2nd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to commerce; providing technical changes; 1.3 regulating personal solicitation sales and insurance 1.4 information reporting; providing that an insurance 1.5 self-audit document is privileged information and not 1.6 discoverable or admissible except as provided by law: 1.7 making technical changes governing insurance agents 1.8 and brokerage businesses; establishing a health 1.9 carrier duty to exercise ordinary care when making 1.10 health care treatment decisions; establishing 1.11 standards for Minnesota uniform health care 1.12 reimbursement documents; requiring certain capital and 1.13 surplus amounts of insurers issuing motor vehicle 1.14 service contract reimbursement policies; transferring 1.15 powers and responsibilities relating to workers' 1.16 compensation reinsurance association from the 1.17 department of labor and industry to the commissioner 1.18 of commerce; making certain modifications of the 1.19 workers' compensation self-insurance law; providing 1.20 certain spouse insurance coverage; regulating 1.21 securities; amending Minnesota Statutes 1998, sections 1.22 60A.052, subdivision 1; 60A.129, subdivision 5; 1.23 60K.14, subdivision 1; 61A.092, subdivision 6; 1.24 62A.136; 62C.11, subdivision 1; 62C.142, subdivision 1.25 2a; 62E.04, subdivision 4; 62J.51, by adding 1.26 subdivisions; 62J.52, subdivisions 1, 2, and 5; 1.27 62J.60, subdivision 1; 62S.02, subdivision 1; 64B.30, 1.28 subdivision 1; 65B.29, subdivisions 2 and 3; 72A.20, 1.29 subdivision 17; 72A.499, subdivision 1; 79.34, 1.30 subdivisions 1, 2, 2a, and 6; 79.35; 79.36; 79.361, 1.31 subdivision 1; 79.37; 79.371, subdivision 2; 79.38, 1.32 subdivision 1; 79A.04, subdivisions 1, 2, 7, and 9; 1.33 79A.11, subdivision 2, and by adding a subdivision; 1.34 79A.22, subdivisions 3 and 11; 80A.122, by adding a 1.35 subdivision; and 80A.28, subdivision 1; Minnesota 1.36 Statutes 1999 Supplement, sections 60A.052, 1.37 subdivision 2; 60K.19, subdivision 8; 62J.535, 1.38 subdivision 2; 72A.20, subdivision 23; 79A.22, 1.39 subdivision 2; 79A.23, subdivisions 1, 2, and 3; and 1.40 79A.24, subdivision 2; Laws 1999, chapter 177, section 1.41 89; proposing coding for new law in Minnesota 1.42 Statutes, chapters 60A; 60K; 62A; and 62J; repealing 1.43 Minnesota Statutes 1998, sections 62A.285, subdivision 1.44 4; 62A.651; 62H.10, subdivision 4; 65B.13; 79.362; 1.45 79.371, subdivision 1; 79.38, subdivisions 2 and 3; 1.46 and 79.39. 2.1 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.2 Section 1. [60A.033] [DEFINITIONS.] 2.3 Subdivision 1. [APPLICATION.] For purposes of sections 2.4 60A.033 to 60A.039, the definitions in this section have the 2.5 meanings given them. 2.6 Subd. 2. [INSURANCE COMPLIANCE SELF-AUDIT.] "Insurance 2.7 compliance self-audit" or "self-audit" means a voluntary 2.8 internal evaluation, review, assessment, process, or audit, not 2.9 expressly required by law of an insurer and designed to 2.10 identify, correct, or prevent noncompliance or to improve 2.11 compliance with statutes, rules, and orders of an activity 2.12 regulated under chapters 60A to 79A or other laws of this state 2.13 or other states or federal law applicable to an insurer. 2.14 Subd. 3. [INSURANCE COMPLIANCE SELF-AUDIT 2.15 DOCUMENT.] "Insurance compliance self-audit document" or 2.16 "self-audit document" means a document prepared as a result of 2.17 or in connection with and not before an insurance compliance 2.18 self-audit and includes, but is not limited to, any of the 2.19 following: 2.20 (1) correspondence, instructions, field notes and records 2.21 of observations, findings, opinions, suggestions, conclusions, 2.22 drafts, checklists, memoranda, drawings, photographs, 2.23 computer-generated or electronically recorded information, 2.24 telephone records, maps, charts, graphs, and surveys, if this 2.25 information is collected or developed for the primary purpose 2.26 and in the course of an insurance compliance self-audit; 2.27 (2) a report prepared by an auditor, who may be an employee 2.28 of the insurer or an independent contractor, which may include 2.29 the scope of the audit, the information gained in the audit, and 2.30 conclusions and recommendations, with exhibits and appendices; 2.31 (3) memoranda and documents analyzing portions or all of 2.32 the report and discussing potential implementation issues; 2.33 (4) an implementation plan that addresses correcting past 2.34 noncompliance, improving current compliance, and preventing 2.35 future noncompliance identified as part of the self-audit; 2.36 (5) analytic data generated in the course of conducting the 3.1 insurance compliance self-audit; or 3.2 (6) a written response to the findings of an insurance 3.3 compliance self-audit. 3.4 An "insurance compliance self-audit document" does not 3.5 include (1) a document or other information contained within an 3.6 insurance compliance self-audit document, but not prepared in 3.7 connection with or result of a self-audit, or (2) a document, 3.8 not prepared in connection with or as a result of a self-audit, 3.9 requested by the commissioner in conjunction with the 3.10 investigation of a consumer complaint where the document relates 3.11 solely to the complainant's policy or any claim made against the 3.12 policy and the complainant has provided the commissioner with 3.13 written authorization requesting its release. 3.14 Sec. 2. [60A.034] [SCOPE OF PRIVILEGE.] 3.15 Subdivision 1. [PRIVILEGED INFORMATION.] An insurance 3.16 compliance self-audit document is privileged information and is 3.17 not discoverable or admissible as evidence in a civil or 3.18 criminal legal action except as otherwise provided in section 3.19 60A.035. If an insurance compliance self-audit document 3.20 provided by an insurer to the commissioner is disclosed to a 3.21 third party by the commissioner, the document is not admissible 3.22 as evidence in a civil or criminal legal action. This privilege 3.23 does not extend to self-audits initiated after the insurer has 3.24 received notice of an examination by state or federal 3.25 regulators. Assertion of the privilege established under this 3.26 subdivision to prevent disclosure of an insurance compliance 3.27 self-audit document does not constitute a fraudulent purpose 3.28 under section 60A.035. 3.29 Subd. 2. [EXAMINATION PROHIBITED.] If an insurer, person, 3.30 or entity performs or directs the performance of an insurance 3.31 compliance self-audit, an officer or employee involved with the 3.32 insurance compliance self-audit, or consultant who is hired for 3.33 the purpose of performing or assisting in the performance of the 3.34 insurance compliance self-audit, may not be examined in a civil 3.35 or criminal proceeding as to the insurance compliance self-audit 3.36 or an insurance compliance self-audit document. This 4.1 subdivision does not apply if the privilege is determined under 4.2 section 60A.035 not to apply. 4.3 Subd. 3. [SUBMISSION PURSUANT TO EXAMINATION.] An insurer 4.4 must submit, in connection with examinations conducted under 4.5 chapter 60A or 60D, an insurance compliance self-audit document 4.6 to the commissioner. The submission does not waive the 4.7 privilege established under this section to which the insurer is 4.8 otherwise entitled, and the submission is subject to sections 4.9 60A.03, subdivision 9, and 60A.031, subdivision 4, paragraph (f). 4.10 Sec. 3. [60A.035] [PRIVILEGE WAIVED OR DISCLOSURE 4.11 ORDERED.] 4.12 Subdivision 1. [WAIVER.] The insurance compliance 4.13 self-audit privilege does not apply to the extent the insurer 4.14 that prepared or caused to be prepared the insurance compliance 4.15 self-audit document expressly waives the privilege by so stating 4.16 its intent in writing. 4.17 Subd. 2. [REQUIRED DISCLOSURE.] In a civil proceeding, a 4.18 court of record may, after an in-camera review, require 4.19 disclosure of material for which the insurance compliance 4.20 self-audit privilege is asserted, if the court determines one of 4.21 the following: 4.22 (1) the privilege is asserted for a fraudulent purpose; or 4.23 (2) the material is not subject to the privilege. 4.24 Sec. 4. [60A.036] [BURDEN OF PROOF.] 4.25 Subdivision 1. [BURDEN.] An insurer asserting the 4.26 insurance compliance self-audit privilege has the burden of 4.27 demonstrating the applicability of the privilege. 4.28 Subd. 2. [STIPULATION.] The parties may at any time 4.29 stipulate in proceedings under section 60A.035 to entry of an 4.30 order directing that specific information contained in an 4.31 insurance compliance self-audit document is or is not subject to 4.32 the insurance compliance self-audit privilege. 4.33 Sec. 5. [60A.037] [EXCEPTIONS TO PRIVILEGE.] 4.34 The insurance compliance self-audit privilege does not 4.35 apply to the following: 4.36 (1) documents, communications, data, reports, or other 5.1 information, other than an insurance self-audit document, 5.2 required to be collected, developed, maintained, reported, or 5.3 otherwise made available to the commissioner, or under federal 5.4 or state law, rule, or order; 5.5 (2) information obtained by observation or monitoring by 5.6 the commissioner of commerce or commissioner or head of any 5.7 other regulatory agency; or 5.8 (3) information obtained from a source independent of the 5.9 insurance compliance self-audit. 5.10 Sec. 6. [60A.038] [STATUTORY OR COMMON LAW PRIVILEGE 5.11 PRESERVED.] 5.12 Nothing in sections 60A.033 to 60A.037 limits, waives, or 5.13 abrogates the scope or nature of any statutory or common law 5.14 privilege including, but not limited to, the work product 5.15 doctrine, the attorney-client privilege, or the subsequent 5.16 remedial measures exclusion. 5.17 Sec. 7. [60A.039] [COMMISSIONER'S AUTHORITY NOT 5.18 RESTRICTED.] 5.19 Nothing in sections 60A.033 to 60A.037, restricts the 5.20 authority of the commissioner to examine and investigate 5.21 insurers or conduct appropriate disciplinary actions or other 5.22 administrative proceedings. 5.23 Sec. 8. Minnesota Statutes 1998, section 60A.052, 5.24 subdivision 1, is amended to read: 5.25 Subdivision 1. [GROUNDS.] The commissioner may by order 5.26 take any or all of the following actions: (a) deny, suspend, or 5.27 revoke a certificate of authority; (b) censure the insurance 5.28 company;or(c) impose a civil penalty as provided for in 5.29 section 45.027, subdivision 6; or (d) under a written agreement 5.30 with the insurance company based upon the company's financial 5.31 condition, impose conditions or restrictions on the insurance 5.32 company's authority to transact business in Minnesota. In order 5.33 to take this action the commissioner must find that the order is 5.34 in the public interest, and the insurance company: 5.35 (1) has a board of directors or principal management that 5.36 is incompetent, untrustworthy, or so lacking in insurance 6.1 company managerial experience as to make its operation hazardous 6.2 to policyholders, its stockholders, or to the insurance buying 6.3 public; 6.4 (2) is controlled directly or indirectly through ownership, 6.5 management, reinsurance transactions, or other business 6.6 relations by any person or persons whose business operations are 6.7 or have been marked by manipulation of any assets, reinsurance, 6.8 or accounts as to create a hazard to the company's 6.9 policyholders, stockholders, or the insurance buying public; 6.10 (3) is in an unsound or unsafe condition; 6.11 (4) has the actual liabilities that exceed the actual funds 6.12 of the company; 6.13 (5) has filed an application for a license which is 6.14 incomplete in any material respect or contains any statement 6.15 which, in light of the circumstances under which it was made, 6.16 contained any misrepresentation or was false, misleading, or 6.17 fraudulent; 6.18 (6) has pled guilty, with or without explicitly admitting 6.19 guilt, pled nolo contendere, or been convicted of a felony, 6.20 gross misdemeanor, or misdemeanor involving moral turpitude, or 6.21 similar conduct; 6.22 (7) is permanently or temporarily enjoined by any court of 6.23 competent jurisdiction from engaging in or continuing any 6.24 conduct or practice involving any aspect of the insurance 6.25 business; 6.26 (8) has violated or failed to comply with any order of the 6.27 insurance regulator of any other state or jurisdiction; 6.28 (9) has had a certificate of authority denied, suspended, 6.29 or revoked, has been censured or reprimanded, has been the 6.30 subject of any other discipline imposed by, or has paid or has 6.31 been required to pay a monetary penalty or fine to, another 6.32 state; 6.33 (10) agents, officers, or directors refuse to submit to 6.34 examination or perform any related legal obligation; or 6.35 (11) has violated or failed to comply with, any of the 6.36 provisions of the insurance laws including chapter 45 or 7.1 chapters 60A to 72A or any rule or order under those chapters. 