HF 1809

1st Unofficial Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; regulating agency terminations, 
  1.3             coverages, fees, forms, disclosures, reports, 
  1.4             information security, and premiums; amending Minnesota 
  1.5             Statutes 2004, sections 60A.14, subdivision 1; 
  1.6             60A.171, subdivision 11; 60A.23, subdivision 8; 
  1.7             60A.966; 60A.969; 62A.136; 62A.31, subdivision 1h; 
  1.8             62A.315; 62A.316; 62E.13, subdivision 2; 62Q.471; 
  1.9             65A.29, subdivision 11; 65B.48, subdivision 3; 72A.20, 
  1.10            subdivisions 13, 36; 79.211, by adding a subdivision; 
  1.11            79.40; 79.56, subdivisions 1, 3; 79.62, subdivision 3; 
  1.12            79A.03, subdivision 9; 79A.04, subdivisions 2, 10; 
  1.13            79A.06, subdivision 5; 79A.12, subdivision 2; 79A.22, 
  1.14            subdivision 11, by adding a subdivision; 176.191, 
  1.15            subdivision 3; Laws 1985, chapter 85, section 1; 
  1.16            proposing coding for new law in Minnesota Statutes, 
  1.17            chapters 60A; 62L; 65A; 65B; repealing Minnesota 
  1.18            Statutes 2004, sections 61A.072, subdivision 2; 62E.03.
  1.19  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.20     Section 1.  Minnesota Statutes 2004, section 60A.14, 
  1.21  subdivision 1, is amended to read: 
  1.22     Subdivision 1.  [FEES OTHER THAN EXAMINATION FEES.] In 
  1.23  addition to the fees and charges provided for examinations, the 
  1.24  following fees must be paid to the commissioner for deposit in 
  1.25  the general fund: 
  1.26     (a) by township mutual fire insurance companies; 
  1.27     (1) for filing certificate of incorporation $25 and 
  1.28  amendments thereto, $10; 
  1.29     (2) for filing annual statements, $15; 
  1.30     (3) for each annual certificate of authority, $15; 
  1.31     (4) for filing bylaws $25 and amendments thereto, $10; 
  1.32     (b) by other domestic and foreign companies including 
  2.1   fraternals and reciprocal exchanges; 
  2.2      (1) for filing certified copy of certificate of articles of 
  2.3   incorporation, $100; 
  2.4      (2) for filing annual statement, $225; 
  2.5      (3) for filing certified copy of amendment to certificate 
  2.6   or articles of incorporation, $100; 
  2.7      (4) for filing bylaws, $75 or amendments thereto, $75; 
  2.8      (5) for each company's certificate of authority, $575, 
  2.9   annually; 
  2.10     (c) the following general fees apply: 
  2.11     (1) for each certificate, including certified copy of 
  2.12  certificate of authority, renewal, valuation of life policies, 
  2.13  corporate condition or qualification, $25; 
  2.14     (2) for each copy of paper on file in the commissioner's 
  2.15  office 50 cents per page, and $2.50 for certifying the same; 
  2.16     (3) for license to procure insurance in unadmitted foreign 
  2.17  companies, $575; 
  2.18     (4) for valuing the policies of life insurance companies, 
  2.19  one cent per $1,000 of insurance so valued, provided that the 
  2.20  fee shall not exceed $13,000 per year for any company.  The 
  2.21  commissioner may, in lieu of a valuation of the policies of any 
  2.22  foreign life insurance company admitted, or applying for 
  2.23  admission, to do business in this state, accept a certificate of 
  2.24  valuation from the company's own actuary or from the 
  2.25  commissioner of insurance of the state or territory in which the 
  2.26  company is domiciled; 
  2.27     (5) for receiving and filing certificates of policies by 
  2.28  the company's actuary, or by the commissioner of insurance of 
  2.29  any other state or territory, $50; 
  2.30     (6) for each appointment of an agent filed with the 
  2.31  commissioner, $10; 
  2.32     (7) for filing forms and rates, $75 $90 per filing, 
  2.33  which or $75 per filing when submitted via electronic filing 
  2.34  system.  Filing fees may be paid on a quarterly basis in 
  2.35  response to an invoice.  Billing and payment may be made 
  2.36  electronically; 
  3.1      (8) for annual renewal of surplus lines insurer license, 
  3.2   $300; 
  3.3      (9) $250 filing fee for a large risk alternative rating 
  3.4   option plan that meets the $250,000 threshold requirement. 
  3.5      The commissioner shall adopt rules to define filings that 
  3.6   are subject to a fee. 
  3.7      Sec. 2.  Minnesota Statutes 2004, section 60A.171, 
  3.8   subdivision 11, is amended to read: 
  3.9      Subd. 11.  Upon termination of an agency, a company is 
  3.10  prohibited from soliciting business in the notice of nonrenewal 
  3.11  required by section 60A.37.  If termination of an agency 
  3.12  contract is the ground for nonrenewal of a policy of homeowner's 
  3.13  insurance, as defined in section 65A.27, subdivision 4, the 
  3.14  company must provide notice to the policyholder that the policy 
  3.15  is not being renewed due to the termination of the company's 
  3.16  contract with the agency.  If the agency is unable to replace 
  3.17  the homeowner's insurance policy with a suitable policy from 
  3.18  another insurer, the agent must notify the policyholder of the 
  3.19  policyholder's right to renew with the company terminating the 
  3.20  agency contract.  The company must renew the policy if the 
  3.21  insured or the insured's agent makes a written request for the 
  3.22  renewal before the renewal date. 
  3.23     Sec. 3.  Minnesota Statutes 2004, section 60A.23, 
  3.24  subdivision 8, is amended to read: 
  3.25     Subd. 8.  [SELF-INSURANCE OR INSURANCE PLAN ADMINISTRATORS 
  3.26  WHO ARE VENDORS OF RISK MANAGEMENT SERVICES.] (1)  [SCOPE.] This 
  3.27  subdivision applies to any vendor of risk management services 
  3.28  and to any entity which administers, for compensation, a 
  3.29  self-insurance or insurance plan.  This subdivision does not 
  3.30  apply (a) to an insurance company authorized to transact 
  3.31  insurance in this state, as defined by section 60A.06, 
  3.32  subdivision 1, clauses (4) and (5); (b) to a service plan 
  3.33  corporation, as defined by section 62C.02, subdivision 6; (c) to 
  3.34  a health maintenance organization, as defined by section 62D.02, 
  3.35  subdivision 4; (d) to an employer directly operating a 
  3.36  self-insurance plan for its employees' benefits; (e) to an 
  4.1   entity which administers a program of health benefits 
  4.2   established pursuant to a collective bargaining agreement 
  4.3   between an employer, or group or association of employers, and a 
  4.4   union or unions; or (f) to an entity which administers a 
  4.5   self-insurance or insurance plan if a licensed Minnesota insurer 
  4.6   is providing insurance to the plan and if the licensed insurer 
  4.7   has appointed the entity administering the plan as one of its 
  4.8   licensed agents within this state. 
  4.9      (2)  [DEFINITIONS.] For purposes of this subdivision the 
  4.10  following terms have the meanings given them. 
  4.11     (a) "Administering a self-insurance or insurance plan" 
  4.12  means (i) processing, reviewing or paying claims, (ii) 
  4.13  establishing or operating funds and accounts, or (iii) otherwise 
  4.14  providing necessary administrative services in connection with 
  4.15  the operation of a self-insurance or insurance plan. 
  4.16     (b) "Employer" means an employer, as defined by section 
  4.17  62E.02, subdivision 2. 
  4.18     (c) "Entity" means any association, corporation, 
  4.19  partnership, sole proprietorship, trust, or other business 
  4.20  entity engaged in or transacting business in this state. 
  4.21     (d) "Self-insurance or insurance plan" means a plan 
  4.22  providing life, medical or hospital care, accident, sickness or 
  4.23  disability insurance for the benefit of employees or members of 
  4.24  an association, or a plan providing liability coverage for any 
  4.25  other risk or hazard, which is or is not directly insured or 
  4.26  provided by a licensed insurer, service plan corporation, or 
  4.27  health maintenance organization. 
  4.28     (e) "Vendor of risk management services" means an entity 
  4.29  providing for compensation actuarial, financial management, 
  4.30  accounting, legal or other services for the purpose of designing 
  4.31  and establishing a self-insurance or insurance plan for an 
  4.32  employer. 
  4.33     (3)  [LICENSE.] No vendor of risk management services or 
  4.34  entity administering a self-insurance or insurance plan may 
  4.35  transact this business in this state unless it is licensed to do 
  4.36  so by the commissioner.  An applicant for a license shall state 
  5.1   in writing the type of activities it seeks authorization to 
  5.2   engage in and the type of services it seeks authorization to 
  5.3   provide.  The license may be granted only when the commissioner 
  5.4   is satisfied that the entity possesses the necessary 
  5.5   organization, background, expertise, and financial integrity to 
  5.6   supply the services sought to be offered.  The commissioner may 
  5.7   issue a license subject to restrictions or limitations upon the 
  5.8   authorization, including the type of services which may be 
  5.9   supplied or the activities which may be engaged in.  The license 
  5.10  fee is $1,000 $1,500 for the initial application and 
  5.11  $1,000 $1,500 for each two-year three-year renewal.  All 
  5.12  licenses are for a period of two three years. 
  5.13     (4)  [REGULATORY RESTRICTIONS; POWERS OF THE COMMISSIONER.] 
  5.14  To assure that self-insurance or insurance plans are financially 
  5.15  solvent, are administered in a fair and equitable fashion, and 
  5.16  are processing claims and paying benefits in a prompt, fair, and 
  5.17  honest manner, vendors of risk management services and entities 
  5.18  administering insurance or self-insurance plans are subject to 
  5.19  the supervision and examination by the commissioner.  Vendors of 
  5.20  risk management services, entities administering insurance or 
  5.21  self-insurance plans, and insurance or self-insurance plans 
  5.22  established or operated by them are subject to the trade 
  5.23  practice requirements of sections 72A.19 to 72A.30.  In lieu of 
  5.24  an unlimited guarantee from a parent corporation for a vendor of 
  5.25  risk management services or an entity administering insurance or 
  5.26  self-insurance plans, the commissioner may accept a surety bond 
  5.27  in a form satisfactory to the commissioner in an amount equal to 
  5.28  120 percent of the total amount of claims handled by the 
  5.29  applicant in the prior year.  If at any time the total amount of 
  5.30  claims handled during a year exceeds the amount upon which the 
  5.31  bond was calculated, the administrator shall immediately notify 
  5.32  the commissioner.  The commissioner may require that the bond be 
  5.33  increased accordingly. 
  5.34     No contract entered into after July 1, 2001, between a 
  5.35  licensed vendor of risk management services and a group 
  5.36  authorized to self-insure for workers' compensation liabilities 
  6.1   under section 79A.03, subdivision 6, may take effect until it 
  6.2   has been filed with the commissioner, and either (1) the 
  6.3   commissioner has approved it or (2) 60 days have elapsed and the 
  6.4   commissioner has not disapproved it as misleading or violative 
  6.5   of public policy. 
