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Minnesota Legislature

Office of the Revisor of Statutes

HF 3783

1st Engrossment - 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, motor vehicle retail installment sales,
service contracts, real estate appraisers, subdivided lands, domestic mutual
insurance companies, and collection agencies; merging certain joint underwriting
associations; making technical and clarifying changes; amending Minnesota
Statutes 2006, sections 53C.01, subdivision 2; 59B.01; 59B.02, subdivision
11, by adding a subdivision; 59B.05, subdivision 5; 60A.71, subdivision 7;
61A.57; 62A.149, subdivision 1; 62A.152, subdivision 2; 62A.44, by adding a
subdivision; 62E.10, subdivision 2; 62F.02, by adding a subdivision; 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, subdivision 2, by
adding a subdivision; 66A.41, subdivision 1; 67A.31, subdivision 2; 72A.51,
subdivision 2; 79A.06, subdivision 5; 79A.22, subdivisions 3, 4; 79A.23,
subdivision 2; 82B.23, subdivision 1; 83.25, by adding a subdivision; Minnesota
Statutes 2007 Supplement, sections 61A.257, subdivision 1; 62A.30, subdivision
2; 62S.23, subdivision 1; 72A.52, subdivision 1; proposing coding for new law
in Minnesota Statutes, chapters 62S; 332; repealing Minnesota Statutes 2006,
sections 62A.149, subdivision 2; 65B.29; Laws 2006, chapter 255, section 26.

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

Section 1.

Minnesota Statutes 2006, section 53C.01, subdivision 2, is amended to read:


Subd. 2.

Cash sale price.

"Cash sale price" means the price at which the seller
would in good faith sell to the buyer, and the buyer would in good faith buy from the seller,
the motor vehicle which is the subject matter of the retail installment contract, if such sale
were a sale for cash, instead of a retail installment sale. The cash sale price may include
any taxes, charges for delivery, servicing, repairing, or improving the motor vehicle,
including accessories and their installation, and any other charges agreed upon between
the parties. The cash price may not include a documentary fee or document administration
fee in excess of deleted text begin$50deleted text endnew text begin $75new text end for services actually rendered to, for, or on behalf of, the retail
buyer in preparing, handling, and processing documents relating to the motor vehicle and
the closing of the retail sale. "Documentary fee" and "document administration fee" do
not include an optional electronic transfer fee as defined under subdivision 14.

Sec. 2.

Minnesota Statutes 2006, section 59B.01, is amended to read:


59B.01 SCOPE AND PURPOSE.

(a) The purpose of this chapter is to create a legal framework within which service
contracts may be sold in this state.

(b) The following are exempt from this chapter:

(1) warranties;

(2) maintenance agreements;

(3) warranties, service contracts, or maintenance agreements offered by public
utilities, as defined in section 216B.02, subdivision 4, or an entity or operating unit owned
by or under common control with a public utility;

(4) service contracts sold or offered for sale to persons other than consumers;

(5) service contracts on tangible property where the tangible property for which the
service contract is sold has a purchase price of $250 or less, exclusive of sales tax;

deleted text begin (6) motor vehicle service contracts as defined in section 65B.29, subdivision 1,
paragraph (1);
deleted text end

deleted text begin (7)deleted text endnew text begin (6)new text end service contracts for home security equipment installed by a licensed
technology systems contractor; and

deleted text begin (8)deleted text endnew text begin (7)new text end motor club membership contracts that typically provide roadside assistance
services to motorists stranded for reasons that include, but are not limited to, mechanical
breakdown or adverse road conditions.

(c) The types of agreements referred to in paragraph (b) are not subject to chapters
60A to 79A, except as otherwise specifically provided by law.

new text begin (d) Service contracts issued by motor vehicle manufacturers covering private
passenger automobiles are only subject to sections 59B.03, subdivision 5, 59B.05, and
59B.07.
new text end

Sec. 3.

