relating to commerce; regulating certain licensees; modifying education
requirements; making technical changes; modifying enforcement provisions and
other actions; prohibiting certain homeowners policy surcharges; regulating
insurance holding company systems by enacting changes proposed by the
National Association of Insurance Commissioners;amending Minnesota Statutes
2012, sections 45.027, subdivision 7; 45.32, by adding subdivisions; 58.12,
subdivision 1; 60A.0789, subdivision 3; 60A.10, subdivision 1; 60D.09; 60D.15,
by adding a subdivision; 60D.17, subdivisions 1, 2, 4, 6, 7; 60D.18, subdivisions
2, 6; 60D.19, subdivisions 1, 2, 3, 11, 12, by adding a subdivision; 60D.20,
subdivisions 1, 3; 60D.21, subdivision 1, by adding subdivisions; 60D.22;
60K.54, subdivision 2; 61A.282, subdivision 1; 66A.01; 68A.01, subdivision 2;
68A.02, subdivision 1; 68A.04, subdivision 1; 82.55, subdivision 4; 82.641,
subdivision 6; 82.81, subdivision 8; 82B.135, subdivision 1; 82B.19, subdivisions
1, 3, by adding a subdivision; 115C.02, subdivision 16; 115C.09, subdivisions
2a, 3; 239.785, subdivision 6; 297I.01, subdivision 9; 327C.095, subdivision 11;
386.66; 507.401, subdivisions 1, 2, 3, 4, 5; 507.45, subdivision 4; 515B.4-109;
Minnesota Statutes 2013 Supplement, sections 82B.094; 82B.13, subdivision
1; 239.761, subdivision 8; 332A.02, subdivision 8; 559.202, subdivision 3;
proposing coding for new law in Minnesota Statutes, chapters 60D; 65A; 82B;
repealing Minnesota Statutes 2012, section 82B.10, subdivision 7.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2012, section 45.32, is amended by adding a subdivision
1.27 Subd. 2a. Qualifications for instructors of the Minnesota Supervisor/Trainee
1.28Appraiser Course. In addition to qualifying under subdivision 2, an instructor of the
1.29Minnesota Supervisor/Trainee Appraiser Course offered as continuing education must:
2.1(1) be licensed in good standing as either a certified residential real property
2.2appraiser or a certified general real property appraiser, and must have been so licensed for
2.3the three-year period immediately preceding the individual's application to become an
2.4instructor of the Minnesota Supervisor/Trainee Appraiser Course; and
2.5(2) not have been the subject of any license or certificate suspension or revocation,
2.6or been prohibited from supervising activities in this state or any other state within the
2.7three years immediately preceding the individual's application to become an instructor
2.8of the Minnesota Supervisor/Trainee Appraiser Course.
Sec. 2. Minnesota Statutes 2012, section 45.32, is amended by adding a subdivision to
2.11 Subd. 3a. Qualifications for instructors of the Minnesota Supervisor/Trainee
2.12Appraiser Course. In addition to qualifying under subdivision 3, an instructor of the
2.13Minnesota Supervisor/Trainee Appraiser Course offered as prelicense education must:
2.14(1) be licensed in good standing as either a certified residential real property
2.15appraiser or a certified general real property appraiser, and must have been so licensed for
2.16the three-year period immediately preceding the individual's application to become an
2.17instructor of the Minnesota Supervisor/Trainee Appraiser Course; and
2.18(2) not have been the subject of any license or certificate suspension or revocation,
2.19or been prohibited from supervising activities in this state or any other state within the
2.20three years immediately preceding the individual's application to become an instructor
2.21of the Minnesota Supervisor/Trainee Appraiser Course.
Sec. 3. Minnesota Statutes 2013 Supplement, section 82B.094, is amended to read:
2.2382B.094 SUPERVISION OF TRAINEE REAL PROPERTY APPRAISERS.
(a) A certified residential real property appraiser or a certified general real property
appraiser, in good standing, may engage a trainee real property appraiser to assist in the
performance of real estate appraisals, provided that the certified residential real property
appraiser or a certified general real property appraiser:
(1) has been licensed in good standing as either a certified residential real property
appraiser or a certified general real property appraiser for
a total of at least three years
2.30 the three-year period immediately preceding the individual's application to become a
(2) has completed a six-hour
course, approved in advance by the commissioner and
2.33provided by an education provider approved by the commissioner,
that is specifically
oriented to the requirements and responsibilities of supervisory appraisers and trainee
appraisers. A course approved by the commissioner for the purposes of this section must
3.2be given the course title "Minnesota Supervisor/Trainee Appraiser Course"
(3) has not been the subject of any license or certificate suspension or revocation
or has not been prohibited from supervising activities in this state or any other state
previous two three
years immediately preceding the individual's application
3.6to become a supervisor
(4) has no more than three trainee real property appraisers working under supervision
at any one time;
(5) actively and personally supervises the trainee real property appraiser, which
includes ensuring that research of general and specific data has been adequately conducted
and properly reported, application of appraisal principles and methodologies has been
properly applied, that the analysis is sound and adequately reported, and that any analyses,
opinions, or conclusions are adequately developed and reported so that the appraisal
report is not misleading;
(6) discusses with the trainee real property appraiser any necessary and appropriate
changes that are made to a report, involving any trainee appraiser, before it is transmitted
to the client. Changes not discussed with the trainee real property appraiser that are made
by the supervising appraiser must be provided in writing to the trainee real property
appraiser upon completion of the appraisal report;
(7) accompanies the trainee real property appraiser on the inspections of the subject
properties and drive-by inspections of the comparable sales on all appraisal assignments
for which the trainee will perform work until the trainee appraiser is determined to be
competent, in accordance with the competency rule of USPAP for the property type;
(8) accepts full responsibility for the appraisal report by signing and certifying
that the report complies with USPAP; and
(9) reviews and signs the trainee real property appraiser's appraisal report or reports
or if the trainee appraiser is not signing the report, states in the appraisal the name of the
trainee and scope of the trainee's significant contribution to the report.
(b) The supervising appraiser must review and sign the applicable experience log
required to be kept by the trainee real property appraiser.
(c) The supervising appraiser must notify the commissioner within ten days when
the supervision of a trainee real property appraiser has terminated or when the trainee
appraiser is no longer under the supervision of the supervising appraiser.
(d) The supervising appraiser must maintain a separate work file for each appraisal
(e) The supervising appraiser must verify that any trainee real property appraiser that
is subject to supervision is properly licensed and in good standing with the commissioner.
Sec. 4. [82B.105] RECIPROCITY.
4.4The education, experience, and examination requirements of this chapter may be
4.5waived by the commissioner for individuals of other jurisdictions if: (1) the individual is
4.6licensed in another jurisdiction and is listed in good standing on the National Registry
4.7maintained by the Appraisal Subcommittee, and (2) the licensing requirements of that
4.8jurisdiction are substantially similar to the provisions of this chapter.
Sec. 5. Minnesota Statutes 2013 Supplement, section 82B.13, subdivision 1, is
amended to read:
Subdivision 1. Trainee real property appraiser.
(a) As a prerequisite for licensing
as a trainee real property appraiser, an applicant must present evidence satisfactory to the
commissioner that the person has successfully completed:
(1) at least 75 hours of prelicense courses approved by the commissioner. Fifteen of
the 75 hours must include successful completion of the 15-hour national USPAP course; and
(2) in addition to the required hours under clause (1), a six-hour
course that is
specifically oriented to the requirements and responsibilities of supervisory appraisers
and trainee appraisers. A course approved by the commissioner for the purposes of this
4.19subdivision must be given the course title "Minnesota Supervisor/Trainee Appraiser
4.20Course." This course must not be counted toward qualifying education to upgrade to
4.21a higher level appraiser license.
(b) All qualifying education must be completed within the five-year period prior to
the date of submission of a trainee real property appraiser license application.
Sec. 6. Minnesota Statutes 2012, section 82B.135, subdivision 1, is amended to read:
Subdivision 1. Submitting to commissioner.
An applicant for a real estate appraiser
license must submit to the commissioner, along with an application for licensure and in a
4.27manner prescribed by the commissioner
a copy of the course completion certificate for
4.28 evidence that the applicant has completed
all required prelicensing education coursework
applicable to the class of license sought.
Sec. 7. Minnesota Statutes 2012, section 82B.19, subdivision 1, is amended to read:
Subdivision 1. License renewals.
A licensed real estate appraiser must present
4.32 evidence satisfactory to the commissioner of having The commissioner must determine
5.1that a licensed real estate appraiser has
met the continuing education requirements of
this chapter before the commissioner renews a license. This determination must be
5.3based on, for a resident appraiser, course completion records uploaded electronically
5.4in a manner prescribed by the commissioner and, for a nonresident appraiser, course
5.5completion records presented by electronic transmission or uploaded electronically in a
5.6manner prescribed by the commissioner.
The basic continuing education requirement for renewal of a license is the
completion by the applicant either as a student or as an instructor, during the immediately
preceding term of licensing, of at least 30 classroom hours of instruction in courses or
seminars that have received the approval of the commissioner. Classroom hour credit
must not be accepted for courses of less than two hours. As part of the continuing
education requirements of this section, the commissioner must require that all real estate
appraisers successfully complete the seven-hour national USPAP update course every two
years. If the applicant's immediately preceding term of licensing consisted of six or more
months, but fewer than 24 months, the applicant must provide evidence of completion
of 15 hours of instruction during the license period. The credit hours required under this
section may be credited to a person for distance education courses that meet Appraiser
Qualifications Board criteria. An approved prelicense education course may be taken
for continuing education credit.
(b) The 15-hour USPAP course cannot be used to satisfy the requirement to complete
the seven-hour national USPAP update course every two years.
(c) Notwithstanding section
326.56, subdivision 2 , a licensed real estate appraiser
5.23 returning from active military duty may be placed in active status for a period of up to 90
5.24 days pending completion of all continuing education requirements.
Sec. 8. Minnesota Statutes 2012, section 82B.19, is amended by adding a subdivision
5.27 Subd. 1a. Deferral. (a) Deferrals may not be granted to appraisers, except in the
5.28case of individuals returning from active military duty, or individuals impacted by a
5.29state-declared or federally declared disaster. The commissioner may allow appraisers
5.30returning from active military duty to be placed in active status for a period of up to 90
5.31days pending completion of all continuing education requirements. The commissioner
5.32may allow appraisers impacted by a state-declared or federally declared disaster that
5.33occurs within 90 days before the end of the continuing education cycle to remain or
5.34be placed in active status for a period of up to 90 days after the end of the appraiser's
5.35continuing education cycle, pending completion of all continuing education requirements.
6.1(b) This subdivision supersedes any conflicting provision in section 326.56,
Sec. 9. Minnesota Statutes 2012, section 82B.19, subdivision 3, is amended to read:
Subd. 3. Reinstatements.
A license as a real estate appraiser that has been
6.5 suspended for less than two years
as a result of disciplinary action by the commissioner
may not be reinstated unless the applicant presents evidence of completion of the
continuing education required by this chapter. This requirement may not be imposed upon
an applicant for reinstatement who has been required to successfully complete the current
6.9experience, education, and
for real estate appraiser licensure
a condition to reinstatement of a license.
Sec. 10. MONEY TRANSMITTERS; NO TRANSIT LIST; DELAYED
6.13Notwithstanding Laws 2013, chapter 50, Minnesota Statutes 2013 Supplement,
6.14section 53B.27, subdivision 3, is effective January 1, 2016.
Sec. 11. REPEALER.
6.16Minnesota Statutes 2012, section 82B.10, subdivision 7, is repealed.
Section 1. Minnesota Statutes 2012, section 115C.02, subdivision 16, is amended to
Subd. 16. Tank in transport.
"Tank in transport" means a liquid fuel cargo tank
6.22with a capacity of greater than 250 gallons
used to deliver petroleum into storage tanks
6.23 or dispense petroleum into mobile tanks
Sec. 2. Minnesota Statutes 2012, section 115C.09, subdivision 2a, is amended to read:
Subd. 2a. Application for reimbursement.
(a) Applications for reimbursement
may be submitted for consideration by the board at the following stages:
(1) after costs have been incurred, and the associated tasks completed, for excavation
basin soil sampling, excavation of contaminated soil, treatment of contaminated soil, or
remedial investigation tasks such as soil boring drilling, monitoring well installation,
vapor risk assessment, and groundwater receptor survey; corrective action costs relating to
the construction and installation of a comprehensive corrective action design system are
not reimbursable at this stage; and
(2) after costs have been incurred, and the associated tasks completed, for tasks related
to the construction and installation of a comprehensive corrective action design system, but
only if the commissioner has approved a comprehensive plan for corrective action that will
adequately address the entire release, including groundwater contamination if necessary.
(b) An applicant shall not submit an application for reimbursement more frequently
than four times per 12-month period unless the application is for more than $2,000
(c) The commissioner shall review a plan, and provide an approval or disapproval to
the applicant and the board, within 60 days in the case of a plan submitted under paragraph
(a), clause (1), and within 120 days in the case of a plan submitted under paragraph (a),
clause (2), or the commissioner shall explain to the board why additional time is necessary.
The board shall consider a complete initial application within 60 days of its submission,
and shall consider a complete supplemental application within 120 days of its submission,
or the board shall explain for the record why additional time is necessary. Board staff may
review applications submitted to the board at the same time the commissioner considers
the appropriateness of the corrective action, but the board may not act on the application
until after the commissioner's approval is received.
(d) A reimbursement may not be made unless the board determines that the
commissioner has determined that the corrective action was appropriate in terms of
protecting public health, welfare, and the environment.
7.23(e) A reimbursement may not be made unless the application was submitted within
7.24seven years after the corrective action services for which reimbursement has been
7.25requested were performed.
7.26EFFECTIVE DATE; APPLICATION.This section is effective July 1, 2015, and
7.27applies to applications for reimbursement on or after that date.
Sec. 3. Minnesota Statutes 2012, section 115C.09, subdivision 3, is amended to read:
Subd. 3. Reimbursements; subrogation; appropriation.
