1st Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to insurance; regulating insurers, agents, 1.3 coverages and benefits, costs, claims, investments, 1.4 and notifications and disclosures; prescribing powers 1.5 and duties of the commissioner; eliminating the 1.6 regulation of nonprofit legal services plans; amending 1.7 Minnesota Statutes 2000, sections 60A.06,subdivision 1.8 3; 60A.08, subdivision 13; 60A.11, subdivision 10; 1.9 60A.129, subdivision 2; 60A.14, subdivision 1; 60A.16, 1.10 subdivision 1; 60A.23, subdivision 8; 60K.14, 1.11 subdivision 2; 61A.072, by adding a subdivision; 1.12 61A.09, subdivision 1; 62A.04, subdivision 2; 62A.17, 1.13 subdivision 1; 62A.20, subdivision 1; 62A.21, 1.14 subdivision 2a; 62A.302; 62A.31, subdivisions 1a, 1i, 1.15 3; 62A.65, subdivision 8; 62E.04, subdivision 4; 1.16 62E.06, subdivision 1; 62I.07, subdivision 1; 62J.60, 1.17 subdivision 3; 62L.05, subdivisions 1, 2; 62M.02, by 1.18 adding a subdivision; 62M.03, subdivision 2; 62M.05, 1.19 subdivision 5; 62Q.01, subdivision 6; 62Q.73, 1.20 subdivision 3; 65A.29, subdivision 7; 65A.30; 65B.04, 1.21 subdivision 3; 65B.06, subdivisions 1, 4; 65B.16; 1.22 65B.19, subdivision 2; 65B.44, subdivision 3; 67A.20, 1.23 by adding a subdivision; 70A.07; 79A.02, subdivision 1.24 1; 79A.03, subdivision 7; 79A.04, subdivision 16; 1.25 79A.15; 471.617, subdivision 1; proposing coding for 1.26 new law in Minnesota Statutes, chapter 62Q; repealing 1.27 Minnesota Statutes 2000, sections 13.7191, subdivision 1.28 11; 60A.111; 62G.01; 62G.02; 62G.03; 62G.04; 62G.05; 1.29 62G.06; 62G.07; 62G.08; 62G.09; 62G.10; 62G.11; 1.30 62G.12; 62G.13; 62G.14; 62G.15; 62G.16; 62G.17; 1.31 62G.18; 62G.19; 62G.20; 62G.21; 62G.22; 62G.23; 1.32 62G.24; 62G.25. 1.33 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.34 Section 1. Minnesota Statutes 2000, section 60A.06, 1.35 subdivision 3, is amended to read: 1.36 Subd. 3. [LIMITATION ON COMBINATION POLICIES.] (a) Unless 1.37 specifically authorized by subdivision 1, clause (4), it is 1.38 unlawful to combine in one policy coverage permitted by 1.39 subdivision 1, clauses (4) and (5)(a). This subdivision does 2.1 not prohibit the simultaneous sale of these products, but the 2.2 sale must involve two separate and distinct policies. 2.3 (b) This subdivision does not apply to group policies. 2.4 (c) This subdivision does not apply to policies permitted 2.5 by subdivision 1, clause (4), that contain benefits providing 2.6 acceleration of life, endowment, or annuity benefits in advance 2.7 of the time they would otherwise be payable, or to long-term 2.8 care policies as defined in section 62A.46, subdivision 2, or 2.9 chapter 62S. 2.10 [EFFECTIVE DATE.] This section is effective the day 2.11 following final enactment. 2.12 Sec. 2. Minnesota Statutes 2000, section 60A.08, 2.13 subdivision 13, is amended to read: 2.14 Subd. 13. [REDUCTION OF LIMITS BY COSTS OF DEFENSE 2.15 PROHIBITED.] (a) No insurer shall issue or renew a policy of 2.16 liability insurance in this state that reduces the limits of 2.17 liability stated in the policy by the costs of legal defense. 2.18 (b) This subdivision does not apply to: 2.19 (1) professional liability insurance with annual aggregate 2.20 limits of liabilitygreater thanof at least $100,000, including 2.21 directors' and officers' and errors and omissions liability 2.22 insurance; 2.23 (2) environmental impairment liability insurance; 2.24 (3) insurance policies issued to large commercial risks; or 2.25 (4) coverages that the commissioner determines to be 2.26 appropriate which will be published in the manner prescribed for 2.27 surplus lines insurance in section 60A.201, subdivision 4. 2.28 (c) For purposes of this subdivision, "large commercial 2.29 risks" means an insured whose gross annual revenues in the 2.30 fiscal year preceding issuance of the policy were at least 2.31 $10,000,000. 2.32 [EFFECTIVE DATE.] This section is effective the day 2.33 following final enactment. 