7.2 Sec. 9. Minnesota Statutes 1999 Supplement, section 7.3 60A.052, subdivision 2, is amended to read: 7.4 Subd. 2. [SUSPENSION OR REVOCATION OF AUTHORITY OR 7.5 CENSURE.] If the commissioner determines that one of the 7.6 conditions listed in subdivision 1 exists, the commissioner may 7.7 issue an order requiring the insurance company to show cause why 7.8 any or all of the following should not occur: (1) revocation or 7.9 suspension of any or all certificates of authority granted to 7.10 the foreign or domestic insurance company or its agent; (2) 7.11 censuring of the insurance company; (3) cancellation of all or 7.12 some of the company's insurance contracts then in force in this 7.13 state;or(4) the imposition of a civil penalty; or (5) under a 7.14 written agreement with the insurance company based upon the 7.15 company's financial condition, imposition of conditions or 7.16 restrictions on the insurance company's authority to transact 7.17 business in Minnesota. The order shall be calculated to give 7.18 reasonable notice of the time and place for hearing thereon, and 7.19 shall state the reasons for the entry of the order. All 7.20 hearings shall be conducted in accordance with chapter 14. The 7.21 insurer may waive its right to the hearing. If the insurer is 7.22 under the supervision or control of the insurance department of 7.23 the insurer's state of domicile, that insurance department, 7.24 acting on behalf of the insurer, may waive the insurer's right 7.25 to the hearing. After the hearing, the commissioner shall enter 7.26 an order disposing of the matter as the facts require. If the 7.27 insurance company fails to appear at a hearing after having been 7.28 duly notified of it, the company shall be considered in default, 7.29 and the proceeding may be determined against the company upon 7.30 consideration of the order to show cause, the allegations of 7.31 which may be considered to be true. 7.32 Sec. 10. Minnesota Statutes 1998, section 60A.129, 7.33 subdivision 5, is amended to read: 7.34 Subd. 5. [CONSOLIDATED FILING.] (a) The commissioner may 7.35 allow an insurer to file a consolidated loss reserve 7.36 certification required by subdivision 2, in lieu of separate 8.1 loss certifications and may allow an insurer to file 8.2 consolidated or combined audited financial statements required 8.3 by subdivision 3, paragraph (a), in lieu of separate annual 8.4 audited financial statements, where it can be demonstrated that 8.5 an insurer is part of a group of insurance companies that has a 8.6 pooling or 100 percent reinsurance agreement which substantially 8.7 affects the solvency and integrity of the reserves of the 8.8 insurer and the insurer cedes all of its direct and assumed 8.9 business to the pool. An affiliated insurance company not 8.10 meeting these requirements may be included in the consolidated 8.11 or combined audited financial statements, if the company's total 8.12 admitted assets are less than five percent of the consolidated 8.13 group's total admitted assets. If these circumstances exist, 8.14 then the company may file a written application to file a 8.15 consolidated loss reserve certification and/or consolidated or 8.16 combined audited financial statements. This application shall 8.17 be for a specified period. 8.18 (b) A consolidated annual audit filing shall include a 8.19 columnar consolidated or combining worksheet. Amounts shown on 8.20 the audited consolidated or combined financial statement shall 8.21 be shown on the worksheet. Amounts for each insurer shall be 8.22 stated separately. Noninsurance operations may be shown on the 8.23 worksheet on a combined or individual basis. Explanations of 8.24 consolidating or eliminating entries shall be shown on the 8.25 worksheet. A reconciliation of any differences between the 8.26 amounts shown in the individual insurer columns of the worksheet 8.27 and comparable amounts shown on the annual statement of the 8.28 insurers shall be included on the worksheet. 8.29 Sec. 11. [60K.081] [BROKERAGE BUSINESS.] 8.30 Every insurance agent duly licensed to transact business in 8.31 this state has the right to procure the insurance of risks, or 8.32 parts of risks, in the class or classes of insurance for which 8.33 the agent is licensed, from an insurer duly authorized to 8.34 transact business in this state, when the agent is not a duly 8.35 appointed agent of the insurer, but the insurance must be 8.36 consummated only through a duly appointed agent of the insurer. 9.1 Sec. 12. Minnesota Statutes 1998, section 60K.14, 9.2 subdivision 1, is amended to read: 9.3 Subdivision 1. [PERSONAL SOLICITATION OF INSURANCE SALES.] 9.4 (a) [DEFINITIONS.] For the purposes of this section, the 9.5 following terms have the meanings given them: 9.6 (1) "agent" means a person, copartnership, or corporation 9.7 required to be licensed pursuant to section 60K.02; and 9.8 (2) "personal solicitation" means any contact by an agent, 9.9 or any person acting on behalf of an agent, made for the purpose 9.10 of selling or attempting to sell insurance, when either the 9.11 agent or a person acting for the agent contacts the buyer by 9.12 telephone or in person, except: (i) an attempted sale in which 9.13 the buyer personally knows the identity of the agent, the name 9.14 of the general agency, if any, which the agent represents, and 9.15 the fact that the agent is an insurance agent; (ii) an attempted 9.16 sale in which the prospective purchaser of insurance initiated 9.17 the contact; or (iii) a personal contact which takes place at 9.18 the agent's place of business. 9.19 (b) [DISCLOSURE REQUIREMENT.] Before a personal 9.20 solicitation, the agent or person acting for an agent shall, at 9.21 the time of initial personal contact with the potential buyer, 9.22 clearly and expressly disclose in writing: 9.23 (1) the nameand state insurance agent license numberof 9.24 the person making the contact; 9.25 (2) the name of the agent, general agency, or insurer that 9.26 person represents; and 9.27 (3) the fact that the agent, agency, or insurer is in the 9.28 business of selling insurance. 9.29 If the initial personal contact is made by telephone, the 9.30 disclosures required by this subdivision need not be made in 9.31 writing. 9.32 (c) [FALSE REPRESENTATION OF GOVERNMENT AFFILIATION.] No 9.33 agent or person acting for an agent shall make any communication 9.34 to a potential buyer that indicates or gives the impression that 9.35 the agent is acting on behalf of a government agency. 9.36 Sec. 13. Minnesota Statutes 1999 Supplement, section 10.1 60K.19, subdivision 8, is amended to read: 10.2 Subd. 8. [MINIMUM EDUCATION REQUIREMENT.] Each person 10.3 subject to this section shall complete a minimum of 30 credit 10.4 hours of courses accredited by the commissioner during each 10.5 24-month licensing period, two hours of which must be devoted to10.6state law, regulations, and rules applicable to the line or10.7lines of insurance for which the agent is licensed. Any person 10.8 whose initial licensing period extends more than six months 10.9 shall complete 15 hours of courses accredited by the 10.10 commissioner during the initial license period. Any person 10.11 teaching or lecturing at an accredited course qualifies for 10.12 1-1/2 times the number of credit hours that would be granted to 10.13 a person completing the accredited course. No more than 15 10.14 credit hours per licensing period may be credited to a person 10.15 for courses sponsored by, offered by, or affiliated with an 10.16 insurance company or its agents. Courses sponsored by, offered 10.17 by, or affiliated with an insurance company or agent may 10.18 restrict its students to agents of the company or agency. 10.19 Sec. 14. Minnesota Statutes 1998, section 61A.092, 10.20 subdivision 6, is amended to read: 10.21 Subd. 6. [APPLICATION.] This section applies to a policy, 10.22 certificate of insurance, or similar evidence of coverage issued 10.23 to a Minnesota resident or issued to provide coverage to a 10.24 Minnesota resident. This section does not apply to: (1) a 10.25 certificate of insurance or similar evidence of coverage that 10.26 meets the conditions of section 61A.093, subdivision 2; or (2) a 10.27 group life insurance policy that contains a provision permitting 10.28 the certificate holder, upon termination or layoff from 10.29 employment, to retain the coverage provided under the group 10.30 policy by paying premiums directly to the insurer, provided that 10.31 the employer shall give the employee notice of the employee's 10.32 and each related certificate holder's right to continue the 10.33 insurance by paying premiums directly to the insurer. A related 10.34 certificate holder is an insured spouse or dependent child of 10.35 the employee. Upon termination of this group policy, each 10.36 covered employee, spouse, and dependent child is entitled to 11.1 have issued to them a life conversion policy as prescribed in 11.2 section 61A.09, subdivision 1, paragraph (h). 11.3 Sec. 15. Minnesota Statutes 1998, section 62A.136, is 11.4 amended to read: 11.5 62A.136 [DENTAL AND VISION PLAN COVERAGE.] 11.6 The following provisions do not apply to health plans 11.7 providing dental or vision coverage only: sections 62A.041; 11.8 62A.0411; 62A.047; 62A.149; 62A.151; 62A.152; 62A.154; 62A.155; 11.9 62A.17, subdivision 6; 62A.21, subdivision 2b; 62A.26; 11.10 62A.28;and62A.285; 62A.30; 62A.304; 62A.3093; and 62E.16. 11.11 Sec. 16. [62A.81] [DEFINITIONS.] 11.12 Subdivision 1. [ENROLLEE.] "Enrollee" means an individual 11.13 who is covered by a health carrier, health insurance, or health 11.14 coverage plan, including an insured, policy holder, subscriber, 11.15 contract holder, member-covered person, or certificate holder. 11.16 Subd. 2. [HEALTH CARE PROVIDER.] "Health care provider" or 11.17 "provider" means a person defined in section 144.335, 11.18 subdivision 1, paragraph (b). 11.19 Subd. 3. [HEALTH CARE TREATMENT DECISION.] "Health care 11.20 treatment decision" means a determination or decision made that 11.21 affects the quality of the diagnosis, care, or treatment 11.22 provided to an enrollee. A health care treatment decision 11.23 includes, but is not limited to, a determination that a service, 11.24 treatment, or procedure is not medically necessary. 11.25 Subd. 4. [HEALTH CARRIER.] "Health carrier" means an 11.26 insurance company licensed under chapter 60A to offer, sell, or 11.27 issue an individual or group policy of accident and sickness 11.28 insurance as defined in section 62A.01; a nonprofit health 11.29 service plan corporation operating under chapter 62C; a health 11.30 maintenance organization operating under chapter 62D; a joint 11.31 self-insurance employee health plan operating under chapter 62H; 11.32 a community integrated systems network licensed under chapter 11.33 62N; a fraternal benefit society operating under chapter 64B; or 11.34 an association, partnership, corporation, or limited liability 11.35 corporation organized for the purpose of providing, arranging, 11.36 or administering health care services or treatment. 12.1 Subd. 5. [MEDICALLY NECESSARY CARE.] "Medically necessary 12.2 care" means diagnostic testing, preventative services, and 12.3 health care services that are appropriate, in terms of types, 12.4 frequency, level, setting, and duration, to the enrollee's 12.5 diagnosis or condition. Medically necessary care must be 12.6 consistent with generally accepted practice parameters, as 12.7 determined by licensed health care providers in the same or 12.8 similar general specialty as typically manages the condition, 12.9 procedure, or treatment at issue and must: 12.10 (1) help restore, establish, maintain, or improve the 12.11 enrollee's health condition or function; 12.12 (2) prevent deterioration of the enrollee's health 12.13 condition or function; or 12.14 (3) prevent the reasonably likely onset of a health problem 12.15 or detect an incipient problem. 12.16 Subd. 6. [ORDINARY CARE.] "Ordinary care" means, in the 12.17 case of a health carrier, that degree of care that a health 12.18 carrier of ordinary prudence would use under the same or similar 12.19 circumstances. In the case of a person who is an employee, 12.20 agent, or representative of a health carrier, ordinary care 12.21 means that degree of care that a person of ordinary prudence in 12.22 the same profession, specialty, or area of practice would use in 12.23 the same or similar circumstances. 12.24 Sec. 17. [62A.82] [APPLICATION.] 12.25 Subdivision 1. [DUTY OF ORDINARY CARE.] A health carrier 12.26 has the duty to exercise ordinary care when making health care 12.27 treatment decisions and is liable for damages to an enrollee for 12.28 harm proximately caused by its failure to exercise ordinary care. 12.29 Subd. 2. [RESPONSIBILITY FOR ACTIONS OF OTHERS.] A health 12.30 carrier is also liable for damages to an enrollee for harm 12.31 proximately caused by a health care treatment decision made by 12.32 its: 12.33 (1) employees; 12.34 (2) agents; or 12.35 (3) representatives who are acting on its behalf and over 12.36 whom it has the right to exercise influence or control or has 13.1 actually exercised influence or control that results in the 13.2 failure to exercise ordinary care. 13.3 In an action against a health carrier, a finding that a 13.4 health care provider is an employee, agent, or representative of 13.5 the health carrier shall not be based solely on proof that the 13.6 person's name appears in a listing of approved health care 13.7 providers made available to enrollees under a health plan. 13.8 Subd. 3. [DEFENSES.] It shall be a defense to an action 13.9 asserted against a health carrier that: 13.10 (1) neither the health carrier, nor any employee, agent, or 13.11 representative for whose conduct the health carrier is liable 13.12 under subdivision 2, controlled, influenced, or participated in 13.13 the health care treatment decision; and 13.14 (2) the health carrier did not deny or delay payment for 13.15 any service, treatment, or procedure prescribed or recommended 13.16 by a provider to the enrollee. 13.17 Subd. 4. [LIMITATIONS.] (a) The standards in subdivisions 13.18 1 and 2 create no obligation on the part of the health carrier 13.19 to provide to an enrollee a service, treatment, or procedure 13.20 that is not covered by the health plan. 13.21 (b) This section does not create liability on the part of 13.22 an employer or an employer group purchasing organization that 13.23 purchases coverage or assumes risk on behalf of its employees. 13.24 Subd. 5. [LIMITATION ON DEFENSES.] Nothing in any law of 13.25 this state prohibiting a health carrier from practicing medicine 13.26 or being licensed to practice medicine may be asserted as a 13.27 defense by the health carrier in an action brought against it 13.28 pursuant to this section or any other law. 13.29 Subd. 6. [NONAPPLICATION.] This section does not apply to 13.30 workers' compensation insurance coverage under chapter 79, 13.31 workers' compensation self-insurance under chapter 79A, or 13.32 health coverage for state employees. This section does not 13.33 apply to governmental programs. For the purposes of this 13.34 subdivision, "governmental programs" means the prepaid medical 13.35 assistance program, the MinnesotaCare program, the prepaid 13.36 general assistance medical care program, and the federal 14.1 Medicare program. 