SF 166

2nd Unofficial Engrossment - 86th Legislature (2009 - 2010)

Posted on 12/26/2012 11:17 p.m.

1.1A bill for an act 1.2relating to insurance; regulating life insurance; prohibiting stranger-originated 1.3life insurance;proposing coding for new law in Minnesota Statutes, chapter 60A; 1.4repealing Minnesota Statutes 2008, sections 61A.073; 61A.074. 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.6    Section 1. new text begin [60A.078] SHORT TITLE. new text end 1.7 new text begin Sections 60A.078 to 60A.0789 may be cited as the "Insurable Interest Act." new text end 1.8    Sec. 2. new text begin [60A.0782] DEFINITIONS. new text end 1.9     new text begin Subdivision 1. new text end new text begin Terms. new text end new text begin For the purpose of this act, unless the context clearly new text end 1.10 new text begin indicates otherwise, the terms in this section have the meanings given them. new text end 1.11     new text begin Subd. 2. new text end new text begin Act. new text end new text begin "Act" means sections 60A.078 to 60A.0789. new text end 1.12     new text begin Subd. 3. new text end new text begin Business entity. new text end new text begin "Business entity" includes, but is not limited to, a joint new text end 1.13 new text begin venture, partnership, corporation, limited liability company, and business trust. new text end 1.14     new text begin Subd. 4. new text end new text begin Commissioner. new text end new text begin "Commissioner" means the commissioner of commerce. new text end 1.15     new text begin Subd. 5. new text end new text begin Legitimate settlement contracts. new text end new text begin "Legitimate settlement contracts" new text end 1.16 new text begin mean settlement contracts that comply with Minnesota law governing viatical settlement new text end 1.17 new text begin contracts and that are not prohibited by section 60A.0785 or otherwise part of or in new text end 1.18 new text begin furtherance of an act, practice, or arrangement that is prohibited by this act. new text end 1.19     new text begin Subd. 6. new text end new text begin Life expectancy evaluation. new text end new text begin "Life expectancy evaluation" means an new text end 1.20 new text begin evaluation conducted by any person other than the insurer or its authorized representatives new text end 1.21 new text begin for the purpose of projecting or estimating how long a particular individual is expected to new text end 1.22 new text begin live. new text end 2.1     new text begin Subd. 7. new text end new text begin Person. new text end new text begin "Person" means any natural person or legal entity, including, but new text end 2.2 new text begin not limited to, a partnership, limited liability company, association, trust, or corporation. new text end 2.3     new text begin Subd. 8. new text end new text begin Policy. new text end new text begin "Policy" means an individual or group policy, group certificate, new text end 2.4 new text begin contract, or arrangement of life insurance affecting the rights of a resident of this state new text end 2.5 new text begin or bearing a reasonable relation to this state, regardless of whether delivered or issued new text end 2.6 new text begin for delivery in this state. new text end 2.7     new text begin Subd. 9. new text end new text begin Policyowner. new text end new text begin "Policyowner" means the owner of a policy. new text end 2.8     new text begin Subd. 10. new text end new text begin Settlement contract. new text end new text begin (a) "Settlement contract" means an agreement new text end 2.9 new text begin between a policyowner and another person establishing the terms under which new text end 2.10 new text begin compensation or anything of value will be paid or which compensation or value is new text end 2.11 new text begin less than the expected death benefit of the insurance policy, in return for the owner's new text end 2.12 new text begin assignment, transfer, sale, devise, or bequest of the death benefit or ownership of any new text end 2.13 new text begin portion of the policy. Settlement contract also includes: new text end 2.14 new text begin (1) the transfer for compensation or value of ownership or beneficial interest in a new text end 2.15 new text begin trust or other entity that owns such a policy if the trust or other entity was formed or new text end 2.16 new text begin availed of for the principal purpose of acquiring one or more policies, which policy insures new text end 2.17 new text begin the life of an individual who is a resident of this state; and new text end 2.18 new text begin (2) a premium finance loan made for a policy by a lender to a policyowner on, new text end 2.19 new text begin before, or after the date of issuance of the policy where: new text end 2.20 new text begin (i) the policyowner or the insured receives a guarantee of a future settlement value new text end 2.21 new text begin of the policy; or new text end 2.22 new text begin (ii) the policyowner or the insured agrees to sell the policy or any portion of its death new text end 2.23 new text begin benefit on any date