2.34 Sec. 3. Minnesota Statutes 2000, section 60A.11, 2.35 subdivision 10, is amended to read: 2.36 Subd. 10. [DEFINITIONS.] The following terms have the 3.1 meaning assigned in this subdivision for purposes of this 3.2 sectionand section 60A.111: 3.3 (a) "Adequate evidence" means a written confirmation, 3.4 advice, or other verification issued by a depository, issuer, or 3.5 custodian bank which shows that the investment is held for the 3.6 company; 3.7 (b) "Adequate security" means a letter of credit qualifying 3.8 under subdivision 11, paragraph (f), cash, or the pledge of an 3.9 investment authorized by any subdivision of this section; 3.10 (c) "Admitted assets," for purposes of computing percentage 3.11 limitations on particular types of investments, means the assets 3.12 as shown by the company's annual statement, required by section 3.13 60A.13, as of the December 31 immediately preceding the date the 3.14 company acquires the investment; 3.15 (d) "Clearing corporation" means The Depository Trust 3.16 Company or any other clearing agency registered with the 3.17 securities and exchange commission pursuant to the Securities 3.18 Exchange Act of 1934, section 17A, Euro-clear Clearance System 3.19 Limited and CEDEL S.A., and, with the approval of the 3.20 commissioner, any other clearing corporation as defined in 3.21 section 336.8-102; 3.22 (e) "Control" has the meaning assigned to that term in, and 3.23 must be determined in accordance with, section 60D.15, 3.24 subdivision 4; 3.25 (f) "Custodian bank" means a bank or trust company or a 3.26 branch of a bank or trust company that is acting as custodian 3.27 and is supervised and examined by state or federal authority 3.28 having supervision over the bank or trust company or with 3.29 respect to a company's foreign investments only by the 3.30 regulatory authority having supervision over banks or trust 3.31 companies in the jurisdiction in which the bank, trust company, 3.32 or branch is located, and any banking institutions qualifying as 3.33 an "Eligible Foreign Custodian" under the Code of Federal 3.34 Regulations, section 270.17f-5, adopted under section 17(f) of 3.35 the Investment Company Act of 1940, and specifically including 3.36 Euro-clear Clearance System Limited and CEDEL S.A., acting as 4.1 custodians; 4.2 (g) "Evergreen clause" means a provision that automatically 4.3 renews a letter of credit for a time certain if the issuer of 4.4 the letter of credit fails to affirmatively signify its 4.5 intention to nonrenew upon expiration; 4.6 (h) "Government obligations" means direct obligations for 4.7 the payment of money, or obligations for the payment of money to 4.8 the extent guaranteed as to the payment of principal and 4.9 interest by any governmental issuer where the obligations are 4.10 payable from ad valorem taxes or guaranteed by the full faith, 4.11 credit, and taxing power of the issuer and are not secured 4.12 solely by special assessments for local improvements; 4.13 (i) "Noninvestment grade obligations" means obligations 4.14 which, at the time of acquisition, were rated below Baa/BBB or 4.15 the equivalent by a securities rating agency or which, at the 4.16 time of acquisition, were not in one of the two highest 4.17 categories established by the securities valuation office of the 4.18 National Association of Insurance Commissioners; 4.19 (j) "Issuer" means the corporation, business trust, 4.20 governmental unit, partnership, association, individual, or 4.21 other entity which issues or on behalf of which is issued any 4.22 form of obligation; 4.23 (k) "Licensed real estate appraiser" means a person who 4.24 develops and communicates real estate appraisals and who holds a 4.25 current, valid license under chapter 82B or a substantially 4.26 similar licensing requirement in another jurisdiction; 4.27 (l) "Member bank" means a national bank, state bank or 4.28 trust company which is a member of the Federal Reserve System; 4.29 (m) "National securities exchange" means an exchange 4.30 registered under section 6 of the