14.2 Subd. 7. [RECOVERY OF ATTORNEY FEES AND OTHER 14.3 EXPENSES.] If an enrollee is the prevailing party in a 14.4 proceeding under this section, the court may award attorney fees 14.5 and other reasonable expenses to the enrollee. This subdivision 14.6 does not preclude an enrollee from recovering costs, 14.7 disbursements, fees, and expenses under other applicable law. 14.8 Subd. 8. [TRANSFER OF LIABILITY.] Any agreement or 14.9 directive that attempts to transfer to a health care provider, 14.10 by indemnification or otherwise, any tort liability relating to 14.11 the activities, actions, or omissions of a health carrier is 14.12 contrary to state public policy and is null and void. 14.13 Subd. 9. [WAIVER OF LIABILITY.] Any agreement or waiver by 14.14 an enrollee of the provisions of this section is contrary to 14.15 state public policy and is null and void. 14.16 Subd. 10. [EXHAUSTION OF APPEALS.] An enrollee must 14.17 exhaust the external review process to the extent authorized by 14.18 law before a claim can be brought against a health carrier under 14.19 this chapter. 14.20 Sec. 18. Minnesota Statutes 1998, section 62C.11, 14.21 subdivision 1, is amended to read: 14.22 Subdivision 1. A service plan corporation shall annually 14.23 on or before the last day of March, file with the commissioner a 14.24 financial statement, in such form as the commissioner shall 14.25 prescribe, verified by not less than two of its principal 14.26 officers, showing the financial condition of the corporation as 14.27 of December 31 of the preceding year.The statement shall14.28include an audit report certified by an independent certified14.29public accountant and reconciled and adjusted to conform to the14.30financial statement.14.31 Sec. 19. Minnesota Statutes 1998, section 62C.142, 14.32 subdivision 2a, is amended to read: 14.33 Subd. 2a. [CONTINUATION PRIVILEGE.] Every subscriber 14.34 contract, other than a contract whose continuance is contingent 14.35 upon continued employment or membership, shall contain a 14.36 provision which permits continuation of coverage under the 15.1 contract for the subscriber's former spouse and children upon 15.2 entry of a valid decree of dissolution of marriage, if the15.3decree requires the subscriber to provide continued coverage for15.4those persons. The coverage may be continued until the earlier 15.5 of the following dates: 15.6 (a)the date of remarriage of either the subscriber orthe 15.7 subscriber's former spouse becomes covered under any other group 15.8 health plan; or 15.9 (b) the date coverage would otherwise terminate under the 15.10 subscriber contract. 15.11 The contract must require the group contract holder to, 15.12 upon request, provide the insured with written verification from 15.13 the insurer of the cost of this coverage promptly at the time of 15.14 eligibility for this coverage and at any time during the 15.15 continuation period. In no event shall the amount of premium 15.16 charged exceed 102 percent of the cost to the plan for such 15.17 period of coverage for other similarly situated spouses and 15.18 dependent children with respect to whom the marital relationship 15.19 has not dissolved, without regard to whether such cost is paid 15.20 by the employer or employee. 15.21 Sec. 20. Minnesota Statutes 1998, section 62E.04, 15.22 subdivision 4, is amended to read: 15.23 Subd. 4. [MAJOR MEDICAL COVERAGE.] Each insurer and 15.24 fraternal shall affirmatively offer coverage of major medical 15.25 expenses to every applicant who applies to the insurer or 15.26 fraternal for a new unqualified policy, which has a lifetime 15.27 benefit limit of less than $1,000,000, at the time of 15.28 application and annually to every holder of such an unqualified 15.29 policy of accident and health insurance renewed by the insurer 15.30 or fraternal. The coverage shall provide that when a covered 15.31 individual incurs out-of-pocket expenses of $5,000 or more 15.32 within a calendar year for services covered in section 62E.06, 15.33 subdivision 1, benefits shall be payable, subject to any 15.34 copayment authorized by the commissioner, up to a maximum 15.35 lifetime limit of $500,000. The offer of coverage of major 15.36 medical expenses may consist of the offer of a rider on an 16.1 existing unqualified policy or a new policy which is a qualified 16.2 plan. 16.3 Sec. 21. Minnesota Statutes 1998, section 62J.51, is 16.4 amended by adding a subdivision to read: 16.5 Subd. 19a. [UNIFORM EXPLANATION OF BENEFITS 16.6 DOCUMENT.] "Uniform explanation of benefits document" means the 16.7 document associated with and explaining the details of a group 16.8 purchaser's claim adjudication for services rendered, which is 16.9 sent to a patient. 16.10 Sec. 22. Minnesota Statutes 1998, section 62J.51, is 16.11 amended by adding a subdivision to read: 16.12 Subd. 19b. [UNIFORM REMITTANCE ADVICE REPORT.] "Uniform 16.13 remittance advice report" means the document associated with and 16.14 explaining the details of a group purchaser's claim adjudication 16.15 for services rendered, which is sent to a provider. 16.16 Sec. 23. Minnesota Statutes 1998, section 62J.52, 16.17 subdivision 1, is amended to read: 16.18 Subdivision 1. [UNIFORM BILLING FORM HCFA 1450.] (a) On 16.19 and after January 1, 1996, all institutional inpatient hospital 16.20 services, ancillary services,andinstitutionally owned or 16.21 operated outpatient services rendered by providers in Minnesota, 16.22 and institutional or noninstitutional home health services that 16.23 are not being billed using an equivalent electronic billing 16.24 format, must be billed using the uniform billing form HCFA 1450, 16.25 except as provided in subdivision 5. 16.26 (b) The instructions and definitions for the use of the 16.27 uniform billing form HCFA 1450 shall be in accordance with the 16.28 uniform billing form manual specified by the commissioner. In 16.29 promulgating these instructions, the commissioner may utilize 16.30 the manual developed by the National Uniform Billing Committee, 16.31 as adopted and finalized by the Minnesota uniform billing 16.32 committee. 16.33 (c) Services to be billed using the uniform billing form 16.34 HCFA 1450 include: institutional inpatient hospital services 16.35 and distinct units in the hospital such as psychiatric unit 16.36 services, physical therapy unit services, swing bed (SNF) 17.1 services, inpatient state psychiatric hospital services, 17.2 inpatient skilled nursing facility services, home health 17.3 services (Medicare part A), and hospice services; ancillary 17.4 services, where benefits are exhausted or patient has no 17.5 Medicare part A, from hospitals, state psychiatric hospitals, 17.6 skilled nursing facilities, and home health (Medicare part B); 17.7andinstitutional owned or operated outpatient services such as 17.8 waivered services, hospital outpatient services, including 17.9 ambulatory surgical center services, hospital referred 17.10 laboratory services, hospital-based ambulance services, and 17.11 other hospital outpatient services, skilled nursing facilities, 17.12 home health, including infusion therapy, freestanding renal 17.13 dialysis centers, comprehensive outpatient rehabilitation 17.14 facilities (CORF), outpatient rehabilitation facilities (ORF), 17.15 rural health clinics, and community mental health centers,; home 17.16 health services such as home health intravenous therapy 17.17 providers, waivered services, personal care attendants, and 17.18 hospice; and any other health care provider certified by the 17.19 Medicare program to use this form. 17.20 (d) On and after January 1, 1996, a mother and newborn 17.21 child must be billed separately, and must not be combined on one 17.22 claim form. 17.23 Sec. 24. Minnesota Statutes 1998, section 62J.52, 17.24 subdivision 2, is amended to read: 17.25 Subd. 2. [UNIFORM BILLING FORM HCFA 1500.] (a) On and 17.26 after January 1, 1996, all noninstitutional health care services 17.27 rendered by providers in Minnesota except dental or pharmacy 17.28 providers, that are not currently being billed using an 17.29 equivalent electronic billing format, must be billed using the 17.30 health insurance claim form HCFA 1500, except as provided in 17.31 subdivision 5. 17.32 (b) The instructions and definitions for the use of the 17.33 uniform billing form HCFA 1500 shall be in accordance with the 17.34 manual developed by the administrative uniformity committee 17.35 entitled standards for the use of the HCFA 1500 form, dated 17.36 February 1994, as further defined by the commissioner. 18.1 (c) Services to be billed using the uniform billing form 18.2 HCFA 1500 include physician services and supplies, durable 18.3 medical equipment, noninstitutional ambulance services, 18.4 independent ancillary services including occupational therapy, 18.5 physical therapy, speech therapy and audiology, podiatry 18.6 services, optometry services, mental health licensed 18.7 professional services, substance abuse licensed professional 18.8 services, nursing practitioner professional services, certified 18.9 registered nurse anesthetists, chiropractors, physician 18.10 assistants, laboratories, medical suppliers, and other health 18.11 care providers such ashome health intravenous therapy18.12providers, personal care attendants,day activity centers,18.13waivered services, hospice, and other home health services,and 18.14 freestanding ambulatory surgical centers. 18.15 Sec. 25. Minnesota Statutes 1998, section 62J.52, 18.16 subdivision 5, is amended to read: 18.17 Subd. 5. [STATE AND FEDERAL HEALTH CARE PROGRAMS.] (a) 18.18 Skilled nursing facilities and ICF/MR services billed to state 18.19 and federal health care programs administered by the department 18.20 of human services shall use the form designated by the 18.21 department of human services. 18.22 (b) On and after July 1, 1996, state and federal health 18.23 care programs administered by the department of human services 18.24 shall accept the HCFA 1450 for community mental health center 18.25 services and shall accept the HCFA 1500 for freestanding 18.26 ambulatory surgical center services. 18.27 (c) State and federal health care programs administered by 18.28 the department of human services shall be authorized to use the 18.29 forms designated by the department of human services for 18.30 pharmacy servicesand for child and teen checkup services. 18.31 (d) State and federal health care programs administered by 18.32 the department of human services shall accept the form 18.33 designated by the department of human services, and the HCFA 18.34 1500 for supplies, medical supplies, or durable medical 18.35 equipment. Health care providers may choose which form to 18.36 submit. 19.1 (e) Personal care attendant and waivered services billed on 19.2 a fee-for-service basis directly to state and federal health 19.3 care programs administered by the department of human services 19.4 shall use either the HCFA 1450 or the HCFA 1500 form, as 19.5 designated by the department of human services. 19.6 Sec. 26. [62J.581] [STANDARDS FOR MINNESOTA UNIFORM HEALTH 19.7 CARE REIMBURSEMENT DOCUMENTS.] 19.8 Subdivision 1. [MINNESOTA UNIFORM REMITTANCE ADVICE 19.9 REPORT.] All group purchasers and payers shall provide a uniform 19.10 remittance advice report to health care providers when a claim 19.11 is adjudicated. The uniform remittance advice report shall 19.12 comply with the standards prescribed in this section. 19.13 Subd. 2. [MINNESOTA UNIFORM EXPLANATION OF BENEFITS 19.14 DOCUMENT.] All group purchasers and payers shall provide a 19.15 uniform explanation of benefits document to health care patients 19.16 when a claim is adjudicated. The uniform explanation of 19.17 benefits document shall comply with the standards prescribed in 19.18 this section. 19.19 Subd. 3. [SCOPE.] For purposes of sections 62J.50 to 19.20 62J.61, the uniform remittance advice report and the uniform 19.21 explanation of benefits document format specified in subdivision 19.22 4 shall apply to all health care services delivered by a health 19.23 care provider or health care provider organization in Minnesota, 19.24 regardless of the location of the payer, excluding commercial 19.25 health insurance. Health care services not paid on an 19.26 individual claims basis, such as capitated payments, are not 19.27 included in this section. A health plan company is excluded 19.28 from the requirements in subdivisions 1 and 2 if they comply 19.29 with section 62A.01, subdivisions 2 and 3. 19.30 Subd. 4. [SPECIFICATIONS.] The uniform remittance advice 19.31 report and the uniform explanation of benefits document shall be 19.32 provided by use of a paper document conforming to the 19.33 specifications in this section or by use of the ANSI X12N 835 19.34 standard electronic format as established under United States 19.35 Code, title 42, sections 1320d to 1320d-8, and as amended from 19.36 time to time for the remittance advice. The commissioner, after 20.1 consulting with the administrative uniformity committee, shall 20.2 specify the data elements and definitions for the uniform 20.3 remittance advice report and the uniform explanation of benefits 20.4 document. The commissioner and the administrative uniformity 20.5 committee must consult with the Minnesota Dental Association and 20.6 Delta Dental Plan of Minnesota before requiring the use of any 20.7 paper documents for dental care services under this section. 20.8 Subd. 5. [EFFECTIVE DATE.] The requirements in 20.9 subdivisions 1 and 2 are effective 12 months after the date of 20.10 required compliance with the standards for the electronic 20.11 remittance advice transaction under United States Code, title 20.12 42, sections 1320d to 1320d-8, and as amended from time to 20.13 time. The requirements in subdivisions 1 and 2 apply regardless 20.14 of when the health care service was provided to the patient. 