  6.6      (5)  [RULEMAKING AUTHORITY.] To carry out the purposes of 
  6.7   this subdivision, the commissioner may adopt rules pursuant to 
  6.8   sections 14.001 to 14.69.  These rules may: 
  6.9      (a) establish reporting requirements for administrators of 
  6.10  insurance or self-insurance plans; 
  6.11     (b) establish standards and guidelines to assure the 
  6.12  adequacy of financing, reinsuring, and administration of 
  6.13  insurance or self-insurance plans; 
  6.14     (c) establish bonding requirements or other provisions 
  6.15  assuring the financial integrity of entities administering 
  6.16  insurance or self-insurance plans; or 
  6.17     (d) establish other reasonable requirements to further the 
  6.18  purposes of this subdivision. 
  6.19     Sec. 4.  Minnesota Statutes 2004, section 60A.966, is 
  6.20  amended to read: 
  6.21     60A.966 [APPROVAL OF VIATICAL SETTLEMENTS CONTRACT FORMS.] 
  6.22     A viatical settlement provider or broker may not use a 
  6.23  viatical settlement contract form in this state unless it has 
  6.24  been filed with and approved by the commissioner.  A viatical 
  6.25  settlement contract form filed with the commissioner is 
  6.26  considered to have been approved if it has not been disapproved 
  6.27  within 60 days of the filing.  The commissioner shall disapprove 
  6.28  a viatical settlement contract form if, in the commissioner's 
  6.29  opinion, the contract or contract provisions are unreasonable, 
  6.30  contrary to the interests of the public, or otherwise misleading 
  6.31  or unfair to the policy owner.  
  6.32     Sec. 5.  Minnesota Statutes 2004, section 60A.969, is 
  6.33  amended to read: 
  6.34     60A.969 [DISCLOSURE.] 
  6.35     A viatical settlement provider or a broker shall disclose 
  6.36  the following information to the viator no later than the 
  7.1   date the viatical settlement contract is signed by all 
  7.2   parties an application is given to the viator: 
  7.3      (1) possible alternatives to viatical settlement contracts 
  7.4   for persons with catastrophic or life threatening illnesses, 
  7.5   including accelerated benefits offered by the issuer of the life 
  7.6   insurance policy; 
  7.7      (2) the fact that some or all of the proceeds of the 
  7.8   viatical settlement may be taxable and that assistance should be 
  7.9   sought from a personal tax advisor; 
  7.10     (3) the fact that the viatical settlement may be subject to 
  7.11  the claims of creditors; 
  7.12     (4) the fact that receipt of a viatical settlement may 
  7.13  adversely affect the recipients' eligibility for Medicaid or 
  7.14  other government benefits or entitlements and that advice should 
  7.15  be obtained from the appropriate agencies; 
  7.16     (5) the policy owner's right to rescind a viatical 
  7.17  settlement contract within 30 days of the date it is executed by 
  7.18  all parties or 15 days of the receipt of the viatical settlement 
  7.19  proceeds by the viator, whichever is less, as provided in 
  7.20  section 60A.970, subdivision 3; and 
  7.21     (6) the date by which the funds will be available to the 
  7.22  viator and the source of the funds. 
  7.23     Sec. 6.  [60A.98] [DEFINITIONS.] 
  7.24     Subdivision 1.  [SCOPE.] For purposes of sections 60A.98 
  7.25  and 60A.981, the terms defined in this section have the meanings 
  7.26  given them. 
  7.27     Subd. 2.  [CUSTOMER.] "Customer" means a consumer who has a 
  7.28  continuing relationship with a licensee under which the licensee 
  7.29  provides one or more insurance products or services to the 
  7.30  consumer that are to be used primarily for personal, family, or 
  7.31  household purposes. 
  7.32     Subd. 3.  [CUSTOMER INFORMATION.] "Customer information" 
  7.33  means nonpublic personal information about a customer, whether 
  7.34  in paper, electronic, or other form, that is maintained by or on 
  7.35  behalf of the licensee. 
  7.36     Subd. 4.  [CUSTOMER INFORMATION SYSTEMS.] "Customer 
  8.1   information systems" means the electronic or physical methods 
  8.2   used to access, collect, store, use, transmit, protect, or 
  8.3   dispose of customer information. 
  8.4      Subd. 5.  [LICENSEE.] "Licensee" means all licensed 
  8.5   insurers, producers, and other persons licensed or required to 
  8.6   be licensed, authorized or required to be authorized, or 
  8.7   registered or required to be registered pursuant to the 
  8.8   insurance laws of this state, except that "licensee" does not 
  8.9   include a purchasing group or an ineligible insurer in regard to 
  8.10  the surplus line insurance conducted pursuant to sections 
  8.11  60A.195 to 60A.209.  "Licensee" does not include producers until 
  8.12  January 1, 2007.  
  8.13     Subd. 6.  [NONPUBLIC FINANCIAL INFORMATION.] "Nonpublic 
  8.14  financial information" means: 
  8.15     (1) personally identifiable financial information; and 
  8.16     (2) any list, description, or other grouping of consumers, 
  8.17  and publicly available information pertaining to them, that is 
  8.18  derived using any personally identifiable financial information 
  8.19  that is not publicly available. 
  8.20     Subd. 7.  [NONPUBLIC PERSONAL HEALTH 
  8.21  INFORMATION.] "Nonpublic personal health information" means 
  8.22  health information: 
  8.23     (1) that identifies an individual who is the subject of the 
  8.24  information; or 
  8.25     (2) with respect to which there is a reasonable basis to 
  8.26  believe that the information could be used to identify an 
  8.27  individual. 
  8.28     Subd. 8.  [NONPUBLIC PERSONAL INFORMATION.] "Nonpublic 
  8.29  personal information" means nonpublic financial information and 
  8.30  nonpublic personal health information.  
  8.31     Subd. 9.  [PERSONALLY IDENTIFIABLE FINANCIAL 
  8.32  INFORMATION.] "Personally identifiable financial information" 
  8.33  means any information: 
  8.34     (1) a consumer provides to a licensee to obtain an 
  8.35  insurance product or service from the licensee; 
  8.36     (2) about a consumer resulting from a transaction involving 
  9.1   an insurance product or service between a licensee and a 
  9.2   consumer; or 
  9.3      (3) the licensee otherwise obtains about a consumer in 
  9.4   connection with providing an insurance product or service to 
  9.5   that consumer. 
  9.6      Subd. 10.  [SERVICE PROVIDER.] "Service provider" means a 
  9.7   person that maintains, processes, or otherwise is permitted 
  9.8   access to customer information through its provision of services 
  9.9   directly to the licensee. 
  9.10     Sec. 7.  [60A.981] [INFORMATION SECURITY PROGRAM.] 
  9.11     Subdivision 1.  [GENERAL REQUIREMENTS.] Each licensee shall 
  9.12  implement a comprehensive written information security program 
  9.13  that includes administrative, technical, and physical safeguards 
  9.14  for the protection of customer information.  The administrative, 
  9.15  technical, and physical safeguards included in the information 
  9.16  security program must be appropriate to the size and complexity 
  9.17  of the licensee and the nature and scope of its activities. 
  9.18     Subd. 2.  [OBJECTIVES.] A licensee's information security 
  9.19  program must be designed to: 
  9.20     (1) ensure the security and confidentiality of customer 
  9.21  information; 
  9.22     (2) protect against any anticipated threats or hazards to 
  9.23  the security or integrity of the information; and 
  9.24     (3) protect against unauthorized access to or use of the 
  9.25  information that could result in substantial harm or 
  9.26  inconvenience to any customer. 
  9.27     Subd. 3.  [EXAMPLES OF METHODS OF DEVELOPMENT AND 
  9.28  IMPLEMENTATION.] The following actions and procedures are 
  9.29  examples of methods of implementation of the requirements of 
  9.30  subdivisions 1 and 2.  These examples are nonexclusive 
  9.31  illustrations of actions and procedures that licensees may 
  9.32  follow to implement subdivisions 1 and 2: 
  9.33     (1) the licensee: 
  9.34     (i) identifies reasonably foreseeable internal or external 
  9.35  threats that could result in unauthorized disclosure, misuse, 
  9.36  alteration, or destruction of customer information or customer 
 10.1   information systems; 
 10.2      (ii) assesses the likelihood and potential damage of these 
 10.3   threats, taking into consideration the sensitivity of customer 
 10.4   information; and 
 10.5      (iii) assesses the sufficiency of policies, procedures, 
 10.6   customer information systems, and other safeguards in place to 
 10.7   control risks; 
 10.8      (2) the licensee: 
 10.9      (i) designs its information security program to control the 
 10.10  identified risks, commensurate with the sensitivity of the 
 10.11  information, as well as the complexity and scope of the 
 10.12  licensee's activities; 
 10.13     (ii) trains staff, as appropriate, to implement the 
 10.14  licensee's information security program; and 
 10.15     (iii) regularly tests or otherwise regularly monitors the 
 10.16  key controls, systems, and procedures of the information 
 10.17  security program.  The frequency and nature of these tests or 
 10.18  other monitoring practices are determined by the licensee's risk 
 10.19  assessment; 
 10.20     (3) the licensee: 
 10.21     (i) exercises appropriate due diligence in selecting its 
 10.22  service providers; and 
 10.23     (ii) requires its service providers to implement 
 10.24  appropriate measures designed to meet the objectives of this 
 10.25  regulation, and, where indicated by the licensee's risk 
 10.26  assessment, takes appropriate steps to confirm that its service 
 10.27  providers have satisfied these obligations; and 
 10.28     (4) the licensee monitors, evaluates, and adjusts, as 
 10.29  appropriate, the information security program in light of any 
 10.30  relevant changes in technology, the sensitivity of its customer 
 10.31  information, internal or external threats to information, and 
 10.32  the licensee's own changing business arrangements, such as 
 10.33  mergers and acquisitions, alliances and joint ventures, 
 10.34  outsourcing arrangements, and changes to customer information 
 10.35  systems. 
 10.36     Sec. 8.  [60A.982] [UNFAIR TRADE PRACTICES.] 
 11.1      A violation of sections 60A.98 and 60A.981 is considered to 
 11.2   be a violation of sections 72A.17 to 72A.32. 
 11.3      Sec. 9.  Minnesota Statutes 2004, section 62A.136, is 
 11.4   amended to read: 
 11.5      62A.136 [DENTAL AND VISION PLAN COVERAGE.] 
 11.6      The following provisions do not apply to health plans as 
 11.7   defined in section 62A.011, subdivision 3, clause (6), providing 
 11.8   dental or vision coverage only:  sections 62A.041; 62A.0411; 
 11.9   62A.047; 62A.149; 62A.151; 62A.152; 62A.154; 62A.155; 62A.17, 
 11.10  subdivision 6; 62A.21, subdivision 2b; 62A.26; 62A.28; 62A.285; 
 11.11  62A.30; 62A.304; 62A.3093; and 62E.16. 
