
<a id="pl.32.23"></a><var>32.23</var>by the employer during the calendar year immediately preceding the calendar year in <br/>
<a id="pl.32.24"></a><var>32.24</var>which the employer's right to self-insure is terminated or withdrawn.<br/>
<a id="pl.32.25"></a><var>32.25</var>    (b) With respect to a self-insurer who terminates its self-insurance authority after <br/>
<a id="pl.32.26"></a><var>32.26</var>April 1, 1998, that member shall obtain and file with the commissioner an actuarial <br/>
<a id="pl.32.27"></a><var>32.27</var>opinion of its outstanding liabilities as determined by an associate or fellow of the <br/>
<a id="pl.32.28"></a><var>32.28</var>Casualty Actuarial Society within 120 days of the date of its termination. If the actuarial <br/>
<a id="pl.32.29"></a><var>32.29</var>opinion is not timely filed, the self-insurers' security fund may, at its discretion, engage <br/>
<a id="pl.32.30"></a><var>32.30</var>the services of an actuary for this purpose. The expense of this actuarial opinion must <br/>
<a id="pl.32.31"></a><var>32.31</var>be assessed against and be the obligation of the self-insurer. The commissioner may <br/>
<a id="pl.32.32"></a><var>32.32</var>issue a certificate of default against the self-insurer for failure to pay this assessment <br/>
<a id="pl.32.33"></a><var>32.33</var>to the self-insurers' security fund as provided by section 
         <statute_ref>79A.04, subdivision 9</statute_ref>. The <br/>
<a id="pl.32.34"></a><var>32.34</var>opinion must separate liability for indemnity benefits from liability from medical benefits, <br/>
<a id="pl.32.35"></a><var>32.35</var>and must discount each up to four percent per annum to net present value. Within 30 <br/>
<a id="pl.32.36"></a><var>32.36</var>days after notification of approval of the actuarial opinion by the commissioner, the <br/>
<a id="pl.33.1"></a><var>33.1</var>member shall pay to the security fund an amount equal to 120 percent of that discounted <br/>
<a id="pl.33.2"></a><var>33.2</var>outstanding indemnity liability, multiplied by the greater of the average annualized <br/>
<a id="pl.33.3"></a><var>33.3</var>assessment rate since inception of the security fund or the annual rate at the time of the <br/>
<a id="pl.33.4"></a><var>33.4</var>most recent assessment before termination. If the payment is not made within 30 days of <br/>
<a id="pl.33.5"></a><var>33.5</var>the notification, interest on it at the rate prescribed by section 
         <statute_ref>549.09</statute_ref> must be paid by the <br/>
<a id="pl.33.6"></a><var>33.6</var>former member to the security fund until the principal amount is paid in full.<br/>
<a id="pl.33.7"></a><var>33.7</var>    (c) A former member who terminated its self-insurance authority before April 1, <br/>
<a id="pl.33.8"></a><var>33.8</var>1998, who has paid assessments to the self-insurers' security fund for seven years, and <br/>
<a id="pl.33.9"></a><var>33.9</var>whose annualized assessment is $500 $15,000 or less, may buy out of its outstanding <br/>
<a id="pl.33.10"></a><var>33.10</var>liabilities to the self-insurers' security fund by an amount calculated as follows: 
         <statute_ref>1.35</statute_ref> <br/>
<a id="pl.33.11"></a><var>33.11</var>multiplied by the indemnity case reserves at the time of the calculation, multiplied by the <br/>
<a id="pl.33.12"></a><var>33.12</var>then current self-insurers' security fund annualized assessment rate.<br/>
<a id="pl.33.13"></a><var>33.13</var>    (d) A former member who terminated its self-insurance authority before April 1, <br/>
<a id="pl.33.14"></a><var>33.14</var>1998, and who is paying assessments within the first seven years after ceasing to be <br/>
<a id="pl.33.15"></a><var>33.15</var>self-insured under paragraph (a), clause (3), may elect to buy out its outstanding liabilities <br/>
<a id="pl.33.16"></a><var>33.16</var>to the self-insurers' security fund by obtaining and filing with the commissioner an <br/>
