HF 1669

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

A bill for an act
relating to insurance; regulating certain fees, rate
filings, and policy renewals and alterations;
regulating the collection of certain information;
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;
62A.02, subdivision 1; 70A.06, subdivision 1; 72A.501,
subdivision 2; proposing coding for new law in
Minnesota Statutes, chapter 60A; 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 this information on its Web
site.
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 under
section 70A.06 may use the expedited filing procedure under this
section for homeowner's insurance and automobile insurance.
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 that the forms, policies, amendments, endorsements,
and rates comply with all applicable Minnesota statutes and
rules. If the filing will impact rates, the description must
identify the rate or rates and rating rules for the product.
Forms and rates filed under this procedure are effective upon
submission to and receipt by the department.
new text end

new text begin Subd. 3. 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. 4. 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 one year after the insurer or rate service
organization had ceased using the form 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. 5. new text end

new text begin Review. new text end

new text begin The commissioner of commerce may review
any rate used or filed for use in Minnesota to determine whether
it is excessive, inadequate, or unfairly discriminatory.
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.

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. A memorandum
of coverage or binder must be provided by the insurer to the
policyholder upon request.
new text end

Sec. 8.

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. 9.

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. new text end

new text begin (a) An insurer may file a life or annuity contract
form and all related riders of any kind or description with the
commissioner for a review under this subdivision by an actuary
specified by the commissioner. The review must be completed
within 60 days of a completed filing. The cost of this 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.
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 rate
applications 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 with at least
five years' relevant experience in annuity pricing. If the
department does not have actuaries with the experience required
by this subdivision, the commissioner shall contract with
actuaries to review all rate applications submitted by insurers
pursuant to this subdivision.
new text end

Sec. 10.

Minnesota Statutes 2004, section 62A.02,
subdivision 1, is amended to read:

Subdivision 1.

Filing.

For purposes of this section,
"health plan" means a health plan as defined in section 62A.011
or a policy of accident and sickness insurance as defined in
section 62A.01. No health plan shall be issued or delivered to
any person in this state, nor shall any application, rider, or
endorsement be used in connection with the health plan, until a
copy of its form and of the classification of risks and the
premium rates pertaining to the form have been filed with the
commissioner. The filing for nongroup health plan forms shall
include a statement of actuarial reasons and data to support the
rate. For health benefit plans as defined in section 62L.02,
and for health plans to be issued to individuals, the health
carrier shall file with the commissioner the information
required in section 62L.08, subdivision 8. For group health
plans for which approval is sought for sales only outside of the
small employer market as defined in section 62L.02, this section
applies only to policies or contracts of accident and sickness
insurance. All forms intended for issuance in the individual or
small employer market must be accompanied by a statement as to
the expected loss ratio for the form. Premium rates and forms
relating to specific insureds or proposed insureds, whether
individuals or groups, need not be filed, unless requested by
the commissioner. new text begin Notwithstanding the requirements of this
section, an insurer issuing a long-term care policy, as defined
in section 62A.46 or 62S.01, may elect to use the expedited form
and rate filing procedure under section 60A.315.
new text end

Sec. 11.

Minnesota Statutes 2004, section 70A.06,
subdivision 1, is amended to read:

Subdivision 1.

Generally.

Every deleted text begin licensed insurer and
every deleted text end rate service organization licensed under section 70A.14 new text begin ,
and every licensed insurer except as otherwise provided in
section 60A.315, new text end shall file with the commissioner all rates and
all changes and amendments of rates made by it for use in this
state not later than their effective date. No rates contained
in a filing shall become effective unless they have been filed
with the commissioner. In any filing, the commissioner may
require the insurer or rate service organization to file
supporting data and explanatory data which shall include:

(1) the experience and judgment of the filer, and, to the
extent it wishes or the commissioner requires, of other insurers
or rate service organizations;

(2) its interpretation of any statistical data relied upon;

(3) descriptions of the actuarial and statistical methods
employed; and

(4) any other matters deemed relevant by the commissioner
or the filer.

Notwithstanding the foregoing, if the supporting data is
not filed within 30 days after so requested by the commissioner,
the rate is no longer effective and is presumed to be an
excessive rate.

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 .

(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 .

(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 exclusively for the purpose of
underwriting or rating an insurance policy, if the agent 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.

new text begin (d) This section and section 72A.502, subdivisions 1 and
12, do not apply to the collection and use of a consumer report,
information from a consumer report, or a numeric product
referred to as an insurance score or credit score, that is used
by a licensed insurer exclusively for the purpose of
underwriting or rating an insurance policy, if the insurer or a
licensed insurance agent acting on behalf of the insurer informs
the policyholder or prospective policyholder requesting the
insurance coverage that a consumer report information from a
consumer report, or a numeric product referred to as an
insurance score or credit score, will be obtained for the
purpose of underwriting or rating the policy. This paragraph is
intended to clarify the provisions of this section and section
72A.502, subdivisions 1 and 12, which do not apply to the
disclosure and collection of consumer report information.
new text end

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, 9, 10, and 11 are effective the day
following final enactment and apply to filings made on or after
that date.
new text end