20.15 Sec. 27. Minnesota Statutes 1999 Supplement, section 20.16 62J.535, subdivision 2, is amended to read: 20.17 Subd. 2. [COMPLIANCE.] (a) Concurrent with theeffective20.18datesdate of required compliance established under United 20.19 States Code, title 42, sections 1320d to 1320d-8, as amended 20.20 from time to time, for uniform electronic billing standards, all 20.21 health care providers must conform to the uniform billing 20.22 standards developed under subdivision 1. 20.23 (b) Notwithstanding paragraph (a), the requirements for the 20.24 uniform remittance advice report shall be effective 12 months 20.25 after the date of the required compliance of the standards for 20.26 the electronic remittance advice transaction are effective under 20.27 United States Code, title 42, sections 1320d to 1320d-8, as 20.28 amended from time to time. 20.29 Sec. 28. Minnesota Statutes 1998, section 62J.60, 20.30 subdivision 1, is amended to read: 20.31 Subdivision 1. [MINNESOTA HEALTH CARE IDENTIFICATION 20.32 CARD.] All individuals with health care coverage shall be issued 20.33 health care identification cards by group purchasers as of 20.34 January 1, 1998, unless the requirements of section 62A.01, 20.35 subdivisions 2 and 3, are met. The health care identification 20.36 cards shall comply with the standards prescribed in this section. 21.1 Sec. 29. Minnesota Statutes 1998, section 62S.02, 21.2 subdivision 1, is amended to read: 21.3 Subdivision 1. [REQUIREMENTS.] A qualified long-term care 21.4 insurance policy may not be offered, issued, delivered, or 21.5 renewed in this state unless the policy satisfies the 21.6 requirements of this chapter and the filing provisions of 21.7 section 62A.02. A qualified long-term care insurance policy 21.8 must cover qualified long-term care services. 21.9 Sec. 30. Minnesota Statutes 1998, section 64B.30, 21.10 subdivision 1, is amended to read: 21.11 Subdivision 1. [VISITATION AND EXAMINATION.] The 21.12 commissioner, or any person the commissioner may appoint, shall 21.13 have the power of visitation and examination into the affairs of 21.14 any domestic society. The commissioner shall conduct an 21.15 examination at leastonce in every three yearsas often as is 21.16 required in section 60A.031, subdivision 1. The commissioner 21.17 may: 21.18 (1) employ assistance for the purposes of examination and 21.19 the commissioner, or any person the commissioner may appoint, 21.20 shall have free access to any books, papers, and documents that 21.21 relate to the business of the association; and 21.22 (2) summon and qualify as witnesses, under oath, and 21.23 examine its officers, agents, and employees, or other persons, 21.24 in relation to the affairs, transactions, and condition of the 21.25 association. 21.26 Sec. 31. Minnesota Statutes 1998, section 65B.29, 21.27 subdivision 2, is amended to read: 21.28 Subd. 2. [INSURANCE REQUIRED.] No motor vehicle service 21.29 contract may be issued, sold, or offered for sale in this state 21.30 unless the provider of the service contract is insured under a 21.31 motor vehicle service contract reimbursement insurance policy 21.32 issued by an insurer authorized to do business in this 21.33 state. Insurers issuing such a policy are required to have 21.34 capital and surplus equal to at least $5,000,000 at the end of 21.35 the preceding year. Capital and surplus must be calculated 21.36 using the accounting standards required by section 60A.13. 22.1 Sec. 32. Minnesota Statutes 1998, section 65B.29, 22.2 subdivision 3, is amended to read: 22.3 Subd. 3. [FILING REQUIREMENTS.] No motor vehicle service 22.4 contract may be issued, sold, or offered for sale in this state 22.5 unless a true and correct copy of the service contract and the 22.6 provider's reimbursement insurance policy have been filed with 22.7 the commissioner and either (1) the commissioner has approved it 22.8 or (2) 60 days have elapsed and the commissioner has not 22.9 disapproved it as misleading or violative of public policy. The 22.10 commissioner may, by written notice to the provider, extend the 22.11 review for an additional period not to exceed 60 days. 22.12 Sec. 33. Minnesota Statutes 1998, section 72A.20, 22.13 subdivision 17, is amended to read: 22.14 Subd. 17. [RETURN OF PREMIUMS.] (a) Refusing, upon 22.15 surrender of an individual policy of life insurance in the case 22.16 of the insured's death, or in the case of a surrender prior to 22.17 death, of an individual insurance policy not covered by the 22.18 standard nonforfeiture laws under section 61A.24, to refund to 22.19 the owner all unearned premiums paid on the policy covering the 22.20 insured as of the time of the insured's death or surrender if 22.21 the unearned premium is for a period of more than one 22.22 month. The return of unearned premium must be delivered to the 22.23 insured within 30 days following surrender of the policy and 22.24 receipt by the insurer of the insured's request for cancellation. 22.25 (b) Refusing, upon termination or cancellation of a policy 22.26 of automobile insurance under section 65B.14, subdivision 2, or 22.27 a policy of homeowner's insurance under section 65A.27, 22.28 subdivision 4, or a policy of accident and sickness insurance 22.29 under section 62A.01, or a policy of comprehensive health 22.30 insurance under chapter 62E, to refund to the insured all 22.31 unearned premiums paid on the policy covering the insured as of 22.32 the time of the termination or cancellation if the unearned 22.33 premium is for a period of more than one month. The return of 22.34 unearned premium must be delivered to the insured within 30 days 22.35 following receipt by the insurer of the insured's request for 22.36 cancellation. 23.1 (c) This subdivision does not apply to policies of 23.2 insurance providing coverage only for motorcycles or other 23.3 seasonally rated or limited use vehicles where the rate is 23.4 reduced to reflect seasonal or limited use. 23.5 (d) For purposes of this section, a premium is unearned 23.6 during the period of time the insurer has not been exposed to 23.7 any risk of loss. Except for premiums for motorcycle coverage 23.8 or other seasonally rated or limited use vehicles where the rate 23.9 is reduced to reflect seasonal or limited use, the unearned 23.10 premium is determined by multiplying the premium by the fraction 23.11 that results from dividing the period of time from the date of 23.12 termination to the date the next scheduled premium is due by the 23.13 period of time for which the premium was paid. 23.14 (e) The owner may cancel a policy referred to in this 23.15 section at any time during the policy period. This provision 23.16 supersedes any inconsistent provision of law or any inconsistent 23.17 policy provision. 23.18 Sec. 34. Minnesota Statutes 1999 Supplement, section 23.19 72A.20, subdivision 23, is amended to read: 23.20 Subd. 23. [DISCRIMINATION IN AUTOMOBILE INSURANCE 23.21 POLICIES.] (a) No insurer that offers an automobile insurance 23.22 policy in this state shall: 23.23 (1) use the employment status of the applicant as an 23.24 underwriting standard or guideline; or 23.25 (2) deny coverage to a policyholder for the same reason. 23.26 (b) No insurer that offers an automobile insurance policy 23.27 in this state shall: 23.28 (1) use the applicant's status as a residential tenant, as 23.29 the term is defined in section 504B.001, subdivision 12, as an 23.30 underwriting standard or guideline; or 23.31 (2) deny coverage to a policyholder for the same reason; or 23.32 (3) make any discrimination in offering or establishing 23.33 rates, premiums, dividends, or benefits of any kind, or by way 23.34 of rebate, for the same reason. 23.35 (c) No insurer that offers an automobile insurance policy 23.36 in this state shall: 24.1 (1) use the failure of the applicant to have an automobile 24.2 policy in force during any period of time before the application 24.3 is made as an underwriting standard or guideline; or 24.4 (2) deny coverage to a policyholder for the same reason. 24.5This provisionParagraph (c) does not apply if the 24.6 applicant was required by law to maintain automobile insurance 24.7 coverage and failed to do so. 24.8 An insurer may require reasonable proof that the applicant 24.9 did not fail to maintain this coverage. The insurer is not 24.10 required to accept the mere lack of a conviction or citation for 24.11 failure to maintain this coverage as proof of failure to 24.12 maintain coverage. The insurer must provide the applicant with 24.13 information identifying the documentation that is required to 24.14 establish reasonable proof that the applicant did not fail to 24.15 maintain the coverage. 24.16 (d) No insurer that offers an automobile insurance policy 24.17 in this state shall use an applicant's prior claims for benefits 24.18 paid under section 65B.44 as an underwriting standard or 24.19 guideline if the applicant was 50 percent or less negligent in 24.20 the accident or accidents causing the claims. 24.21 (e) No insurer shall refuse to issue any standard or 24.22 preferred policy of motor vehicle insurance or make any 24.23 discrimination in the acceptance of risks, in rates, premiums, 24.24 dividends, or benefits of any kind, or by way of rebate: 24.25 (1) between persons of the same class, or 24.26 (2) on account of race, or 24.27 (3) on account of physical handicap if the handicap is 24.28 compensated for by special training, equipment, prosthetic 24.29 device, corrective lenses, or medication and if the physically 24.30 handicapped person: 24.31 (i) is licensed by the department of public safety to 24.32 operate a motor vehicle in this state, and 24.33 (ii) operates only vehicles that are equipped with 24.34 auxiliary devices and equipment necessary for safe and effective 24.35 operation by the handicapped person, or 24.36 (4) on account of marital dissolution. 25.1 Sec. 35. Minnesota Statutes 1998, section 72A.499, 25.2 subdivision 1, is amended to read: 25.3 Subdivision 1. [NOTICE AND INFORMATION.] (a) In the event 25.4 of an adverse underwriting decision, the insurer or insurance 25.5 agent responsible for the decision shall provide in writing to 25.6 the applicant, policyholder, or individual proposed for coverage: 25.7 (1) the specific reason or reasons for the adverse 25.8 underwriting decision, a summary of the person's rights under 25.9 sections 72A.497 and 72A.498, and that upon request the person 25.10 may receive the specific items of personal information that 25.11 support those reasons and the specific sources of the 25.12 information; or 25.13 (2) the specific reason or reasons for the adverse 25.14 underwriting decision, the specific items of personal and 25.15 privileged information that support those reasons, the names and 25.16 addresses of the sources that supplied the specific items of 25.17 information specified, and a summary of the rights established 25.18 under sections 72A.497 and 72A.498. 25.19 (b) if the adverse underwriting decision is either solely 25.20 or partially based upon a report of credit worthiness, credit 25.21 standing, or credit capacity that an insurer receives from a 25.22 consumer reporting agency, the primary reason or reasons for the 25.23 credit score or codes or other credit based information used by 25.24 the insurer in the insurer's underwriting. 25.25 Sec. 36. Minnesota Statutes 1998, section 79.34, 25.26 subdivision 1, is amended to read: 25.27 Subdivision 1. [CONDITIONS REQUIRING MEMBERSHIP.] The 25.28nonprofit association known as theworkers' compensation 25.29 reinsurance associationmay be incorporated under chapter 317A25.30with all the powers of a corporation formed under that chapter,25.31except that if the provisions of that chapter are inconsistent25.32with sections 79.34 to 79.40, sections 79.34 to 79.40 governis 25.33 a division of the department of commerce directed by a deputy 25.34 commissioner appointed by the commissioner. Each insurer as 25.35 defined by section 79.01, subdivision 2, shall, as a condition 25.36 of its authority to transact workers' compensation insurance in 26.1 this state, be a member of the reinsurance association and is 26.2 bound by the plan of operation of the reinsurance association; 26.3 provided, that all affiliated insurers within a holding company 26.4 system as defined in chapter 60D are considered a single entity 26.5 for purposes of the exercise of all rights and duties of 26.6 membership in the reinsurance association. Each self-insurer 26.7 approved under section 176.181 and each political subdivision 26.8 that self-insures shall, as a condition of its authority to 26.9 self-insure workers' compensation liability in this state, be a 26.10 member of the reinsurance association and is bound by its plan 26.11 of operation; provided that: 26.12 (1) all affiliated companies within a holding company 26.13 system, as determined by the commissioner oflabor and industry26.14 commerce in a manner consistent with the standards and 26.15 definitions in chapter 60D, are considered a single entity for 26.16 purposes of the exercise of all rights and duties of membership 26.17 in the reinsurance association; and 26.18 (2) all group self-insurers granted authority to 26.19 self-insure pursuant to section 176.181 are considered single 26.20 entities for purposes of the exercise of all the rights and 26.21 duties of membership in the reinsurance association. As a 26.22 condition of its authority to self-insure workers' compensation 26.23 liability, and for losses incurred after December 31, 1983, the 26.24 state is a member of the reinsurance association and is bound by 26.25 its plan of operation. The commissioner of employee relations 26.26 represents the state in the exercise of all the rights and 26.27 duties of membership in the reinsurance association. The state 26.28 treasurer shall pay the premium to the reinsurance association 26.29 from the state compensation revolving fund upon warrants of the 26.30 commissioner of employee relations, except that the University 26.31 of Minnesota shall pay its portion of workers' compensation 