Securities Exchange Act of 4.31 1934 or an exchange regulated under the laws of the Dominion of 4.32 Canada; 4.33 (n) "NASDAQ" means the reporting system for securities 4.34 meeting the definition of National Market System security as 4.35 provided under Part I to Schedule D of the National Association 4.36 of Securities Dealers Incorporated bylaws; 5.1 (o) "Obligations" include bonds, notes, debentures, 5.2 transportation equipment certificates, repurchase agreements, 5.3 bank certificates of deposit, time deposits, bankers' 5.4 acceptances, and other obligations for the payment of money not 5.5 in default as to payments of principal and interest on the date 5.6 of investment, whether constituting general obligations of the 5.7 issuer or payable only out of certain revenues or certain funds 5.8 pledged or otherwise dedicated for payment. Leases are 5.9 considered obligations if the lease is assigned for the benefit 5.10 of the company and is nonterminable by the lessee or lessees 5.11 thereunder upon foreclosure of any lien upon the leased 5.12 property, and rental payments are sufficient to amortize the 5.13 investment over the primary lease term; 5.14 (p) "Qualified assets" means the sum of (1) all investments 5.15 qualified in accordance with this section other than investments 5.16 in affiliates and subsidiaries, (2) investments in obligations 5.17 of affiliates as defined in section 60D.15, subdivision 2, 5.18 secured by real or personal property sufficient to qualify the 5.19 investment under subdivision 19 or 23, (3) qualified investments 5.20 in subsidiaries, as defined in section 60D.15, subdivision 9, on 5.21 a consolidated basis with the insurance company without 5.22 allowance for goodwill or other intangible value, and (4) cash 5.23 on hand and on deposit, agent's balances or uncollected premiums 5.24 not due more than 90 days, assets held pursuant to section 5.25 60A.12, subdivision 2, investment income due and accrued, funds 5.26 due or on deposit or recoverable on loss payments under 5.27 contracts of reinsurance entered into pursuant to section 5.28 60A.09, premium bills and notes receivable, federal income taxes 5.29 recoverable, and equities and deposits in pools and 5.30 associations; 5.31 (q) "Qualified net earnings" means that the net earnings of 5.32 the issuer after elimination of extraordinary nonrecurring items 5.33 of income and expense and before income taxes and fixed charges 5.34 over the five immediately preceding completed fiscal years, or 5.35 its period of existence if less than five years, has averaged 5.36 not less than 1-1/4 times its average annual fixed charges 6.1 applicable to the period; 6.2 (r) "Required liabilities" means the sum of (1) total 6.3 liabilities as required to be reported in the company's most 6.4 recent annual report to the commissioner of commerce of this 6.5 state, (2) for companies operating under the stock plan, the 6.6 minimum paid-up capital and surplus required to be maintained 6.7 pursuant to section 60A.07, subdivision 5a, (3) for companies 6.8 operating under the mutual or reciprocal plan, the minimum 6.9 amount of surplus required to be maintained pursuant to section 6.10 60A.07, subdivision 5b, and (4) the amount, if any, by which the 6.11 company's loss and loss adjustment expense reserves exceed 350 6.12 percent of its surplus as it pertains to policyholders as of the 6.13 same date. The commissioner may waive the requirement in clause 6.14 (4) unless the company's written premiums exceed 300 percent of 6.15 its surplus as it pertains to policyholders as of the same 6.16 date. In addition to the required amounts pursuant to clauses 6.17 (1) to (4), the commissioner may require that the amount of any 6.18 apparent reserve deficiency that may be revealed by one to five 6.19 year loss and loss adjustment expense development analysis for 6.20 the five years reported in the company's most recent annual 6.21 statement to the commissioner be added to required liabilities; 6.22 (s) "Revenue