1.1A bill for an act1.2relating 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 11.24LICENSING1.25    Section 1. Minnesota Statutes 2012, section 45.32, is amended by adding a subdivision 1.26to read:1.27    Subd. 2a.Qualifications for instructors of the Minnesota Supervisor/Trainee 1.28Appraiser Course.In addition to qualifying under subdivision 2, an instructor of the 1.29Minnesota Supervisor/Trainee Appraiser Course offered as continuing education must:2.1(1) be licensed in good standing as either a certified residential real property 2.2appraiser or a certified general real property appraiser, and must have been so licensed for 2.3the three-year period immediately preceding the individual's application to become an 2.4instructor of the Minnesota Supervisor/Trainee Appraiser Course; and2.5(2) not have been the subject of any license or certificate suspension or revocation, 2.6or been prohibited from supervising activities in this state or any other state within the 2.7three years immediately preceding the individual's application to become an instructor 2.8of the Minnesota Supervisor/Trainee Appraiser Course.2.9    Sec. 2. Minnesota Statutes 2012, section 45.32, is amended by adding a subdivision to 2.10read:2.11    Subd. 3a.Qualifications for instructors of the Minnesota Supervisor/Trainee 2.12Appraiser Course.In addition to qualifying under subdivision 3, an instructor of the 2.13Minnesota Supervisor/Trainee Appraiser Course offered as prelicense education must:2.14(1) be licensed in good standing as either a certified residential real property 2.15appraiser or a certified general real property appraiser, and must have been so licensed for 2.16the three-year period immediately preceding the individual's application to become an 2.17instructor of the Minnesota Supervisor/Trainee Appraiser Course; and2.18(2) not have been the subject of any license or certificate suspension or revocation, 2.19or been prohibited from supervising activities in this state or any other state within the 2.20three years immediately preceding the individual's application to become an instructor 2.21of the Minnesota Supervisor/Trainee Appraiser Course.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 years2.30 the three-year period immediately preceding the individual's application to become a 2.31supervisor;2.32(2) has completed a six-hour course, approved in advance by the commissioner and 2.33provided by an education provider approved by the commissioner, that is specifically 2.34oriented to the requirements and responsibilities of supervisory appraisers and trainee 3.1appraisers. A course approved by the commissioner for the purposes of this section must 3.2be given the course title "Minnesota Supervisor/Trainee Appraiser Course";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 three years immediately preceding the individual's application 3.6to become a supervisor;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; and3.26(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. [82B.105] RECIPROCITY.4.4The education, experience, and examination requirements of this chapter may be 4.5waived by the commissioner for individuals of other jurisdictions if: (1) the individual is 4.6licensed in another jurisdiction and is listed in good standing on the National Registry 4.7maintained by the Appraisal Subcommittee, and (2) the licensing requirements of that 4.8jurisdiction are substantially similar to the provisions of this chapter.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; and4.16(2) in addition to the required hours under clause (1), a six-hour course that is 4.17specifically oriented to the requirements and responsibilities of supervisory appraisers 4.18and trainee appraisers. A course approved by the commissioner for the purposes of this 4.19subdivision must be given the course title "Minnesota Supervisor/Trainee Appraiser 4.20Course." This course must not be counted toward qualifying education to upgrade to 4.21a higher level appraiser license.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 and in a 4.27manner prescribed by the commissioner, a copy of the course completion certificate for4.28 evidence that the applicant has completed 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 The commissioner must determine 5.1that a licensed real estate appraiser has met the continuing education requirements of 5.2this chapter before the commissioner renews a license. This determination must be 5.3based on, for a resident appraiser, course completion records uploaded electronically 5.4in a manner prescribed by the commissioner and, for a nonresident appraiser, course 5.5completion records presented by electronic transmission or uploaded electronically in a 5.6manner prescribed by the commissioner.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    Subd. 1a.Deferral.(a) Deferrals may not be granted to appraisers, except in the 5.28case of individuals returning from active military duty, or individuals impacted by a 5.29state-declared or federally declared disaster. The commissioner may allow appraisers 5.30returning from active military duty to be placed in active status for a period of up to 90 5.31days pending completion of all continuing education requirements. The commissioner 5.32may allow appraisers impacted by a state-declared or federally declared disaster that 5.33occurs within 90 days before the end of the continuing education cycle to remain or 5.34be placed in active status for a period of up to 90 days after the end of the appraiser's 5.35continuing education cycle, pending completion of all continuing education requirements.6.1(b) This subdivision supersedes any conflicting provision in section 326.56, 6.2subdivision 2.6.3    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 revoked6.5 suspended for less than two years 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 current 6.9experience, education, and examination requirements for real estate appraiser licensure as 6.10a condition to reinstatement of a license.6.11    Sec. 10. MONEY TRANSMITTERS; NO TRANSIT LIST; DELAYED 6.12EFFECTIVE DATE.6.13Notwithstanding Laws 2013, chapter 50, Minnesota Statutes 2013 Supplement, 6.14section 53B.27, subdivision 3, is effective January 1, 2016.6.15    Sec. 11.  REPEALER.6.16Minnesota Statutes 2012, section 82B.10, subdivision 7, is repealed.6.17ARTICLE 26.18PETROFUND6.19    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 6.22with a capacity of greater than 250 gallons used to deliver petroleum into storage tanks6.23 or dispense petroleum into mobile tanks.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; and7.3(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(e) A reimbursement may not be made unless the application was submitted within 7.24seven years after the corrective action services for which reimbursement has been 7.25requested were performed.7.26EFFECTIVE DATE; APPLICATION.This section is effective July 1, 2015, and 7.27applies to applications for reimbursement on or after that date.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 a7.35 maximum reimbursement not to exceed of $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; and9.17(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; and9.27(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.10.3EFFECTIVE DATE.This section is effective the day following final enactment.10.4ARTICLE 310.5ADMINISTRATIVE SERVICES10.6    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 D6751-11b.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 commerce 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 410.22ENFORCEMENT10.23    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; and10.30(2) the person has violated any law, rule, or order related to the duties and 10.31responsibilities entrusted to the commissioner; or11.1(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; or11.3(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)(1) 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 and provide the licensee or applicant an opportunity 11.11to request a hearing under the contested case provisions of chapter 14. 