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HF 3783

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to commerce; regulating insurance fees, coverages, contracts, filings,
and forms; regulating financial planners, real estate appraisers, domestic mutual
insurance companies, and collection agencies; making technical and clarifying
changes; amending Minnesota Statutes 2006, sections 60A.71, subdivision
7; 62A.149, subdivision 1; 62A.152, subdivision 2; 62E.10, subdivision 2;
62M.02, subdivision 21; 62Q.47; 62Q.64; 62S.01, by adding subdivisions;
62S.13, subdivision 4; 62S.15; 62S.18, subdivision 2; 62S.20, subdivision
6, by adding subdivisions; 62S.26, subdivision 2; 62S.266, subdivisions 4,
10; 62S.29, by adding subdivisions; 65A.37; 66A.02, subdivision 4; 66A.07,
by adding a subdivision; 72A.51, subdivision 2; 82B.23, subdivision 1;
256B.0571, subdivision 8; Minnesota Statutes 2007 Supplement, sections
62A.30, subdivision 2; 72A.52, subdivision 1; proposing coding for new law
in Minnesota Statutes, chapters 62S; 332; repealing Minnesota Statutes 2006,
section 62A.149, subdivision 2; Laws 2006, chapter 255, section 26.

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

Section 1.

Minnesota Statutes 2006, section 60A.71, subdivision 7, is amended to read:


Subd. 7.

new text beginDuration; new text endfees.

new text begin(a) new text endEach applicant for a reinsurance intermediary license
shall pay to the commissioner a fee of $200 for an initial two-year license and a fee of
$150 for each renewal. Applications shall be submitted on forms prescribed by the
commissioner.

new text begin (b) Initial licenses issued under this chapter are valid for a period not to exceed 24
months and expire on October 31 of the renewal year assigned by the commissioner. Each
renewal reinsurance intermediary license is valid for a period of 24 months. Licensees
who submit renewal applications postmarked or delivered on or before October 15 of the
renewal year may continue to transact business whether or not the renewal license has been
received by November 1. Licensees who submit applications postmarked or delivered
after October 15 of the renewal year must not transact business after the expiration date
of the license until the renewal license has been received.
new text end

new text begin (c) All fees are nonreturnable, except that an overpayment of any fee may be
refunded upon proper application.
new text end

Sec. 2.

Minnesota Statutes 2006, section 62A.149, subdivision 1, is amended to read:


Subdivision 1.

Application.

The provisions of this section apply to all group
policies of accident and health insurance and group subscriber contracts offered by
nonprofit health service plan corporations regulated under chapter 62C, and to a plan or
policy that is individually underwritten or provided for a specific individual and family
members as a nongroup policy unless the individual elects in writing to refuse benefits
under this subdivision in exchange for an appropriate reduction in premiums or subscriber
charges under the policy or plan, when the policies or subscriber contracts are issued or
delivered in Minnesota or provide benefits to Minnesota residents enrolled thereunder.

This section does not apply to policies designed primarily to provide coverage
payable on a per diem, fixed indemnity or nonexpense incurred basis or policies that
provide accident only coverage.

Every insurance policy or subscriber contract included within the provisions of this
subdivision, upon issuance or renewal, shall provide deleted text beginfor payment of benefitsdeleted text endnew text begin coverage
that complies with the requirements of section 62Q.47, paragraphs (b) and (c),
new text end for the
treatment of alcoholism, chemical dependency or drug addiction to any Minnesota resident
entitled to coveragenew text begin.new text end deleted text beginthereunder on the same basis as coverage for other benefits when
treatment is rendered in
deleted text end

deleted text begin (1) a licensed hospital,
deleted text end

deleted text begin (2) a residential treatment program as licensed by the state of Minnesota pursuant
to diagnosis or recommendation by a doctor of medicine,
deleted text end

deleted text begin (3) a nonresidential treatment program approved or licensed by the state of
Minnesota.
deleted text end

Sec. 3.

Minnesota Statutes 2006, section 62A.152, subdivision 2, is amended to read:


Subd. 2.

Minimum benefits.

deleted text begin(a)deleted text end All group policies and all group subscriber
contracts providing benefits for mental or nervous disorder treatments in a hospital shall
also provide coverage deleted text beginon the same basis as coverage for other benefits for at least 80
percent of the cost of the usual and customary charges of the first ten hours of treatment
incurred over a 12-month benefit period, for mental or nervous disorder consultation,
diagnosis and treatment services delivered while the insured person is not a bed patient
in a hospital, and at least 75 percent of the cost of the usual and customary charges for
any additional hours of treatment during the same 12-month benefit period for serious or
persistent mental or nervous disorders, if the services are furnished by (1) a licensed or
accredited hospital, (2) a community mental health center or mental health clinic approved
or licensed by the commissioner of human services or other authorized state agency, or (3)
a mental health professional, as defined in sections 245.462, subdivision 18, clauses (1) to
(5); and 245.4871, subdivision 27, clauses (1) to (5). Prior authorization from an accident
and health insurance company, or a nonprofit health service corporation, shall be required
for an extension of coverage beyond ten hours of treatment. This prior authorization
must be based upon the severity of the disorder, the patient's risk of deterioration without
ongoing treatment and maintenance, degree of functional impairment, and a concise
treatment plan. Authorization for extended treatment may be limited to a maximum of 30
visit hours during any 12-month benefit period.
deleted text end

deleted text begin (b) For purposes of this section, covered treatment for a minor includes treatment for
the family if family therapy is recommended by a provider listed in paragraph (a). For
purposes of determining benefits under this section, "hours of treatment" means treatment
rendered on an individual or single-family basis. If treatment is rendered on a group basis,
the hours of covered group treatment must be provided at a ratio of no less than two group
treatment sessions to one individual treatment hour.
deleted text end new text begin that complies with the requirements
of section 62Q.47, paragraphs (b) and (c).
new text end

Sec. 4.

Minnesota Statutes 2007 Supplement, section 62A.30, subdivision 2, is
amended to read:


Subd. 2.

Required coverage.