26.32 reinsurance premiums directly to the workers' compensation 26.33 reinsurance association. For the purposes of this section, 26.34 "state" means the administrative branch of state government, the 26.35 legislative branch, the judicial branch, the University of 26.36 Minnesota, and any other entity whose workers' compensation 27.1 liability is paid from the state revolving fund. The 27.2 commissioner of finance may calculate, prorate, and charge a 27.3 department or agency the portion of premiums paid to the 27.4 reinsurance association for employees who are paid wholly or in 27.5 part by federal funds, dedicated funds, or special revenue 27.6 funds.The reinsurance association is not a state agency.27.7Actions of the reinsurance association and its board of27.8directors and actions of the commissioner of labor and industry27.9with respect to the reinsurance association are not subject to27.10chapters 13 and 15. All property owned by the association is27.11exempt from taxation.The reinsurance association is not 27.12 obligated to make any payments or pay any assessments to any 27.13 funds or pools established pursuant to this chapter or chapter 27.14 176 or any other law. 27.15 Sec. 37. Minnesota Statutes 1998, section 79.34, 27.16 subdivision 2, is amended to read: 27.17 Subd. 2. [LOSSES; RETENTION LIMITS.] The reinsurance 27.18 association shall provide and each member shall accept 27.19 indemnification for 100 percent of the amount of ultimate loss 27.20 sustained in each loss occurrence relating to one or more claims 27.21 arising out of a single compensable event, including aggregate 27.22 losses related to a single event or occurrence which constitutes 27.23 a single loss occurrence, under chapter 176 on and after October 27.24 1, 1979, in excess of a low, a high, or a super retention limit, 27.25 at the option of the member. In case of occupational disease 27.26 causing disablement on and after October 1, 1979, each person 27.27 suffering disablement due to occupational disease is considered 27.28 to be involved in a separate loss occurrence. On January 1, 27.29 1995, the lower retention limit is $250,000, which shall also be 27.30 known as the 1995 base retention limit. On each January 1 27.31 thereafter, the cumulative annual percentage changes in the 27.32 statewide average weekly wage after October 1, 1994, as 27.33 determined in accordance with section 176.011, subdivision 20, 27.34 shall first be multiplied by the 1995 base retention limit, the 27.35 result of which shall then be added to the 1995 base retention 27.36 limit. The resulting figure shall be rounded to the nearest 28.1 $10,000, yielding the low retention limit for that year, 28.2 provided that the low retention limit shall not be reduced in 28.3 any year. The high retention limit shall be two times the low 28.4 retention limit and shall be adjusted when the low retention 28.5 limit is adjusted. The super retention limit shall be four 28.6 times the low retention limit and shall be adjusted when the low 28.7 retention limit is adjusted. Ultimate loss as used in this 28.8 section means the actual loss amount which a member is obligated 28.9 to pay and which is paid by the member for workers' compensation 28.10 benefits payable under chapter 176 and shall not include claim 28.11 expenses, assessments, damages or penalties. For losses 28.12 incurred on or after January 1, 1979, any amounts paid by a 28.13 member pursuant to sections 176.183, 176.221, 176.225, and 28.14 176.82 shall not be included in ultimate loss and shall not be 28.15 indemnified by the reinsurance association. A loss is incurred 28.16 by the reinsurance association on the date on which the accident 28.17 or other compensable event giving rise to the loss occurs, and a 28.18 member is liable for a loss up to its retention limit in effect 28.19 at the time that the loss was incurred, except that members 28.20 which are determined by the reinsurance association to be 28.21 controlled by or under common control with another member, and 28.22 which are liable for claims from one or more employees entitled 28.23 to compensation for a single compensable event, including 28.24 aggregate losses relating to a single loss occurrence, may 28.25 aggregate their losses and obtain indemnification from the 28.26 reinsurance association for the aggregate losses in excess of 28.27 the highest retention limit selected by any of the members in 28.28 effect at the time the loss was incurred. Each member is liable 28.29 for payment of its ultimate loss and shall be entitled to 28.30 indemnification from the reinsurance association for the 28.31 ultimate loss in excess of the member's retention limit in 28.32 effect at the time of the loss occurrence. 28.33 A member that chooses the high or super retention limit 28.34 shall retain the liability for all losses below the chosen 28.35 retention limit itself and shall not transfer the liability to 28.36 any other entity or reinsure or otherwise contract for 29.1 reimbursement or indemnification for losses below its retention 29.2 limit, except in the following cases: (a) when the reinsurance 29.3 or contract is with another member which, directly or 29.4 indirectly, through one or more intermediaries, control or are 29.5 controlled by or are under common control with the member; (b) 29.6 when the reinsurance or contract provides for reimbursement or 29.7 indemnification of a member if and only if the total of all 29.8 claims which the member pays or incurs, but which are not 29.9 reimbursable or subject to indemnification by the reinsurance 29.10 association for a given period of time, exceeds a dollar value 29.11 or percentage of premium written or earned and stated in the 29.12 reinsurance agreement or contract; (c) when the reinsurance or 29.13 contract is a pooling arrangement with other insurers where 29.14 liability of the member to pay claims pursuant to chapter 176 is 29.15 incidental to participation in the pool and not as a result of 29.16 providing workers' compensation insurance to employers on a 29.17 direct basis under chapter 176; (d) when the reinsurance or 29.18 contract is limited to all the claims of a specific insured of a 29.19 member which are reimbursed or indemnified by a reinsurer which, 29.20 directly or indirectly, through one or more intermediaries, 29.21 controls or is controlled by or is under common control with the 29.22 insured of the member so long as any subsequent contract or 29.23 reinsurance of the reinsurer relating to the claims of the 29.24 insured of a member is not inconsistent with the bases of 29.25 exception provided under clauses (a), (b) and (c); or (e) when 29.26 the reinsurance or contract is limited to all claims of a 29.27 specific self-insurer member which are reimbursed or indemnified 29.28 by a reinsurer which, directly or indirectly, through one or 29.29 more intermediaries, controls or is controlled by or is under 29.30 common control with the self-insurer member so long as any 29.31 subsequent contract or reinsurance of the reinsurer relating to 29.32 the claims of the self-insurer member are not inconsistent with 29.33 the bases for exception provided under clauses (a), (b) and (c). 29.34 Whenever it appears to the commissioner oflabor and29.35industrycommerce that any member that chooses the high or super 29.36 retention limit has participated in the transfer of liability to 30.1 any other entity or reinsured or otherwise contracted for 30.2 reimbursement or indemnification of losses below its retention 30.3 limit in a manner inconsistent with the bases for exception 30.4 provided under clauses (a), (b), (c), (d), and (e), the 30.5 commissioner may, after giving notice and an opportunity to be 30.6 heard, order the member to pay to the state of Minnesota an 30.7 amount not to exceed twice the difference between the 30.8 reinsurance premium for the high or super retention limit, as 30.9 appropriate, and the low retention limit applicable to the 30.10 member for each year in which the prohibited reinsurance or 30.11 contract was in effect. Any member subject to this penalty 30.12 provision shall continue to be bound by its selection of the 30.13 high or super retention limit for purposes of membership in the 30.14 reinsurance association. 30.15 Sec. 38. Minnesota Statutes 1998, section 79.34, 30.16 subdivision 2a, is amended to read: 30.17 Subd. 2a. [DEFICIENCY.] If theboardcommissioner of 30.18 commerce determines that a distribution of excess surplus 30.19 resulted in inadequate funds being available to pay claims that 30.20 arose during the period upon which that distribution was 30.21 calculated, theboardcommissioner shall determine the amount of 30.22 the deficiency. The deficiency shall be made up by imposing an 30.23 assessment rate against self-insured members and policyholders 30.24 of insurer members.The board shall notify the commissioner of30.25commerce of the amount of the deficiency and recommend an30.26assessment rate.The commissioner shall order an assessment at 30.27 a rate and for the time period necessary to eliminate the 30.28 deficiency. The assessment rate shall be applied to the 30.29 exposure base of self-insured employers and insured employers. 30.30 The assessment may not be retroactive and applies only 30.31 prospectively. The assessment may be spread over a period of 30.32 time that will cause the least financial hardship to employers. 30.33 All assessments under this subdivision are payable to the 30.34 association. The commissioner may issue orders necessary to 30.35 administer this section. 30.36 Sec. 39. Minnesota Statutes 1998, section 79.34, 31.1 subdivision 6, is amended to read: 31.2 Subd. 6. [IDENTIFYING LOSSES IN REPORT.] The commissioner 31.3 oflabor and industrycommerce shall require each member to 31.4 identify the portion of all losses which exceed its retention 31.5 limit selected under this section in any report filed with the 31.6 workers' compensation insurers rating association of Minnesota 31.7 or filed with the department of labor and industry for use in 31.8 reviewing the workers' compensation schedule of rates. 31.9 Sec. 40. Minnesota Statutes 1998, section 79.35, is 31.10 amended to read: 31.11 79.35 [DUTIES; RESPONSIBILITIES; POWERS.] 31.12 The reinsurance association shall do the following on 31.13 behalf of its members: 31.14 (a) Assume 100 percent of the liability as provided in 31.15 section 79.34; 31.16 (b) Establish procedures by which members shall promptly 31.17 report to the reinsurance association each claim which, on the 31.18 basis of the injury sustained, may reasonably be anticipated to 31.19 involve liability to the reinsurance association if the member 31.20 is held liable under chapter 176. Solely for the purpose of 31.21 reporting claims, the member shall in all instances consider 31.22 itself legally liable for the injury. The member shall advise 31.23 the reinsurance association of subsequent developments likely to 31.24 materially affect the interest of the reinsurance association in 31.25 the claim; 31.26 (c) Maintain relevant loss and expense data relative to all 31.27 liabilities of the reinsurance association and require each 31.28 member to furnish statistics in connection with liabilities of 31.29 the reinsurance association at the times and in the form and 31.30 detail as may be required by the plan of operation; 31.31 (d) Calculate and charge to members a total premium 31.32 sufficient to cover the expected liability which the reinsurance 31.33 association will incur, together with incurred or estimated to 31.34 be incurred operating and administrative expenses for the period 31.35 to which this premium applies and actual claim payments to be 31.36 made by members, during the period to which this premium 32.1 applies, for claims in excess of the prefunded limit in effect 32.2 at the time the loss was incurred. Each member shall be charged 32.3 a premium established by the board as sufficient to cover the 32.4 reinsurance association's incurred liabilities and expenses 32.5 between the member's selected retention limit and the prefunded 32.6 limit. The prefunded limit shall be 20 times the lower 32.7 retention limit established in section 79.34, subdivision 2. 32.8 Each member shall be charged a proportion of the total premium 32.9 calculated for its selected retention limit in an amount equal 32.10 to its proportion of the exposure base of all members during the 32.11 period to which the reinsurance association premium will apply. 32.12 The exposure base shall be determined by theboard and is32.13subject to the approval of thecommissioner oflabor and32.14industrycommerce. In determining the exposure base, theboard32.15 commissioner shall consider, among other things, equity, 32.16 administrative convenience, records maintained by members, 32.17 amenability to audit, and degree of risk refinement. Each 32.18 member shall also be charged a premium determined by theboard32.19 commissioner to equitably distribute excess or deficient 32.20 premiums from previous periods including any excess or deficient 32.21 premiums resulting from a retroactive change in the prefunded 32.22 limit. The premiums charged to members shall not be unfairly 32.23 discriminatory as defined in section 79.074. All premiums shall32.24be approved by the commissioner of labor and industry; 32.25 (e) Require and accept the payment of premiums from members 32.26 of the reinsurance association; 32.27 (f) Receive and distribute all sums required by the 32.28 operation of the reinsurance association; 32.29 (g) Establish procedures for reviewing claims procedures 32.30 and practices of members of the reinsurance association. If the 32.31 claims procedures or practices of a member are considered 32.32 inadequate to properly service the liabilities of the 32.33 reinsurance association, the reinsurance association may 32.34 undertake, or may contract with another person, including 32.35 another member, to adjust or assist in the adjustment of claims 32.36 which create a potential liability to the association. The 33.1 reinsurance association may charge the cost of the adjustment 33.2 under this paragraph to the member, except that any penalties or 33.3 interest incurred under sections 176.183, 176.221, 176.225, and 33.4 176.82 as a result of actions by the reinsurance association 33.5 after it has undertaken adjustment of the claim shall not be 33.6 charged to the member but shall be included in the ultimate loss 33.7 and listed as a separate item; and 33.8 (h) Provide each member of the reinsurance association with 33.9 an annual report of the operations of the reinsurance 33.10 association in a form theboard of directorscommissioner of 33.11 commerce may specify. 