following the issuance of the policy. new text end 2.24 new text begin (b) Settlement contract does not include: new text end 2.25 new text begin (1) a policy loan or accelerated death benefit made by the insurer under the policy's new text end 2.26 new text begin terms; new text end 2.27 new text begin (2) a premium finance loan in which loan proceeds are used solely to pay premiums new text end 2.28 new text begin for the policy and loan-related costs, including, without limitation, interest, arrangement new text end 2.29 new text begin fees, utilization fees and similar fees, closing costs, legal fees and expenses, trustee new text end 2.30 new text begin fees and expenses, and third-party collateral provider fees and expenses, including fees new text end 2.31 new text begin payable to letter of credit issuers; new text end 2.32 new text begin (3) a loan made by a bank or other licensed financial institution in which the lender new text end 2.33 new text begin takes an interest in a policy solely to secure repayment of a loan or, if there is a default new text end 2.34 new text begin on the loan and the policy is transferred, the transfer of such a policy by the lender, as new text end 2.35 new text begin long as the default itself is not pursuant to an agreement or understanding with any other new text end 2.36 new text begin person for the purpose of evading regulation under this act; new text end 3.1 new text begin (4) an agreement in which all the parties are closely related to the insured by blood new text end 3.2 new text begin or law or have a lawful substantial economic interest in the continued life, health, and new text end 3.3 new text begin bodily safety of the person insured or are trusts established for the benefit of such parties; new text end 3.4 new text begin (5) any designation, consent, or agreement by an insured who is an employee or an new text end 3.5 new text begin employer in connection with the purchase by the employer, or by a trust established by the new text end 3.6 new text begin employer, of life insurance on the life of the employee; new text end 3.7 new text begin (6) a bona fide business succession planning arrangement: new text end 3.8 new text begin (i) between shareholders in a corporation or between a corporation and one or more new text end 3.9 new text begin of its shareholders or one or more trusts established by its shareholders; new text end 3.10 new text begin (ii) between partners in a partnership or between a partnership and one or more of its new text end 3.11 new text begin partners or one or more trusts established by its partner; or new text end 3.12 new text begin (iii) between members in a limited liability company or between a limited liability new text end 3.13 new text begin company and one or more of its members or one or more trusts established by its new text end 3.14 new text begin members; or new text end 3.15 new text begin (7) an agreement entered into by a service recipient, or a trust established by the new text end 3.16 new text begin service recipient, and a service provider, or a trust established by the service provider, who new text end 3.17 new text begin performs significant services for the service recipient's trade or business. new text end 3.18     new text begin Subd. 11. new text end new text begin Stranger-originated life insurance practices. new text end new text begin "Stranger-originated life new text end 3.19 new text begin insurance practices" or "STOLI practices" mean an act, practice, or arrangement to initiate new text end 3.20 new text begin a life insurance policy for the benefit of a third-party investor who, at the time of policy new text end 3.21 new text begin origination, has no insurable interest in the insured. STOLI practices include, but are not new text end 3.22 new text begin limited to, cases in which life insurance is purchased with resources or guarantees from or new text end 3.23 new text begin through a person or entity, who, at the time of policy inception, could not lawfully initiate new text end 3.24 new text begin the policy themselves, and where, at the time of inception, there is an arrangement or new text end 3.25 new text begin agreement, whether verbal or written, to directly or indirectly transfer the ownership of new text end 3.26 new text begin the policy and/or the policy benefits to a third party. Trusts that are created to give the new text end 3.27 new text begin appearance of insurable interest and are used to initiate policies for investors violate the new text end 3.28 new text begin insurable interest requirements and the prohibition against STOLI practices. new text end 3.29    Sec. 3. new text begin [60A.0783] INSURABLE INTEREST REQUIRED. new text end 3.30     new text begin Subdivision 1. new text end new text begin Insurance on life of another. new text end new text begin A person may not procure or cause new text end 3.31 new text begin to be procured or effected a policy upon the life of another individual unless the benefits new text end 3.32 new text begin under the policy are payable to the insured, the personal representatives of the insured's new