Every policy, plan, certificate, or contract referred to
in subdivision 1 that provides coverage to a Minnesota resident must provide coverage for
routine screening procedures for cancernew text begin and related office visitsnew text end, including mammograms,
surveillance tests for ovarian cancer for women who are at risk for ovarian cancer as
defined in subdivision 3, pap smears, and colorectal screening tests for men and women,
when ordered or provided by a physician in accordance with the standard practice of
medicine.

Sec. 5.

Minnesota Statutes 2006, section 62E.10, subdivision 2, is amended to read:


Subd. 2.

Board of directors; organization.

The board of directors of the
association shall be made up of eleven members as follows: six directors selected by
contributing members, subject to approval by the commissioner, one of which must be a
health actuary; five public directors selected by the commissioner, at least two of whom
must be deleted text beginplandeleted text end enrolleesnew text begin who are covered under an individual plan subject to assessment
under section 62E.11 or group plan offered by an employer subject to assessment under
section 62E.11
new text end, two of whom must be representatives of employers whose accident and
health insurance premiums are part of the association's assessment base, and one of whom
must be a licensed insurance agent. At least two of the public directors must reside
outside of the seven county metropolitan area. In determining voting rights at members'
meetings, each member shall be entitled to vote in person or proxy. The vote shall be
a weighted vote based upon the member's cost of self-insurance, accident and health
insurance premium, subscriber contract charges, health maintenance contract payment, or
community integrated service network payment derived from or on behalf of Minnesota
residents in the previous calendar year, as determined by the commissioner. In approving
directors of the board, the commissioner shall consider, among other things, whether all
types of members are fairly represented. Directors selected by contributing members
may be reimbursed from the money of the association for expenses incurred by them as
directors, but shall not otherwise be compensated by the association for their services. The
costs of conducting meetings of the association and its board of directors shall be borne
by members of the association.

Sec. 6.

Minnesota Statutes 2006, section 62M.02, subdivision 21, is amended to read:


Subd. 21.

Utilization review organization.

"Utilization review organization"
means an entity including but not limited to an insurance company licensed under chapter
60A to offer, sell, or issue a policy of accident and sickness insurance as defined in section
62A.01; new text begina prepaid limited health service organization issued a certificate of authority
and operating under sections 62A.451 to 62A.4528;
new text enda health service plan licensed under
chapter 62C; a health maintenance organization licensed under chapter 62D; a community
integrated service network licensed under chapter 62N; an accountable provider network
operating under chapter 62T; a fraternal benefit society operating under chapter 64B;
a joint self-insurance employee health plan operating under chapter 62H; a multiple
employer welfare arrangement, as defined in section 3 of the Employee Retirement
Income Security Act of 1974 (ERISA), United States Code, title 29, section 1103, as
amended; a third party administrator licensed under section 60A.23, subdivision 8, which
conducts utilization review and determines certification of an admission, extension of stay,
or other health care services for a Minnesota resident; or any entity performing utilization
review that is affiliated with, under contract with, or conducting utilization review on
behalf of, a business entity in this state. Utilization review organization does not include
a clinic or health care system acting pursuant to a written delegation agreement with an
otherwise regulated utilization review organization that contracts with the clinic or health
care system. The regulated utilization review organization is accountable for the delegated
utilization review activities of the clinic or health care system.

Sec. 7.

Minnesota Statutes 2006, section 62Q.47, is amended to read:


62Q.47 new text beginALCOHOLISM, new text endMENTAL HEALTHnew text begin,new text end AND CHEMICAL
DEPENDENCY SERVICES.

(a) All health plans, as defined in section 62Q.01, that provide coverage for
new text begin alcoholism, new text endmental healthnew text begin,new text end or chemical dependency services, must comply with the
requirements of this section.

(b) Cost-sharing requirements and benefit or service limitations for outpatient
mental health and outpatient chemical dependency new text beginand alcoholism new text endservices, except for
persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600
to 9530.6660, must not place a greater financial burden on the insured or enrollee, or be
more restrictive than those requirements and limitations for outpatient medical services.

(c) Cost-sharing requirements and benefit or service limitations for inpatient hospital
mental health and inpatient hospital and residential chemical dependency new text beginand alcoholism
new text endservices, except for persons placed in chemical dependency services under Minnesota
Rules, parts 9530.6600 to 9530.6660, must not place a greater financial burden on the
insured or enrollee, or be more restrictive than those requirements and limitations for
inpatient hospital medical services.

Sec. 8.

Minnesota Statutes 2006, section 62Q.64, is amended to read:


62Q.64 DISCLOSURE OF EXECUTIVE COMPENSATION.

(a) Each health plan company doing business in this state new text beginwhose annual Minnesota
premiums exceed $10,000,000 based on the most recent assessment base of the Minnesota
Comprehensive Health Association
new text endshall annually file with deleted text beginthe Consumer Advisory Board
created in section 62J.75
deleted text endnew text begin either the commissioner of commerce or the commissioner
of health, as appropriate
new text end:

(1) a copy of the health plan company's form 990 filed with the federal Internal
Revenue Service; or

(2) if the health plan company did not file a form 990 with the federal Internal
Revenue Service, a list of the amount and recipients of the health plan company's five
highest salaries, including all types of compensation, in excess of $50,000.

(b) A filing under this section is public data under section 13.03.

Sec. 9.

Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision
to read:


new text begin Subd. 16a. new text end

new text begin Hands-on assistance. new text end

new text begin "Hands-on assistance" means minimal, moderate,
or maximal physical assistance without which the individual would not be able to perform
the activity of daily living.
new text end

Sec. 10.

Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision
to read:


new text begin Subd. 22a. new text end

new text begin Personal care. new text end

new text begin "Personal care" means the provision of hands-on services
to assist an individual with activities of daily living.
new text end

Sec. 11.

Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision
to read:


new text begin Subd. 23b. new text end

new text begin Providers of services. new text end

new text begin All providers of services, including but not
limited to "skilled nursing facility," "extended care facility," "convalescent nursing home,"
"personal care facility," "specialized care providers," "assisted living facility," and
"home care agency" are defined in relation to the services and facilities required to be
available and the licensure, certification, registration, or degree status of those providing
or supervising the services. When the definition requires that the provider be appropriately
licensed, certified, or registered, it must also state what requirements a provider must
meet in lieu of licensure, certification, or registration when the state in which the service
is to be furnished does not require a provider of these services to be licensed, certified,
or registered, or when the state licenses, certifies, or registers the provider of services
under another name.
new text end

Sec. 12.

Minnesota Statutes 2006, section 62S.01, is amended by adding a subdivision
to read:


new text begin Subd. 25b. new text end

new text begin Skilled nursing care, personal care, home care, specialized care,
assisted living care, and other services.
new text end

new text begin "Skilled nursing care," "personal care," "home
care," "specialized care," "assisted living care," and other services are defined in relation
to the level of skill required, the nature of the care, and the setting in which care must
be delivered.
new text end

Sec. 13.

Minnesota Statutes 2006, section 62S.13, subdivision 4, is amended to read:


Subd. 4.

Field issue prohibition.

A long-term care insurance policy or certificate
may not be field issued based on medical or health status. For purposes of this section,
"field issued" means a policy or certificate issued by an agent or a third-party administrator
under the underwriting authority granted to the agent or third-party administrator by an
insurernew text begin and using the insurer's underwriting guidelinesnew text end.

Sec. 14.

Minnesota Statutes 2006, section 62S.15, is amended to read:


62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.

new text begin (a) new text endNo policy may be delivered or issued for delivery in this state as long-term care
insurance if the policy limits or excludes coverage by type of illness, treatment, medical
condition, or accident, except as follows:

(1) preexisting conditions or diseases;

(2) mental or nervous disorders; except that the exclusion or limitation of benefits on
the basis of Alzheimer's disease is prohibited;

(3) alcoholism and drug addiction;

(4) illness, treatment, or medical condition arising out of war or act of war;
participation in a felony, riot, or insurrection; service in the armed forces or auxiliary
units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying
aviation;

(5) treatment provided in a government facility unless otherwise required by
law, services for which benefits are available under Medicare or other government
program except Medicaid, state or federal workers' compensation, employer's liability
or occupational disease law, motor vehicle no-fault law; services provided by a member
of the covered person's immediate family; and services for which no charge is normally
made in the absence of insurance; deleted text beginand
deleted text end

(6) expenses for services or items available or paid under another long-term care
insurance or health insurance policydeleted text begin.deleted text endnew text begin; and
new text end

new text begin (7) in the case of a qualified long-term care insurance contract, expenses for services
or items to the extent that the expenses are reimbursable under title XVIII of the Social
Security Act or would be so reimbursable but for the application of a deductible or
coinsurance amount.
new text end

new text begin (b) new text endThis subdivision does not prohibit exclusions and limitations by type of provider
or territorial limitations.new text begin However, no long-term care issuer may deny a claim because
services are provided in a state other than the state of policy issued under the following
conditions:
new text end

new text begin (1) when the state other than the state of policy issue does not have the provider
licensing, certification, or registration required in the policy, but where the provider
satisfies the policy requirements outlined for providers in lieu of licensure, certification, or
registration; or
new text end

new text begin (2) when the state other than the state of policy issue licenses, certifies, or registers
the provider under another name.
new text end

new text begin For purposes of this paragraph, "state of policy issue" means the state in which the
individual policy or certificate was originally issued.
new text end

Sec. 15.

Minnesota Statutes 2006, section 62S.18, subdivision 2, is amended to read:


Subd. 2.

Premiums.

new text begin(a) new text endThe premiums charged to an insured for long-term care
insurance replaced under subdivision 1 shall not increase due to either the increasing
age of the insured at ages beyond 65 or the duration the insured has been covered under
this policy.

new text begin (b) The purchase of additional coverage must not be considered a premium rate
increase, but for purposes of the calculation required under section 62S.291, the portion
of the premium attributable to the additional coverage must be added to and considered
part of the initial annual premium.
new text end

new text begin (c) A reduction in benefits must not be considered a premium change, but for
purpose of the calculation required under section 62S.291, the initial annual premium must
be based on the reduced benefits.
new text end

Sec. 16.

new text begin [62S.181] ELECTRONIC ENROLLMENT FOR GROUP POLICIES.
new text end

new text begin Subdivision 1. new text end

new text begin Employers or labor unions. new text end

new text begin In the case of a group defined in section
62S.01, subdivision 15, clause (1), any requirement that a signature of an insured be
obtained by an agent or insurer is satisfied if:
new text end

new text begin (1) the consent is obtained by telephonic or electronic enrollment by the group
policyholder or insurer. A verification of enrollment information must be provided to the
enrollee;
new text end

new text begin (2) the telephonic or electronic enrollment provides necessary and reasonable
safeguards to ensure the accuracy, retention, and prompt retrieval of records; and
new text end

new text begin (3) the telephonic or electronic enrollment provides necessary and reasonable
safeguards to ensure that the confidentiality of individually identifiable information and
"privileged information" as defined by section 72A.491, subdivision 19, is maintained.
new text end

new text begin Subd. 2. new text end

new text begin Availability of insurer records. new text end

new text begin The insurer shall make available, upon
request of the commissioner, records that will demonstrate the insurer's ability to confirm
enrollment and coverage amounts.
new text end

Sec. 17.

Minnesota Statutes 2006, section 62S.20, is amended by adding a subdivision
to read:


new text begin Subd. 5a. new text end

new text begin Disclosure of tax consequences. new text end

new text begin With regard to life insurance policies
that provide an accelerated benefit for long-term care, a disclosure statement is required
at the time of application for the policy or rider and at the same time the accelerated
benefit payment request is submitted that receipt of these accelerated benefits may be
taxable, and that assistance should be sought from a personal tax advisor. The disclosure
statement must be prominently displayed on the first page of the policy or rider and any
other related documents. This subdivision does not apply to qualified long-term care
insurance contracts.
new text end

Sec. 18.

