HF 2853

1st Unofficial Engrossment - 88th Legislature (2013 - 2014)

Posted on 04/30/2014 08:37 a.m.

1.1A bill for an act 1.2relating to commerce; regulating certain licensees; modifying education 1.3requirements; making technical changes; modifying enforcement provisions and 1.4other actions; prohibiting certain homeowners policy surcharges; regulating 1.5insurance holding company systems by enacting changes proposed by the 1.6National Association of Insurance Commissioners;amending Minnesota Statutes 1.72012, sections 45.027, subdivision 7; 45.32, by adding subdivisions; 58.12, 1.8subdivision 1; 60A.0789, subdivision 3; 60A.10, subdivision 1; 60D.09; 60D.15, 1.9by adding a subdivision; 60D.17, subdivisions 1, 2, 4, 6, 7; 60D.18, subdivisions 1.102, 6; 60D.19, subdivisions 1, 2, 3, 11, 12, by adding a subdivision; 60D.20, 1.11subdivisions 1, 3; 60D.21, subdivision 1, by adding subdivisions; 60D.22; 1.1260K.54, subdivision 2; 61A.282, subdivision 1; 66A.01; 68A.01, subdivision 2; 1.1368A.02, subdivision 1; 68A.04, subdivision 1; 82.55, subdivision 4; 82.641, 1.14subdivision 6; 82.81, subdivision 8; 82B.135, subdivision 1; 82B.19, subdivisions 1.151, 3, by adding a subdivision; 115C.02, subdivision 16; 115C.09, subdivisions 1.162a, 3; 239.785, subdivision 6; 297I.01, subdivision 9; 327C.095, subdivision 11; 1.17386.66; 507.401, subdivisions 1, 2, 3, 4, 5; 507.45, subdivision 4; 515B.4-109; 1.18Minnesota Statutes 2013 Supplement, sections 82B.094; 82B.13, subdivision 1.191; 239.761, subdivision 8; 332A.02, subdivision 8; 559.202, subdivision 3; 1.20proposing coding for new law in Minnesota Statutes, chapters 60D; 65A; 82B; 1.21repealing Minnesota Statutes 2012, section 82B.10, subdivision 7. 1.22BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.23ARTICLE 1 1.24LICENSING 1.25    Section 1. Minnesota Statutes 2012, section 45.32, is amended by adding a subdivision 1.26to read: 1.27     new text begin Subd. 2a. new text end new text begin Qualifications for instructors of the Minnesota Supervisor/Trainee new text end 1.28 new text begin Appraiser Course. new text end new text begin In addition to qualifying under subdivision 2, an instructor of the new text end 1.29 new text begin Minnesota Supervisor/Trainee Appraiser Course offered as continuing education must: new text end 2.1 new text begin (1) be licensed in good standing as either a certified residential real property new text end 2.2 new text begin appraiser or a certified general real property appraiser, and must have been so licensed for new text end 2.3 new text begin the three-year period immediately preceding the individual's application to become an new text end 2.4 new text begin instructor of the Minnesota Supervisor/Trainee Appraiser Course; and new text end 2.5 new text begin (2) not have been the subject of any license or certificate suspension or revocation, new text end 2.6 new text begin or been prohibited from supervising activities in this state or any other state within the new text end 2.7 new text begin three years immediately preceding the individual's application to become an instructor new text end 2.8 new text begin of the Minnesota Supervisor/Trainee Appraiser Course. new text end 2.9    Sec. 2. Minnesota Statutes 2012, section 45.32, is amended by adding a subdivision to 2.10read: 2.11     new text begin Subd. 3a. new text end new text begin Qualifications for instructors of the Minnesota Supervisor/Trainee new text end 2.12 new text begin Appraiser Course. new text end new text begin In addition to qualifying under subdivision 3, an instructor of the new text end 2.13 new text begin Minnesota Supervisor/Trainee Appraiser Course offered as prelicense education must: new text end 2.14 new text begin (1) be licensed in good standing as either a certified residential real property new text end 2.15 new text begin appraiser or a certified general real property appraiser, and must have been so licensed for new text end 2.16 new text begin the three-year period immediately preceding the individual's application to become an new text end 2.17 new text begin instructor of the Minnesota Supervisor/Trainee Appraiser Course; and new text end 2.18 new text begin (2) not have been the subject of any license or certificate suspension or revocation, new text end 2.19 new text begin or been prohibited from supervising activities in this state or any other state within the new text end 2.20 new text begin three years immediately preceding the individual's application to become an instructor new text end 2.21 new text begin of the Minnesota Supervisor/Trainee Appraiser Course. new text end 2.22    Sec. 3. Minnesota Statutes 2013 Supplement, section 82B.094, is amended to read: 2.2382B.094 SUPERVISION OF TRAINEE REAL PROPERTY APPRAISERS. 2.24(a) A certified residential real property appraiser or a certified general real property 2.25appraiser, in good standing, may engage a trainee real property appraiser to assist in the 2.26performance of real estate appraisals, provided that the certified residential real property 2.27appraiser or a certified general real property appraiser: 2.28(1) has been licensed in good standing as either a certified residential real property 2.29appraiser or a certified general real property appraiser for a total of at least three years 2.30 new text begin the three-year period immediately preceding the individual's application to become a new text end 2.31 new text begin supervisor new text end ; 2.32(2) has completed a new text begin six-hour new text end course new text begin , approved in advance by the commissioner and new text end 2.33 new text begin provided by an education provider approved by the commissioner, new text end that is specifically 2.34oriented to the requirements and responsibilities of supervisory appraisers and trainee 3.1appraisers new text begin . A course approved by the commissioner for the purposes of this section must new text end 3.2 new text begin be given the course title "Minnesota Supervisor/Trainee Appraiser Course" new text end ; 3.3(3) has not been the subject of any license or certificate suspension or revocation 3.4or has not been prohibited from supervising activities in this state or any other state 3.5within the previous two new text begin three new text end years new text begin immediately preceding the individual's application new text end 3.6 new text begin to become a supervisor new text end ; 3.7(4) has no more than three trainee real property appraisers working under supervision 3.8at any one time; 3.9(5) actively and personally supervises the trainee real property appraiser, which 3.10includes ensuring that research of general and specific data has been adequately conducted 3.11and properly reported, application of appraisal principles and methodologies has been 3.12properly applied, that the analysis is sound and adequately reported, and that any analyses, 3.13opinions, or conclusions are adequately developed and reported so that the appraisal 3.14report is not misleading; 3.15(6) discusses with the trainee real property appraiser any necessary and appropriate 3.16changes that are made to a report, involving any trainee appraiser, before it is transmitted 3.17to the client. Changes not discussed with the trainee real property appraiser that are made 3.18by the supervising appraiser must be provided in writing to the trainee real property 3.19appraiser upon completion of the appraisal report; 3.20(7) accompanies the trainee real property appraiser on the inspections of the subject 3.21properties and drive-by inspections of the comparable sales on all appraisal assignments 3.22for which the trainee will perform work until the trainee appraiser is determined to be 3.23competent, in accordance with the competency rule of USPAP for the property type; 3.24(8) accepts full responsibility for the appraisal report by signing and certifying 3.25that the report complies with USPAP; and 3.26(9) reviews and signs the trainee real property appraiser's appraisal report or reports 3.27or if the trainee appraiser is not signing the report, states in the appraisal the name of the 3.28trainee and scope of the trainee's significant contribution to the report. 3.29(b) The supervising appraiser must review and sign the applicable experience log 3.30required to be kept by the trainee real property appraiser. 3.31(c) The supervising appraiser must notify the commissioner within ten days when 3.32the supervision of a trainee real property appraiser has terminated or when the trainee 3.33appraiser is no longer under the supervision of the supervising appraiser. 3.34(d) The supervising appraiser must maintain a separate work file for each appraisal 3.35assignment. 4.1(e) The supervising appraiser must verify that any trainee real property appraiser that 4.2is subject to supervision is properly licensed and in good standing with the commissioner. 4.3    Sec. 4. new text begin [82B.105] RECIPROCITY. new text end 4.4 new text begin The education, experience, and examination requirements of this chapter may be new text end 4.5 new text begin waived by the commissioner for individuals of other jurisdictions if: (1) the individual is new text end 4.6 new text begin licensed in another jurisdiction and is listed in good standing on the National Registry new text end 4.7 new text begin maintained by the Appraisal Subcommittee, and (2) the licensing requirements of that new text end 4.8 new text begin jurisdiction are substantially similar to the provisions of this chapter. new text end 4.9    Sec. 5. Minnesota Statutes 2013 Supplement, section 82B.13, subdivision 1, is 4.10amended to read: 4.11    Subdivision 1. Trainee real property appraiser. (a) As a prerequisite for licensing 4.12as a trainee real property appraiser, an applicant must present evidence satisfactory to the 4.13commissioner that the person has successfully completed: 4.14(1) at least 75 hours of prelicense courses approved by the commissioner. Fifteen of 4.15the 75 hours must include successful completion of the 15-hour national USPAP course; and 4.16(2) in addition to the required hours under clause (1), a new text begin six-hour new text end course that is 4.17specifically oriented to the requirements and responsibilities of supervisory appraisers 4.18and trainee appraisers. new text begin A course approved by the commissioner for the purposes of this new text end 4.19 new text begin subdivision must be given the course title "Minnesota Supervisor/Trainee Appraiser new text end 4.20 new text begin Course." This course must not be counted toward qualifying education to upgrade to new text end 4.21 new text begin a higher level appraiser license. new text end 4.22(b) All qualifying education must be completed within the five-year period prior to 4.23the date of submission of a trainee real property appraiser license application. 4.24    Sec. 6. Minnesota Statutes 2012, section 82B.135, subdivision 1, is amended to read: 4.25    Subdivision 1. Submitting to commissioner. An applicant for a real estate appraiser 4.26license must submit to the commissioner, along with an application for licensure new text begin and in a new text end 4.27 new text begin manner prescribed by the commissioner new text end , a copy of the course completion certificate for 4.28 new text begin evidence that the applicant has completed new text end all required prelicensing education coursework 4.29applicable to the class of license sought. 4.30    Sec. 7. Minnesota Statutes 2012, section 82B.19, subdivision 1, is amended to read: 4.31    Subdivision 1. License renewals. (a) A licensed real estate appraiser must present 4.32evidence satisfactory to the commissioner of having new text begin The commissioner must determine new text end 5.1 new text begin that a licensed real estate appraiser has new text end met the continuing education requirements of 5.2this chapter before the commissioner renews a license. new text begin This determination must be new text end 5.3 new text begin based on, for a resident appraiser, course completion records uploaded electronically new text end 5.4 new text begin in a manner prescribed by the commissioner and, for a nonresident appraiser, course new text end 5.5 new text begin completion records presented by electronic transmission or uploaded electronically in a new text end 5.6 new text begin manner prescribed by the commissioner. new text end 5.7The basic continuing education requirement for renewal of a license is the 5.8completion by the applicant either as a student or as an instructor, during the immediately 5.9preceding term of licensing, of at least 30 classroom hours of instruction in courses or 5.10seminars that have received the approval of the commissioner. Classroom hour credit 5.11must not be accepted for courses of less than two hours. As part of the continuing 5.12education requirements of this section, the commissioner must require that all real estate 5.13appraisers successfully complete the seven-hour national USPAP update course every two 5.14years. If the applicant's immediately preceding term of licensing consisted of six or more 5.15months, but fewer than 24 months, the applicant must provide evidence of completion 5.16of 15 hours of instruction during the license period. The credit hours required under this 5.17section may be credited to a person for distance education courses that meet Appraiser 5.18Qualifications Board criteria. An approved prelicense education course may be taken 5.19for continuing education credit. 5.20(b) The 15-hour USPAP course cannot be used to satisfy the requirement to complete 5.21the seven-hour national USPAP update course every two years. 5.22(c) Notwithstanding section 326.56, subdivision 2, a licensed real estate appraiser 5.23returning from active military duty may be placed in active status for a period of up to 90 5.24days pending completion of all continuing education requirements. 5.25    Sec. 8. Minnesota Statutes 2012, section 82B.19, is amended by adding a subdivision 5.26to read: 5.27     new text begin Subd. 1a. new text end new text begin Deferral. new text end new text begin (a) Deferrals may not be granted to appraisers, except in the new text end 5.28 new text begin case of individuals returning from active military duty, or individuals impacted by a new text end 5.29 new text begin state-declared or federally declared disaster. The commissioner may allow appraisers new text end 5.30 new text begin returning from active military duty to be placed in active status for a period of up to 90 new text end 5.31 new text begin days pending completion of all continuing education requirements. The commissioner new text end 5.32 new text begin may allow appraisers impacted by a state-declared or federally declared disaster that new text end 5.33 new text begin occurs within 90 days before the end of the continuing education cycle to remain or new text end 5.34 new text begin be placed in active status for a period of up to 90 days after the end of the appraiser's new text end 5.35 new text begin continuing education cycle, pending completion of all continuing education requirements. new text end 6.1 new text begin (b) This subdivision supersedes any conflicting provision in section 326.56, new text end 6.2 new text begin subdivision 2. new text end 6.3    Sec. 9. Minnesota Statutes 2012, section 82B.19, subdivision 3, is amended to read: 6.4    Subd. 3. Reinstatements. A license as a real estate appraiser that has been revoked 6.5 new text begin suspended for less than two years new text end as a result of disciplinary action by the commissioner 6.6may not be reinstated unless the applicant presents evidence of completion of the 6.7continuing education required by this chapter. This requirement may not be imposed upon 6.8an applicant for reinstatement who has been required to successfully complete the new text begin current new text end 6.9 new text begin experience, education, and new text end examination new text begin requirements new text end for real estate appraiser new text begin licensure new text end as 6.10a condition to reinstatement of a license. 6.11    Sec. 10. new text begin MONEY TRANSMITTERS; NO TRANSIT LIST; DELAYED new text end 6.12 new text begin EFFECTIVE DATE. new text end 6.13 new text begin Notwithstanding Laws 2013, chapter 50, Minnesota Statutes 2013 Supplement, new text end 6.14 new text begin section 53B.27, subdivision 3, is effective January 1, 2016. new text end 6.15    Sec. 11. new text begin REPEALER. new text end 6.16 new text begin Minnesota Statutes 2012, section 82B.10, subdivision 7, new text end new text begin is repealed. new text end 6.17ARTICLE 2 6.18PETROFUND 6.19    Section 1. Minnesota Statutes 2012, section 115C.02, subdivision 16, is amended to 6.20read: 6.21    Subd. 16. Tank in transport. "Tank in transport" means a liquid fuel cargo tank 6.22 new text begin with a capacity of greater than 250 gallons new text end used to deliver petroleum into storage tanks 6.23 new text begin or dispense petroleum into mobile tanks new text end . 6.24    Sec. 2. Minnesota Statutes 2012, section 115C.09, subdivision 2a, is amended to read: 6.25    Subd. 2a. Application for reimbursement. (a) Applications for reimbursement 6.26may be submitted for consideration by the board at the following stages: 6.27(1) after costs have been incurred, and the associated tasks completed, for excavation 6.28basin soil sampling, excavation of contaminated soil, treatment of contaminated soil, or 6.29remedial investigation tasks such as soil boring drilling, monitoring well installation, 6.30vapor risk assessment, and groundwater receptor survey; corrective action costs relating to 7.1the construction and installation of a comprehensive corrective action design system are 7.2not reimbursable at this stage; and 7.3(2) after costs have been incurred, and the associated tasks completed, for tasks related 7.4to the construction and installation of a comprehensive corrective action design system, but 7.5only if the commissioner has approved a comprehensive plan for corrective action that will 7.6adequately address the entire release, including groundwater contamination if necessary. 7.7(b) An applicant shall not submit an application for reimbursement more frequently 7.8than four times per 12-month period unless the application is for more than $2,000 7.9in reimbursement. 7.10(c) The commissioner shall review a plan, and provide an approval or disapproval to 7.11the applicant and the board, within 60 days in the case of a plan submitted under paragraph 7.12(a), clause (1), and within 120 days in the case of a plan submitted under paragraph (a), 7.13clause (2), or the commissioner shall explain to the board why additional time is necessary. 7.14The board shall consider a complete initial application within 60 days of its submission, 7.15and shall consider a complete supplemental application within 120 days of its submission, 7.16or the board shall explain for the record why additional time is necessary. Board staff may 7.17review applications submitted to the board at the same time the commissioner considers 7.18the appropriateness of the corrective action, but the board may not act on the application 7.19until after the commissioner's approval is received. 7.20(d) A reimbursement may not be made unless the board determines that the 7.21commissioner has determined that the corrective action was appropriate in terms of 7.22protecting public health, welfare, and the environment. 7.23 new text begin (e) A reimbursement may not be made unless the application was submitted within new text end 7.24 new text begin seven years after the corrective action services for which reimbursement has been new text end 7.25 new text begin requested were performed. new text end 7.26 new text begin EFFECTIVE DATE; APPLICATION. new text end new text begin This section is effective July 1, 2015, and new text end 7.27 new text begin applies to applications for reimbursement on or after that date. new text end 7.28    Sec. 3. Minnesota Statutes 2012, section 115C.09, subdivision 3, is amended to read: 7.29    Subd. 3. Reimbursements; subrogation; appropriation. (a) The board shall 7.30reimburse an eligible applicant from the fund for 90 percent of the total reimbursable costs 7.31incurred at the site, except that the board may reimburse an eligible applicant from the 7.32fund for greater than 90 percent of the total reimbursable costs, if the applicant previously 7.33qualified for a higher reimbursement rate. For costs associated with a release from a 7.34tank in transport, the board may reimburse 90 percent of costs over $10,000, with the new text begin a new text end 7.35 maximum reimbursement not to exceed new text begin of new text end $100,000. 8.1Not more than $1,000,000 may be reimbursed for costs associated with a single 8.2release, regardless of the number of persons eligible for reimbursement, and not more than 8.3$2,000,000 may be reimbursed for costs associated with a single tank facility. 8.4(b) A reimbursement may not be made from the fund under this chapter until the 8.5board has determined that the costs for which reimbursement is requested were actually 8.6incurred and were reasonable. 