HF 1092

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; providing an expedited form and 
  1.3             rate filing for certain types of insurance; amending 
  1.4             Minnesota Statutes 2002, sections 60A.14, subdivision 
  1.5             1; 61A.02, subdivision 2; 61A.09, subdivision 1; 
  1.6             61A.17; 62A.02, subdivisions 1, 2; 62A.11, subdivision 
  1.7             3; 70A.06, subdivision 1; proposing coding for new law 
  1.8             in Minnesota Statutes, chapters 60A. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2002, section 60A.14, 
  1.11  subdivision 1, is amended to read: 
  1.12     Subdivision 1.  [FEES OTHER THAN EXAMINATION FEES.] In 
  1.13  addition to the fees and charges provided for examinations, the 
  1.14  following fees must be paid to the commissioner for deposit in 
  1.15  the general fund: 
  1.16     (a) by township mutual fire insurance companies; 
  1.17     (1) for filing certificate of incorporation $25 and 
  1.18  amendments thereto, $10; 
  1.19     (2) for filing annual statements, $15; 
  1.20     (3) for each annual certificate of authority, $15; 
  1.21     (4) for filing bylaws $25 and amendments thereto, $10; 
  1.22     (b) by other domestic and foreign companies including 
  1.23  fraternals and reciprocal exchanges; 
  1.24     (1) for filing certified copy of certificate of articles of 
  1.25  incorporation, $100; 
  1.26     (2) for filing annual statement, $225; 
  1.27     (3) for filing certified copy of amendment to certificate 
  2.1   or articles of incorporation, $100; 
  2.2      (4) for filing bylaws, $75 or amendments thereto, $75; 
  2.3      (5) for each company's certificate of authority, $575, 
  2.4   annually; 
  2.5      (c) the following general fees apply: 
  2.6      (1) for each certificate, including certified copy of 
  2.7   certificate of authority, renewal, valuation of life policies, 
  2.8   corporate condition or qualification, $25; 
  2.9      (2) for each copy of paper on file in the commissioner's 
  2.10  office 50 cents per page, and $2.50 for certifying the same; 
  2.11     (3) for license to procure insurance in unadmitted foreign 
  2.12  companies, $575; 
  2.13     (4) for valuing the policies of life insurance companies, 
  2.14  one cent per $1,000 of insurance so valued, provided that the 
  2.15  fee shall not exceed $13,000 per year for any company.  The 
  2.16  commissioner may, in lieu of a valuation of the policies of any 
  2.17  foreign life insurance company admitted, or applying for 
  2.18  admission, to do business in this state, accept a certificate of 
  2.19  valuation from the company's own actuary or from the 
  2.20  commissioner of insurance of the state or territory in which the 
  2.21  company is domiciled; 
  2.22     (5) for receiving and filing certificates of policies by 
  2.23  the company's actuary, or by the commissioner of insurance of 
  2.24  any other state or territory, $50; 
  2.25     (6) for each appointment of an agent filed with the 
  2.26  commissioner, $10; 
  2.27     (7) for filing forms and, rates, and compliance 
  2.28  certifications under section 60A.315, $75 per filing, which may 
  2.29  be paid on a quarterly basis in response to an invoice.  Billing 
  2.30  and payment may be made electronically; 
  2.31     (8) for annual renewal of surplus lines insurer license, 
  2.32  $300; 
  2.33     (9) $250 filing fee for a large risk alternative rating 
  2.34  option plan that meets the $250,000 threshold requirement. 
  2.35     The commissioner shall adopt rules to define filings that 
  2.36  are subject to a fee. 
  3.1      Sec. 2.  [60A.315] [EXPEDITED FORM AND RATE FILING.] 
  3.2      Subdivision 1.  [AUTHORITY.] An insurer otherwise required 
  3.3   to file rates and forms under sections 61A.02, 61A.09, 61A.17, 
  3.4   62A.02, 62A.11, 70A.06 or other law shall use the expedited 
  3.5   filing procedure under this section. 
  3.6      Subd. 2.  [COMPLIANCE CERTIFICATIONS.] An insurer shall 
  3.7   file with the department of commerce on a prescribed form, a 
  3.8   description of the policy, amendment, or endorsement and a 
  3.9   written certification signed by an officer of the insurer that 
  3.10  the forms, policies, amendments, endorsements, and rates comply 
  3.11  with all applicable Minnesota statutes and rules.  If the filing 
  3.12  will impact rates, the description must identify the rate or 
  3.13  rates and rating rules for the product.  Forms and rates filed 
  3.14  under this procedure are effective upon submission to and 
  3.15  receipt by the department. 
