SF 528

2nd Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:13am

A bill for an act
relating to insurance; providing recovery of interest and attorney fees for breach
of an insurance policy; amending Minnesota Statutes 2008, section 471.982,
subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 60A.

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

Section 1.

new text begin [60A.0811] BREACH OF INSURANCE POLICY; RECOVERY OF
INTEREST AND ATTORNEY FEES.
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:
new text end

new text begin (1) "insurance policy" means a commercial or professional insurance policy or
contract other than:
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new text begin (i) a workers' compensation insurance policy or contract;
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new text begin (ii) a health insurance policy or contract issued, executed, renewed, maintained, or
delivered in this state by a health carrier as defined in section 62A.011, subdivision 2;
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new text begin (iii) a life insurance or disability insurance policy or contract; or
new text end

new text begin (iv) a policy or contract issued by a township mutual fire insurance company or
farmers mutual fire insurance company operating under chapter 65A or 67A;
new text end

new text begin (2) "insured" means any named insured, additional insured, or insured under an
insurance policy; and
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new text begin (3) "insurer" means an insurer:
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new text begin (i) incorporated or organized in this state; or
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new text begin (ii) admitted, authorized, or licensed to do business or doing business in this state but
not incorporated or organized in this state. Insurer does not include the joint underwriting
association operating under chapter 62F or 62I; or a township mutual fire insurance
company or farmers mutual fire insurance company operating under chapter 65A or 67A.
new text end

new text begin Subd. 2. new text end

new text begin Interest; fees. new text end

new text begin (a) An insured who prevails in any claim against an insurer
based on the insurer's breach or repudiation of, or failure to fulfill, a duty to provide
services or make payments is entitled to recover: (1) seven percent per annum interest on
monetary amounts due under the insurance policy, calculated from the date the request
for payment of those benefits was made to the insurer; and (2) reasonable attorney fees
as provided under this section in addition to other attorney fees allowable under law or
an insurance policy.
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new text begin (b) Punitive damages or damages for nonmonetary losses are not recoverable
under this section.
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new text begin Subd. 3. new text end

new text begin Effect of arbitration under section 65B.525. new text end

new text begin If an insurer agrees to
liability for personal injury protection, uninsured, or underinsured benefits under a policy
of private passenger vehicle insurance under chapter 65B and only the amount of benefits
is disputed, the insured is not entitled to recover attorney fees under this section if the
insurer agrees to submit the dispute to binding arbitration or if binding arbitration is
required under section 65B.525.
new text end

new text begin Subd. 4. new text end

new text begin Application. new text end

new text begin This section applies to a court action or arbitration
proceeding, including an action seeking declaratory judgment.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2009, and applies to a
cause of action arising on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2008, section 471.982, subdivision 3, is amended to read:

Subd. 3.

Exemptions.

Self-insurance pools established and open for enrollment
on a statewide basis by the Minnesota League of Cities Insurance Trust, the Minnesota
School Boards Association Insurance Trust, the Minnesota Association of Townships
Insurance and Bond Trust, or the Minnesota Association of Counties Insurance Trust
and the political subdivisions that belong to them are exempt from the requirements of
this section and deleted text begin section deleted text end new text begin sections new text end 65B.48, subdivision 3 new text begin , and 60A.0811 new text end . In addition, the
Minnesota Association of Townships Insurance and Bond Trust and the townships that
belong to it are exempt from the requirement to hold the certificate of surety authorization
issued by the commissioner of commerce as provided in section 574.15.