text end 3.33 new text begin estate, or to a person having, at the time the policy is issued, an insurable interest in the new text end 3.34 new text begin individual insured. new text end 4.1     new text begin Subd. 2. new text end new text begin What constitutes an insurable interest. new text end new text begin Insurable interest, with reference new text end 4.2 new text begin to insurance on the life of another, includes only the following interests. new text end 4.3 new text begin (a) An individual has an insurable interest in the life of another person to whom the new text end 4.4 new text begin individual is closely related by blood or by law or in whom the individual has a substantial new text end 4.5 new text begin interest engendered by love and affection. new text end 4.6 new text begin (b) An individual has an insurable interest in the life of another person if such new text end 4.7 new text begin individual has a lawful and substantial economic interest in the continued life of the new text end 4.8 new text begin individual insured, as distinguished from an interest that would arise only by or would be new text end 4.9 new text begin enhanced in value by the death of the individual insured. new text end 4.10 new text begin (c) An individual party to a contract for the purchase or sale of an interest in any new text end 4.11 new text begin business entity and, if applicable, a trust or the trustee of a trust of which the individual is new text end 4.12 new text begin a settlor, has an insurable interest in the life of each other individual party to the contract, new text end 4.13 new text begin but only for the purpose of carrying out the intent and purpose of the contract. new text end 4.14 new text begin (d) A trust, or the trustee of a trust, has an insurable interest in the life of an new text end 4.15 new text begin individual insured under a life insurance policy owned by the trust, or the trustee of the new text end 4.16 new text begin trust acting in a fiduciary capacity, if the insured is the settlor of the trust; an individual new text end 4.17 new text begin closely related by blood or law to the settlor; or an individual in whom the settlor otherwise new text end 4.18 new text begin has an insurable interest if, in each of the situations described in this paragraph, the life new text end 4.19 new text begin insurance proceeds are primarily for the benefit of trust beneficiaries having an insurable new text end 4.20 new text begin interest in the life of the insured and the trust is not used, directly or indirectly, as part of or new text end 4.21 new text begin in furtherance of an act, practice, or arrangement that is otherwise prohibited by this act. new text end 4.22 new text begin (e) A guardian, trustee, or other fiduciary, acting in a fiduciary capacity, has an new text end 4.23 new text begin insurable interest in the life of any person for whose benefit the fiduciary holds property, new text end 4.24 new text begin and in the life of any other individual in whose life the person has an insurable interest so new text end 4.25 new text begin long as the life insurance proceeds are used primarily for the benefit of persons having an new text end 4.26 new text begin insurable interest in the life of the insured and the guardianship or fiduciary relationship new text end 4.27 new text begin is not used, directly or indirectly, as part of or in furtherance of an act, practice, or new text end 4.28 new text begin arrangement that is otherwise prohibited by this act. new text end 4.29 new text begin (f) An organization in section 170(c) of the United States Internal Revenue Code new text end 4.30 new text begin of 1986, as amended through December 31, 2008, has an insurable interest in the life of new text end 4.31 new text begin any person who consents in writing to the organization's ownership or purchase of that new text end 4.32 new text begin insurance. new text end 4.33 new text begin (g) A trustee, sponsor, or custodian of assets held in any plan governed by the new text end 4.34 new text begin Employee Retirement Income Security Act of 1974, 29 United States Code, subsection new text end 4.35 new text begin 1001, et seq., or in any other retirement or employee benefit plan, has an insurable interest new text end 4.36 new text begin in the life of any participant in the plan provided consent is obtained in writing from the new text end 5.1 new text begin participant before the insurance is purchased. An employer, trustee, sponsor, or custodian new text end 5.2 new text begin may not retaliate or take adverse action against any participant who does not consent to new text end 5.3 new text begin the issuance of insurance on the participant's life. new text end 5.4 new text begin (h) A business entity has an insurable interest in the life of any of the owners, new text end 5.5 new text begin directors, officers, partners, and managers of the business entity or any affiliate or new text end 5.6 new text begin subsidiary of the business entity, or key employees or key persons of the business entity new text end 5.7 new text begin or affiliate or