Minnesota Statutes 2006, section 59B.02, is amended by adding a subdivision
to read:


new text begin Subd. 5a. new text end

new text begin Motor vehicle manufacturer. new text end

new text begin "Motor vehicle manufacturer" means
a person that:
new text end

new text begin (1) manufactures or produces motor vehicles and sells motor vehicles under its
own name or label;
new text end

new text begin (2) is a wholly owned subsidiary of the person that manufactures or produces motor
vehicles;
new text end

new text begin (3) is a corporation which owns 100 percent of the person that manufactures or
produces motor vehicles;
new text end

new text begin (4) does not manufacture or produce motor vehicles, but sells motor vehicles under
the trade name or label of another person that manufactures or produces motor vehicles;
new text end

new text begin (5) manufactures or produces motor vehicles and sells the motor vehicles under the
trade name or label of another person that manufactures or produces motor vehicles; or
new text end

new text begin (6) does not manufacture or produce motor vehicles but, pursuant to a written
contract, licenses the use of its trade name or label to another person that manufactures
or produces motor vehicles and that sells motor vehicles under the licensor's trade name
or label.
new text end

Sec. 4.

Minnesota Statutes 2006, section 59B.02, subdivision 11, is amended to read:


Subd. 11.

Service contract.

"Service contract" means a contract or agreement for a
separately stated consideration for a specific duration to perform the repair, replacement,
or maintenance of property or indemnification for repair, replacement, or maintenance, for
the operational or structural failure due to a defect in materials, workmanship, or normal
wear and tear, with or without additional provisions for incidental payment of indemnity
under limited circumstancesnew text begin, including without limitation, towing, rental, emergency
road service, and road hazard protection
new text end. Service contracts may provide for the repair,
replacement, or maintenance of property for damage resulting from power surges and
accidental damage from handling.

Sec. 5.

Minnesota Statutes 2006, section 59B.05, subdivision 5, is amended to read:


Subd. 5.

Coverages, limitations, and exclusions.

No particular causes of loss or
property are required to be covered, but service contracts must specify the merchandise
and services to be provided and, with equal prominence, any limitations, exceptions, or
exclusions including, but not limited to, any damage or breakdown not covered by the
service contract.new text begin Service contracts may cover damage resulting from rust, corrosion, or
damage caused by a noncovered part or system.
new text end

Sec. 6.

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. 7.

Minnesota Statutes 2007 Supplement, section 61A.257, subdivision 1, is
amended to read:


Subdivision 1.

Definitions.

(a) For the purposes of this section only, the following
terms have the meanings given them.

(b) "2001 CSO Mortality Table" means that mortality table, consisting of separate
rates of mortality for male and female lives, developed by the American Academy of
Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the
Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and
adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in
the Proceedings of the NAIC (2nd Quarter 2002) and supplemented by the 2001 CSO
Preferred Class Structure Mortality Table defined in paragraph (c). Unless the context
indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of
that table and the select and ultimate form of that table and includes both the smoker and
nonsmoker mortality tables and the composite mortality tables. It also includes both the
age-nearest-birthday and age-last-birthday bases of the mortality tables. Mortality tables
in the 2001 CSO Mortality Table include the following:

(1) "2001 CSO Mortality Table (F)" means that mortality table consisting of the rates
of mortality for female lives from the 2001 CSO Mortality Table;

(2) "2001 CSO Mortality Table (M)" means that mortality table consisting of the
rates of mortality for male lives from the 2001 CSO Mortality Table;

(3) "composite mortality tables" means mortality tables with rates of mortality that
do not distinguish between smokers and nonsmokers; and

(4) "smoker and nonsmoker mortality tables" means mortality tables with separate
rates of mortality for smokers and nonsmokers.