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. The 11.17order must: (i) state the reasons that an order is being sought and whether a civil penalty 11.18is sought; and (ii) inform the licensee or applicant that unless the licensee or applicant 11.19requests a hearing on the matter within 30 days of receipt of the order, it becomes final by 11.20operation of law and that a final order will be issued under paragraph (a). If a hearing is 11.21requested by the licensee or applicant pursuant to item (ii): (A) the commissioner shall, 11.22within 15 days of receiving the request, set the date and time for the hearing and notify 11.23the licensee or applicant of those facts; and (B) the commissioner may modify, vacate, or 11.24extend the order, until the commissioner issues a final order under paragraph (a).11.25(2) The commissioner may, by order, summarily suspend a license pending final 11.26determination of an order to show cause issued under clause (1). If a license is suspended 11.27pending final determination of an order to show cause and the licensee requests a hearing 11.28on the matter within 30 days of receipt of the order to show cause, a hearing on the merits 11.29must be held within 30 days of receipt of the hearing request. The summary suspension or 11.30summary revocation procedure does not apply to action by the commissioner against the 11.31certificate of authority of an insurer authorized to do business in Minnesota.11.32(c) All hearings must be conducted according to chapter 14. After the hearing, the 11.33commissioner shall enter an a final 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(d) If an order becomes final because a person subject to an order does not timely 12.5request a hearing as provided in paragraph (b) or if the petition for judicial review is not 12.6timely filed after a hearing and a final order is issued by the commissioner as provided 12.7in paragraph (a), the commissioner may file a certified copy of the final order with the 12.8clerk of a court of competent jurisdiction. The final order so filed has the same effect as a 12.9judgment of the court and may be recorded, enforced, or satisfied in the same manner as 12.10a judgment of the court.12.11(e) If a person does not comply with a final order under this section, the 12.12commissioner may petition a court of competent jurisdiction to enforce the order. The 12.13court may not require the commissioner to post a bond in an action or proceeding under 12.14this section. If the court finds, after service and opportunity for hearing, that the person 12.15was not in compliance with the order, the court may adjudge the person in civil contempt 12.16of the order. The court may impose a further civil penalty against the person for contempt 12.17in an amount up to $10,000 for each violation and may grant any other relief the court 12.18determines is just and proper in the circumstances.12.19(f) 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 paragraph, 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; or13.8(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; and13.11(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 including, but not limited to, negligently making a false 13.24statement or knowingly and willfully omitting a material fact;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; or14.3(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.(a) 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(b) A life insurance policy owner, who believes in good faith that the insurer may 14.9challenge the policy for lack of insurable interest, may bring a declaratory judgment action 14.10seeking a court order declaring the policy valid.14.11(c) The right of a life insurance policy owner to bring a declaratory judgment action 14.12applies only to policies issued in Minnesota prior to the effective date of the Insurable 14.13Interest Act and that have a death benefit equal to or greater than one million dollars. Only 14.14the owner of record of a life insurance policy on the effective date of this section may 14.15bring a declaratory judgment action under this section.14.16EFFECTIVE DATE.This section is effective the day following final enactment 14.17and shall sunset on December 31, 2016.14.18    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 insurers, 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 date15.6 criminal prosecution begins, 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.15.11For purposes of this subdivision, the date the criminal prosecution begins is the date 15.12the indictment is returned or the date the criminal complaint is filed.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; or15.25(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(e) Investments or cash posted as collateral or variation margin (other than initial 16.18margin amounts) in connection with qualified financial contracts, as defined in section 16.1960B.03, subdivision 22, are not subject to this subdivision.16.20    Sec. 7. [65A.285] SURCHARGE PROHIBITION.16.21    Subdivision 1.Surcharge prohibition.An insurer may not impose a surcharge on 16.22homeowners insurance solely as a result of a consumer inquiry.16.23    Subd. 2.Definitions.For purposes of this section:16.24(1) "consumer inquiry" means a telephone call or other communication made to an 16.25insurer that does not result in a paid claim and that is in regard to the general terms or 16.26conditions of or coverage offered under an insurance policy. The term includes a question 16.27concerning the process for filing a claim and whether a policy will cover a loss; and16.28(2) "surcharge" means an increase in premium for a policy, including the removal 16.29of a claim-free discount.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 insurers. 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 insurer 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 insurer, 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 insurer, 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 insurer 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 insurer.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 insurer17.31 or its agents according to the company's insurer's 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 insurer to an insured or 18.1an applicant for insurance for the assumption by the title insurance company insurer of 18.2the risk created by the issuance of the title insurance policy. Direct risk premiums of a 18.3title insurance company insurer 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 company18.8 insurance agent, 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 insurer authorized to do business 18.20in this state, or a direct employee of a title company insurance agent, or a person who 18.21has an agency agreement with a title insurance company insurer or a title company18.22 insurance agent in which the agent agrees to perform closing services on the title insurance 18.23company's insurer's or title company's insurance agent's behalf and the title insurance 18.24company insurer or title company insurance agent assumes responsibility for the actions 18.25of the agent as if the agent were a direct employee of the title insurance company insurer18.26 or title company insurance agent;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 insurer authorized to do business in this state; and19.2(7) a title company insurance agent that has a contractual agency relationship with 19.3a title insurance company insurer authorized to do business in this state, where the title 19.4insurance company insurer assumes responsibility for the actions of the title company19.5 insurance agent and its employees or agents as if they were employees or agents of the 19.6title insurance company insurer.