subsidiary, provided consent is obtained in writing from key employees or new text end 5.8 new text begin persons before the insurance is purchased. The business entity or affiliate or subsidiary new text end 5.9 new text begin may not retaliate or take adverse action against any key employee or person who does new text end 5.10 new text begin not consent to the issuance of insurance on the key employee or key person's life. For new text end 5.11 new text begin purposes of this subdivision, a "key employee" or "key person" means an individual new text end 5.12 new text begin whose position or compensation is described in section 101(j)(2)(A)(ii) of the Internal new text end 5.13 new text begin Revenue Code of 1986, as amended through December 31, 2008. new text end 5.14 new text begin (i) A financial institution or other person to whom a debt is owed, whether for the new text end 5.15 new text begin purposes of premium financing or otherwise, has an insurable interest in the life of the new text end 5.16 new text begin borrower limited to the amount of debt owed plus reasonable interest and service charges. new text end 5.17     new text begin Subd. 3. new text end new text begin Insured's own life. new text end new text begin An individual has an insurable interest in their own life new text end 5.18 new text begin and an individual of competent legal capacity that procures or effects a policy on their new text end 5.19 new text begin own life may designate any person as the beneficiary, provided the policy is not part of or new text end 5.20 new text begin in furtherance of an act, practice, or arrangement that is otherwise prohibited by this act. new text end 5.21     new text begin Subd. 4. new text end new text begin Reliance on statements. new text end new text begin An insurer is entitled to rely upon all reasonable new text end 5.22 new text begin statements, declarations, and representations made by an applicant for life insurance new text end 5.23 new text begin relative to the existence of an insurable interest; and no insurer shall incur legal new text end 5.24 new text begin liability, except as set forth in the policy, by virtue of untrue statements, declarations, or new text end 5.25 new text begin representations so relied upon in good faith by the insurer. new text end 5.26     new text begin Subd. 5. new text end new text begin Consent of insured. new text end new text begin A policy upon the life of an individual, other than new text end 5.27 new text begin a policy of noncontributory group life insurance, may not be effectuated unless, on or new text end 5.28 new text begin before the time the policy is effectuated, the individual insured, having legal capacity to new text end 5.29 new text begin contract, applies for or consents in writing to the policy and its terms. Consent may be new text end 5.30 new text begin given by another in the following cases: new text end 5.31 new text begin (1) a parent or a person having legal custody of a minor may consent to the issuance new text end 5.32 new text begin of a policy on a dependent child; new text end 5.33 new text begin (2) a court-appointed guardian of a person may consent to the issuance of a policy new text end 5.34 new text begin on the person under guardianship; new text end 5.35 new text begin (3) a court-appointed conservator of a person's estate may consent to the issuance of new text end 5.36 new text begin a policy on the person whose estate is under conservatorship; new text end 6.1 new text begin (4) an attorney-in-fact may consent to the issuance of a policy on the person that new text end 6.2 new text begin appointed the attorney-in-fact for the limited purpose of replacing one or more policies new text end 6.3 new text begin with one or more new policies, provided the aggregate amount of life insurance on the new text end 6.4 new text begin person as the result of the replacement remains the same or decreases; new text end 6.5 new text begin (5) a trustee of a revocable trust may consent to the issuance of a policy on the new text end 6.6 new text begin life of a settlor of the trust; and new text end 6.7 new text begin (6) a court of general jurisdiction may give consent to the issuance of a policy upon new text end 6.8 new text begin a showing of facts the court considers sufficient to justify the issuance of the policy. new text end 6.9    Sec. 4. new text begin [60A.0784] PROHIBITED PRACTICES. new text end 6.10 new text begin It is unlawful for any person to: new text end 6.11 new text begin (1) procure or cause to be procured or effected a policy in violation of section new text end 6.12 new text begin 60A.0783; new text end 6.13 new text begin (2) engage in STOLI practices or otherwise wager on life; new text end 6.14 new text begin (3) solicit, market, or otherwise promote the purchase of a policy for the purpose of new text end 6.15 new text begin or with an emphasis on the subsequent sale of the policy in the secondary market; new text end 6.16 new text begin (4) enter into a premium finance agreement with any person or agency, or any new text end 6.17 new text begin person affiliated with such