<a id="pl.33.17"></a><var>33.17</var>actuarial opinion of its outstanding liabilities as determined by an associate or fellow of <br/>
<a id="pl.33.18"></a><var>33.18</var>the Casualty Actuarial Society. The opinion must separate liability for indemnity benefits <br/>
<a id="pl.33.19"></a><var>33.19</var>from liability for medical benefits, and must discount each up to four percent per annum to <br/>
<a id="pl.33.20"></a><var>33.20</var>net present value. Within 30 days after notification of approval of the actuarial opinion <br/>
<a id="pl.33.21"></a><var>33.21</var>by the commissioner, the member shall pay to the security fund an amount equal to 120 <br/>
<a id="pl.33.22"></a><var>33.22</var>percent of that discounted outstanding indemnity liability, multiplied by the greater of the <br/>
<a id="pl.33.23"></a><var>33.23</var>average annualized assessment rate since inception of the security fund or the annual rate <br/>
<a id="pl.33.24"></a><var>33.24</var>at the time of the most recent assessment.<br/>
<a id="pl.33.25"></a><var>33.25</var>    (e) A former member who has paid the security fund according to paragraphs (b) to <br/>
<a id="pl.33.26"></a><var>33.26</var>(d) and subsequently receives authority from the commissioner to again self-insure shall be <br/>
<a id="pl.33.27"></a><var>33.27</var>assessed under section 
         <statute_ref>79A.12, subdivision 2</statute_ref>, only on indemnity benefits paid on injuries <br/>
<a id="pl.33.28"></a><var>33.28</var>that occurred after the former member received authority to self-insure again; provided <br/>
<a id="pl.33.29"></a><var>33.29</var>that the member furnishes verified data regarding those benefits to the security fund.<br/>
<a id="pl.33.30"></a><var>33.30</var>    (f) In addition to proceedings to establish liabilities and penalties otherwise <br/>
<a id="pl.33.31"></a><var>33.31</var>provided, a failure to comply may be the subject of a proceeding before the commissioner. <br/>
<a id="pl.33.32"></a><var>33.32</var>An appeal from the commissioner's determination may be taken pursuant to the contested <br/>
<a id="pl.33.33"></a><var>33.33</var>case procedures of chapter 14 within 30 days of the commissioner's written determination.<br/>
<a id="pl.33.34"></a><var>33.34</var>    Any current or past member of the self-insurers' security fund is subject to service of <br/>
<a id="pl.33.35"></a><var>33.35</var>process on any claim arising out of chapter 176 or this chapter in the manner provided by <br/>
<a id="pl.33.36"></a><var>33.36</var>section 
         <statute_ref>5.25</statute_ref>, or as otherwise provided by law. The issuance of a certificate to self-insure <br/>
<a id="pl.34.1"></a><var>34.1</var>to the private self-insured employer shall be deemed to be the agreement that any process <br/>
<a id="pl.34.2"></a><var>34.2</var>which is served in accordance with this section shall be of the same legal force and effect <br/>
<a id="pl.34.3"></a><var>34.3</var>as if served personally within this state.<br/>
<br/>
<a id="bill.0.50.0"></a><a id="pl.34.4"></a><var>34.4</var>    Sec. 50. Minnesota Statutes 2006, section 79A.22, subdivision 3, is amended to read:<br/>
<a id="pl.34.5"></a><var>34.5</var>    Subd. 3. <b>New membership.</b> The commercial self-insurance group shall file with <br/>
<a id="pl.34.6"></a><var>34.6</var>the commissioner the name of any new employer that has been accepted in the group <br/>
<a id="pl.34.7"></a><var>34.7</var>prior to the initiation date of membership within five business days of the initiation date <br/>
<a id="pl.34.8"></a><var>34.8</var>of membership along with the member's signed indemnity agreement and evidence the <br/>
<a id="pl.34.9"></a><var>34.9</var>member has deposited sufficient premiums with the group as required by the commercial <br/>
<a id="pl.34.10"></a><var>34.10</var>self-insurance group's bylaws or plan of operation. The security deposit of the group shall <br/>
<a id="pl.34.11"></a><var>34.11</var>be increased quarterly to an amount equal to 50 percent of the new members' premiums <br/>