(c) "2001 CSO Preferred Class Structure Mortality Table" means mortality tables
with separate rates of mortality for new text beginthe new text endsuper preferred deleted text beginNonsmokersdeleted text endnew text begin nonsmokernew text end, preferred
deleted text begin Nonsmokersdeleted text endnew text begin nonsmokernew text end, residual standard deleted text beginNonsmokersdeleted text endnew text begin nonsmokernew text end, preferred deleted text beginSmokersdeleted text endnew text begin
smoker
new text end, and residual standard smoker splits of the 2001 CSO Nonsmoker and Smoker
new text begin Mortality new text endTables as adopted by the NAIC at the September 2006 national meeting and
published in the NAIC Proceedings (3rd Quarter 2006). Unless the context indicates
otherwise, the "2001 CSO Preferred Class Structure Mortality Table" includes both the
ultimate form of that table and the select and ultimate form of that table, the smoker and
nonsmoker mortality tables, both the male and female mortality tables and the gender
composite mortality tables, and both the age-nearest-birthday and age-last-birthday bases
of the mortality table.

(d) "Statistical agent" means an entity with proven systems for protecting the
confidentiality of individual insured and insurer information; demonstrated resources
for and history of ongoing electronic communications and data transfer ensuring data
integrity with insurers, which are its members or subscribers; and a history of and means
for aggregation of data and accurate promulgation of the experience modifications in a
timely manner.

Sec. 8.

Minnesota Statutes 2006, section 61A.57, is amended to read:


61A.57 DUTIES OF INSURERS THAT USE AGENTS OR BROKERS.

Each insurer that uses an agent or broker in a life insurance or annuity sale shall:

(a) Require with or as part of each completed application for life insurance or
annuity, a statement signed by the agent or broker as to whether the agent or broker knows
replacement is or may be involved in the transaction.

(b) Where a replacement is involved:

(1) require from the agent or broker with the application for life insurance or
annuity, a copy of the fully completed and signed replacement notice provided the
applicant under section 61A.55. The existing life insurance or annuity must be identified
by name of insurer, insured, and contract number. If a number has not been assigned by
the existing insurer, alternative identification, such as an application or receipt number,
must be listed; and

(2) send to each existing insurer a written communication advising of the
replacement or proposed replacement and the identification information obtained under
this section. This written communication must be made within five working days of the
date that the application is received in the replacing insurer's home or regional office, or
the date the proposed policy or contract is issued, whichever is sooner.

(c) The replacing insurer shall maintain evidence of the "notice regarding
replacement" and a replacement register, cross-indexed, by replacing agent and existing
insurer to be replaced. Evidence that all requirements were met shall be maintained for at
least six years.

(d) The replacing insurer shall provide in its policy or contract, or in a separate
written notice that is delivered with the policy or contract, that the applicant has a right
to an unconditional refund of all premiums paid, which right may be exercised within a
period of deleted text begin20deleted text endnew text begin 30new text end days beginning from the date of delivery of the policy.

Sec. 9.

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. 10.

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. 11.

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 the office or facility visitnew 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. 12.

Minnesota Statutes 2006, section 62A.44, is amended by adding a subdivision
to read:


new text begin Subd. 2a. new text end

new text begin Electronic enrollment. new text end

new text begin (a) For any Medicare supplement plan as defined
in section 62A.3099, 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 insured. A verification of the enrollment information must be provided to
the applicant;
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 individual information and privileged
information as defined in section 72A.491, subdivision 19, is maintained.
new text end

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

Sec. 13.

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 plan enrollees, two of whom deleted text beginmust be representatives of employers whose
accident and health insurance premiums are part of the association's assessment base,
deleted text endnew text begin 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 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. 14.

Minnesota Statutes 2006, section 62F.02, is amended by adding a subdivision
to read:


new text begin Subd. 3. new text end

new text begin Merger. new text end

new text begin Effective January 1, 2008, the association is merged into the joint
underwriting association under chapter 62I.
new text end

Sec. 15.

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. 16.

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. 17.

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. 18.

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. 19.

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. 20.

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. 21.

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. 22.

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. 23.

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. 24.

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. 25.

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. 26.

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. 27.

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. 28.

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. 29.

Minnesota Statutes 2007 Supplement, section 62S.23, subdivision 1, is
amended to read:


Subdivision 1.

Inflation protection feature.