person or agency, pursuant to which the lender or any person new text end 6.18 new text begin affiliated with the lender shall receive any proceeds, fees, or other consideration, directly new text end 6.19 new text begin or indirectly, from the policy or policyowner or any other person with respect to the new text end 6.20 new text begin premium finance agreement or any settlement contract or other transaction related to new text end 6.21 new text begin such policy that are in addition to the amounts required to pay the principal, interest, and new text end 6.22 new text begin service charges related to policy premiums pursuant to the premium finance agreement or new text end 6.23 new text begin subsequent sale of such agreement; provided, further, that any payments, charges, fees, new text end 6.24 new text begin or other amounts in addition to the amounts required to pay the principal, interest, and new text end 6.25 new text begin service charges related to policy premiums paid under the premium finance agreement new text end 6.26 new text begin shall be remitted to the insured or to the insured's estate if the insured is not living at the new text end 6.27 new text begin time of the determination of the overpayment; or new text end 6.28 new text begin (5) enter into or to offer to enter into a settlement contract prior to the issuance of a new text end 6.29 new text begin policy that is the subject of the settlement contract or proposed settlement contract. new text end 6.30    Sec. 5. new text begin [60A.0785] PROHIBITION; ENTRY INTO SETTLEMENT new text end 6.31 new text begin CONTRACTS. new text end 6.32     new text begin Subdivision 1. new text end new text begin Prohibition. new text end new text begin No prospective purchaser of the policy from the insured new text end 6.33 new text begin shall, at any time prior to, or at the time of, the application for, or issuance of, a policy, new text end 6.34 new text begin or during a four-year period commencing with the date of issuance of the policy, enter new text end 7.1 new text begin into a settlement contract regardless of the date the compensation is to be provided and new text end 7.2 new text begin regardless of the date the assignment, transfer, sale, devise, bequest, or surrender of the new text end 7.3 new text begin policy is to occur, unless and until the prospective policy purchaser has determined, based new text end 7.4 new text begin on reasonable inquiry, which includes but is not limited to questioning the insured and new text end 7.5 new text begin reviewing the broker's files, that none of the following circumstances are present: new text end 7.6     new text begin (1) there was an agreement or understanding, before issuance of the policy, between new text end 7.7 new text begin the insured, policyowner, or owner of a beneficial interest in the policy, and another person new text end 7.8 new text begin to guarantee any liability or to purchase, or stand ready to purchase, the policy or an new text end 7.9 new text begin interest therein, including through an assumption or forgiveness of a loan; or new text end 7.10     new text begin (2) both of the following are present: new text end 7.11     new text begin (i) all or a portion of the policy premiums were funded by means other than by the new text end 7.12 new text begin insured's personal assets or assets provided by a person who is closely related to the new text end 7.13 new text begin insured by blood or law or who has a lawful and substantial economic interest in the new text end 7.14 new text begin continued life of the insured. For purposes of this provision, funds from a premium finance new text end 7.15 new text begin loan are considered assets of the insured or such person only if the insured or such person new text end 7.16 new text begin is contractually obligated to repay the full amount of the loan and to pledge personal new text end 7.17 new text begin assets, other than the policy itself, for loan amounts exceeding the policy's cash value; and new text end 7.18     new text begin (ii) the insured underwent a life expectancy evaluation within the eighteen-month new text end 7.19 new text begin time period immediately prior to the issuance of the policy and, during the same time new text end 7.20 new text begin period, the results of the life expectancy evaluation were shared with or used by any new text end 7.21 new text begin person for the purpose of determining the actual or potential value of the policy in the new text end 7.22 new text begin secondary market. new text end 7.23     new text begin Subd. 2. new text end new text begin Legitimate insurance transactions. new text end new text begin Nothing in this act prevents: new text end 7.24     new text begin (1) any policyowner, whether or not the policyowner is also the subject of the new text end 7.25 new text begin insurance, from entering into a legitimate settlement contract; new text end 7.26     new text begin (2) any person from soliciting a person to enter into a legitimate settlement contract; new text end 7.27     new text begin (3) a person from enforcing the payment of