HF 5173

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/25/2024 02:51pm

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

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

Section 1.

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

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (a) "Commissioner" means the commissioner of commerce or the commissioner's
representative.
new text end

new text begin (b) "Eligible applicant" means an individual who meets the requirements of subdivision
6 and who has applied for a low-cost policy under the program.
new text end

new text begin (c) "Facility" has the meaning given in section 65B.02, subdivision 3.
new text end

new text begin (d) "Insured" means a driver insured under the program.
new text end

new text begin (e) "Low-cost policy" means a low-cost motor vehicle insurance policy issued in
compliance with subdivision 5.
new text end

new text begin (f) "Member" has the meaning given in section 65B.02, subdivision 4.
new text end

new text begin (g) "Minnesota lifeline insurance program" or "program" means the program created
under this section.
new text end

new text begin (h) "Motor vehicle" has the meaning given in section 169.011, subdivision 42.
new text end

new text begin (i) "Moving violation" means a violation of law or municipal ordinance regulating the
operation of motor vehicles on the streets or highways. Moving violation does not include
a law or ordinance related to parking or equipment.
new text end

new text begin (j) "Qualified health coverage" means medical assistance, MinnesotaCare, Medicare, or
TRICARE.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin (a) The commissioner must establish the Minnesota lifeline
automobile insurance program to offer more affordable motor vehicle insurance policies to
low-income Minnesota drivers, reduce the number of uninsured motorists, and promote
public safety.
new text end

new text begin (b) The commissioner must consult with the facility in creating and operating the program.
new text end

new text begin (c) By March 1 of each year, the commissioner must issue a report to the standing
committees of the legislature with jurisdiction over insurance that evaluates the
competitiveness of the private passenger vehicle insurance market in Minnesota in order to
evaluate whether the program is having an effect on uninsured motorist rates.
new text end

new text begin (d) The report under paragraph (c) must:
new text end

new text begin (1) compare the average rates charged by auto insurers in Minnesota with the premium
rates charged by the facility;
new text end

new text begin (2) provide market information, including but not limited to the number of carriers,
market shares, and losses; and
new text end

new text begin (3) recommend to the legislature appropriate modifications to this section.
new text end

new text begin Subd. 3. new text end

new text begin Facility. new text end

new text begin (a) The facility must:
new text end

new text begin (1) assist the commissioner establish and develop the program;
new text end

new text begin (2) determine whether an applicant is eligible for the program; and
new text end

new text begin (3) sell, issue, and deliver low-cost policies under the program and accept payment for
premiums by cash, if requested by the insured.
new text end

new text begin (b) The facility must determine the rates charged for low-cost policies and file rates with
the commissioner, in compliance with section 70A.06. Prior to determining the rates, the
facility must conduct a meeting with opportunity for public comment on the proposed rates
and the rate setting process.
new text end

new text begin (c) The facility must determine the rates for the program based on:
new text end

new text begin (1) the rate, claims, and loss data for, at minimum, the two prior years, including but
not limited to overall losses for private passenger auto insurance policies required under
state law;
new text end

new text begin (2) the distribution of losses for private passenger auto insurance policies based on
criminal driving history and geographic area;
new text end

new text begin (3) actual losses on policies sold by the facility under the program, when available;
new text end

new text begin (4) overall private passenger auto insurance industry trends in Minnesota, but only to
the extent that program data are not available or not credible and adjusted to reflect the
eligibility factors described in subdivision 6;
new text end

new text begin (5) up to three geographic locations; and
new text end

new text begin (6) public comments submitted under paragraph (b).
new text end

new text begin (d) When assessing loss reserve of the program, the commissioner must only allow loss
reserves that are estimated based on actual claim losses under low-cost policies or comparable
data by a statistician, as adjusted to reflect the coverage provided by low-cost policies and
eligibility factors used to become an insured.
new text end

new text begin (e) The facility must set rates for the program in an amount adequate to pay for losses
incurred for claims filed under the program and program expenses incurred by the facility
to operate the program, including those related to administration, underwriting, subrogation,
rate setting, taxes, commission, and claims adjusting.
new text end

new text begin (f) The facility must create and maintain a website for the program that includes the
information necessary for an eligible applicant to apply for the program.
new text end

new text begin (g) The program may accept funding from sources other than members to support the
program's marketing, outreach, and public education efforts.
new text end

new text begin (h) Money for marketing, outreach, and public education must be awarded equitably
among geographic regions, taking into consideration a region's target population and
marketing goals.
new text end

new text begin (i) The facility has the authority to form a subcommittee, subject to chapter 13D, to
make recommendations regarding the program's operation.
new text end

new text begin Subd. 4. new text end

new text begin Producers. new text end

new text begin (a) A licensed producer must provide to an applicant for a low-cost
policy the following information in no smaller than 14-point type on a form prescribed by
the commissioner:
new text end

new text begin (1) notice that a low-cost policy under this section satisfies the requirements under
section 65B.48 to maintain automobile liability insurance;
new text end

new text begin (2) premium cost;
new text end

new text begin (3) how eligibility is determined; and
new text end

new text begin (4) the difference between the coverage available under a low-cost policy and the
minimum coverage requirements that apply to policies sold outside of the program and in
compliance with section 65B.48.
new text end