33.12 Sec. 41. Minnesota Statutes 1998, section 79.36, is 33.13 amended to read: 33.14 79.36 [ADDITIONAL POWERS.] 33.15 In addition to the powers granted in section 79.35, the 33.16 reinsurance association may do the following: 33.17 (a) Sue and be sued. A judgment against the reinsurance 33.18 association shall not create any direct liability against the 33.19 individual members of the reinsurance association. The 33.20 reinsurance association shall provide in the plan of operation 33.21 for the indemnification, to the extent provided in the plan of 33.22 operation, of the members, members of the board of directors of 33.23 the reinsurance association, and officers, employees and other 33.24 persons lawfully acting on behalf of the reinsurance 33.25 association; 33.26 (b) Reinsure all or any portion of its potential liability, 33.27 including potential liability in excess of the prefunded limit, 33.28 with reinsurers licensed to transact insurance in this state or 33.29 otherwise approved by the commissioner oflabor and industry33.30 commerce; 33.31 (c) Provide for appropriate housing, equipment, and 33.32 personnel as may be necessary to assure the efficient operation 33.33 of the reinsurance association; 33.34 (d) Contract for goods and services, including but not 33.35 limited to independent claims management, actuarial, investment, 33.36 and legal services from others within or without this state to 34.1 assure the efficient operation of the reinsurance association; 34.2 (e) Adopt operating rules, consistent with the plan of 34.3 operation, for the administration of the reinsurance 34.4 association, enforce those operating rules, and delegate 34.5 authority as necessary to assure the proper administration and 34.6 operation of the reinsurance association; 34.7 (f) Intervene in or prosecute at any time, including but 34.8 not limited to intervention or prosecution as subrogee to the 34.9 member's rights in a third party action, any proceeding under 34.10 this chapter or chapter 176 in which liability of the 34.11 reinsurance association may, in the opinion of theboard of34.12directors of the reinsurance association or its designee34.13 commissioner of commerce, be established, or the reinsurance 34.14 association affected in any other way; 34.15 (g) The net proceeds derived from intervention or 34.16 prosecution of any subrogation interest, or other recovery, 34.17 shall first be used to reimburse the reinsurance association for 34.18 amounts paid or payable pursuant to this chapter, together with 34.19 any expenses of recovery, including attorney's fees, and any 34.20 excess shall be paid to the member or other person entitled 34.21 thereto, as determined by theboard of directors of the34.22reinsurance associationcommissioner of commerce, unless 34.23 otherwise ordered by a court. 34.24 (h) Hear and determine complaints of a company or other 34.25 interested party concerning the operation of the reinsurance 34.26 association; and 34.27 (i) Perform other acts not specifically enumerated in this 34.28 section which are necessary or proper to accomplish the purposes 34.29 of the reinsurance association and which are not inconsistent 34.30 with sections 79.34 to 79.40 or the plan of operation. 34.31 Sec. 42. Minnesota Statutes 1998, section 79.361, 34.32 subdivision 1, is amended to read: 34.33 Subdivision 1. [SCOPE.] This section governs the 34.34 distribution of excess surplus of the workers' compensation 34.35 reinsurance association declared after January 1, 1993. A 34.36 distribution of excess surplus is declared on the date theboard35.1votescommissioner of commerce determines to make a distribution. 35.2 No distribution of excess surplus other than that provided by 35.3 this section may be made. 35.4 Sec. 43. Minnesota Statutes 1998, section 79.37, is 35.5 amended to read: 35.6 79.37 [ADVISORY BOARDOF DIRECTORS.] 35.7A board of directors of the reinsurance association is35.8created and is responsible for the operation of the reinsurance35.9association consistent with the plan of operation and sections35.1079.34 to 79.40.The commissioner of commerce shall appoint an 35.11 advisory boardconsistsconsisting of 13 directors. 35.12 Fourdirectors shallmembers must represent insurers,; two 35.13directors shallmembers must represent employers,; twoshall35.14 members must represent self-insurers; twodirectors shall35.15 members must represent employees; the commissioner of finance 35.16 and the executive director of the state board of investment or 35.17 their designees shall serve asdirectorsmembers; and 35.18 onedirector shallmember must represent the public. Insurer 35.19 members of the reinsurance associationshall electmay nominate 35.20 thedirectorsmembers who represent insurers; self-insurer 35.21 members of the reinsurance associationshall electmay nominate 35.22 thedirectorsmembers who represent self-insurers; and the 35.23 commissioner oflabor and industrycommerce shall appoint the 35.24 remaining directors for the terms authorized in the plan of 35.25 operation.Each director is entitled to one vote. Terms of the35.26directors shall be staggered so that the terms of all the35.27directors do not expire at the same time and so that a director35.28does not serve a term of more than four years. The board shall35.29select a chair and other officers it deems appropriate.35.30A majority of the directors currently holding office35.31constitutes a quorum. Action may be taken by a majority vote of35.32the directors present.35.33The board shall take reasonable and prudent action35.34regarding the management of the reinsurance association35.35including but not limited to determining the entity who shall35.36manage the daily affairs of the reinsurance association. The36.1board shall report to the governor of its actions regarding the36.2entity selected to manage the reinsurance association and the36.3reasons for the selection.36.4 Sec. 44. Minnesota Statutes 1998, section 79.371, 36.5 subdivision 2, is amended to read: 36.6 Subd. 2. [PERSONAL LIABILITY; EXCLUDED.] The members of 36.7 the advisory board andofficers oremployees of the association 36.8 are not liable personally, either jointly or severally, for the 36.9 obligation created by this section. 36.10 Sec. 45. Minnesota Statutes 1998, section 79.38, 36.11 subdivision 1, is amended to read: 36.12 Subdivision 1. [PROVISIONS.] The commissioner of commerce 36.13 shall by rule adopt a plan of operationshallto provide for all 36.14 of the following: 36.15 (a) The establishment of necessary facilities; 36.16 (b) The management and operation of the reinsurance 36.17 association; 36.18 (c) A preliminary premium, payable by each member in 36.19 proportion to its total premium in the year preceding the 36.20 inauguration of the reinsurance association, for initial 36.21 expenses necessary to commence operation of the reinsurance 36.22 association; 36.23 (d) Procedures to be utilized in charging premiums, 36.24 including adjustments from excess or deficient premiums from 36.25 prior periods; 36.26 (e) Procedures governing the actual payment of premiums to 36.27 the reinsurance association; 36.28 (f) Reimbursement of each member of the advisory board by 36.29 the reinsurance association for actual and necessary expenses 36.30 incurred on reinsurance association business; and 36.31 (g)The composition, terms, compensation and other36.32necessary rules consistent with section 79.37 for boards of36.33directors of the reinsurance association;36.34(h) The investment policy of the reinsurance association;36.35and36.36(i)Any other matters required by or necessary to 37.1 effectively implement sections 79.34 to 79.40. 37.2 Sec. 46. Minnesota Statutes 1998, section 79A.04, 37.3 subdivision 1, is amended to read: 37.4 Subdivision 1. [ANNUAL SECURING OF LIABILITY.] Each year 37.5 every private self-insuring employer shall secure incurred 37.6 liabilities for the payment of compensation and the performance 37.7 oftheits obligations and the obligations of all self-insuring 37.8 employers imposed under chapter 176 by renewing the prior year's 37.9 security deposit or by making a new deposit of security. If a 37.10 new deposit is made, it must be posted within 60 days of the 37.11 filing of the self-insured employer's annual report with the 37.12 commissioner, but in no event later than July 1. 37.13 Sec. 47. Minnesota Statutes 1998, section 79A.04, 37.14 subdivision 2, is amended to read: 37.15 Subd. 2. [MINIMUM DEPOSIT.] The minimum deposit is 110 37.16 percent of the private self-insurer's estimated future liability. 37.17Up to ten percent of thatThe deposit may be used to secure 37.18 payment of all administrative and legal costs, and unpaid 37.19 assessments required by section 79A.12, subdivision 2, relating 37.20 to or arising fromthe employer'sits or other employers' 37.21 self-insuring. As used in this section, "private self-insurer" 37.22 includes both current and former members of the self-insurers' 37.23 security fund; and "private self-insurers' estimated future 37.24 liability" means the private self-insurers' total of estimated 37.25 future liability as determined by an Associate or Fellow of the 37.26 Casualty Actuarial Society every year for group member private 37.27 self-insurers and, for a nongroup member private self-insurer's 37.28 authority to self-insure, every year for the first five years. 37.29 After the first five years, the nongroup member's total shall be 37.30 as determined by an Associate or Fellow of the Casualty 37.31 Actuarial Society at least every two years, and each such 37.32 actuarial study shall include a projection of future losses 37.33 during the period until the next scheduled actuarial study, less 37.34 payments anticipated to be made during that time. 37.35 All data and information furnished by a private 37.36 self-insurer to an Associate or Fellow of the Casualty Actuarial 38.1 Society for purposes of determining private self-insurers' 38.2 estimated future liability must be certified by an officer of 38.3 the private self-insurer to be true and correct with respect to 38.4 payroll and paid losses, and must be certified, upon information 38.5 and belief, to be true and correct with respect to reserves. 38.6 The certification must be made by sworn affidavit. In addition 38.7 to any other remedies provided by law, the certification of 38.8 false data or information pursuant to this subdivision may 38.9 result in a fine imposed by the commissioner of commerce on the 38.10 private self-insurer up to the amount of $5,000, and termination 38.11 of the private self-insurers' authority to self-insure. The 38.12 determination of private self-insurers' estimated future 38.13 liability by an Associate or Fellow of the Casualty Actuarial 38.14 Society shall be conducted in accordance with standards and 38.15 principles for establishing loss and loss adjustment expense 38.16 reserves by the Actuarial Standards Board, an affiliate of the 38.17 American Academy of Actuaries. The commissioner may reject an 38.18 actuarial report that does not meet the standards and principles 38.19 of the Actuarial Standards Board, and may further disqualify the 38.20 actuary who prepared the report from submitting any future 38.21 actuarial reports pursuant to this chapter. Within 30 days 38.22 after the actuary has been served by the commissioner with a 38.23 notice of disqualification, an actuary who is aggrieved by the 38.24 disqualification may request a hearing to be conducted in 38.25 accordance with chapter 14. Based on a review of the actuarial 38.26 report, the commissioner of commerce may require an increase in 38.27 the minimum security deposit in an amount the commissioner 38.28 considers sufficient. 38.29 Estimated future liability is determined by first taking 38.30 the total amount of the self-insured's future liability of 38.31 workers' compensation claims and then deducting the total amount 38.32 which is estimated to be returned to the self-insurer from any 38.33 specific excess insurance coverage, aggregate excess insurance 38.34 coverage, and any supplementary benefits or second injury 38.35 benefits which are estimated to be reimbursed by the special 38.36 compensation fund. Supplementary benefits or second injury 39.1 benefits will not be reimbursed by the special compensation fund 39.2 unless the special compensation fund assessment pursuant to 39.3 section 176.129 is paid and the reports required thereunder are 39.4 filed with the special compensation fund. In the case of surety 39.5 bonds, bonds shall secure administrative and legal costs in 39.6 addition to the liability for payment of compensation reflected 39.7 on the face of the bond. In no event shall the security be less 39.8 than the last retention limit selected by the self-insurer with 39.9 the workers' compensation reinsurance association, provided that 39.10 the commissioner may allow former members to post less than the 39.11 workers' compensation reinsurance association retention level if 39.12 that amount is adequate to secure payment of the self-insurers' 39.13 estimated future liability, as defined in this subdivision, 39.14 including payment of claims, administrative and legal costs, and 39.15 unpaid assessments required by section 79A.12, subdivision 2. 