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 insurance agent 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 insurers, "gross premiums" means the charge for 19.21title insurance made by a title insurance company insurer or its agents according to the 19.22company's insurer's 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 insurer 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 insurer 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 insurers, 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; and21.14    (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 insurers 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; or22.16(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; or22.28(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 insurer" 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 insurer 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 insurer 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; and23.34(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 insurer, but such delegation to an 24.5agent by a title insurance company insurer shall not relieve the title insurance company24.6 insurer 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 insurer 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 insurer;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 insurer;24.16(4) the term of appointment of the agent; and24.17(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 insurer 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 insurer 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 agent, 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 insurer 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 DEED26.4Know What You Are Getting Into26.5(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)DODO NOThave to pay homeowner's insurance.26.11(b)DODO NOThave to pay property taxes.26.1226.13(c)DODO NOThave 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 Sign26.25(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 agent 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 Agreement27.7(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 527.13MODEL HOLDING COMPANY ACT CHANGES27.14    Section 1. Minnesota Statutes 2012, section 60D.09, is amended to read:27.1560D.09 CRIMINAL PROCEEDINGS PENALTIES.27.16    Subdivision 1.Failure to file registration statement; civil penalty.An insurer 27.17failing, without just cause, to file a registration statement as required in section 60D.19 27.18shall pay a penalty of $1,000 for each day's delay, to be recovered by the commissioner 27.19and paid into the general fund. The commissioner may reduce the penalty if the insurer 27.20demonstrates to the commissioner that the imposition of the penalty would constitute a 27.21financial hardship to the insurer.27.22    Subd. 2.Failure to provide notice and filing regarding affiliated transaction 27.23or agreement; civil penalty.An insurer failing, without just cause, to provide the 27.24appropriate notice and filing under section 60D.20 regarding an affiliated transaction or 27.25agreement, shall pay a penalty of $5,000, to be recovered by the commissioner and paid 27.26into the general fund.27.27    Subd. 3.Certain contracts and agreements; cease and desist and void orders.27.28Whenever it appears to the commissioner that an insurer subject to sections 60D.15 to 27.2960D.29 or a director, officer, employee, or agent of an insurer has engaged in a transaction 27.30or entered into a contract that is subject to section 60D.20 and that would have been 27.31disapproved by the commissioner, the commissioner may order the insurer to cease and 27.32desist immediately any further activity under that transaction or contract. After notice and 28.1hearing, the commissioner may also order the insurer to void any contracts and restore the 28.2status quo if the action is in the best interest of the policyholders, creditors, or the public.28.3    Subd. 4.Criminal penalties. 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    Subd. 4a.Enterprise risk."Enterprise risk" means an activity, circumstance, event, 28.14or series of events involving one or more affiliates of an insurer that, if not remedied 28.15promptly, is likely to have a material adverse effect upon the financial condition or 28.16liquidity of the insurer or its insurance holding company system as a whole, including, 28.17but not limited to, anything that would cause the insurer's risk-based capital to fall into 28.18company action level as set forth in sections 60A.50 to 60A.696 or would cause the insurer 28.19to be in hazardous financial condition in accordance with the standards of section 60G.20.28.20    Sec. 3. Minnesota Statutes 2012, section 60D.17, subdivision 1, is amended to read:28.21    Subdivision 1. Filing requirements.(a) 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(b) For purposes of this section, a controlling person of a domestic insurer seeking to 28.34divest its controlling interest in the domestic insurer, in any manner, shall file with the 29.1commissioner, with a copy to the insurer, confidential notice of its proposed divestiture 29.2at least 30 days before the cessation of control. The commissioner shall determine those 29.3instances in which the party or parties seeking to divest or to acquire a controlling interest 29.4in an insurer will be required to file for and obtain approval of the transaction.29.5(c) With respect to a transaction subject to this section, the acquiring person must 29.6also file a preacquisition notification with the commissioner, which must contain the 29.7information set forth in section 60D.18, subdivision 3, paragraph (b). A failure to file the 29.8notification may be subject to penalties specified in section 60D.18, subdivision 5.29.9(d) 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(e) The statement filed with the commissioner pursuant to subdivisions 1 and 2 must 29.20remain confidential until the transaction is approved by the commissioner, except that all 29.21attachments filed with the statement remain confidential after the approval unless the 29.22commissioner, in the commissioner's discretion, determines that confidential treatment of 29.23any of this information will interfere with enforcement of this section.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"; and29.30(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; and29.33(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 and a statement as to the method by 30.22which the fairness of the proposal was arrived at.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(l) An agreement by the person required to file the statement referred to in 31.13subdivision 1 that it will provide the annual report, specified in section 60D.19, subdivision 31.1411a, for so long as control exists.31.15(m) A consent by the person required to file the statement referred to in subdivision 31.161 that the person and all subsidiaries within its control in the insurance holding company 31.17system will provide information to the commissioner upon request as necessary to 31.18evaluate enterprise risk to the insurer.31.19(l) (n) 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) (n) 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) (n) 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; and32.19(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; or32.30(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(c) If the proposed acquisition of control will require the approval of more 33.9than one commissioner, the public hearing referred to in paragraph (b) may be held 33.10on a consolidated basis upon request of the person filing the statement referred to in 33.11subdivision 1. The person shall file the statement referred to in subdivision 1 with the 33.12National Association of Insurance Commissioners (NAIC) within five days of making 33.13the request for a public hearing. A commissioner may opt out of a consolidated hearing, 33.14and shall provide notice to the applicant of the opt-out within ten days of the receipt of 33.15the statement referred to in subdivision 1. A hearing conducted on a consolidated basis 33.16must be public and must be held within the United States before the commissioners of 33.17the states in which the insurers are domiciled. The commissioners shall hear and receive 33.18evidence. A commissioner may attend the hearing, in person or by telecommunication. 