Minnesota Statutes 2006, section 62S.20, is amended by adding a subdivision
to read:


new text begin Subd. 5b. new text end

new text begin Benefit triggers. new text end

new text begin Activities of daily living and cognitive impairment
must be used to measure an insured's need for long-term care and must be described
in the policy or certificate in a separate paragraph and must be labeled "Eligibility for
the Payment of Benefits." Any additional benefit triggers must also be explained in this
section. If these triggers differ for different benefits, explanation of the trigger must
accompany each benefit description. If an attending physician or other specified person
must certify a certain level of functional dependency in order to be eligible for benefits,
this too shall be specified.
new text end

Sec. 19.

Minnesota Statutes 2006, section 62S.20, subdivision 6, is amended to read:


Subd. 6.

Qualified long-term care insurance policy.

A qualified long-term care
insurance policy must include a disclosure statement in the policy that the policy is
intended to be a qualified long-term care insurance policynew text begin under section 7702B(b) of the
Internal Revenue Code of 1986, as amended
new text end.

Sec. 20.

new text begin [62S.251] RESERVE STANDARDS.
new text end

new text begin Subdivision 1. new text end

new text begin Benefits provided through acceleration of benefits under life
policies.
new text end

new text begin When long-term care benefits are provided through the acceleration of benefits
under group or individual life policies or riders to these policies, policy reserves for the
benefits must be determined in accordance with section 61A.25. Claim reserves must also
be established in the case when the policy or rider is in claim status.
new text end

new text begin Reserves for policies and riders subject to this section must be based on the multiple
decrement model utilizing all relevant decrements except for voluntary termination rates.
Single decrement approximations are acceptable if the calculation produces essentially
similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial.
The calculations may take into account the reduction in life insurance benefits due to
the payment of long-term care benefits. However, in no event must the reserves for the
long-term care benefit and the life insurance benefit be less than the reserves for the life
insurance benefit assuming no long-term care benefit.
new text end

new text begin In the development and calculation of reserves for policies and riders subject to this
subdivision, due regard must be given to the applicable policy provisions, marketing
methods, administrative procedures, and all other considerations which have an impact on
projected claim costs, including, but not limited to, the following:
new text end

new text begin (1) definition of insured events;
new text end

new text begin (2) covered long-term care facilities;
new text end

new text begin (3) existence of home convalescence care coverage;
new text end

new text begin (4) definition of facilities;
new text end

new text begin (5) existence or absence of barriers to eligibility;
new text end

new text begin (6) premium waiver provision;
new text end

new text begin (7) renewability;
new text end

new text begin (8) ability to raise premiums;
new text end

new text begin (9) marketing method;
new text end

new text begin (10) underwriting procedures;
new text end

new text begin (11) claims adjustment procedures;
new text end

new text begin (12) waiting period;
new text end

new text begin (13) maximum benefit;
new text end

new text begin (14) availability of eligible facilities;
new text end

new text begin (15) margins in claim costs;
new text end

new text begin (16) optional nature of benefit;
new text end

new text begin (17) delay in eligibility for benefit;
new text end

new text begin (18) inflation protection provisions; and
new text end

new text begin (19) guaranteed insurability option.
new text end

new text begin Any applicable valuation morbidity table shall be certified as appropriate as a
statutory valuation table by a member of the American Academy of Actuaries.
new text end

new text begin Subd. 2. new text end

new text begin Benefits provided otherwise. new text end

new text begin When long-term care benefits are provided
other than as in subdivision 1, reserves must be determined in accordance with sections
60A.76 to 60A.768.
new text end

Sec. 21.

Minnesota Statutes 2006, section 62S.26, subdivision 2, is amended to read:


Subd. 2.

Life insurance policies.

Subdivision 1 shall not apply to life insurance
policies that accelerate benefits for long-term care. A life insurance policy that funds
long-term care benefits entirely by accelerating the death benefit is considered to provide
reasonable benefits in relation to premiums paid, if the policy complies with all of the
following provisions:

(1) the interest credited internally to determine cash value accumulations, including
long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest
rate for cash value accumulations without long-term care set forth in the policy;

(2) the portion of the policy that provides life insurance benefits meets the
nonforfeiture requirements of section 61A.24;

(3) the policy meets the disclosure requirements of sections 62S.09, 62S.10, and
62S.11; deleted text beginanddeleted text end

new text begin (4) any policy illustration that meets the applicable requirements of the NAIC Life
Insurance Illustrations Model Regulation; and
new text end

deleted text begin (4)deleted text end new text begin(5) new text endan actuarial memorandum is filed with the commissioner that includes:

(i) a description of the basis on which the long-term care rates were determined;

(ii) a description of the basis for the reserves;

(iii) a summary of the type of policy, benefits, renewability, general marketing
method, and limits on ages of issuance;

(iv) a description and a table of each actuarial assumption used. For expenses,
an insurer must include percentage of premium dollars per policy and dollars per unit
of benefits, if any;

(v) a description and a table of the anticipated policy reserves and additional reserves
to be held in each future year for active lives;

(vi) the estimated average annual premium per policy and the average issue age;

(vii) a statement as to whether underwriting is performed at the time of application.
The statement shall indicate whether underwriting is used and, if used, the statement
shall include a description of the type or types of underwriting used, such as medical
underwriting or functional assessment underwriting. Concerning a group policy, the
statement shall indicate whether the enrollee or any dependent will be underwritten and
when underwriting occurs; and

(viii) a description of the effect of the long-term care policy provision on the required
premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both
for active lives and those in long-term care claim status.

Sec. 22.

Minnesota Statutes 2006, section 62S.266, subdivision 4, is amended to read:


Subd. 4.

Contingent benefit upon lapse.

(a) After rejection of the offer required
under subdivision 2, for individual and group policies without nonforfeiture benefits
issued after July 1, 2001, the insurer shall provide a contingent benefit upon lapse.

(b) If a group policyholder elects to make the nonforfeiture benefit an option to
the certificate holder, a certificate shall provide either the nonforfeiture benefit or the
contingent benefit upon lapse.

