HF 1669

4th Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; regulating certain fees, rate
filings, policy renewals and alterations, insurance
holding company systems, and insurance information
reporting practices; amending Minnesota Statutes 2004,
sections 60A.08, subdivision 3; 60A.14, subdivision 1;
60A.171, subdivisions 1, 2; 60A.351; 60K.46,
subdivision 7; 61A.02, subdivision 2, by adding a
subdivision; 72A.501, subdivisions 1, 2; proposing
coding for new law in Minnesota Statutes, chapters
60A; 60D; repealing Minnesota Statutes 2004, section
60A.171, subdivision 4.

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

Section 1.

Minnesota Statutes 2004, section 60A.08,
subdivision 3, is amended to read:

Subd. 3.

Renewal; new policy.

Any insurance policy
terminating by its provisions at a specified expiration date or
limited as to term by any statute and not otherwise renewable
may be renewed or extended at the option of the insurer, at the
premium rate then required therefor, for a specific additional
period or periods by a certificate, and without requiring the
issuance of a new policy deleted text begin more than once in any five-year
period deleted text end . new text begin The insurer must also post the current policy form on
its Web site, or must inform the policyholder annually in
writing that a copy of the current policy form is available on
request.
new text end

Sec. 2.

Minnesota Statutes 2004, section 60A.14,
subdivision 1, is amended to read:

Subdivision 1.

Fees other than examination fees.

In
addition to the fees and charges provided for examinations, the
following fees must be paid to the commissioner for deposit in
the general fund:

(a) by township mutual fire insurance companies;

(1) for filing certificate of incorporation $25 and
amendments thereto, $10;

(2) for filing annual statements, $15;

(3) for each annual certificate of authority, $15;

(4) for filing bylaws $25 and amendments thereto, $10;

(b) by other domestic and foreign companies including
fraternals and reciprocal exchanges;

(1) for filing certified copy of certificate of articles of
incorporation, $100;

(2) for filing annual statement, $225;

(3) for filing certified copy of amendment to certificate
or articles of incorporation, $100;

(4) for filing bylaws, $75 or amendments thereto, $75;

(5) for each company's certificate of authority, $575,
annually;

(c) the following general fees apply:

(1) for each certificate, including certified copy of
certificate of authority, renewal, valuation of life policies,
corporate condition or qualification, $25;

(2) for each copy of paper on file in the commissioner's
office 50 cents per page, and $2.50 for certifying the same;

(3) for license to procure insurance in unadmitted foreign
companies, $575;

(4) for valuing the policies of life insurance companies,
one cent per $1,000 of insurance so valued, provided that the
fee shall not exceed $13,000 per year for any company. The
commissioner may, in lieu of a valuation of the policies of any
foreign life insurance company admitted, or applying for
admission, to do business in this state, accept a certificate of
valuation from the company's own actuary or from the
commissioner of insurance of the state or territory in which the
company is domiciled;

(5) for receiving and filing certificates of policies by
the company's actuary, or by the commissioner of insurance of
any other state or territory, $50;

(6) for each appointment of an agent filed with the
commissioner, $10;

(7) for filing forms deleted text begin and deleted text end new text begin , new text end rates, new text begin and compliance
certifications under section 60A.315, new text end $75 per filing, which may
be paid on a quarterly basis in response to an invoice. Billing
and payment may be made electronically;

(8) for annual renewal of surplus lines insurer license,
$300;

(9) $250 filing fee for a large risk alternative rating
option plan that meets the $250,000 threshold requirement.

The commissioner shall adopt rules to define filings that
are subject to a fee.

Sec. 3.

new text begin [60A.315] EXPEDITED FORM AND RATE FILING.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin An insurer or rate service
organization otherwise required to file rates and forms may use
the expedited filing procedure under this section for
homeowner's insurance as defined in section 65A.27, subdivision
4, and automobile insurance as governed by chapter 65B.
new text end