<a id="pl.34.12"></a><var>34.12</var>for that quarter. If the total increase of new members' premiums for the first quarter is <br/>
<a id="pl.34.13"></a><var>34.13</var>less than five percent of the total annual premium of the group, no quarterly increase <br/>
<a id="pl.34.14"></a><var>34.14</var>is necessary until the cumulative quarterly increases for that calendar year exceed five <br/>
<a id="pl.34.15"></a><var>34.15</var>percent of the total premium of the group. The commissioner may, at the commissioner's <br/>
<a id="pl.34.16"></a><var>34.16</var>option, review the financial statement of any applicant whose premium equals 25 percent <br/>
<a id="pl.34.17"></a><var>34.17</var>or more of the group's total premium.<br/>
<br/>
<a id="bill.0.51.0"></a><a id="pl.34.18"></a><var>34.18</var>    Sec. 51. Minnesota Statutes 2006, section 79A.22, subdivision 4, is amended to read:<br/>
<a id="pl.34.19"></a><var>34.19</var>    Subd. 4. <b>Commercial self-insurance group common claims fund.</b> (a) Each <br/>
<a id="pl.34.20"></a><var>34.20</var>commercial self-insurance group shall establish a common claims fund.<br/>
<a id="pl.34.21"></a><var>34.21</var>    (b) Each commercial self-insurance group shall, not less than ten days prior to the <br/>
<a id="pl.34.22"></a><var>34.22</var>proposed effective date of the group, collect cash premiums from each member equal to <br/>
<a id="pl.34.23"></a><var>34.23</var>not less than 20 percent of the member's annual workers' compensation premium to be <br/>
<a id="pl.34.24"></a><var>34.24</var>paid into a common claims fund, maintained by the group in a designated depository. The <br/>
<a id="pl.34.25"></a><var>34.25</var>remaining balance of the member's premium shall be paid to the group in a reasonable <br/>
<a id="pl.34.26"></a><var>34.26</var>manner over the remainder of the year. Payments in subsequent years shall be made <br/>
<a id="pl.34.27"></a><var>34.27</var>according to the business plan.<br/>
<a id="pl.34.28"></a><var>34.28</var>    (c) Each commercial self-insurance group shall initiate proceedings against a <br/>
<a id="pl.34.29"></a><var>34.29</var>member when that member becomes more than 15 30 days delinquent in any payment <br/>
<a id="pl.34.30"></a><var>34.30</var>of premium to the fund.<br/>
<a id="pl.34.31"></a><var>34.31</var>    (d) There shall be no commingling of any assets of the common claims fund with the <br/>
<a id="pl.34.32"></a><var>34.32</var>assets of any individual member or with any other account of the service company or fiscal <br/>
<a id="pl.34.33"></a><var>34.33</var>agent unrelated to the payment of workers' compensation liabilities incurred by the group.<br/>
<br/>
<a id="bill.0.52.0"></a><a id="pl.35.1"></a><var>35.1</var>    Sec. 52. Minnesota Statutes 2006, section 79A.23, subdivision 2, is amended to read:<br/>
<a id="pl.35.2"></a><var>35.2</var>    Subd. 2. <b>Required reports from members to group.</b> (a) Each member of the <br/>
<a id="pl.35.3"></a><var>35.3</var>commercial self-insurance group shall, by September 15, submit to the group its most <br/>
<a id="pl.35.4"></a><var>35.4</var>recent annual financial statement, together with other financial information the group may <br/>
<a id="pl.35.5"></a><var>35.5</var>require. These financial statements submitted must not have a fiscal year end date older <br/>
<a id="pl.35.6"></a><var>35.6</var>than January 15 of the group's calendar year end. Individual group members constituting <br/>
<a id="pl.35.7"></a><var>35.7</var>at least 25 percent of the group's annual premium shall submit to the group reviewed or <br/>
<a id="pl.35.8"></a><var>35.8</var>audited financial statements. The remaining members must submit compilation level <br/>
<a id="pl.35.9"></a><var>35.9</var>statements.<br/>
<a id="pl.35.10"></a><var>35.10</var>    (b) For groups that have been in existence for at least three years, individual group <br/>
<a id="pl.35.11"></a><var>35.11</var>members may satisfy the requirements of paragraph (a) by submitting compiled, reviewed, <br/>