proceeds from the interest obtained new text end 7.28 new text begin under a legitimate settlement contract; or new text end 7.29     new text begin (4) the assignment, sale, transfer, devise, or bequest with respect to the death benefit new text end 7.30 new text begin or ownership of any portion of a policy, provided the assignment, sale, transfer, devise, or new text end 7.31 new text begin bequest is not part of or in furtherance of STOLI practices. new text end 7.32    Sec. 6. new text begin [60A.0787] PROCESSING CHANGE OF OWNERSHIP OR new text end 7.33 new text begin BENEFICIARY REQUESTS. new text end 7.34     new text begin Subdivision 1. new text end new text begin Obligation to process change of ownership or beneficiary new text end 7.35 new text begin requests. new text end new text begin Upon receipt of a properly completed request for change of ownership or new text end 8.1 new text begin beneficiary of a policy and, if applicable, the completed questionnaire described in new text end 8.2 new text begin this section, the insurer shall respond in writing within 30 calendar days with written new text end 8.3 new text begin acknowledgment confirming that the change has been effected or specifying the reasons new text end 8.4 new text begin why the requested change cannot be processed. The insurer shall not unreasonably delay new text end 8.5 new text begin effecting change of ownership or beneficiary and shall not otherwise interfere with any new text end 8.6 new text begin permitted settlement contract entered into in this state. new text end 8.7     new text begin Subd. 2. new text end new text begin Written questionnaire. new text end new text begin If the insurer receives a request for change new text end 8.8 new text begin of ownership or beneficiary within the four-year period commencing with the date the new text end 8.9 new text begin policy is issued, the insurer may require, as a condition of effecting the requested change, new text end 8.10 new text begin that the policyowner complete and return a written questionnaire designed to determine new text end 8.11 new text begin whether the change request relates to or is made in accordance with a settlement contract new text end 8.12 new text begin and if so, whether the circumstances described in section 60A.0785 are present. The new text end 8.13 new text begin questionnaire shall be in a form approved by the commissioner and shall include, but new text end 8.14 new text begin not be limited to, the following: new text end 8.15 new text begin (1) the definition of settlement contract; new text end 8.16 new text begin (2) an inquiry regarding whether the request for change of ownership or beneficiary new text end 8.17 new text begin relates to or is made in accordance with a settlement contract; new text end 8.18 new text begin (3) if the answer to clause (2) is "yes," then an inquiry regarding whether the new text end 8.19 new text begin circumstances described in section 60A.0785 are present; new text end 8.20 new text begin (4) a disclosure that presenting false material information, or concealing material new text end 8.21 new text begin information, in connection with the questionnaire is defined under the laws of this state new text end 8.22 new text begin as a fraudulent act; and new text end 8.23 new text begin (5) a signed certification by the policyowner that the answers and information new text end 8.24 new text begin provided in and pursuant to the questionnaire are true and complete to the best of the new text end 8.25 new text begin policyowner's knowledge and belief. new text end 8.26     new text begin Subd. 3. new text end new text begin Other inquiries. new text end new text begin Nothing in this section should be interpreted to limit an new text end 8.27 new text begin insurer's ability to make other inquiries to detect STOLI practices. new text end 8.28     new text begin Subd. 4. new text end new text begin Fraternal benefit societies. new text end new text begin Nothing in this act shall prohibit a fraternal new text end 8.29 new text begin benefit society regulated under chapter 64B from enforcing the terms of its bylaws or rules new text end 8.30 new text begin regarding permitted beneficiaries and owners. new text end 8.31    Sec. 7. new text begin [60A.0788] FRAUDULENT ACTS. new text end 8.32     new text begin Subdivision 1. new text end new text begin Fraudulent acts. new text end new text begin A person who commits a fraudulent act as defined new text end 8.33 new text begin in this section commits insurance fraud and may be sentenced under section 609.611, new text end 8.34 new text begin subdivision 3. new text end 9.1     new text begin Subd. 2. new text end new text begin List of fraudulent acts. new text end new text begin All of the following acts are fraudulent when new text end 9.2 new text begin committed by a person who, with intent to defraud and for the purpose of depriving new text end 9.3 new text begin another of property or for pecuniary gain, commits, or permits any of its employees or its new text end 9.4 new text begin agents to commit them: new text end 9.5 new text