8.7(c) When an applicant has obtained responsible competitive bids or proposals 8.8according to rules promulgated under this chapter prior to June 1, 1995, the eligible costs 8.9for the tasks, procedures, services, materials, equipment, and tests of the low bid or proposal 8.10are presumed to be reasonable by the board, unless the costs of the low bid or proposal are 8.11substantially in excess of the average costs charged for similar tasks, procedures, services, 8.12materials, equipment, and tests in the same geographical area during the same time period. 8.13(d) When an applicant has obtained a minimum of two responsible competitive bids 8.14or proposals on forms prescribed by the board and where the rules promulgated under 8.15this chapter after June 1, 1995, designate maximum costs for specific tasks, procedures, 8.16services, materials, equipment and tests, the eligible costs of the low bid or proposal are 8.17deemed reasonable if the costs are at or below the maximums set forth in the rules. 8.18(e) Costs incurred for change orders executed as prescribed in rules promulgated 8.19under this chapter after June 1, 1995, are presumed reasonable if the costs are at or below 8.20the maximums set forth in the rules, unless the costs in the change order are above those in 8.21the original bid or proposal or are unsubstantiated and inconsistent with the process and 8.22standards required by the rules. 8.23(f) A reimbursement may not be made from the fund in response to either an initial 8.24or supplemental application for costs incurred after June 4, 1987, that are payable under 8.25an applicable insurance policy, except that if the board finds that the applicant has made 8.26reasonable efforts to collect from an insurer and failed, the board shall reimburse the 8.27applicant. 8.28(g) If the board reimburses an applicant for costs for which the applicant has 8.29insurance coverage, the board is subrogated to the rights of the applicant with respect to 8.30that insurance coverage, to the extent of the reimbursement by the board. The board may 8.31request the attorney general to bring an action in district court against the insurer to enforce 8.32the board's subrogation rights. Acceptance by an applicant of reimbursement constitutes 8.33an assignment by the applicant to the board of any rights of the applicant with respect to 8.34any insurance coverage applicable to the costs that are reimbursed. Notwithstanding this 8.35paragraph, the board may instead request a return of the reimbursement under subdivision 8.365 and may employ against the applicant the remedies provided in that subdivision, except 9.1where the board has knowingly provided reimbursement because the applicant was denied 9.2coverage by the insurer. 9.3(h) Money in the fund is appropriated to the board to make reimbursements under 9.4this chapter. A reimbursement to a state agency must be credited to the appropriation 9.5account or accounts from which the reimbursed costs were paid. 9.6(i) The board may reduce the amount of reimbursement to be made under this 9.7chapter if it finds that the applicant has not complied with a provision of this chapter, a 9.8rule or order issued under this chapter, or one or more of the following requirements: 9.9(1) the agency was given notice of the release as required by section 115.061; 9.10(2) the applicant, to the extent possible, fully cooperated with the agency in 9.11responding to the release; 9.12(3) the state rules applicable after December 22, 1993, to operating an underground 9.13storage tank and appurtenances without leak detection; 9.14(4) the state rules applicable after December 22, 1998, to operating an underground 9.15storage tank and appurtenances without corrosion protection or spill and overfill 9.16protection; and 9.17(5) the state rule applicable after November 1, 1998, to operating an aboveground 9.18tank without a dike or other structure that would contain a spill at the aboveground tank site. 9.19(j) The reimbursement may be reduced as much as 100 percent for failure by 9.20the applicant to comply with the requirements in paragraph (i), clauses (1) to (5). In 9.21determining the amount of the reimbursement reduction, the board shall consider: 9.22(1) the reasonable determination by the agency that the noncompliance poses a 9.23threat to the environment; 9.24(2) whether the noncompliance was negligent, knowing, or willful; 9.25(3) the deterrent effect of the award reduction on other tank owners and operators; 9.26(4) the amount of reimbursement reduction recommended by the commissioner; and 9.27(5) the documentation of noncompliance provided by the commissioner. 9.28(k) An applicant may request that the board issue a multiparty check that includes each 9.29lender who advanced funds to pay the costs of the corrective action or to each contractor 9.30or consultant who provided corrective action services. This request must be made by filing 9.31with the board a document, in a form prescribed by the board, indicating the identity of the 9.32applicant, the identity of the lender, contractor, or consultant, the dollar amount, and the 9.33location of the corrective action. The applicant must submit a request for the issuance 9.34of a multiparty check for each application submitted to the board. Payment under this 9.35paragraph does not constitute the assignment of the applicant's right to reimbursement 10.1to the consultant, contractor, or lender. The board has no liability to an applicant for a 10.2payment issued as a multiparty check that meets the requirements of this paragraph. 10.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment. new text end 10.4ARTICLE 3 10.5ADMINISTRATIVE SERVICES 10.6    Section 1. Minnesota Statutes 2013 Supplement, section 239.761, subdivision 8, 10.7is amended to read: 10.8    Subd. 8. Diesel fuel oil. (a) When diesel fuel oil is not blended with biodiesel, it 10.9must comply with ASTM specification D975-12a. 10.10(b) When diesel fuel oil is a blend of up to five volume percent biodiesel, the diesel 10.11component must comply with ASTM specification D975-12a and the biodiesel component 10.12must comply with ASTM specification D675-11b new text begin D6751-11b new text end . 10.13    Sec. 2. Minnesota Statutes 2012, section 239.785, subdivision 6, is amended to read: 10.14    Subd. 6. Liquefied petroleum gas account. A liquefied petroleum gas account in 10.15the special revenue fund is established in the state treasury. Fees and penalties collected 10.16under this section must be deposited in the state treasury and credited to the liquefied 10.17petroleum gas account. Money in that account, including interest earned, is appropriated 10.18to the commissioner of education new text begin commerce new text end for programs to improve the energy efficiency 10.19of residential liquefied petroleum gas heating equipment in low-income households, and, 10.20when necessary, to provide weatherization services to the homes. 10.21ARTICLE 4 10.22ENFORCEMENT 10.23    Section 1. Minnesota Statutes 2012, section 45.027, subdivision 7, is amended to read: 10.24    Subd. 7. Actions against licensees. (a) In addition to any other actions authorized 10.25by this section, the commissioner may, by order, deny, suspend, or revoke the authority 10.26or license of a person subject to the duties and responsibilities entrusted to the 10.27commissioner, as described under section 45.011, subdivision 4, or censure that person if 10.28the commissioner finds that: 10.29(1) the order is in the public interest; and 10.30(2) the person has violated any law, rule, or order related to the duties and 10.31responsibilities entrusted to the commissioner; or 11.1(3) the person has provided false, misleading, or incomplete information to the 11.2commissioner or has refused to allow a reasonable inspection of records or premises; or 11.3(4) the person has engaged in an act or practice, whether or not the act or practice 11.4directly involves the business for which the person is licensed or authorized, which 11.5demonstrates that the applicant or licensee is untrustworthy, financially irresponsible, or 11.6otherwise incompetent or unqualified to act under the authority or license granted by 11.7the commissioner. 11.8(b) new text begin (1) new text end The commissioner shall issue an order requiring a licensee or applicant for a 11.9license to show cause why the license should not be revoked or suspended, or the licensee 11.10censured, or the application denied new text begin and provide the licensee or applicant an opportunity new text end 11.11 new text begin to request a hearing under the contested case provisions of chapter 14 new text end . The order must 11.12be calculated to give reasonable notice of the time and place for a hearing on the action, 11.13and must state the reasons for the entry of the order. The commissioner may, by order, 11.14summarily suspend a license pending final determination of an order to show cause. If a 11.15license is suspended pending final determination of an order to show cause, a hearing on 11.16the merits must be held within 30 days of the issuance of the order of suspension. new text begin The new text end 11.17 new text begin order must: (i) state the reasons that an order is being sought and whether a civil penalty new text end 11.18 new text begin is sought; and (ii) inform the licensee or applicant that unless the licensee or applicant new text end 11.19 new text begin requests a hearing on the matter within 30 days of receipt of the order, it becomes final by new text end 11.20 new text begin operation of law and that a final order will be issued under paragraph (a). If a hearing is new text end 11.21 new text begin requested by the licensee or applicant pursuant to item (ii): (A) the commissioner shall, new text end 11.22 new text begin within 15 days of receiving the request, set the date and time for the hearing and notify new text end 11.23 new text begin the licensee or applicant of those facts; and (B) the commissioner may modify, vacate, or new text end 11.24 new text begin extend the order, until the commissioner issues a final order under paragraph (a). new text end 11.25 new text begin (2) The commissioner may, by order, summarily suspend a license pending final new text end 11.26 new text begin determination of an order to show cause issued under clause (1). If a license is suspended new text end 11.27 new text begin pending final determination of an order to show cause and the licensee requests a hearing new text end 11.28 new text begin on the matter within 30 days of receipt of the order to show cause, a hearing on the merits new text end 11.29 new text begin must be held within 30 days of receipt of the hearing request. The summary suspension or new text end 11.30 new text begin summary revocation procedure does not apply to action by the commissioner against the new text end 11.31 new text begin certificate of authority of an insurer authorized to do business in Minnesota. new text end 11.32 new text begin (c) new text end All hearings must be conducted according to chapter 14. After the hearing, the 11.33commissioner shall enter an new text begin a final new text end order disposing of the matter as the facts require. If the 11.34licensee or applicant fails to appear at a hearing after having been duly notified of it, the 11.35person is considered in default, and the proceeding may be determined against the licensee 11.36or applicant upon consideration of the order to show cause, the allegations of which may 12.1be considered true. The summary suspension or summary revocation procedures does not 12.2apply to action by the commissioner against the certificate of authority of an insurer 12.3authorized to do business in Minnesota. 12.4 new text begin (d) If an order becomes final because a person subject to an order does not timely new text end 12.5 new text begin request a hearing as provided in paragraph (b) or if the petition for judicial review is not new text end 12.6 new text begin timely filed after a hearing and a final order is issued by the commissioner as provided new text end 12.7 new text begin in paragraph (a), the commissioner may file a certified copy of the final order with the new text end 12.8 new text begin clerk of a court of competent jurisdiction. The final order so filed has the same effect as a new text end 12.9 new text begin judgment of the court and may be recorded, enforced, or satisfied in the same manner as new text end 12.10 new text begin a judgment of the court. new text end 12.11 new text begin (e) If a person does not comply with a final order under this section, the new text end 12.12 new text begin commissioner may petition a court of competent jurisdiction to enforce the order. The new text end 12.13 new text begin court may not require the commissioner to post a bond in an action or proceeding under new text end 12.14 new text begin this section. If the court finds, after service and opportunity for hearing, that the person new text end 12.15 new text begin was not in compliance with the order, the court may adjudge the person in civil contempt new text end 12.16 new text begin of the order. The court may impose a further civil penalty against the person for contempt new text end 12.17 new text begin in an amount up to $10,000 for each violation and may grant any other relief the court new text end 12.18 new text begin determines is just and proper in the circumstances. new text end 12.19 new text begin (f) new text end Except for information classified as confidential under sections 60A.03, 12.20subdivision 9 ; 60A.031; 60A.93; and 60D.22, the commissioner may make any data 12.21otherwise classified as private or confidential pursuant to this section accessible to an 12.22appropriate person or agency if the commissioner determines that the access will aid the 12.23law enforcement process, promote public health or safety, or dispel widespread rumor or 12.24unrest. If the commissioner determines that private or confidential information should 12.25be disclosed, the commissioner shall notify the attorney general as to the information to 12.26be disclosed, the purpose of the disclosure, and the need for the disclosure. The attorney 12.27general shall review the commissioner's determination. If the attorney general believes 12.28that the commissioner's determination does not satisfy the purpose and intent of this 12.29provision new text begin paragraph new text end , the attorney general shall advise the commissioner in writing that 12.30the information may not be disclosed. If the attorney general believes the commissioner's 12.31determination satisfies the purpose and intent of this provision, the attorney general shall 12.32advise the commissioner in writing, accordingly. 12.33After disclosing information pursuant to this provision, the commissioner shall 12.34advise the chairs of the senate and house of representatives judiciary committees of the 12.35disclosure and the basis for it. 13.1    Sec. 2. Minnesota Statutes 2012, section 58.12, subdivision 1, is amended to read: 13.2    Subdivision 1. Powers of commissioner. (a) The commissioner may by order 13.3take any or all of the following actions: 13.4(1) bar a person from engaging in residential mortgage origination or servicing; 13.5(2) deny, suspend, or revoke a residential mortgage originator or a servicer license; 13.6(3) censure a licensee; 13.7(4) impose a civil penalty as provided for in section 45.027, subdivision 6; or 13.8(5) revoke an exemption or certificate of exemption. 13.9(b) In order to take the action in paragraph (a), the commissioner must find: 13.10(1) that the order is in the public interest; and 13.11(2) that the residential mortgage originator, servicer, applicant, or other person, an 13.12officer, director, partner, employee, or agent or any person occupying a similar status or 13.13performing similar functions, or a person in control of the originator, servicer, applicant, 13.14or other person has: 13.15(i) violated any provision of this chapter or rule or order under this chapter; 13.16(ii) filed an application for a license that is incomplete in any material respect or 13.17contains a statement that, in light of the circumstances under which it is made, is false or 13.18misleading with respect to a material fact; 13.19(iii) failed to maintain compliance with the affirmations made under section 58.06, 13.20subdivision 2 ; 13.21(iv) violated a standard of conduct or engaged in a fraudulent, coercive, deceptive, 13.22or dishonest act or practice, whether or not the act or practice involves the residential 13.23mortgage lending business new text begin including, but not limited to, negligently making a false new text end 13.24 new text begin statement or knowingly and willfully omitting a material fact new text end ; 13.25(v) engaged in an act or practice, whether or not the act or practice involves the 13.26business of making a residential mortgage loan, that demonstrates untrustworthiness, 13.27financial irresponsibility, or incompetence; 13.28(vi) pled guilty, with or without explicitly admitting guilt, pled nolo contendere, 13.29or been convicted of a felony, gross misdemeanor, or a misdemeanor involving moral 13.30turpitude; 13.31(vii) paid a civil penalty or been the subject of disciplinary action by the 13.32commissioner, or an order of suspension or revocation, cease and desist order or injunction 13.33order or order barring involvement in an industry or profession issued by this or any other 13.34state or federal regulatory agency or by the Secretary of Housing and Urban Development; 13.35(viii) been found by a court of competent jurisdiction to have engaged in conduct 13.36evidencing gross negligence, fraud, misrepresentation, or deceit; 14.1(ix) refused to cooperate with an investigation or examination by the commissioner; 14.2(x) failed to pay any fee or assessment imposed by the commissioner; or 14.3(xi) failed to comply with state and federal tax obligations. 14.4    Sec. 3. Minnesota Statutes 2012, section 60A.0789, subdivision 3, is amended to read: 14.5    Subd. 3. Declaratory judgment action. new text begin (a) new text end If, prior to payment of death benefits, 14.6the insurer believes the policy was initiated by STOLI practices, the insurer may bring a 14.7declaratory judgment action seeking a court order declaring the policy void. 14.8 new text begin (b) A life insurance policy owner, who believes in good faith that the insurer may new text end 14.9 new text begin challenge the policy for lack of insurable interest, may bring a declaratory judgment action new text end 14.10 new text begin seeking a court order declaring the policy valid. new text end 14.11 new text begin (c) The right of a life insurance policy owner to bring a declaratory judgment action new text end 14.12 new text begin applies only to policies issued in Minnesota prior to the effective date of the Insurable new text end 14.13 new text begin Interest Act and that have a death benefit equal to or greater than one million dollars. Only new text end 14.14 new text begin the owner of record of a life insurance policy on the effective date of this section may new text end 14.15 new text begin bring a declaratory judgment action under this section. new text end 14.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective the day following final enactment new text end 14.17 new text begin and shall sunset on December 31, 2016. new text end 14.18    Sec. 4. Minnesota Statutes 2012, section 60A.10, subdivision 1, is amended to read: 14.19    Subdivision 1. Domestic companies. (1) Deposit as security for all policyholders 14.20required. No company in this state, other than farmers' mutual, or real estate title 14.21insurance companies new text begin insurers new text end , shall do business in this state unless it has on deposit with 14.22the commissioner, for the protection of both its resident and nonresident policyholders, 14.23securities to an amount, the actual market value of which, exclusive of interest, shall 14.24never be less than $500,000 or one-half the applicable financial requirement set forth in 14.25sections 60A.07, 66A.32, and 66A.33, whichever is less. The securities shall be retained 14.26under the control of the commissioner as long as any policies of the depositing company 14.27remain in force. 14.28(2) Securities defined. For the purpose of this subdivision, the word "securities" 14.29means bonds or other obligations of, or bonds or other obligations insured or guaranteed 14.30by, the United States, any state of the United States, any municipality of this state, or any 14.31agency or instrumentality of the foregoing. 14.32(3) Protection of deposit from levy. No judgment creditor or other claimant may 14.33levy upon any securities held on deposit with, or for the account of, the commissioner. 14.34Upon the entry of an order by a court of competent jurisdiction for the rehabilitation, 15.1liquidation or conservation of any depositing company as provided in chapter 60B, that 15.2company's deposit together with any accrued income thereon shall be transferred to the 15.3commissioner as rehabilitator, liquidator, or conservator. 