  3.16     Subd. 3.  [FEES.] In order to be effective, the filing must 
  3.17  be accompanied by payment of the filing fee applicable to the 
  3.18  policy, amendment, endorsement, or rate unless the fee is 
  3.19  remitted in accordance with an alternative procedure allowed 
  3.20  pursuant to Minnesota Statutes, section 60A.14. 
  3.21     Subd. 4.  [RECORD KEEPING.] The insurer shall retain the 
  3.22  policy, amendment, or endorsement for at least one year after 
  3.23  the insurer had ceased using the form and shall provide to the 
  3.24  department of commerce upon request a copy of any form in use 
  3.25  pursuant to these filing procedures. 
  3.26     Subd. 5.  [ALLOWABLE RATE CHANGES.] Any subsequent rate 
  3.27  increases or decreases of up to seven percent above or below the 
  3.28  insurer's current filed rate may take effect upon the 
  3.29  department's receipt of the insurer's submission of the rate 
  3.30  change, and the applicable fee.  Rate increases implemented 
  3.31  pursuant to this subdivision may not exceed seven percent in a 
  3.32  12-month period.  Changes in rating rules or classifications are 
  3.33  effective upon submission to and receipt by the department 
  3.34  provided that the insurer, through an officer of the insurer, 
  3.35  certifies in writing that the changes comply with all applicable 
  3.36  Minnesota statutes and rules, and upon payment of the applicable 
  4.1   filing fee. 
  4.2      Subd. 6.  [INELIGIBLE RATE CHANGES.] Any rate increases or 
  4.3   decreases that exceed the seven percent limit established by 
  4.4   subdivision 5 may be used upon submission to and receipt by the 
  4.5   department and payment of the applicable filing fee.  However, 
  4.6   when filing rates that exceed the seven percent limit, insurers 
  4.7   shall include with the filing all necessary supporting material 
  4.8   for the rate or rates. 
  4.9      Subd. 7.  [REVIEW.] The commissioner of commerce shall have 
  4.10  the right to review any rate used or filed for use in Minnesota 
  4.11  to determine whether it is excessive, inadequate, or unfairly 
  4.12  discriminatory. 
  4.13     Subd. 8.  [APPLICATION.] This section does not apply to 
  4.14  workers compensation insurance, long-term care insurance 
  4.15  regulated under sections 62A.46 to 62A.56, and chapter 62S, 
  4.16  medicare-related coverage, as defined in section 62A.31, 
  4.17  subdivision 3, paragraph (q), or rate service organizations. 
  4.18     Sec. 3.  Minnesota Statutes 2002, section 61A.02, 
  4.19  subdivision 2, is amended to read: 
  4.20     Subd. 2.  [APPROVAL REQUIRED.] Except as otherwise provided 
  4.21  in section 60A.315, no policy or certificate of life insurance 
  4.22  or annuity contract, issued to an individual, group, or multiple 
  4.23  employer trust, nor any rider of any kind or description which 
  4.24  is made a part thereof shall be issued or delivered in this 
  4.25  state, or be issued by a life insurance company organized under 
  4.26  the laws of this state, until the form of the same has been 
  4.27  approved by the commissioner.  In making a determination under 
  4.28  this section, the commissioner may require the insurer to 
  4.29  provide rates and advertising materials related to policies or 
  4.30  contracts, certificates, or similar evidence of coverage issued 
  4.31  or delivered in this state.  
  4.32     Subdivisions 1 to 5 apply to a policy, certificate of 
  4.33  insurance, or similar evidence of coverage issued to a Minnesota 
  4.34  resident or issued to provide coverage to a Minnesota resident.  
  4.35  Subdivisions 1 to 5 do not apply to a certificate of insurance 
  4.36  or similar evidence of coverage that meets the conditions of 
  5.1   section 61A.093, subdivision 2. 