(a) No insurer may offer a long-term
care insurance policy unless the insurer also offers to the policyholder, in addition to any
other inflation protection, the option to purchase a policy that provides for benefit levels to
increase with benefit maximums or reasonable durations which are meaningful to account
for reasonably anticipated increases in the costs of long-term care services covered by
the policy. In addition to other options that may be offered, insurers must offer to each
policyholder, at the time of purchase, the option to purchase a policy with an inflation
protection feature no less favorable than one of the following:

(1) increases benefit levels annually in a manner so that the increases are
compounded annually at a rate not less than five percent;

(2) guarantees the insured individual the right to periodically increase benefit levels
without providing evidence of insurability or health status so long as the option for the
previous period has not been declined. The amount of the additional benefit shall be no
less than the difference between the existing policy benefit and that benefit compounded
annually at a rate of at least five percent for the period beginning with the purchase of the
existing benefit and extending until the year in which the offer is made; or

(3) covers a specified percentage of actual or reasonable charges and does not
include a maximum specified indemnity amount or limit.

(b) A long-term care partnership policy must provide the inflation protection
described in this subdivision. If the policy is sold to an individual who:

(1) has not attained age 61 as of the date of purchase, the policy must provide
compound annual inflation protection;

(2) has attained age 61, but has not attained age 76 as of such date, the policy must
provide some level of inflation protection; and

(3) has attained the age of 76 as of such date, the policy may, but is not required to,
provide some level of inflation protection.

new text begin Inflation protection for a long-term care partnership policy may not be less than
three percent per year or a rate based on changes in the Consumer Price Index. The
commissioner, however, may approve other types of inflation protection that comply with
this section and further the goals of the partnership program.
new text end

Sec. 30.

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. 31.

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. 32.

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. 33.

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. 34.

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 two 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. 35.

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. 36.

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. 37.

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. 38.

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. 39.

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. 40.

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. 41.

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. 42.

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.

new text begin EFFECTIVE DATE. new text end

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

Sec. 43.

Minnesota Statutes 2006, section 66A.07, subdivision 2, is amended to read:


Subd. 2.

Life insurance companies.

(a) Unless otherwise approved by the
commissioner of commerce, a domestic mutual life insurance company member is any
person who is listed on the records of the company as the owner of an in-force policy,
and each member is entitled to one vote regardless of the number of policies owned by
the member or the amounts of coverage provided to the member. For purposes of this
section, "policy" means a policy or contract of insurance, including an annuity contract
issued by the company, but excluding individual noncontributory insurance policies for
which the premiums are paid by a financial institution, association, employer, or other
institutional entity. Except as otherwise provided in the company's certificate or bylaws, a
person covered under a group policy is not a member by virtue of such coverage, except
that a person insured under a group life insurance policy is a member if: (1) the person
is insured under a group life policy under which cash value has accumulated and deleted text beginbeendeleted text end
new text begin some cash value is new text endallocated to the insured deleted text beginpersonsdeleted text endnew text begin personnew text end; and (2) the group policyholder
makes no contribution to the premiums or deposits for the policy.

(b) Every member of a mutual life insurance company must be notified of its annual
meetings by a written notice mailed to the member's address, or by an imprint on the front
or back of the policy, premium notice, receipt, or certificate of renewal, substantially
as follows:

"The policyowner is hereby notified that by virtue of his or her ownership of this
policy, the policyowner is a member of the .......... Insurance Company, and that the annual
meetings of said company are held at its home office on the .... day of .... in each year,
at .... o'clock."

For mutual life insurance holding companies, the notice of the annual meeting may
be modified to reflect that the policyowner, by virtue of his or her ownership of a policy
issued by a subsidiary insurance company reorganized under section 66A.40, is a member
of the mutual insurance holding company. Notice given in this manner is deemed to
comply with the requirements of section 302A.435.

Sec. 44.

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. 45.

Minnesota Statutes 2006, section 66A.41, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) For the purposes of this section, the terms in this
subdivision have the meanings given them.