 11.12     Sec. 10.  Minnesota Statutes 2004, section 62A.31, 
 11.13  subdivision 1h, is amended to read: 
 11.14     Subd. 1h.  [LIMITATIONS ON DENIALS, CONDITIONS, AND PRICING 
 11.15  OF COVERAGE.] No health carrier issuing Medicare-related 
 11.16  coverage in this state may impose preexisting condition 
 11.17  limitations or otherwise deny or condition the issuance or 
 11.18  effectiveness of any such coverage available for sale in this 
 11.19  state, nor may it discriminate in the pricing of such coverage, 
 11.20  because of the health status, claims experience, receipt of 
 11.21  health care, medical condition, or age of an applicant where an 
 11.22  application for such coverage is submitted prior to or during 
 11.23  the six-month period beginning with the first day of the month 
 11.24  in which an individual first enrolled for benefits under 
 11.25  Medicare Part B.  This subdivision applies to each 
 11.26  Medicare-related coverage offered by a health carrier regardless 
 11.27  of whether the individual has attained the age of 65 years.  If 
 11.28  an individual who is enrolled in Medicare Part B due to 
 11.29  disability status is involuntarily disenrolled due to loss of 
 11.30  disability status, the individual is eligible for another 
 11.31  six-month enrollment period provided under this subdivision 
 11.32  beginning the first day of the month in which the individual 
 11.33  later becomes eligible for and enrolls again in Medicare Part 
 11.34  B.  An individual who is or was previously enrolled in Medicare 
 11.35  Part B due to disability status is eligible for another 
 11.36  six-month enrollment period under this subdivision beginning the 
 12.1   first day of the month in which the individual has attained the 
 12.2   age of 65 years and either maintains enrollment in, or enrolls 
 12.3   again in, Medicare Part B.  If an individual enrolled in 
 12.4   Medicare Part B voluntarily disenrolls from Medicare Part B 
 12.5   because the individual becomes reemployed and is enrolled under 
 12.6   an employee welfare benefit plan, the individual is eligible for 
 12.7   another six-month enrollment period, as provided in this 
 12.8   subdivision, beginning the first day of the month in which the 
 12.9   individual later becomes eligible for and enrolls again in 
 12.10  Medicare Part B. 
 12.11     Sec. 11.  Minnesota Statutes 2004, section 62A.315, is 
 12.12  amended to read: 
 12.13     62A.315 [EXTENDED BASIC MEDICARE SUPPLEMENT PLAN; 
 12.14  COVERAGE.] 
 12.15     The extended basic Medicare supplement plan must have a 
 12.16  level of coverage so that it will be certified as a qualified 
 12.17  plan pursuant to section 62E.07, and will provide: 
 12.18     (1) coverage for all of the Medicare Part A inpatient 
 12.19  hospital deductible and coinsurance amounts, and 100 percent of 
 12.20  all Medicare Part A eligible expenses for hospitalization not 
 12.21  covered by Medicare; 
 12.22     (2) coverage for the daily co-payment amount of Medicare 
 12.23  Part A eligible expenses for the calendar year incurred for 
 12.24  skilled nursing facility care; 
 12.25     (3) coverage for the coinsurance amount or in the case of 
 12.26  hospital outpatient department services paid under a prospective 
 12.27  payment system, the co-payment amount, of Medicare eligible 
 12.28  expenses under Medicare Part B regardless of hospital 
 12.29  confinement, and the Medicare Part B deductible amount; 
 12.30     (4) 80 percent of the usual and customary hospital and 
 12.31  medical expenses and supplies described in section 62E.06, 
 12.32  subdivision 1, not to exceed any charge limitation established 
 12.33  by the Medicare program or state law, the usual and customary 
 12.34  hospital and medical expenses and supplies, described in section 
 12.35  62E.06, subdivision 1, while in a foreign country, and 
 12.36  prescription drug expenses, not covered by Medicare; 
 13.1      (5) coverage for the reasonable cost of the first three 
 13.2   pints of blood, or equivalent quantities of packed red blood 
 13.3   cells as defined under federal regulations under Medicare parts 
 13.4   A and B, unless replaced in accordance with federal regulations; 
 13.5      (6) 100 percent of the cost of immunizations not otherwise 
 13.6   covered under Part D of the Medicare program and routine 
 13.7   screening procedures for cancer, including mammograms and pap 
 13.8   smears; 
 13.9      (7) preventive medical care benefit:  coverage for the 
 13.10  following preventive health services not covered by Medicare: 
 13.11     (i) an annual clinical preventive medical history and 
 13.12  physical examination that may include tests and services from 
 13.13  clause (ii) and patient education to address preventive health 
 13.14  care measures; 
 13.15     (ii) any one or a combination of the following preventive 
 13.16  screening tests or preventive services, the selection and 
 13.17  frequency of which is considered determined to be medically 
 13.18  appropriate: by the attending physician. 
 13.19     (A) fecal occult blood test and/or digital rectal 
 13.20  examination; 
 13.21     (B) dipstick urinalysis for hematuria, bacteriuria, and 
 13.22  proteinuria; 
 13.23     (C) pure tone (air only) hearing screening test 
 13.24  administered or ordered by a physician; 
 13.25     (D) serum cholesterol screening every five years; 
 13.26     (E) thyroid function test; 
 13.27     (F) diabetes screening; 
 13.28     (iii) any other tests or preventive measures determined 
 13.29  appropriate by the attending physician.  
 13.30     Reimbursement shall be for the actual charges up to 100 
 13.31  percent of the Medicare-approved amount for each service as if 
 13.32  Medicare were to cover the service as identified in American 
 13.33  Medical Association current procedural terminology (AMA CPT) 
 13.34  codes to a maximum of $120 annually under this benefit.  This 
 13.35  benefit shall not include payment for any procedure covered by 
 13.36  Medicare; 
 14.1      (8) at-home recovery benefit:  coverage for services to 
 14.2   provide short-term at-home assistance with activities of daily 
 14.3   living for those recovering from an illness, injury, or surgery: 
 14.4      (i) for purposes of this benefit, the following definitions 
 14.5   shall apply: 
 14.6      (A) "activities of daily living" include, but are not 
 14.7   limited to, bathing, dressing, personal hygiene, transferring, 
 14.8   eating, ambulating, assistance with drugs that are normally 
 14.9   self-administered, and changing bandages or other dressings; 
 14.10     (B) "care provider" means a duly qualified or licensed home 
 14.11  health aide/homemaker, personal care aide, or nurse provided 
 14.12  through a licensed home health care agency or referred by a 
 14.13  licensed referral agency or licensed nurses registry; 
 14.14     (C) "home" means a place used by the insured as a place of 
 14.15  residence, provided that the place would qualify as a residence 
 14.16  for home health care services covered by Medicare.  A hospital 
 14.17  or skilled nursing facility shall not be considered the 
 14.18  insured's place of residence; 
 14.19     (D) "at-home recovery visit" means the period of a visit 
 14.20  required to provide at-home recovery care, without limit on the 
 14.21  duration of the visit, except each consecutive four hours in a 
 14.22  24-hour period of services provided by a care provider is one 
 14.23  visit; 
 14.24     (ii) coverage requirements and limitations: 
 14.25     (A) at-home recovery services provided must be primarily 
 14.26  services that assist in activities of daily living; 
 14.27     (B) the insured's attending physician must certify that the 
 14.28  specific type and frequency of at-home recovery services are 
 14.29  necessary because of a condition for which a home care plan of 
 14.30  treatment was approved by Medicare; 
 14.31     (C) coverage is limited to: 
 14.32     (I) no more than the number and type of at-home recovery 
 14.33  visits certified as medically necessary by the insured's 
 14.34  attending physician.  The total number of at-home recovery 
 14.35  visits shall not exceed the number of Medicare-approved home 
 14.36  health care visits under a Medicare-approved home care plan of 
 15.1   treatment; 
 15.2      (II) the actual charges for each visit up to a maximum 
 15.3   reimbursement of $100 per visit; 
 15.4      (III) $4,000 per calendar year; 
 15.5      (IV) seven visits in any one week; 
 15.6      (V) care furnished on a visiting basis in the insured's 
 15.7   home; 
 15.8      (VI) services provided by a care provider as defined in 
 15.9   this section; 
 15.10     (VII) at-home recovery visits while the insured is covered 
 15.11  under the policy or certificate and not otherwise excluded; 
 15.12     (VIII) at-home recovery visits received during the period 
 15.13  the insured is receiving Medicare-approved home care services or 
 15.14  no more than eight weeks after the service date of the last 
 15.15  Medicare-approved home health care visit; 
 15.16     (iii) coverage is excluded for: 
 15.17     (A) home care visits paid for by Medicare or other 
 15.18  government programs; and 
 15.19     (B) care provided by unpaid volunteers or providers who are 
 15.20  not care providers. 
 15.21     Sec. 12.  Minnesota Statutes 2004, section 62A.316, is 
 15.22  amended to read: 
 15.23     62A.316 [BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.] 
 15.24     (a) The basic Medicare supplement plan must have a level of 
 15.25  coverage that will provide: 
 15.26     (1) coverage for all of the Medicare part A inpatient 
 15.27  hospital coinsurance amounts, and 100 percent of all Medicare 
 15.28  part A eligible expenses for hospitalization not covered by 
 15.29  Medicare, after satisfying the Medicare part A deductible; 
 15.30     (2) coverage for the daily co-payment amount of Medicare 
 15.31  part A eligible expenses for the calendar year incurred for 
 15.32  skilled nursing facility care; 
 15.33     (3) coverage for the coinsurance amount, or in the case of 
 15.34  outpatient department services paid under a prospective payment 
 15.35  system, the co-payment amount, of Medicare eligible expenses 
 15.36  under Medicare part B regardless of hospital confinement, 
 16.1   subject to the Medicare part B deductible amount; 
 16.2      (4) 80 percent of the hospital and medical expenses and 
 16.3   supplies incurred during travel outside the United States as a 
 16.4   result of a medical emergency; 
 16.5      (5) coverage for the reasonable cost of the first three 
 16.6   pints of blood, or equivalent quantities of packed red blood 
 16.7   cells as defined under federal regulations under Medicare parts 
 16.8   A and B, unless replaced in accordance with federal regulations; 
 16.9      (6) 100 percent of the cost of immunizations not otherwise 
 16.10  covered under Part D of the Medicare program and routine 
 16.11  screening procedures for cancer screening including mammograms 
 16.12  and pap smears; and 
 16.13     (7) 80 percent of coverage for all physician prescribed 
 16.14  medically appropriate and necessary equipment and supplies used 
 16.15  in the management and treatment of diabetes not otherwise 
 16.16  covered under Part D of the Medicare program.  Coverage must 
 16.17  include persons with gestational, type I, or type II diabetes. 