33.19In this paragraph, the term "commissioner" when used in reference to an official from a 33.20state other than Minnesota means the state official charged with the responsibility of 33.21supervising the business of insurance in that state.33.22(d) In connection with a change of control of a domestic insurer, any determination 33.23by the commissioner that the person acquiring control of the insurer shall be required 33.24to maintain or restore the capital of the insurer to the level required by the laws and 33.25regulations of this state shall be made not later than 60 days after the date of notification of 33.26the change in control submitted pursuant to section 60D.17, subdivision 1.33.27(c) (e) 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; or34.1(2) the effectuation or any attempt to effectuate an acquisition of control of, 34.2divestiture of, 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 in compliance with section 45.028, subdivision 2.34.14    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 60D.17;34.21(2)(1) 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) (2) 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) (3) the acquisition of already affiliated persons;35.2(5) (4) 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; or35.6(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) (5) 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; and35.15(7) (6) 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 subdivisions 2 and 3; and 
         60D.2660D.25 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 domestic 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:.35.31(1) this section;35.32(2) section 60D.20, subdivisions 1, paragraph (a); 2; and 4; and35.33(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 an insurance36.8 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 with the commissioner on a form and in a format36.15 prescribed by the National Association of Insurance Commissioners, which shall contain36.16 containing 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; and36.33(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; and37.1(5) if requested by the commissioner, financial statements of or within an insurance 37.2holding company system and all affiliates including, but not limited to, annual audited 37.3financial statements filed with the United States Securities and Exchange Commission 37.4(SEC) pursuant to the Securities Act of 1933, as amended, or the Securities Exchange 37.5Act of 1934, as amended. An insurer required to file financial statements pursuant to this 37.6clause may satisfy the request by providing the commissioner with the most recently filed 37.7parent corporation financial statements that have been filed with the SEC;37.8(5) (6) 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.;37.11(7) statements that the insurer's board of directors oversees corporate governance 37.12and internal controls and that the insurer's officers or senior management have approved 37.13and implemented, and continue to maintain and monitor, corporate governance and 37.14internal control procedures; and37.15(8) any other information required by the commissioner by rule.37.16    Sec. 12. Minnesota Statutes 2012, section 60D.19, subdivision 3, is amended to read:37.17    Subd. 3. Summary of changes to 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. A disclaimer of affiliation is deemed to have 37.31been granted unless the commissioner, within 30 days following receipt of a complete 37.32disclaimer, notifies the filing party that the disclaimer is disallowed. In the event of 37.33disallowance, the disclaiming party may request an administrative hearing, which must 37.34be granted. The disclaiming party is relieved of its duty to register under this section if 38.1approval of the disclaimer has been granted by the commissioner, or if the disclaimer is 38.2deemed to have been approved.38.3    Sec. 14. Minnesota Statutes 2012, section 60D.19, is amended by adding a subdivision 38.4to read:38.5    Subd. 11a.Enterprise risk filing.The ultimate controlling person of an insurer 38.6subject to registration shall also file an annual enterprise risk report. The report must, to 38.7the best of the ultimate controlling person's knowledge and belief, identify the material 38.8risks within the insurance holding company system that could pose enterprise risk to the 38.9insurer. The report must be filed with the lead state commissioner of the insurance holding 38.10company system as determined by the procedures within the Financial Analysis Handbook 38.11adopted by the National Association of Insurance Commissioners.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 or enterprise risk filing 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 an insurance holding company system. (a) 38.18Transactions within a an insurance 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(2) agreements for cost-sharing services and management shall include the 38.22provisions required by rule issued by the commissioner;38.23(2) (3) charges or fees for services performed shall be reasonable;38.24(3) (4) expenses incurred and payment received shall be allocated to the insurer in 38.25conformity with customary insurance accounting practices consistently applied;38.26(4) (5) 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; and38.30(5) (6) 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 its39.2 insurance holding company system, including amendments or modifications of affiliate 39.3agreements previously filed pursuant to this section, which are subject to any materiality 39.4standards contained in clauses (1) to (7), 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. The notice for amendments or modifications 39.8must include the reasons for the change and the financial impact on the domestic insurer. 39.9Informal notice must be reported, within 30 days after a termination of a previously filed 39.10agreement , to the commissioner for determination of the type of filing required, if any: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, including: (i) all 39.26reinsurance pooling agreements; and (ii) agreements in which the reinsurance premium or 39.27a change in the insurer's liabilities, or the projected reinsurance premium or a change in 39.28the insurer's liabilities in any of the next three years, 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, tax allocation agreements, 39.35guarantees, and all cost-sharing arrangements; and40.1(5) guarantees when made by a domestic insurer; provided, however, that a 40.2guarantee which is quantifiable as to amount is not subject to the notice requirements 40.3of this paragraph unless it exceeds the lesser of one-half of one percent of the insurer's 40.4admitted assets or ten percent of surplus as regards policyholders as of the 31st day of 40.5December next preceding. Further, all guarantees which are not quantifiable as to amount 40.6are subject to the notice requirements of this paragraph;40.7(6) direct or indirect acquisitions or investments in a person that controls the insurer 40.8or in an affiliate of the insurer in an amount which, together with its present holdings in the 40.9investments, exceeds two and one-half percent of the insurer's surplus to policyholders. 