15.4    Sec. 5. Minnesota Statutes 2012, section 60K.54, subdivision 2, is amended to read: 15.5    Subd. 2. Criminal prosecutions. Within 30 days of the initial pretrial hearing date 15.6 new text begin criminal prosecution begins new text end , a producer shall report to the commissioner any criminal 15.7prosecution of the producer taken in any jurisdiction. The report must include a copy of 15.8the initial complaint filed, the order resulting from the hearing, and any other relevant legal 15.9documents. In addition, a producer shall report to the commissioner within ten days any 15.10conviction, guilty plea, or plea of nolo contendere to any felony or gross misdemeanor. 15.11 new text begin For purposes of this subdivision, the date the criminal prosecution begins is the date new text end 15.12 new text begin the indictment is returned or the date the criminal complaint is filed. new text end 15.13    Sec. 6. Minnesota Statutes 2012, section 61A.282, subdivision 1, is amended to read: 15.14    Subdivision 1. Requirements. A company's investments shall be held in its 15.15corporate name or its nominee name, except that: 15.16(a) Investments may be held in the name of a clearing corporation or of a custodian 15.17bank or in the name of the nominee of either under the following conditions: 15.18(1) The clearing corporation, custodian bank, or nominee must be legally authorized 15.19to hold the particular investment for the account of others; 15.20(2) Where the investment is evidenced by a certificate and held in the name of a 15.21custodian bank or the nominee of a custodian bank, a written agreement shall provide that 15.22certificates so deposited shall at all times be kept separate and apart from other deposits 15.23with the depository, so that at all times they may be identified as belonging solely to the 15.24company making the deposit; or 15.25(3) Where a clearing corporation is to act as depository, the investment may be 15.26merged or held in bulk in the clearing corporation's name, or in the name of its nominee, 15.27together with any other investments deposited with the clearing corporation by any other 15.28person, if a written agreement provides that adequate evidence of the deposit will be 15.29obtained and retained by the company or a custodian bank. 15.30As used in this subdivision, the term "custodian bank" means a bank or trust 15.31company licensed by the United States or any state thereof. 15.32(b) A company may participate, through a bank or trust company which is a member 15.33of the Federal Reserve System, in the Federal Reserve's book-entry system, if the records 16.1of the member bank or trust company at all times show that the investments are held for 16.2the company and/or for specific accounts of the company. 16.3(c) If an investment consists of an individual interest in a pool of obligations, or of a 16.4fractional interest in a single obligation, the certificate of participation or interest, or the 16.5confirmation of participation or interest in the investment, shall be held in the manner set 16.6forth in paragraph (a) or held in the name of the company. 16.7(d) Where an investment is not evidenced by a certificate, except as provided in 16.8paragraph (b), adequate evidence of the company's investment shall be obtained from the 16.9issuer or its transfer or recording agent and retained by the company, a custodian bank, or 16.10clearing corporation. Adequate evidence, for purposes of this section, shall mean a written 16.11receipt or other verification issued by the depository or issuer or a custodian bank which 16.12shows that the investment is held for the company. Transfers of ownership of investments 16.13held as described in paragraphs (a)(3), (b), and (c) may be evidenced by bookkeeping 16.14entry on the books of the issuer of the investment or its transfer or recording agent or 16.15the clearing corporation without physical delivery of certificates, if any, evidencing the 16.16company's investment. 16.17 new text begin (e) Investments or cash posted as collateral or variation margin (other than initial new text end 16.18 new text begin margin amounts) in connection with qualified financial contracts, as defined in section new text end 16.19 new text begin 60B.03, subdivision 22, are not subject to this subdivision. new text end 16.20    Sec. 7. new text begin [65A.285] SURCHARGE PROHIBITION. new text end 16.21     new text begin Subdivision 1. new text end new text begin Surcharge prohibition. new text end new text begin An insurer may not impose a surcharge on new text end 16.22 new text begin homeowners insurance solely as a result of a consumer inquiry. new text end 16.23     new text begin Subd. 2. new text end new text begin Definitions. new text end new text begin For purposes of this section: new text end 16.24 new text begin (1) "consumer inquiry" means a telephone call or other communication made to an new text end 16.25 new text begin insurer that does not result in a paid claim and that is in regard to the general terms or new text end 16.26 new text begin conditions of or coverage offered under an insurance policy. The term includes a question new text end 16.27 new text begin concerning the process for filing a claim and whether a policy will cover a loss; and new text end 16.28 new text begin (2) "surcharge" means an increase in premium for a policy, including the removal new text end 16.29 new text begin of a claim-free discount. new text end 16.30    Sec. 8. Minnesota Statutes 2012, section 66A.01, is amended to read: 16.3166A.01 SCOPE OF CHAPTER. 16.32This chapter shall apply to mutual insurance companies other than: assessment 16.33benefit associations, fraternal benefit societies, township mutual insurance companies and 17.1title insurance companies new text begin insurers new text end . Sections 66A.08 to 66A.311 do not apply to mutual 17.2life insurance companies. 17.3Sections 60A.07, subdivision 1, clauses (1) and (2); 66A.34; 66A.35; 66A.36; 17.466A.37 ; 66A.38; and 66A.39, do not apply to mutual property and casualty insurance 17.5companies. 17.6    Sec. 9. Minnesota Statutes 2012, section 68A.01, subdivision 2, is amended to read: 17.7    Subd. 2. Guaranty fund and investment thereof. Before issuing any policy or other 17.8contract of guaranty or insurance, every real estate title insurance company new text begin insurer new text end shall set 17.9apart and keep separate a guaranty fund of $100,000 or an amount equal to two-fifths of its 17.10capital stock whichever is the greater. The guaranty fund shall be invested according to law. 17.11    Sec. 10. Minnesota Statutes 2012, section 68A.02, subdivision 1, is amended to read: 17.12    Subdivision 1. 1964-2001 premium reserve. Upon issuance of each contract of 17.13title insurance issued on or after January 1, 1964, through January 1, 2001, by a domestic 17.14real estate title insurance company new text begin insurer new text end , there shall be reserved initially a sum equal 17.15to ten percent of the original premium charged therefor. At the end of each calendar 17.16year following the year in which the contract of title insurance is issued, there shall be 17.17a reduction in the sum so reserved in the amount of one-twentieth of such sum. On any 17.18contract of title insurance issued prior to January 1, 1964, by a domestic real estate title 17.19insurance company new text begin insurer new text end , a reserve shall be set up on January 1, 1964, and thereafter 17.20maintained in such sum as would have been required if the foregoing requirements with 17.21respect to title insurance reserves had existed at and after the date of the contract of title 17.22insurance. Such sums herein required to be reserved shall at all times and for all purposes 17.23be considered and constitute unearned portions of the original premiums on such contracts 17.24of title insurance, shall be charged as a reserve liability of the real estate title insurance 17.25company new text begin insurer new text end in determining its financial condition, and, for the purpose of applying the 17.26provisions of section 60A.23, subdivision 4, shall be deemed to constitute the whole amount 17.27of the premiums on the unexpired risks of such real estate title insurance company new text begin insurer new text end . 17.28    Sec. 11. Minnesota Statutes 2012, section 68A.04, subdivision 1, is amended to read: 17.29    Subdivision 1. Direct risk premiums. For purposes of this chapter, "direct risk 17.30premiums" means the charge for title insurance made by a title insurance company new text begin insurer new text end 17.31 or its agents according to the company's new text begin insurer's new text end rate filing approved by the commissioner 17.32of commerce without a deduction for commissions paid to or retained by the agent and 17.33is that portion of the fee charged by a title insurance company new text begin insurer new text end to an insured or 18.1an applicant for insurance for the assumption by the title insurance company new text begin insurer new text end of 18.2the risk created by the issuance of the title insurance policy. Direct risk premiums of a 18.3title insurance company new text begin insurer new text end do not include any other charge or fee for abstracting, 18.4searching, or examining the title, or for escrow, closing, or other related services. 18.5    Sec. 12. Minnesota Statutes 2012, section 82.55, subdivision 4, is amended to read: 18.6    Subd. 4. Closing agent; real estate closing agent. "Closing agent" or "real estate 18.7closing agent" means any person whether or not acting as an agent for a title company 18.8 new text begin insurance agent new text end , a licensed attorney, real estate broker, or real estate salesperson, who for 18.9another and with or without a commission, fee, or other valuable consideration or with 18.10or without the intention or expectation of receiving a commission, fee, or other valuable 18.11consideration, directly or indirectly provides closing services incident to the sale, trade, 18.12lease, or loan of residential real estate, including drawing or assisting in drawing papers 18.13incident to the sale, trade, lease, or loan, or advertises or claims to be engaged in these 18.14activities. 18.15    Sec. 13. Minnesota Statutes 2012, section 82.641, subdivision 6, is amended to read: 18.16    Subd. 6. Exemption. The following persons, when acting as closing agents, 18.17are exempt from the requirements of this section and sections 82.75 and 82.81 unless 18.18otherwise required in this chapter: 18.19(1) a direct employee of a title insurance company new text begin insurer new text end authorized to do business 18.20in this state, or a direct employee of a title company new text begin insurance agent new text end , or a person who 18.21has an agency agreement with a title insurance company new text begin insurer new text end or a title company 18.22 new text begin insurance agent new text end in which the agent agrees to perform closing services on the title insurance 18.23company's new text begin insurer's new text end or title company's new text begin insurance agent's new text end behalf and the title insurance 18.24company new text begin insurer new text end or title company new text begin insurance agent new text end assumes responsibility for the actions 18.25of the agent as if the agent were a direct employee of the title insurance company new text begin insurer new text end 18.26 or title company new text begin insurance agent new text end ; 18.27(2) a licensed attorney or a direct employee of a licensed attorney; 18.28(3) a licensed real estate broker or salesperson; 18.29(4) a direct employee of a licensed real estate broker if the broker maintains all funds 18.30received in connection with the closing services in the broker's trust account; 18.31(5) a bank, trust company, savings association, credit union, industrial loan and thrift 18.32company, regulated lender under chapter 56, public utility, or land mortgage or farm loan 18.33association organized under the laws of this state or the United States, when engaged in 18.34the transaction of businesses within the scope of its corporate powers as provided by law; 19.1(6) a title insurance company new text begin insurer new text end authorized to do business in this state; and 19.2(7) a title company new text begin insurance agent new text end that has a contractual agency relationship with 19.3a title insurance company new text begin insurer new text end authorized to do business in this state, where the title 19.4insurance company new text begin insurer new text end assumes responsibility for the actions of the title company 19.5 new text begin insurance agent new text end and its employees or agents as if they were employees or agents of the 19.6title insurance company new text begin insurer new text end . 19.7    Sec. 14. Minnesota Statutes 2012, section 82.81, subdivision 8, is amended to read: 19.8    Subd. 8. Closing services. No real estate broker, salesperson, or closing agent 19.9shall require a person to use any particular lender, licensed attorney, real estate broker, 19.10real estate salesperson, real estate closing agent, or title company new text begin insurance agent new text end in 19.11connection with a residential real estate closing. 19.12    Sec. 15. Minnesota Statutes 2012, section 297I.01, subdivision 9, is amended to read: 19.13    Subd. 9. Gross premiums. "Gross premiums" means total premiums paid by 19.14policyholders and applicants of policies, whether received in the form of money or other 19.15valuable consideration, on property, persons, lives, interests and other risks located, 19.16resident, or to be performed in this state, but excluding consideration and premiums for 19.17reinsurance assumed from other insurance companies. 19.18 (a) "Gross premiums" includes the total consideration paid to bail bond agents 19.19for bail bonds. 19.20(b) For title insurance companies new text begin insurers new text end , "gross premiums" means the charge for 19.21title insurance made by a title insurance company new text begin insurer new text end or its agents according to the 19.22company's new text begin insurer's new text end rate filing approved by the commissioner of commerce without a 19.23deduction for commissions paid to or retained by the agent. Gross premiums of a title 19.24insurance company new text begin insurer new text end does not include any other charge or fee for abstracting, 19.25searching, or examining the title, or escrow, closing, or other related services. 19.26 (c) "Gross premiums" includes any workers' compensation special compensation 19.27fund premium surcharge pursuant to section 176.129. 19.28(d) "Gross premiums" for nonadmitted insurance includes any payment made as 19.29consideration for an insurance contract for such insurance, including premium deposits, 19.30assessments, fees, and any other compensation given in consideration for a contract 19.31of insurance. Gross premiums does not include the stamping fee, as provided under 19.32section 60A.2085, subdivision 7, nor the operating assessment, as provided under section 19.3360A.208, subdivision 8 . 20.1    Sec. 16. Minnesota Statutes 2012, section 327C.095, subdivision 11, is amended to read: 20.2    Subd. 11. Affidavit of compliance. After a park is sold, a park owner or other 20.3person with personal knowledge may record an affidavit with the county recorder or 20.4registrar of titles in the county in which the park is located certifying compliance with 20.5subdivision 6 or 7 or that subdivisions 6 and 7 are not applicable. The affidavit may be 20.6used as proof of the facts stated in the affidavit. A person acquiring an interest in a park 20.7or a title insurance company new text begin insurer new text end or attorney who prepares, furnishes, or examines 20.8evidence of title may rely on the truth and accuracy of statements made in the affidavit and 20.9is not required to inquire further as to the park owner's compliance with subdivisions 6 20.10and 7. When an affidavit is recorded, the right to purchase provided under subdivisions 6 20.11and 7 terminate, and if registered property, the registrar of titles shall delete the memorials 20.12of the notice and affidavit from future certificates of title. 20.13    Sec. 17. Minnesota Statutes 2013 Supplement, section 332A.02, subdivision 8, is 20.14amended to read: 20.15    Subd. 8. Debt management services provider. "Debt management services 20.16provider" means any person offering or providing debt management services to a debtor 20.17domiciled in this state, regardless of whether or not a fee is charged for the services and 20.18regardless of whether the person maintains a physical presence in the state. This term 20.19includes any person to whom debt management services are delegated, and does not 20.20include services performed by the following when engaged in the regular course of their 20.21respective businesses and professions: 20.22    (1) exempt attorneys at law, escrow agents, accountants, broker-dealers in securities; 20.23    (2) state or national banks, credit unions, trust companies, savings associations, title 20.24insurance companies new text begin insurers new text end , insurance companies, and all other lending institutions duly 20.25authorized to transact business in Minnesota; 20.26    (3) persons who, as employees on a regular salary or wage of an employer not 20.27engaged in the business of debt management, perform credit services for their employer; 20.28    (4) public officers acting in their official capacities and persons acting as a debt 20.29management services provider pursuant to court order; 20.30    (5) any person while performing services incidental to the dissolution, winding up, 20.31or liquidation of a partnership, corporation, or other business enterprise; 20.32    (6) the state, its political subdivisions, public agencies, and their employees; 20.33    (7) collection agencies, provided that the services are provided to a creditor; 21.1    (8) "qualified organizations" designated as representative payees for purposes of the 21.2Social Security and Supplemental Security Income Representative Payee System and the 21.3federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508; 21.4    (9) accelerated mortgage payment providers. "Accelerated mortgage payment 21.5providers" are persons who, after satisfying the requirements of sections 332.30 to 332.303, 21.6receive funds to make mortgage payments to a lender or lenders, on behalf of mortgagors, 21.7in order to exceed regularly scheduled minimum payment obligations under the terms of 21.8the indebtedness. The term does not include: (i) persons or entities described in clauses (1) 21.9to (8); (ii) mortgage lenders or servicers, industrial loan and thrift companies, or regulated 21.10lenders under chapter 56; or (iii) persons authorized to make loans under section 47.20, 21.11subdivision 1 . For purposes of this clause and sections 332.30 to 332.303, "lender" means 21.12the original lender or that lender's assignee, whichever is the current mortgage holder; 21.13    (10) trustees, guardians, and conservators; and 21.14    (11) debt settlement services providers. 21.15    Sec. 18. Minnesota Statutes 2012, section 386.66, is amended to read: 21.16386.66 BOND OR ABSTRACTER'S LIABILITY INSURANCE POLICY. 21.17Before a license shall be issued, the applicant shall file with the commissioner an 21.18annual bond or abstracter's liability insurance policy for each license year, to be approved 21.19by the commissioner, running to the state of Minnesota in the penal sum of at least 21.20$100,000 conditioned for the payment by such abstracter of any damages that may be 21.21sustained by or accrue to any person by reason of or on account of any error, deficiency or 21.22mistake arising wrongfully or negligently in any abstract, or continuation thereof, or in 21.23any certificate showing ownership of, or interest in, or liens upon any lands in the state of 21.24Minnesota, whether registered or not, made by and issued by such abstracter, provided 21.25however, that the aggregate liability of the surety to all persons under such bond shall 21.26in no event exceed the amount of such bond. If the applicant intends to engage in the 21.27business of abstracting in any county having more than 200,000 inhabitants, the bond or 21.28insurance policy required herein shall be in the penal sum of at least $250,000. Applicants 21.29that are title insurance companies new text begin insurers new text end regulated by chapter 68A and licensed pursuant 21.30to sections 60A.02 and 60A.06, subdivision 1, clause (7), and their employees or those 21.31having cash or securities on deposit with the state of Minnesota in an amount equal to the 21.32said bond or insurance policy shall be exempt from furnishing the bond or an insurance 21.33policy herein required but shall be liable to the same extent as if a bond or insurance policy 21.34has been given and filed. The bond or insurance policy required hereunder shall be written 21.35by some surety or other company authorized to do business in this state issuing bonds or 22.1abstracter's liability insurance policies and shall be issued for a period of one or more 22.2years, and renewed for one year at the date of expiration as principal continues in business. 