HF 2218

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

A bill for an act
relating to commerce; regulating the compensation of
licensees; requiring disclosures; amending Minnesota
Statutes 2004, section 72A.20, by adding a
subdivision; proposing coding for new law in Minnesota
Statutes, chapter 60K.

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

Section 1.

new text begin [60K.481] DISCLOSURE OF COMPENSATION BY
INSURANCE PRODUCERS.
new text end

new text begin Any person receiving compensation for the sale or renewal
of an insurance product shall, before selling the product,
disclose in writing to the prospective purchaser any
compensation, service fees, brokerage, or any other payments or
allowances or anything of value whether paid directly or
indirectly to the producer or an affiliate of the producer as a
direct result of the sale. The disclosure may be expressed in
dollars or as a percentage of the premium. The disclosure
required in this section applies to the principal insurance
transaction. The disclosure is not required of subsidiary
transactions such as changes to coverage.
new text end

Sec. 2.

new text begin [60K.482] DISCLOSURE OF INSURANCE PRODUCER AGENCY
RELATIONSHIP.
new text end

new text begin An insurance producer must inform its customers, before
offering to sell or renew an insurance product, that under
Minnesota law the insurance producer is an agent of the
insurance company and not the agent of the insured.
new text end

Sec. 3.

Minnesota Statutes 2004, section 72A.20, is
amended by adding a subdivision to read:

new text begin Subd. 38. new text end

new text begin Compensation disclosure. new text end

new text begin It is an unfair trade
practice for any insurance producer to accept compensation or
any other item of value that inures to the benefit of the
producer based on an expenditure made by the insured unless the
producer has disclosed the source and nature of compensation
pursuant to the requirements of chapter 60K.
new text end