40.10Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to section 40.1160D.16, or in nonsubsidiary insurance affiliates that are subject to the provisions of 40.12sections 60D.15 to 60D.29, are exempt from this requirement; and40.13(5) (7) 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 insurance 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 insurance 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 sections 60D.15 to 60D.29.41.3(b) Nothing in this chapter sections 60D.15 to 60D.29 precludes a domestic insurer 41.4from having or sharing a common management or cooperative or joint 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 one or more committees comprised solely 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 or committees41.20 shall have responsibility for selecting independent certified public accountants and 41.21reviewing the scope and results of the independent audit and any internal audit nominating 41.22candidates for director for election by shareholders or policyholders, evaluating the 41.23performance of officers deemed to be principal officers of the insurer, and recommending 41.24to the board of directors the selection and compensation of the principal officers.41.25(e) Paragraphs (c) and (d) do not apply to a domestic insurer if the person controlling 41.26the insurer is, such as an insurer, or a general business corporation the principal business 41.27of which is insurance, having a mutual insurance holding company, or a publicly 41.28held corporation, has a board of directors and committees of the board that meet the 41.29requirements of paragraphs (c) and (d) with respect to the controlling entity.41.30(f) An insurer may make application to the commissioner for a waiver from the 41.31requirements of this subdivision, if the insurer's annual direct written and assumed 41.32premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and 41.33Federal Flood Program, is less than $300,000,000. An insurer may also make application 41.34to the commissioner for a waiver from the requirements of this subdivision based upon 41.35unique circumstances. The commissioner may consider various factors including, but not 42.1limited to, the type of business entity, volume of business written, availability of qualified 42.2board members, or ownership or organizational structure of the entity.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 60D.19 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 examine an insurer 42.12registered under section 60D.19 and its affiliates to ascertain the financial condition of the 42.13insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by 42.14an entity or combination of entities within the insurance holding company system, or by 42.15the insurance holding company system on a consolidated basis.42.16    Sec. 19. Minnesota Statutes 2012, section 60D.21, is amended by adding a subdivision 42.17to read:42.18    Subd. 1a.Access to books and records.(a) The commissioner may order an insurer 42.19registered under section 60D.19 to produce the records, books, or other information papers 42.20in the possession of the insurer or its affiliates that are reasonably necessary to determine 42.21compliance with sections 60D.15 to 60D.29.42.22(b) To determine compliance with sections 60D.15 to 60D.29, the commissioner 42.23may order an insurer registered under section 60D.19 to produce information not in the 42.24possession of the insurer if the insurer can obtain access to the information pursuant to 42.25contractual relationships, statutory obligations, or other method. In the event the insurer 42.26cannot obtain the information requested by the commissioner, the insurer shall provide 42.27the commissioner a detailed explanation of the reason that the insurer cannot obtain the 42.28information and the identity of the holder of the information. Whenever it appears to 42.29the commissioner that the detailed explanation is without merit, the commissioner may 42.30require, after notice and hearing, the insurer to pay a penalty of $5,000 for each day's 42.31delay, or may suspend or revoke the insurer's license.42.32    Sec. 20. Minnesota Statutes 2012, section 60D.21, is amended by adding a subdivision 42.33to read:43.1    Subd. 4.Compelling production.In the event the insurer fails to comply with 43.2an order, the commissioner may examine the affiliates to obtain the information. The 43.3commissioner may also issue subpoenas, administer oaths, and to examine under oath 43.4any person for purposes of determining compliance with this section. Upon the failure 43.5or refusal of a person to obey a subpoena, the commissioner may petition a court of 43.6competent jurisdiction, and upon proper showing, the court may enter an order compelling 43.7the witness to appear and testify or produce documentary evidence. Failure to obey the 43.8court order is punishable as contempt of court. Every person is obliged to attend as a 43.9witness at the place specified in the subpoena, when subpoenaed, anywhere within the 43.10state. The person is entitled to the same fees and mileage, if claimed, as a witness in 43.11district court. The fees, mileage, and actual expense, if any, necessarily incurred in 43.12securing the attendance of witnesses and their testimony, must be itemized and charged 43.13against, and be paid by, the company being examined.43.14    Sec. 21. [60D.215] SUPERVISORY COLLEGES.43.15    Subdivision 1.Power of commissioner.With respect to any insurer registered 43.16under section 60D.19, and in accordance with subdivision 3, the commissioner may also 43.17participate in a supervisory college for a domestic insurer that is part of an insurance 43.18holding company system with international operations in order to determine compliance 43.19by the insurer with sections 60D.15 to 60D.29. The powers of the commissioner with 43.20respect to supervisory colleges include, but are not limited to, the following:43.21(1) initiating the establishment of a supervisory college;43.22(2) clarifying the membership and participation of other supervisors in the 43.23supervisory college;43.24(3) clarifying the functions of the supervisory college and the role of other regulators, 43.25including the establishment of a groupwide supervisor;43.26(4) coordinating the ongoing activities of the supervisory college, including planning 43.27meetings, supervisory activities, and processes for information sharing; and43.28(5) establishing a crisis management plan.43.29    Subd. 2.Expenses.Each registered insurer subject to this section is liable for and 43.30shall pay the reasonable expenses of the commissioner's participation in a supervisory 43.31college in accordance with subdivision 3, including reasonable travel expenses. For 43.32purposes of this section, a supervisory college may be convened as either a temporary 43.33or permanent forum for communication and cooperation between the regulators charged 43.34with the supervision of the insurer or its affiliates, and the commissioner may establish a 43.35regular assessment to the insurer for the payment of these expenses.44.1    Subd. 3.Supervisory college.In order to assess the business strategy, financial 44.2position, legal and regulatory position, risk exposure, risk management, and governance 44.3processes, and as part of the examination of individual insurers in accordance with section 44.460D.21, the commissioner may participate in a supervisory college with other regulators 44.5charged with supervision of the insurer or its affiliates, including other state, federal, 44.6and international regulatory agencies. The commissioner may enter into agreements 44.7in accordance with section 60D.22 providing the basis for cooperation between the 44.8commissioner and the other regulatory agencies, and the activities of the supervisory 44.9college. Nothing in this section delegates to the supervisory college the authority of the 44.10commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.44.11    Sec. 22. Minnesota Statutes 2012, section 60D.22, is amended to read:44.1260D.22 CONFIDENTIAL TREATMENT CONFIDENTIALITY.44.13    Subdivision 1.Classification protection and use of information by commissioner.