  5.2      Sec. 4.  Minnesota Statutes 2002, section 61A.09, 
  5.3   subdivision 1, is amended to read: 
  5.4      Subdivision 1.  [FILING REQUIREMENT.] Except as otherwise 
  5.5   provided in section 60A.315, no group life insurance policy or 
  5.6   group annuity shall be issued for delivery in this state until 
  5.7   the form thereof and the form of any certificates issued 
  5.8   thereunder have been filed in accordance with and subject to the 
  5.9   provisions of section 61A.02.  Each person insured under such a 
  5.10  group life insurance policy (excepting policies which insure the 
  5.11  lives of debtors of a creditor or vendor to secure payment of 
  5.12  indebtedness) shall be furnished a certificate of insurance 
  5.13  issued by the insurer and containing the following: 
  5.14     (a) name and location of the insurance company; 
  5.15     (b) a statement as to the insurance protection to which the 
  5.16  certificate holder is entitled, including any changes in such 
  5.17  protection depending on the age of the person whose life is 
  5.18  insured; 
  5.19     (c) any and all provisions regarding the termination or 
  5.20  reduction of the certificate holder's insurance protection; 
  5.21     (d) a statement that the master group policy may be 
  5.22  examined at a reasonably accessible place; 
  5.23     (e) the maximum rate of contribution to be paid by the 
  5.24  certificate holder; 
  5.25     (f) beneficiary and method required to change such 
  5.26  beneficiary; 
  5.27     (g) a statement that alternative methods for the payment of 
  5.28  group life policy proceeds of $15,000 or more must be offered to 
  5.29  beneficiaries in lieu of a lump sum distribution, at their 
  5.30  request.  Alternative payment methods which must be offered at 
  5.31  the request of the beneficiaries must include, but are not 
  5.32  limited to, a life income option, an income option for fixed 
  5.33  amounts or fixed time periods, and the option to select an 
  5.34  interest-bearing account with the company with the right to 
  5.35  select another option at a later date; 
  5.36     (h) in the case of a group term insurance policy if the 
  6.1   policy provides that insurance of the certificate holder will 
  6.2   terminate, in case of a policy issued to an employer, by reason 
  6.3   of termination of the certificate holder's employment, or in 
  6.4   case of a policy issued to an organization of which the 
  6.5   certificate holder is a member, by reason of termination of 
  6.6   membership, a provision to the effect that in case of 
  6.7   termination of employment or membership, or in case of 
  6.8   termination of the group policy, the certificate holder shall be 
  6.9   entitled to have issued by the insurer, without evidence of 
  6.10  insurability, upon application made to the insurer within 31 
  6.11  days after the termination, and upon payment of the premium 
  6.12  applicable to the class of risk to which that person belongs and 
  6.13  to the form and amount of the policy at that person's then 
  6.14  attained age, a policy of life insurance only, in any one of the 
  6.15  forms customarily issued by the insurer except term insurance, 
  6.16  in an amount equal to the amount of the life insurance 
  6.17  protection under such group insurance policy at the time of such 
  6.18  termination; and shall contain a further provision to the effect 
  6.19  that upon the death of the certificate holder during such 31-day 
  6.20  period and before any such individual policy has become 
  6.21  effective, the amount of insurance for which the certificate 
  6.22  holder was entitled to make application shall be payable as a 
  6.23  death benefit by the insurer.  
  6.24     This section applies to a policy, certificate of insurance, 
  6.25  or similar evidence of coverage issued to a Minnesota resident 
  6.26  or issued to provide coverage to a Minnesota resident.  This 
  6.27  section does not apply to a certificate of insurance or similar 
  6.28  evidence of coverage that meets the conditions of section 
  6.29  61A.093, subdivision 2. 
  6.30     Sec. 5.  Minnesota Statutes 2002, section 61A.17, is 
  6.31  amended to read: 
  6.32     61A.17 [FILING OF CONTRACTS.] 
  6.33     Except as otherwise provided in section 60A.315, no 
  6.34  contract on a variable basis shall be issued in this state until 
  6.35  a copy of the form thereof (and, in the case of a group 
  6.36  contract, the form of any certificate evidencing variable 
  7.1   benefits issued pursuant thereto) and any form of application 
  7.2   for such contract shall have been filed with the commissioner.  
  7.3   No life insurance contract on a variable basis shall be filed 
  7.4   for issuance in Minnesota or issued in Minnesota before the 
  7.5   commissioner has promulgated rules under section 61A.20 
  7.6   regarding life insurance contracts on a variable basis.  
  7.7      Sec. 6.  Minnesota Statutes 2002, section 62A.02, 
  7.8   subdivision 1, is amended to read: 
  7.9      Subdivision 1.  [FILING.] For purposes of this section, 
  7.10  "health plan" means a health plan as defined in section 62A.011 
  7.11  or a policy of accident and sickness insurance as defined in 
  7.12  section 62A.01.  Except as otherwise provided in section 
  7.13  60A.315, no health plan shall be issued or delivered to any 
  7.14  person in this state, nor shall any application, rider, or 
  7.15  endorsement be used in connection with the health plan, until a 
  7.16  copy of its form and of the classification of risks and the 
  7.17  premium rates pertaining to the form have been filed with the 
  7.18  commissioner.  The filing for nongroup health plan forms shall 
  7.19  include a statement of actuarial reasons and data to support the 
  7.20  rate.  For health benefit plans as defined in section 62L.02, 
  7.21  and for health plans to be issued to individuals, the health 
  7.22  carrier shall file with the commissioner the information 
  7.23  required in section 62L.08, subdivision 8.  For group health 
  7.24  plans for which approval is sought for sales only outside of the 
  7.25  small employer market as defined in section 62L.02, this section 
  7.26  applies only to policies or contracts of accident and sickness 
  7.27  insurance.  All forms intended for issuance in the individual or 
  7.28  small employer market must be accompanied by a statement as to 
  7.29  the expected loss ratio for the form.  Premium rates and forms 
  7.30  relating to specific insureds or proposed insureds, whether 
  7.31  individuals or groups, need not be filed, unless requested by 
  7.32  the commissioner. 