obligations" means obligations for the payment 6.23 of money by a governmental issuer where the obligations are 6.24 payable from revenues, earnings, or special assessments on 6.25 properties benefited by local improvements of the issuer which 6.26 are specifically pledged therefor; 6.27 (t) "Security" has the meaning given in section 5 of the 6.28 Security Act of 1933 and specifically includes, but is not 6.29 limited to, stocks, stock equivalents, warrants, rights, 6.30 options, obligations, American Depository Receipts (ADR's), 6.31 repurchase agreements, and reverse repurchase agreements; and 6.32 (u) "Unrestricted surplus" means the amount by which 6.33 qualified assets exceed 110 percent of required liabilities. 6.34 [EFFECTIVE DATE.] This section is effective the day 6.35 following final enactment. 6.36 Sec. 4. Minnesota Statutes 2000, section 60A.129, 7.1 subdivision 2, is amended to read: 7.2 Subd. 2. [LOSS RESERVE CERTIFICATION.] (a) Each domestic 7.3 company engaged in providing the types of coverage described in 7.4 section 60A.06, subdivision 1, clause (1), (2), (3), (5)(b), 7.5 (6), (8), (9), (10), (11), (12), (13), or (14), must have its 7.6 loss reserves certified by a qualified actuary. The company 7.7 must file the certification with the commissioner within 30 days 7.8 of completion of the certification, but not later than June 1. 7.9 The actuary providing the certificationmust notmay be an 7.10 employee of the company but the commissioner may still require 7.11 an independent actuarial certification as described in 7.12 subdivision 1. This subdivision does not apply to township 7.13 mutual companies, or to other domestic insurers having less than 7.14 $1,000,000 of premiums written in any year and fewer than 1,000 7.15 policyholders. The commissioner may allow an exception to the 7.16 stand alone certification where it can be demonstrated that a 7.17 company in a group has a pooling or 100 percent reinsurance 7.18 agreement used in a group which substantially affects the 7.19 solvency and integrity of the reserves of the company, or where 7.20 it is only the parent company of a group which is licensed to do 7.21 business in Minnesota. If these circumstances exist, the 7.22 company may file a written request with the commissioner for an 7.23 exception. Companies writing reinsurance alone are not exempt 7.24 from this requirement. The certification must contain the 7.25 following statement: "The loss reserves and loss expense7.26reserves have been examined and found to be calculated in7.27accordance with generally accepted actuarial principles and7.28practicesIn my opinion, the reserves described in this 7.29 certification are consistent with reserves computed in 7.30 accordance with standards and principles established by the 7.31 Actuarial Standards Board and are fairly stated." 7.32 (b) Each foreign company engaged in providing the types of 7.33 coverage described in section 60A.06, subdivision 1, clause (1), 7.34 (2), (3), (5)(b), (6), (8), (9), (10), (11), (12), (13), or 7.35 (14), required by this section to file an annual audited 7.36 financial report, whose total net earned premium for Schedule P, 8.1 Part 1A to Part 1H plus Part 1R, (Schedule P, Part 1A to Part 1H 8.2 plus Part 1R, Column 4, current year premiums earned, from the 8.3 company's most currently filed annual statement) is equal to 8.4 one-third or more of the company's total net earned premium 8.5 (Underwriting and Investment Exhibit, Part 2, Column 4, total 8.6 line, of the annual statement) must have a reserve certification 8.7 by a qualified actuary at least every three years. In the year 8.8 that the certification is due, the company must file the 8.9 certification with the commissioner within 30 days of completion 8.10 of the certification, but not later than June 1. The actuary 8.11 providing the certification must not be an employee of the 8.12 company. Companies writing reinsurance alone are not exempt 8.13 from this requirement. The certification must contain the 8.14 following statement: "The loss reserves and loss expense 8.15 reserves have been examined and found to be calculated in 8.16 accordance with generally accepted actuarial principles and 8.17 practices and are fairly stated." 