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 60D.20 and all information reported pursuant to sections 44.1760D.18 and 60D.19, 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. Documents, materials, 44.25or other information in the possession or control of the department that are obtained by 44.26or disclosed to the commissioner or any other person in the course of an examination or 44.27investigation made pursuant to section 60D.21 and all information reported pursuant to 44.28sections 60D.17, except as provided in section 60D.17, subdivision 1, paragraph (e); 44.2960D.18; 60D.19; and 60D.20, are classified as confidential or protected nonpublic or both, 44.30are not subject to subpoena, and are not subject to discovery or admissible in evidence 44.31in a private civil action. However, the commissioner may use the documents, materials, 44.32or other information in the furtherance of any regulatory or legal action brought as a 44.33part of the commissioner's official duties. The commissioner shall not otherwise make 44.34the documents, materials, or other information public without the prior written consent 44.35of the insurer to which it pertains unless the commissioner, after giving the insurer and 45.1its affiliates who would be affected by this action notice and opportunity to be heard, 45.2determines that the interest of policyholders, shareholders, or the public will be served by 45.3the publication of it, in which event the commissioner may publish all or any part in the 45.4manner the commissioner deems appropriate.45.5    Subd. 2.Testimonial privilege.Neither the commissioner nor any person who 45.6received documents, materials, or other information while acting under the authority of the 45.7commissioner or with whom these documents, materials, or other information are shared 45.8pursuant to sections 60D.15 to 60D.29 is permitted or required to testify in a private civil 45.9action concerning documents, materials, or information subject to subdivision 1 that are 45.10classified as confidential, protected nonpublic, or both.45.11    Subd. 3.Sharing of information.In order to assist in the performance of the 45.12commissioner's duties, the commissioner:45.13(1) may share documents, materials, or other information, including the confidential, 45.14protected nonpublic, and privileged documents, materials, or information subject to this 45.15section, with other state, federal, and international regulatory agencies, with the NAIC and 45.16its affiliates and subsidiaries, and with state, federal, and international law enforcement 45.17authorities, including members of any supervisory college described in section 60D.215, 45.18provided that the recipient agrees in writing to maintain the confidentiality and privileged 45.19status of the document, material, or other information, and has verified in writing the 45.20legal authority to maintain confidentiality;45.21(2) notwithstanding clause (1), may only share confidential, protected nonpublic, and 45.22privileged documents, materials, or information reported pursuant to section 60D.19 with 45.23commissioners of states having statutes or regulations substantially similar to subdivision 45.241 and who have agreed in writing not to disclose this information;45.25(3) may receive documents, materials, or information, including otherwise 45.26confidential and privileged documents, materials, or information from the NAIC and 45.27its affiliates and subsidiaries and from regulatory and law enforcement officials of 45.28other foreign or domestic jurisdictions, and shall maintain as confidential, protected 45.29nonpublic, or privileged any document, material, or information received with notice or 45.30the understanding that it is confidential or privileged under the laws of the jurisdiction that 45.31is the source of the document, material, or information; and45.32(4) shall enter into written agreements with the NAIC governing sharing and use of 45.33information provided pursuant to sections 60D.15 to 60D.29 consistent with this clause 45.34that shall:45.35(i) specify procedures and protocols regarding the confidentiality and security of 45.36information shared with the NAIC and its affiliates and subsidiaries pursuant to sections 46.160D.15 to 60D.29, including procedures and protocols for sharing by the NAIC with other 46.2state, federal, or international regulators;46.3(ii) specify that ownership of information shared with the NAIC and its affiliates and 46.4subsidiaries pursuant to sections 60D.15 to 60D.29 remains with the commissioner and 46.5the NAIC's use of the information is subject to the direction of the commissioner;46.6(iii) require prompt notice to be given to an insurer whose confidential or protected 46.7nonpublic information in the possession of the NAIC pursuant to sections 60D.15 to 46.860D.29 is subject to a request or subpoena to the NAIC for disclosure or production; and46.9(iv) require the NAIC and its affiliates and subsidiaries to consent to intervention by 46.10an insurer in any judicial or administrative action in which the NAIC and its affiliates and 46.11subsidiaries may be required to disclose confidential or protected nonpublic information 46.12about the insurer shared with the NAIC and its affiliates and subsidiaries pursuant to 46.13sections 60D.15 to 60D.29.46.14    Subd. 4.Responsibility for administration, execution, and enforcement.The 46.15sharing of information by the commissioner pursuant to sections 60D.15 to 60D.29 does 46.16not constitute a delegation of regulatory authority or rulemaking, and the commissioner is 46.17solely responsible for the administration, execution, and enforcement of the provisions of 46.18sections 60D.15 to 60D.29.46.19    Subd. 5.Disclosure not deemed to be waiver of privilege or confidentiality.No 46.20waiver of any applicable privilege or claim of confidentiality in the documents, materials, 46.21or information occurs as a result of disclosure to the commissioner under this section or as 46.22a result of sharing as authorized in subdivision 3.46.23    Subd. 6.Classification protection and use by others.Documents, materials, or 46.24other information in the possession or control of the NAIC pursuant to sections 60D.15 to 46.2560D.29 are confidential, protected nonpublic, or privileged, are not subject to subpoena, 46.26and are not subject to discovery or admissible in evidence in a private civil action.46.27ARTICLE 646.28RISK ASSESSMENT AND OWN RISK AND SOLVENCY 46.29ASSESSMENT MODEL ACT46.30    Section 1. [60D.50] PURPOSE AND SCOPE.46.31(a) The purpose of sections 60D.50 to 60D.58 is to provide the requirements for 46.32maintaining a risk management framework and completing an Own Risk and Solvency 46.33Assessment (ORSA) and provide guidance and instructions for filing an ORSA Summary 46.34Report with the commissioner.47.1(b) Sections 60D.50 to 60D.58 apply to all insurers domiciled in this state unless 47.2exempt pursuant to section 60D.55.47.3    Sec. 2. [60D.51] DEFINITIONS.47.4    Subdivision 1.Scope.For purposes of sections 60D.50 to 60D.58, the terms in 47.5this section have the meanings given them.47.6    Subd. 2.Insurance group.For the purpose of conducting an ORSA, "insurance 47.7group" means those insurers and affiliates included within an insurance holding company 47.8system as defined in section 60D.15, subdivision 5.47.9    Subd. 3.Insurer."Insurer" has the meaning given in section 60D.15, subdivision 47.106, except that it does not include agencies, authorities, or instrumentalities of the United 47.11States, its possessions or territories, the Commonwealth of Puerto Rico, the District of 47.12Columbia, or a state or political subdivision of a state.47.13    Subd. 4.Own Risk and Solvency Assessment or ORSA."Own Risk and Solvency 47.14Assessment" or "ORSA" means a confidential internal assessment, appropriate to the 47.15nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or 47.16insurance group of the material and relevant risks associated with the insurer's or insurance 47.17group's current business plan, and