  7.33     Sec. 7.  Minnesota Statutes 2002, section 62A.02, 
  7.34  subdivision 2, is amended to read: 
  7.35     Subd. 2.  [APPROVAL.] (a) Except as otherwise provided in 
  7.36  section 60A.315, the health plan form shall not be issued, nor 
  8.1   shall any application, rider, endorsement, or rate be used in 
  8.2   connection with it, until the expiration of 60 days after it has 
  8.3   been filed unless the commissioner approves it before that time. 
  8.4      (b) Notwithstanding paragraph (a), a rate filed with 
  8.5   respect to a policy of accident and sickness insurance as 
  8.6   defined in section 62A.01 by an insurer licensed under chapter 
  8.7   60A, may be used on or after the date of filing with the 
  8.8   commissioner.  Rates that are not approved or disapproved within 
  8.9   the 60-day time period are deemed approved.  This paragraph does 
  8.10  not apply to Medicare-related coverage as defined in section 
  8.11  62A.31, subdivision 3, paragraph (q). 
  8.12     Sec. 8.  Minnesota Statutes 2002, section 62A.11, 
  8.13  subdivision 3, is amended to read: 
  8.14     Subd. 3.  [POLICY FORMS.] Except as otherwise provided in 
  8.15  section 60A.315, no policy of blanket accident and sickness 
  8.16  insurance may be issued or delivered in this state unless a copy 
  8.17  of the form thereof has been approved by the commissioner and it 
  8.18  contains in substance such of the provisions required for 
  8.19  individual policies as may be applicable to blanket accident and 
  8.20  sickness insurance and the following provisions: 
  8.21     (1) A provision that the policy and the application of the 
  8.22  policyholder shall constitute the entire contract between the 
  8.23  parties, and that, in the absence of fraud, all statements made 
  8.24  by the policyholder shall be deemed representations and not 
  8.25  warranties, and that no statement made for the purpose of 
  8.26  affecting insurance shall avoid such insurance or reduce 
  8.27  benefits unless contained in a written instrument signed by the 
  8.28  policyholder, a copy of which has been furnished to such 
  8.29  policyholder.  
  8.30     (2) A provision that to the group or class originally 
  8.31  insured shall be added from time to time all new persons 
  8.32  eligible for coverage.  
  8.33     Sec. 9.  Minnesota Statutes 2002, section 70A.06, 
  8.34  subdivision 1, is amended to read: 
  8.35     Subdivision 1.  Every licensed insurer and every rate 
  8.36  service organization licensed under section 70A.14, and every 
  9.1   licensed insurer except as otherwise provided in section 
  9.2   60A.315, shall file with the commissioner all rates and all 
  9.3   changes and amendments of rates made by it for use in this state 
  9.4   not later than their effective date.  No rates contained in a 
  9.5   filing shall become effective unless they have been filed with 
  9.6   the commissioner.  In any filing, the commissioner may require 
  9.7   the insurer or rate service organization to file supporting data 
  9.8   and explanatory data which shall include: 
  9.9      (1) the experience and judgment of the filer, and, to the 
  9.10  extent it wishes or the commissioner requires, of other insurers 
  9.11  or rate service organizations; 
  9.12     (2) its interpretation of any statistical data relied upon; 
  9.13     (3) descriptions of the actuarial and statistical methods 
  9.14  employed; and 
  9.15     (4) any other matters deemed relevant by the commissioner 
  9.16  or the filer.  
  9.17     Notwithstanding the foregoing, if the supporting data is 
  9.18  not filed within 30 days after so requested by the commissioner, 
  9.19  the rate is no longer effective and is presumed to be an 
  9.20  excessive rate. 
  9.21     Sec. 10.  [EFFECTIVE DATE; APPLICATION.] 
  9.22     Sections 1 to 9 are effective the day following final 
  9.23  enactment and apply to filings made on or after that date.