 16.18     (b) Only the following optional benefit riders may be added 
 16.19  to this plan: 
 16.20     (1) coverage for all of the Medicare part A inpatient 
 16.21  hospital deductible amount; 
 16.22     (2) a minimum of 80 percent of eligible medical expenses 
 16.23  and supplies not covered by Medicare part B, not to exceed any 
 16.24  charge limitation established by the Medicare program or state 
 16.25  law; 
 16.26     (3) coverage for all of the Medicare part B annual 
 16.27  deductible; 
 16.28     (4) coverage for at least 50 percent, or the equivalent of 
 16.29  50 percent, of usual and customary prescription drug expenses; 
 16.30     (5) coverage for the following preventive health services 
 16.31  medical care benefit coverage for the following preventative 
 16.32  health services not covered by Medicare: 
 16.33     (i) an annual clinical preventive medical history and 
 16.34  physical examination that may include tests and services from 
 16.35  clause (ii) and patient education to address preventive health 
 16.36  care measures; 
 17.1      (ii) any one or a combination of the following preventive 
 17.2   screening tests or preventive services, the selection and 
 17.3   frequency of which is considered determined to be medically 
 17.4   appropriate: by the attending physician. 
 17.5      (A) fecal occult blood test and/or digital rectal 
 17.6   examination; 
 17.7      (B) dipstick urinalysis for hematuria, bacteriuria, and 
 17.8   proteinuria; 
 17.9      (C) pure tone (air only) hearing screening test, 
 17.10  administered or ordered by a physician; 
 17.11     (D) serum cholesterol screening every five years; 
 17.12     (E) thyroid function test; 
 17.13     (F) diabetes screening; 
 17.14     (iii) any other tests or preventive measures determined 
 17.15  appropriate by the attending physician. 
 17.16     Reimbursement shall be for the actual charges up to 100 
 17.17  percent of the Medicare-approved amount for each service, as if 
 17.18  Medicare were to cover the service as identified in American 
 17.19  Medical Association current procedural terminology (AMA CPT) 
 17.20  codes, to a maximum of $120 annually under this benefit.  This 
 17.21  benefit shall not include payment for a procedure covered by 
 17.22  Medicare; 
 17.23     (6) coverage for services to provide short-term at-home 
 17.24  assistance with activities of daily living for those recovering 
 17.25  from an illness, injury, or surgery: 
 17.26     (i) For purposes of this benefit, the following definitions 
 17.27  apply: 
 17.28     (A) "activities of daily living" include, but are not 
 17.29  limited to, bathing, dressing, personal hygiene, transferring, 
 17.30  eating, ambulating, assistance with drugs that are normally 
 17.31  self-administered, and changing bandages or other dressings; 
 17.32     (B) "care provider" means a duly qualified or licensed home 
 17.33  health aide/homemaker, personal care aid, or nurse provided 
 17.34  through a licensed home health care agency or referred by a 
 17.35  licensed referral agency or licensed nurses registry; 
 17.36     (C) "home" means a place used by the insured as a place of 
 18.1   residence, provided that the place would qualify as a residence 
 18.2   for home health care services covered by Medicare.  A hospital 
 18.3   or skilled nursing facility shall not be considered the 
 18.4   insured's place of residence; 
 18.5      (D) "at-home recovery visit" means the period of a visit 
 18.6   required to provide at-home recovery care, without limit on the 
 18.7   duration of the visit, except each consecutive four hours in a 
 18.8   24-hour period of services provided by a care provider is one 
 18.9   visit; 
 18.10     (ii) Coverage requirements and limitations: 
 18.11     (A) at-home recovery services provided must be primarily 
 18.12  services that assist in activities of daily living; 
 18.13     (B) the insured's attending physician must certify that the 
 18.14  specific type and frequency of at-home recovery services are 
 18.15  necessary because of a condition for which a home care plan of 
 18.16  treatment was approved by Medicare; 
 18.17     (C) coverage is limited to: 
 18.18     (I) no more than the number and type of at-home recovery 
 18.19  visits certified as necessary by the insured's attending 
 18.20  physician.  The total number of at-home recovery visits shall 
 18.21  not exceed the number of Medicare-approved home care visits 
 18.22  under a Medicare-approved home care plan of treatment; 
 18.23     (II) the actual charges for each visit up to a maximum 
 18.24  reimbursement of $40 per visit; 
 18.25     (III) $1,600 per calendar year; 
 18.26     (IV) seven visits in any one week; 
 18.27     (V) care furnished on a visiting basis in the insured's 
 18.28  home; 
 18.29     (VI) services provided by a care provider as defined in 
 18.30  this section; 
 18.31     (VII) at-home recovery visits while the insured is covered 
 18.32  under the policy or certificate and not otherwise excluded; 
 18.33     (VIII) at-home recovery visits received during the period 
 18.34  the insured is receiving Medicare-approved home care services or 
 18.35  no more than eight weeks after the service date of the last 
 18.36  Medicare-approved home health care visit; 
 19.1      (iii) Coverage is excluded for: 
 19.2      (A) home care visits paid for by Medicare or other 
 19.3   government programs; and 
 19.4      (B) care provided by family members, unpaid volunteers, or 
 19.5   providers who are not care providers; 
 19.6      (7) coverage for at least 50 percent, or the equivalent of 
 19.7   50 percent, of usual and customary prescription drug expenses to 
 19.8   a maximum of $1,200 paid by the issuer annually under this 
 19.9   benefit.  An issuer of Medicare supplement insurance policies 
 19.10  that elects to offer this benefit rider shall also make 
 19.11  available coverage that contains the rider specified in clause 
 19.12  (4). 
 19.13     Sec. 13.  Minnesota Statutes 2004, section 62E.13, 
 19.14  subdivision 2, is amended to read: 
 19.15     Subd. 2.  [SELECTION OF WRITING CARRIER.] The association 
 19.16  may select policies and contracts, or parts thereof, submitted 
 19.17  by a member or members of the association, or by the association 
 19.18  or others, to develop specifications for bids from any entity 
 19.19  which wishes to be selected as a writing carrier to administer 
 19.20  the state plan.  The selection of the writing carrier shall be 
 19.21  based upon criteria established by the board of directors of the 
 19.22  association and approved by the commissioner.  The criteria 
 19.23  shall outline specific qualifications that an entity must 
 19.24  satisfy in order to be selected and, at a minimum, shall include 
 19.25  the entity's proven ability to handle large group accident and 
 19.26  health insurance cases, efficient claim paying capacity, and the 
 19.27  estimate of total charges for administering the plan.  The 
 19.28  association may select separate writing carriers for the two 
 19.29  types of qualified plans and the $2,000, $5,000, and $10,000 
 19.30  deductible plans, the qualified Medicare supplement plan plans, 
 19.31  and the health maintenance organization contract. 
 19.32     Sec. 14.  [62L.056] [SMALL EMPLOYER FLEXIBLE BENEFITS 
 19.33  PLANS.] 
 19.34     (a) Notwithstanding any provision of this chapter or 
 19.35  chapter 363A, a health carrier may offer, sell, issue, and renew 
 19.36  a health benefit plan that is a flexible benefits plan under 
 20.1   this section to a small employer if the following requirements 
 20.2   are satisfied: 
 20.3      (1) the health carrier is assessed less than ten percent of 
 20.4   the total amount assessed by the Minnesota Comprehensive Health 
 20.5   Association; 
 20.6      (2) the health benefit plan must be offered in compliance 
 20.7   with this chapter, except as otherwise permitted in this 
 20.8   section; 
 20.9      (3) the health benefit plan to be offered must be designed 
 20.10  to enable employers and covered persons to better manage costs 
 20.11  and coverage options through the use of co-pays, deductibles, 
 20.12  and other cost-sharing arrangements; 
 20.13     (4) the health benefit plan must be issued and administered 
 20.14  in compliance with sections 62E.141; 62L.03, subdivision 6; and 
 20.15  62L.12, subdivisions 3 and 4, relating to prohibitions against 
 20.16  enrolling in the Minnesota Comprehensive Health Association 
 20.17  persons eligible for employer group coverage; 
 20.18     (5) the health benefit plan may modify or exclude any or 
 20.19  all coverages of benefits that would otherwise be required by 
 20.20  law, except for maternity benefits and other benefits required 
 20.21  under federal law, and provided further that maternity benefits 
 20.22  may be excluded only if every employee of the small employer 
 20.23  approves the exclusion; 
 20.24     (6) the health benefit plan may modify or exclude any or 
 20.25  all coverages of services when provided by specific types of 
 20.26  health care providers otherwise required by law, except as 
 20.27  required by federal law; 
 20.28     (7) each health benefit plan must be approved by the 
 20.29  commissioner of commerce, but the commissioner may not 
 20.30  disapprove a plan on the grounds of a modification or exclusion 
 20.31  permitted under clause (5) or (6); and 
 20.32     (8) prior to sale of the health benefit plan, the small 
 20.33  employer must be given a written list of the coverages otherwise 
 20.34  required by law that are modified or excluded in the health 
 20.35  benefit plan.  The list must include a description of each 
 20.36  coverage in the list and indicate whether the coverage is 
 21.1   modified or excluded.  If a coverage is modified, the list must 
 21.2   describe the modification.  The list may, but need not, also 
 21.3   list any or all coverages otherwise required by law that are 
 21.4   included in the health benefit plan and indicate that they are 
 21.5   included. 
 21.6      (b) The definitions in section 62L.02 apply to this section 
 21.7   as modified by this section. 
 21.8      (c) An employer may provide a health benefit plan permitted 
 21.9   under this section to its employees, the employees' dependents, 
 21.10  and other persons eligible for coverage under the employer's 
 21.11  plan notwithstanding chapter 363A. 
 21.12     Sec. 15.  Minnesota Statutes 2004, section 62Q.471, is 
 21.13  amended to read: 
 21.14     62Q.471 [EXCLUSION FOR SUICIDE ATTEMPTS PROHIBITED.] 
 21.15     (a) No health plan may exclude or reduce coverage for 
 21.16  health care for an enrollee who is otherwise covered under the 
 21.17  health plan on the basis that the need for the health care arose 
 21.18  out of a suicide or suicide attempt by the enrollee. 
 21.19     (b) For purposes of this section, "health plan" has the 
 21.20  meaning given in section 62Q.01, subdivision 3, but includes the 
 21.21  coverages described in section 62A.011, clauses (4), (6), 
 21.22  and (7) and through (10). 
 21.23     Sec. 16.  Minnesota Statutes 2004, section 65A.29, 
 21.24  subdivision 11, is amended to read: 
 21.25     Subd. 11.  [NONRENEWAL.] Every insurer shall establish a 
 21.26  plan that sets out the minimum number and amount of claims 
 21.27  during an experience period that may result in a 
 21.28  nonrenewal.  For purposes of the plan, the insurer may not 
 21.29  consider as a claim the insured's inquiry about a hypothetical 
 21.30  claim, or the insured's inquiry to the insured's agent regarding 
 21.31  a potential claim. 
 21.32     No homeowner's insurance policy may be nonrenewed based on 
 21.33  the insured's loss experience unless the insurer has sent a 
 21.34  written notice that any future losses may result in nonrenewal 
 21.35  due to loss experience. 
 21.36     Any nonrenewal of a homeowner's insurance policy must, at a 
 22.1   minimum, comply with the requirements of subdivision 8 and the 
 22.2   rules adopted by the commissioner. 