(c) The contingent benefit on lapse must be triggered every time an insurer increases
the premium rates to a level which results in a cumulative increase of the annual premium
equal to or exceeding the percentage of the insured's initial annual premium based on
the insured's issue age provided in this paragraph, and the policy or certificate lapses
within 120 days of the due date of the premium increase. Unless otherwise required,
policyholders shall be notified at least 30 days prior to the due date of the premium
reflecting the rate increase.

Triggers for a Substantial Premium Increase

Issue Age
Percent Increase Over
Initial Premium
29 and Under
200
30-34
190
35-39
170
40-44
150
45-49
130
50-54
110
55-59
90
60
70
61
66
62
62
63
58
64
54
65
50
66
48
67
46
68
44
69
42
70
40
71
38
72
36
73
34
74
32
75
30
76
28
77
26
78
24
79
22
80
20
81
19
82
18
83
17
84
16
85
15
86
14
87
13
88
12
89
11
90 and over
10

(d) new text beginA contingent benefit on lapse must also be triggered for policies with a fixed
or limited premium paying period every time an insurer increases the premium rates to a
level that results in a cumulative increase of the annual premium equal to or exceeding the
percentage of the insured's initial annual premium set forth below based on the insured's
issue age, the policy or certificate lapses within 120 days of the due date of the premium
so increased, and the ratio in paragraph (e), clause (2), is 40 percent or more. Unless
otherwise required, policyholders shall be notified at least 30 days prior to the due date of
the premium reflecting the rate increase.
new text end

new text begin Triggers for a Substantial Premium Increase
new text end
new text begin Issue Age
new text end
new text begin Percent Increase Over Initial Premium
new text end
new text begin Under 65
new text end
new text begin 50%
new text end
new text begin 65-80
new text end
new text begin 30%
new text end
new text begin Over 80
new text end
new text begin 10%
new text end

new text begin This provision shall be in addition to the contingent benefit provided by paragraph
(c) and where both are triggered, the benefit provided must be at the option of the insured.
new text end

new text begin (e) new text endOn or before the effective date of a substantial premium increase as defined in
paragraph (c), the insurer shall:

(1) offer to reduce policy benefits provided by the current coverage without the
requirement of additional underwriting so that required premium payments are not
increased;

(2) offer to convert the coverage to a paid-up status with a shortened benefit period
according to the terms of subdivision 5. This option may be elected at any time during the
120-day period referenced in paragraph (c); and

(3) notify the policyholder or certificate holder that a default or lapse at any time
during the 120-day period referenced in paragraph (c) is deemed to be the election of
the offer to convert in clause (2).

new text begin (f) On or before the effective date of a substantial premium increase as defined in
paragraph (d), the insurer shall:
new text end

new text begin (1) offer to reduce policy benefits provided by the current coverage without the
requirement of additional underwriting so that required premium payments are not
increased;
new text end

new text begin (2) offer to convert the coverage to a paid-up status where the amount payable for
each benefit is 90 percent of the amount payable in effect immediately prior to lapse times
the ratio of the number of completed months of paid premiums divided by the number of
months in the premium paying period. This option may be elected at any time during the
120-day period referenced in paragraph (d); and
new text end

new text begin (3) notify the policyholder or certificate holder that a default or lapse at any time
during the 120-day period referenced in paragraph (d) shall be deemed to be the election
of the offer to convert in clause (2) if the ratio is 40 percent or more.
new text end

Sec. 23.

Minnesota Statutes 2006, section 62S.266, subdivision 10, is amended to read:


Subd. 10.

Purchased blocks of business.

To determine whether contingent
nonforfeiture upon lapse provisions are triggered under subdivision 4, paragraph (c)new text begin or (d)new text end,
a replacing insurer that purchased or otherwise assumed a block or blocks of long-term
care insurance policies from another insurer shall calculate the percentage increase based
on the initial annual premium paid by the insured when the policy was first purchased
from the original insurer.

Sec. 24.

new text begin [62S.267] STANDARDS FOR BENEFIT TRIGGERS.
new text end

new text begin Subdivision 1. new text end

new text begin Benefit payment determinations. new text end

new text begin A long-term care insurance
policy must condition the payment of benefits on a determination of the insured's ability
to perform activities of daily living and on cognitive impairment. Eligibility for the
payment of benefits must not be more restrictive than requiring either a deficiency in the
ability to perform not more than three of the activities of daily living or the presence
of cognitive impairment.
new text end

new text begin Activities of daily living include at least the following as defined in section 62S.01
and in the policy: bathing, continence, dressing, eating, toileting, and transferring.
new text end

new text begin Insurers may use activities of daily living to trigger covered benefits in addition to
those contained in this subdivision as long as they are defined in the policy.
new text end

new text begin Subd. 2. new text end

new text begin Additional provisions for determining benefit payments. new text end

new text begin An insurer
may use additional provisions for the determination of when benefits are payable under a
policy or certificate if the provisions do not restrict, and are not in lieu of, the requirements
contained in subdivision 1.
new text end

new text begin Subd. 3. new text end

new text begin Deficiency determination. new text end

new text begin For purposes of this section, the determination
of a deficiency must not be more restrictive than requiring the hands-on assistance of
another person to perform the prescribed activities of daily living, or of the deficiency is
due to the presence of a cognitive impairment, supervision or verbal cueing by another
person is needed in order to protect the insured or others.
new text end

new text begin Subd. 4. new text end

new text begin Assessments. new text end

new text begin Assessments of activities if daily living and cognitive
impairment must be performed by licensed or certified professionals, such as physicians,
nurses, or social workers.
new text end

new text begin Subd. 5. new text end

new text begin Appeal process. new text end

new text begin Long-term care insurance policies must include a clear
description of the process for appealing and resolving benefit determinations.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective and applies to a long-term care
policy issued in this state on or after the effective date of this section. This section does
not apply to certificates issued on or after the effective date of this section, under a group
long-term care insurance policy as defined in section 62S.01, subdivision 15, that was in
force at the time this section became effective.
new text end

Sec. 25.