(b) "Converting mutual insurer" means a Minnesota domestic mutual insurance
company seeking to reorganize according to this section.

(c) "Converting mutual holding company" means a Minnesota domestic mutual
insurance holding company seeking to reorganize according to this section.

(d) "Converting mutual company" means a converting mutual insurer or a converting
mutual holding company seeking to convert according to this section.

(e) "Reorganized company" means a converting mutual insurer or a converting
mutual holding company, as the case may be, that has reorganized according to this section.

(f) "Eligible member" means:

(1) for converting mutual insurers, a policyholder whose policy is in force as of the
record date. Unless otherwise provided in the plan, a person covered under a group policy
is not an eligible member, except that a person insured under a group life insurance policy
is an eligible member if, on the record date:

(i) the person is insured under a group life policy under which cash value has
accumulated and deleted text beginbeendeleted text endnew text begin some cash value isnew text end allocated to the insured deleted text beginpersonsdeleted text endnew text begin personnew text end; and

(ii) the group policyholder makes no contribution to the premiums for the group
policy; and

(2) for converting mutual holding companies, a person who is a member of the
converting mutual holding company, as defined by the converting mutual holding
company's articles of incorporation and bylaws, determined as of the record date.

(g) "Plan of conversion" or "plan" means a plan adopted by a converting mutual
company's board of directors under this section.

(h) "Policy" means a policy or contract of insurance, including an annuity contract,
issued by a converting mutual insurer or issued by a reorganized insurance company
subsidiary of a mutual holding company, but excluding individual noncontributory
insurance policies for which the premiums are paid by a financial institution, association,
employer, or other institutional entity.

(i) "Active participating policy" means an individual policy of a converting mutual
company or its subsidiary that: (1) is a participating policy; (2) is among a class of similar
policies that have been credited with policy dividends at any time within the 12 months
preceding the effective date of the conversion or that will, under the then current dividend
scale, be credited with policy dividends if in force on a future policy anniversary; (3) gives
rise to membership interests in the converting mutual company; and (4) is in force on the
effective date or some other reasonable date identified in the plan.

(j) "Commissioner" means the commissioner of commerce.

(k) "Effective date of a conversion" means the date determined according to
subdivision 6.

(l) "Record date" means the date that the converting mutual company's board
of directors adopts a plan of conversion, unless another date is specified in the plan of
conversion and approved by the commissioner.

(m) "Membership interests" means all rights as members of the converting
mutual company, including, but not limited to, the rights to vote and to participate in
any distributions of distributable net worth, whether or not incident to the company's
liquidation.

(n) "Distributable net worth" means the value of the converting mutual company
as of the record date of the conversion, or other date approved by the commissioner,
determined as set forth in the plan and approved by the commissioner. The commissioner
may approve a valuation method based on any of the following: (1) the surplus as regards
policyholders of a converting mutual insurer determined according to statutory accounting
principles, which may be adjusted to reflect the current market values of assets and
liabilities, together with any other adjustments that are appropriate in the circumstances;
(2) the net equity of a converting mutual holding company or a converting mutual insurer
determined according to generally accepted accounting principles, which may be adjusted
to reflect the current market values of assets and liabilities, together with any other
adjustments that are appropriate in the circumstances; (3) the fair market value of the
converting mutual company determined by an independent, qualified person; or (4) any
other reasonable valuation method.

(o) "Permitted issuer" means: (1) a corporation organized and owned by the
converting mutual company or by any other insurance company or insurance holding
company for the purpose of purchasing and holding securities representing a majority of
voting control of the reorganized company; (2) a stock insurance company owned by the
converting mutual company or by any other insurance company or insurance holding
company into which the converting mutual company will be merged; or (3) any other
corporation approved by the commissioner.

Sec. 46.

Minnesota Statutes 2006, section 67A.31, subdivision 2, is amended to read:


Subd. 2.

Insurable property in cities.