the sufficiency of capital resources to support those risks.47.18    Subd. 5.ORSA Guidance Manual."ORSA Guidance Manual" means the current 47.19version of the Own Risk and Solvency Assessment Guidance Manual developed and 47.20adopted by the National Association of Insurance Commissioners (NAIC) and as amended 47.21from time to time. A change in the ORSA Guidance Manual is effective on the January 1 47.22following the calendar year in which the changes have been adopted by the NAIC.47.23    Subd. 6.ORSA Summary Report."ORSA Summary Report" means a confidential 47.24high-level summary of an insurer's or insurance group's ORSA.47.25    Sec. 3. [60D.52] RISK MANAGEMENT FRAMEWORK.47.26An insurer shall maintain a risk management framework to assist the insurer with 47.27identifying, assessing, monitoring, managing, and reporting on its material and relevant 47.28risks. This requirement may be satisfied if the insurance group of which the insurer is a 47.29member maintains a risk management framework applicable to the operations of the insurer.47.30    Sec. 4. [60D.53] ORSA REQUIREMENT.47.31Subject to section 60D.55, an insurer, or the insurance group of which the insurer 47.32is a member, shall regularly conduct an ORSA consistent with a process comparable to 47.33the ORSA Guidance Manual. The ORSA must be conducted no less than annually but 48.1also at any time when there are significant changes to the risk profile of the insurer or the 48.2insurance group of which the insurer is a member.48.3    Sec. 5. [60D.54] ORSA SUMMARY REPORT.48.4    Subdivision 1.Required submission.Upon the commissioner's request and no 48.5more than once per year, an insurer shall submit to the commissioner an ORSA Summary 48.6Report or any combination of reports that together contain the information described in the 48.7ORSA Guidance Manual, applicable to the insurer or the insurance group of which it is a 48.8member. Notwithstanding any request from the commissioner, if the insurer is a member 48.9of an insurance group, the insurer shall submit the reports required by this subdivision if 48.10the commissioner is the lead state commissioner of the insurance group as determined by 48.11the procedures adopted by the National Association of Insurance Commissioners.48.12    Subd. 2.Attestation.The reports in subdivision 1 shall include a signature of the 48.13insurer's or insurance group's chief risk officer or other executive having responsibility for 48.14the oversight of the insurer's enterprise risk management process attesting to the best of the 48.15executive's belief and knowledge that the insurer applies the enterprise risk management 48.16process described in the ORSA Summary Report and that a copy of the report has been 48.17provided to the insurer's board of directors or the appropriate committee of the board.48.18    Subd. 3.Alternative compliance.An insurer may comply with subdivision 1 48.19by providing the most recent and substantially similar reports provided by the insurer 48.20or another member of an insurance group of which the insurer is a member to the 48.21commissioner of another state, or to a supervisor or regulator of a foreign jurisdiction, if 48.22that report provides information that is comparable to the information described in the 48.23ORSA Guidance Manual. A report in a language other than English must be accompanied 48.24by a translation of the report into the English language.48.25    Sec. 6. [60D.55] EXEMPTION.48.26    Subdivision 1.Annual premium levels.An insurer is exempt from the requirements 48.27of sections 60D.50 to 60D.58 if:48.28(1) the insurer has annual direct written and unaffiliated assumed premium, 48.29including international direct and assumed premium but excluding premiums reinsured 48.30with the Federal Crop Insurance Corporation and Federal Flood Program, less than 48.31$500,000,000; and48.32(2) the insurance group of which the insurer is a member has annual direct written 48.33and unaffiliated assumed premium, including international direct and assumed premium 49.1but excluding premiums reinsured with the Federal Crop Insurance Corporation and 49.2Federal Flood Program, less than $1,000,000,000.49.3    Subd. 2.Summary report required.(a) If an insurer qualifies for exemption 49.4pursuant to subdivision 1, clause (1), but the insurance group of which the insurer is a 49.5member does not qualify for exemption pursuant to subdivision 1, clause (2), then the 49.6ORSA Summary Report that may be required pursuant to section 60D.54 must include 49.7every insurer within the insurance group. This requirement may be satisfied by the 49.8submission of more than one ORSA Summary Report for any combination of insurers, 49.9provided any combination of reports includes every insurer within the insurance group.49.10(b) If an insurer does not qualify for exemption pursuant to subdivision 1, clause 49.11(1), but the insurance group of which it is a member qualifies for exemption pursuant to 49.12subdivision 1, clause (2), then the only ORSA Summary Report that may be required 49.13pursuant to section 60D.54 is the report applicable to that insurer.49.14    Subd. 3.Waiver.An insurer that does not qualify for exemption pursuant to 49.15subdivision 1 may apply to the commissioner for a waiver from the requirements of 49.16sections 60D.50 to 60D.58 based on unique circumstances. In deciding whether to grant 49.17the insurer's request for waiver, the commissioner may consider the type and volume 49.18of business written, ownership and organizational structure, and any other factor the 49.19commissioner considers relevant to the insurer or insurance group of which the insurer is 49.20a member. If the insurer is part of an insurance group with insurers domiciled in more 49.21than one state, the commissioner shall coordinate with the lead state commissioner and 49.22with the other domiciliary commissioners in considering whether to grant the insurer's 49.23request for a waiver.49.24    Subd. 4.Additional requirements.Notwithstanding the exemptions in this section, 49.25the commissioner may require that an insurer maintain a risk management framework, 49.26conduct an ORSA, and file an ORSA Summary Report:49.27(1) based on unique circumstances including, but not limited to, the type and volume 49.28of business written, ownership and organizational structure, federal agency requests, 49.29and international supervisor requests; and49.30(2) if the insurer has risk-based capital for a company action level event as set forth 49.31in section 60A.52 or 60A.62, meets one or more of the standards of an insurer deemed to 49.32be in a hazardous financial condition pursuant to section 60G.20, or otherwise exhibits 49.33qualities of a troubled insurer as determined by the commissioner.49.34    Subd. 5.Consequences of loss of exemption.If an insurer that qualifies for an 49.35exemption pursuant to subdivision 1 subsequently no longer qualifies for that exemption 49.36due to changes in premium as reflected in the insurer's most recent annual statement or in 50.1the most recent annual statements of the insurers within the insurance group of which the 50.2insurer is a member, the insurer has one year following the year the threshold is exceeded 50.3to comply with sections 60D.50 to 60D.58.50.4    Sec. 7. [60D.56] CONTENTS OF ORSA SUMMARY REPORT.50.5    Subdivision 1.Preparation and documentation.The ORSA Summary Report 50.6shall be prepared by the insurer consistent with the ORSA Guidance Manual, subject 50.7to the requirements of subdivision 2. Documentation and supporting information shall 50.8be maintained by the insurer and made available upon examination or upon request of 50.9the commissioner.50.10    Subd. 2.Review.The review of the ORSA Summary Report, and any additional 50.11requests for information, shall be made by the commissioner using similar procedures 50.12currently used in the analysis and examination of multistate or global insurers and 50.13insurance groups.50.14    Sec. 