(a) The board shall
reimburse an eligible applicant from the fund for 90 percent of the total reimbursable costs
incurred at the site, except that the board may reimburse an eligible applicant from the
fund for greater than 90 percent of the total reimbursable costs, if the applicant previously
qualified for a higher reimbursement rate. For costs associated with a release from a
tank in transport, the board may reimburse
90 percent of costs over $10,000, with the a
reimbursement not to exceed of
Not more than $1,000,000 may be reimbursed for costs associated with a single
release, regardless of the number of persons eligible for reimbursement, and not more than
$2,000,000 may be reimbursed for costs associated with a single tank facility.
(b) A reimbursement may not be made from the fund under this chapter until the
board has determined that the costs for which reimbursement is requested were actually
incurred and were reasonable.
(c) When an applicant has obtained responsible competitive bids or proposals
according to rules promulgated under this chapter prior to June 1, 1995, the eligible costs
for the tasks, procedures, services, materials, equipment, and tests of the low bid or proposal
are presumed to be reasonable by the board, unless the costs of the low bid or proposal are
substantially in excess of the average costs charged for similar tasks, procedures, services,
materials, equipment, and tests in the same geographical area during the same time period.
(d) When an applicant has obtained a minimum of two responsible competitive bids
or proposals on forms prescribed by the board and where the rules promulgated under
this chapter after June 1, 1995, designate maximum costs for specific tasks, procedures,
services, materials, equipment and tests, the eligible costs of the low bid or proposal are
deemed reasonable if the costs are at or below the maximums set forth in the rules.
(e) Costs incurred for change orders executed as prescribed in rules promulgated
under this chapter after June 1, 1995, are presumed reasonable if the costs are at or below
the maximums set forth in the rules, unless the costs in the change order are above those in
the original bid or proposal or are unsubstantiated and inconsistent with the process and
standards required by the rules.
(f) A reimbursement may not be made from the fund in response to either an initial
or supplemental application for costs incurred after June 4, 1987, that are payable under
an applicable insurance policy, except that if the board finds that the applicant has made
reasonable efforts to collect from an insurer and failed, the board shall reimburse the
(g) If the board reimburses an applicant for costs for which the applicant has
insurance coverage, the board is subrogated to the rights of the applicant with respect to
that insurance coverage, to the extent of the reimbursement by the board. The board may
request the attorney general to bring an action in district court against the insurer to enforce
the board's subrogation rights. Acceptance by an applicant of reimbursement constitutes
an assignment by the applicant to the board of any rights of the applicant with respect to
any insurance coverage applicable to the costs that are reimbursed. Notwithstanding this
paragraph, the board may instead request a return of the reimbursement under subdivision
5 and may employ against the applicant the remedies provided in that subdivision, except
where the board has knowingly provided reimbursement because the applicant was denied
coverage by the insurer.
(h) Money in the fund is appropriated to the board to make reimbursements under
this chapter. A reimbursement to a state agency must be credited to the appropriation
account or accounts from which the reimbursed costs were paid.
(i) The board may reduce the amount of reimbursement to be made under this
chapter if it finds that the applicant has not complied with a provision of this chapter, a
rule or order issued under this chapter, or one or more of the following requirements:
(1) the agency was given notice of the release as required by section
(2) the applicant, to the extent possible, fully cooperated with the agency in
responding to the release;
(3) the state rules applicable after December 22, 1993, to operating an underground
storage tank and appurtenances without leak detection;
(4) the state rules applicable after December 22, 1998, to operating an underground
storage tank and appurtenances without corrosion protection or spill and overfill
(5) the state rule applicable after November 1, 1998, to operating an aboveground
tank without a dike or other structure that would contain a spill at the aboveground tank site.
(j) The reimbursement may be reduced as much as 100 percent for failure by
the applicant to comply with the requirements in paragraph (i), clauses (1) to (5). In
determining the amount of the reimbursement reduction, the board shall consider:
(1) the reasonable determination by the agency that the noncompliance poses a
threat to the environment;
(2) whether the noncompliance was negligent, knowing, or willful;
(3) the deterrent effect of the award reduction on other tank owners and operators;
(4) the amount of reimbursement reduction recommended by the commissioner; and
(5) the documentation of noncompliance provided by the commissioner.
(k) An applicant may request that the board issue a multiparty check that includes each
lender who advanced funds to pay the costs of the corrective action or to each contractor
or consultant who provided corrective action services. This request must be made by filing
with the board a document, in a form prescribed by the board, indicating the identity of the
applicant, the identity of the lender, contractor, or consultant, the dollar amount, and the
location of the corrective action. The applicant must submit a request for the issuance
of a multiparty check for each application submitted to the board. Payment under this
paragraph does not constitute the assignment of the applicant's right to reimbursement
to the consultant, contractor, or lender. The board has no liability to an applicant for a
payment issued as a multiparty check that meets the requirements of this paragraph.
10.3EFFECTIVE DATE.This section is effective the day following final enactment.
Section 1. Minnesota Statutes 2013 Supplement, section 239.761, subdivision 8,
is amended to read:
Subd. 8. Diesel fuel oil.
(a) When diesel fuel oil is not blended with biodiesel, it
must comply with ASTM specification D975-12a.
(b) When diesel fuel oil is a blend of up to five volume percent biodiesel, the diesel
component must comply with ASTM specification D975-12a and the biodiesel component
must comply with ASTM specification
Sec. 2. Minnesota Statutes 2012, section 239.785, subdivision 6, is amended to read:
Subd. 6. Liquefied petroleum gas account.
A liquefied petroleum gas account in
the special revenue fund is established in the state treasury. Fees and penalties collected
under this section must be deposited in the state treasury and credited to the liquefied
petroleum gas account. Money in that account, including interest earned, is appropriated
to the commissioner of
for programs to improve the energy efficiency
of residential liquefied petroleum gas heating equipment in low-income households, and,
when necessary, to provide weatherization services to the homes.
Section 1. Minnesota Statutes 2012, section 45.027, subdivision 7, is amended to read:
Subd. 7. Actions against licensees.
(a) In addition to any other actions authorized
by this section, the commissioner may, by order, deny, suspend, or revoke the authority
or license of a person subject to the duties and responsibilities entrusted to the
commissioner, as described under section
45.011, subdivision 4
, or censure that person if
the commissioner finds that:
(1) the order is in the public interest; and
(2) the person has violated any law, rule, or order related to the duties and
responsibilities entrusted to the commissioner; or
(3) the person has provided false, misleading, or incomplete information to the
commissioner or has refused to allow a reasonable inspection of records or premises; or
(4) the person has engaged in an act or practice, whether or not the act or practice
directly involves the business for which the person is licensed or authorized, which
demonstrates that the applicant or licensee is untrustworthy, financially irresponsible, or
otherwise incompetent or unqualified to act under the authority or license granted by
The commissioner shall issue an order requiring a licensee or applicant for a
license to show cause why the license should not be revoked or suspended, or the licensee
censured, or the application denied and provide the licensee or applicant an opportunity
11.11to request a hearing under the contested case provisions of chapter 14
The order must
11.12 be calculated to give reasonable notice of the time and place for a hearing on the action,
11.13 and must state the reasons for the entry of the order. The commissioner may, by order,
11.14 summarily suspend a license pending final determination of an order to show cause. If a
11.15 license is suspended pending final determination of an order to show cause, a hearing on
11.16 the merits must be held within 30 days of the issuance of the order of suspension. The
11.17order must: (i) state the reasons that an order is being sought and whether a civil penalty
11.18is sought; and (ii) inform the licensee or applicant that unless the licensee or applicant
11.19requests a hearing on the matter within 30 days of receipt of the order, it becomes final by
11.20operation of law and that a final order will be issued under paragraph (a). If a hearing is
11.21requested by the licensee or applicant pursuant to item (ii): (A) the commissioner shall,
11.22within 15 days of receiving the request, set the date and time for the hearing and notify
11.23the licensee or applicant of those facts; and (B) the commissioner may modify, vacate, or
11.24extend the order, until the commissioner issues a final order under paragraph (a).
11.25(2) The commissioner may, by order, summarily suspend a license pending final
11.26determination of an order to show cause issued under clause (1). If a license is suspended
11.27pending final determination of an order to show cause and the licensee requests a hearing
11.28on the matter within 30 days of receipt of the order to show cause, a hearing on the merits
11.29must be held within 30 days of receipt of the hearing request. The summary suspension or
11.30summary revocation procedure does not apply to action by the commissioner against the
11.31certificate of authority of an insurer authorized to do business in Minnesota.
All hearings must be conducted according to chapter 14. After the hearing, the
commissioner shall enter
an a final
order disposing of the matter as the facts require. If the
licensee or applicant fails to appear at a hearing after having been duly notified of it, the
person is considered in default, and the proceeding may be determined against the licensee
upon consideration of the order to show cause, the allegations of which may
12.1 be considered true. The summary suspension or summary revocation procedures does not
12.2 apply to action by the commissioner against the certificate of authority of an insurer
12.3 authorized to do business in Minnesota
12.4(d) If an order becomes final because a person subject to an order does not timely
12.5request a hearing as provided in paragraph (b) or if the petition for judicial review is not
12.6timely filed after a hearing and a final order is issued by the commissioner as provided
12.7in paragraph (a), the commissioner may file a certified copy of the final order with the
12.8clerk of a court of competent jurisdiction. The final order so filed has the same effect as a
12.9judgment of the court and may be recorded, enforced, or satisfied in the same manner as
12.10a judgment of the court.
12.11(e) If a person does not comply with a final order under this section, the
12.12commissioner may petition a court of competent jurisdiction to enforce the order. The
12.13court may not require the commissioner to post a bond in an action or proceeding under
12.14this section. If the court finds, after service and opportunity for hearing, that the person
12.15was not in compliance with the order, the court may adjudge the person in civil contempt
12.16of the order. The court may impose a further civil penalty against the person for contempt
12.17in an amount up to $10,000 for each violation and may grant any other relief the court
12.18determines is just and proper in the circumstances.
Except for information classified as confidential under sections
, the commissioner may make any data
otherwise classified as private or confidential pursuant to this section accessible to an
appropriate person or agency if the commissioner determines that the access will aid the
law enforcement process, promote public health or safety, or dispel widespread rumor or
unrest. If the commissioner determines that private or confidential information should
be disclosed, the commissioner shall notify the attorney general as to the information to
be disclosed, the purpose of the disclosure, and the need for the disclosure. The attorney
general shall review the commissioner's determination. If the attorney general believes
that the commissioner's determination does not satisfy the purpose and intent of this
, the attorney general shall advise the commissioner in writing that
the information may not be disclosed. If the attorney general believes the commissioner's
determination satisfies the purpose and intent of this provision, the attorney general shall
advise the commissioner in writing, accordingly.
After disclosing information pursuant to this provision, the commissioner shall
advise the chairs of the senate and house of representatives judiciary committees of the
disclosure and the basis for it.
Sec. 2. Minnesota Statutes 2012, section 58.12, subdivision 1, is amended to read:
Subdivision 1. Powers of commissioner.
(a) The commissioner may by order
take any or all of the following actions:
(1) bar a person from engaging in residential mortgage origination or servicing;
(2) deny, suspend, or revoke a residential mortgage originator or a servicer license;
(3) censure a licensee;
(4) impose a civil penalty as provided for in section
45.027, subdivision 6
(5) revoke an exemption or certificate of exemption.
(b) In order to take the action in paragraph (a), the commissioner must find:
(1) that the order is in the public interest; and
(2) that the residential mortgage originator, servicer, applicant, or other person, an
officer, director, partner, employee, or agent or any person occupying a similar status or
performing similar functions, or a person in control of the originator, servicer, applicant,
or other person has:
(i) violated any provision of this chapter or rule or order under this chapter;
(ii) filed an application for a license that is incomplete in any material respect or
contains a statement that, in light of the circumstances under which it is made, is false or
misleading with respect to a material fact;
(iii) failed to maintain compliance with the affirmations made under section
(iv) violated a standard of conduct or engaged in a fraudulent, coercive, deceptive,
or dishonest act or practice, whether or not the act or practice involves the residential
mortgage lending business including, but not limited to, negligently making a false
13.24statement or knowingly and willfully omitting a material fact
(v) engaged in an act or practice, whether or not the act or practice involves the
business of making a residential mortgage loan, that demonstrates untrustworthiness,
financial irresponsibility, or incompetence;
(vi) pled guilty, with or without explicitly admitting guilt, pled nolo contendere,
or been convicted of a felony, gross misdemeanor, or a misdemeanor involving moral
(vii) paid a civil penalty or been the subject of disciplinary action by the
commissioner, or an order of suspension or revocation, cease and desist order or injunction
order or order barring involvement in an industry or profession issued by this or any other
state or federal regulatory agency or by the Secretary of Housing and Urban Development;
(viii) been found by a court of competent jurisdiction to have engaged in conduct
evidencing gross negligence, fraud, misrepresentation, or deceit;
(ix) refused to cooperate with an investigation or examination by the commissioner;
(x) failed to pay any fee or assessment imposed by the commissioner; or
(xi) failed to comply with state and federal tax obligations.
Sec. 3. Minnesota Statutes 2012, section 60A.0789, subdivision 3, is amended to read:
Subd. 3. Declaratory judgment action. (a)
If, prior to payment of death benefits,
the insurer believes the policy was initiated by STOLI practices, the insurer may bring a
declaratory judgment action seeking a court order declaring the policy void.
14.8(b) A life insurance policy owner, who believes in good faith that the insurer may
14.9challenge the policy for lack of insurable interest, may bring a declaratory judgment action
14.10seeking a court order declaring the policy valid.
14.11(c) The right of a life insurance policy owner to bring a declaratory judgment action
14.12applies only to policies issued in Minnesota prior to the effective date of the Insurable
14.13Interest Act and that have a death benefit equal to or greater than one million dollars. Only
14.14the owner of record of a life insurance policy on the effective date of this section may
14.15bring a declaratory judgment action under this section.
14.16EFFECTIVE DATE.This section is effective the day following final enactment
14.17and shall sunset on December 31, 2016.