8.18 (c) Each company providing life and/or health insurance 8.19 coverages described in section 60A.06, subdivision 1, clause (4) 8.20 or (5)(a), required by this section to file an audited annual 8.21 financial report, whose premiums and annuity considerations (net 8.22 of reinsurance) from accident and health equal one-third or more 8.23 of the company's total premiums and annuity considerations (net 8.24 of reinsurance), as reported in the summary of operations, must 8.25 have its aggregate reserve for accident and health policies and 8.26 liability for policy and contract claims for accident and health 8.27 certified by a qualified actuary at least once every three 8.28 years. The actuary providing the certification must not be an 8.29 employee of the company. Companies writing reinsurance alone 8.30 are not exempt from this requirement. The certification must 8.31 contain the following statement: "The policy and contract 8.32 claims reserves for accident and health have been examined and 8.33 found to be calculated in accordance with generally accepted 8.34 actuarial principles and practices and are fairly stated." 8.35 [EFFECTIVE DATE.] This section is effective the day 8.36 following final enactment. 9.1 Sec. 5. Minnesota Statutes 2000, section 60A.14, 9.2 subdivision 1, is amended to read: 9.3 Subdivision 1. [FEES OTHER THAN EXAMINATION FEES.] In 9.4 addition to the fees and charges provided for examinations, the 9.5 following fees must be paid to the commissioner for deposit in 9.6 the general fund: 9.7 (a) by township mutual fire insurance companies: 9.8 (1) for filing certificate of incorporation $25 and 9.9 amendments thereto, $10; 9.10 (2) for filing annual statements, $15; 9.11 (3) for each annual certificate of authority, $15; 9.12 (4) for filing bylaws $25 and amendments thereto, $10. 9.13 (b) by other domestic and foreign companies including 9.14 fraternals and reciprocal exchanges: 9.15 (1) for filing certified copy of certificate of articles of 9.16 incorporation, $100; 9.17 (2) for filing annual statement, $225; 9.18 (3) for filing certified copy of amendment to certificate 9.19 or articles of incorporation, $100; 9.20 (4) for filing bylaws, $75 or amendments thereto, $75; 9.21 (5) for each company's certificate of authority, $575, 9.22 annually. 9.23 (c) the following general fees apply: 9.24 (1) for each certificate, including certified copy of 9.25 certificate of authority, renewal, valuation of life policies, 9.26 corporate condition or qualification, $25; 9.27 (2) for each copy of paper on file in the commissioner's 9.28 office 50 cents per page, and $2.50 for certifying the same; 9.29 (3) for license to procure insurance in unadmitted foreign 9.30 companies, $575; 9.31 (4) for valuing the policies of life insurance companies, 9.32 one cent per $1,000 of insurance so valued, provided that the 9.33 fee shall not exceed $13,000 per year for any company. The 9.34 commissioner may, in lieu of a valuation of the policies of any 9.35 foreign life insurance company admitted, or applying for 9.36 admission, to do business in this state, accept a certificate of 10.1 valuation from the company's own actuary or from the 10.2 commissioner of insurance of the state or territory in which the 10.3 company is domiciled; 10.4 (5) for receiving and filing certificates of policies by 10.5 the company's actuary, or by the commissioner of insurance of 10.6 any other state or territory, $50; 10.7 (6) for each appointment of an agent filed with the 10.8 commissioner, a domestic insurer shall remit $5 and all other 10.9 insurers shall remit $3; 10.10 (7) for filing forms and rates, $75 per filing, to be paid 10.11 on a quarterly basis in response to an invoice. Billing and 10.12 payment may be made electronically; 10.13 (8) for annual renewal of surplus lines insurer license, 10.14 $300. 