 22.3      Sec. 17.  [65A.297] [ACTIVE DUTY MEMBER OF ARMED SERVICES 
 22.4   RESERVE OR NATIONAL GUARD; USE IN UNDERWRITING PROHIBITED.] 
 22.5      No insurer, including the Minnesota FAIR plan, shall refuse 
 22.6   to renew, decline to offer or write, reduce the limits of, 
 22.7   cancel, or charge differential rates for equivalent coverage for 
 22.8   any coverage in a homeowner's policy because the dwelling is 
 22.9   vacant or occupied by a caretaker if the insured's absence is 
 22.10  caused solely by the insured being called to active duty as a 
 22.11  member of the armed services reserve or the National Guard. 
 22.12     Sec. 18.  [65B.286] [SNOWMOBILE AUXILIARY LIGHTING SYSTEM 
 22.13  DISCOUNT.] 
 22.14     Subdivision 1.  [DEFINITION.] For the purposes of this 
 22.15  section, the term "auxiliary hazard warning lighting system" 
 22.16  means a system installed by the manufacturer of a snowmobile as 
 22.17  original equipment or installed in a snowmobile by the 
 22.18  manufacturer or an authorized dealer of that manufacturer as an 
 22.19  aftermarket system that does the following when activated: 
 22.20     (1) a yellow light emitting diode (L.E.D.) light on the 
 22.21  front of the snowmobile that flashes at least once per second 
 22.22  and is visible at least one-half mile in front of the 
 22.23  snowmobile; and 
 22.24     (2) a red light emitting diode (L.E.D.) light on the rear 
 22.25  of the snowmobile that flashes at least once per second and is 
 22.26  visible at least one-half mile from behind the snowmobile. 
 22.27     Subd. 2.  [REQUIRED REDUCTION.] An insurer must provide an 
 22.28  appropriate premium reduction of at least five percent on a 
 22.29  policy insuring the snowmobile, or on that portion of a policy 
 22.30  insuring a snowmobile that is issued, delivered, or renewed in 
 22.31  this state, to the insured whose snowmobile is equipped with an 
 22.32  authorized auxiliary hazard warning lighting system.  The 
 22.33  premium reduction required by this subdivision applies to every 
 22.34  snowmobile of the insured that is equipped with an auxiliary 
 22.35  hazard warning lighting system. 
 22.36     Sec. 19.  Minnesota Statutes 2004, section 65B.48, 
 23.1   subdivision 3, is amended to read: 
 23.2      Subd. 3.  Self-insurance, subject to approval of the 
 23.3   commissioner, is effected by filing with the commissioner in 
 23.4   satisfactory form: 
 23.5      (1) a continuing undertaking by the owner or other 
 23.6   appropriate person to pay tort liabilities or basic economic 
 23.7   loss benefits, or both, and to perform all other obligations 
 23.8   imposed by sections 65B.41 to 65B.71; 
 23.9      (2) evidence that appropriate provision exists for prompt 
 23.10  administration of all claims, benefits, and obligations provided 
 23.11  by sections 65B.41 to 65B.71; 
 23.12     (3) evidence that reliable financial arrangements, 
 23.13  deposits, or commitments exist providing assurance, 
 23.14  substantially equivalent to that afforded by a policy of 
 23.15  insurance complying with sections 65B.41 to 65B.71, for payment 
 23.16  of tort liabilities, basic economic loss benefits, and all other 
 23.17  obligations imposed by sections 65B.41 to 65B.71; and 
 23.18     (4) a nonrefundable initial application fee 
 23.19  of $1,500 $2,500 and an annual a renewal fee of $400 $1,200 
 23.20  for political subdivisions and $500 $1,500 for nonpolitical 
 23.21  entities every three years.  
 23.22     Sec. 20.  Minnesota Statutes 2004, section 72A.20, 
 23.23  subdivision 13, is amended to read: 
 23.24     Subd. 13.  [REFUSAL TO RENEW.] Refusing to renew, declining 
 23.25  to offer or write, or charging differential rates for an 
 23.26  equivalent amount of homeowner's insurance coverage, as defined 
 23.27  by section 65A.27, for property located in a town or statutory 
 23.28  or home rule charter city, in which the insurer offers to sell 
 23.29  or writes homeowner's insurance, solely because:  
 23.30     (a) of the geographic area in which the property is 
 23.31  located; 
 23.32     (b) of the age of the primary structure sought to be 
 23.33  insured; 
 23.34     (c) the insured or prospective insured was denied coverage 
 23.35  of the property by another insurer, whether by cancellation, 
 23.36  nonrenewal or declination to offer coverage, for a reason other 
 24.1   than those specified in section 65A.01, subdivision 3a, clauses 
 24.2   (a) to (e); or 
 24.3      (d) the property of the insured or prospective insured has 
 24.4   been insured under the Minnesota FAIR Plan Act, shall constitute 
 24.5   an unfair method of competition and an unfair and deceptive act 
 24.6   or practice; or 
 24.7      (e) the insured has inquired about coverage for a 
 24.8   hypothetical claim or has made an inquiry to the insured's agent 
 24.9   regarding a potential claim.  
 24.10     This subdivision prohibits an insurer from filing or 
 24.11  charging different rates for different zip code areas within the 
 24.12  same town or statutory or home rule charter city. 
 24.13     This subdivision shall not prohibit the insurer from 
 24.14  applying underwriting or rating standards which the insurer 
 24.15  applies generally in all other locations in the state and which 
 24.16  are not specifically prohibited by clauses (a) to (d) (e).  Such 
 24.17  underwriting or rating standards shall specifically include but 
 24.18  not be limited to standards based upon the proximity of the 
 24.19  insured property to an extraordinary hazard or based upon the 
 24.20  quality or availability of fire protection services or based 
 24.21  upon the density or concentration of the insurer's risks.  
 24.22  Clause (b) shall not prohibit the use of rating standards based 
 24.23  upon the age of the insured structure's plumbing, electrical, 
 24.24  heating or cooling system or other part of the structure, the 
 24.25  age of which affects the risk of loss.  Any insurer's failure to 
 24.26  comply with section 65A.29, subdivisions 2 to 4, either (1) by 
 24.27  failing to give an insured or applicant the required notice or 
 24.28  statement or (2) by failing to state specifically a bona fide 
 24.29  underwriting or other reason for the refusal to write shall 
 24.30  create a presumption that the insurer has violated this 
 24.31  subdivision.  
 24.32     Sec. 21.  Minnesota Statutes 2004, section 72A.20, 
 24.33  subdivision 36, is amended to read: 
 24.34     Subd. 36.  [LIMITATIONS ON THE USE OF CREDIT INFORMATION.] 
 24.35  (a) No insurer or group of affiliated insurers may reject, 
 24.36  cancel, or nonrenew a policy of private passenger motor vehicle 
 25.1   insurance as defined under section 65B.01 or a policy of 
 25.2   homeowner's insurance as defined under section 65A.27, for any 
 25.3   person in whole or in part on the basis of credit information, 
 25.4   including a credit reporting product known as a "credit score" 
 25.5   or "insurance score," without consideration and inclusion of any 
 25.6   other applicable underwriting factor. 
 25.7      (b) If credit information, credit scoring, or insurance 
 25.8   scoring is to be used in underwriting, the insurer must disclose 
 25.9   to the consumer that credit information will be obtained and 
 25.10  used as part of the insurance underwriting process. 
 25.11     (c) Insurance inquiries and non-consumer-initiated 
 25.12  inquiries must not be used as part of the credit scoring or 
 25.13  insurance scoring process. 
 25.14     (d) If a credit score, insurance score, or other credit 
 25.15  information relating to a consumer, with respect to the types of 
 25.16  insurance referred to in paragraph (a), is adversely impacted or 
 25.17  cannot be generated because of the absence of a credit history, 
 25.18  the insurer must exclude the use of credit as a factor in the 
 25.19  decision to reject, cancel, or nonrenew. 
 25.20     (e) Insurers must upon the request of a policyholder 
 25.21  reevaluate the policyholder's score.  Any change in premium 
 25.22  resulting from the reevaluation must be effective upon the 
 25.23  renewal of the policy.  An insurer is not required to reevaluate 
 25.24  a policyholder's score pursuant to this paragraph more than 
 25.25  twice in any given calendar year. 
 25.26     (f) Insurers must upon request of the applicant or 
 25.27  policyholder provide reasonable underwriting exceptions based 
 25.28  upon prior credit histories for persons whose credit information 
 25.29  is unduly influenced by expenses related to a catastrophic 
 25.30  injury or illness, temporary loss of employment, or the death of 
 25.31  an immediate family member.  The insurer may require reasonable 
 25.32  documentation of these events prior to granting an exception. 
 25.33     (f) (g) A credit scoring or insurance scoring methodology 
 25.34  must not be used by an insurer if the credit scoring or 
 25.35  insurance scoring methodology incorporates the gender, race, 
 25.36  nationality, or religion of an insured or applicant. 
 26.1      (g) (h) Insurers that employ a credit scoring or insurance 
 26.2   scoring system in underwriting of coverage described in 
 26.3   paragraph (a) must have on file with the commissioner: 
 26.4      (1) the insurer's credit scoring or insurance scoring 
 26.5   methodology; and 
 26.6      (2) information that supports the insurer's use of a credit 
 26.7   score or insurance score as an underwriting criterion. 
 26.8      (h) (i) Insurers described in paragraph (g) shall file the 
 26.9   required information with the commissioner within 120 days of 
 26.10  August 1, 2002, or prior to implementation of a credit scoring 
 26.11  or insurance scoring system by the insurer, if that date is 
 26.12  later. 
 26.13     (i) (j) Information provided by, or on behalf of, an 
 26.14  insurer to the commissioner under this subdivision is trade 
 26.15  secret information under section 13.37. 
 26.16     Sec. 22.  Minnesota Statutes 2004, section 79.211, is 
 26.17  amended by adding a subdivision to read: 
 26.18     Subd. 4.  [EXPERIENCE MODIFICATION FACTOR REVISION FOR 
 26.19  CERTAIN CLOSED CLAIMS.] An insurer or an employer insured under 
 26.20  a workers' compensation policy subject to an experience rating 
 26.21  plan may request in writing of the data service organization 
 26.22  computing the policy's experience modification factor that the 
 26.23  most recent factor be revised if each of the following criteria 
 26.24  is met: 
 26.25     (1) a workers' compensation claim under that policy is 
 26.26  closed between the normal valuation date for that claim and the 
 26.27  next time that valuation is used in computing the experience 
 26.28  modification factor on the policy; 
 26.29     (2) the data service organization receives a revised unit 
 26.30  statistical report containing data on the closed claim in a form 
 26.31  consistent with its filed unit statistical plan; and 
 26.32     (3) inclusion of the closed claim in the experience 
 26.33  modification factor calculation would impact that factor by five 
 26.34  percentage points or more. 
 26.35     Sec. 23.  Minnesota Statutes 2004, section 79.40, is 
 26.36  amended to read: 
 27.1      79.40 [PREMIUM INCLUSION IN RATEMAKING.] 
 27.2      Premiums charged members by the reinsurance association 
 27.3   shall be recognized in the ratemaking procedures for insurance 
 27.4   rates in the same manner as assessments for the special 
 27.5   compensation fund.  