new text begin Subd. 2. new text end

new text begin Compliance certifications. new text end

new text begin An insurer or rate
service organization shall file with the Department of Commerce
on a prescribed form a description of the policy, amendment, or
endorsement and a written certification signed by an officer of
the insurer or the rate service organization that the forms,
policies, amendments, and endorsements comply with all
applicable Minnesota statutes, rules, and case law, and a copy
of the policy, amendment, or endorsement. If the filing will
impact rates, the filing must comply with section 70A.06,
subdivisions 1 and 1a. Forms and rates filed under this
procedure are effective upon receipt by the department. Anyone
using the expedited filing procedures authorized by this section
must provide copies of the form filings within 24 hours of
receiving a request from the commissioner. Insurers may comply
with this requirement by providing the form filings in paper or
electronic format.
new text end

new text begin Subd. 3. new text end

new text begin Application of law. new text end

new text begin If an insurer uses the
services of a rate service organization for purposes of filing a
certificate of compliance under this section, the certification
by the rate service organization under subdivision 2 does not
excuse the insurer from its obligation to ensure that its filing
complies with all applicable Minnesota statutes, rules, and case
law.
new text end

new text begin Subd. 4. new text end

new text begin Fees. new text end

new text begin In order to be effective, the filing must
be accompanied by payment of the filing fee applicable to the
policy, amendment, endorsement, or rate unless the fee is
remitted in accordance with an alternative procedure allowed
under section 60A.14.
new text end

new text begin Subd. 5. new text end

new text begin Record keeping. new text end

new text begin The insurer or rate service
organization shall retain the policy, amendment, or endorsement
for at least five years after that policy, amendment, or
endorsement ceased providing coverage to any Minnesota
policyholder, and shall provide to the Department of Commerce
upon request a copy of any form in use pursuant to these filing
procedures.
new text end

new text begin Subd. 6. new text end

new text begin Audits; penalties. new text end

new text begin The commissioner is
authorized to conduct audits and investigations under section
45.027 and this chapter to determine if the insurers are
complying with Minnesota law in the issuance of policies
described under this section. If the policy filings contain
provisions that are inconsistent with or violate Minnesota law,
the commissioner may take action against the insurer under
section 45.027. The commissioner shall assess the insurer for
the costs of the investigation performed by the department and
shall deposit all such assessments into the revolving fund
established under section 60A.03.
new text end

Sec. 4.

Minnesota Statutes 2004, section 60A.171,
subdivision 1, is amended to read:

Subdivision 1.

Termination rights and obligations.

(a)
After an agency contractual relationship has been in effect for
a period of three years, an insurance company writing fire or
casualty loss insurance in this state may not terminate the
agency contractual relationship with any appointed agent unless
the company has deleted text begin attempted to rehabilitate the agent as provided
in subdivision 4. The insurer shall provide written notice of
intent to rehabilitate.
deleted text end

deleted text begin (b) If the agent and company are not able to reach a
mutually acceptable plan of rehabilitation, the company may
terminate the agency contractual relationship after providing
deleted text end new text begin provided new text end written notice of termination to the agent at least deleted text begin 90
deleted text end new text begin 60 new text end days in advance new text begin of the effective date of the termination new text end .

deleted text begin (c) deleted text end new text begin (b) new text end The notice of termination must include the reasons
for termination deleted text begin and a copy of the notice of intent to
rehabilitate deleted text end .

deleted text begin (d) deleted text end new text begin (c) new text end An insurance company may not terminate an agency
contract based upon any of the following:

(1) an adverse loss experience for a single year;

(2) the geographic location of the agent's auto and
homeowners insurance business; or

(3) the performance of obligations required of an insurer
under Minnesota Statutes.

deleted text begin (e) deleted text end new text begin (d) new text end For purposes of this section, "fire or casualty
loss insurance" means any line of insurance which an insurance
agent with a personal lines, property, or casualty license under
sections 60K.30 to 60K.56 may write in this state.

Sec. 5.

Minnesota Statutes 2004, section 60A.171,
subdivision 2, is amended to read:

Subd. 2.

Agent request to renew insurance contract.

The
company shall at the request of the agent renew any insurance
contract written by the agent for the company for not more than
one year for fire or casualty loss insurance during a period
of deleted text begin nine deleted text end new text begin 18 new text end months after the effective date of the termination,
but in the event any risk does not meet current underwriting
standards of the company, the company may decline its renewal,
provided that the company shall give the agent not less than 60
days' notice of its intention not to renew the contract of
insurance. new text begin The company shall not reduce the agent's
commissions, unless the company is reducing the commissions for
other appointed agents in the state at the same time.
new text end

Sec. 6.