10.15 The commissioner shall adopt rules to define filings that 10.16 are subject to a fee. 10.17 [EFFECTIVE DATE.] This section is effective July 1, 2001. 10.18 Sec. 6. Minnesota Statutes 2000, section 60A.16, 10.19 subdivision 1, is amended to read: 10.20 Subdivision 1. [SCOPE.] (1) [DOMESTIC INSURANCE 10.21 CORPORATIONS.] Any two or more domestic insurance corporations, 10.22 formed for any of the purposes for which stock, mutual, or stock 10.23 and mutual insurance corporations, or reciprocal or 10.24 interinsurance contract exchanges might be formed under the laws 10.25 of this state, may be 10.26 (a) merged into one of such domestic insurance 10.27 corporations, or 10.28 (b) consolidated into a new insurance corporation to be 10.29 formed under the laws of this state. 10.30 (2) [DOMESTIC AND FOREIGN INSURANCE CORPORATIONS.] Any such 10.31 domestic insurance corporations and any foreign insurance 10.32 corporations formed to carry on any insurance business for the 10.33 conduct of which an insurance corporation might be organized 10.34 under the laws of this state, may be 10.35 (a) merged into one of such domestic insurance 10.36 corporations, or 11.1 (b) merged into one of such foreign insurance corporations, 11.2 or 11.3 (c) consolidated into a new insurance corporation to be 11.4 formed under the laws of this state, or 11.5 (d) consolidated into a new insurance corporation to be 11.6 formed under the laws of the government under which one of such 11.7 foreign insurance corporations was formed, provided that each of 11.8 such foreign insurance corporations is authorized by the laws of 11.9 the government under which it was formed to effect such merger 11.10 or consolidation. 11.11 [EFFECTIVE DATE.] This section is effective the day 11.12 following final enactment. 11.13 Sec. 7. Minnesota Statutes 2000, section 60A.23, 11.14 subdivision 8, is amended to read: 11.15 Subd. 8. [SELF-INSURANCE OR INSURANCE PLAN ADMINISTRATORS 11.16 WHO ARE VENDORS OF RISK MANAGEMENT SERVICES.] (1) [SCOPE.] This 11.17 subdivision applies to any vendor of risk management services 11.18 and to any entity which administers, for compensation, a 11.19 self-insurance or insurance plan. This subdivision does not 11.20 apply (a) to an insurance company authorized to transact 11.21 insurance in this state, as defined by section 60A.06, 11.22 subdivision 1, clauses (4) and (5); (b) to a service plan 11.23 corporation, as defined by section 62C.02, subdivision 6; (c) to 11.24 a health maintenance organization, as defined by section 62D.02, 11.25 subdivision 4; (d) to an employer directly operating a 11.26 self-insurance plan for its employees' benefits; (e) to an 11.27 entity which administers a program of health benefits 11.28 established pursuant to a collective bargaining agreement 11.29 between an employer, or group or association of employers, and a 11.30 union or unions; or (f) to an entity which administers a 11.31 self-insurance or insurance plan if a licensed Minnesota insurer 11.32 is providing insurance to the plan and if the licensed insurer 11.33 has appointed the entity administering the plan as one of its 11.34 licensed agents within this state. 11.35 (2) [DEFINITIONS.] For purposes of this subdivision the 11.36 following terms have the meanings given them. 12.1 (a) "Administering a self-insurance or insurance plan" 12.2 means (i) processing, reviewing or paying claims, (ii) 12.3 establishing or operating funds and accounts, or (iii) otherwise 12.4 providing necessary administrative services in connection with 12.5 the operation of a self-insurance or insurance plan. 12.6 (b) "Employer" means an employer, as defined by section 12.7 62E.02, subdivision 2. 12.8 (c) "Entity" means any association, corporation, 12.9 partnership, sole proprietorship, trust, or other business 12.10 entity engaged in or transacting business in this state. 