They may also insure churches and
dwellings, together with the usual outbuildings and the usual contents of deleted text beginbothdeleted text end those
dwellings and churches and outbuildings, in any city except a city of the first deleted text beginor seconddeleted text end
classnew text begin, or a city of the second class only with approval granted by the commissionernew text end.

Sec. 47.

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 may be given personallydeleted text begin,deleted text endnew text begin ornew text end by maildeleted text begin, or by telegramdeleted text end. 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.

Sec. 48.

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 deleted text beginstatedeleted text endnew text begin include a noticenew text end, clearly and
conspicuously in boldface type of a minimum size of ten points, deleted text begina right to cancel noticedeleted text end
which shall include the followingnew text begin elementsnew text end:

(1) a minimum of ten days new text beginto cancel the policy new text endbeginning on the date the policy
is received by the owner;

(2) new text beginif the policy is a replacement policy, new text enda minimum of 30 days beginning on the
date the policy is received by the owner deleted text beginif the policy is a replacement policydeleted text endnew text begin. Pursuant to
section 61A.57, this requirement may also be provided in a separate written notice that
is delivered with the policy or contract
new text end;

(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 deleted text beginand the parties
shall be in the same position as if no policy had been issued
deleted text end;

(5) deleted text beginadeleted text endnew text begin for policies or contracts other than a variable annuity or a variable life policy, a
statement that the insurer will
new text end refund deleted text beginofdeleted text end all premiums paid, including any fees or charges,
if the policy is returned; and

(6) a statement deleted text beginthat notice given by mail and return of the policy or contract by mail
are effective on being postmarked, properly addressed, and postage prepaid
deleted text endnew text begin describing
when the cancellation becomes effective
new text end.

new text begin The insurer must return all payments made for this policy within ten days after it
receives notice of cancellation and the returned policy.
new text endFor 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.new text begin For variable life
insurance policies, this notice must be suitably modified so as to notify the purchaser that
the purchaser is entitled to a refund of: (i) the premiums paid; or (ii) the variable account
value plus any amount deducted from the portion of the premium applied to the account.
new text end

Sec. 49.

Minnesota Statutes 2006, section 79A.06, subdivision 5, is amended to read:


Subd. 5.

Private employers who have ceased to be self-insured.

(a) Private
employers who have ceased to be private self-insurers shall discharge their continuing
obligations to secure the payment of compensation which is accrued during the period of
self-insurance, for purposes of Laws 1988, chapter 674, sections 1 to 21, by compliance
with all of the following obligations of current certificate holders:

(1) Filing reports with the commissioner to carry out the requirements of this chapter;

(2) Depositing and maintaining a security deposit for accrued liability for the
payment of any compensation which may become due, pursuant to chapter 176. However,
if a private employer who has ceased to be a private self-insurer purchases an insurance
policy from an insurer authorized to transact workers' compensation insurance in this state
which provides coverage of all claims for compensation arising out of injuries occurring
during the entire period the employer was self-insured, whether or not reported during
that period, the policy will:

(i) discharge the obligation of the employer to maintain a security deposit for the
payment of the claims covered under the policy;

(ii) discharge any obligation which the self-insurers' security fund has or may have
for payment of all claims for compensation arising out of injuries occurring during the
period the employer was self-insured, whether or not reported during that period; and

(iii) discharge the obligations of the employer to pay any future assessments to
the self-insurers' security fund.

A private employer who has ceased to be a private self-insurer may instead buy an
insurance policy described above, except that it covers only a portion of the period of time
during which the private employer was self-insured; purchase of such a policy discharges
any obligation that the self-insurers' security fund has or may have for payment of all
claims for compensation arising out of injuries occurring during the period for which the
policy provides coverage, whether or not reported during that period.