new text begin (b) A licensed producer is entitled to receive a commission on each low-cost policy sold
that is equal to 12 percent of the policy premiums, provided that the commission is not less
than $50. The facility or any insurance company issuing a low-cost policy under this section
is prohibited from requiring a producer to return any portion of the commission paid for the
sale of a low-cost policy if the insured, facility, or issuing carrier cancels the policy before
the end of the policy term.
new text end

new text begin (c) A licensed producer that complies with the disclosure requirements of this subdivision
in conjunction with the sale of a low-cost policy is not liable for selling a policy that does
not provide the coverage required in section 65B.49.
new text end

new text begin (d) A producer is not required to accept cash as a payment.
new text end

new text begin Subd. 5. new text end

new text begin Low-cost policies. new text end

new text begin The program must include and the facility must offer a
low-cost policy, with a length of six or 12 months, that includes:
new text end

new text begin (1) basic economic loss benefits that provide (i) reimbursement for all loss suffered
through injury arising out of the maintenance or use of a motor vehicle, subject to any
applicable deductibles, exclusions, disqualifications, and other conditions, and (ii) a minimum
of $5,000 for income loss, replacement services loss, funeral expense loss, survivor's
economic loss, and survivor's replacement services loss arising out of the injury to any one
person;
new text end

new text begin (2) the payment of claims for bodily injury or death arising from an accident of $30,000
for any one person and $60,000 for any two or more persons, in addition to interest and
costs;
new text end

new text begin (3) the payment of claims for property of others damaged or destroyed in an accident
of $10,000, in addition to interest and costs; and
new text end

new text begin (4) uninsured and underinsured motorist coverage with limits of $25,000 because of
injury to or the death of one person in any accident and $50,000 because of injury to or the
death of two or more persons in any accident.
new text end

new text begin Subd. 6. new text end

new text begin Eligible applicant. new text end

new text begin (a) An eligible applicant must:
new text end

new text begin (1) be a resident of Minnesota;
new text end

new text begin (2) demonstrate that all household members are enrolled in qualified health coverage;
and
new text end

new text begin (3) have been continuously licensed as a driver for the three years immediately preceding
application, except that a license suspension or revocation does not constitute a break in
continuous licensure for the purposes of satisfying this requirement if the revocation or
suspension was due to any of the following:
new text end

new text begin (i) a conviction for a violation under section 169.791, 169.797, or 171.24, subdivision
1 or 2;
new text end

new text begin (ii) a violation of section 171.18, subdivision 1, paragraph (a), clause (1), for being cited
for a violation of section 169.791 or 169.797;
new text end

new text begin (iii) failure to appear in court under section 171.16, subdivision 3a, for a petty
misdemeanor; or
new text end

new text begin (iv) failure to pay a fine under section 171.16, subdivision 3.
new text end

new text begin (b) A policy may be issued to an eligible applicant who has had continuous licensure
for less than three years. A surcharge of up to 30 percent of the base premium is applied to
a policy issued pursuant to this paragraph.
new text end

new text begin (c) An eligible applicant must not have a misdemeanor, gross misdemeanor, or felony
conviction for a violation arising out of the use of a motor vehicle, other than for a violation
of section 171.24, subdivision 1 or 2; 169.791; or 169.797.
new text end

new text begin (d) An eligible applicant must not, within the three years immediately preceding
application, be:
new text end

new text begin (1) at fault in a motor vehicle accident involving bodily injury or death;
new text end

new text begin (2) convicted of a misdemeanor, gross misdemeanor, or felony for a violation arising
out of the use of a motor vehicle other than for a violation of section 171.24, subdivision 1
or 2; 169.791; or 169.797;
new text end

new text begin (3) convicted of a violation of section 84.765; 84.795, subdivision 5; 86B.33; or a
Minnesota statute or a statute in another state that is equivalent to the sections identified in
this clause;
new text end

new text begin (4) convicted of more than two moving violations;
new text end

new text begin (5) at fault in more than one motor vehicle accident that involved only damage to
property; or
new text end

new text begin (6) convicted of one or more moving violations and found to be at fault for one or more
motor vehicle accidents that involved only damage to property.
new text end

new text begin (e) If an applicant is rejected by the facility, the facility must allow the applicant to cure
the deficiency and must accept the cured application if the applicant is otherwise eligible
for the program.
new text end

new text begin (f) An enrollee may be required to provide proof of qualified health insurance.
new text end

new text begin (g) A low-cost policy may be nonrenewed if the insured no longer meets the requirements
under subdivision 6.
new text end

Sec. 2.

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

new text begin Subd. 11. new text end

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

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

Sec. 3. new text begin APPROPRIATION.
new text end

new text begin (a) $....... in fiscal year 2025 is appropriated from the general fund to the commissioner
of commerce to establish the Minnesota lifeline automobile insurance program.
new text end

new text begin (b) $....... in fiscal year 2025 is appropriated from the general fund to the commissioner
of commerce to perform outreach and marketing for the Minnesota lifeline automobile
insurance program.
new text end