39.16 The posting or depositing of security pursuant to this section 39.17 shall release all previously posted or deposited security from 39.18 any obligations under the posting or depositing and any surety 39.19 bond so released shall be returned to the surety. Any other 39.20 security shall be returned to the depositor or the person 39.21 posting the bond. 39.22 As a condition for the granting or renewing of a 39.23 certificate to self-insure, the commissioner may require a 39.24 private self-insurer to furnish any additional security the 39.25 commissioner considers sufficient to insure payment of all 39.26 claims under chapter 176. 39.27 Sec. 48. Minnesota Statutes 1998, section 79A.04, 39.28 subdivision 7, is amended to read: 39.29 Subd. 7. [PERFECTION OF SECURITY.] Upon the commissioner 39.30 sending a request to renew, request to post, or request to 39.31 increase a security deposit, a perfected security interest is 39.32 created in the private self-insured's assets in favor of the 39.33 commissioner to the extent of any then unsecured portion of the 39.34 self-insured's incurred liabilities. That perfected security 39.35 interest is transferred to any cash or securities thereafter 39.36 posted by the private self-insured with the state treasurer and 40.1 is released only upon either of the following: 40.2 (1) the acceptance by the commissioner of a surety bond or 40.3 irrevocable letter of credit for the full amount of the incurred 40.4 liabilities for the payment of compensation; or 40.5 (2) the return of cash or securities by the commissioner. 40.6 The private self-insured employer loses all right, title, 40.7 and interest in and any right to control all assets or 40.8 obligations posted or left on deposit as security. In the event 40.9of a declaration of bankruptcy or insolvency by a court of40.10competent jurisdictionthat a private self-insurer is the 40.11 subject of a voluntary or involuntary petition under the United 40.12 States Bankruptcy Code, title 11, or a court of competent 40.13 jurisdiction has declared the private self-insurer to be 40.14 bankrupt or insolvent, or in the event of the issuance of a 40.15 certificate of default by the commissioner, the commissioner 40.16 shall liquidate the deposit as provided in this chapter, and 40.17 transfer it to the self-insurer's security fund for application 40.18 to the self-insured employer's incurred liability and other 40.19 current or future obligations of the self-insurers' security 40.20 fund. In the event that a private self-insurer is the subject 40.21 of a voluntary or involuntary petition under the United States 40.22 Bankruptcy Code, title 11, or a court of competent jurisdiction 40.23 has declared the private self-insurer to be bankrupt or 40.24 insolvent, or in the event of the issuance of a certificate of 40.25 default by the commissioner, all right, title, and interest in 40.26 and any right to control all assets or obligations which have 40.27 been posted or deposited as security must be transferred to the 40.28 self-insurers' security fund. 40.29 Sec. 49. Minnesota Statutes 1998, section 79A.04, 40.30 subdivision 9, is amended to read: 40.31 Subd. 9. [INSOLVENCY, BANKRUPTCY, OR DEFAULT; UTILIZATION 40.32 OF SECURITY DEPOSIT.] The commissioner of labor and industry 40.33 shall notify the commissioner and the security fund if the 40.34 commissioner of labor and industry has knowledge that any 40.35 private self-insurer has failed to pay workers' compensation 40.36 benefits as required by chapter 176. If the commissioner 41.1 determines that a private self-insurer is the subject of a 41.2 voluntary or involuntary petition under the United States 41.3 Bankruptcy Code, title 11, or the commissioner determines that a 41.4 court of competent jurisdiction has declared the private 41.5 self-insurer to be bankrupt or insolvent, and the private 41.6 self-insurer has failed to pay workers' compensation as required 41.7 by chapter 176 or, if the commissioner issues a certificate of 41.8 default against a private self-insurer for failure to pay 41.9 workers' compensation as required by chapter 176, or failure to 41.10 pay an assessment to the self-insurers' security fund when due, 41.11 then the security deposit shall be utilized to administer and 41.12 pay the private self-insurers' workers' compensation or 41.13 assessment obligations or any other current or future 41.14 obligations of the self-insurers' security fund. 41.15 Sec. 50. Minnesota Statutes 1998, section 79A.11, 41.16 subdivision 2, is amended to read: 41.17 Subd. 2. [SECURITY DEPOSITS.] The security fund shall have 41.18 the right and obligation to obtainfromand retain the security 41.19 deposit of an insolvent private self-insurerthe amount ofto 41.20 apply to the private self-insurer's current or future 41.21 compensation obligations, including reasonable administrative 41.22 and legal costs, paid or assumed by the security fund and to 41.23 other current or future obligations of the security fund. 41.24 Reimbursement of administrative costs, including legal costs, 41.25 shall be subject to approval by a majority of the security 41.26 fund's voting trustees. The security fund shall be a party in 41.27 interest in any action to obtain the security deposit for the 41.28 payment of compensation obligations of an insolvent self-insurer. 41.29 Sec. 51. Minnesota Statutes 1998, section 79A.11, is 41.30 amended by adding a subdivision to read: 41.31 Subd. 2a. [REPLACEMENT INSURANCE POLICY.] The insolvent 41.32 self-insurer may obtain an insurance policy as described in 41.33 section 79A.06, subdivision 5, to discharge further workers' 41.34 compensation obligations assumed by the self-insurers' security 41.35 fund on behalf of the insolvent insurer. At the self-insurers' 41.36 security fund's option and in its sole discretion, any part of 42.1 the insolvent self-insurers' security deposit may be used to 42.2 fund the acquisition of this policy. After the security deposit 42.3 has been used to: (1) fund the acquisition of this policy; (2) 42.4 pay all direct and indirect administrative and professional 42.5 expenses of the fund related to the insolvent self-insurer; and 42.6 (3) to the extent not covered by the insurance policy, pay the 42.7 insolvent self-insurers' losses, allocated loss expense and 42.8 unallocated loss expense, any part of the insolvent 42.9 self-insurers' security deposit that remains must be promptly 42.10 returned to the insolvent self-insurer. 42.11 Sec. 52. Minnesota Statutes 1999 Supplement, section 42.12 79A.22, subdivision 2, is amended to read: 42.13 Subd. 2. [FINANCIAL STANDARDS.] Commercial self-insurance 42.14 groups shall have and maintain: 42.15 (1) combined net worth of all of the members in an amount 42.16 at least equal to1210 times the group's selected retention 42.17 level of the workers' compensation reinsurance association. For 42.18 purposes of this clause, the amount of any retained surplus by 42.19 the group is considered part of the combined net worth of all 42.20 the members; 42.21 (2) sufficient assets and liquidity in the group's common 42.22 claims fund to promptly and completely meet all obligations of 42.23 its members under this chapter and chapter 176. 42.24 Sec. 53. Minnesota Statutes 1998, section 79A.22, 42.25 subdivision 3, is amended to read: 42.26 Subd. 3. [NEW MEMBERSHIP.] The commercial self-insurance 42.27 group shall file with the commissioner the name of any new 42.28 employer that has been accepted in the group prior to the 42.29 initiation date of membership along with the member's signed 42.30 indemnity agreement and evidence the member has deposited 42.31 sufficient premiums with the group as required by the commercial 42.32 self-insurance group's bylaws or plan of operation. The 42.33 security deposit of the groupwillshall be increased quarterly 42.34 to an amount equal to 50 percent of the newmember's premium42.35 members' premiums for that quarter. If the total increase of 42.36 new members' premiums for the first quarter is less than five 43.1 percent of the total annual premium of the group, no quarterly 43.2 increase is necessary until the cumulative quarterly increases 43.3 for that calendar year exceed five percent of the total premium 43.4 of the group. Thedepartment of commercecommissioner may, at 43.5itsthe commissioner's option, review the financial statement of 43.6 any applicant whose premium equals 25 percent or more of the 43.7 group's total premium. 43.8 Sec. 54. Minnesota Statutes 1998, section 79A.22, 43.9 subdivision 11, is amended to read: 43.10 Subd. 11. [DISBURSEMENT OF FUND SURPLUS.] (a) One hundred 43.11 percent of any surplus money for a fund year in excess of 125 43.12 percent of the amount necessary to fulfill all obligations under 43.13 the Workers' Compensation Act, chapter 176, for that fund year 43.14 may be declared refundable to a member at any time. The date 43.15 shall be no earlier than 18 months following the end of such 43.16 fund year. The first disbursement of fund surplus may not be 43.17 made prior to thecompletion of an operational audit by the43.18commissionerwritten approval of the commissioner. There can be 43.19 no more than one refund made in any 12-month period. When all 43.20 the claims of any one fund year have been fully paid, as 43.21 certified by an actuary, all surplus money from that fund year 43.22 may be declared refundable. 43.23 (b) The commercial self-insurance group shall give notice 43.24 to the commissioner of any refund. Said notice shall be 43.25 accompanied by a statement from the commercial self-insurer 43.26 group's certified public accountant certifying that the proposed 43.27 refund is in compliance with paragraph (a). 43.28 Sec. 55. Minnesota Statutes 1999 Supplement, section 43.29 79A.23, subdivision 1, is amended to read: 43.30 Subdivision 1. [REQUIRED REPORTS TO COMMISSIONER.] Each 43.31 commercial self-insurance group shall submit the following 43.32 documents to the commissioner. 43.33 (a) An annual report shall be submitted by April 1 showing 43.34 the incurred losses, paid and unpaid, specifying indemnity and 43.35 medical losses by classification, payroll by classification, and 43.36 current estimated outstanding liability for workers' 44.1 compensation on a calendar year basis, in a manner and on forms 44.2 available from the commissioner. In addition each group will 44.3 submit a quarterly interim loss report showing incurred losses 44.4 for all its membership. 44.5 (b) Each commercial self-insurance group shall submit 44.6 within 45 days of the end of each quarter: 44.7 (1) a schedule showing all the members who participate in 44.8 the group, their date of inception, and date of withdrawal, if 44.9 applicable; 44.10 (2) a separate section identifying which members were added 44.11 or withdrawn during that quarter; and 44.12 (3) an internal financial statement and copies of the 44.13 fiscal agent's statements supporting the balances in the common 44.14 claims fund. 44.15 (c) The commercial self-insurance group shall submit an 44.16 annual certified financial audit report of the commercial 44.17 self-insurance group fund by April 1 of the following year. The 44.18 report must be accompanied by an expense schedule showing the 44.19 commercial self-insurance group's operational costs for the same 44.20 year including service company charges, accounting and actuarial 44.21 fees, fund administration charges, reinsurance premiums, 44.22 commissions, and any other costs associated with the 44.23 administration of the group program. 44.24 (d) An officer of the commercial self-insurance group 44.25 shall, under oath, attest to the accuracy of each report 44.26 submitted under paragraphs (a), (b), and (c). Upon sufficient 44.27 cause, the commissioner shall require the commercial 44.28 self-insurance group to submit a certified audit of payroll and 44.29 claim records conducted by an independent auditor approved by 44.30 the commissioner, based on generally accepted accounting 44.31 principles and generally accepted auditing standards, and 44.32 supported by an actuarial review and opinion of the future 44.33 contingent liabilities. The basis for sufficient cause shall 44.34 include the following factors: 44.35 (1) where the losses reported appear significantly 44.36 different from similar types of groups; 45.1 (2) where major changes in the reports exist from year to 45.2 year, which are not solely attributable to economic factors; or 45.3 (3) where the commissioner has reason to believe that the 45.4 losses and payroll in the report do not accurately reflect the 45.5 losses and payroll of the commercial self-insurance group. 45.6 If any discrepancy is found, the commissioner shall require 45.7 changes in the commercial self-insurance group's business plan 45.8 or service company recordkeeping practices. 45.9 (e) Each commercial self-insurance group shall submit by 45.10 September 15 a copy of the group's annual federal and state 45.11 income tax returns or provide proof that it has received an 45.12 exemption from these filings. 45.13 (f) With the annual loss report each commercial 45.14 self-insurance group shall report to the commissioner any 45.15 worker's compensation claim where the full, undiscounted value 45.16 is estimated to exceed $50,000, in a manner and on forms 45.17 prescribed by the commissioner. 45.18 (g) Each commercial self-insurance group shall submit by 45.19 May 1 a list of all members and the percentage of premium each 45.20 represents to the total group's premium for the previous 45.21 calendar year. 45.22 (h) Each commercial self-insurance group shall submit by 45.23 October 15 the following documents prepared by the group's 45.24 certified public accountant: 45.25 (1) a compiled combined financial statement of group 45.26 members and a list of members included in this statement. An 45.27 "Agreed Upon Procedures" report, as determined by the 45.28 commissioner, indicating combined net worth, total assets,cash45.29flow,and net income of the group members may be filed in lieu 45.30 of the compiled combined financial statement; and 45.31 (2) a report that the statements which were combined have 45.32 met the requirements of subdivision 2. 