Sec. 4. Minnesota Statutes 2012, section 60A.10, subdivision 1, is amended to read:
Subdivision 1. Domestic companies.
(1) Deposit as security for all policyholders
No company in this state, other than farmers' mutual, or real estate title
insurance companies insurers
, shall do business in this state unless it has on deposit with
the commissioner, for the protection of both its resident and nonresident policyholders,
securities to an amount, the actual market value of which, exclusive of interest, shall
never be less than $500,000 or one-half the applicable financial requirement set forth in
, whichever is less. The securities shall be retained
under the control of the commissioner as long as any policies of the depositing company
remain in force.
(2) Securities defined.
For the purpose of this subdivision, the word "securities"
means bonds or other obligations of, or bonds or other obligations insured or guaranteed
by, the United States, any state of the United States, any municipality of this state, or any
agency or instrumentality of the foregoing.
(3) Protection of deposit from levy.
No judgment creditor or other claimant may
levy upon any securities held on deposit with, or for the account of, the commissioner.
Upon the entry of an order by a court of competent jurisdiction for the rehabilitation,
liquidation or conservation of any depositing company as provided in chapter 60B, that
company's deposit together with any accrued income thereon shall be transferred to the
commissioner as rehabilitator, liquidator, or conservator.
Sec. 5. Minnesota Statutes 2012, section 60K.54, subdivision 2, is amended to read:
Subd. 2. Criminal prosecutions.
Within 30 days of the
initial pretrial hearing
15.6 criminal prosecution begins
, a producer shall report to the commissioner any criminal
prosecution of the producer taken in any jurisdiction. The report must include a copy of
the initial complaint filed, the order resulting from the hearing, and any other relevant legal
documents. In addition, a producer shall report to the commissioner within ten days any
conviction, guilty plea, or plea of nolo contendere to any felony or gross misdemeanor.
15.11For purposes of this subdivision, the date the criminal prosecution begins is the date
15.12the indictment is returned or the date the criminal complaint is filed.
Sec. 6. Minnesota Statutes 2012, section 61A.282, subdivision 1, is amended to read:
Subdivision 1. Requirements.
A company's investments shall be held in its
corporate name or its nominee name, except that:
(a) Investments may be held in the name of a clearing corporation or of a custodian
bank or in the name of the nominee of either under the following conditions:
(1) The clearing corporation, custodian bank, or nominee must be legally authorized
to hold the particular investment for the account of others;
(2) Where the investment is evidenced by a certificate and held in the name of a
custodian bank or the nominee of a custodian bank, a written agreement shall provide that
certificates so deposited shall at all times be kept separate and apart from other deposits
with the depository, so that at all times they may be identified as belonging solely to the
company making the deposit; or
(3) Where a clearing corporation is to act as depository, the investment may be
merged or held in bulk in the clearing corporation's name, or in the name of its nominee,
together with any other investments deposited with the clearing corporation by any other
person, if a written agreement provides that adequate evidence of the deposit will be
obtained and retained by the company or a custodian bank.
As used in this subdivision, the term "custodian bank" means a bank or trust
company licensed by the United States or any state thereof.
(b) A company may participate, through a bank or trust company which is a member
of the Federal Reserve System, in the Federal Reserve's book-entry system, if the records
of the member bank or trust company at all times show that the investments are held for
the company and/or for specific accounts of the company.
(c) If an investment consists of an individual interest in a pool of obligations, or of a
fractional interest in a single obligation, the certificate of participation or interest, or the
confirmation of participation or interest in the investment, shall be held in the manner set
forth in paragraph (a) or held in the name of the company.
(d) Where an investment is not evidenced by a certificate, except as provided in
paragraph (b), adequate evidence of the company's investment shall be obtained from the
issuer or its transfer or recording agent and retained by the company, a custodian bank, or
clearing corporation. Adequate evidence, for purposes of this section, shall mean a written
receipt or other verification issued by the depository or issuer or a custodian bank which
shows that the investment is held for the company. Transfers of ownership of investments
held as described in paragraphs (a)(3), (b), and (c) may be evidenced by bookkeeping
entry on the books of the issuer of the investment or its transfer or recording agent or
the clearing corporation without physical delivery of certificates, if any, evidencing the
16.17(e) Investments or cash posted as collateral or variation margin (other than initial
16.18margin amounts) in connection with qualified financial contracts, as defined in section
16.1960B.03, subdivision 22, are not subject to this subdivision.
Sec. 7. [65A.285] SURCHARGE PROHIBITION.
16.21 Subdivision 1. Surcharge prohibition. An insurer may not impose a surcharge on
16.22homeowners insurance solely as a result of a consumer inquiry.
16.23 Subd. 2. Definitions. For purposes of this section:
16.24(1) "consumer inquiry" means a telephone call or other communication made to an
16.25insurer that does not result in a paid claim and that is in regard to the general terms or
16.26conditions of or coverage offered under an insurance policy. The term includes a question
16.27concerning the process for filing a claim and whether a policy will cover a loss; and
16.28(2) "surcharge" means an increase in premium for a policy, including the removal
16.29of a claim-free discount.
Sec. 8. Minnesota Statutes 2012, section 66A.01, is amended to read:
16.3166A.01 SCOPE OF CHAPTER.
This chapter shall apply to mutual insurance companies other than: assessment
benefit associations, fraternal benefit societies, township mutual insurance companies and
insurance companies insurers
do not apply to mutual
life insurance companies.
60A.07, subdivision 1
, clauses (1) and (2);
, do not apply to mutual property and casualty insurance
Sec. 9. Minnesota Statutes 2012, section 68A.01, subdivision 2, is amended to read:
Subd. 2. Guaranty fund and investment thereof.
Before issuing any policy or other
contract of guaranty or insurance, every real estate title
insurance company insurer
apart and keep separate a guaranty fund of $100,000 or an amount equal to two-fifths of its
capital stock whichever is the greater. The guaranty fund shall be invested according to law.
Sec. 10. Minnesota Statutes 2012, section 68A.02, subdivision 1, is amended to read:
Subdivision 1. 1964-2001 premium reserve.
Upon issuance of each contract of
title insurance issued on or after January 1, 1964, through January 1, 2001, by a domestic
real estate title
insurance company insurer
, there shall be reserved initially a sum equal
to ten percent of the original premium charged therefor. At the end of each calendar
year following the year in which the contract of title insurance is issued, there shall be
a reduction in the sum so reserved in the amount of one-twentieth of such sum. On any
contract of title insurance issued prior to January 1, 1964, by a domestic real estate title
insurance company insurer
, a reserve shall be set up on January 1, 1964, and thereafter
maintained in such sum as would have been required if the foregoing requirements with
respect to title insurance reserves had existed at and after the date of the contract of title
insurance. Such sums herein required to be reserved shall at all times and for all purposes
be considered and constitute unearned portions of the original premiums on such contracts
of title insurance, shall be charged as a reserve liability of the real estate title
17.25 company insurer
in determining its financial condition, and, for the purpose of applying the
provisions of section
60A.23, subdivision 4
, shall be deemed to constitute the whole amount
of the premiums on the unexpired risks of such real estate title
insurance company insurer
Sec. 11. Minnesota Statutes 2012, section 68A.04, subdivision 1, is amended to read:
Subdivision 1. Direct risk premiums.
For purposes of this chapter, "direct risk
premiums" means the charge for title insurance made by a title
insurance company insurer
or its agents according to the
rate filing approved by the commissioner
of commerce without a deduction for commissions paid to or retained by the agent and
is that portion of the fee charged by a title
insurance company insurer
to an insured or
an applicant for insurance for the assumption by the title
insurance company insurer
the risk created by the issuance of the title insurance policy. Direct risk premiums of a
insurance company insurer
do not include any other charge or fee for abstracting,
searching, or examining the title, or for escrow, closing, or other related services.
Sec. 12. Minnesota Statutes 2012, section 82.55, subdivision 4, is amended to read:
Subd. 4. Closing agent; real estate closing agent.
"Closing agent" or "real estate
closing agent" means any person whether or not acting as an agent for a title
18.8 insurance agent
, a licensed attorney, real estate broker, or real estate salesperson, who for
another and with or without a commission, fee, or other valuable consideration or with
or without the intention or expectation of receiving a commission, fee, or other valuable
consideration, directly or indirectly provides closing services incident to the sale, trade,
lease, or loan of residential real estate, including drawing or assisting in drawing papers
incident to the sale, trade, lease, or loan, or advertises or claims to be engaged in these
Sec. 13. Minnesota Statutes 2012, section 82.641, subdivision 6, is amended to read:
Subd. 6. Exemption.
The following persons, when acting as closing agents,
are exempt from the requirements of this section and sections
otherwise required in this chapter:
(1) a direct employee of a title
insurance company insurer
authorized to do business
in this state, or a direct employee of a title
company insurance agent
, or a person who
has an agency agreement with a title
insurance company insurer
or a title
18.22 insurance agent
in which the agent agrees to perform closing services on the title
18.23 company's insurer's
company's insurance agent's
behalf and the title
18.24 company insurer
company insurance agent
assumes responsibility for the actions
of the agent as if the agent were a direct employee of the title
insurance company insurer
company insurance agent
(2) a licensed attorney or a direct employee of a licensed attorney;
(3) a licensed real estate broker or salesperson;
(4) a direct employee of a licensed real estate broker if the broker maintains all funds
received in connection with the closing services in the broker's trust account;
(5) a bank, trust company, savings association, credit union, industrial loan and thrift
company, regulated lender under chapter 56, public utility, or land mortgage or farm loan
association organized under the laws of this state or the United States, when engaged in
the transaction of businesses within the scope of its corporate powers as provided by law;
(6) a title
insurance company insurer
authorized to do business in this state; and
(7) a title
company insurance agent
that has a contractual agency relationship with
insurance company insurer
authorized to do business in this state, where the title
insurance company insurer
assumes responsibility for the actions of the title
19.5 insurance agent
and its employees or agents as if they were employees or agents of the
insurance company insurer
Sec. 14. Minnesota Statutes 2012, section 82.81, subdivision 8, is amended to read:
Subd. 8. Closing services.
No real estate broker, salesperson, or closing agent
shall require a person to use any particular lender, licensed attorney, real estate broker,
real estate salesperson, real estate closing agent, or title
company insurance agent
connection with a residential real estate closing.
Sec. 15. Minnesota Statutes 2012, section 297I.01, subdivision 9, is amended to read:
Subd. 9. Gross premiums.
"Gross premiums" means total premiums paid by
policyholders and applicants of policies, whether received in the form of money or other
valuable consideration, on property, persons, lives, interests and other risks located,
resident, or to be performed in this state, but excluding consideration and premiums for
reinsurance assumed from other insurance companies.
(a) "Gross premiums" includes the total consideration paid to bail bond agents
for bail bonds.
(b) For title
insurance companies insurers
, "gross premiums" means the charge for
title insurance made by a title
insurance company insurer
or its agents according to the
rate filing approved by the commissioner of commerce without a
deduction for commissions paid to or retained by the agent. Gross premiums of a title
insurance company insurer
does not include any other charge or fee for abstracting,
searching, or examining the title, or escrow, closing, or other related services.
(c) "Gross premiums" includes any workers' compensation special compensation
fund premium surcharge pursuant to section
(d) "Gross premiums" for nonadmitted insurance includes any payment made as
consideration for an insurance contract for such insurance, including premium deposits,
assessments, fees, and any other compensation given in consideration for a contract
of insurance. Gross premiums does not include the stamping fee, as provided under
60A.2085, subdivision 7
, nor the operating assessment, as provided under section
19.3360A.208, subdivision 8
Sec. 16. Minnesota Statutes 2012, section 327C.095, subdivision 11, is amended to read:
Subd. 11. Affidavit of compliance.
After a park is sold, a park owner or other
person with personal knowledge may record an affidavit with the county recorder or
registrar of titles in the county in which the park is located certifying compliance with
subdivision 6 or 7 or that subdivisions 6 and 7 are not applicable. The affidavit may be
used as proof of the facts stated in the affidavit. A person acquiring an interest in a park
or a title
insurance company insurer
or attorney who prepares, furnishes, or examines
evidence of title may rely on the truth and accuracy of statements made in the affidavit and
is not required to inquire further as to the park owner's compliance with subdivisions 6
and 7. When an affidavit is recorded, the right to purchase provided under subdivisions 6
and 7 terminate, and if registered property, the registrar of titles shall delete the memorials
of the notice and affidavit from future certificates of title.
Sec. 17. Minnesota Statutes 2013 Supplement, section 332A.02, subdivision 8, is
amended to read:
Subd. 8. Debt management services provider.
"Debt management services
provider" means any person offering or providing debt management services to a debtor
domiciled in this state, regardless of whether or not a fee is charged for the services and
regardless of whether the person maintains a physical presence in the state. This term
includes any person to whom debt management services are delegated, and does not
include services performed by the following when engaged in the regular course of their
respective businesses and professions:
(1) exempt attorneys at law, escrow agents, accountants, broker-dealers in securities;
(2) state or national banks, credit unions, trust companies, savings associations, title
insurance companies insurers
, insurance companies, and all other lending institutions duly
authorized to transact business in Minnesota;
(3) persons who, as employees on a regular salary or wage of an employer not
engaged in the business of debt management, perform credit services for their employer;
(4) public officers acting in their official capacities and persons acting as a debt
management services provider pursuant to court order;
(5) any person while performing services incidental to the dissolution, winding up,
or liquidation of a partnership, corporation, or other business enterprise;
(6) the state, its political subdivisions, public agencies, and their employees;
(7) collection agencies, provided that the services are provided to a creditor;
(8) "qualified organizations" designated as representative payees for purposes of the
Social Security and Supplemental Security Income Representative Payee System and the
federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508;
(9) accelerated mortgage payment providers. "Accelerated mortgage payment
providers" are persons who, after satisfying the requirements of sections
receive funds to make mortgage payments to a lender or lenders, on behalf of mortgagors,
in order to exceed regularly scheduled minimum payment obligations under the terms of
the indebtedness. The term does not include: (i) persons or entities described in clauses (1)
to (8); (ii) mortgage lenders or servicers, industrial loan and thrift companies, or regulated
lenders under chapter 56; or (iii) persons authorized to make loans under section
. For purposes of this clause and sections
, "lender" means
the original lender or that lender's assignee, whichever is the current mortgage holder;
(10) trustees, guardians, and conservators; and
(11) debt settlement services providers.