12.11 (d) "Self-insurance or insurance plan" means a plan 12.12 providing life, medical or hospital care, accident, sickness or 12.13 disability insurance for the benefit of employees or members of 12.14 an association, or a plan providing liability coverage for any 12.15 other risk or hazard, which is or is not directly insured or 12.16 provided by a licensed insurer, service plan corporation, or 12.17 health maintenance organization. 12.18 (e) "Vendor of risk management services" means an entity 12.19 providing for compensation actuarial, financial management, 12.20 accounting, legal or other services for the purpose of designing 12.21 and establishing a self-insurance or insurance plan for an 12.22 employer. 12.23 (3) [LICENSE.] No vendor of risk management services or 12.24 entity administering a self-insurance or insurance plan may 12.25 transact this business in this state unless it is licensed to do 12.26 so by the commissioner. An applicant for a license shall state 12.27 in writing the type of activities it seeks authorization to 12.28 engage in and the type of services it seeks authorization to 12.29 provide. The license may be granted only when the commissioner 12.30 is satisfied that the entity possesses the necessary 12.31 organization, background, expertise, and financial integrity to 12.32 supply the services sought to be offered. The commissioner may 12.33 issue a license subject to restrictions or limitations upon the 12.34 authorization, including the type of services which may be 12.35 supplied or the activities which may be engaged in. The license 12.36 fee is $1,000 for the initial application and $1,000 for each 13.1 two-year renewal. All licenses are for a period of two years. 13.2 (4) [REGULATORY RESTRICTIONS; POWERS OF THE COMMISSIONER.] 13.3 To assure that self-insurance or insurance plans are financially 13.4 solvent, are administered in a fair and equitable fashion, and 13.5 are processing claims and paying benefits in a prompt, fair, and 13.6 honest manner, vendors of risk management services and entities 13.7 administering insurance or self-insurance plans are subject to 13.8 the supervision and examination by the commissioner. Vendors of 13.9 risk management services, entities administering insurance or 13.10 self-insurance plans, and insurance or self-insurance plans 13.11 established or operated by them are subject to the trade 13.12 practice requirements of sections 72A.19 to 72A.30. In lieu of 13.13 an unlimited guarantee from a parent corporation for a vendor of 13.14 risk management services or an entity administering insurance or 13.15 self-insurance plans, the commissioner may accept a surety bond 13.16 in a form satisfactory to the commissioner in an amount equal to 13.17 120 percent of the total amount of claims handled by the 13.18 applicant in the prior year. If at any time the total amount of 13.19 claims handled during a year exceeds the amount upon which the 13.20 bond was calculated, the administrator shall immediately notify 13.21 the commissioner. The commissioner may require that the bond be 13.22 increased accordingly. 13.23 No contract entered into after July 1, 2001, between a 13.24 licensed vendor of risk management services and a group 13.25 authorized to self-insure for workers' compensation liabilities 13.26 under section 79A.03, subdivision 6, may take effect until it 13.27 has been filed with the commissioner, and either (1) the 13.28 commissioner has approved it or (2) 60 days have elapsed and the 13.29 commissioner has not disapproved it as misleading or violative 13.30 of public policy. 13.31 (5) [RULEMAKING AUTHORITY.] To carry out the purposes of 13.32 this subdivision, the commissioner may adopt rules pursuant to 13.33 sections 14.001 to 14.69. These rules may: 13.34 (a) establish reporting requirements for administrators of 13.35 insurance or self-insurance plans; 13.36 (b) establish standards and guidelines to assure the 14.1 adequacy of financing, reinsuring, and administration of 14.2 insurance or self-insurance plans; 14.3 (c) establish bonding requirements or other provisions 14.4 assuring the financial integrity of entities administering 14.5 insurance or self-insurance plans; or 14.6 (d) establish other reasonable requirements to further the 14.7 purposes of this subdivision. 