22.3    Sec. 19. Minnesota Statutes 2012, section 507.401, subdivision 1, is amended to read: 22.4    Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this 22.5section. 22.6(b) "Assignment of rents and profits" means an assignment, whether in a separate 22.7document or in a mortgage, of any of the benefits accruing under a recorded or unrecorded 22.8lease or tenancy existing, or subsequently created, on property encumbered by a mortgage, 22.9which is given as additional security for the debt secured by the mortgage. 22.10(c) "Mortgage" means a mortgage or mortgage lien, including any assignment of 22.11rents and profits given as additional security for the debt secured by that lien, on an 22.12interest in real property in this state given to secure a loan in the original principal amount 22.13of $1,500,000 or less. 22.14(d) "Mortgagee" means: 22.15(1) the grantee of a mortgage; or 22.16(2) if a mortgage has been assigned of record, the last person to whom the mortgage 22.17has been assigned of record. 22.18(e) "Mortgage servicer" means the last person to whom a mortgagor or the 22.19mortgagor's successor in interest has been instructed by a mortgagee to send payments on 22.20a loan secured by a mortgage. A person transmitting a payoff statement is the mortgage 22.21servicer for the mortgage described in the payoff statement. 22.22(f) "Mortgagor" means the grantor of a mortgage. 22.23(g) "Partial release" means the release of specified parcels of land from a mortgage. 22.24(h) "Payoff statement" means a statement of the amount of: 22.25(1) the unpaid balance of a loan secured by a mortgage, including principal, interest, 22.26and any other charges properly due under or secured by the mortgage, and interest on a 22.27per day basis for the unpaid balance; or 22.28(2) the portion of the unpaid balance of the loan secured by the mortgage required 22.29by the mortgagee or mortgage servicer to be paid as a condition for the issuance of a 22.30partial release. 22.31(i) "Record" means to record with the county recorder or file with the registrar of titles. 22.32(j) "Title insurance company new text begin insurer new text end " means a corporation or other business entity 22.33authorized and licensed to transact the business of insuring titles to interests in real 22.34property in this state under chapter 68A. 23.1    Sec. 20. Minnesota Statutes 2012, section 507.401, subdivision 2, is amended to read: 23.2    Subd. 2. Certificate of release. An officer or duly appointed agent of a title 23.3insurance company new text begin insurer new text end may, on behalf of a mortgagor or a person who acquired from 23.4the mortgagor title to all or a part of the property described in a mortgage, execute a 23.5certificate of release that complies with the requirements of this section and record the 23.6certificate of release in the real property records of each county in which the mortgage is 23.7recorded if a satisfaction or release of the mortgage has not been executed and recorded 23.8after the date payment in full of the loan secured by the mortgage was sent in accordance 23.9with a payoff statement furnished by the mortgagee or the mortgage servicer. 23.10    Sec. 21. Minnesota Statutes 2012, section 507.401, subdivision 3, is amended to read: 23.11    Subd. 3. Contents. A certificate of release executed under this section must contain 23.12substantially all of the following: 23.13(1) the name of the mortgagor, the name of the original mortgagee, and, if applicable, 23.14the mortgage servicer, the date of the mortgage, the date of recording, and volume and 23.15page or document number in the real property records where the mortgage is recorded, 23.16together with similar information for the last recorded assignment of the mortgage; 23.17(2) if applicable, the date of any assignment of rents and profits, the date of its 23.18recording, and its volume and page or document number in the real property records 23.19where it has been recorded or filed, together with similar information for the last recorded 23.20assignment thereof; 23.21(3) a statement that the mortgage was in the original principal amount of $1,500,000 23.22or less; 23.23(4) a statement that the person executing the certificate of release is an officer or a duly 23.24appointed agent of a title insurance company new text begin insurer new text end authorized and licensed to transact 23.25the business of insuring titles to interests in real property in this state under chapter 68A; 23.26(5) a statement that the certificate of release is made on behalf of the mortgagor or a 23.27person who acquired title from the mortgagor to all or a part of the property described in 23.28the mortgage; 23.29(6) a statement that the mortgagee or mortgage servicer provided a payoff statement 23.30which was used to make full or partial payment of the unpaid balance of the loan secured 23.31by the mortgage; 23.32(7) a statement that full or partial payment of the unpaid balance of the loan secured 23.33by the mortgage was made in accordance with the written or verbal payoff statement; and 23.34(8) where the certificate of release affects only a portion of the land encumbered by 23.35the mortgage, a legal description of the portion being released. 24.1    Sec. 22. Minnesota Statutes 2012, section 507.401, subdivision 4, is amended to read: 24.2    Subd. 4. Execution. (a) A certificate of release authorized by subdivision 2 must be 24.3executed and acknowledged as required by law in the case of a deed and may be executed 24.4by a duly appointed agent of a title insurance company new text begin insurer new text end , but such delegation to an 24.5agent by a title insurance company new text begin insurer new text end shall not relieve the title insurance company 24.6 new text begin insurer new text end of any liability for damages caused by its agent for the wrongful or erroneous 24.7execution of a certificate of release. 24.8(b) The appointment of agent must be executed and acknowledged as required by 24.9law in the case of a deed and must state: 24.10(1) the title insurance company new text begin insurer new text end as the grantor; 24.11(2) the identity of the person, partnership, or corporation authorized to act as agent 24.12to execute and record certificates of release provided for in this section on behalf of the 24.13title insurance company new text begin insurer new text end ; 24.14(3) that the agent has the full authority to execute and record certificates of release 24.15provided for in this section on behalf of the title insurance company new text begin insurer new text end ; 24.16(4) the term of appointment of the agent; and 24.17(5) that the agent has consented to and accepts the terms of the appointment. 24.18(c) A single appointment of agent may be recorded in each county in each recording 24.19or filing office. A separate appointment of agent shall not be necessary for each certificate 24.20of release. For registered land the appointment of agent shall be shown as a memorial on 24.21each certificate of title on which a mortgage to be released by a certificate of release under 24.22this section is a memorial. The appointment of agent may be rerecorded where necessary 24.23to establish authority of the agent, but such authority shall continue until a revocation of 24.24appointment is recorded in the office of the county recorder, or registrar of titles, where 24.25the appointment of agent was recorded. 24.26    Sec. 23. Minnesota Statutes 2012, section 507.401, subdivision 5, is amended to read: 24.27    Subd. 5. Effect. For purposes of releasing the mortgage, a certificate of release 24.28containing the information and statements provided for in subdivision 3 and executed as 24.29provided in this section is prima facie evidence of the facts contained in it, is entitled to be 24.30recorded with the county recorder or registrar of titles, and operates as a release of the 24.31mortgage described in the certificate of release. The county recorder and the registrar of 24.32titles shall rely upon it to release the mortgage. Recording of a wrongful or erroneous 24.33certificate of release by a title insurance company new text begin insurer new text end or its agent shall not relieve 24.34the mortgagor, or the mortgagor's successors or assigns, from any personal liability on 24.35the loan or other obligations secured by the mortgage. In addition to any other remedy 25.1provided by law, a title insurance company new text begin insurer new text end wrongfully or erroneously recording a 25.2certificate of release under this section shall be liable to the mortgagee for actual damage 25.3sustained due to the recordings of the certificate of release. 25.4    Sec. 24. Minnesota Statutes 2012, section 507.45, subdivision 4, is amended to read: 25.5    Subd. 4. Choice of closer; notice. (a) No real estate salesperson, broker, attorney, 25.6auctioneer, builder, title company new text begin agent new text end , financial institution, or other person making a 25.7mortgage loan may require a person to use any particular licensed attorney, real estate 25.8broker, real estate salesperson, or real estate closing agent in connection with a residential 25.9real estate closing. 25.10(b) All listing agreements must include a notice informing sellers of their rights 25.11under this subdivision. The notice must require the seller to indicate in writing whether it 25.12is acceptable to the seller to have the licensee arrange for closing services or whether the 25.13seller wishes to arrange for others to conduct the closing. The notice must also include the 25.14disclosure of any controlled business arrangement, as the term is defined in United States 25.15Code, title 12, section 1602, between the licensee and the real estate closing agent through 25.16which the licensee proposes to arrange closing services. 25.17    Sec. 25. Minnesota Statutes 2012, section 515B.4-109, is amended to read: 25.18515B.4-109 ESCROW DEPOSITS. 25.19All earnest money paid or deposits made in connection with the purchase or 25.20reservation of units from or with a declarant shall be deposited in an escrow account 25.21controlled jointly by the declarant and the purchaser, or controlled by a licensed title 25.22insurance company new text begin insurer new text end or agent thereof, an attorney representing either the declarant 25.23or the purchaser, a licensed real estate broker, an independent bonded escrow company, or 25.24a governmental agency or instrumentality. The escrow account shall be in an institution 25.25whose deposits are insured by a governmental agency or instrumentality. The money or 25.26deposits shall be held in the escrow account until (i) delivered to the declarant at closing; 25.27(ii) delivered to the declarant because of the purchaser's default under a reservation 25.28agreement or a contract to purchase the unit; (iii) delivered to the purchaser pursuant to 25.29the provisions of section 515B.4-106 or the provisions of a reservation agreement or a 25.30contract to purchase; or (iv) delivered for payment of construction costs pursuant to a 25.31written agreement between the declarant and the purchaser. 25.32    Sec. 26. Minnesota Statutes 2013 Supplement, section 559.202, subdivision 3, is 25.33amended to read: 26.1    Subd. 3. Content of the notice. The notice must contain the following verbatim 26.2language: 26.3"IMPORTANT INFORMATION ABOUT CONTRACTS FOR DEED 26.4Know What You Are Getting Into 26.5(1) A contract for deed is a complex legal agreement. You are NOT a tenant. Mortgage 26.6foreclosure laws don't apply. 26.7(2) You should know ALL of your obligations and rights before you sign a purchase 26.8agreement or contract for deed. 26.9(3) You (seller must circle one): 26.10 (a) DO DO NOT have to pay homeowner's insurance. 26.11 (b) DO DO NOT have to pay property taxes. 26.12 26.13 (c) DO DO NOT have to make and pay for some or all of the repairs or maintenance, as described in the contract for deed. 26.14(4) After some time, you may need to make a large lump sum payment (called a "balloon 26.15payment"). Know when it is due and how much it will be. You'll probably need to get a 26.16new mortgage, another financial arrangement, or pay for the balance in cash at that time. 26.17(5) If you miss just a single payment or can't make the balloon payment, the seller can 26.18cancel your contract. You will likely lose all the money you have already paid. You will 26.19likely lose your ability to purchase the home. The seller can begin an eviction action 26.20against you in just a few months. 26.21(6) Within four months of signing the contract for deed, you must "record" it in the office 26.22of the county recorder or registrar of titles in the county in which the property is located. 26.23If you do not do so, you could face a fine. 26.24Key Things Highly Recommended Before You Sign 26.25(1) Get advice from a lawyer or the Minnesota Home Ownership Center at 1-866-462-6466 26.26or go to www.hocmn.org. To find a lawyer through the Minnesota State Bar Association, 26.27go to www.mnfindalawyer.com. 26.28(2) Get an independent, professional appraisal of the property to learn what it is worth. 26.29(3) Get an independent, professional inspection of the property. 26.30(4) Buy title insurance or ask a real estate lawyer for a "title opinion." 26.31(5) Check with the city or county to find out if there are inspection reports or unpaid 26.32utility bills. 27.1(6) Check with a title company new text begin agent new text end or the county where the property is located to find out 27.2if there is a mortgage or other lien on the property and if the property taxes have been paid. 27.3(7) Ensure that your interest rate does not exceed the maximum allowed by law by 27.4calling the Department of Commerce to get a recorded message for the current month's 27.5maximum rate. 27.6If You Are Entering into a Purchase Agreement 27.7(1) If you haven't already signed the contract for deed, you can cancel the purchase 27.8agreement (and get all your money back) if you do so within five business days after 27.9getting this notice. 27.10(2) To cancel the purchase agreement, you must follow the provisions of Minnesota 27.11Statutes, section 559.217, subdivision 4. Ask a lawyer for help." 27.12ARTICLE 5 27.13MODEL HOLDING COMPANY ACT CHANGES 27.14    Section 1. Minnesota Statutes 2012, section 60D.09, is amended to read: 27.1560D.09 CRIMINAL PROCEEDINGS new text begin PENALTIES new text end . 27.16     new text begin Subdivision 1. new text end new text begin Failure to file registration statement; civil penalty. new text end new text begin An insurer new text end 27.17 new text begin failing, without just cause, to file a registration statement as required in section 60D.19 new text end 27.18 new text begin shall pay a penalty of $1,000 for each day's delay, to be recovered by the commissioner new text end 27.19 new text begin and paid into the general fund. The commissioner may reduce the penalty if the insurer new text end 27.20 new text begin demonstrates to the commissioner that the imposition of the penalty would constitute a new text end 27.21 new text begin financial hardship to the insurer. new text end 27.22     new text begin Subd. 2. new text end new text begin Failure to provide notice and filing regarding affiliated transaction new text end 27.23 new text begin or agreement; civil penalty. new text end new text begin An insurer failing, without just cause, to provide the new text end 27.24 new text begin appropriate notice and filing under section 60D.20 regarding an affiliated transaction or new text end 27.25 new text begin agreement, shall pay a penalty of $5,000, to be recovered by the commissioner and paid new text end 27.26 new text begin into the general fund. new text end 27.27     new text begin Subd. 3. new text end new text begin Certain contracts and agreements; cease and desist and void orders. new text end 27.28 new text begin Whenever it appears to the commissioner that an insurer subject to sections 60D.15 to new text end 27.29 new text begin 60D.29 or a director, officer, employee, or agent of an insurer has engaged in a transaction new text end 27.30 new text begin or entered into a contract that is subject to section 60D.20 and that would have been new text end 27.31 new text begin disapproved by the commissioner, the commissioner may order the insurer to cease and new text end 27.32 new text begin desist immediately any further activity under that transaction or contract. After notice and new text end 28.1 new text begin hearing, the commissioner may also order the insurer to void any contracts and restore the new text end 28.2 new text begin status quo if the action is in the best interest of the policyholders, creditors, or the public. new text end 28.3     new text begin Subd. 4. new text end new text begin Criminal penalties. new text end Whenever it appears to the commissioner that any 28.4insurer or any director, officer, employee or agent thereof has committed a willful violation 28.5of sections 60D.15 to 60D.29, the commissioner may cause criminal proceedings to be 28.6instituted by the district court for the county in which the principal office of the insurer 28.7is located or if such insurer has no such office in the state, then by the District Court for 28.8Ramsey County against such insurer or the responsible director, officer, employee or agent 28.9thereof. Any person who willfully violates sections 60D.15 to 60D.29 shall be guilty, for the 28.10first offense, of a misdemeanor, and for each subsequent offense, of a gross misdemeanor. 28.11    Sec. 2. Minnesota Statutes 2012, section 60D.15, is amended by adding a subdivision 28.12to read: 28.13     new text begin Subd. 4a. new text end new text begin Enterprise risk. new text end new text begin "Enterprise risk" means an activity, circumstance, event, new text end 28.14 new text begin or series of events involving one or more affiliates of an insurer that, if not remedied new text end 28.15 new text begin promptly, is likely to have a material adverse effect upon the financial condition or new text end 28.16 new text begin liquidity of the insurer or its insurance holding company system as a whole, including, new text end 28.17 new text begin but not limited to, anything that would cause the insurer's risk-based capital to fall into new text end 28.18 new text begin company action level as set forth in sections 60A.50 to 60A.696 or would cause the insurer new text end 28.19 new text begin to be in hazardous financial condition in accordance with the standards of section 60G.20. new text end 28.20    Sec. 3. Minnesota Statutes 2012, section 60D.17, subdivision 1, is amended to read: 28.21    Subdivision 1. Filing requirements. new text begin (a) new text end No person other than the issuer shall: (1) 28.22make a tender offer for or a request or invitation for tenders of, or enter into any agreement 28.23to exchange securities or, seek to acquire, or acquire, in the open market or otherwise, 28.24any voting security of a domestic insurer if, after the consummation thereof, the person 28.25would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in 28.26control of the insurer; or (2) enter into an agreement to merge with or otherwise to acquire 28.27control of a domestic insurer or any person controlling a domestic insurer unless, at the 28.28time the offer, request, or invitation is made or the agreement is entered into, or before 28.29the acquisition of the securities if no offer or agreement is involved, the person has filed 28.30with the commissioner and has sent to the insurer, a statement containing the information 28.31required by this section and the offer, request, invitation, agreement, or acquisition has 28.32been approved by the commissioner in the manner prescribed in this section. 28.33 new text begin (b) For purposes of this section, a controlling person of a domestic insurer seeking to new text end 28.34 new text begin divest its controlling interest in the domestic insurer, in any manner, shall file with the new text end 29.1 new text begin commissioner, with a copy to the insurer, confidential notice of its proposed divestiture new text end 29.2 new text begin at least 30 days before the cessation of control. The commissioner shall determine those new text end 29.3 new text begin instances in which the party or parties seeking to divest or to acquire a controlling interest new text end 29.4 new text begin in an insurer will be required to file for and obtain approval of the transaction. new text end 29.5 new text begin (c) With respect to a transaction subject to this section, the acquiring person must new text end 29.6 new text begin also file a preacquisition notification with the commissioner, which must contain the new text end 29.7 new text begin information set forth in section 60D.18, subdivision 3, paragraph (b). A failure to file the new text end 29.8 new text begin notification may be subject to penalties specified in section 60D.18, subdivision 5. new text end 29.9 new text begin (d) new text end For purposes of this section, a domestic insurer includes a person controlling a 29.10domestic insurer unless the person as determined by the commissioner is either directly or 29.11through its affiliates primarily engaged in business other than the business of insurance. 