A policy described in this clause may not be issued by an insurer unless it has
previously been approved as to form and substance by the commissioner; and

(3) Paying within 30 days all assessments of which notice is sent by the security
fund, for a period of seven years from the last day its certificate of self-insurance was in
effect. Thereafter, the private employer who has ceased to be a private self-insurer may
either: (i) continue to pay within 30 days all assessments of which notice is sent by the
security fund until it has no incurred liabilities for the payment of compensation arising
out of injuries during the period of self-insurance; or (ii) pay the security fund a cash
payment equal to four percent of the net present value of all remaining incurred liabilities
for the payment of compensation under sections 176.101 and 176.111 as certified by a
member of the casualty actuarial society. Assessments shall be based on the benefits paid
by the employer during the calendar year immediately preceding the calendar year in
which the employer's right to self-insure is terminated or withdrawn.

(b) With respect to a self-insurer who terminates its self-insurance authority after
April 1, 1998, that member shall obtain and file with the commissioner an actuarial
opinion of its outstanding liabilities as determined by an associate or fellow of the
Casualty Actuarial Society within 120 days of the date of its termination. If the actuarial
opinion is not timely filed, the self-insurers' security fund may, at its discretion, engage
the services of an actuary for this purpose. The expense of this actuarial opinion must
be assessed against and be the obligation of the self-insurer. The commissioner may
issue a certificate of default against the self-insurer for failure to pay this assessment
to the self-insurers' security fund as provided by section 79A.04, subdivision 9. The
opinion must separate liability for indemnity benefits from liability from medical benefits,
and must discount each up to four percent per annum to net present value. Within 30
days after notification of approval of the actuarial opinion by the commissioner, the
member shall pay to the security fund an amount equal to 120 percent of that discounted
outstanding indemnity liability, multiplied by the greater of the average annualized
assessment rate since inception of the security fund or the annual rate at the time of the
most recent assessment before termination. If the payment is not made within 30 days of
the notification, interest on it at the rate prescribed by section 549.09 must be paid by the
former member to the security fund until the principal amount is paid in full.

(c) A former member who terminated its self-insurance authority before April 1,
1998, who has paid assessments to the self-insurers' security fund for seven years, and
whose annualized assessment is deleted text begin$500deleted text endnew text begin $15,000new text end or less, may buy out of its outstanding
liabilities to the self-insurers' security fund by an amount calculated as follows: 1.35
multiplied by the indemnity case reserves at the time of the calculation, multiplied by the
then current self-insurers' security fund annualized assessment rate.

(d) A former member who terminated its self-insurance authority before April 1,
1998, and who is paying assessments within the first seven years after ceasing to be
self-insured under paragraph (a), clause (3), may elect to buy out its outstanding liabilities
to the self-insurers' security fund by obtaining and filing with the commissioner an
actuarial opinion of its outstanding liabilities as determined by an associate or fellow of
the Casualty Actuarial Society. The opinion must separate liability for indemnity benefits
from liability for medical benefits, and must discount each up to four percent per annum to
net present value. Within 30 days after notification of approval of the actuarial opinion
by the commissioner, the member shall pay to the security fund an amount equal to 120
percent of that discounted outstanding indemnity liability, multiplied by the greater of the
average annualized assessment rate since inception of the security fund or the annual rate
at the time of the most recent assessment.

(e) A former member who has paid the security fund according to paragraphs (b) to
(d) and subsequently receives authority from the commissioner to again self-insure shall be
assessed under section 79A.12, subdivision 2, only on indemnity benefits paid on injuries
that occurred after the former member received authority to self-insure again; provided
that the member furnishes verified data regarding those benefits to the security fund.

(f) In addition to proceedings to establish liabilities and penalties otherwise
provided, a failure to comply may be the subject of a proceeding before the commissioner.
An appeal from the commissioner's determination may be taken pursuant to the contested
case procedures of chapter 14 within 30 days of the commissioner's written determination.

Any current or past member of the self-insurers' security fund is subject to service of
process on any claim arising out of chapter 176 or this chapter in the manner provided by
section 5.25, or as otherwise provided by law. The issuance of a certificate to self-insure
to the private self-insured employer shall be deemed to be the agreement that any process
which is served in accordance with this section shall be of the same legal force and effect
as if served personally within this state.

Sec. 50.