8. [60D.57] CONFIDENTIALITY.50.15    Subdivision 1.Classification protection and use of information by commissioner.50.16Documents, materials, or other information, including the ORSA Summary Report, in the 50.17possession of or control of the department that are obtained by, created by, or disclosed to 50.18the commissioner or any other person under sections 60D.50 to 60D.58 are recognized by 50.19this state as being confidential and containing trade secrets. Those documents, materials, 50.20or other information are classified as confidential or protected nonpublic or both, are 50.21not subject to subpoena, and are not subject to discovery or admissible in evidence in a 50.22private civil action. However, the commissioner may use the documents, materials, or 50.23other information in the furtherance of a regulatory or legal action brought as a part of the 50.24commissioner's official duties. The commissioner shall not otherwise make the documents, 50.25materials, or other information public without the prior written consent of the insurer.50.26    Subd. 2.Testimonial privilege.Neither the commissioner nor any person who 50.27received documents, materials, or other ORSA-related information, through examination 50.28or otherwise, while acting under the authority of the commissioner or with whom the 50.29documents, materials, or other information are shared pursuant to sections 60D.50 to 50.3060D.58 is permitted or required to testify in a private civil action concerning documents, 50.31materials, or information subject to subdivision 1 that are classified as confidential, 50.32protected nonpublic, or both.50.33    Subd. 3.Sharing of information.In order to assist in the performance of the 50.34commissioner's regulatory duties, the commissioner:51.1(1) may, upon request, share documents, materials, or other ORSA-related 51.2information, including the confidential, protected nonpublic, and privileged documents, 51.3materials, or information subject to subdivision 1, including proprietary and trade secret 51.4documents and materials with other state, federal, and international financial regulatory 51.5agencies, including members of a supervisory college, as defined in section 60D.215, with 51.6the National Association of Insurance Commissioners and with third-party consultants 51.7designated by the commissioner, provided that the recipient agrees in writing to maintain 51.8the confidentiality and privileged status of the ORSA-related documents, materials, or 51.9other information and has verified in writing the legal authority to maintain confidentiality;51.10(2) may receive documents, materials, or other ORSA-related information, including 51.11otherwise confidential and privileged documents, materials, or information, including 51.12proprietary and trade secret information or documents, from regulatory officials of other 51.13foreign or domestic jurisdictions, including members of a supervisory college, as defined 51.14in section 60D.215, and from the National Association of Insurance Commissioners, and 51.15shall maintain as confidential, protected nonpublic, or privileged documents, materials, 51.16or information received with notice or the understanding that it is confidential or 51.17privileged under the laws of the jurisdiction that is the source of the document, material, 51.18or information; and51.19(3) shall enter into a written agreement with the National Association of Insurance 51.20Commissioners or a third-party consultant governing sharing and use of information 51.21provided pursuant to sections 60D.50 to 60D.58, consistent with this subdivision that:51.22    (i) specifies procedures and protocols regarding the confidentiality and security 51.23of information shared with the National Association of Insurance Commissioners or a 51.24third-party consultant pursuant to sections 60D.50 to 60D.58, including procedures and 51.25protocols for sharing by the National Association of Insurance Commissioners with other 51.26state regulators from states in which the insurance group has domiciled insurers. The 51.27agreement must provide that the recipient agrees in writing to maintain the confidentiality 51.28and privileged status of the ORSA-related documents, materials, or other information and 51.29has verified in writing the legal authority to maintain confidentiality;51.30(ii) specifies that ownership of information shared with the National Association 51.31of Insurance Commissioners or a third-party consultant pursuant to sections 60D.50 51.32to 60D.58 remains with the commissioner and the National Association of Insurance 51.33Commissioner's or a third-party consultant's use of the information is subject to the 51.34direction of the commissioner;52.1(iii) prohibits the National Association of Insurance Commissioners or a third-party 52.2consultant from storing the information shared pursuant to sections 60D.50 to 60D.58 in a 52.3permanent database after the underlying analysis is completed;52.4(iv) requires prompt notice to be given to an insurer whose confidential or protected 52.5nonpublic information in the possession of the National Association of Insurance 52.6Commissioners or a third-party consultant pursuant to sections 60D.50 to 60D.58 is 52.7subject to a request or subpoena to the National Association of Insurance Commissioners 52.8or a third-party consultant for disclosure or production;52.9(v) requires the National Association of Insurance Commissioners or a third-party 52.10consultant to consent to intervention by an insurer in any judicial or administrative action 52.11in which the National Association of Insurance Commissioners or a third-party consultant 52.12may be required to disclose confidential or protected nonpublic information about the 52.13insurer shared with the National Association of Insurance Commissioners or a third-party 52.14consultant pursuant to sections 60D.50 to 60D.58; and52.15(vi) in the case of an agreement involving a third-party consultant, provides for the 52.16insurer's written consent.52.17    Subd. 4.Responsibility for administration, execution, and enforcement.The 52.18sharing of information and documents by the commissioner pursuant to sections 60D.50 to 52.1960D.58 does not constitute a delegation of regulatory authority or rulemaking, and the 52.20commissioner is solely responsible for the administration, execution, and enforcement of 52.21sections 60D.50 to 60D.58.52.22    Subd. 5.Disclosure not deemed to be waiver of privilege or confidentiality.No 52.23waiver of an applicable privilege or claim of confidentiality in the documents, proprietary 52.24and trade secret materials, or other ORSA-related information occurs as a result of 52.25disclosure of ORSA-related information or documents to the commissioner under this 52.26subdivision or as a result of sharing as authorized in sections 60D.50 to 60D.58.52.27    Subd. 6.Classification, protection, and use of information by others.Documents, 52.28materials, or other information in the possession or control of the National Association 52.29of Insurance Commissioners or a third-party consultant pursuant to sections 60D.50 to 52.3060D.58 are confidential, protected nonpublic, and privileged, are not subject to subpoena, 52.31and are not subject to discovery or admissible in evidence in a private civil action.52.32    Sec. 9. [60D.58] SANCTIONS.52.33An insurer failing, without just cause, to timely file the ORSA Summary Report as 52.34required in sections 60D.50 to 60D.58 shall pay a penalty of $1,000 for each day's delay to 52.35be recovered by the commissioner and to be paid into the general fund. The commissioner 53.1may reduce the penalty if the insurer demonstrates to the commissioner that the imposition 53.2of the penalty would constitute a financial hardship to the insurer.53.3    Sec. 10. EFFECTIVE DATE.53.4The requirements of sections 1 to 9 are effective January 1, 2015. The first filing of 53.5the ORSA Summary Report is in 2015 pursuant to Minnesota Statutes, section 60D.54.