Sec. 18. Minnesota Statutes 2012, section 386.66, is amended to read:
21.16386.66 BOND OR ABSTRACTER'S LIABILITY INSURANCE POLICY.
Before a license shall be issued, the applicant shall file with the commissioner an
annual bond or abstracter's liability insurance policy for each license year, to be approved
by the commissioner, running to the state of Minnesota in the penal sum of at least
$100,000 conditioned for the payment by such abstracter of any damages that may be
sustained by or accrue to any person by reason of or on account of any error, deficiency or
mistake arising wrongfully or negligently in any abstract, or continuation thereof, or in
any certificate showing ownership of, or interest in, or liens upon any lands in the state of
Minnesota, whether registered or not, made by and issued by such abstracter, provided
however, that the aggregate liability of the surety to all persons under such bond shall
in no event exceed the amount of such bond. If the applicant intends to engage in the
business of abstracting in any county having more than 200,000 inhabitants, the bond or
insurance policy required herein shall be in the penal sum of at least $250,000. Applicants
that are title
insurance companies insurers
regulated by chapter 68A and licensed pursuant
60A.06, subdivision 1
, clause (7), and their employees or those
having cash or securities on deposit with the state of Minnesota in an amount equal to the
said bond or insurance policy shall be exempt from furnishing the bond or an insurance
policy herein required but shall be liable to the same extent as if a bond or insurance policy
has been given and filed. The bond or insurance policy required hereunder shall be written
by some surety or other company authorized to do business in this state issuing bonds or
abstracter's liability insurance policies and shall be issued for a period of one or more
years, and renewed for one year at the date of expiration as principal continues in business.
Sec. 19. Minnesota Statutes 2012, section 507.401, subdivision 1, is amended to read:
Subdivision 1. Definitions.
(a) The definitions in this subdivision apply to this
(b) "Assignment of rents and profits" means an assignment, whether in a separate
document or in a mortgage, of any of the benefits accruing under a recorded or unrecorded
lease or tenancy existing, or subsequently created, on property encumbered by a mortgage,
which is given as additional security for the debt secured by the mortgage.
(c) "Mortgage" means a mortgage or mortgage lien, including any assignment of
rents and profits given as additional security for the debt secured by that lien, on an
interest in real property in this state given to secure a loan in the original principal amount
of $1,500,000 or less.
(d) "Mortgagee" means:
(1) the grantee of a mortgage; or
(2) if a mortgage has been assigned of record, the last person to whom the mortgage
has been assigned of record.
(e) "Mortgage servicer" means the last person to whom a mortgagor or the
mortgagor's successor in interest has been instructed by a mortgagee to send payments on
a loan secured by a mortgage. A person transmitting a payoff statement is the mortgage
servicer for the mortgage described in the payoff statement.
(f) "Mortgagor" means the grantor of a mortgage.
(g) "Partial release" means the release of specified parcels of land from a mortgage.
(h) "Payoff statement" means a statement of the amount of:
(1) the unpaid balance of a loan secured by a mortgage, including principal, interest,
and any other charges properly due under or secured by the mortgage, and interest on a
per day basis for the unpaid balance; or
(2) the portion of the unpaid balance of the loan secured by the mortgage required
by the mortgagee or mortgage servicer to be paid as a condition for the issuance of a
(i) "Record" means to record with the county recorder or file with the registrar of titles.
insurance company insurer
" means a corporation or other business entity
authorized and licensed to transact the business of insuring titles to interests in real
property in this state under chapter 68A.
Sec. 20. Minnesota Statutes 2012, section 507.401, subdivision 2, is amended to read:
Subd. 2. Certificate of release.
An officer or duly appointed agent of a title
insurance company insurer
may, on behalf of a mortgagor or a person who acquired from
the mortgagor title to all or a part of the property described in a mortgage, execute a
certificate of release that complies with the requirements of this section and record the
certificate of release in the real property records of each county in which the mortgage is
recorded if a satisfaction or release of the mortgage has not been executed and recorded
after the date payment in full of the loan secured by the mortgage was sent in accordance
with a payoff statement furnished by the mortgagee or the mortgage servicer.
Sec. 21. Minnesota Statutes 2012, section 507.401, subdivision 3, is amended to read:
Subd. 3. Contents.
A certificate of release executed under this section must contain
substantially all of the following:
(1) the name of the mortgagor, the name of the original mortgagee, and, if applicable,
the mortgage servicer, the date of the mortgage, the date of recording, and volume and
page or document number in the real property records where the mortgage is recorded,
together with similar information for the last recorded assignment of the mortgage;
(2) if applicable, the date of any assignment of rents and profits, the date of its
recording, and its volume and page or document number in the real property records
where it has been recorded or filed, together with similar information for the last recorded
(3) a statement that the mortgage was in the original principal amount of $1,500,000
(4) a statement that the person executing the certificate of release is an officer or a duly
appointed agent of a title
insurance company insurer
authorized and licensed to transact
the business of insuring titles to interests in real property in this state under chapter 68A;
(5) a statement that the certificate of release is made on behalf of the mortgagor or a
person who acquired title from the mortgagor to all or a part of the property described in
(6) a statement that the mortgagee or mortgage servicer provided a payoff statement
which was used to make full or partial payment of the unpaid balance of the loan secured
by the mortgage;
(7) a statement that full or partial payment of the unpaid balance of the loan secured
by the mortgage was made in accordance with the written or verbal payoff statement; and
(8) where the certificate of release affects only a portion of the land encumbered by
the mortgage, a legal description of the portion being released.
Sec. 22. Minnesota Statutes 2012, section 507.401, subdivision 4, is amended to read:
Subd. 4. Execution.
(a) A certificate of release authorized by subdivision 2 must be
executed and acknowledged as required by law in the case of a deed and may be executed
by a duly appointed agent of a title
insurance company insurer
, but such delegation to an
agent by a title
insurance company insurer
shall not relieve the title
of any liability for damages caused by its agent for the wrongful or erroneous
execution of a certificate of release.
(b) The appointment of agent must be executed and acknowledged as required by
law in the case of a deed and must state:
(1) the title
insurance company insurer
as the grantor;
(2) the identity of the person, partnership, or corporation authorized to act as agent
to execute and record certificates of release provided for in this section on behalf of the
insurance company insurer
(3) that the agent has the full authority to execute and record certificates of release
provided for in this section on behalf of the title
insurance company insurer
(4) the term of appointment of the agent; and
(5) that the agent has consented to and accepts the terms of the appointment.
(c) A single appointment of agent may be recorded in each county in each recording
or filing office. A separate appointment of agent shall not be necessary for each certificate
of release. For registered land the appointment of agent shall be shown as a memorial on
each certificate of title on which a mortgage to be released by a certificate of release under
this section is a memorial. The appointment of agent may be rerecorded where necessary
to establish authority of the agent, but such authority shall continue until a revocation of
appointment is recorded in the office of the county recorder, or registrar of titles, where
the appointment of agent was recorded.
Sec. 23. Minnesota Statutes 2012, section 507.401, subdivision 5, is amended to read:
Subd. 5. Effect.
For purposes of releasing the mortgage, a certificate of release
containing the information and statements provided for in subdivision 3 and executed as
provided in this section is prima facie evidence of the facts contained in it, is entitled to be
recorded with the county recorder or registrar of titles, and operates as a release of the
mortgage described in the certificate of release. The county recorder and the registrar of
titles shall rely upon it to release the mortgage. Recording of a wrongful or erroneous
certificate of release by a title
insurance company insurer
or its agent shall not relieve
the mortgagor, or the mortgagor's successors or assigns, from any personal liability on
the loan or other obligations secured by the mortgage. In addition to any other remedy
provided by law, a title
insurance company insurer
wrongfully or erroneously recording a
certificate of release under this section shall be liable to the mortgagee for actual damage
sustained due to the recordings of the certificate of release.
Sec. 24. Minnesota Statutes 2012, section 507.45, subdivision 4, is amended to read:
Subd. 4. Choice of closer; notice.
(a) No real estate salesperson, broker, attorney,
auctioneer, builder, title
, financial institution, or other person making a
mortgage loan may require a person to use any particular licensed attorney, real estate
broker, real estate salesperson, or real estate closing agent in connection with a residential
real estate closing.
(b) All listing agreements must include a notice informing sellers of their rights
under this subdivision. The notice must require the seller to indicate in writing whether it
is acceptable to the seller to have the licensee arrange for closing services or whether the
seller wishes to arrange for others to conduct the closing. The notice must also include the
disclosure of any controlled business arrangement, as the term is defined in United States
Code, title 12, section 1602, between the licensee and the real estate closing agent through
which the licensee proposes to arrange closing services.
Sec. 25. Minnesota Statutes 2012, section 515B.4-109, is amended to read:
25.18515B.4-109 ESCROW DEPOSITS.
All earnest money paid or deposits made in connection with the purchase or
reservation of units from or with a declarant shall be deposited in an escrow account
controlled jointly by the declarant and the purchaser, or controlled by a licensed title
insurance company insurer
or agent thereof, an attorney representing either the declarant
or the purchaser, a licensed real estate broker, an independent bonded escrow company, or
a governmental agency or instrumentality. The escrow account shall be in an institution
whose deposits are insured by a governmental agency or instrumentality. The money or
deposits shall be held in the escrow account until (i) delivered to the declarant at closing;
(ii) delivered to the declarant because of the purchaser's default under a reservation
agreement or a contract to purchase the unit; (iii) delivered to the purchaser pursuant to
the provisions of section
or the provisions of a reservation agreement or a
contract to purchase; or (iv) delivered for payment of construction costs pursuant to a
written agreement between the declarant and the purchaser.
Sec. 26. Minnesota Statutes 2013 Supplement, section 559.202, subdivision 3, is
amended to read:
Subd. 3. Content of the notice.
The notice must contain the following verbatim
26.3"IMPORTANT INFORMATION ABOUT CONTRACTS FOR DEED
26.4Know What You Are Getting Into
(1) A contract for deed is a complex legal agreement. You are NOT a tenant. Mortgage
foreclosure laws don't apply.
(2) You should know ALL of your obligations and rights before you sign a purchase
agreement or contract for deed.
(3) You (seller must circle one):
|have to pay homeowner's insurance.
|have to pay property taxes.
|have to make and pay for some or all of the repairs or
maintenance, as described in the contract for deed.
(4) After some time, you may need to make a large lump sum payment (called a "balloon
payment"). Know when it is due and how much it will be. You'll probably need to get a
new mortgage, another financial arrangement, or pay for the balance in cash at that time.
(5) If you miss just a single payment or can't make the balloon payment, the seller can
cancel your contract. You will likely lose all the money you have already paid. You will
likely lose your ability to purchase the home. The seller can begin an eviction action
against you in just a few months.
(6) Within four months of signing the contract for deed, you must "record" it in the office
of the county recorder or registrar of titles in the county in which the property is located.
If you do not do so, you could face a fine.
26.24Key Things Highly Recommended Before You Sign
(1) Get advice from a lawyer or the Minnesota Home Ownership Center at 1-866-462-6466
or go to www.hocmn.org. To find a lawyer through the Minnesota State Bar Association,
go to www.mnfindalawyer.com.
(2) Get an independent, professional appraisal of the property to learn what it is worth.
(3) Get an independent, professional inspection of the property.
(4) Buy title insurance or ask a real estate lawyer for a "title opinion."
(5) Check with the city or county to find out if there are inspection reports or unpaid
(6) Check with a title
or the county where the property is located to find out
if there is a mortgage or other lien on the property and if the property taxes have been paid.
(7) Ensure that your interest rate does not exceed the maximum allowed by law by
calling the Department of Commerce to get a recorded message for the current month's
27.6If You Are Entering into a Purchase Agreement
(1) If you haven't already signed the contract for deed, you can cancel the purchase
agreement (and get all your money back) if you do so within five business days after
getting this notice.
(2) To cancel the purchase agreement, you must follow the provisions of Minnesota
559.217, subdivision 4
. Ask a lawyer for help."
27.13MODEL HOLDING COMPANY ACT CHANGES
Section 1. Minnesota Statutes 2012, section 60D.09, is amended to read:
CRIMINAL PROCEEDINGS PENALTIES.
27.16 Subdivision 1. Failure to file registration statement; civil penalty. An insurer
27.17failing, without just cause, to file a registration statement as required in section 60D.19
27.18shall pay a penalty of $1,000 for each day's delay, to be recovered by the commissioner
27.19and paid into the general fund. The commissioner may reduce the penalty if the insurer
27.20demonstrates to the commissioner that the imposition of the penalty would constitute a
27.21financial hardship to the insurer.
27.22 Subd. 2. Failure to provide notice and filing regarding affiliated transaction
27.23or agreement; civil penalty. An insurer failing, without just cause, to provide the
27.24appropriate notice and filing under section 60D.20 regarding an affiliated transaction or
27.25agreement, shall pay a penalty of $5,000, to be recovered by the commissioner and paid
27.26into the general fund.
27.27 Subd. 3. Certain contracts and agreements; cease and desist and void orders.
27.28Whenever it appears to the commissioner that an insurer subject to sections 60D.15 to
27.2960D.29 or a director, officer, employee, or agent of an insurer has engaged in a transaction
27.30or entered into a contract that is subject to section 60D.20 and that would have been
27.31disapproved by the commissioner, the commissioner may order the insurer to cease and
27.32desist immediately any further activity under that transaction or contract. After notice and
28.1hearing, the commissioner may also order the insurer to void any contracts and restore the
28.2status quo if the action is in the best interest of the policyholders, creditors, or the public.