Minnesota Statutes 2006, section 79A.22, subdivision 3, is amended to read:


Subd. 3.

New membership.

The commercial self-insurance group shall file with
the commissioner the name of any new employer that has been accepted in the group
deleted text begin prior to the initiation date of membershipdeleted text endnew text begin within five business days of the initiation date
of membership
new text end along with the member's signed indemnity agreement and evidence the
member has deposited sufficient premiums with the group as required by the commercial
self-insurance group's bylaws or plan of operation. The security deposit of the group shall
be increased quarterly to an amount equal to 50 percent of the new members' premiums
for that quarter. If the total increase of new members' premiums for the first quarter is
less than five percent of the total annual premium of the group, no quarterly increase
is necessary until the cumulative quarterly increases for that calendar year exceed five
percent of the total premium of the group. The commissioner may, at the commissioner's
option, review the financial statement of any applicant whose premium equals 25 percent
or more of the group's total premium.

Sec. 51.

Minnesota Statutes 2006, section 79A.22, subdivision 4, is amended to read:


Subd. 4.

Commercial self-insurance group common claims fund.

(a) Each
commercial self-insurance group shall establish a common claims fund.

(b) Each commercial self-insurance group shall, not less than ten days prior to the
proposed effective date of the group, collect cash premiums from each member equal to
not less than 20 percent of the member's annual workers' compensation premium to be
paid into a common claims fund, maintained by the group in a designated depository. The
remaining balance of the member's premium shall be paid to the group in a reasonable
manner over the remainder of the year. Payments in subsequent years shall be made
according to the business plan.

(c) Each commercial self-insurance group shall initiate proceedings against a
member when that member becomes more than deleted text begin15deleted text endnew text begin 30new text end days delinquent in any payment
of premium to the fund.

(d) There shall be no commingling of any assets of the common claims fund with the
assets of any individual member or with any other account of the service company or fiscal
agent unrelated to the payment of workers' compensation liabilities incurred by the group.

Sec. 52.

Minnesota Statutes 2006, section 79A.23, subdivision 2, is amended to read:


Subd. 2.

Required reports from members to group.

(a) Each member of the
commercial self-insurance group shall, by September 15, submit to the group its most
recent annual financial statement, together with other financial information the group may
require. These financial statements submitted must not have a fiscal year end date older
than January 15 of the group's calendar year end. Individual group members constituting
at least 25 percent of the group's annual premium shall submit to the group reviewed or
audited financial statements. The remaining members must submit compilation level
statements.

(b) For groups that have been in existence for at least three years, individual group
members may satisfy the requirements of paragraph (a) by submitting compiled, reviewed,
or audited statements or the most recent federal income tax return filed by the member.

new text begin (c) Groups that have been in existence for at least five years may satisfy the
requirement of paragraph (a) through submissions from members representing at least
50 percent of the group's total earned premium. Of those submissions, those from
members representing at least 25 percent of the entire group's total earned premium must
be audited or reviewed financial statements. The remainder of the submissions may be
compiled, reviewed, or audited financial statements or the most recent tax return filed by
the members.
new text end

Sec. 53.

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. 54.

Minnesota Statutes 2006, section 83.25, is amended by adding a subdivision
to read:


new text begin Subd. 4. new text end

new text begin Limited broker licensee. new text end

new text begin An individual acting on behalf of a limited
broker licensee issued a license under section 82.34, subdivision 13, is not required to be
an officer of a corporation or a partner of a partnership if:
new text end

new text begin (1) the individual is solely engaged in the business of selling a timeshare interest as
defined in section 83.20, subdivision 13;
new text end

new text begin (2) the individual is adequately supervised by the limited broker licensee; and
new text end

new text begin (3) the limited broker licensee maintains a roster of individuals selling a timeshare
interest including the date the individual started selling. This roster must be made
available to the commissioner upon demand within three days of the request.
new text end

Sec. 55.

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. 56. new text beginREPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2006, sections 62A.149, subdivision 2; and 65B.29, new text end new text begin are
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