29.12However, the person shall file a preacquisition notification with the commissioner 29.13containing the information set forth in section 60D.18, subdivision 3, paragraph (b), 29.1430 days before the proposed effective date of the acquisition. Failure to file is subject 29.15to section 60D.18, subdivision 5. For the purposes of this section, "person" does not 29.16include any securities broker holding, in the usual and customary brokers function, less 29.17than 20 percent of the voting securities of an insurance company or of any person that 29.18controls an insurance company. 29.19 new text begin (e) The statement filed with the commissioner pursuant to subdivisions 1 and 2 must new text end 29.20 new text begin remain confidential until the transaction is approved by the commissioner, except that all new text end 29.21 new text begin attachments filed with the statement remain confidential after the approval unless the new text end 29.22 new text begin commissioner, in the commissioner's discretion, determines that confidential treatment of new text end 29.23 new text begin any of this information will interfere with enforcement of this section. new text end 29.24    Sec. 4. Minnesota Statutes 2012, section 60D.17, subdivision 2, is amended to read: 29.25    Subd. 2. Content of statement. The statement to be filed with the commissioner 29.26shall be made under oath or affirmation and shall contain the following information: 29.27(a) The name and address of each person by whom or on whose behalf the merger 29.28or other acquisition of control referred to in subdivision 1 is to be effected, hereinafter 29.29called "acquiring party"; and 29.30(1) if the person is an individual, the principal occupation and all offices and 29.31positions held during the past five years, and any conviction of crimes other than minor 29.32traffic violations during the past ten years; and 29.33(2) if the person is not an individual, a report of the nature of its business operations 29.34during the past five years or for a lesser period as the person and any predecessors have 29.35been in existence; an informative description of the business intended to be done by the 30.1person and the person's subsidiaries; and a list of all individuals who are or who have 30.2been selected to become directors or executive officers of such person, or who perform 30.3or will perform functions appropriate to such positions. The list must include for each 30.4individual the information required by clause (1). 30.5(b) The source, nature, and amount of the consideration used or to be used in 30.6effecting the merger or other acquisition of control, a description of any transaction in 30.7which funds were or are to be obtained for this purpose, including any pledge of the 30.8insurer's stock, or the stock of any of its subsidiaries or controlling affiliates, and the 30.9identity of persons furnishing the consideration, provided, however, that where a source of 30.10the consideration is a loan made in the lender's ordinary course of business, the identity of 30.11the lender shall remain confidential, if the person filing the statement so requests. 30.12(c) Fully audited financial information as to the earnings and financial condition of 30.13each acquiring party for the preceding five fiscal years of each acquiring party, or for a 30.14lesser period as the acquiring party and any predecessors have been in existence, and similar 30.15unaudited information as of a date not earlier than 90 days before the filing of the statement. 30.16(d) Any plans or proposals that each acquiring party may have to liquidate the 30.17insurer, to sell its assets or merge or consolidate it with any person, or to make any other 30.18material change in its business or corporate structure or management. 30.19(e) The number of shares of any security referred to in subdivision 1 that each 30.20acquiring party proposes to acquire, and the terms of the offer, request, invitation, 30.21agreement, or acquisition referred to in subdivision 1 new text begin and a statement as to the method by new text end 30.22 new text begin which the fairness of the proposal was arrived at new text end . 30.23(f) The amount of each class of any security referred to in subdivision 1 that is 30.24beneficially owned or concerning which there is a right to acquire beneficial ownership 30.25by each acquiring party. 30.26(g) A full description of any contracts, arrangements, or understandings with 30.27respect to any security referred to in subdivision 1 in which any acquiring party is 30.28involved, including but not limited to, transfer of any of the securities, joint ventures, loan 30.29or option arrangements, puts or calls, guarantees of loans, guarantees against loss or 30.30guarantees of profits, division of losses or profits, or the giving or withholding of proxies. 30.31The description must identify the persons with whom the contracts, arrangements, or 30.32understandings have been entered into. 30.33(h) A description of the purchase of any security referred to in subdivision 1 during 30.34the 12 calendar months preceding the filing of the statement, by any acquiring party, 30.35including the dates of purchase, names of the purchasers, and consideration paid or 30.36agreed to be paid for it. 31.1(i) A description of any recommendations to purchase any security referred to in 31.2subdivision 1 made during the 12 calendar months preceding the filing of the statement, 31.3by any acquiring party, or by anyone based upon interviews or at the suggestion of the 31.4acquiring party. 31.5(j) Copies of all tender offers for, requests, or invitations for tenders of, exchange 31.6offers for, and agreements to acquire or exchange any securities referred to in subdivision 31.71 and, if distributed, of additional soliciting material relating to them. 31.8(k) The term of any agreement, contract, or understanding made with or proposed to 31.9be made with any broker-dealer as to solicitation of securities referred to in subdivision 1 31.10for tender, and the amount of any fees, commissions, or other compensation to be paid to 31.11broker-dealers with regard to it. 31.12 new text begin (l) An agreement by the person required to file the statement referred to in new text end 31.13 new text begin subdivision 1 that it will provide the annual report, specified in section 60D.19, subdivision new text end 31.14 new text begin 11a, for so long as control exists. new text end 31.15 new text begin (m) A consent by the person required to file the statement referred to in subdivision new text end 31.16 new text begin 1 that the person and all subsidiaries within its control in the insurance holding company new text end 31.17 new text begin system will provide information to the commissioner upon request as necessary to new text end 31.18 new text begin evaluate enterprise risk to the insurer. new text end 31.19(l) new text begin (n) new text end Additional information the commissioner may by rule prescribe as necessary 31.20or appropriate for the protection of policyholders of the insurer or in the public interest. 31.21If the person required to file the statement referred to in subdivision 1 is a 31.22partnership, limited partnership, syndicate, or other group, the commissioner may require 31.23that the information called for by paragraphs (a) to (l) new text begin (n) new text end must be given with respect to 31.24each partner of the partnership or limited partnership, each member of the syndicate 31.25or group, and each person who controls the partner or member. If a partner, member, 31.26or person is a corporation, or the person required to file the statement referred to in 31.27subdivision 1 is a corporation the commissioner may require that the information called 31.28for by paragraphs (a) to (l) new text begin (n) new text end be given with respect to the corporation, each officer and 31.29director of the corporation, and each person who is directly or indirectly the beneficial 31.30owner of more than ten percent of the outstanding voting securities of the corporation. 31.31If any material change occurs in the facts set forth in the statement filed with the 31.32commissioner and sent to the insurer pursuant to this section, an amendment setting forth 31.33the change, together with copies of all documents and other material relevant to the 31.34change, must be filed with the commissioner and sent to the insurer within two business 31.35days after the person learns of the change. 32.1    Sec. 5. Minnesota Statutes 2012, section 60D.17, subdivision 4, is amended to read: 32.2    Subd. 4. Approval by commissioner; hearings. (a) The commissioner shall 32.3approve any merger or other acquisition of control referred to in subdivision 1 unless, after 32.4a public hearing, the commissioner finds that: 32.5(1) after the change of control, the domestic insurer referred to in subdivision 1 32.6would not be able to satisfy the requirements for the issuance of a license to write the line 32.7or lines of insurance for which it is presently licensed, unless the domestic insurer is in 32.8rehabilitation or other court-ordered supervision and the acquiring party commits to a plan 32.9that would enable the domestic insurer to satisfy the requirements for the issuance of a 32.10license within a reasonable amount of time; 32.11(2) the effect of the merger or other acquisition of control would be substantially 32.12to lessen competition in insurance in this state or tend to create a monopoly therein in 32.13applying the competitive standard in this subdivision: 32.14(i) the informational requirements of section 60D.18, subdivision 3, paragraph (b), 32.15and the standards of section 60D.18, subdivision 4, paragraph (c), shall apply; 32.16(ii) the merger or other acquisition shall not be disapproved if the commissioner finds 32.17that any of the situations meeting the criteria provided by section 60D.18, subdivision 4, 32.18paragraph (c), exist; and 32.19(iii) the commissioner may condition the approval of the merger or other acquisition 32.20on the removal of the basis of disapproval within a specified period of time; 32.21(3) the financial condition of any acquiring party is such as might jeopardize the 32.22financial stability of the insurer, or prejudice the interest of its policyholders; 32.23(4) the plans or proposals that the acquiring party has to liquidate the insurer, sell its 32.24assets, or consolidate or merge it with any person, or to make any other material change 32.25in its business or corporate structure or management, are unfair and unreasonable to 32.26policyholders of the insurer and not in the public interest; 32.27(5) the competence, experience, and integrity of those persons who would control 32.28the operation of the insurer are such that it would not be in the interest of policyholders of 32.29the insurer and of the public to permit the merger or other acquisition of control; or 32.30(6) the acquisition is likely to be hazardous or prejudicial to the insurance buying 32.31public. 32.32(b) The public hearing referred to in paragraph (a) must be held 30 days after the 32.33statement required by subdivision 1 is filed, and at least 20 days' notice of it shall be 32.34given by the commissioner to the person filing the statement. Not less than seven days 32.35notice of the public hearing shall be given by the person filing the statement to the insurer 32.36and to other persons designated by the commissioner. The commissioner shall make a 33.1determination within 30 days after the conclusion of the hearing. At the hearing, the 33.2person filing the statement, the insurer, any person to whom notice of hearing was sent, 33.3and any other person whose interest may be affected by it may present evidence, examine 33.4and cross-examine witnesses, and offer oral and written arguments and may conduct 33.5discovery proceedings in the same manner as is presently allowed in the district courts of 33.6this state. All discovery proceedings must be concluded not later than three days before 33.7the start of the public hearing. 33.8 new text begin (c) If the proposed acquisition of control will require the approval of more new text end 33.9 new text begin than one commissioner, the public hearing referred to in paragraph (b) may be held new text end 33.10 new text begin on a consolidated basis upon request of the person filing the statement referred to in new text end 33.11 new text begin subdivision 1. The person shall file the statement referred to in subdivision 1 with the new text end 33.12 new text begin National Association of Insurance Commissioners (NAIC) within five days of making new text end 33.13 new text begin the request for a public hearing. A commissioner may opt out of a consolidated hearing, new text end 33.14 new text begin and shall provide notice to the applicant of the opt-out within ten days of the receipt of new text end 33.15 new text begin the statement referred to in subdivision 1. A hearing conducted on a consolidated basis new text end 33.16 new text begin must be public and must be held within the United States before the commissioners of new text end 33.17 new text begin the states in which the insurers are domiciled. The commissioners shall hear and receive new text end 33.18 new text begin evidence. A commissioner may attend the hearing, in person or by telecommunication. new text end 33.19 new text begin In this paragraph, the term "commissioner" when used in reference to an official from a new text end 33.20 new text begin state other than Minnesota means the state official charged with the responsibility of new text end 33.21 new text begin supervising the business of insurance in that state. new text end 33.22 new text begin (d) In connection with a change of control of a domestic insurer, any determination new text end 33.23 new text begin by the commissioner that the person acquiring control of the insurer shall be required new text end 33.24 new text begin to maintain or restore the capital of the insurer to the level required by the laws and new text end 33.25 new text begin regulations of this state shall be made not later than 60 days after the date of notification of new text end 33.26 new text begin the change in control submitted pursuant to section 60D.17, subdivision 1. new text end 33.27(c) new text begin (e) new text end The commissioner may retain at the acquiring person's expense any attorneys, 33.28actuaries, accountants, and other experts not otherwise a part of the commissioner's staff 33.29as may be reasonably necessary to assist the commissioner in reviewing the proposed 33.30acquisition of control. 33.31    Sec. 6. Minnesota Statutes 2012, section 60D.17, subdivision 6, is amended to read: 33.32    Subd. 6. Violations. The following are violations of this section: 33.33(1) the failure to file any statement, amendment, or other material required to be filed 33.34pursuant to subdivision 1 or 2; or 34.1(2) the effectuation or any attempt to effectuate an acquisition of control of, 34.2 new text begin divestiture of, new text end or merger with, a domestic insurer unless the commissioner has approved it. 34.3    Sec. 7. Minnesota Statutes 2012, section 60D.17, subdivision 7, is amended to read: 34.4    Subd. 7. Jurisdiction, consent to service of process. The courts of this state have 34.5jurisdiction over every person not resident, domiciled, or authorized to do business in this 34.6state who files a statement with the commissioner under this section, and overall actions 34.7involving the person arising out of violations of this section, and the person is deemed to 34.8have performed acts equivalent to and constituting an appointment by the person of the 34.9commissioner to be the person's true and lawful attorney upon whom may be served all 34.10lawful process in any action, suit, or proceeding arising out of violations of this section. 34.11Copies of all lawful process shall be served on the commissioner and transmitted by 34.12registered or certified mail by the commissioner to the person at the person's last known 34.13address new text begin in compliance with section 45.028, subdivision 2 new text end . 34.14    Sec. 8. Minnesota Statutes 2012, section 60D.18, subdivision 2, is amended to read: 34.15    Subd. 2. Scope. (a) Except as exempted in paragraph (b), this section applies to any 34.16acquisition in which there is a change in control of an insurer authorized to do business in 34.17this state. 34.18(b) This section does not apply to the following: 34.19(1) an acquisition subject to approval or disapproval by the commissioner pursuant 34.20to section ; 34.21(2) new text begin (1) new text end a purchase of securities solely for investment purposes so long as such 34.22securities are not used by voting or otherwise to cause or attempt to cause the substantial 34.23lessening of competition in any insurance market in this state. If a purchase of securities 34.24results in a presumption of control under section 60D.15, subdivision 4, it is not solely for 34.25investment purposes unless the commissioner of the insurer's state of domicile accepts a 34.26disclaimer of control or affirmatively finds that control does not exist and such disclaimer 34.27action or affirmative finding is communicated by the domiciliary commissioner to the 34.28commissioner of this state; 34.29(3) new text begin (2) new text end the acquisition of a person by another person when both persons are 34.30neither directly nor through affiliates primarily engaged in the business of insurance, if 34.31preacquisition notification is filed with the commissioner in accordance with subdivision 3, 34.32paragraph (a), 30 days before the proposed effective date of the acquisition. However, the 34.33preacquisition notification is not required for exclusion from this section, if the acquisition 34.34would otherwise be excluded from this section by any other clause of this paragraph; 35.1(4) new text begin (3) new text end the acquisition of already affiliated persons; 35.2(5) new text begin (4) new text end an acquisition if, as an immediate result of the acquisition; 35.3(i) in no market would the combined market share of the involved insurers exceed 35.4five percent of the total market; 35.5(ii) there would be no increase in any market share; or 35.6(iii) in no market would the combined market share of the involved insurers exceed 35.712 percent of the total market; and the market share increases by more than two percent 35.8of the total market. 35.9For the purpose of this clause, a market means direct written insurance premium in 35.10this state for a line of business as contained in the annual statement required to be filed by 35.11insurers licensed to do business in this state; 35.12(6) new text begin (5) new text end an acquisition for which a preacquisition notification would be required 35.13pursuant to this section due solely to the resulting effect on the ocean marine insurance 35.14line of business; and 35.15(7) new text begin (6) new text end an acquisition of an insurer whose domiciliary commissioner affirmatively 35.16finds that the insurer is in failing condition; there is a lack of feasible alternative to 35.17improving the condition; the public benefits of improving the insurer's condition through 35.18the acquisition exceed the public benefits that would arise from not lessening competition; 35.19and the findings are communicated by the domiciliary commissioner to the commissioner 35.20of this state. 35.21    Sec. 9. Minnesota Statutes 2012, section 60D.18, subdivision 6, is amended to read: 35.22    Subd. 6. Inapplicable provisions. Sections 60D.24, paragraphs (b) and (c) 35.23 new text begin subdivisions 2 and 3 new text end ; and new text begin new text end do not apply to acquisitions covered under 35.24subdivision 2. 35.25    Sec. 10. Minnesota Statutes 2012, section 60D.19, subdivision 1, is amended to read: 35.26    Subdivision 1. Registration. Every new text begin domestic new text end insurer that is authorized to do 35.27business in this state and that is a member of an insurance holding company system 35.28shall register with the commissioner, except a foreign insurer subject to registration 35.29requirements and standards adopted by statute or regulation in the jurisdiction of its 35.30domicile that are substantially similar to those contained in: new text begin . new text end 35.31(1) this section; 35.32(2) section 60D.20, subdivisions 1, paragraph (a); 2; and 4; and 35.33(3) either section 60D.20, subdivision 1, paragraph (b), or a provision such as the 35.34following: Each registered insurer shall keep current the information required to be 36.1disclosed in its registration statement by reporting all material changes or additions within 36.215 days after the end of the month in which it learns of each such change or addition. 