28.3 Subd. 4. Criminal penalties.
Whenever it appears to the commissioner that any
insurer or any director, officer, employee or agent thereof has committed a willful violation
, the commissioner may cause criminal proceedings to be
instituted by the district court for the county in which the principal office of the insurer
is located or if such insurer has no such office in the state, then by the District Court for
Ramsey County against such insurer or the responsible director, officer, employee or agent
thereof. Any person who willfully violates sections
shall be guilty, for the
first offense, of a misdemeanor, and for each subsequent offense, of a gross misdemeanor.
Sec. 2. Minnesota Statutes 2012, section 60D.15, is amended by adding a subdivision
28.13 Subd. 4a. Enterprise risk. "Enterprise risk" means an activity, circumstance, event,
28.14or series of events involving one or more affiliates of an insurer that, if not remedied
28.15promptly, is likely to have a material adverse effect upon the financial condition or
28.16liquidity of the insurer or its insurance holding company system as a whole, including,
28.17but not limited to, anything that would cause the insurer's risk-based capital to fall into
28.18company action level as set forth in sections 60A.50 to 60A.696 or would cause the insurer
28.19to be in hazardous financial condition in accordance with the standards of section 60G.20.
Sec. 3. Minnesota Statutes 2012, section 60D.17, subdivision 1, is amended to read:
Subdivision 1. Filing requirements. (a)
No person other than the issuer shall: (1)
make a tender offer for or a request or invitation for tenders of, or enter into any agreement
to exchange securities or, seek to acquire, or acquire, in the open market or otherwise,
any voting security of a domestic insurer if, after the consummation thereof, the person
would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in
control of the insurer; or (2) enter into an agreement to merge with or otherwise to acquire
control of a domestic insurer or any person controlling a domestic insurer unless, at the
time the offer, request, or invitation is made or the agreement is entered into, or before
the acquisition of the securities if no offer or agreement is involved, the person has filed
with the commissioner and has sent to the insurer, a statement containing the information
required by this section and the offer, request, invitation, agreement, or acquisition has
been approved by the commissioner in the manner prescribed in this section.
28.33(b) For purposes of this section, a controlling person of a domestic insurer seeking to
28.34divest its controlling interest in the domestic insurer, in any manner, shall file with the
29.1commissioner, with a copy to the insurer, confidential notice of its proposed divestiture
29.2at least 30 days before the cessation of control. The commissioner shall determine those
29.3instances in which the party or parties seeking to divest or to acquire a controlling interest
29.4in an insurer will be required to file for and obtain approval of the transaction.
29.5(c) With respect to a transaction subject to this section, the acquiring person must
29.6also file a preacquisition notification with the commissioner, which must contain the
29.7information set forth in section 60D.18, subdivision 3, paragraph (b). A failure to file the
29.8notification may be subject to penalties specified in section 60D.18, subdivision 5.
For purposes of this section, a domestic insurer includes a person controlling a
domestic insurer unless the person as determined by the commissioner is either directly or
through its affiliates primarily engaged in business other than the business of insurance.
However, the person shall file a preacquisition notification with the commissioner
29.13 containing the information set forth in section
60D.18, subdivision 3 , paragraph (b),
29.14 30 days before the proposed effective date of the acquisition. Failure to file is subject
29.15 to section
60D.18, subdivision 5 .
For the purposes of this section, "person" does not
include any securities broker holding, in the usual and customary brokers function, less
than 20 percent of the voting securities of an insurance company or of any person that
controls an insurance company.
29.19(e) The statement filed with the commissioner pursuant to subdivisions 1 and 2 must
29.20remain confidential until the transaction is approved by the commissioner, except that all
29.21attachments filed with the statement remain confidential after the approval unless the
29.22commissioner, in the commissioner's discretion, determines that confidential treatment of
29.23any of this information will interfere with enforcement of this section.
Sec. 4. Minnesota Statutes 2012, section 60D.17, subdivision 2, is amended to read:
Subd. 2. Content of statement.
The statement to be filed with the commissioner
shall be made under oath or affirmation and shall contain the following
(a) The name and address of each person by whom or on whose behalf the merger
or other acquisition of control referred to in subdivision 1 is to be effected, hereinafter
called "acquiring party"; and
(1) if the person is an individual, the principal occupation and all offices and
positions held during the past five years, and any conviction of crimes other than minor
traffic violations during the past ten years; and
(2) if the person is not an individual, a report of the nature of its business operations
during the past five years or for a lesser period as the person and any predecessors have
been in existence; an informative description of the business intended to be done by the
person and the person's subsidiaries; and a list of all individuals who are or who have
been selected to become directors or executive officers of such person, or who perform
or will perform functions appropriate to such positions. The list must include for each
individual the information required by clause (1).
(b) The source, nature, and amount of the consideration used or to be used in
effecting the merger or other acquisition of control, a description of any transaction in
which funds were or are to be obtained for this purpose, including any pledge of the
insurer's stock, or the stock of any of its subsidiaries or controlling affiliates, and the
identity of persons furnishing the consideration, provided, however, that where a source of
the consideration is a loan made in the lender's ordinary course of business, the identity of
the lender shall remain confidential, if the person filing the statement so requests.
(c) Fully audited financial information as to the earnings and financial condition of
each acquiring party for the preceding five fiscal years of each acquiring party, or for a
lesser period as the acquiring party and any predecessors have been in existence, and similar
unaudited information as of a date not earlier than 90 days before the filing of the statement.
(d) Any plans or proposals that each acquiring party may have to liquidate the
insurer, to sell its assets or merge or consolidate it with any person, or to make any other
material change in its business or corporate structure or management.
(e) The number of shares of any security referred to in subdivision 1 that each
acquiring party proposes to acquire, and the terms of the offer, request, invitation,
agreement, or acquisition referred to in subdivision 1 and a statement as to the method by
30.22which the fairness of the proposal was arrived at
(f) The amount of each class of any security referred to in subdivision 1 that is
beneficially owned or concerning which there is a right to acquire beneficial ownership
by each acquiring party.
(g) A full description of any contracts, arrangements, or understandings with
respect to any security referred to in subdivision 1 in which any acquiring party is
involved, including but not limited to, transfer of any of the securities, joint ventures, loan
or option arrangements, puts or calls, guarantees of loans, guarantees against loss or
guarantees of profits, division of losses or profits, or the giving or withholding of proxies.
The description must identify the persons with whom the contracts, arrangements, or
understandings have been entered into.
(h) A description of the purchase of any security referred to in subdivision 1 during
the 12 calendar months preceding the filing of the statement, by any acquiring party,
including the dates of purchase, names of the purchasers, and consideration paid or
agreed to be paid for it.
(i) A description of any recommendations to purchase any security referred to in
subdivision 1 made during the 12 calendar months preceding the filing of the statement,
by any acquiring party, or by anyone based upon interviews or at the suggestion of the
(j) Copies of all tender offers for, requests, or invitations for tenders of, exchange
offers for, and agreements to acquire or exchange any securities referred to in subdivision
1 and, if distributed, of additional soliciting material relating to them.
(k) The term of any agreement, contract, or understanding made with or proposed to
be made with any broker-dealer as to solicitation of securities referred to in subdivision 1
for tender, and the amount of any fees, commissions, or other compensation to be paid to
broker-dealers with regard to it.
31.12(l) An agreement by the person required to file the statement referred to in
31.13subdivision 1 that it will provide the annual report, specified in section 60D.19, subdivision
31.1411a, for so long as control exists.
31.15(m) A consent by the person required to file the statement referred to in subdivision
31.161 that the person and all subsidiaries within its control in the insurance holding company
31.17system will provide information to the commissioner upon request as necessary to
31.18evaluate enterprise risk to the insurer.
Additional information the commissioner may by rule prescribe as necessary
or appropriate for the protection of policyholders of the insurer or in the public interest.
If the person required to file the statement referred to in subdivision 1 is a
partnership, limited partnership, syndicate, or other group, the commissioner may require
that the information called for by paragraphs (a) to
must be given with respect to
each partner of the partnership or limited partnership, each member of the syndicate
or group, and each person who controls the partner or member. If a partner, member,
or person is a corporation, or the person required to file the statement referred to in
subdivision 1 is a corporation the commissioner may require that the information called
for by paragraphs (a) to
be given with respect to the corporation, each officer and
director of the corporation, and each person who is directly or indirectly the beneficial
owner of more than ten percent of the outstanding voting securities of the corporation.
If any material change occurs in the facts set forth in the statement filed with the
commissioner and sent to the insurer pursuant to this section, an amendment setting forth
the change, together with copies of all documents and other material relevant to the
change, must be filed with the commissioner and sent to the insurer within two business
days after the person learns of the change.
Sec. 5. Minnesota Statutes 2012, section 60D.17, subdivision 4, is amended to read:
Subd. 4. Approval by commissioner; hearings.
(a) The commissioner shall
approve any merger or other acquisition of control referred to in subdivision 1 unless, after
a public hearing, the commissioner finds that:
(1) after the change of control, the domestic insurer referred to in subdivision 1
would not be able to satisfy the requirements for the issuance of a license to write the line
or lines of insurance for which it is presently licensed, unless the domestic insurer is in
rehabilitation or other court-ordered supervision and the acquiring party commits to a plan
that would enable the domestic insurer to satisfy the requirements for the issuance of a
license within a reasonable amount of time;
(2) the effect of the merger or other acquisition of control would be substantially
to lessen competition in insurance in this state or tend to create a monopoly therein in
applying the competitive standard in this subdivision:
(i) the informational requirements of section
60D.18, subdivision 3
, paragraph (b),
and the standards of section
60D.18, subdivision 4
, paragraph (c), shall apply;
(ii) the merger or other acquisition shall not be disapproved if the commissioner finds
that any of the situations meeting the criteria provided by section
60D.18, subdivision 4
paragraph (c), exist; and
(iii) the commissioner may condition the approval of the merger or other acquisition
on the removal of the basis of disapproval within a specified period of time;
(3) the financial condition of any acquiring party is such as might jeopardize the
financial stability of the insurer, or prejudice the interest of its policyholders;
(4) the plans or proposals that the acquiring party has to liquidate the insurer, sell its
assets, or consolidate or merge it with any person, or to make any other material change
in its business or corporate structure or management, are unfair and unreasonable to
policyholders of the insurer and not in the public interest;
(5) the competence, experience, and integrity of those persons who would control
the operation of the insurer are such that it would not be in the interest of policyholders of
the insurer and of the public to permit the merger or other acquisition of control; or
(6) the acquisition is likely to be hazardous or prejudicial to the insurance buying
(b) The public hearing referred to in paragraph (a) must be held 30 days after the
statement required by subdivision 1 is filed, and at least 20 days' notice of it shall be
given by the commissioner to the person filing the statement. Not less than seven days
notice of the public hearing shall be given by the person filing the statement to the insurer
and to other persons designated by the commissioner. The commissioner shall make a
determination within 30 days after the conclusion of the hearing. At the hearing, the
person filing the statement, the insurer, any person to whom notice of hearing was sent,
and any other person whose interest may be affected by it may present evidence, examine
and cross-examine witnesses, and offer oral and written arguments and may conduct
discovery proceedings in the same manner as is presently allowed in the district courts of
this state. All discovery proceedings must be concluded not later than three days before
the start of the public hearing.
33.8(c) If the proposed acquisition of control will require the approval of more
33.9than one commissioner, the public hearing referred to in paragraph (b) may be held
33.10on a consolidated basis upon request of the person filing the statement referred to in
33.11subdivision 1. The person shall file the statement referred to in subdivision 1 with the
33.12National Association of Insurance Commissioners (NAIC) within five days of making
33.13the request for a public hearing. A commissioner may opt out of a consolidated hearing,
33.14and shall provide notice to the applicant of the opt-out within ten days of the receipt of
33.15the statement referred to in subdivision 1. A hearing conducted on a consolidated basis
33.16must be public and must be held within the United States before the commissioners of
33.17the states in which the insurers are domiciled. The commissioners shall hear and receive
33.18evidence. A commissioner may attend the hearing, in person or by telecommunication.
33.19In this paragraph, the term "commissioner" when used in reference to an official from a
33.20state other than Minnesota means the state official charged with the responsibility of
33.21supervising the business of insurance in that state.
33.22(d) In connection with a change of control of a domestic insurer, any determination
33.23by the commissioner that the person acquiring control of the insurer shall be required
33.24to maintain or restore the capital of the insurer to the level required by the laws and
33.25regulations of this state shall be made not later than 60 days after the date of notification of
33.26the change in control submitted pursuant to section 60D.17, subdivision 1.
The commissioner may retain at the acquiring person's expense any attorneys,
actuaries, accountants, and other experts not otherwise a part of the commissioner's staff
as may be reasonably necessary to assist the commissioner in reviewing the proposed
acquisition of control.
Sec. 6. Minnesota Statutes 2012, section 60D.17, subdivision 6, is amended to read:
Subd. 6. Violations.
The following are violations of this section:
(1) the failure to file any statement, amendment, or other material required to be filed
pursuant to subdivision 1 or 2; or
(2) the effectuation or any attempt to effectuate an acquisition of control of,
or merger with, a domestic insurer unless the commissioner has approved it.
Sec. 7. Minnesota Statutes 2012, section 60D.17, subdivision 7, is amended to read:
Subd. 7. Jurisdiction, consent to service of process.
The courts of this state have
jurisdiction over every person not resident, domiciled, or authorized to do business in this
state who files a statement with the commissioner under this section, and overall actions
involving the person arising out of violations of this section, and the person is deemed to
have performed acts equivalent to and constituting an appointment by the person of the
commissioner to be the person's true and lawful attorney upon whom may be served all
lawful process in any action, suit, or proceeding arising out of violations of this section.
Copies of all lawful process shall be served on the commissioner
and transmitted by
34.12 registered or certified mail by the commissioner to the person at the person's last known
34.13 address in compliance with section 45.028, subdivision 2
Sec. 8. Minnesota Statutes 2012, section 60D.18, subdivision 2, is amended to read:
Subd. 2. Scope.