new text begin [62S.268] ADDITIONAL STANDARDS FOR BENEFIT TRIGGERS
FOR QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have
the meanings given them:
new text end

new text begin (a) "Qualified long-term care services" means services that meet the requirements
of section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, as follows:
necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation, and
rehabilitative services, and maintenance or personal care services which are required by
a chronically ill individual, and are provided pursuant to a plan of care prescribed by a
licensed health care practitioner.
new text end

new text begin (b) "Chronically ill individual" has the meaning prescribed for this term by section
7702B(c)(2) of the Internal Revenue Code of 1986, as amended. Under this provision, a
chronically ill individual means any individual who has been certified by a licensed health
care practitioner as being unable to perform, without substantial assistance from another
individual, at least two activities of daily living for a period of at least 90 days due to a
loss of functional capacity, or requiring substantial supervision to protect the individual
from threats to health and safety due to severe cognitive impairment.
new text end

new text begin The term "chronically ill individual" does not include an individual otherwise
meeting these requirements unless within the preceding 12-month period a licensed health
care practitioner has certified that the individual meets these requirements.
new text end

new text begin (c) "Licensed health care practitioner" means a physician, as defined in section
1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social
worker, or other individual who meets requirements prescribed by the Secretary of the
Treasury.
new text end

new text begin (d) "Maintenance or personal care services" means any care the primary purpose
of which is the provision of needed assistance with any of the disabilities as a result of
which the individual is a chronically ill individual, including the protection from threats
to health and safety due to severe cognitive impairment.
new text end

new text begin Subd. 2. new text end

new text begin Services. new text end

new text begin A qualified long-term care insurance contract shall pay only for
qualified long-term care services received by a chronically ill individual provided pursuant
to a plan of care prescribed by a licensed health care practitioner.
new text end

new text begin Subd. 3. new text end

new text begin Payment of benefits. new text end

new text begin A qualified long-term care insurance contract
shall condition the payment of benefits on a determination of the insured's inability to
perform activities of daily living for an expected period of at least 90 days due to a loss
of functional capacity or to severe cognitive impairment.
new text end

new text begin Subd. 4. new text end

new text begin Certifications. new text end

new text begin (a) Certifications regarding activities of daily living
and cognitive impairment required pursuant to subdivision 3 shall be performed by the
following licensed or certified professionals: physicians, registered professional nurses,
licensed social workers, or other individuals who meet requirements prescribed by the
Secretary of the Treasury.
new text end

new text begin (b) Certifications required pursuant to subdivision 3 may be performed by a licensed
health care professional at the direction of the carrier as is reasonably necessary with
respect to a specific claim, except that when a licensed health care practitioner has certified
that an insured is unable to perform activities of daily living for an expected period of at
least 90 days due to a loss of functional capacity and the insured is in claim status, the
certification may not be rescinded and additional certifications may not be performed until
after the expiration of the 90-day period.
new text end

new text begin Subd. 5. new text end

new text begin Dispute resolution. new text end

new text begin Qualified long-term care insurance contracts shall
include a clear description of the process for appealing and resolving disputes with respect
to benefit determinations.
new text end

Sec. 26.

Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision
to read:


new text begin Subd. 2a. new text end

new text begin Associations to educate members. new text end

new text begin With respect to the obligations set
forth in this section, the primary responsibility of an association, as defined in section
62S.01, subdivision 15, clause (2), when endorsing or selling long-term care insurance is
to educate its members concerning long-term care issues in general so that its members
can make informed decisions. Associations shall provide objective information regarding
long-term care insurance policies or certificates endorsed or sold by the associations to
ensure that members of such associations receive a balanced and complete explanation of
the features in the policies or certificates that are being endorsed or sold.
new text end

Sec. 27.

Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision
to read:


new text begin Subd. 6a. new text end

new text begin Additional association duties. new text end

new text begin An association shall also at the time of
the association's decision to endorse, engage the services of a person with expertise in
long-term care insurance not affiliated with the insurer to conduct an examination of the
policies, including its benefits, features, and rates and update the examination thereafter in
the event of material change; actively monitor the marketing efforts of the insurer and its
agents; and review and approve all marketing materials or other insurance communications
used to promote sales or sent to members regarding the policies or certificates. This
subdivision does not apply to qualified long-term care insurance contracts.
new text end

Sec. 28.

Minnesota Statutes 2006, section 62S.29, is amended by adding a subdivision
to read:


new text begin Subd. 9. new text end

new text begin Unfair trade practices. new text end

new text begin Failure to comply with the filing and certification
requirements of this section constitutes an unfair trade practice in violation of sections
72A.17 to 72A.32.
new text end

Sec. 29.

new text begin [62S.291] AVAILABILITY OF NEW SERVICES OR PROVIDERS.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement. new text end

new text begin An insurer shall notify policyholders of the
availability of a new long-term policy series that provides coverage for new long-term
care services or providers material in nature and not previously available through the
insurer to the general public. The notice must be provided within 12 months of the date
that the new policy series is made available for sale in this state.
new text end

new text begin Subd. 2. new text end

new text begin Exception. new text end

new text begin (a) Notwithstanding subdivision 1, notification is not required
for any policy issued before the effective date of this section or to any policyholder or
certificate holder who is currently eligible for benefits, within an elimination period or on
a claim, or who previously had been in claim status, or who would not be eligible to apply
for coverage due to issue age limitations under the new policy. The insurer may require
that policyholders meet all eligibility requirements, including underwriting and payment
of the required premium to add such new services or providers.
new text end

new text begin (b) An insurer is not required to notify policyholders of a new proprietary policy
series created and filed for use in a limited distribution channel. For purposes of this
subdivision, "limited distribution channel" means through a discrete entity, such as a
financial institution or brokerage, for which specialized products are available that are
not available for sale to the general public. Policyholders that purchased such a new
proprietary policy shall be notified when a new long-term care policy series that provides
coverage for new long-term care services or providers material in nature is made available
to that limited distribution channel.
new text end

new text begin Subd. 3. new text end

new text begin Compliance. new text end

new text begin An insurer shall make the new coverage available in one of
the following ways:
new text end