 27.6      Sec. 24.  Minnesota Statutes 2004, section 79.56, 
 27.7   subdivision 1, is amended to read: 
 27.8      Subdivision 1.  [PREFILING OF RATES.] (a) Each insurer 
 27.9   shall file with the commissioner a complete copy of its rates 
 27.10  and rating plan, and all changes and amendments thereto, and 
 27.11  such supporting data and information that the commissioner may 
 27.12  by rule require, at least 60 days prior to its effective date.  
 27.13  The commissioner shall advise an insurer within 30 days of the 
 27.14  filing if its submission is not accompanied with such supporting 
 27.15  data and information that the commissioner by rule may require.  
 27.16  The commissioner may extend the filing review period and 
 27.17  effective date for an additional 30 days if an insurer, after 
 27.18  having been advised of what supporting data and information is 
 27.19  necessary to complete its filing, does not provide such 
 27.20  information within 15 days of having been so notified.  If any 
 27.21  rate or rating plan filing or amendment thereto is not 
 27.22  disapproved by the commissioner within the filing review period, 
 27.23  the insurer may implement it.  For the period August 1, 1995, to 
 27.24  December 31, 1995, the filing shall be made at least 90 days 
 27.25  prior to the effective date and the department shall advise an 
 27.26  insurer within 60 days of such filing if the filing is 
 27.27  insufficient under this section. 
 27.28     (b) A rating plan or rates are not subject to the 
 27.29  requirements of paragraph (a), where the insurer files a 
 27.30  certification verifying that it will use the mutually agreed 
 27.31  upon rating plan or rates only to write a specific employer that 
 27.32  generates $250,000 in annual written workers' compensation 
 27.33  premiums before the application of any large deductible rating 
 27.34  plan.  The certification must be refiled upon each renewal of 
 27.35  the employer's policy.  The $250,000 threshold includes premiums 
 27.36  generated in any state.  The designation and certification must 
 28.1   be submitted in substantially the following form: 
 28.2   Name and address of insurer:................................. 
 28.3   Name and address of insured employer:........................ 
 28.4   Policy period:............................................... 
 28.5   I certify that the employer named above generates $250,000 or 
 28.6   more in annual countrywide written workers' compensation 
 28.7   premiums, and that the calculation of this threshold is based on 
 28.8   the rates and rating plans that have been approved by the 
 28.9   appropriate state regulatory authority.  The filing of this 
 28.10  certification authorizes the use of this rate or rating plan 
 28.11  only for the named employer. 
 28.12  Name of responsible officer:................................. 
 28.13  Title:....................................................... 
 28.14  Signature:................................................... 
 28.15     Sec. 25.  Minnesota Statutes 2004, section 79.56, 
 28.16  subdivision 3, is amended to read: 
 28.17     Subd. 3.  [PENALTIES.] (a) Any insurer using a rate or a 
 28.18  rating plan which has not been filed or certified under 
 28.19  subdivision 1 shall be subject to a fine of up to $100 for each 
 28.20  day the failure to file continues.  The commissioner may, after 
 28.21  a hearing on the record, find that the failure is willful.  A 
 28.22  willful failure to meet filing requirements shall be punishable 
 28.23  by a fine of up to $500 for each day during which a willful 
 28.24  failure continues.  These penalties shall be in addition to any 
 28.25  other penalties provided by law.  
 28.26     (b) Notwithstanding this subdivision, an employer that 
 28.27  generates $250,000 in annual written workers' compensation 
 28.28  premium under the rates and rating plan of an insurer before the 
 28.29  application of any large deductible rating plans, may be written 
 28.30  by that insurer using rates or rating plans that are not subject 
 28.31  to disapproval but which have been filed.  For the purposes of 
 28.32  this paragraph, written workers' compensation premiums generated 
 28.33  from states other than Minnesota are included in calculating the 
 28.34  $250,000 threshold for large risk alternative rating option 
 28.35  plans.  
 28.36     Sec. 26.  Minnesota Statutes 2004, section 79.62, 
 29.1   subdivision 3, is amended to read: 
 29.2      Subd. 3.  [ISSUANCE.] The commissioner, upon finding that 
 29.3   the applicant organization is qualified to provide the services 
 29.4   required and proposed, or has contracted with a licensed data 
 29.5   service organization to purchase these services which are 
 29.6   required by this chapter but are not provided directly by the 
 29.7   applicant, and that all requirements of law are met, shall issue 
 29.8   a license.  Each license is subject to annual renewal effective 
 29.9   June 30.  Each new or renewal license application must be 
 29.10  accompanied by a fee of $50 $1,000.  
 29.11     Sec. 27.  Minnesota Statutes 2004, section 79A.03, 
 29.12  subdivision 9, is amended to read: 
 29.13     Subd. 9.  [FILING REPORTS.] (a) Incurred losses, paid and 
 29.14  unpaid, specifying indemnity and medical losses by 
 29.15  classification, payroll by classification, and current estimated 
 29.16  outstanding liability for workers' compensation shall be 
 29.17  reported to the commissioner by each self-insurer on a calendar 
 29.18  year basis, in a manner and on forms available from the 
 29.19  commissioner.  Payroll information must be filed by April 1 of 
 29.20  the following year.  
 29.21     (b) Each self-insurer shall, under oath, attest to the 
 29.22  accuracy of each report submitted pursuant to paragraph (a).  
 29.23  Upon sufficient cause, the commissioner shall require the 
 29.24  self-insurer to submit a certified audit of payroll and claim 
 29.25  records conducted by an independent auditor approved by the 
 29.26  commissioner, based on generally accepted accounting principles 
 29.27  and generally accepted auditing standards, and supported by an 
 29.28  actuarial review and opinion of the future contingent 
 29.29  liabilities.  The basis for sufficient cause shall include the 
 29.30  following factors:  where the losses reported appear 
 29.31  significantly different from similar types of businesses; where 
 29.32  major changes in the reports exist from year to year, which are 
 29.33  not solely attributable to economic factors; or where the 
 29.34  commissioner has reason to believe that the losses and payroll 
 29.35  in the report do not accurately reflect the losses and payroll 
 29.36  of that employer.  If any discrepancy is found, the commissioner 
 30.1   shall require changes in the self-insurer's or workers' 
 30.2   compensation service company record-keeping practices. 
 30.3      (c) An annual status report due August 1 by each 
 30.4   self-insurer shall be filed in a manner and on forms prescribed 
 30.5   by the commissioner.  
 30.6      (d) Each individual self-insurer shall, within four months 
 30.7   after the end of its fiscal year, annually file with the 
 30.8   commissioner its latest 10K report required by the Securities 
 30.9   and Exchange Commission.  If an individual self-insurer does not 
 30.10  prepare a 10K report, it shall file an annual certified 
 30.11  financial statement, together with such other financial 
 30.12  information as the commissioner may require to substantiate data 
 30.13  in the financial statement.  
 30.14     (e) Each member of the group shall, within seven six months 
 30.15  after the end of each fiscal year for that group, file submit to 
 30.16  a certified public accountant designated by the group, the most 
 30.17  recent annual financial statement, reviewed by a certified 
 30.18  public accountant in accordance with the Statements on Standards 
 30.19  for Accounting and Review Services, Volume 2, the American 
 30.20  Institute of Certified Public Accountants Professional 
 30.21  Standards, or audited in accordance with generally accepted 
 30.22  auditing standards, together with such other financial 
 30.23  information the commissioner may require.  In addition, the 
 30.24  group shall file with the commissioner, within seven months 
 30.25  after the end of each fiscal year for that group, combining 
 30.26  financial statements of the group members, compiled by a 
 30.27  certified public accountant in accordance with the Statements on 
 30.28  Standards for Accounting and Review Services, Volume 2, the 
 30.29  American Institute of Certified Public Accountants Professional 
 30.30  Standards.  The combining financial statements shall include, 
 30.31  but not be limited to, a balance sheet, income statement, 
 30.32  statement of changes in net worth, and statement of cash flow.  
 30.33  Each combining financial statement shall include a column for 
 30.34  each individual group member along with a total column.  Each 
 30.35  combined statement shall have a statement from the certified 
 30.36  public accountant confirming that each member has submitted the 
 31.1   required financial statement as defined in this section.  The 
 31.2   certified public accountant shall notify the commissioner if any 
 31.3   statement is qualified or otherwise conditional.  The 
 31.4   commissioner may require additional financial information from 
 31.5   any group member.  
 31.6      Where a group has 50 or more members, the group shall file, 
 31.7   in lieu of the combining financial statements, a combined 
 31.8   financial statement showing only the total column for the entire 
 31.9   group's balance sheet, income statement, statement of changes in 
 31.10  net worth, and statement of cash flow.  Additionally, the group 
 31.11  shall disclose, for each member, the total assets, net worth, 
 31.12  revenue, and income for the most recent fiscal year.  The 
 31.13  combining and combined financial statements may omit all 
 31.14  footnote disclosures. 
 31.15     (f) In addition to the financial statements required by 
 31.16  paragraphs (d) and (e), interim financial statements or 10Q 
 31.17  reports required by the Securities and Exchange Commission may 
 31.18  be required by the commissioner upon an indication that there 
 31.19  has been deterioration in the self-insurer's financial 
 31.20  condition, including a worsening of current ratio, lessening of 
 31.21  net worth, net loss of income, the downgrading of the company's 
 31.22  bond rating, or any other significant change that may adversely 
 31.23  affect the self-insurer's ability to pay expected losses.  Any 
 31.24  self-insurer that files an 8K report with the Securities and 
 31.25  Exchange Commission shall also file a copy of the report with 
 31.26  the commissioner within 30 days of the filing with the 
 31.27  Securities and Exchange Commission. 
 31.28     Sec. 28.  Minnesota Statutes 2004, section 79A.04, 
 31.29  subdivision 2, is amended to read: 
 31.30     Subd. 2.  [MINIMUM DEPOSIT.] The minimum deposit is 110 
 31.31  percent of the private self-insurer's estimated future 
 31.32  liability.  The deposit may be used to secure payment of all 
 31.33  administrative and legal costs, and unpaid assessments required 
 31.34  by section 79A.12, subdivision 2, relating to or arising from 
 31.35  its or other employers' self-insuring.  As used in this section, 
 31.36  "private self-insurer" includes both current and former members 
 32.1   of the self-insurers' security fund; and "private self-insurers' 
 32.2   estimated future liability" means the private self-insurers' 
 32.3   total of estimated future liability as determined by an 
 32.4   Associate or Fellow of the Casualty Actuarial Society every year 
 32.5   for group member private self-insurers and, for a nongroup 
 32.6   member private self-insurer's authority to self-insure, every 
 32.7   year for the first five years.  After the first five years, the 
 32.8   nongroup member's total shall be as determined by an Associate 
 32.9   or Fellow of the Casualty Actuarial Society at least every two 
 32.10  years, and each such actuarial study shall include a projection 
 32.11  of future losses during the period until the next scheduled 
 32.12  actuarial study, less payments anticipated to be made during 
 32.13  that time.  
 32.14     All data and information furnished by a private 
 32.15  self-insurer to an Associate or Fellow of the Casualty Actuarial 
 32.16  Society for purposes of determining private self-insurers' 
 32.17  estimated future liability must be certified by an officer of 
 32.18  the private self-insurer to be true and correct with respect to 
 32.19  payroll and paid losses, and must be certified, upon information 
 32.20  and belief, to be true and correct with respect to reserves.  
