HF 2245

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/27/2023 03:06pm

A bill for an act
relating to insurance; requiring the commissioner of commerce to create a low-cost
motor vehicle insurance program for low-income residents; appropriating money;
amending Minnesota Statutes 2022, section 65B.49, by adding a subdivision;
proposing coding for new law in Minnesota Statutes, chapter 65B.

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

Section 1.

new text begin [65B.121] MINNESOTA LIFELINE INSURANCE PROGRAM.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section the following terms have
the meanings given.
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new text begin (a) "Commissioner" means the commissioner of commerce or the commissioner's
designee.
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new text begin (b) "Eligible applicant" means an individual who meets the requirements of subdivision
6 and who has applied for a low-cost policy under the program.
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new text begin (c) "Facility" has the meaning given in section 65B.02, subdivision 3.
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new text begin (d) "Insured" means a driver insured under the program.
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new text begin (e) "Low-cost policy" means a low-cost motor vehicle insurance policy issued in
compliance with subdivision 5.
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new text begin (f) "Member" has the meaning given in section 65B.02, subdivision 4.
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new text begin (g) "Minnesota lifeline insurance program" or "program" means the program created
under this section.
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new text begin (h) "Motor vehicle" has the meaning given in section 169.011, subdivision 42.
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new text begin (i) "Moving violation" means a violation of a law or municipal ordinance, except a law
or ordinance related to parking or equipment, regulating the operation of motor vehicles on
the streets or highways.
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new text begin (j) "Qualified consumer organization" means an organization that has experience
analyzing insurance rates, including motor vehicle insurance rates, and advocating to protect
consumer rights.
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new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin (a) The commissioner must establish the Minnesota lifeline
automobile insurance program to offer affordable motor vehicle insurance policies to
low-income Minnesota drivers, reduce the number of uninsured motorists, and promote
public safety.
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new text begin (b) The commissioner must consult with the facility when creating and operating the
program.
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new text begin (c) The commissioner must contract with a qualified consumer organization and solicit
public comment on the rate-setting process and premiums.
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new text begin (d) The commissioner must determine the premiums charged on low-cost policies for
the first two years the program is operational. When determining the premiums, the
commissioner must consider:
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new text begin (1) the rate, claims, and loss data, including but not limited to overall losses for policies
that provided the minimum motor vehicle insurance coverage required by state law for at
least the previous two years;
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new text begin (2) the distribution of losses under low-cost policies, based on criminal driving history
and geographic area;
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new text begin (3) the opinion of a qualified consumer organization; and
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new text begin (4) public comment on the proposed premiums and rate-setting process.
new text end

new text begin (e) The commissioner must annually review and approve premiums proposed by the
facility beginning the third year of the program's operation.
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new text begin (f) When assessing the program's loss reserves, the commissioner must only allow loss
reserves that are estimated based on actual claim losses under low-cost policies or comparable
data by a statistician, as adjusted to reflect the coverage provided by low-cost policies and
the eligibility factors used to become an insured under the program.
new text end

new text begin Subd. 3. new text end

new text begin Facility. new text end

new text begin (a) The facility must:
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new text begin (1) help the commissioner establish and develop the program;
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new text begin (2) determine whether an applicant is eligible for the program;
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new text begin (3) sell, issue, and deliver low-cost policies under the program; and
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new text begin (4) accept payment for premiums by cash, if requested by the insured.
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new text begin (b) Beginning the third year the program is in operation and every year thereafter, the
facility, subject to approval by the commissioner, must determine the premiums charged
for low-cost policies.
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new text begin (c) The facility must determine the premiums for the program based on:
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new text begin (1) actual losses on policies sold by the facility under the program;
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new text begin (2) overall private passenger auto insurance industry trends in Minnesota, but only to
the extent that the program's data are not credible and adjusted to reflect the eligibility
factors described in subdivision 6; and
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new text begin (3) up to three geographic locations, except that premiums charged to insureds in the
highest cost area must not be more than 100 percent higher than the premiums charged to
insureds in the lowest cost area.
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new text begin (d) The facility must set premiums for the program in an amount adequate to pay for (1)
losses incurred for claims filed under the program, and (2) program expenses incurred by
the facility to operate the program, including expenses related to administration, underwriting,
subrogation, rate setting, taxes, commission, and claims adjusting.
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new text begin (e) Each facility member must pay an annual assessment per insured motor vehicle, in
an amount to be determined by the facility, to support marketing, outreach, and public
education efforts for the program. The outreach must include the creation and maintenance
of a website for the program that includes all necessary information for an eligible applicant
to apply for the program.
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new text begin (f) The program may accept funding from sources besides members to support marketing,
outreach, and public education efforts.
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new text begin (g) Money for marketing, outreach, and public education must be awarded equitably
among any geographic regions, taking into consideration a region's target population and
marketing goals.
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new text begin Subd. 4. new text end

new text begin Producers. new text end

new text begin (a) A licensed producer must provide the following information in
no smaller than 14-point type and on a separate document to an applicant for a low-cost
policy under this section:
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new text begin (1) notice that a low-cost policy under this section meets the requirements to maintain
automobile liability insurance under section 65B.48;
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new text begin (2) premium cost;
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new text begin (3) how eligibility is determined; and
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new text begin (4) the difference between (i) the coverage available under a low-cost policy, and (ii)
the minimum coverage requirements that apply to policies sold outside of the program and
in compliance with section 65B.48.
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new text begin (b) Licensed producers are entitled to receive a commission on each low-cost policy
sold that is equal to 12 percent of policy premiums or $50, whichever is greater.
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new text begin Subd. 5. new text end