(a) Except as exempted in paragraph (b), this section applies to any
acquisition in which there is a change in control of an insurer authorized to do business in
(b) This section does not apply to the following:
(1) an acquisition subject to approval or disapproval by the commissioner pursuant
34.20 to section
34.21 (2) (1)
a purchase of securities solely for investment purposes so long as such
securities are not used by voting or otherwise to cause or attempt to cause the substantial
lessening of competition in any insurance market in this state. If a purchase of securities
results in a presumption of control under section
60D.15, subdivision 4
, it is not solely for
investment purposes unless the commissioner of the insurer's state of domicile accepts a
disclaimer of control or affirmatively finds that control does not exist and such disclaimer
action or affirmative finding is communicated by the domiciliary commissioner to the
commissioner of this state;
the acquisition of a person by another person when both persons are
neither directly nor through affiliates primarily engaged in the business of insurance, if
preacquisition notification is filed with the commissioner in accordance with subdivision 3,
paragraph (a), 30 days before the proposed effective date of the acquisition. However, the
preacquisition notification is not required for exclusion from this section, if the acquisition
would otherwise be excluded from this section by any other clause of this paragraph;
the acquisition of already affiliated persons;
an acquisition if, as an immediate result of the acquisition;
(i) in no market would the combined market share of the involved insurers exceed
five percent of the total market;
(ii) there would be no increase in any market share; or
(iii) in no market would the combined market share of the involved insurers exceed
12 percent of the total market; and the market share increases by more than two percent
of the total market.
For the purpose of this clause, a market means direct written insurance premium in
this state for a line of business as contained in the annual statement required to be filed by
insurers licensed to do business in this state;
an acquisition for which a preacquisition notification would be required
pursuant to this section due solely to the resulting effect on the ocean marine insurance
line of business; and
an acquisition of an insurer whose domiciliary commissioner affirmatively
finds that the insurer is in failing condition; there is a lack of feasible alternative to
improving the condition; the public benefits of improving the insurer's condition through
the acquisition exceed the public benefits that would arise from not lessening competition;
and the findings are communicated by the domiciliary commissioner to the commissioner
of this state.
Sec. 9. Minnesota Statutes 2012, section 60D.18, subdivision 6, is amended to read:
Subd. 6. Inapplicable provisions.
paragraphs (b) and (c)
35.23 subdivisions 2 and 3
do not apply to acquisitions covered under
Sec. 10. Minnesota Statutes 2012, section 60D.19, subdivision 1, is amended to read:
Subdivision 1. Registration.
that is authorized to do
35.27 business in this state and
that is a member of an insurance holding company system
shall register with the commissioner
, except a foreign insurer subject to registration
35.29 requirements and standards adopted by statute or regulation in the jurisdiction of its
35.30 domicile that are substantially similar to those contained in:.
35.31 (1) this section;
35.32 (2) section
60D.20, subdivisions 1, paragraph (a) ; 2; and 4; and
35.33 (3) either section
60D.20, subdivision 1 , paragraph (b), or a provision such as the
35.34 following: Each registered insurer shall keep current the information required to be
36.1 disclosed in its registration statement by reporting all material changes or additions within
36.2 15 days after the end of the month in which it learns of each such change or addition.
Any insurer that is subject to registration under this section shall register within 15
days after it becomes subject to registration, and annually thereafter by June 1 of each year
for the previous calendar year, unless the commissioner for good cause shown extends
the time for registration, and then within such extended time. The commissioner may
require any insurer authorized to do business in the state that is a member of
a an insurance
holding company system, and that is not subject to registration under this section, to
furnish a copy of the registration statement, the summary specified in subdivision 3 or
other information filed by the insurance company with the insurance regulatory authority
of domiciliary jurisdiction.
Sec. 11. Minnesota Statutes 2012, section 60D.19, subdivision 2, is amended to read:
Subd. 2. Information and form required.
Every insurer subject to registration
shall file the registration statement with the commissioner
on a form and in a format
prescribed by the National Association of Insurance Commissioners,
which shall contain
the following current information:
(1) the capital structure, general financial condition, ownership, and management of
the insurer and any person controlling the insurer;
(2) the identity and relationship of every member of the insurance holding company
(3) the following agreements in force, and transactions currently outstanding or that
have occurred during the last calendar year between the insurer and its affiliates:
(i) loans, other investments, or purchases, sales, or exchanges of securities of the
affiliates by the insurer or of the insurer by its affiliates;
(ii) purchases, sales, or exchange of assets;
(iii) transactions not in the ordinary course of business;
(iv) guarantees or undertakings for the benefit of an affiliate which result in an actual
contingent exposure of the insurer's assets to liability, other than insurance contracts
entered into in the ordinary course of the insurer's business;
(v) all management agreements, service contracts, and all cost-sharing arrangements;
(vi) reinsurance agreements;
(vii) dividends and other distributions to shareholders; and
(viii) consolidated tax allocation agreements;
(4) any pledge of the insurer's stock, including stock of any subsidiary or controlling
affiliate, for a loan made to any member of the insurance holding company system;
37.1(5) if requested by the commissioner, financial statements of or within an insurance
37.2holding company system and all affiliates including, but not limited to, annual audited
37.3financial statements filed with the United States Securities and Exchange Commission
37.4(SEC) pursuant to the Securities Act of 1933, as amended, or the Securities Exchange
37.5Act of 1934, as amended. An insurer required to file financial statements pursuant to this
37.6clause may satisfy the request by providing the commissioner with the most recently filed
37.7parent corporation financial statements that have been filed with the SEC;
37.8 (5) (6)
other matters concerning transactions between registered insurers and any
affiliates as may be included from time to time in any registration forms adopted or
approved by the commissioner
37.11(7) statements that the insurer's board of directors oversees corporate governance
37.12and internal controls and that the insurer's officers or senior management have approved
37.13and implemented, and continue to maintain and monitor, corporate governance and
37.14internal control procedures; and
37.15(8) any other information required by the commissioner by rule.
Sec. 12. Minnesota Statutes 2012, section 60D.19, subdivision 3, is amended to read:
Subd. 3. Summary of changes to registration statement.
statements must contain a summary outlining all items in the current registration statement
representing changes from the prior registration statement.
Sec. 13. Minnesota Statutes 2012, section 60D.19, subdivision 11, is amended to read:
Subd. 11. Disclaimer.
Any person may file with the commissioner a disclaimer of
affiliation with any authorized insurer or the disclaimer may be filed by the insurer or any
member of an insurance holding company system. The disclaimer shall fully disclose all
material relationships and bases for affiliation between the person and the insurer as well
as the basis for disclaiming the affiliation.
After a disclaimer has been filed, the insurer
37.26 shall be relieved of any duty to register or report under this section that may arise out of
37.27 the insurer's relationship with the person unless and until the commissioner disallows
37.28 the disclaimer. The commissioner shall disallow the disclaimer only after furnishing
37.29 all parties in interest with notice and opportunity to be heard and after making specific
37.30 findings of fact to support the disallowance. A disclaimer of affiliation is deemed to have
37.31been granted unless the commissioner, within 30 days following receipt of a complete
37.32disclaimer, notifies the filing party that the disclaimer is disallowed. In the event of
37.33disallowance, the disclaiming party may request an administrative hearing, which must
37.34be granted. The disclaiming party is relieved of its duty to register under this section if
38.1approval of the disclaimer has been granted by the commissioner, or if the disclaimer is
38.2deemed to have been approved.
Sec. 14. Minnesota Statutes 2012, section 60D.19, is amended by adding a subdivision
38.5 Subd. 11a. Enterprise risk filing. The ultimate controlling person of an insurer
38.6subject to registration shall also file an annual enterprise risk report. The report must, to
38.7the best of the ultimate controlling person's knowledge and belief, identify the material
38.8risks within the insurance holding company system that could pose enterprise risk to the
38.9insurer. The report must be filed with the lead state commissioner of the insurance holding
38.10company system as determined by the procedures within the Financial Analysis Handbook
38.11adopted by the National Association of Insurance Commissioners.
Sec. 15. Minnesota Statutes 2012, section 60D.19, subdivision 12, is amended to read:
Subd. 12. Violations.
The failure to file a registration statement or any summary
of the registration statement or enterprise risk filing
required by this section within the
time specified for the filing is a violation of this section.
Sec. 16. Minnesota Statutes 2012, section 60D.20, subdivision 1, is amended to read:
Subdivision 1. Transactions within
a an insurance holding company system.
a an insurance
holding company system to which an insurer subject to
registration is a party are subject to the following standards:
(1) the terms shall be fair and reasonable;
38.21(2) agreements for cost-sharing services and management shall include the
38.22provisions required by rule issued by the commissioner;
charges or fees for services performed shall be reasonable;
expenses incurred and payment received shall be allocated to the insurer in
conformity with customary insurance accounting practices consistently applied;
the books, accounts, and records of each party to all such transactions shall be
so maintained as to clearly and accurately disclose the nature and details of the transactions
including this accounting information as is necessary to support the reasonableness of the
charges or fees to the respective parties; and
the insurer's surplus as regards policyholders following any dividends or
distributions to shareholder affiliates shall be reasonable in relation to the insurer's
outstanding liabilities and adequate to its financial needs.
(b) The following transactions involving a domestic insurer and any person in its
holding company system, including amendments or modifications of affiliate
39.3agreements previously filed pursuant to this section, which are subject to any materiality
39.4standards contained in clauses (1) to (7),
may not be entered into unless the insurer has
notified the commissioner in writing of its intention to enter into the transaction at least 30
days prior thereto, or a shorter period the commissioner permits, and the commissioner
has not disapproved it within this period. The notice for amendments or modifications
39.8must include the reasons for the change and the financial impact on the domestic insurer.
39.9Informal notice must be reported, within 30 days after a termination of a previously filed
39.10agreement , to the commissioner for determination of the type of filing required, if any
(1) sales, purchases, exchanges, loans or extensions of credit, guarantees, or
investments provided the transactions are equal to or exceed: (i) with respect to nonlife
insurers, the lesser of three percent of the insurer's admitted assets, or 25 percent of surplus
as regards policyholders; (ii) with respect to life insurers, three percent of the insurer's
admitted assets; each as of the 31st day of December next preceding;
(2) loans or extensions of credit to any person who is not an affiliate, where the
insurer makes the loans or extensions of credit with the agreement or understanding that
the proceeds of the transactions, in whole or in substantial part, are to be used to make
loans or extensions of credit to, to purchase assets of, or to make investments in, any
affiliate of the insurer making such loans or extensions of credit provided the transactions
are equal to or exceed: (i) with respect to nonlife insurers, the lesser of three percent of
the insurer's admitted assets or 25 percent of surplus as regards policyholders; (ii) with
respect to life insurers, three percent of the insurer's admitted assets; each as of the 31st
day of December next preceding;
(3) reinsurance agreements or modifications to those agreements, including: (i) all
39.26reinsurance pooling agreements; and (ii) agreements
in which the reinsurance premium or
a change in the insurer's liabilities, or the projected reinsurance premium or a change in
39.28the insurer's liabilities in any of the next three years,
equals or exceeds five percent of the
insurer's surplus as regards policyholders, as of the 31st day of December next preceding,
including those agreements which may require as consideration the transfer of assets
from an insurer to a nonaffiliate, if an agreement or understanding exists between the
insurer and nonaffiliate that any portion of such assets will be transferred to one or more
affiliates of the insurer;
(4) all management agreements, service contracts, tax allocation agreements,
and all cost-sharing arrangements;
40.1(5) guarantees when made by a domestic insurer; provided, however, that a
40.2guarantee which is quantifiable as to amount is not subject to the notice requirements
40.3of this paragraph unless it exceeds the lesser of one-half of one percent of the insurer's
40.4admitted assets or ten percent of surplus as regards policyholders as of the 31st day of
40.5December next preceding. Further, all guarantees which are not quantifiable as to amount
40.6are subject to the notice requirements of this paragraph;
40.7(6) direct or indirect acquisitions or investments in a person that controls the insurer
40.8or in an affiliate of the insurer in an amount which, together with its present holdings in the
40.9investments, exceeds two and one-half percent of the insurer's surplus to policyholders.
40.10Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to section
40.1160D.16, or in nonsubsidiary insurance affiliates that are subject to the provisions of
40.12sections 60D.15 to 60D.29, are exempt from this requirement; and
40.13 (5) (7)
any material transactions, specified by regulation, which the commissioner
determines may adversely affect the interests of the insurer's policyholders.
Nothing contained in this section authorizes or permits any transactions that, in the
case of an insurer not a member of the same insurance
holding company system, would be
otherwise contrary to law.
(c) A domestic insurer may not enter into transactions which are part of a plan or
series of like transactions with persons within the insurance
holding company system if
the purpose of those separate transactions is to avoid the statutory threshold amount and
thus avoid the review that would occur otherwise. If the commissioner determines that
the separate transactions were entered into over any 12-month period for the purpose, the
commissioner may exercise the authority under section
(d) The commissioner, in reviewing transactions pursuant to paragraph (b), shall
consider whether the transactions comply with the standards set forth in paragraph (a), and
whether they may adversely affect the interests of policyholders.
(e) The commissioner shall be notified within 30 days of any investment of the
domestic insurer in any one corporation if the total investment in the corporation by
the insurance holding company system exceeds ten percent of the corporation's voting
Sec. 17. Minnesota Statutes 2012, section 60D.20, subdivision 3, is amended to read:
Subd. 3. Management of domestic insurers subject to registration.
Notwithstanding the control of a domestic insurer by any person, the officers and directors
of the insurer shall not thereby be relieved of any obligation or liability to which they
would otherwise be subject by law, and the insurer shall be managed so as to assure its
separate operating identity consistent with
this chapter sections 60D.15 to 60D.29
(b) Nothing in
this chapter sections 60D.15 to 60D.29
precludes a domestic insurer
from having or sharing a common management or cooperative or joint
use of personnel,
property, or services with one or more other persons under arrangements meeting the
standards of subdivision 1, paragraph (a), clause (1).