 32.21  The certification must be made by sworn affidavit.  In addition 
 32.22  to any other remedies provided by law, the certification of 
 32.23  false data or information pursuant to this subdivision may 
 32.24  result in a fine imposed by the commissioner of commerce on the 
 32.25  private self-insurer up to the amount of $5,000, and termination 
 32.26  of the private self-insurers' authority to self-insure.  The 
 32.27  determination of private self-insurers' estimated future 
 32.28  liability by an Associate or Fellow of the Casualty Actuarial 
 32.29  Society shall be conducted in accordance with standards and 
 32.30  principles for establishing loss and loss adjustment expense 
 32.31  reserves by the Actuarial Standards Board, an affiliate of the 
 32.32  American Academy of Actuaries.  The commissioner may reject an 
 32.33  actuarial report that does not meet the standards and principles 
 32.34  of the Actuarial Standards Board, and may further disqualify the 
 32.35  actuary who prepared the report from submitting any future 
 32.36  actuarial reports pursuant to this chapter.  Within 30 days 
 33.1   after the actuary has been served by the commissioner with a 
 33.2   notice of disqualification, an actuary who is aggrieved by the 
 33.3   disqualification may request a hearing to be conducted in 
 33.4   accordance with chapter 14.  Based on a review of the actuarial 
 33.5   report, the commissioner of commerce may require an increase in 
 33.6   the minimum security deposit in an amount the commissioner 
 33.7   considers sufficient. 
 33.8      Estimated future liability is determined by first taking 
 33.9   the total amount of the self-insured's future liability of 
 33.10  workers' compensation claims and then deducting the total amount 
 33.11  which is estimated to be returned to the self-insurer from any 
 33.12  specific excess insurance coverage, aggregate excess insurance 
 33.13  coverage, and any supplementary benefits or second injury 
 33.14  benefits which are estimated to be reimbursed by the special 
 33.15  compensation fund.  However, in the determination of estimated 
 33.16  future liability, the actuary for the self-insurer shall not 
 33.17  take a credit for any excess insurance or reinsurance which is 
 33.18  provided by a captive insurance company which is wholly owned by 
 33.19  the self-insurer.  Supplementary benefits or second injury 
 33.20  benefits will not be reimbursed by the special compensation fund 
 33.21  unless the special compensation fund assessment pursuant to 
 33.22  section 176.129 is paid and the reports required thereunder are 
 33.23  filed with the special compensation fund.  In the case of surety 
 33.24  bonds, bonds shall secure administrative and legal costs in 
 33.25  addition to the liability for payment of compensation reflected 
 33.26  on the face of the bond.  In no event shall the security be less 
 33.27  than the last retention limit selected by the self-insurer with 
 33.28  the Workers' Compensation Reinsurance Association, provided that 
 33.29  the commissioner may allow former members to post less than the 
 33.30  Workers' Compensation Reinsurance Association retention level if 
 33.31  that amount is adequate to secure payment of the self-insurers' 
 33.32  estimated future liability, as defined in this subdivision, 
 33.33  including payment of claims, administrative and legal costs, and 
 33.34  unpaid assessments required by section 79A.12, subdivision 2.  
 33.35  The posting or depositing of security pursuant to this section 
 33.36  shall release all previously posted or deposited security from 
 34.1   any obligations under the posting or depositing and any surety 
 34.2   bond so released shall be returned to the surety.  Any other 
 34.3   security shall be returned to the depositor or the person 
 34.4   posting the bond. 
 34.5      As a condition for the granting or renewing of a 
 34.6   certificate to self-insure, the commissioner may require a 
 34.7   private self-insurer to furnish any additional security the 
 34.8   commissioner considers sufficient to insure payment of all 
 34.9   claims under chapter 176. 
 34.10     Sec. 29.  Minnesota Statutes 2004, section 79A.04, 
 34.11  subdivision 10, is amended to read: 
 34.12     Subd. 10.  [NOTICE; OBLIGATION OF FUND.] In the event of 
 34.13  bankruptcy, insolvency, or certificate of default, the 
 34.14  commissioner shall immediately notify by certified mail the 
 34.15  commissioner of finance, the surety, the issuer of an 
 34.16  irrevocable letter of credit, and any custodian of the security 
 34.17  required in this chapter.  At the time of notification, the 
 34.18  commissioner shall also call the security and transfer and 
 34.19  assign it to the self-insurers' security fund.  The commissioner 
 34.20  shall also immediately notify by certified mail the 
 34.21  self-insurers' security fund, and order the security fund to 
 34.22  assume the insolvent self-insurers' obligations for which it is 
 34.23  liable under chapter 176.  The security fund shall commence 
 34.24  payment of these obligations within 14 days of receipt of this 
 34.25  notification and order.  Payments shall be made to claimants 
 34.26  whose entitlement to benefits can be ascertained by the security 
 34.27  fund, with or without proceedings before the Department of Labor 
 34.28  and Industry, the Office of Administrative Hearings, the 
 34.29  Workers' Compensation Court of Appeals, or the Minnesota Supreme 
 34.30  Court.  Upon the assumption of obligations by the security fund 
 34.31  pursuant to the commissioner's notification and order, the 
 34.32  security fund has the right to immediate possession of any 
 34.33  posted or deposited security and the custodian, surety, or 
 34.34  issuer of any irrevocable letter of credit or the commissioner, 
 34.35  if in possession of it, shall turn over the security, proceeds 
 34.36  of the surety bond, or letter of credit to the security fund 
 35.1   together with the interest that has accrued since the date of 
 35.2   the self-insured employer's insolvency.  The security fund has 
 35.3   the right to the immediate possession of all relevant worker's 
 35.4   compensation claim files and data of the self-insurer, and the 
 35.5   possessor of the files and data must turn the files and data, or 
 35.6   complete copies of them, over to the security fund within five 
 35.7   days of the notification provided under this subdivision.  If 
 35.8   the possessor of the files and data fails to timely turn over 
 35.9   the files and data to the security fund, it is liable to the 
 35.10  security fund for a penalty of $500 per day for each day after 
 35.11  the five-day period has expired.  The security fund is entitled 
 35.12  to recover its reasonable attorney fees and costs in any action 
 35.13  brought to obtain possession of the worker's compensation claim 
 35.14  files and data of the self-insurer, and for any action to 
 35.15  recover the penalties provided by this subdivision.  The 
 35.16  self-insurers' security fund may administer payment of benefits 
 35.17  or it may retain a third-party administrator to do so.  
 35.18     Sec. 30.  Minnesota Statutes 2004, section 79A.06, 
 35.19  subdivision 5, is amended to read: 
 35.20     Subd. 5.  [PRIVATE EMPLOYERS WHO HAVE CEASED TO BE 
 35.21  SELF-INSURED.] (a) Private employers who have ceased to be 
 35.22  private self-insurers shall discharge their continuing 
 35.23  obligations to secure the payment of compensation which is 
 35.24  accrued during the period of self-insurance, for purposes of 
 35.25  Laws 1988, chapter 674, sections 1 to 21, by compliance with all 
 35.26  of the following obligations of current certificate holders: 
 35.27     (1) Filing reports with the commissioner to carry out the 
 35.28  requirements of this chapter; 
 35.29     (2) Depositing and maintaining a security deposit for 
 35.30  accrued liability for the payment of any compensation which may 
 35.31  become due, pursuant to chapter 176.  However, if a private 
 35.32  employer who has ceased to be a private self-insurer purchases 
 35.33  an insurance policy from an insurer authorized to transact 
 35.34  workers' compensation insurance in this state which provides 
 35.35  coverage of all claims for compensation arising out of injuries 
 35.36  occurring during the entire period the employer was 
 36.1   self-insured, whether or not reported during that period, the 
 36.2   policy will: 
 36.3      (i) discharge the obligation of the employer to maintain a 
 36.4   security deposit for the payment of the claims covered under the 
 36.5   policy; 
 36.6      (ii) discharge any obligation which the self-insurers' 
 36.7   security fund has or may have for payment of all claims for 
 36.8   compensation arising out of injuries occurring during the period 
 36.9   the employer was self-insured, whether or not reported during 
 36.10  that period; and 
 36.11     (iii) discharge the obligations of the employer to pay any 
 36.12  future assessments to the self-insurers' security fund.  
 36.13     A private employer who has ceased to be a private 
 36.14  self-insurer may instead buy an insurance policy described 
 36.15  above, except that it covers only a portion of the period of 
 36.16  time during which the private employer was self-insured; 
 36.17  purchase of such a policy discharges any obligation that the 
 36.18  self-insurers' security fund has or may have for payment of all 
 36.19  claims for compensation arising out of injuries occurring during 
 36.20  the period for which the policy provides coverage, whether or 
 36.21  not reported during that period.  
 36.22     A policy described in this clause may not be issued by an 
 36.23  insurer unless it has previously been approved as to form and 
 36.24  substance by the commissioner; and 
 36.25     (3) Paying within 30 days all assessments of which notice 
 36.26  is sent by the security fund, for a period of seven years from 
 36.27  the last day its certificate of self-insurance was in effect.  
 36.28  Thereafter, the private employer who has ceased to be a private 
 36.29  self-insurer may either:  (i) continue to pay within 30 days all 
 36.30  assessments of which notice is sent by the security fund until 
 36.31  it has no incurred liabilities for the payment of compensation 
 36.32  arising out of injuries during the period of self-insurance; or 
 36.33  (ii) pay the security fund a cash payment equal to four percent 
 36.34  of the net present value of all remaining incurred liabilities 
 36.35  for the payment of compensation under sections 176.101 and 
 36.36  176.111 as certified by a member of the casualty actuarial 
 37.1   society.  Assessments shall be based on the benefits paid by the 
 37.2   employer during the calendar year immediately preceding the 
 37.3   calendar year in which the employer's right to self-insure is 
 37.4   terminated or withdrawn. 
 37.5      (b) With respect to a self-insurer who terminates its 
 37.6   self-insurance authority after April 1, 1998, that member shall 
 37.7   obtain and file with the commissioner an actuarial opinion of 
 37.8   its outstanding liabilities as determined by an associate or 
 37.9   fellow of the Casualty Actuarial Society within 120 days of the 
 37.10  date of its termination.  If the actuarial opinion is not timely 
 37.11  filed, the self-insurers' security fund may, at its discretion, 
 37.12  engage the services of an actuary for this purpose.  The expense 
 37.13  of this actuarial opinion must be assessed against and be the 
 37.14  obligation of the self-insurer.  The commissioner may issue a 
 37.15  certificate of default against the self-insurer for failure to 
 37.16  pay this assessment to the self-insurers' security fund as 
 37.17  provided by section 79A.04, subdivision 9.  The opinion must 
 37.18  separate liability for indemnity benefits from liability from 
 37.19  medical benefits, and must discount each up to four percent per 
 37.20  annum to net present value.  Within 30 days after notification 
 37.21  of approval of the actuarial opinion by the commissioner, the 
 37.22  member shall pay to the security fund an amount equal to 120 
 37.23  percent of that discounted outstanding indemnity liability, 
 37.24  multiplied by the greater of the average annualized assessment 
 37.25  rate since inception of the security fund or the annual rate at 
 37.26  the time of the most recent assessment before termination.  If 
 37.27  the payment is not made within 30 days of the notification, 
 37.28  interest on it at the rate prescribed by section 549.09 must be 
 37.29  paid by the former member to the security fund until the 
 37.30  principal amount is paid in full. 