new text begin (1) by adding a rider to the existing policy and charging a separate premium for the
new rider based in the insured's attained age;
new text end

new text begin (2) by exchanging the existing policy or certificate for one with an issue age based
on the present age of the insured and recognizing past insured status by granting premium
credits toward the premiums for the new policy or certificate. The premium credits must
be based on premiums paid or reserves held for the prior policy or certificate;
new text end

new text begin (3) by exchanging the existing policy or certificate for a new policy or certificate in
which consideration for past insured status is recognized by setting the premium for the
new policy or certificate at the issue age of the policy or certificate being exchanged. The
cost for the new policy or certificate may recognize the difference in reserves between the
new policy or certificate and the original policy or certificate; or
new text end

new text begin (4) by an alternative program developed by the insurer that meets the intent of this
section if the program is filed with and approved by the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Policies considered exchanges. new text end

new text begin Policies issued pursuant to this section
shall be considered exchanges and not replacements. These exchanges are not subject
to sections 62S.24 and 62S.30, and the reporting requirements of section 62S.25,
subdivisions 1 to 6.
new text end

new text begin Subd. 5. new text end

new text begin Notification to certain groups. new text end

new text begin Where the policy is offered through
an employer, labor organization, professional, trade, or occupational organization, the
required notification in subdivision 1 must be made to the offering entity. However, if
the policy is issued to a group defined in section 62S.01, subdivision 15, clause (4), the
notification shall be made to each certificate holder.
new text end

new text begin Subd. 6. new text end

new text begin Effect on coverage offers and requests for coverage. new text end

new text begin Nothing in this
section prohibits an insurer from offering any policy, rider, certificate, or coverage change
to any policyholder or certificate holder. However, upon request any policyholder may
apply for currently available coverage that includes the new services or providers.
The insurer may require that policyholders meet all eligibility requirements, including
underwriting and payment of the required premium to add such new services or providers.
new text end

new text begin Subd. 7. new text end

new text begin Life policies or riders. new text end

new text begin This section does not apply to life insurance
policies or riders containing accelerated long-term care benefits.
new text end

Sec. 30.

new text begin [62S.292] RIGHT TO REDUCE COVERAGE AND LOWER
PREMIUMS.
new text end

new text begin Subdivision 1. new text end

new text begin Required policy or certificate provision. new text end

new text begin Every long-term care
insurance policy and certificate shall include a provision that allows the policyholder or
certificate holder to reduce coverage and lower the policy or certificate premium in at
least one of the following ways:
new text end

new text begin (1) reducing the maximum benefit; or
new text end

new text begin (2) reducing the daily, weekly, or monthly benefit amount.
new text end

new text begin The insurer may also offer other reduction options that are consistent with the policy
or certificate design or the carrier's administrative processes.
new text end

new text begin The provision shall include a description of the ways in which coverage may be
reduced and the process for requesting and implementing a reduction in coverage.
new text end

new text begin Subd. 2. new text end

new text begin Age determination. new text end

new text begin The age to determine the premium for the reduced
coverage shall be based on the age used to determine the premiums for the coverage
currently in force.
new text end

new text begin Subd. 3. new text end

new text begin Limitation. new text end

new text begin The insurer may limit any reduction in coverage to plans or
options available for that policy form and to those for which benefits will be available
after consideration of claims paid or payable.
new text end

new text begin Subd. 4. new text end

new text begin Written reminder. new text end

new text begin If a policy or certificate is about to lapse, the insurer
shall provide a written reminder to the policyholder or certificate holder of his or her right
to reduce coverage and premiums in the notice required by section 7A(3) of this regulation.
new text end

new text begin Subd. 5. new text end

new text begin Nonapplication. new text end

new text begin This section does not apply to life insurance policies or
riders containing accelerated long-term care benefits.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section applies to any long-term care policy issued in
this state on or after August 1, 2008.
new text end

Sec. 31.

Minnesota Statutes 2006, section 65A.37, is amended to read:


65A.37 POLICY FORMS.

All policies must be on standard policy forms deleted text beginpublished by Insurance Services
Office,
deleted text end issued for a term of one yeardeleted text begin,deleted text end and approved by the commissioner.

Sec. 32.

Minnesota Statutes 2006, section 66A.02, subdivision 4, is amended to read:


Subd. 4.

Exceptions.

The following provisions of chapter 302A do not apply
to domestic mutual insurance companies: sections 302A.011, subdivisions 2, 6, 6a, 7,
10, 20, 21, 25, 26, 27, 28, 29, 31, 32, and 37
to 59; 302A.105; 302A.137; 302A.161,
subdivision 19
; 302A.201, subdivision 2; 302A.401 to 302A.429; 302A.433, subdivisions
1, paragraphs (a), (b), (c), and (e), and 2
; 302A.437, subdivision 2;new text begin 302A.443;new text end 302A.445,
subdivisions 3 to 6
; 302A.449, subdivision 7; 302A.453 to 302A.457; 302A.461;
302A.463; 302A.471 to 302A.473; 302A.553; 302A.601 to 302A.651; 302A.671 to
302A.675; 302A.681 to 302A.691; and 302A.701 to 302A.791. Those clauses of section
302A.111 that refer to any of the sections previously referenced in this subdivision do
not apply to domestic mutual insurance companies. The following sections of chapter
302A are modified in their application to domestic mutual insurance companies in the
manner indicated:

(1) with regard to section 302A.133, the articles may be amended pursuant to section
302A.171 by the incorporators or by the board before the issuance of any policies by
the company;

(2) with regard to section 302A.135, subdivision 2, a resolution proposing an
amendment to the certificate of authority must be filed with the corporate secretary no less
than 30 days before the meeting to consider the proposed amendment;

(3) with regard to section 302A.161, subdivision 19 of that section does not apply,
except this must not be construed to limit the power of a mutual insurance company
from issuing securities other than stock;

(4) with regard to section 302A.201, the references in subdivision 1 of that section
to "subdivision 2" and "section 302A.457" do not apply;

(5) with regard to section 302A.203, the board shall consist of no less than five
directors;

(6) with regard to section 302A.215, subdivisions 2 and 3 of that section only apply
if the corporation's certificate of incorporation provides cumulative voting;

(7) with regard to section 302A.433, subdivision 1 of that section, special meetings of
the members may be called for any purpose or purposes at any time by a person or persons
authorized in the articles or bylaws to call special meetings, and with regard to subdivision
3 of that section, special meetings must be held on the date and at the time and place fixed
by a person or persons authorized by the articles or bylaws to call a meeting; and

(8) with regard to section 302A.435, if the company complies substantially and in
good faith with the notice requirements of section 302A.435, the company's failure to give
any member or members the required notice does not impair the validity of any action
taken at the members' meeting.