(c) Not less than one-third of the directors of a
domestic insurer, and
not less than one-third of the members of each committee of the board of directors of any
domestic insurer shall be persons who are not officers or employees of
the insurer or of any entity controlling, controlled by, or under common control with the
insurer and who are not beneficial owners of a controlling interest in the voting stock of
the insurer or any such entity. At least one such person must be included in any quorum
for the transaction of business at any meeting of the board of directors or any committee
of the board.
(d) The board of directors of a
domestic insurer shall establish
41.16 committee having a majority one or more committees comprised solely
of directors who
are not officers or employees of the insurer or of any entity controlling, controlled by, or
under common control with the insurer and who are not beneficial owners of a controlling
interest in the voting stock of the insurer or any such entity. The committee or committees
shall have responsibility for
selecting independent certified public accountants and
41.21 reviewing the scope and results of the independent audit and any internal audit nominating
41.22candidates for director for election by shareholders or policyholders, evaluating the
41.23performance of officers deemed to be principal officers of the insurer, and recommending
41.24to the board of directors the selection and compensation of the principal officers
(e) Paragraphs (c) and (d) do not apply to a domestic insurer if the person controlling
is, such as
or a general business corporation the principal business
41.27 of which is insurance, having a mutual insurance holding company, or a publicly
41.28held corporation, has
a board of directors and committees of the board that meet the
requirements of paragraphs (c) and (d) with respect to the controlling entity
41.30(f) An insurer may make application to the commissioner for a waiver from the
41.31requirements of this subdivision, if the insurer's annual direct written and assumed
41.32premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and
41.33Federal Flood Program, is less than $300,000,000. An insurer may also make application
41.34to the commissioner for a waiver from the requirements of this subdivision based upon
41.35unique circumstances. The commissioner may consider various factors including, but not
42.1limited to, the type of business entity, volume of business written, availability of qualified
42.2board members, or ownership or organizational structure of the entity.
Sec. 18. Minnesota Statutes 2012, section 60D.21, subdivision 1, is amended to read:
Subdivision 1. Power of commissioner.
Subject to the limitation contained in this
section and in addition to the powers that the commissioner has under chapter 60A relating
to the examination of insurers, the commissioner shall also have the power to
42.7 insurer registered under section
60D.19 to produce records, books, or other information
42.8 papers in the possession of the insurer or its affiliates as are reasonably necessary to
42.9 ascertain the financial condition of the insurer or to determine compliance with this
42.10 chapter. In the event the insurer fails to comply with the order, the commissioner shall
42.11 have the power to examine the affiliates to obtain the information examine an insurer
42.12registered under section 60D.19 and its affiliates to ascertain the financial condition of the
42.13insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by
42.14an entity or combination of entities within the insurance holding company system, or by
42.15the insurance holding company system on a consolidated basis
Sec. 19. Minnesota Statutes 2012, section 60D.21, is amended by adding a subdivision
42.18 Subd. 1a. Access to books and records. (a) The commissioner may order an insurer
42.19registered under section 60D.19 to produce the records, books, or other information papers
42.20in the possession of the insurer or its affiliates that are reasonably necessary to determine
42.21compliance with sections 60D.15 to 60D.29.
42.22(b) To determine compliance with sections 60D.15 to 60D.29, the commissioner
42.23may order an insurer registered under section 60D.19 to produce information not in the
42.24possession of the insurer if the insurer can obtain access to the information pursuant to
42.25contractual relationships, statutory obligations, or other method. In the event the insurer
42.26cannot obtain the information requested by the commissioner, the insurer shall provide
42.27the commissioner a detailed explanation of the reason that the insurer cannot obtain the
42.28information and the identity of the holder of the information. Whenever it appears to
42.29the commissioner that the detailed explanation is without merit, the commissioner may
42.30require, after notice and hearing, the insurer to pay a penalty of $5,000 for each day's
42.31delay, or may suspend or revoke the insurer's license.
Sec. 20. Minnesota Statutes 2012, section 60D.21, is amended by adding a subdivision
43.1 Subd. 4. Compelling production. In the event the insurer fails to comply with
43.2an order, the commissioner may examine the affiliates to obtain the information. The
43.3commissioner may also issue subpoenas, administer oaths, and to examine under oath
43.4any person for purposes of determining compliance with this section. Upon the failure
43.5or refusal of a person to obey a subpoena, the commissioner may petition a court of
43.6competent jurisdiction, and upon proper showing, the court may enter an order compelling
43.7the witness to appear and testify or produce documentary evidence. Failure to obey the
43.8court order is punishable as contempt of court. Every person is obliged to attend as a
43.9witness at the place specified in the subpoena, when subpoenaed, anywhere within the
43.10state. The person is entitled to the same fees and mileage, if claimed, as a witness in
43.11district court. The fees, mileage, and actual expense, if any, necessarily incurred in
43.12securing the attendance of witnesses and their testimony, must be itemized and charged
43.13against, and be paid by, the company being examined.
Sec. 21. [60D.215] SUPERVISORY COLLEGES.
43.15 Subdivision 1. Power of commissioner. With respect to any insurer registered
43.16under section 60D.19, and in accordance with subdivision 3, the commissioner may also
43.17participate in a supervisory college for a domestic insurer that is part of an insurance
43.18holding company system with international operations in order to determine compliance
43.19by the insurer with sections 60D.15 to 60D.29. The powers of the commissioner with
43.20respect to supervisory colleges include, but are not limited to, the following:
43.21(1) initiating the establishment of a supervisory college;
43.22(2) clarifying the membership and participation of other supervisors in the
43.24(3) clarifying the functions of the supervisory college and the role of other regulators,
43.25including the establishment of a groupwide supervisor;
43.26(4) coordinating the ongoing activities of the supervisory college, including planning
43.27meetings, supervisory activities, and processes for information sharing; and
43.28(5) establishing a crisis management plan.
43.29 Subd. 2. Expenses. Each registered insurer subject to this section is liable for and
43.30shall pay the reasonable expenses of the commissioner's participation in a supervisory
43.31college in accordance with subdivision 3, including reasonable travel expenses. For
43.32purposes of this section, a supervisory college may be convened as either a temporary
43.33or permanent forum for communication and cooperation between the regulators charged
43.34with the supervision of the insurer or its affiliates, and the commissioner may establish a
43.35regular assessment to the insurer for the payment of these expenses.
44.1 Subd. 3. Supervisory college. In order to assess the business strategy, financial
44.2position, legal and regulatory position, risk exposure, risk management, and governance
44.3processes, and as part of the examination of individual insurers in accordance with section
44.460D.21, the commissioner may participate in a supervisory college with other regulators
44.5charged with supervision of the insurer or its affiliates, including other state, federal,
44.6and international regulatory agencies. The commissioner may enter into agreements
44.7in accordance with section 60D.22 providing the basis for cooperation between the
44.8commissioner and the other regulatory agencies, and the activities of the supervisory
44.9college. Nothing in this section delegates to the supervisory college the authority of the
44.10commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.
Sec. 22. Minnesota Statutes 2012, section 60D.22, is amended to read:
CONFIDENTIAL TREATMENT CONFIDENTIALITY.
44.13 Subdivision 1. Classification protection and use of information by commissioner.
44.14 All information, documents, and copies of them obtained by or disclosed to the
44.15 commissioner or any other person in the course of an examination or investigation
44.16 made pursuant to section
60D.20 and all information reported pursuant to sections
44.17 60D.18 and
60D.19 , shall be given confidential treatment and shall not be subject to
44.18 subpoena and shall not be made public by the commissioner, the National Association
44.19 of Insurance Commissioners, or any other person, except to insurance departments of
44.20 other states, without the prior written consent of the insurer to which it pertains unless
44.21 the commissioner, after giving the insurer and its affiliates who would be affected, notice
44.22 and opportunity to be heard, determines that the interest of policyholders or the public
44.23 will be served by the publication, in which event the commissioner may publish all or
44.24 any part in the manner the commissioner considers appropriate. Documents, materials,
44.25or other information in the possession or control of the department that are obtained by
44.26or disclosed to the commissioner or any other person in the course of an examination or
44.27investigation made pursuant to section 60D.21 and all information reported pursuant to
44.28sections 60D.17, except as provided in section 60D.17, subdivision 1, paragraph (e);
44.2960D.18; 60D.19; and 60D.20, are classified as confidential or protected nonpublic or both,
44.30are not subject to subpoena, and are not subject to discovery or admissible in evidence
44.31in a private civil action. However, the commissioner may use the documents, materials,
44.32or other information in the furtherance of any regulatory or legal action brought as a
44.33part of the commissioner's official duties. The commissioner shall not otherwise make
44.34the documents, materials, or other information public without the prior written consent
44.35of the insurer to which it pertains unless the commissioner, after giving the insurer and
45.1its affiliates who would be affected by this action notice and opportunity to be heard,
45.2determines that the interest of policyholders, shareholders, or the public will be served by
45.3the publication of it, in which event the commissioner may publish all or any part in the
45.4manner the commissioner deems appropriate.
45.5 Subd. 2. Testimonial privilege. Neither the commissioner nor any person who
45.6received documents, materials, or other information while acting under the authority of the
45.7commissioner or with whom these documents, materials, or other information are shared
45.8pursuant to sections 60D.15 to 60D.29 is permitted or required to testify in a private civil
45.9action concerning documents, materials, or information subject to subdivision 1 that are
45.10classified as confidential, protected nonpublic, or both.
45.11 Subd. 3. Sharing of information. In order to assist in the performance of the
45.12commissioner's duties, the commissioner:
45.13(1) may share documents, materials, or other information, including the confidential,
45.14protected nonpublic, and privileged documents, materials, or information subject to this
45.15section, with other state, federal, and international regulatory agencies, with the NAIC and
45.16its affiliates and subsidiaries, and with state, federal, and international law enforcement
45.17authorities, including members of any supervisory college described in section 60D.215,
45.18provided that the recipient agrees in writing to maintain the confidentiality and privileged
45.19status of the document, material, or other information, and has verified in writing the
45.20legal authority to maintain confidentiality;
45.21(2) notwithstanding clause (1), may only share confidential, protected nonpublic, and
45.22privileged documents, materials, or information reported pursuant to section 60D.19 with
45.23commissioners of states having statutes or regulations substantially similar to subdivision
45.241 and who have agreed in writing not to disclose this information;
45.25(3) may receive documents, materials, or information, including otherwise
45.26confidential and privileged documents, materials, or information from the NAIC and
45.27its affiliates and subsidiaries and from regulatory and law enforcement officials of
45.28other foreign or domestic jurisdictions, and shall maintain as confidential, protected
45.29nonpublic, or privileged any document, material, or information received with notice or
45.30the understanding that it is confidential or privileged under the laws of the jurisdiction that
45.31is the source of the document, material, or information; and
45.32(4) shall enter into written agreements with the NAIC governing sharing and use of
45.33information provided pursuant to sections 60D.15 to 60D.29 consistent with this clause
45.35(i) specify procedures and protocols regarding the confidentiality and security of
45.36information shared with the NAIC and its affiliates and subsidiaries pursuant to sections
46.160D.15 to 60D.29, including procedures and protocols for sharing by the NAIC with other
46.2state, federal, or international regulators;
46.3(ii) specify that ownership of information shared with the NAIC and its affiliates and
46.4subsidiaries pursuant to sections 60D.15 to 60D.29 remains with the commissioner and
46.5the NAIC's use of the information is subject to the direction of the commissioner;
46.6(iii) require prompt notice to be given to an insurer whose confidential or protected
46.7nonpublic information in the possession of the NAIC pursuant to sections 60D.15 to
46.860D.29 is subject to a request or subpoena to the NAIC for disclosure or production; and
46.9(iv) require the NAIC and its affiliates and subsidiaries to consent to intervention by
46.10an insurer in any judicial or administrative action in which the NAIC and its affiliates and
46.11subsidiaries may be required to disclose confidential or protected nonpublic information
46.12about the insurer shared with the NAIC and its affiliates and subsidiaries pursuant to
46.13sections 60D.15 to 60D.29.
46.14 Subd. 4. Responsibility for administration, execution, and enforcement. The
46.15sharing of information by the commissioner pursuant to sections 60D.15 to 60D.29 does
46.16not constitute a delegation of regulatory authority or rulemaking, and the commissioner is
46.17solely responsible for the administration, execution, and enforcement of the provisions of
46.18sections 60D.15 to 60D.29.
46.19 Subd. 5. Disclosure not deemed to be waiver of privilege or confidentiality. No
46.20waiver of any applicable privilege or claim of confidentiality in the documents, materials,
46.21or information occurs as a result of disclosure to the commissioner under this section or as
46.22a result of sharing as authorized in subdivision 3.
46.23 Subd. 6. Classification protection and use by others. Documents, materials, or
46.24other information in the possession or control of the NAIC pursuant to sections 60D.15 to
46.2560D.29 are confidential, protected nonpublic, or privileged, are not subject to subpoena,
46.26and are not subject to discovery or admissible in evidence in a private civil action.
46.28RISK ASSESSMENT AND OWN RISK AND SOLVENCY
46.29ASSESSMENT MODEL ACT
Section 1. [60D.50] PURPOSE AND SCOPE.
46.31(a) The purpose of sections 60D.50 to 60D.58 is to provide the requirements for
46.32maintaining a risk management framework and completing an Own Risk and Solvency
46.33Assessment (ORSA) and provide guidance and instructions for filing an ORSA Summary
46.34Report with the commissioner.
47.1(b) Sections 60D.50 to 60D.58 apply to all insurers domiciled in this state unless
47.2exempt pursuant to section 60D.55.
Sec. 2. [60D.51] DEFINITIONS.
47.4 Subdivision 1. Scope. For purposes of sections 60D.50 to 60D.58, the terms in
47.5this section have the meanings given them.
47.6 Subd. 2. Insurance group. For the purpose of conducting an ORSA, "insurance
47.7group" means those insurers and affiliates included within an insurance holding company
47.8system as defined in section 60D.15, subdivision 5.