 37.31     (c) A former member who terminated its self-insurance 
 37.32  authority before April 1, 1998, who has paid assessments to the 
 37.33  self-insurers' security fund for seven years, and whose 
 37.34  annualized assessment is $500 or less, may buy out of its 
 37.35  outstanding liabilities to the self-insurers' security fund by 
 37.36  an amount calculated as follows:  1.35 multiplied by the 
 38.1   indemnity case reserves at the time of the calculation, 
 38.2   multiplied by the then current self-insurers' security fund 
 38.3   annualized assessment rate. 
 38.4      (d) A former member who terminated its self-insurance 
 38.5   authority before April 1, 1998, and who is paying assessments 
 38.6   within the first seven years after ceasing to be self-insured 
 38.7   under paragraph (a), clause (3), may elect to buy out its 
 38.8   outstanding liabilities to the self-insurers' security fund by 
 38.9   obtaining and filing with the commissioner an actuarial opinion 
 38.10  of its outstanding liabilities as determined by an associate or 
 38.11  fellow of the Casualty Actuarial Society.  The opinion must 
 38.12  separate liability for indemnity benefits from liability for 
 38.13  medical benefits, and must discount each up to four percent per 
 38.14  annum to net present value.  Within 30 days after notification 
 38.15  of approval of the actuarial opinion by the commissioner, the 
 38.16  member shall pay to the security fund an amount equal to 120 
 38.17  percent of that discounted outstanding indemnity liability, 
 38.18  multiplied by the greater of the average annualized assessment 
 38.19  rate since inception of the security fund or the annual rate at 
 38.20  the time of the most recent assessment. 
 38.21     (e) A former member who has paid the security fund 
 38.22  according to paragraphs (b) to (d) and subsequently receives 
 38.23  authority from the commissioner to again self-insure shall be 
 38.24  assessed under section 79A.12, subdivision 2, only on indemnity 
 38.25  benefits paid on injuries that occurred after the former member 
 38.26  received authority to self-insure again; provided that the 
 38.27  member furnishes verified data regarding those benefits to the 
 38.28  security fund. 
 38.29     (f) In addition to proceedings to establish liabilities and 
 38.30  penalties otherwise provided, a failure to comply may be the 
 38.31  subject of a proceeding before the commissioner.  An appeal from 
 38.32  the commissioner's determination may be taken pursuant to the 
 38.33  contested case procedures of chapter 14 within 30 days of the 
 38.34  commissioner's written determination. 
 38.35     Any current or past member of the self-insurers' security 
 38.36  fund is subject to service of process on any claim arising out 
 39.1   of chapter 176 or this chapter in the manner provided by section 
 39.2   5.25, or as otherwise provided by law.  The issuance of a 
 39.3   certificate to self-insure to the private self-insured employer 
 39.4   shall be deemed to be the agreement that any process which is 
 39.5   served in accordance with this section shall be of the same 
 39.6   legal force and effect as if served personally within this state.
 39.7      Sec. 31.  Minnesota Statutes 2004, section 79A.12, 
 39.8   subdivision 2, is amended to read: 
 39.9      Subd. 2.  [ASSESSMENT.] The security fund may assess each 
 39.10  of its members a pro rata share of the funding necessary to 
 39.11  carry out its obligation and the purposes of this chapter.  
 39.12  Total annual assessments in any calendar year shall not exceed 
 39.13  ten percent of the workers' compensation benefits paid under 
 39.14  sections 176.101 and 176.111 during the previous paid indemnity 
 39.15  losses, as defined in section 176.129, made by the self-insured 
 39.16  employer during the preceding calendar year.  The annual 
 39.17  assessment calculation shall not include supplementary benefits 
 39.18  paid which will be reimbursed by the special compensation fund.  
 39.19  Funds obtained by assessments pursuant to this subdivision may 
 39.20  only be used for the purposes of this chapter.  The trustees 
 39.21  shall certify to the commissioner the collection and receipt of 
 39.22  all money from assessments, noting any delinquencies.  The 
 39.23  trustees shall take any action deemed appropriate to collect any 
 39.24  delinquent assessments. 
 39.25     Sec. 32.  Minnesota Statutes 2004, section 79A.22, 
 39.26  subdivision 11, is amended to read: 
 39.27     Subd. 11.  [DISBURSEMENT OF FUND SURPLUS.] (a) One 
 39.28  hundred Except as otherwise provided in paragraphs (b) and (c), 
 39.29  100 percent of any surplus money for a fund year in excess of 
 39.30  125 percent of the amount necessary to fulfill all obligations 
 39.31  under the Workers' Compensation Act, chapter 176, for that fund 
 39.32  year may be declared refundable to a member eligible members at 
 39.33  any time.  The date shall be no earlier than 18 months following 
 39.34  the end of such fund year.  The first disbursement of fund 
 39.35  surplus may not be made prior to the written approval of the 
 39.36  commissioner.  There can be no more than one refund made in any 
 40.1   12-month period. 
 40.2      (b) Except as otherwise provided in paragraph (c), for 
 40.3   groups that have been in existence for five years or more, 100 
 40.4   percent of any surplus money for a fund year in excess of 110 
 40.5   percent of the amount necessary to fulfill all obligations under 
 40.6   the Workers' Compensation Act, chapter 176, for that fund year 
 40.7   may be declared refundable to eligible members at any time. 
 40.8      (c) Excess surplus distributions under paragraphs (a) and 
 40.9   (b) may not be greater than the combined surplus of the group at 
 40.10  the time of the distribution. 
 40.11     (d) When all the claims of any one fund year have been 
 40.12  fully paid, as certified by an actuary, all surplus money from 
 40.13  that fund year may be declared refundable. 
 40.14     (b) (e) The commercial self-insurance group shall give ten 
 40.15  days' prior notice to the commissioner of any refund.  Said The 
 40.16  notice shall must be accompanied by a statement from the 
 40.17  commercial self-insurer group's certified public accountant 
 40.18  certifying that the proposed refund is in compliance 
 40.19  with paragraph (a) this subdivision. 
 40.20     Sec. 33.  Minnesota Statutes 2004, section 79A.22, is 
 40.21  amended by adding a subdivision to read: 
 40.22     Subd. 14.  [ALL STATES COVERAGE.] Policies issued by 
 40.23  commercial self-insurance groups pursuant to this chapter may 
 40.24  also provide workers' compensation coverage required under the 
 40.25  laws of states other than Minnesota, commonly known as "all 
 40.26  states coverage."  The coverage must be provided to members of 
 40.27  the group which are temporarily performing work in another state.
 40.28     Sec. 34.  Minnesota Statutes 2004, section 176.191, 
 40.29  subdivision 3, is amended to read: 
 40.30     Subd. 3.  [INSURER PAYMENT.] If a dispute exists as to 
 40.31  whether an employee's injury is compensable under this chapter 
 40.32  and the employee is otherwise covered by an insurer or entity 
 40.33  pursuant to chapters 62A, 62C and, 62D, 62E, 62R, and 62T, that 
 40.34  insurer or entity shall pay any medical costs incurred by the 
 40.35  employee for the injury up to the limits of the applicable 
 40.36  coverage and shall make any disability payments otherwise 
 41.1   payable by that insurer or entity in the absence of or in 
 41.2   addition to workers' compensation liability.  If the injury is 
 41.3   subsequently determined to be compensable pursuant to this 
 41.4   chapter, the workers' compensation insurer shall be ordered to 
 41.5   reimburse the insurer or entity that made the payments for all 
 41.6   payments made under this subdivision by the insurer or entity, 
 41.7   including interest at a rate of 12 percent a year.  If a payment 
 41.8   pursuant to this subdivision exceeds the reasonable value as 
 41.9   permitted by sections 176.135 and 176.136, the provider shall 
 41.10  reimburse the workers' compensation insurer for all the excess 
 41.11  as provided by rules promulgated by the commissioner. 
 41.12     Sec. 35.  Laws 1985, chapter 85, section 1, is amended to 
 41.13  read: 
 41.14     Section 1.  [CERTAIN COUNTIES; JOINT AGREEMENTS FOR 
 41.15  INSURANCE COVERAGE.] 
 41.16     (a) The counties of Aitkin, Itasca, Koochiching and St. 
 41.17  Louis, and political subdivisions located in those counties, 
 41.18  except the city of Duluth, when two or more of them are acting 
 41.19  jointly under Minnesota Statutes, section 471.61, subdivision 1, 
 41.20  or section 471.59 for purposes of section 471.61, may act 
 41.21  jointly for the same purposes with any nonprofit organization 
 41.22  organized under the laws of Minnesota and which is exempt from 
 41.23  taxation pursuant to section 501(c)(3) of the Internal Revenue 
 41.24  Code 1954, as amended through December 31, 1984. 
 41.25     (b) Notwithstanding Minnesota Statutes, sections 62L.03; 
 41.26  62L.04; 62L.045; or any other provision of Minnesota Statutes, 
 41.27  chapter 62L, an arrangement described in paragraph (a) may 
 41.28  provide the same health coverage under the same plan and premium 
 41.29  rates to its member employers that have 50 or fewer employees 
 41.30  that the arrangement provides to its member employers that have 
 41.31  more than 50 employees.  The insurer offering the plan need not 
 41.32  offer this same plan to small employers that are not member 
 41.33  employers in the arrangement described in paragraph (a). 
 41.34     (c) Paragraph (b) is a pilot project that expires at the 
 41.35  end of its third full plan year after its date of enactment.  
 41.36  After the second full plan year, the entity operating an 
 42.1   arrangement described in paragraph (a) shall provide a written 
 42.2   report to the commissioner of commerce summarizing the 
 42.3   advantages and disadvantages of the pilot project and 
 42.4   recommending whether to make it permanent. 
 42.5      Sec. 36.  [REPEALER.] 
 42.6      Minnesota Statutes 2004, sections 61A.072, subdivision 2; 
 42.7   and 62E.03 are repealed. 
 42.8      Sec. 37.  [EFFECTIVE DATES.] 
 42.9      (a) Sections 9, 13, 15, 19, 21, 24, and 30 to 34 and 36 are 
 42.10  effective the day following final enactment.  Section 17 is 
 42.11  effective the day following final enactment and applies to any 
 42.12  action taken by an insurer on or after that date.  Sections 1, 
 42.13  3, 20, and 25 to 27 are effective July 1, 2005.  The remaining 
 42.14  sections are effective August 1, 2005. 
 42.15     (b) Pursuant to Minnesota Statutes, section 645.023, 
 42.16  subdivision 1, clause (a), local approval of section 35 is not 
 42.17  required.  Section 35 is effective the day following final 
 42.18  enactment.