begin (1) failing to disclose to the insurer where the insurer has requested such disclosure new text end 9.6 new text begin that the prospective insured has undergone a life expectancy evaluation; new text end 9.7 new text begin (2) misrepresenting a person's state of residence or facilitating the change of the state new text end 9.8 new text begin in which a person resides for the express purpose of evading or avoiding the provisions new text end 9.9 new text begin of this act; and new text end 9.10 new text begin (3) presenting, causing to be presented, or preparing with knowledge or belief that it new text end 9.11 new text begin will be presented to an insurer any false material information, or concealing any material new text end 9.12 new text begin information, as part of, in support of, or concerning a fact material to one or more of new text end 9.13 new text begin the following: new text end 9.14 new text begin (i) a questionnaire as provided for under section 60A.0787; or new text end 9.15 new text begin (ii) any other documents or communications, whether written or verbal, which are new text end 9.16 new text begin intended to detect STOLI practices or demonstrate compliance with this act. new text end 9.17    Sec. 8. new text begin [60A.0789] REMEDIES. new text end 9.18     new text begin Subdivision 1. new text end new text begin Actions to recover death benefits. new text end new text begin (a) If the beneficiary, assignee, or new text end 9.19 new text begin other payee receives the death benefits under a life insurance policy initiated by STOLI new text end 9.20 new text begin practices or a policy procured or effected in violation of section 60A.0783, the personal new text end 9.21 new text begin representative of the insured's estate or other lawfully acting agent may maintain an action new text end 9.22 new text begin to recover such benefits from the person receiving them. new text end 9.23 new text begin (b) Where a person receives the death benefit as a result of a nonwillful violation of new text end 9.24 new text begin this act, the court may limit the recovery to unjust enrichment, calculated as the benefits new text end 9.25 new text begin received plus interest from the date of receipt, less premiums paid under the policy by new text end 9.26 new text begin the recipient and any consideration paid by the recipient to the insured in connection new text end 9.27 new text begin with the policy. new text end 9.28 new text begin (c) Where a person receives the death benefits as the result of a willful violation of new text end 9.29 new text begin this act, the court may, in addition to actual damages, order the defendant or defendants to new text end 9.30 new text begin pay exemplary damages in an amount up to two times the death benefits. A pattern of new text end 9.31 new text begin violations of this act and conduct involving one or more fraudulent acts are evidence of new text end 9.32 new text begin willfulness. The exemplary damages shall be paid to one or more governmental agencies new text end 9.33 new text begin charged with combating consumer fraud, including the Department of Commerce. new text end 10.1 new text begin (d) The court may award reasonable attorney fees, together with costs and new text end 10.2 new text begin disbursements, to any party that recovers damages in any action brought under this new text end 10.3 new text begin subdivision. new text end 10.4     new text begin Subd. 2. new text end new text begin Enforceability of contracts. new text end new text begin Any contract, agreement, arrangement, or new text end 10.5 new text begin transaction prohibited under this act is voidable. new text end 10.6     new text begin Subd. 3. new text end new text begin Effect on other law. new text end new text begin This act shall not: new text end 10.7 new text begin (1) preempt or limit other civil remedies, including, but not limited to, declaratory new text end 10.8 new text begin judgments, injunctive relief, and interpleaders; new text end 10.9 new text begin (2) preempt the authority or relieve the duty of other law enforcement or regulatory new text end 10.10 new text begin agencies to investigate, examine, and prosecute suspected violations of law; new text end 10.11 new text begin (3) limit the powers granted elsewhere by the laws of this state to the commissioner new text end 10.12 new text begin or an insurance fraud unit or the attorney general to investigate and examine possible new text end 10.13 new text begin violations of law and to take appropriate actions against wrongdoers; or new text end 10.14 new text begin (4) limit the power of this state to punish a person for conduct that constitutes a new text end 10.15 new text begin crime under other laws of this state. new text end 10.16    Sec. 9. new text begin REPEALER. new text end 10.17 new text begin Minnesota Statutes 2008, sections 61A.073; and 61A.074, new text end new text begin are repealed. new text end 10.18    Sec. 10. new text begin EFFECTIVE DATE. new text end 10.19 new text begin This act is effective for policies issued on or after August 1, 2009. new text end