HF 1405

as introduced - 87th Legislature (2011 - 2012) Posted on 04/07/2011 11:41am

A bill for an act
relating to insurance; regulating claims processing for insurance on portable
electronics products; permitting use of an automated claims processing system
subject to certain requirements and safeguards; amending Minnesota Statutes
2010, sections 72B.02, by adding a subdivision; 72B.03, subdivision 1, by
adding a subdivision; 72B.041, subdivision 2, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 72B.02, is amended by adding a
subdivision to read:

new text begin Subd. 23. new text end

new text begin Automated claims adjudication system. new text end

new text begin "Automated claims
adjudication system" means a preprogrammed computer system designed for the
collection, data entry, calculation, and final resolution of portable electronics insurance
claims relating to coverage regulated by section 60K.381, which:
new text end

new text begin (1) may be utilized only by a licensed independent adjuster; licensed insurance
producer as defined in section 60K.31, subdivision 6; or a supervised individual operating
under section 72B.03, subdivision 1, paragraph (a), clause (14);
new text end

new text begin (2) must comply with all claims payment requirements of the insurance laws of
this state; and
new text end

new text begin (3) must be certified as compliant with this section by a licensed independent
adjuster that is an officer of a business entity licensed under this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 72B.03, subdivision 1, is amended to read:

Subdivision 1.

Requirement; exceptions.

(a) A person shall not act or hold out
as an independent adjuster, public adjuster, or public adjuster solicitor unless the person
is licensed as an independent adjuster, public adjuster, or public adjuster solicitor in
accordance with this chapter, or is exempt from licensure as an independent adjuster,
public adjuster, or public adjuster solicitor under this chapter.

(b) The definition of adjuster does not include, and a license as an adjuster is not
required of, the following:

(1) attorneys-at-law admitted to practice in this state, when acting in the attorney's
professional capacity as an attorney;

(2) a person employed solely to obtain facts surrounding a claim or to furnish
technical assistance to a licensed adjuster;

(3) an individual who is employed to investigate suspected fraudulent insurance
claims but who does not adjust losses or determine claims payments;

(4) a person who solely performs executive, administrative, managerial, or clerical
duties or any combination of these duties and who does not investigate, negotiate, or settle
claims with policyholders, claimants, or their legal representative;

(5) a licensed health care provider or its employee who provides managed care
services so long as the services do not include the determination of compensability;

(6) a managed care organization or any of its employees or an employee of any
organization providing managed care services so long as the services do not include the
determination of compensability;

(7) a person who settles only reinsurance or subrogation claims;

(8) an officer, director, manager, or employee of an authorized insurer, a surplus lines
insurer, a risk retention group, or an attorney-in-fact of a reciprocal insurer;

(9) a United States manager of the United States branch of an alien insurer;

(10) a person who investigates, negotiates, or settles life, accident and health,
annuity, or disability insurance claims;

(11) an individual employee, under a self-insured arrangement, who adjusts claims
on behalf of the employee's employer;

(12) a licensed insurance producer, attorney-in-fact of a reciprocal insurer, or
managing general agent of the insurer to whom claim authority has been granted by the
insurer;

(13) a person authorized to adjust workers' compensation or disability claims under
the authority of a third-party administrator license pursuant to section 60A.23, subdivision
8 deleted text begin . deleted text end new text begin ; or
new text end

new text begin (14) an individual who:
new text end

new text begin (i) collects claim information from, or furnishes claim information to, insureds or
claimants; and
new text end

new text begin (ii) conducts data entry including entering data into an automated claims adjudication
system, provided that the individual is an employee of a licensed independent adjuster or
its affiliate where no more than 25 such persons are under the supervision of one licensed
independent adjuster or licensed insurance producer who is exempt from licensure under
clause (12).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 72B.03, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Residents of Canada. new text end

new text begin An individual resident of Canada may be licensed
pursuant to section 72B.041 and may designate Minnesota as the individual's home state,
complying with the requirements of that section applicable to resident adjusters, and by
submitting to the jurisdiction of the commissioner. An individual resident of Canada
licensed as a resident adjuster under the law of another state must be granted nonresident
independent adjuster licensure in Minnesota if the individual's designated home state
grants licensure to residents of this state on the same basis.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2010, section 72B.041, subdivision 2, is amended to read:

Subd. 2.

Criminal history record check; fingerprints.

(a) An individual applying
for a resident independent or public adjuster license must:

(1) consent to a criminal history record check;

(2) submit a fingerprint card in a form acceptable to the commissioner; and

(3) pay the fee required to perform criminal history record checks with the Minnesota
Bureau of Criminal Apprehension and the Federal Bureau of Investigation.

(b) The commissioner may contract for the collection and transmission of
fingerprints required under this chapter and may order the fee for collecting and
transmitting fingerprints to be payable directly to the contractor by the applicant. The
commissioner may agree to a reasonable fingerprinting fee to be charged by the contractor.

(c) The commissioner must treat and maintain an applicant's fingerprints and any
criminal history record information obtained under this chapter as confidential and must
apply security measures consistent with the standards specified by the Criminal Justice
Information Services Division of the Federal Bureau of Investigation for the electronic
storage of fingerprints and necessary identifying information. The commissioner must
limit the use of records solely to the purposes authorized in this chapter. The fingerprints
and any criminal history record information must not be subject to subpoena, other than
one issued in a criminal action or investigation.

(d) The commissioner may receive criminal history record information from another
government agency in lieu of the Minnesota Bureau of Criminal Apprehension.

(e) The commissioner may require any documents reasonably necessary to verify the
information contained in the application.

(f) All applicants for a license as a public adjuster must attach to their application
evidence that the bonding requirement in subdivision 3 has been satisfied.

new text begin (g) A business entity applying for a resident independent adjuster license shall
submit the names, addresses, Social Security numbers, criminal and administrative history,
background checks, biographical statement, and fingerprints, of all executive officers and
directors of the applicant and of all executive officers and directors of entities owning and
any individuals owning, directly or indirectly, more than 50 percent of the outstanding
voting securities of the applicant.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2010, section 72B.041, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Business entity. new text end

new text begin A business entity applying for a nonresident independent
adjuster license shall submit the names, addresses, Social Security numbers, criminal
and administrative history, background checks, biographical statement, and fingerprints,
of all executive officers and directors of the applicant and of all executive officers and
directors of entities owning and any individuals owning, directly or indirectly, more
than 50 percent of outstanding voting securities of the applicant. Any such nonresident
business entity applicant whose home state complies with all of the provisions of this
subdivision is not required to submit a criminal and administrative history, background
check, biographical statement, and fingerprints for its executive officers, directors, and
owners of outstanding voting securities.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end