Minnesota Statutes 2004, section 60A.351, is
amended to read:

60A.351 RENEWAL OF INSURANCE POLICY WITH ALTERED RATES.

If an insurance company licensed to do business in this
state offers or purports to offer to renew any commercial
liability and/or property insurance policy at less favorable
terms as to the dollar amount of coverage or deductibles, higher
rates, and/or higher rating plan, the new terms, the new rates
and/or rating plan may take effect on the renewal date of the
policy if the insurer has sent to the policyholder notice of the
new terms, new rates and/or rating plan at least 60 days prior
to the expiration date. If the insurer has not so notified the
policyholder, the policyholder may elect to cancel the renewal
policy within the 60-day period after receipt of the notice.
Earned premium for the period of coverage, if any, shall be
calculated pro rata upon the prior rate. This deleted text begin subdivision
deleted text end new text begin section new text end does not apply to ocean marine insurance, accident and
health insurance, deleted text begin and deleted text end reinsurance new text begin , and coverage under the
federal Terrorism Risk Insurance Act new text end .

This section does not apply if the change relates to guide
"a" rates or excess rates also known as "consent to rates" or if
there has been any change in the risk insured.

Sec. 7.

new text begin [60D.30] ELIGIBILITY DETERMINATION.
new text end

new text begin Section 302A.521, subdivision 3, applies to a corporation
that is a member of an insurance holding company system, except
if a determination for advancement is not made under section
302A.521, subdivision 6, clauses (1) to (4), the corporation
that is a member of an insurance holding company system may make
the determination that a person is entitled to payment or
reimbursement of expenses in advance of the final disposition of
a proceeding upon receipt of a written affirmation as provided
in section 302A.521, subdivision 3.
new text end

Sec. 8.

Minnesota Statutes 2004, section 60K.46,
subdivision 7, is amended to read:

Subd. 7.

Altering existing policies; written binders
required.

An insurance producer having express authority to
bind coverage, who orally agrees on behalf of an insurer to
provide insurance coverage, or to alter an existing insurance
agreement, shall execute and deleted text begin deliver deleted text end new text begin forward new text end a deleted text begin written
deleted text end memorandum or binder containing the terms of the oral agreement
to the insured within deleted text begin three deleted text end new text begin five new text end business days from the time the
oral agreement is entered new text begin , unless the insurer forwards the
information new text end . new text begin The memorandum of coverage or binder may be
forwarded by mail, facsimile, or electronically. The memorandum
of coverage or binder must be forwarded by mail, unless the
insured authorizes facsimile or electronic transmission of it.
A memorandum of coverage or binder must be provided by the
insurer to the policyholder upon request.
new text end

Sec. 9.

Minnesota Statutes 2004, section 61A.02,
subdivision 2, is amended to read:

Subd. 2.

Approval required.

new text begin Except as otherwise
authorized pursuant to subdivision 2a, new text end no policy or certificate
of life insurance or annuity contract, issued to an individual,
group, or multiple employer trust, nor any rider of any kind or
description which is made a part thereof shall be issued or
delivered in this state, or be issued by a life insurance
company organized under the laws of this state, until the form
of the same has been approved by the commissioner. In making a
determination under this section, the commissioner may require
the insurer to provide rates and advertising materials related
to policies or contracts, certificates, or similar evidence of
coverage issued or delivered in this state.

Subdivisions 1 to 5 apply to a policy, certificate of
insurance, or similar evidence of coverage issued to a Minnesota
resident or issued to provide coverage to a Minnesota resident.
Subdivisions 1 to 5 do not apply to a certificate of insurance
or similar evidence of coverage that meets the conditions of
section 61A.093, subdivision 2.

Sec. 10.