<a id="pl.35.12"></a><var>35.12</var>or audited statements or the most recent federal income tax return filed by the member.<br/>
<a id="pl.35.13"></a><var>35.13</var>    (c) Groups that have been in existence for at least five years may satisfy the <br/>
<a id="pl.35.14"></a><var>35.14</var>requirement of paragraph (a) through submissions from members representing at least <br/>
<a id="pl.35.15"></a><var>35.15</var>50 percent of the group's total earned premium. Of those submissions, those from <br/>
<a id="pl.35.16"></a><var>35.16</var>members representing at least 25 percent of the entire group's total earned premium must <br/>
<a id="pl.35.17"></a><var>35.17</var>be audited or reviewed financial statements. The remainder of the submissions may be <br/>
<a id="pl.35.18"></a><var>35.18</var>compiled, reviewed, or audited financial statements or the most recent tax return filed by <br/>
<a id="pl.35.19"></a><var>35.19</var>the members.<br/>
<br/>
<a id="bill.0.53.0"></a><a id="pl.35.20"></a><var>35.20</var>    Sec. 53. Minnesota Statutes 2006, section 82B.23, subdivision 1, is amended to read:<br/>
<a id="pl.35.21"></a><var>35.21</var>    Subdivision 1. <b>Requirement.</b> The commissioner shall certify and transmit to the <br/>
<a id="pl.35.22"></a><var>35.22</var>appraisal subcommittee established pursuant to the Federal Institutions Reform, Recovery, <br/>
<a id="pl.35.23"></a><var>35.23</var>and Enforcement Act of 1989, Public Law 100-73, the names of those licensees who <br/>
<a id="pl.35.24"></a><var>35.24</var>have satisfied the requirements for certification and licensure established by the appraisal <br/>
<a id="pl.35.25"></a><var>35.25</var>subcommittee and to collect and transmit any required fees.<br/>
<br/>
<a id="bill.0.54.0"></a><a id="pl.35.26"></a><var>35.26</var>    Sec. 54. Minnesota Statutes 2006, section 83.25, is amended by adding a subdivision <br/>
<a id="pl.35.27"></a><var>35.27</var>to read:<br/>
<a id="pl.35.28"></a><var>35.28</var>    Subd. 4. <b>Limited broker licensee.</b> An individual acting on behalf of a limited <br/>
<a id="pl.35.29"></a><var>35.29</var>broker licensee issued a license under section 82.34, subdivision 13, is not required to be <br/>
<a id="pl.35.30"></a><var>35.30</var>an officer of a corporation or a partner of a partnership if:<br/>
<a id="pl.35.31"></a><var>35.31</var>    (1) the individual is solely engaged in the business of selling a timeshare interest as <br/>
<a id="pl.35.32"></a><var>35.32</var>defined in section 83.20, subdivision 13;<br/>
<a id="pl.35.33"></a><var>35.33</var>    (2) the individual is adequately supervised by the limited broker licensee; and<br/>
<a id="pl.36.1"></a><var>36.1</var>    (3) the limited broker licensee maintains a roster of individuals selling a timeshare <br/>
<a id="pl.36.2"></a><var>36.2</var>interest including the date the individual started selling. This roster must be made <br/>
<a id="pl.36.3"></a><var>36.3</var>available to the commissioner upon demand within three days of the request.<br/>
<br/>
<a id="bill.0.55.0"></a><a id="pl.36.4"></a><var>36.4</var>    Sec. 55. <b>[332.345] SEGREGATED ACCOUNTS.</b><br/>
<a id="pl.36.5"></a><var>36.5</var>    A payment collected by a collector or collection agency on behalf of a customer <br/>
<a id="pl.36.6"></a><var>36.6</var>shall be held by the collector or collection agency in a separate trust account clearly <br/>
<a id="pl.36.7"></a><var>36.7</var>designated for customer funds. The account must be in a bank or other depository <br/>
<a id="pl.36.8"></a><var>36.8</var>institution authorized or chartered under the laws of any state or of the United States.<br/>
<br/>
<a id="bill.0.56.0"></a><a id="pl.36.9"></a><var>36.9</var>    Sec. 56. <b>REPEALER.</b><br/>
<a id="pl.36.10"></a><var>36.10</var>(a) Minnesota Statutes 2006, sections 62A.149, subdivision 2; and 65B.29, are <br/>
<a id="pl.36.11"></a><var>36.11</var>repealed.<br/>
<a id="pl.36.12"></a><var>36.12</var>(b) Laws 2006, chapter 255, section 26, is repealed.<br/>