45.33 (i) If any group member comprises over 25 percent of total 45.34 group premium, that member's financial statement must be 45.35 reviewed or audited, and, at the commissioner's option, must be 45.36 filed with thedepartment of commercecommissioner by October 15 46.1 of the following year. 46.2 (j) Each commercial self-insurance group shall submit a 46.3 copy of each member's accountant's report letter from the 46.4 reports used in compiling the combined financial 46.5 statements. This requirement does not apply to any group that 46.6 has been in existence for at least three years. 46.7 Sec. 56. Minnesota Statutes 1999 Supplement, section 46.8 79A.23, subdivision 2, is amended to read: 46.9 Subd. 2. [REQUIRED REPORTS FROM MEMBERS TO GROUP.] (a) 46.10 Each member of the commercial self-insurance group shall, by 46.11 September 15, submit to the group its most recent annual 46.12 financial statement, together with other financial information 46.13 the group may require. These financial statements submitted 46.14 must not have a fiscal year end date older than January 15 of 46.15 the group's calendar year end. Individual group members 46.16 constituting at least 25 percent of the group's annual premium 46.17 shall submit to the group reviewed or audited financial 46.18 statements. The remaining members must submit compilation level 46.19 statements. 46.20 (b) For groups that have been in existence for at least 46.21 three years, individual group members may satisfy the 46.22 requirements of paragraph (a) by submitting compiled, reviewed, 46.23 or audited statements or the most recent federal income tax 46.24 return filed by the member. 46.25 Sec. 57. Minnesota Statutes 1999 Supplement, section 46.26 79A.23, subdivision 3, is amended to read: 46.27 Subd. 3. [OPERATIONAL AUDIT.] (a) The commissioner, prior 46.28 to authorizing surplus distribution of a commercial 46.29 self-insurance group's first fund year or no later than after 46.30 the third anniversary of the group's authority to self-insure, 46.31shallmay conduct an operational audit of the commercial 46.32 self-insurance group's claim handling and reserve practices as 46.33 well as its underwriting procedures to determine if they adhere 46.34 to the group's business plan. The commissioner may select 46.35 outside consultants to assist in conducting the audit. After 46.36 completion of the audit, the commissioner shall either renew or 47.1 revoke the commercial self-insurance group's authority to 47.2 self-insure. The commissioner may also order any changes deemed 47.3 necessary in the claims handling, reserving practices, or 47.4 underwriting procedures of the group. 47.5 (b) The cost of the operational audit shall be borne by the 47.6 commercial self-insurance group. 47.7 Sec. 58. Minnesota Statutes 1999 Supplement, section 47.8 79A.24, subdivision 2, is amended to read: 47.9 Subd. 2. [MINIMUM DEPOSIT.] The minimum deposit is 125 47.10 percent of the commercial self-insurance group's estimated 47.11 future liability for the payment of compensation as determined 47.12 by an actuary. Ifallthemembers of the commercial47.13self-insurancegrouphave submitted reviewed or audited47.14financial statements to the group's accountanthas been in 47.15 existence for three years, this minimum deposit shall be 110 47.16 percent of the commercial self-insurance group's estimated 47.17 future liability for the payment of workers' compensation as 47.18 determined by an actuary.The group must file a letter with the47.19commissioner from the group's accountant which confirms that the47.20compiled combined financial statements were prepared from47.21members reviewed or audited financial statements only before the47.22lower security deposit is allowed.Each actuarial study shall 47.23 include a projection of future losses during a one-year period 47.24 until the next scheduled actuarial study, less payments 47.25 anticipated to be made during that time. Deduction should be 47.26 made for the total amount which is estimated to be returned to 47.27 the commercial self-insurance group from any specific excess 47.28 insurance coverage, aggregate excess insurance coverage, and any 47.29 supplementary benefits which are estimated to be reimbursed by 47.30 the special compensation fund. Supplementary benefits will not 47.31 be reimbursed by the special compensation fund unless the 47.32 special compensation fund assessment pursuant to section 176.129 47.33 is paid and the required reports are filed with the special 47.34 compensation fund. In the case of surety bonds, bonds shall 47.35 secure administrative and legal costs in addition to the 47.36 liability for payment of compensation reflected on the face of 48.1 the bond. In no event shall the security be less than the 48.2 group's selected retention limit of the workers' compensation 48.3 reinsurance association. The posting or depositing of security 48.4 under this section shall release all previously posted or 48.5 deposited security from any obligations under the posting or 48.6 depositing and any surety bond so released shall be returned to 48.7 the surety. Any other security shall be returned to the 48.8 depositor or the person posting the bond. 48.9 Sec. 59. Minnesota Statutes 1998, section 80A.122, is 48.10 amended by adding a subdivision to read: 48.11 Subd. 4a. [EXPIRATION.] (a) A filing made in connection 48.12 with the securities of an open-end investment company, whether 48.13 owned by an insurance company, bank, securities firm, or any 48.14 other entity, under subdivision 1 expires the next June 30 48.15 unless renewed. To renew a notice filing, an issuer shall: 48.16 (1) before expiration of a current notice filing, file with 48.17 the commissioner the documents specified by the commissioner 48.18 under subdivision 1, clause (2), together with any fees required 48.19 by section 80A.28, subdivision 1, paragraph (c); and 48.20 (2) no later than September 1 following expiration, file a 48.21 sales report for the prior fiscal year with the commissioner 48.22 specifying: 48.23 (i) the registered sales; 48.24 (ii) the actual sales; and 48.25 (iii) the balance that could be sold without an additional 48.26 filing under section 80A.28, subdivision 1, paragraph (c). 48.27 (b) No portion of the unsold balance of shares indicated on 48.28 the issuer's sales report may be lawfully sold in this state in 48.29 connection with a renewed notice filing until fees have been 48.30 paid to renew the shares. 48.31 Sec. 60. Minnesota Statutes 1998, section 80A.28, 48.32 subdivision 1, is amended to read: 48.33 Subdivision 1. (a) There shall be a filing fee of $100 for 48.34 every application for registration or notice filing. There 48.35 shall be an additional fee of one-tenth of one percent of the 48.36 maximum aggregate offering price at which the securities are to 49.1 be offered in this state, and the maximum combined fees shall 49.2 not exceed $300. 49.3 (b) When an application for registration is withdrawn 49.4 before the effective date or a preeffective stop order is 49.5 entered under section 80A.13, subdivision 1, all but the $100 49.6 filing fee shall be returned. If an application to register 49.7 securities is denied, the total of all fees received shall be 49.8 retained. 49.9 (c) Where a filing is made in connection with a federal 49.10 covered security under section 18(b)(2) of the Securities Act of 49.11 1933, there is a fee of $100 for every initial filing. If the 49.12 filing is made in connection with redeemable securities issued 49.13 by an open end management company or unit investment trust, as 49.14 defined in the Investment Company Act of 1940, there is an 49.15 additional annual fee of 1/20 of one percent of the maximum 49.16 aggregate offering price at which the securities are to be 49.17 offered in this state during the notice filing period. The fee 49.18 must be paid at the time of the initial filing and thereafter in 49.19 connection with each renewal no later than July 1 of each year 49.20 and must be sufficient to cover the shares the issuer expects to 49.21 sell in this state over the next 12 months. If during a current 49.22 notice filing the issuer determines it is likely to sell shares 49.23 in excess of the shares for which fees have been paid to the 49.24 commissioner, the issuer shall submit an amended notice filing 49.25 to the commissioner under section 80A.122, subdivision 1, clause 49.26 (3), together with a fee of 1/20 of one percent of the maximum 49.27 aggregate offering price of the additional shares. Shares for 49.28 which a fee has been paid, but which have not been sold at the 49.29 time of expiration of the notice filing, may not be sold unless 49.30 an additional fee to cover the shares has been paid to the 49.31 commissioner as provided in this section and section 80A.122, 49.32 subdivision 4a. If the filing is made in connection with 49.33 redeemable securities issued by such a company or trust, there 49.34 is no maximum fee for securities filings made according to this 49.35 paragraph. If the filing is made in connection with any other 49.36 federal covered security under Section 18(b)(2) of the 50.1 Securities Act of 1933, there is an additional fee of one-tenth 50.2 of one percent of the maximum aggregate offering price at which 50.3 the securities are to be offered in this state, and the combined 50.4 fees shall not exceed $300. Beginning with fiscal year 2001 and 50.5 continuing each fiscal year thereafter, as of the last day of 50.6 each fiscal year, the commissioner shall determine the total 50.7 amount of all fees that were collected under this paragraph in 50.8 connection with any filings made for that fiscal year for 50.9 securities of an open-end investment company on behalf of a 50.10 security that is a federal covered security pursuant to section 50.11 18(b)(2) of the Securities Act of 1933. To the extent the total 50.12 fees collected by the commissioner in connection with these 50.13 filings exceed $25,000,000, the commissioner shall refund, on a 50.14 pro rata basis, to all persons who paid any fees for that fiscal 50.15 year, the amount of fees collected by the commissioner in excess 50.16 of $25,000,000. No individual refund is required of amounts of 50.17 $100 or less for a fiscal year. 50.18 Sec. 61. Laws 1999, chapter 177, section 89, is amended to 50.19 read: 50.20 Sec. 89. [EFFECTIVE DATES.] 50.21 (a) Sections 1, 3, 5 to 8, 20, 22 to 28, 31, 34, 35, 38, 50.22 39, 44 to 51, 54 to 56, 58 to 60, 66, 67, 69 to 87, and 88, 50.23 paragraph (b), are effective the day following final enactment. 50.24 (b) Sections 13 to 15 are effective the day following final 50.25 enactment and apply to plans of merger approved on or after that 50.26 date by the board of directors of the first of the constituent 50.27 corporations to grant such approval. Merging or consolidating 50.28 insurance corporations may, however, elect to have the changes 50.29 made by sections 13 to 15 not apply to a merger or consolidation 50.30 arising out of a joint agreement entered into prior to January 50.31 1, 2000. 50.32 (c) Section 32 is effective July 1,20002001. 50.33 (d) Section 33 is effective December 1, 1999, and applies 50.34 to all license renewals on or after that date. 50.35 (e) Section 30 is effective as follows: 50.36 (1) The amendment to Minnesota Statutes, section 60K.03, 51.1 subdivision 2, paragraph (d), is effective January 1, 2000. 51.2 (2) The amendment to Minnesota Statutes, section 60K.03, 51.3 subdivision 2, paragraph (e), is effective the day following 51.4 final enactment. 51.5 Sec. 62. [SPOUSE INSURANCE COVERAGE.] 51.6 (a) If the spouse of a retired employee who received 51.7 employer-paid hospital, medical, and dental benefits under Laws 51.8 1993, chapter 224, article 8, section 18, was covered as a 51.9 dependent of the retired employee when the employee retired, the 51.10 spouse may continue coverage under the retired employee's group 51.11 until the latter of the time the spouse or the retired employee 51.12 attains the age of 65. The spouse must pay for coverage after 51.13 the retired employee attains the age of 65. Eligibility is 51.14 subject to changes in coverage and payment amounts that apply to 51.15 employees in positions from which the retired employee retired. 51.16 This section does not apply if the retired employee terminated 51.17 coverage because the employee became eligible for employer-paid 51.18 health insurance from a new employer. 51.19 (b) A spouse whose coverage had been discontinued before 51.20 the effective date of this section because the retired employee 51.21 attained the age of 65 may receive coverage for which the spouse 51.22 becomes eligible under paragraph (a) only if the spouse notifies 51.23 the former employer within 180 days of the effective date of 51.24 this act. 51.25 Sec. 63. [TRANSFER.] 51.26 Powers and responsibilities relating to the workers' 51.27 compensation reinsurance association are transferred from the 51.28 commissioner of labor and industry to the commissioner of 51.29 commerce in accordance with Minnesota Statutes, section 15.039. 51.30 Sec. 64. [REPEALER.] 51.31 Minnesota Statutes 1998, sections 62A.285, subdivision 4; 51.32 62A.651; 62H.10, subdivision 4; 65B.13; 79.362; 79.371, 51.33 subdivision 1; 79.38, subdivisions 2 and 3; and 79.39, are 51.34 repealed. 51.35 Sec. 65. [EFFECTIVE DATES.] 51.36 Sections 8, 9, 11, 12, 15, 18, 19, 27, 29, 34, 35, 46 to 52.1 58, and 64 are effective the day following enactment. 52.2 Sections 16 and 17 apply to claims arising from events that 52.3 occur on or after January 1, 2001, for health plan contracts 52.4 issued or renewed on or after that date. 52.5 Section 31 is effective January 1, 2001. 52.6 Sections 36 to 45 and 63 are effective July 1, 2000. 52.7 Section 62 is effective the day following final enactment. 52.8 In addition to application to a spouse of a retired employee 52.9 when the retired employee attains the age of 65 after the 52.10 effective date, section 62 also applies to a spouse who was 52.11 terminated from coverage before the effective date because the 52.12 retired employee attained the age of 65.