36.3Any insurer that is subject to registration under this section shall register within 15 36.4days after it becomes subject to registration, and annually thereafter by June 1 of each year 36.5for the previous calendar year, unless the commissioner for good cause shown extends 36.6the time for registration, and then within such extended time. The commissioner may 36.7require any insurer authorized to do business in the state that is a member of a new text begin an insurance new text end 36.8 holding company system, and that is not subject to registration under this section, to 36.9furnish a copy of the registration statement, the summary specified in subdivision 3 or 36.10other information filed by the insurance company with the insurance regulatory authority 36.11of domiciliary jurisdiction. 36.12    Sec. 11. Minnesota Statutes 2012, section 60D.19, subdivision 2, is amended to read: 36.13    Subd. 2. Information and form required. Every insurer subject to registration 36.14shall file the registration statement new text begin with the commissioner new text end on a form new text begin and in a format new text end 36.15 prescribed by the National Association of Insurance Commissioners, which shall contain 36.16 new text begin containing new text end the following current information: 36.17(1) the capital structure, general financial condition, ownership, and management of 36.18the insurer and any person controlling the insurer; 36.19(2) the identity and relationship of every member of the insurance holding company 36.20system; 36.21(3) the following agreements in force, and transactions currently outstanding or that 36.22have occurred during the last calendar year between the insurer and its affiliates: 36.23(i) loans, other investments, or purchases, sales, or exchanges of securities of the 36.24affiliates by the insurer or of the insurer by its affiliates; 36.25(ii) purchases, sales, or exchange of assets; 36.26(iii) transactions not in the ordinary course of business; 36.27(iv) guarantees or undertakings for the benefit of an affiliate which result in an actual 36.28contingent exposure of the insurer's assets to liability, other than insurance contracts 36.29entered into in the ordinary course of the insurer's business; 36.30(v) all management agreements, service contracts, and all cost-sharing arrangements; 36.31(vi) reinsurance agreements; 36.32(vii) dividends and other distributions to shareholders; and 36.33(viii) consolidated tax allocation agreements; 36.34(4) any pledge of the insurer's stock, including stock of any subsidiary or controlling 36.35affiliate, for a loan made to any member of the insurance holding company system; and 37.1 new text begin (5) if requested by the commissioner, financial statements of or within an insurance new text end 37.2 new text begin holding company system and all affiliates including, but not limited to, annual audited new text end 37.3 new text begin financial statements filed with the United States Securities and Exchange Commission new text end 37.4 new text begin (SEC) pursuant to the Securities Act of 1933, as amended, or the Securities Exchange new text end 37.5 new text begin Act of 1934, as amended. An insurer required to file financial statements pursuant to this new text end 37.6 new text begin clause may satisfy the request by providing the commissioner with the most recently filed new text end 37.7 new text begin parent corporation financial statements that have been filed with the SEC; new text end 37.8(5) new text begin (6) new text end other matters concerning transactions between registered insurers and any 37.9affiliates as may be included from time to time in any registration forms adopted or 37.10approved by the commissioner. new text begin ; new text end 37.11 new text begin (7) statements that the insurer's board of directors oversees corporate governance new text end 37.12 new text begin and internal controls and that the insurer's officers or senior management have approved new text end 37.13 new text begin and implemented, and continue to maintain and monitor, corporate governance and new text end 37.14 new text begin internal control procedures; and new text end 37.15 new text begin (8) any other information required by the commissioner by rule. new text end 37.16    Sec. 12. Minnesota Statutes 2012, section 60D.19, subdivision 3, is amended to read: 37.17    Subd. 3. Summary of new text begin changes to new text end registration statement. All registration 37.18statements must contain a summary outlining all items in the current registration statement 37.19representing changes from the prior registration statement. 37.20    Sec. 13. Minnesota Statutes 2012, section 60D.19, subdivision 11, is amended to read: 37.21    Subd. 11. Disclaimer. Any person may file with the commissioner a disclaimer of 37.22affiliation with any authorized insurer or the disclaimer may be filed by the insurer or any 37.23member of an insurance holding company system. The disclaimer shall fully disclose all 37.24material relationships and bases for affiliation between the person and the insurer as well 37.25as the basis for disclaiming the affiliation. After a disclaimer has been filed, the insurer 37.26shall be relieved of any duty to register or report under this section that may arise out of 37.27the insurer's relationship with the person unless and until the commissioner disallows 37.28the disclaimer. The commissioner shall disallow the disclaimer only after furnishing 37.29all parties in interest with notice and opportunity to be heard and after making specific 37.30findings of fact to support the disallowance. new text begin A disclaimer of affiliation is deemed to have new text end 37.31 new text begin been granted unless the commissioner, within 30 days following receipt of a complete new text end 37.32 new text begin disclaimer, notifies the filing party that the disclaimer is disallowed. In the event of new text end 37.33 new text begin disallowance, the disclaiming party may request an administrative hearing, which must new text end 37.34 new text begin be granted. The disclaiming party is relieved of its duty to register under this section if new text end 38.1 new text begin approval of the disclaimer has been granted by the commissioner, or if the disclaimer is new text end 38.2 new text begin deemed to have been approved. new text end 38.3    Sec. 14. Minnesota Statutes 2012, section 60D.19, is amended by adding a subdivision 38.4to read: 38.5     new text begin Subd. 11a. new text end new text begin Enterprise risk filing. new text end new text begin The ultimate controlling person of an insurer new text end 38.6 new text begin subject to registration shall also file an annual enterprise risk report. The report must, to new text end 38.7 new text begin the best of the ultimate controlling person's knowledge and belief, identify the material new text end 38.8 new text begin risks within the insurance holding company system that could pose enterprise risk to the new text end 38.9 new text begin insurer. The report must be filed with the lead state commissioner of the insurance holding new text end 38.10 new text begin company system as determined by the procedures within the Financial Analysis Handbook new text end 38.11 new text begin adopted by the National Association of Insurance Commissioners. new text end 38.12    Sec. 15. Minnesota Statutes 2012, section 60D.19, subdivision 12, is amended to read: 38.13    Subd. 12. Violations. The failure to file a registration statement or any summary 38.14of the registration statement new text begin or enterprise risk filing new text end required by this section within the 38.15time specified for the filing is a violation of this section. 38.16    Sec. 16. Minnesota Statutes 2012, section 60D.20, subdivision 1, is amended to read: 38.17    Subdivision 1. Transactions within a new text begin an insurance new text end holding company system. (a) 38.18Transactions within a new text begin an insurance new text end holding company system to which an insurer subject to 38.19registration is a party are subject to the following standards: 38.20(1) the terms shall be fair and reasonable; 38.21 new text begin (2) agreements for cost-sharing services and management shall include the new text end 38.22 new text begin provisions required by rule issued by the commissioner; new text end 38.23(2) new text begin (3) new text end charges or fees for services performed shall be reasonable; 38.24(3) new text begin (4) new text end expenses incurred and payment received shall be allocated to the insurer in 38.25conformity with customary insurance accounting practices consistently applied; 38.26(4) new text begin (5) new text end the books, accounts, and records of each party to all such transactions shall be 38.27so maintained as to clearly and accurately disclose the nature and details of the transactions 38.28including this accounting information as is necessary to support the reasonableness of the 38.29charges or fees to the respective parties; and 38.30(5) new text begin (6) new text end the insurer's surplus as regards policyholders following any dividends or 38.31distributions to shareholder affiliates shall be reasonable in relation to the insurer's 38.32outstanding liabilities and adequate to its financial needs. 39.1(b) The following transactions involving a domestic insurer and any person in its 39.2 new text begin insurance new text end holding company system new text begin , including amendments or modifications of affiliate new text end 39.3 new text begin agreements previously filed pursuant to this section, which are subject to any materiality new text end 39.4 new text begin standards contained in clauses (1) to (7), new text end may not be entered into unless the insurer has 39.5notified the commissioner in writing of its intention to enter into the transaction at least 30 39.6days prior thereto, or a shorter period the commissioner permits, and the commissioner 39.7has not disapproved it within this period new text begin . The notice for amendments or modifications new text end 39.8 new text begin must include the reasons for the change and the financial impact on the domestic insurer. new text end 39.9 new text begin Informal notice must be reported, within 30 days after a termination of a previously filed new text end 39.10 new text begin agreement , to the commissioner for determination of the type of filing required, if any new text end : 39.11(1) sales, purchases, exchanges, loans or extensions of credit, guarantees, or 39.12investments provided the transactions are equal to or exceed: (i) with respect to nonlife 39.13insurers, the lesser of three percent of the insurer's admitted assets, or 25 percent of surplus 39.14as regards policyholders; (ii) with respect to life insurers, three percent of the insurer's 39.15admitted assets; each as of the 31st day of December next preceding; 39.16(2) loans or extensions of credit to any person who is not an affiliate, where the 39.17insurer makes the loans or extensions of credit with the agreement or understanding that 39.18the proceeds of the transactions, in whole or in substantial part, are to be used to make 39.19loans or extensions of credit to, to purchase assets of, or to make investments in, any 39.20affiliate of the insurer making such loans or extensions of credit provided the transactions 39.21are equal to or exceed: (i) with respect to nonlife insurers, the lesser of three percent of 39.22the insurer's admitted assets or 25 percent of surplus as regards policyholders; (ii) with 39.23respect to life insurers, three percent of the insurer's admitted assets; each as of the 31st 39.24day of December next preceding; 39.25(3) reinsurance agreements or modifications to those agreements new text begin , including: (i) all new text end 39.26 new text begin reinsurance pooling agreements; and (ii) agreements new text end in which the reinsurance premium or 39.27a change in the insurer's liabilities new text begin , or the projected reinsurance premium or a change in new text end 39.28 new text begin the insurer's liabilities in any of the next three years, new text end equals or exceeds five percent of the 39.29insurer's surplus as regards policyholders, as of the 31st day of December next preceding, 39.30including those agreements which may require as consideration the transfer of assets 39.31from an insurer to a nonaffiliate, if an agreement or understanding exists between the 39.32insurer and nonaffiliate that any portion of such assets will be transferred to one or more 39.33affiliates of the insurer; 39.34(4) all management agreements, service contracts new text begin , tax allocation agreements, new text end 39.35 new text begin guarantees, new text end and all cost-sharing arrangements; and 40.1 new text begin (5) guarantees when made by a domestic insurer; provided, however, that a new text end 40.2 new text begin guarantee which is quantifiable as to amount is not subject to the notice requirements new text end 40.3 new text begin of this paragraph unless it exceeds the lesser of one-half of one percent of the insurer's new text end 40.4 new text begin admitted assets or ten percent of surplus as regards policyholders as of the 31st day of new text end 40.5 new text begin December next preceding. Further, all guarantees which are not quantifiable as to amount new text end 40.6 new text begin are subject to the notice requirements of this paragraph; new text end 40.7 new text begin (6) direct or indirect acquisitions or investments in a person that controls the insurer new text end 40.8 new text begin or in an affiliate of the insurer in an amount which, together with its present holdings in the new text end 40.9 new text begin investments, exceeds two and one-half percent of the insurer's surplus to policyholders. new text end 40.10 new text begin Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to section new text end 40.11 new text begin 60D.16, or in nonsubsidiary insurance affiliates that are subject to the provisions of new text end 40.12 new text begin sections 60D.15 to 60D.29, are exempt from this requirement; and new text end 40.13(5) new text begin (7) new text end any material transactions, specified by regulation, which the commissioner 40.14determines may adversely affect the interests of the insurer's policyholders. 40.15Nothing contained in this section authorizes or permits any transactions that, in the 40.16case of an insurer not a member of the same new text begin insurance new text end holding company system, would be 40.17otherwise contrary to law. 40.18(c) A domestic insurer may not enter into transactions which are part of a plan or 40.19series of like transactions with persons within the new text begin insurance new text end holding company system if 40.20the purpose of those separate transactions is to avoid the statutory threshold amount and 40.21thus avoid the review that would occur otherwise. If the commissioner determines that 40.22the separate transactions were entered into over any 12-month period for the purpose, the 40.23commissioner may exercise the authority under section 60D.25. 40.24(d) The commissioner, in reviewing transactions pursuant to paragraph (b), shall 40.25consider whether the transactions comply with the standards set forth in paragraph (a), and 40.26whether they may adversely affect the interests of policyholders. 40.27(e) The commissioner shall be notified within 30 days of any investment of the 40.28domestic insurer in any one corporation if the total investment in the corporation by 40.29the insurance holding company system exceeds ten percent of the corporation's voting 40.30securities. 40.31    Sec. 17. Minnesota Statutes 2012, section 60D.20, subdivision 3, is amended to read: 40.32    Subd. 3. Management of domestic insurers subject to registration. (a) 40.33Notwithstanding the control of a domestic insurer by any person, the officers and directors 40.34of the insurer shall not thereby be relieved of any obligation or liability to which they 41.1would otherwise be subject by law, and the insurer shall be managed so as to assure its 41.2separate operating identity consistent with this chapter new text begin sections 60D.15 to 60D.29 new text end . 41.3(b) Nothing in this chapter new text begin sections 60D.15 to 60D.29 new text end precludes a domestic insurer 41.4from having or sharing a common management new text begin or cooperative or joint new text end use of personnel, 41.5property, or services with one or more other persons under arrangements meeting the 41.6standards of subdivision 1, paragraph (a), clause (1). 41.7(c) Not less than one-third of the directors of a publicly traded domestic insurer, and 41.8not less than one-third of the members of each committee of the board of directors of any 41.9publicly traded domestic insurer shall be persons who are not officers or employees of 41.10the insurer or of any entity controlling, controlled by, or under common control with the 41.11insurer and who are not beneficial owners of a controlling interest in the voting stock of 41.12the insurer or any such entity. At least one such person must be included in any quorum 41.13for the transaction of business at any meeting of the board of directors or any committee 41.14of the board. 41.15(d) The board of directors of a publicly traded domestic insurer shall establish an audit 41.16committee having a majority new text begin one or more committees comprised solely new text end of directors who 41.17are not officers or employees of the insurer or of any entity controlling, controlled by, or 41.18under common control with the insurer and who are not beneficial owners of a controlling 41.19interest in the voting stock of the insurer or any such entity. The committee new text begin or committees new text end 41.20 shall have responsibility for selecting independent certified public accountants and 41.21reviewing the scope and results of the independent audit and any internal audit new text begin nominating new text end 41.22 new text begin candidates for director for election by shareholders or policyholders, evaluating the new text end 41.23 new text begin performance of officers deemed to be principal officers of the insurer, and recommending new text end 41.24 new text begin to the board of directors the selection and compensation of the principal officers new text end . 41.25(e) Paragraphs (c) and (d) do not apply to a domestic insurer if the person controlling 41.26the insurer is new text begin , such as new text end an insurer, or a general business corporation the principal business 41.27of which is insurance, having new text begin a mutual insurance holding company, or a publicly new text end 41.28 new text begin held corporation, has new text end a board of directors and committees of the board that meet the 41.29requirements of paragraphs (c) and (d) new text begin with respect to the controlling entity new text end . 41.30 new text begin (f) An insurer may make application to the commissioner for a waiver from the new text end 41.31 new text begin requirements of this subdivision, if the insurer's annual direct written and assumed new text end 41.32 new text begin premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and new text end 41.33 new text begin Federal Flood Program, is less than $300,000,000. An insurer may also make application new text end 41.34 new text begin to the commissioner for a waiver from the requirements of this subdivision based upon new text end 41.35 new text begin unique circumstances. The commissioner may consider various factors including, but not new text end 42.1 new text begin limited to, the type of business entity, volume of business written, availability of qualified new text end 42.2 new text begin board members, or ownership or organizational structure of the entity. new text end 42.3    Sec. 18. Minnesota Statutes 2012, section 60D.21, subdivision 1, is amended to read: 42.4    Subdivision 1. Power of commissioner. Subject to the limitation contained in this 42.5section and in addition to the powers that the commissioner has under chapter 60A relating 42.6to the examination of insurers, the commissioner shall also have the power to order any 42.7insurer registered under section to produce records, books, or other information 42.8papers in the possession of the insurer or its affiliates as are reasonably necessary to 42.9ascertain the financial condition of the insurer or to determine compliance with this 42.10chapter. In the event the insurer fails to comply with the order, the commissioner shall 42.11have the power to examine the affiliates to obtain the information new text begin examine an insurer new text end 42.12 new text begin registered under section 60D.19 and its affiliates to ascertain the financial condition of the new text end 42.13 new text begin insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by new text end 42.14 new text begin an entity or combination of entities within the insurance holding company system, or by new text end 42.15 new text begin the insurance holding company system on a consolidated basis new text end . 