Minnesota Statutes 2004, section 61A.02, is
amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Expedited procedure for life or annuity
contracts; form and rate filing reviews. new text end

new text begin (a) An insurer may
file a life or annuity contract, rates, or forms and all related
riders of any kind or description with the commissioner for a
review under this subdivision. Any review must be completed
within 60 days of receipt of a completed filing. The cost of
any actuarial review must be paid by the insurer submitting the
filing under this subdivision.
new text end

new text begin (b) If a filing has been disapproved and is resubmitted,
the cover letter must note the disapproval and any changes made
since the earlier filing, with an explanation of why the new
filing should be approved. Resubmission of disapproved forms
should, where possible, be made within 90 days of disapproval.
new text end

new text begin (c) The filer may request a hearing within ten days of
receiving a final disapproval. Within 20 days of the receipt of
the request, the commissioner shall schedule a date for the
hearing, which must occur within 30 days of the scheduling. At
least ten days' written notice of the hearing must be given to
all interested parties. All hearings must be conducted in
accordance with chapter 14.
new text end

new text begin (d) The hearing officer may order a prehearing conference
for the resolution or simplification of issues, to be held no
less than three days before the scheduled date of a hearing.
new text end

new text begin (e) All actuaries used by the commissioner to review
filings submitted by insurers pursuant to this subdivision,
whether employed by the department or secured by contract, must
be members of the American Academy of Actuaries. The
commissioner may contract with actuaries to review filings
submitted by insurers under this subdivision, and shall assess
the applicant for the costs of this review. Payments received
by the commissioner under this subdivision shall be deposited in
the revolving fund established under section 60A.03.
new text end

new text begin (f) Except for the change in timing for the review of
completed filings found in paragraph (a) and the expedited
hearing procedures found in paragraph (c), nothing in this
subdivision shall be construed as changing the statutory and
regulatory standards for approval or disapproval of filings.
new text end

Sec. 11.

Minnesota Statutes 2004, section 72A.501,
subdivision 1, is amended to read:

Subdivision 1.

Requirement; content.

An authorization
used by an insurer, insurance-support organization, or insurance
agent to disclose or collect personal or privileged information
must be in writing and must meet the following requirements:

(1) is written in plain language;

(2) is dated;

(3) specifies the types of persons authorized to disclose
information about the person;

(4) specifies the nature of the information authorized to
be disclosed;

(5) names the insurer or insurance agent and identifies by
generic reference representatives of the insurer to whom the
person is authorizing information to be disclosed;

(6) specifies the purposes for which the information is
collected; and

(7) specifies the length of time the authorization remains
valid.

new text begin If the insurer, insurance-support organization, or insurance
agent determines to disclose or collect a kind of information
not specified in a previous authorization, a new authorization
specifying that kind of information must be obtained.
new text end

Sec. 12.

Minnesota Statutes 2004, section 72A.501,
subdivision 2, is amended to read:

Subd. 2.

Application.

(a) If the authorization is signed
to collect information in connection with an application for a
property and casualty insurance policy, a policy reinstatement,
or a request for a change in benefits, the authorization deleted text begin must
not remain deleted text end new text begin is new text end valid deleted text begin for longer than one year from the date the
authorization is signed or the date the insurer grants or denies
coverage, reinstatement, or change in benefits, whichever is
sooner deleted text end new text begin as long as the individual is continually insured with the
insurer new text end . new text begin At each renewal of the policy, the insurer must notify
the insured in writing of the contents of the authorization and
that the authorization remains in effect unless revoked.
new text end

(b) If the authorization is signed to collect information
in connection with an application for a life, disability, and
health insurance policy or contract, reinstatement, or request
for change in benefits, the authorization deleted text begin may not remain deleted text end new text begin is
new text end valid deleted text begin for longer than 26 months from the date the authorization
is signed deleted text end new text begin as long as the individual is continually insured with
the insurer new text end . new text begin At each renewal of the policy, the insurer must
notify the insured in writing of the contents of the
authorization and that the authorization remains in effect
unless revoked.
new text end

(c) This section and section 72A.502, subdivisions 1 and
12, do not apply to the collection and use of a numeric product
referred to as an insurance score or credit score that is used
by a licensed insurance agent new text begin or insurer new text end exclusively for the
purpose of underwriting or rating an insurance policy, if the
agent new text begin or insurer new text end informs the policyholder or prospective
policyholder requesting the insurance coverage that an insurance
score or credit score will be obtained for the purpose of
underwriting or rating the policy.

Sec. 13. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 60A.171, subdivision 4, is
repealed.
new text end

Sec. 14. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin Sections 2, 3, and 10 are effective the day following final
enactment and apply to filings made on or after that date.
new text end