47.9 Subd. 3. Insurer. "Insurer" has the meaning given in section 60D.15, subdivision
47.106, except that it does not include agencies, authorities, or instrumentalities of the United
47.11States, its possessions or territories, the Commonwealth of Puerto Rico, the District of
47.12Columbia, or a state or political subdivision of a state.
47.13 Subd. 4. Own Risk and Solvency Assessment or ORSA. "Own Risk and Solvency
47.14Assessment" or "ORSA" means a confidential internal assessment, appropriate to the
47.15nature, scale, and complexity of an insurer or insurance group, conducted by that insurer or
47.16insurance group of the material and relevant risks associated with the insurer's or insurance
47.17group's current business plan, and the sufficiency of capital resources to support those risks.
47.18 Subd. 5. ORSA Guidance Manual. "ORSA Guidance Manual" means the current
47.19version of the Own Risk and Solvency Assessment Guidance Manual developed and
47.20adopted by the National Association of Insurance Commissioners (NAIC) and as amended
47.21from time to time. A change in the ORSA Guidance Manual is effective on the January 1
47.22following the calendar year in which the changes have been adopted by the NAIC.
47.23 Subd. 6. ORSA Summary Report. "ORSA Summary Report" means a confidential
47.24high-level summary of an insurer's or insurance group's ORSA.
Sec. 3. [60D.52] RISK MANAGEMENT FRAMEWORK.
47.26An insurer shall maintain a risk management framework to assist the insurer with
47.27identifying, assessing, monitoring, managing, and reporting on its material and relevant
47.28risks. This requirement may be satisfied if the insurance group of which the insurer is a
47.29member maintains a risk management framework applicable to the operations of the insurer.
Sec. 4. [60D.53] ORSA REQUIREMENT.
47.31Subject to section 60D.55, an insurer, or the insurance group of which the insurer
47.32is a member, shall regularly conduct an ORSA consistent with a process comparable to
47.33the ORSA Guidance Manual. The ORSA must be conducted no less than annually but
48.1also at any time when there are significant changes to the risk profile of the insurer or the
48.2insurance group of which the insurer is a member.
Sec. 5. [60D.54] ORSA SUMMARY REPORT.
48.4 Subdivision 1. Required submission. Upon the commissioner's request and no
48.5more than once per year, an insurer shall submit to the commissioner an ORSA Summary
48.6Report or any combination of reports that together contain the information described in the
48.7ORSA Guidance Manual, applicable to the insurer or the insurance group of which it is a
48.8member. Notwithstanding any request from the commissioner, if the insurer is a member
48.9of an insurance group, the insurer shall submit the reports required by this subdivision if
48.10the commissioner is the lead state commissioner of the insurance group as determined by
48.11the procedures adopted by the National Association of Insurance Commissioners.
48.12 Subd. 2. Attestation. The reports in subdivision 1 shall include a signature of the
48.13insurer's or insurance group's chief risk officer or other executive having responsibility for
48.14the oversight of the insurer's enterprise risk management process attesting to the best of the
48.15executive's belief and knowledge that the insurer applies the enterprise risk management
48.16process described in the ORSA Summary Report and that a copy of the report has been
48.17provided to the insurer's board of directors or the appropriate committee of the board.
48.18 Subd. 3. Alternative compliance. An insurer may comply with subdivision 1
48.19by providing the most recent and substantially similar reports provided by the insurer
48.20or another member of an insurance group of which the insurer is a member to the
48.21commissioner of another state, or to a supervisor or regulator of a foreign jurisdiction, if
48.22that report provides information that is comparable to the information described in the
48.23ORSA Guidance Manual. A report in a language other than English must be accompanied
48.24by a translation of the report into the English language.
Sec. 6. [60D.55] EXEMPTION.
48.26 Subdivision 1. Annual premium levels. An insurer is exempt from the requirements
48.27of sections 60D.50 to 60D.58 if:
48.28(1) the insurer has annual direct written and unaffiliated assumed premium,
48.29including international direct and assumed premium but excluding premiums reinsured
48.30with the Federal Crop Insurance Corporation and Federal Flood Program, less than
48.32(2) the insurance group of which the insurer is a member has annual direct written
48.33and unaffiliated assumed premium, including international direct and assumed premium
49.1but excluding premiums reinsured with the Federal Crop Insurance Corporation and
49.2Federal Flood Program, less than $1,000,000,000.
49.3 Subd. 2. Summary report required. (a) If an insurer qualifies for exemption
49.4pursuant to subdivision 1, clause (1), but the insurance group of which the insurer is a
49.5member does not qualify for exemption pursuant to subdivision 1, clause (2), then the
49.6ORSA Summary Report that may be required pursuant to section 60D.54 must include
49.7every insurer within the insurance group. This requirement may be satisfied by the
49.8submission of more than one ORSA Summary Report for any combination of insurers,
49.9provided any combination of reports includes every insurer within the insurance group.
49.10(b) If an insurer does not qualify for exemption pursuant to subdivision 1, clause
49.11(1), but the insurance group of which it is a member qualifies for exemption pursuant to
49.12subdivision 1, clause (2), then the only ORSA Summary Report that may be required
49.13pursuant to section 60D.54 is the report applicable to that insurer.
49.14 Subd. 3. Waiver. An insurer that does not qualify for exemption pursuant to
49.15subdivision 1 may apply to the commissioner for a waiver from the requirements of
49.16sections 60D.50 to 60D.58 based on unique circumstances. In deciding whether to grant
49.17the insurer's request for waiver, the commissioner may consider the type and volume
49.18of business written, ownership and organizational structure, and any other factor the
49.19commissioner considers relevant to the insurer or insurance group of which the insurer is
49.20a member. If the insurer is part of an insurance group with insurers domiciled in more
49.21than one state, the commissioner shall coordinate with the lead state commissioner and
49.22with the other domiciliary commissioners in considering whether to grant the insurer's
49.23request for a waiver.
49.24 Subd. 4. Additional requirements. Notwithstanding the exemptions in this section,
49.25the commissioner may require that an insurer maintain a risk management framework,
49.26conduct an ORSA, and file an ORSA Summary Report:
49.27(1) based on unique circumstances including, but not limited to, the type and volume
49.28of business written, ownership and organizational structure, federal agency requests,
49.29and international supervisor requests; and
49.30(2) if the insurer has risk-based capital for a company action level event as set forth
49.31in section 60A.52 or 60A.62, meets one or more of the standards of an insurer deemed to
49.32be in a hazardous financial condition pursuant to section 60G.20, or otherwise exhibits
49.33qualities of a troubled insurer as determined by the commissioner.
49.34 Subd. 5. Consequences of loss of exemption. If an insurer that qualifies for an
49.35exemption pursuant to subdivision 1 subsequently no longer qualifies for that exemption
49.36due to changes in premium as reflected in the insurer's most recent annual statement or in
50.1the most recent annual statements of the insurers within the insurance group of which the
50.2insurer is a member, the insurer has one year following the year the threshold is exceeded
50.3to comply with sections 60D.50 to 60D.58.
Sec. 7. [60D.56] CONTENTS OF ORSA SUMMARY REPORT.
50.5 Subdivision 1. Preparation and documentation. The ORSA Summary Report
50.6shall be prepared by the insurer consistent with the ORSA Guidance Manual, subject
50.7to the requirements of subdivision 2. Documentation and supporting information shall
50.8be maintained by the insurer and made available upon examination or upon request of
50.10 Subd. 2. Review. The review of the ORSA Summary Report, and any additional
50.11requests for information, shall be made by the commissioner using similar procedures
50.12currently used in the analysis and examination of multistate or global insurers and
Sec. 8. [60D.57] CONFIDENTIALITY.
50.15 Subdivision 1. Classification protection and use of information by commissioner.
50.16Documents, materials, or other information, including the ORSA Summary Report, in the
50.17possession of or control of the department that are obtained by, created by, or disclosed to
50.18the commissioner or any other person under sections 60D.50 to 60D.58 are recognized by
50.19this state as being confidential and containing trade secrets. Those documents, materials,
50.20or other information are classified as confidential or protected nonpublic or both, are
50.21not subject to subpoena, and are not subject to discovery or admissible in evidence in a
50.22private civil action. However, the commissioner may use the documents, materials, or
50.23other information in the furtherance of a regulatory or legal action brought as a part of the
50.24commissioner's official duties. The commissioner shall not otherwise make the documents,
50.25materials, or other information public without the prior written consent of the insurer.
50.26 Subd. 2. Testimonial privilege. Neither the commissioner nor any person who
50.27received documents, materials, or other ORSA-related information, through examination
50.28or otherwise, while acting under the authority of the commissioner or with whom the
50.29documents, materials, or other information are shared pursuant to sections 60D.50 to
50.3060D.58 is permitted or required to testify in a private civil action concerning documents,
50.31materials, or information subject to subdivision 1 that are classified as confidential,
50.32protected nonpublic, or both.
50.33 Subd. 3. Sharing of information. In order to assist in the performance of the
50.34commissioner's regulatory duties, the commissioner:
51.1(1) may, upon request, share documents, materials, or other ORSA-related
51.2information, including the confidential, protected nonpublic, and privileged documents,
51.3materials, or information subject to subdivision 1, including proprietary and trade secret
51.4documents and materials with other state, federal, and international financial regulatory
51.5agencies, including members of a supervisory college, as defined in section 60D.215, with
51.6the National Association of Insurance Commissioners and with third-party consultants
51.7designated by the commissioner, provided that the recipient agrees in writing to maintain
51.8the confidentiality and privileged status of the ORSA-related documents, materials, or
51.9other information and has verified in writing the legal authority to maintain confidentiality;
51.10(2) may receive documents, materials, or other ORSA-related information, including
51.11otherwise confidential and privileged documents, materials, or information, including
51.12proprietary and trade secret information or documents, from regulatory officials of other
51.13foreign or domestic jurisdictions, including members of a supervisory college, as defined
51.14in section 60D.215, and from the National Association of Insurance Commissioners, and
51.15shall maintain as confidential, protected nonpublic, or privileged documents, materials,
51.16or information received with notice or the understanding that it is confidential or
51.17privileged under the laws of the jurisdiction that is the source of the document, material,
51.18or information; and
51.19(3) shall enter into a written agreement with the National Association of Insurance
51.20Commissioners or a third-party consultant governing sharing and use of information
51.21provided pursuant to sections 60D.50 to 60D.58, consistent with this subdivision that:
51.22 (i) specifies procedures and protocols regarding the confidentiality and security
51.23of information shared with the National Association of Insurance Commissioners or a
51.24third-party consultant pursuant to sections 60D.50 to 60D.58, including procedures and
51.25protocols for sharing by the National Association of Insurance Commissioners with other
51.26state regulators from states in which the insurance group has domiciled insurers. The
51.27agreement must provide that the recipient agrees in writing to maintain the confidentiality
51.28and privileged status of the ORSA-related documents, materials, or other information and
51.29has verified in writing the legal authority to maintain confidentiality;
51.30(ii) specifies that ownership of information shared with the National Association
51.31of Insurance Commissioners or a third-party consultant pursuant to sections 60D.50
51.32to 60D.58 remains with the commissioner and the National Association of Insurance
51.33Commissioner's or a third-party consultant's use of the information is subject to the
51.34direction of the commissioner;
52.1(iii) prohibits the National Association of Insurance Commissioners or a third-party
52.2consultant from storing the information shared pursuant to sections 60D.50 to 60D.58 in a
52.3permanent database after the underlying analysis is completed;
52.4(iv) requires prompt notice to be given to an insurer whose confidential or protected
52.5nonpublic information in the possession of the National Association of Insurance
52.6Commissioners or a third-party consultant pursuant to sections 60D.50 to 60D.58 is
52.7subject to a request or subpoena to the National Association of Insurance Commissioners
52.8or a third-party consultant for disclosure or production;
52.9(v) requires the National Association of Insurance Commissioners or a third-party
52.10consultant to consent to intervention by an insurer in any judicial or administrative action
52.11in which the National Association of Insurance Commissioners or a third-party consultant
52.12may be required to disclose confidential or protected nonpublic information about the
52.13insurer shared with the National Association of Insurance Commissioners or a third-party
52.14consultant pursuant to sections 60D.50 to 60D.58; and
52.15(vi) in the case of an agreement involving a third-party consultant, provides for the
52.16insurer's written consent.
52.17 Subd. 4. Responsibility for administration, execution, and enforcement. The
52.18sharing of information and documents by the commissioner pursuant to sections 60D.50 to
52.1960D.58 does not constitute a delegation of regulatory authority or rulemaking, and the
52.20commissioner is solely responsible for the administration, execution, and enforcement of
52.21sections 60D.50 to 60D.58.
52.22 Subd. 5. Disclosure not deemed to be waiver of privilege or confidentiality. No
52.23waiver of an applicable privilege or claim of confidentiality in the documents, proprietary
52.24and trade secret materials, or other ORSA-related information occurs as a result of
52.25disclosure of ORSA-related information or documents to the commissioner under this
52.26subdivision or as a result of sharing as authorized in sections 60D.50 to 60D.58.
52.27 Subd. 6. Classification, protection, and use of information by others. Documents,
52.28materials, or other information in the possession or control of the National Association
52.29of Insurance Commissioners or a third-party consultant pursuant to sections 60D.50 to
52.3060D.58 are confidential, protected nonpublic, and privileged, are not subject to subpoena,
52.31and are not subject to discovery or admissible in evidence in a private civil action.
Sec. 9. [60D.58] SANCTIONS.
52.33An insurer failing, without just cause, to timely file the ORSA Summary Report as
52.34required in sections 60D.50 to 60D.58 shall pay a penalty of $1,000 for each day's delay to
52.35be recovered by the commissioner and to be paid into the general fund. The commissioner
53.1may reduce the penalty if the insurer demonstrates to the commissioner that the imposition
53.2of the penalty would constitute a financial hardship to the insurer.
Sec. 10. EFFECTIVE DATE.
53.4The requirements of sections 1 to 9 are effective January 1, 2015. The first filing of
53.5the ORSA Summary Report is in 2015 pursuant to Minnesota Statutes, section 60D.54.