42.16    Sec. 19. Minnesota Statutes 2012, section 60D.21, is amended by adding a subdivision 42.17to read: 42.18     new text begin Subd. 1a. new text end new text begin Access to books and records. new text end new text begin (a) The commissioner may order an insurer new text end 42.19 new text begin registered under section 60D.19 to produce the records, books, or other information papers new text end 42.20 new text begin in the possession of the insurer or its affiliates that are reasonably necessary to determine new text end 42.21 new text begin compliance with sections 60D.15 to 60D.29. new text end 42.22 new text begin (b) To determine compliance with sections 60D.15 to 60D.29, the commissioner new text end 42.23 new text begin may order an insurer registered under section 60D.19 to produce information not in the new text end 42.24 new text begin possession of the insurer if the insurer can obtain access to the information pursuant to new text end 42.25 new text begin contractual relationships, statutory obligations, or other method. In the event the insurer new text end 42.26 new text begin cannot obtain the information requested by the commissioner, the insurer shall provide new text end 42.27 new text begin the commissioner a detailed explanation of the reason that the insurer cannot obtain the new text end 42.28 new text begin information and the identity of the holder of the information. Whenever it appears to new text end 42.29 new text begin the commissioner that the detailed explanation is without merit, the commissioner may new text end 42.30 new text begin require, after notice and hearing, the insurer to pay a penalty of $5,000 for each day's new text end 42.31 new text begin delay, or may suspend or revoke the insurer's license. new text end 42.32    Sec. 20. Minnesota Statutes 2012, section 60D.21, is amended by adding a subdivision 42.33to read: 43.1     new text begin Subd. 4. new text end new text begin Compelling production. new text end new text begin In the event the insurer fails to comply with new text end 43.2 new text begin an order, the commissioner may examine the affiliates to obtain the information. The new text end 43.3 new text begin commissioner may also issue subpoenas, administer oaths, and to examine under oath new text end 43.4 new text begin any person for purposes of determining compliance with this section. Upon the failure new text end 43.5 new text begin or refusal of a person to obey a subpoena, the commissioner may petition a court of new text end 43.6 new text begin competent jurisdiction, and upon proper showing, the court may enter an order compelling new text end 43.7 new text begin the witness to appear and testify or produce documentary evidence. Failure to obey the new text end 43.8 new text begin court order is punishable as contempt of court. Every person is obliged to attend as a new text end 43.9 new text begin witness at the place specified in the subpoena, when subpoenaed, anywhere within the new text end 43.10 new text begin state. The person is entitled to the same fees and mileage, if claimed, as a witness in new text end 43.11 new text begin district court. The fees, mileage, and actual expense, if any, necessarily incurred in new text end 43.12 new text begin securing the attendance of witnesses and their testimony, must be itemized and charged new text end 43.13 new text begin against, and be paid by, the company being examined. new text end 43.14    Sec. 21. new text begin [60D.215] SUPERVISORY COLLEGES. new text end 43.15     new text begin Subdivision 1. new text end new text begin Power of commissioner. new text end new text begin With respect to any insurer registered new text end 43.16 new text begin under section 60D.19, and in accordance with subdivision 3, the commissioner may also new text end 43.17 new text begin participate in a supervisory college for a domestic insurer that is part of an insurance new text end 43.18 new text begin holding company system with international operations in order to determine compliance new text end 43.19 new text begin by the insurer with sections 60D.15 to 60D.29. The powers of the commissioner with new text end 43.20 new text begin respect to supervisory colleges include, but are not limited to, the following: new text end 43.21 new text begin (1) initiating the establishment of a supervisory college; new text end 43.22 new text begin (2) clarifying the membership and participation of other supervisors in the new text end 43.23 new text begin supervisory college; new text end 43.24 new text begin (3) clarifying the functions of the supervisory college and the role of other regulators, new text end 43.25 new text begin including the establishment of a groupwide supervisor; new text end 43.26 new text begin (4) coordinating the ongoing activities of the supervisory college, including planning new text end 43.27 new text begin meetings, supervisory activities, and processes for information sharing; and new text end 43.28 new text begin (5) establishing a crisis management plan. new text end 43.29     new text begin Subd. 2. new text end new text begin Expenses. new text end new text begin Each registered insurer subject to this section is liable for and new text end 43.30 new text begin shall pay the reasonable expenses of the commissioner's participation in a supervisory new text end 43.31 new text begin college in accordance with subdivision 3, including reasonable travel expenses. For new text end 43.32 new text begin purposes of this section, a supervisory college may be convened as either a temporary new text end 43.33 new text begin or permanent forum for communication and cooperation between the regulators charged new text end 43.34 new text begin with the supervision of the insurer or its affiliates, and the commissioner may establish a new text end 43.35 new text begin regular assessment to the insurer for the payment of these expenses. new text end 44.1     new text begin Subd. 3. new text end new text begin Supervisory college. new text end new text begin In order to assess the business strategy, financial new text end 44.2 new text begin position, legal and regulatory position, risk exposure, risk management, and governance new text end 44.3 new text begin processes, and as part of the examination of individual insurers in accordance with section new text end 44.4 new text begin 60D.21, the commissioner may participate in a supervisory college with other regulators new text end 44.5 new text begin charged with supervision of the insurer or its affiliates, including other state, federal, new text end 44.6 new text begin and international regulatory agencies. The commissioner may enter into agreements new text end 44.7 new text begin in accordance with section 60D.22 providing the basis for cooperation between the new text end 44.8 new text begin commissioner and the other regulatory agencies, and the activities of the supervisory new text end 44.9 new text begin college. Nothing in this section delegates to the supervisory college the authority of the new text end 44.10 new text begin commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction. new text end 44.11    Sec. 22. Minnesota Statutes 2012, section 60D.22, is amended to read: 44.1260D.22 CONFIDENTIAL TREATMENT new text begin CONFIDENTIALITY new text end . 44.13     new text begin Subdivision 1. new text end new text begin Classification protection and use of information by commissioner. new text end 44.14All information, documents, and copies of them obtained by or disclosed to the 44.15commissioner or any other person in the course of an examination or investigation 44.16made pursuant to section and all information reported pursuant to sections 44.17 and , shall be given confidential treatment and shall not be subject to 44.18subpoena and shall not be made public by the commissioner, the National Association 44.19of Insurance Commissioners, or any other person, except to insurance departments of 44.20other states, without the prior written consent of the insurer to which it pertains unless 44.21the commissioner, after giving the insurer and its affiliates who would be affected, notice 44.22and opportunity to be heard, determines that the interest of policyholders or the public 44.23will be served by the publication, in which event the commissioner may publish all or 44.24any part in the manner the commissioner considers appropriate. new text begin Documents, materials, new text end 44.25 new text begin or other information in the possession or control of the department that are obtained by new text end 44.26 new text begin or disclosed to the commissioner or any other person in the course of an examination or new text end 44.27 new text begin investigation made pursuant to section 60D.21 and all information reported pursuant to new text end 44.28 new text begin sections 60D.17, except as provided in section 60D.17, subdivision 1, paragraph (e); new text end 44.29 new text begin 60D.18; 60D.19; and 60D.20, are classified as confidential or protected nonpublic or both, new text end 44.30 new text begin are not subject to subpoena, and are not subject to discovery or admissible in evidence new text end 44.31 new text begin in a private civil action. However, the commissioner may use the documents, materials, new text end 44.32 new text begin or other information in the furtherance of any regulatory or legal action brought as a new text end 44.33 new text begin part of the commissioner's official duties. The commissioner shall not otherwise make new text end 44.34 new text begin the documents, materials, or other information public without the prior written consent new text end 44.35 new text begin of the insurer to which it pertains unless the commissioner, after giving the insurer and new text end 45.1 new text begin its affiliates who would be affected by this action notice and opportunity to be heard, new text end 45.2 new text begin determines that the interest of policyholders, shareholders, or the public will be served by new text end 45.3 new text begin the publication of it, in which event the commissioner may publish all or any part in the new text end 45.4 new text begin manner the commissioner deems appropriate. new text end 45.5     new text begin Subd. 2. new text end new text begin Testimonial privilege. new text end new text begin Neither the commissioner nor any person who new text end 45.6 new text begin received documents, materials, or other information while acting under the authority of the new text end 45.7 new text begin commissioner or with whom these documents, materials, or other information are shared new text end 45.8 new text begin pursuant to sections 60D.15 to 60D.29 is permitted or required to testify in a private civil new text end 45.9 new text begin action concerning documents, materials, or information subject to subdivision 1 that are new text end 45.10 new text begin classified as confidential, protected nonpublic, or both. new text end 45.11     new text begin Subd. 3. new text end new text begin Sharing of information. new text end new text begin In order to assist in the performance of the new text end 45.12 new text begin commissioner's duties, the commissioner: new text end 45.13 new text begin (1) may share documents, materials, or other information, including the confidential, new text end 45.14 new text begin protected nonpublic, and privileged documents, materials, or information subject to this new text end 45.15 new text begin section, with other state, federal, and international regulatory agencies, with the NAIC and new text end 45.16 new text begin its affiliates and subsidiaries, and with state, federal, and international law enforcement new text end 45.17 new text begin authorities, including members of any supervisory college described in section 60D.215, new text end 45.18 new text begin provided that the recipient agrees in writing to maintain the confidentiality and privileged new text end 45.19 new text begin status of the document, material, or other information, and has verified in writing the new text end 45.20 new text begin legal authority to maintain confidentiality; new text end 45.21 new text begin (2) notwithstanding clause (1), may only share confidential, protected nonpublic, and new text end 45.22 new text begin privileged documents, materials, or information reported pursuant to section 60D.19 with new text end 45.23 new text begin commissioners of states having statutes or regulations substantially similar to subdivision new text end 45.24 new text begin 1 and who have agreed in writing not to disclose this information; new text end 45.25 new text begin (3) may receive documents, materials, or information, including otherwise new text end 45.26 new text begin confidential and privileged documents, materials, or information from the NAIC and new text end 45.27 new text begin its affiliates and subsidiaries and from regulatory and law enforcement officials of new text end 45.28 new text begin other foreign or domestic jurisdictions, and shall maintain as confidential, protected new text end 45.29 new text begin nonpublic, or privileged any document, material, or information received with notice or new text end 45.30 new text begin the understanding that it is confidential or privileged under the laws of the jurisdiction that new text end 45.31 new text begin is the source of the document, material, or information; and new text end 45.32 new text begin (4) shall enter into written agreements with the NAIC governing sharing and use of new text end 45.33 new text begin information provided pursuant to sections 60D.15 to 60D.29 consistent with this clause new text end 45.34 new text begin that shall: new text end 45.35 new text begin (i) specify procedures and protocols regarding the confidentiality and security of new text end 45.36 new text begin information shared with the NAIC and its affiliates and subsidiaries pursuant to sections new text end 46.1 new text begin 60D.15 to 60D.29, including procedures and protocols for sharing by the NAIC with other new text end 46.2 new text begin state, federal, or international regulators; new text end 46.3 new text begin (ii) specify that ownership of information shared with the NAIC and its affiliates and new text end 46.4 new text begin subsidiaries pursuant to sections 60D.15 to 60D.29 remains with the commissioner and new text end 46.5 new text begin the NAIC's use of the information is subject to the direction of the commissioner; new text end 46.6 new text begin (iii) require prompt notice to be given to an insurer whose confidential or protected new text end 46.7 new text begin nonpublic information in the possession of the NAIC pursuant to sections 60D.15 to new text end 46.8 new text begin 60D.29 is subject to a request or subpoena to the NAIC for disclosure or production; and new text end 46.9 new text begin (iv) require the NAIC and its affiliates and subsidiaries to consent to intervention by new text end 46.10 new text begin an insurer in any judicial or administrative action in which the NAIC and its affiliates and new text end 46.11 new text begin subsidiaries may be required to disclose confidential or protected nonpublic information new text end 46.12 new text begin about the insurer shared with the NAIC and its affiliates and subsidiaries pursuant to new text end 46.13 new text begin sections 60D.15 to 60D.29. new text end 46.14     new text begin Subd. 4. new text end new text begin Responsibility for administration, execution, and enforcement. new text end new text begin The new text end 46.15 new text begin sharing of information by the commissioner pursuant to sections 60D.15 to 60D.29 does new text end 46.16 new text begin not constitute a delegation of regulatory authority or rulemaking, and the commissioner is new text end 46.17 new text begin solely responsible for the administration, execution, and enforcement of the provisions of new text end 46.18 new text begin sections 60D.15 to 60D.29. new text end 46.19     new text begin Subd. 5. new text end new text begin Disclosure not deemed to be waiver of privilege or confidentiality. new text end new text begin No new text end 46.20 new text begin waiver of any applicable privilege or claim of confidentiality in the documents, materials, new text end 46.21 new text begin or information occurs as a result of disclosure to the commissioner under this section or as new text end 46.22 new text begin a result of sharing as authorized in subdivision 3. new text end 46.23     new text begin Subd. 6. new text end new text begin Classification protection and use by others. new text end new text begin Documents, materials, or new text end 46.24 new text begin other information in the possession or control of the NAIC pursuant to sections 60D.15 to new text end 46.25 new text begin 60D.29 are confidential, protected nonpublic, or privileged, are not subject to subpoena, new text end 46.26 new text begin and are not subject to discovery or admissible in evidence in a private civil action. new text end 46.27ARTICLE 6 46.28RISK ASSESSMENT AND OWN RISK AND SOLVENCY 46.29ASSESSMENT MODEL ACT 46.30    Section 1. new text begin [60D.50] PURPOSE AND SCOPE. new text end 46.31 new text begin (a) The purpose of sections 60D.50 to 60D.58 is to provide the requirements for new text end 46.32 new text begin maintaining a risk management framework and completing an Own Risk and Solvency new text end 46.33 new text begin Assessment (ORSA) and provide guidance and instructions for filing an ORSA Summary new text end 46.34 new text begin Report with the commissioner. new text end 47.1 new text begin (b) Sections 60D.50 to 60D.58 apply to all insurers domiciled in this state unless new text end 47.2 new text begin exempt pursuant to section 60D.55. new text end 47.3    Sec. 2. new text begin [60D.51] DEFINITIONS. new text end 47.4     new text begin Subdivision 1. new text end new text begin Scope. new text end new text begin For purposes of sections 60D.50 to 60D.58, the terms in new text end 47.5 new text begin this section have the meanings given them. new text end 47.6     new text begin Subd. 2. new text end new text begin Insurance group. new text end new text begin For the purpose of conducting an ORSA, "insurance new text end 47.7 new text begin group" means those insurers and affiliates included within an insurance holding company new text end 47.8 new text begin system as defined in section 60D.15, subdivision 5. new text end 47.9     new text begin Subd. 3. new text end new text begin Insurer. new text end new text begin "Insurer" has the meaning given in section 60D.15, subdivision new text end 47.10 new text begin 6, except that it does not include agencies, authorities, or instrumentalities of the United new text end 47.11 new text begin States, its possessions or territories, the Commonwealth of Puerto Rico, the District of new text end 47.12 new text begin Columbia, or a state or political subdivision of a state. new text end 47.13     new text begin Subd. 4. new text end new text begin Own Risk and Solvency Assessment or ORSA. new text end new text begin "Own Risk and Solvency new text end 47.14 new text begin Assessment" or "ORSA" means a confidential internal assessment, appropriate to the new text end 47.15 new text begin nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or new text end 47.16 new text begin insurance group of the material and relevant risks associated with the insurer's or insurance new text end 47.17 new text begin group's current business plan, and the sufficiency of capital resources to support those risks. new text end 47.18     new text begin Subd. 5. new text end new text begin ORSA Guidance Manual. new text end new text begin "ORSA Guidance Manual" means the current new text end 47.19 new text begin version of the Own Risk and Solvency Assessment Guidance Manual developed and new text end 47.20 new text begin adopted by the National Association of Insurance Commissioners (NAIC) and as amended new text end 47.21 new text begin from time to time. A change in the ORSA Guidance Manual is effective on the January 1 new text end 47.22 new text begin following the calendar year in which the changes have been adopted by the NAIC. new text end 47.23     new text begin Subd. 6. new text end new text begin ORSA Summary Report. new text end new text begin "ORSA Summary Report" means a confidential new text end 47.24 new text begin high-level summary of an insurer's or insurance group's ORSA. new text end 47.25    Sec. 3. new text begin [60D.52] RISK MANAGEMENT FRAMEWORK. new text end 47.26 new text begin An insurer shall maintain a risk management framework to assist the insurer with new text end 47.27 new text begin identifying, assessing, monitoring, managing, and reporting on its material and relevant new text end 47.28 new text begin risks. This requirement may be satisfied if the insurance group of which the insurer is a new text end 47.29 new text begin