Sec. 33.

Minnesota Statutes 2006, section 66A.07, is amended by adding a subdivision
to read:


new text begin Subd. 5. new text end

new text begin Quorum. new text end

new text begin The number of members present in person or by proxy at a
member meeting are a quorum for the transaction of business, unless a larger proportion
or number is provided in the articles or bylaws. If a quorum is present when a duly called
or held meeting is convened, the members present may continue to transact business until
adjournment, even though the withdrawal of members originally present leaves less than
the proportion or number otherwise required for a quorum.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2008.
new text end

Sec. 34.

Minnesota Statutes 2006, section 72A.51, subdivision 2, is amended to read:


Subd. 2.

Return of policy or contract; notice.

Any individual person may cancel
an individual policy of insurance against loss or damage by reason of the sickness of the
assured or the assured's dependents, a nonprofit health service plan contract providing
benefits for hospital, surgical and medical care, a health maintenance organization
subscriber contract, or a policy of insurance authorized by section 60A.06, subdivision 1,
clause (4), by returning the policy or contract and by giving written notice of cancellation
any time before midnight of the tenth day following the date of purchase. Notice of
cancellation deleted text beginmay be given personally, by mail, or by telegram. The policy or contract
may be returned personally or by mail. If by mail, the notice or return of the policy or
contract is effective upon being postmarked, properly addressed and postage prepaid.
deleted text endnew text begin
must comply with the following:
new text end

new text begin (1) a minimum of ten days beginning on the date the policy is received by the owner;
new text end

new text begin (2) a minimum of 20 days beginning on the date the policy is received by the owner
if the policy is a replacement policy subject to section 61A.57;
new text end

new text begin (3) a requirement for the return of the policy to the company or an agent of the
company;
new text end

new text begin (4) a statement that the policy is considered void from the beginning and the parties
shall be in the same position as if no policy had been issued;
new text end

new text begin (5) subject to subdivision 3, a refund of all premiums paid, including any fees or
charges, if the policy is returned; and
new text end

new text begin (6) a statement that notice given by mail and return of the policy or contract by mail
are effective on being postmarked, properly addressed, and postage prepaid.
new text end

Sec. 35.

Minnesota Statutes 2007 Supplement, section 72A.52, subdivision 1, is
amended to read:


Subdivision 1.

Contents.

In addition to all other legal requirements a policy or
contract of insurance described in section 72A.51 shall show the name and address of the
insurer and the seller of the policy or contract and shall state, clearly and conspicuously
in boldface type of a minimum size of ten points, a right to cancel notice which shall
include the following:

(1) a minimum of ten days beginning on the date the policy is received by the owner;

(2) a minimum of deleted text begin30deleted text endnew text begin 20new text end days beginning on the date the policy is received by the
owner if the policy is a replacement policy;

(3) a requirement for the return of the policy to the company or an agent of the
company;

(4) a statement that the policy is considered void from the beginning and the parties
shall be in the same position as if no policy had been issued;

(5) a refund of all premiums paid, including any fees or charges, if the policy is
returned; and

(6) a statement that notice given by mail and return of the policy or contract by mail
are effective on being postmarked, properly addressed, and postage prepaid.

For variable annuity contracts issued pursuant to sections 61A.13 to 61A.21, this
notice shall be suitably modified so as to notify the purchaser that the purchaser is entitled
to a refund of the amount calculated in accordance with the provisions of section 72A.51,
subdivision 3
.

Sec. 36.

Minnesota Statutes 2006, section 82B.23, subdivision 1, is amended to read:


Subdivision 1.

Requirement.

The commissioner shall certify and transmit to the
appraisal subcommittee established pursuant to the Federal Institutions Reform, Recovery,
and Enforcement Act of 1989, Public Law 100-73, the names of those licensees who
have satisfied the requirements for certification new text beginand licensure new text endestablished by the appraisal
subcommittee and to collect and transmit any required fees.

Sec. 37.

Minnesota Statutes 2006, section 256B.0571, subdivision 8, is amended to
read:


Subd. 8.

Program established.

(a) The commissioner, in cooperation with the
commissioner of commerce, shall establish the Minnesota partnership for long-term care
program to provide for the financing of long-term care through a combination of private
insurance and medical assistance.

(b) An individual who meets the requirements in this paragraph is eligible to
participate in the partnership program. The individual must:

(1) be a Minnesota resident at the time coverage first became effective under the
partnership policy;new text begin and
new text end

(2) be a beneficiary of a partnership policy that (i) is issued on or after the effective
date of the state plan amendment implementing the partnership program in Minnesota, or
(ii) qualifies as a partnership policy under the provisions of subdivision 8adeleted text begin; anddeleted text endnew text begin.
new text end

deleted text begin (3) have exhausted all of the benefits under the partnership policy as described in this
section.
deleted text end Benefits received under a long-term care insurance policy before July 1, 2006, do
not count toward the exhaustion of benefits required in this subdivision.

Sec. 38.

new text begin [332.345] SEGREGATED ACCOUNTS.
new text end

new text begin A payment collected by a collector or collection agency on behalf of a customer
shall be held by the collector or collection agency in a separate trust account clearly
designated for customer funds. The account must be in a bank or other depository
institution authorized or chartered under the laws of any state or of the United States.
new text end

Sec. 39. new text beginREPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2006, section 62A.149, subdivision 2, new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Laws 2006, chapter 255, section 26, new text end new text begin is repealed.
new text end