new text begin Low-cost policies. new text end

new text begin The program must include and the facility must offer a
low-cost policy with a length of six or 12 months that includes:
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new text begin (1) basic economic loss benefits that provide reimbursement for all loss suffered through
injury arising out of the maintenance or use of a motor vehicle, subject to any applicable
deductibles, exclusions, disqualifications, and other conditions, and provide a minimum of
$10,000 for loss arising out of the injury of any one person, consisting of:
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new text begin (i) $5,000 of personal injury protection coverage for medical claims; and
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new text begin (ii) $5,000 for income loss, replacement services loss, funeral expense loss, survivor's
economic loss, and survivor's replacement services loss arising out of the injury to any one
person;
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new text begin (2) $20,000 for any one person and $40,000 for any two or more persons, in addition to
interest and costs, for the payment of claims for bodily injury or death arising from an
accident;
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new text begin (3) $10,000, in addition to interest and costs, for the payment of claims for property of
others damaged or destroyed in an accident; and
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new text begin (4) uninsured and underinsured motorist coverage with limits of $20,000 because of
injury to or the death of one person in any accident and $40,000 because of injury to or the
death of two or more persons in any accident.
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new text begin Subd. 6. new text end

new text begin Eligible applicant. new text end

new text begin (a) An eligible applicant must:
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new text begin (1) be a resident of Minnesota;
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new text begin (2) have a gross annual household income that is no more than 300 percent of the federal
poverty level in the year the policy was issued or reissued;
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new text begin (3) demonstrate that all household members are covered by medical insurance that covers
hospitalization and emergency services; and
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new text begin (4) have been continuously licensed as a driver for the three years immediately preceding
application, except that a license suspension or revocation does not constitute a break in
continuous licensure for the purposes of satisfying this requirement if the revocation or
suspension was due to any of the following:
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new text begin (i) a conviction for a violation under section 169.791, 169.797, or 171.24, subdivision
1 or 2;
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new text begin (ii) a violation of section 171.18, subdivision 1, paragraph (a), clause (1), for being cited
for a violation of section 169.791 or 169.797;
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new text begin (iii) failure to appear in court under Minnesota Statutes 2020, section 169.92, subdivision
4, for a petty misdemeanor; or
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new text begin (iv) failure to pay a fine under section 171.16, subdivision 3.
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new text begin (b) A policy may be issued to an eligible applicant who has had continuous licensure
for less than three years, but the policy is subject to a surcharge of up to 30 percent of the
base premium.
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new text begin (c) An eligible applicant must not have a misdemeanor, gross misdemeanor, or felony
conviction for a violation arising out of the use of a motor vehicle, other than for a violation
of section 171.24, subdivision 1 or 2; 169.791; or 169.797.
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new text begin (d) An eligible applicant must not, within the three years immediately preceding
application, have been:
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new text begin (1) found to be at fault, as decided by a civil court, in a motor vehicle accident involving
bodily injury or death;
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new text begin (2) convicted of a misdemeanor, gross misdemeanor, or felony for a violation arising
out of the use of a motor vehicle, other than for a violation of section 171.24, subdivision
1 or 2; 169.791; or 169.797;
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new text begin (3) convicted of a violation of section 84.765; 84.795, subdivision 5; or 86B.33 or in
Minnesota or another state that conforms with any of the sections identified in this clause;
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new text begin (4) convicted of more than two moving violations;
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new text begin (5) found to be at fault in more than one motor vehicle accident that involved only
damage to property; or
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new text begin (6) convicted of one or more moving violations and found to be at fault, as decided by
a civil court, for one or more motor vehicle accidents that involved only damage to property.
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new text begin (e) If an applicant is rejected by the facility, the facility must allow the applicant to cure
the deficiency and must accept the application if the applicant is otherwise eligible for the
program.
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new text begin (f) An insured is not required to provide documentation of income eligibility more than
once every three years. A new violation arising out of operation or use of a motor vehicle
may render the enrollee ineligible for renewal. Notwithstanding this paragraph, an enrollee
may be required to provide proof of medical insurance that meets the requirements of
paragraph (a), clause (3), once a year.
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new text begin (g) A low-cost policy may be nonrenewed if the insured no longer meets the requirements
under subdivision 6.
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Sec. 2.

Minnesota Statutes 2022, section 65B.49, is amended by adding a subdivision to
read:

new text begin Subd. 10. new text end

new text begin Minnesota lifeline automobile insurance program. new text end

new text begin Notwithstanding this
section or any law to the contrary, a policy issued pursuant to the Minnesota lifeline
automobile insurance program under section 65B.121 meets the requirements of this section.
new text end

Sec. 3. new text begin APPROPRIATION.
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new text begin $....... in fiscal year 2024 is appropriated from the general fund to the commissioner of
commerce to develop the Minnesota lifeline automobile insurance program under Minnesota
Statutes, section 65B.121.
new text end