member maintains a risk management framework applicable to the operations of the insurer. new text end 47.30    Sec. 4. new text begin [60D.53] ORSA REQUIREMENT. new text end 47.31 new text begin Subject to section 60D.55, an insurer, or the insurance group of which the insurer new text end 47.32 new text begin is a member, shall regularly conduct an ORSA consistent with a process comparable to new text end 47.33 new text begin the ORSA Guidance Manual. The ORSA must be conducted no less than annually but new text end 48.1 new text begin also at any time when there are significant changes to the risk profile of the insurer or the new text end 48.2 new text begin insurance group of which the insurer is a member. new text end 48.3    Sec. 5. new text begin [60D.54] ORSA SUMMARY REPORT. new text end 48.4     new text begin Subdivision 1. new text end new text begin Required submission. new text end new text begin Upon the commissioner's request and no new text end 48.5 new text begin more than once per year, an insurer shall submit to the commissioner an ORSA Summary new text end 48.6 new text begin Report or any combination of reports that together contain the information described in the new text end 48.7 new text begin ORSA Guidance Manual, applicable to the insurer or the insurance group of which it is a new text end 48.8 new text begin member. Notwithstanding any request from the commissioner, if the insurer is a member new text end 48.9 new text begin of an insurance group, the insurer shall submit the reports required by this subdivision if new text end 48.10 new text begin the commissioner is the lead state commissioner of the insurance group as determined by new text end 48.11 new text begin the procedures adopted by the National Association of Insurance Commissioners. new text end 48.12     new text begin Subd. 2. new text end new text begin Attestation. new text end new text begin The reports in subdivision 1 shall include a signature of the new text end 48.13 new text begin insurer's or insurance group's chief risk officer or other executive having responsibility for new text end 48.14 new text begin the oversight of the insurer's enterprise risk management process attesting to the best of the new text end 48.15 new text begin executive's belief and knowledge that the insurer applies the enterprise risk management new text end 48.16 new text begin process described in the ORSA Summary Report and that a copy of the report has been new text end 48.17 new text begin provided to the insurer's board of directors or the appropriate committee of the board. new text end 48.18     new text begin Subd. 3. new text end new text begin Alternative compliance. new text end new text begin An insurer may comply with subdivision 1 new text end 48.19 new text begin by providing the most recent and substantially similar reports provided by the insurer new text end 48.20 new text begin or another member of an insurance group of which the insurer is a member to the new text end 48.21 new text begin commissioner of another state, or to a supervisor or regulator of a foreign jurisdiction, if new text end 48.22 new text begin that report provides information that is comparable to the information described in the new text end 48.23 new text begin ORSA Guidance Manual. A report in a language other than English must be accompanied new text end 48.24 new text begin by a translation of the report into the English language. new text end 48.25    Sec. 6. new text begin [60D.55] EXEMPTION. new text end 48.26     new text begin Subdivision 1. new text end new text begin Annual premium levels. new text end new text begin An insurer is exempt from the requirements new text end 48.27 new text begin of sections 60D.50 to 60D.58 if: new text end 48.28 new text begin (1) the insurer has annual direct written and unaffiliated assumed premium, new text end 48.29 new text begin including international direct and assumed premium but excluding premiums reinsured new text end 48.30 new text begin with the Federal Crop Insurance Corporation and Federal Flood Program, less than new text end 48.31 new text begin $500,000,000; and new text end 48.32 new text begin (2) the insurance group of which the insurer is a member has annual direct written new text end 48.33 new text begin and unaffiliated assumed premium, including international direct and assumed premium new text end 49.1 new text begin but excluding premiums reinsured with the Federal Crop Insurance Corporation and new text end 49.2 new text begin Federal Flood Program, less than $1,000,000,000. new text end 49.3     new text begin Subd. 2. new text end new text begin Summary report required. new text end new text begin (a) If an insurer qualifies for exemption new text end 49.4 new text begin pursuant to subdivision 1, clause (1), but the insurance group of which the insurer is a new text end 49.5 new text begin member does not qualify for exemption pursuant to subdivision 1, clause (2), then the new text end 49.6 new text begin ORSA Summary Report that may be required pursuant to section 60D.54 must include new text end 49.7 new text begin every insurer within the insurance group. This requirement may be satisfied by the new text end 49.8 new text begin submission of more than one ORSA Summary Report for any combination of insurers, new text end 49.9 new text begin provided any combination of reports includes every insurer within the insurance group. new text end 49.10 new text begin (b) If an insurer does not qualify for exemption pursuant to subdivision 1, clause new text end 49.11 new text begin (1), but the insurance group of which it is a member qualifies for exemption pursuant to new text end 49.12 new text begin subdivision 1, clause (2), then the only ORSA Summary Report that may be required new text end 49.13 new text begin pursuant to section 60D.54 is the report applicable to that insurer. new text end 49.14     new text begin Subd. 3. new text end new text begin Waiver. new text end new text begin An insurer that does not qualify for exemption pursuant to new text end 49.15 new text begin subdivision 1 may apply to the commissioner for a waiver from the requirements of new text end 49.16 new text begin sections 60D.50 to 60D.58 based on unique circumstances. In deciding whether to grant new text end 49.17 new text begin the insurer's request for waiver, the commissioner may consider the type and volume new text end 49.18 new text begin of business written, ownership and organizational structure, and any other factor the new text end 49.19 new text begin commissioner considers relevant to the insurer or insurance group of which the insurer is new text end 49.20 new text begin a member. If the insurer is part of an insurance group with insurers domiciled in more new text end 49.21 new text begin than one state, the commissioner shall coordinate with the lead state commissioner and new text end 49.22 new text begin with the other domiciliary commissioners in considering whether to grant the insurer's new text end 49.23 new text begin request for a waiver. new text end 49.24     new text begin Subd. 4. new text end new text begin Additional requirements. new text end new text begin Notwithstanding the exemptions in this section, new text end 49.25 new text begin the commissioner may require that an insurer maintain a risk management framework, new text end 49.26 new text begin conduct an ORSA, and file an ORSA Summary Report: new text end 49.27 new text begin (1) based on unique circumstances including, but not limited to, the type and volume new text end 49.28 new text begin of business written, ownership and organizational structure, federal agency requests, new text end 49.29 new text begin and international supervisor requests; and new text end 49.30 new text begin (2) if the insurer has risk-based capital for a company action level event as set forth new text end 49.31 new text begin in section 60A.52 or 60A.62, meets one or more of the standards of an insurer deemed to new text end 49.32 new text begin be in a hazardous financial condition pursuant to section 60G.20, or otherwise exhibits new text end 49.33 new text begin qualities of a troubled insurer as determined by the commissioner. new text end 49.34     new text begin Subd. 5. new text end new text begin Consequences of loss of exemption. new text end new text begin If an insurer that qualifies for an new text end 49.35 new text begin exemption pursuant to subdivision 1 subsequently no longer qualifies for that exemption new text end 49.36 new text begin due to changes in premium as reflected in the insurer's most recent annual statement or in new text end 50.1 new text begin the most recent annual statements of the insurers within the insurance group of which the new text end 50.2 new text begin insurer is a member, the insurer has one year following the year the threshold is exceeded new text end 50.3 new text begin to comply with sections 60D.50 to 60D.58. new text end 50.4    Sec. 7. new text begin [60D.56] CONTENTS OF ORSA SUMMARY REPORT. new text end 50.5     new text begin Subdivision 1. new text end new text begin Preparation and documentation. new text end new text begin The ORSA Summary Report new text end 50.6 new text begin shall be prepared by the insurer consistent with the ORSA Guidance Manual, subject new text end 50.7 new text begin to the requirements of subdivision 2. Documentation and supporting information shall new text end 50.8 new text begin be maintained by the insurer and made available upon examination or upon request of new text end 50.9 new text begin the commissioner. new text end 50.10     new text begin Subd. 2. new text end new text begin Review. new text end new text begin The review of the ORSA Summary Report, and any additional new text end 50.11 new text begin requests for information, shall be made by the commissioner using similar procedures new text end 50.12 new text begin currently used in the analysis and examination of multistate or global insurers and new text end 50.13 new text begin insurance groups. new text end 50.14    Sec. 8. new text begin [60D.57] CONFIDENTIALITY. new text end 50.15     new text begin Subdivision 1. new text end new text begin Classification protection and use of information by commissioner. new text end 50.16 new text begin Documents, materials, or other information, including the ORSA Summary Report, in the new text end 50.17 new text begin possession of or control of the department that are obtained by, created by, or disclosed to new text end 50.18 new text begin the commissioner or any other person under sections 60D.50 to 60D.58 are recognized by new text end 50.19 new text begin this state as being confidential and containing trade secrets. Those documents, materials, new text end 50.20 new text begin or other information are classified as confidential or protected nonpublic or both, are new text end 50.21 new text begin not subject to subpoena, and are not subject to discovery or admissible in evidence in a new text end 50.22 new text begin private civil action. However, the commissioner may use the documents, materials, or new text end 50.23 new text begin other information in the furtherance of a regulatory or legal action brought as a part of the new text end 50.24 new text begin commissioner's official duties. The commissioner shall not otherwise make the documents, new text end 50.25 new text begin materials, or other information public without the prior written consent of the insurer. new text end 50.26     new text begin Subd. 2. new text end new text begin Testimonial privilege. new text end new text begin Neither the commissioner nor any person who new text end 50.27 new text begin received documents, materials, or other ORSA-related information, through examination new text end 50.28 new text begin or otherwise, while acting under the authority of the commissioner or with whom the new text end 50.29 new text begin documents, materials, or other information are shared pursuant to sections 60D.50 to new text end 50.30 new text begin 60D.58 is permitted or required to testify in a private civil action concerning documents, new text end 50.31 new text begin materials, or information subject to subdivision 1 that are classified as confidential, new text end 50.32 new text begin protected nonpublic, or both. new text end 50.33     new text begin Subd. 3. new text end new text begin Sharing of information. new text end new text begin In order to assist in the performance of the new text end 50.34 new text begin commissioner's regulatory duties, the commissioner: new text end 51.1 new text begin (1) may, upon request, share documents, materials, or other ORSA-related new text end 51.2 new text begin information, including the confidential, protected nonpublic, and privileged documents, new text end 51.3 new text begin materials, or information subject to subdivision 1, including proprietary and trade secret new text end 51.4 new text begin documents and materials with other state, federal, and international financial regulatory new text end 51.5 new text begin agencies, including members of a supervisory college, as defined in section 60D.215, with new text end 51.6 new text begin the National Association of Insurance Commissioners and with third-party consultants new text end 51.7 new text begin designated by the commissioner, provided that the recipient agrees in writing to maintain new text end 51.8 new text begin the confidentiality and privileged status of the ORSA-related documents, materials, or new text end 51.9 new text begin other information and has verified in writing the legal authority to maintain confidentiality; new text end 51.10 new text begin (2) may receive documents, materials, or other ORSA-related information, including new text end 51.11 new text begin otherwise confidential and privileged documents, materials, or information, including new text end 51.12 new text begin proprietary and trade secret information or documents, from regulatory officials of other new text end 51.13 new text begin foreign or domestic jurisdictions, including members of a supervisory college, as defined new text end 51.14 new text begin in section 60D.215, and from the National Association of Insurance Commissioners, and new text end 51.15 new text begin shall maintain as confidential, protected nonpublic, or privileged documents, materials, new text end 51.16 new text begin or information received with notice or the understanding that it is confidential or new text end 51.17 new text begin privileged under the laws of the jurisdiction that is the source of the document, material, new text end 51.18 new text begin or information; and new text end 51.19 new text begin (3) shall enter into a written agreement with the National Association of Insurance new text end 51.20 new text begin Commissioners or a third-party consultant governing sharing and use of information new text end 51.21 new text begin provided pursuant to sections 60D.50 to 60D.58, consistent with this subdivision that: new text end 51.22     new text begin (i) specifies procedures and protocols regarding the confidentiality and security new text end 51.23 new text begin of information shared with the National Association of Insurance Commissioners or a new text end 51.24 new text begin third-party consultant pursuant to sections 60D.50 to 60D.58, including procedures and new text end 51.25 new text begin protocols for sharing by the National Association of Insurance Commissioners with other new text end 51.26 new text begin state regulators from states in which the insurance group has domiciled insurers. The new text end 51.27 new text begin agreement must provide that the recipient agrees in writing to maintain the confidentiality new text end 51.28 new text begin and privileged status of the ORSA-related documents, materials, or other information and new text end 51.29 new text begin has verified in writing the legal authority to maintain confidentiality; new text end 51.30 new text begin (ii) specifies that ownership of information shared with the National Association new text end 51.31 new text begin of Insurance Commissioners or a third-party consultant pursuant to sections 60D.50 new text end 51.32 new text begin to 60D.58 remains with the commissioner and the National Association of Insurance new text end 51.33 new text begin Commissioner's or a third-party consultant's use of the information is subject to the new text end 51.34 new text begin direction of the commissioner; new text end 52.1 new text begin (iii) prohibits the National Association of Insurance Commissioners or a third-party new text end 52.2 new text begin consultant from storing the information shared pursuant to sections 60D.50 to 60D.58 in a new text end 52.3 new text begin permanent database after the underlying analysis is completed; new text end 52.4 new text begin (iv) requires prompt notice to be given to an insurer whose confidential or protected new text end 52.5 new text begin nonpublic information in the possession of the National Association of Insurance new text end 52.6 new text begin Commissioners or a third-party consultant pursuant to sections 60D.50 to 60D.58 is new text end 52.7 new text begin subject to a request or subpoena to the National Association of Insurance Commissioners new text end 52.8 new text begin or a third-party consultant for disclosure or production; new text end 52.9 new text begin (v) requires the National Association of Insurance Commissioners or a third-party new text end 52.10 new text begin consultant to consent to intervention by an insurer in any judicial or administrative action new text end 52.11 new text begin in which the National Association of Insurance Commissioners or a third-party consultant new text end 52.12 new text begin may be required to disclose confidential or protected nonpublic information about the new text end 52.13 new text begin insurer shared with the National Association of Insurance Commissioners or a third-party new text end 52.14 new text begin consultant pursuant to sections 60D.50 to 60D.58; and new text end 52.15 new text begin (vi) in the case of an agreement involving a third-party consultant, provides for the new text end 52.16 new text begin insurer's written consent. new text end 52.17     new text begin Subd. 4. new text end new text begin Responsibility for administration, execution, and enforcement. new text end new text begin The new text end 52.18 new text begin sharing of information and documents by the commissioner pursuant to sections 60D.50 to new text end 52.19 new text begin 60D.58 does not constitute a delegation of regulatory authority or rulemaking, and the new text end 52.20 new text begin commissioner is solely responsible for the administration, execution, and enforcement of new text end 52.21 new text begin sections 60D.50 to 60D.58. new text end 52.22     new text begin Subd. 5. new text end new text begin Disclosure not deemed to be waiver of privilege or confidentiality. new text end new text begin No new text end 52.23 new text begin waiver of an applicable privilege or claim of confidentiality in the documents, proprietary new text end 52.24 new text begin and trade secret materials, or other ORSA-related information occurs as a result of new text end 52.25 new text begin disclosure of ORSA-related information or documents to the commissioner under this new text end 52.26 new text begin subdivision or as a result of sharing as authorized in sections 60D.50 to 60D.58. new text end 52.27     new text begin Subd. 6. new text end new text begin Classification, protection, and use of information by others. new text end new text begin Documents, new text end 52.28 new text begin materials, or other information in the possession or control of the National Association new text end 52.29 new text begin of Insurance Commissioners or a third-party consultant pursuant to sections 60D.50 to new text end 52.30 new text begin 60D.58 are confidential, protected nonpublic, and privileged, are not subject to subpoena, new text end 52.31 new text begin and are not subject to discovery or admissible in evidence in a private civil action. new text end 52.32    Sec. 9. new text begin [60D.58] SANCTIONS. new text end 52.33 new text begin An insurer failing, without just cause, to timely file the ORSA Summary Report as new text end 52.34 new text begin required in sections 60D.50 to 60D.58 shall pay a penalty of $1,000 for each day's delay to new text end 52.35 new text begin be recovered by the commissioner and to be paid into the general fund. The commissioner new text end 53.1 new text begin may reduce the penalty if the insurer demonstrates to the commissioner that the imposition new text end 53.2 new text begin of the penalty would constitute a financial hardship to the insurer. new text end 53.3    Sec. 10. new text begin EFFECTIVE DATE. new text end 53.4 new text begin The requirements of sections 1 to 9 are effective January 1, 2015. The first filing of new text end 53.5 new text begin the ORSA Summary Report is in 2015 pursuant to Minnesota Statutes, section 60D.54. new text end