14.8 [EFFECTIVE DATE.] This section is effective July 1, 2001. 14.9 Sec. 8. Minnesota Statutes 2000, section 60K.14, 14.10 subdivision 2, is amended to read: 14.11 Subd. 2. [FEES FOR SERVICES.] No person shall charge a fee 14.12 for any services rendered in connection with the solicitation, 14.13 negotiation, or servicing of any insurance contract unless: 14.14 (1) before rendering the services, a written statement is 14.15 provided disclosing: 14.16 (i) the services for which fees are charged; 14.17 (ii) the amount of the fees; 14.18 (iii) that the fees are charged in addition to premiums; 14.19 and 14.20 (iv) that premiums include a commission; and 14.21 (2) all fees charged are reasonable in relation to the 14.22 services rendered. 14.23 No person shall charge a fee from an individual in 14.24 connection with the submitting of a FAIR plan application on 14.25 residential property occupied by the individual. 14.26 [EFFECTIVE DATE.] This section is effective the day 14.27 following final enactment. 14.28 Sec. 9. Minnesota Statutes 2000, section 61A.072, is 14.29 amended by adding a subdivision to read: 14.30 Subd. 6. [ACCELERATED BENEFITS.] (a) "Accelerated benefits" 14.31 covered under this section are benefits payable under the life 14.32 insurance contract: 14.33 (1) to a policyholder or certificate holder, during the 14.34 lifetime of the insured, in anticipation of death upon the 14.35 occurrence of a specified life-threatening or catastrophic 14.36 condition as defined by the policy or rider; 15.1 (2) that reduce the death benefit otherwise payable under 15.2 the life insurance contract; and 15.3 (3) that are payable upon the occurrence of a single 15.4 qualifying event that results in the payment of a benefit amount 15.5 fixed at the time of acceleration. 15.6 (b) "Qualifying event" means one or more of the following: 15.7 (1) a medical condition that would result in a drastically 15.8 limited life span as specified in the contract; 15.9 (2) a medical condition that has required or requires 15.10 extraordinary medical intervention, such as, but not limited to, 15.11 major organ transplant or continuous artificial life support 15.12 without which the insured would die; or 15.13 (3) a condition that requires continuous confinement in an 15.14 eligible institution as defined in the contract if the insured 15.15 is expected to remain there for the rest of the insured's life. 15.16 [EFFECTIVE DATE.] This section is effective July 1, 2001. 15.17 Sec. 10. Minnesota Statutes 2000, section 61A.09, 15.18 subdivision 1, is amended to read: 15.19 Subdivision 1. No group life insurance policy or group 15.20 annuity shall be issued for delivery in this state until the 15.21 form thereof and the form of any certificates issued thereunder 15.22 have been filed in accordance with and subject to the provisions 15.23 of section 61A.02. Each person insured under such a group life 15.24 insurance policy (excepting policies which insure the lives of 15.25 debtors of a creditor or vendor to secure payment of 15.26 indebtedness) shall be furnished a certificate of insurance 15.27 issued by the insurer and containing the following: 15.28 (a) Name and location of the insurance company; 15.29 (b) A statement as to the insurance protection to which the 15.30 certificate holder is entitled, including any changes in such 15.31 protection depending on the age of the person whose life is 15.32 insured; 15.33 (c) Any and all provisions regarding the termination or 15.34 reduction of the certificate holder's insurance protection; 15.35 (d) A statement that the master group policy may be 15.36 examined at a reasonably accessible place; 16.1 (e) The maximum rate of contribution to be paid by the 16.2 certificate holder; 16.3 (f) Beneficiary and method required to change such 16.4 beneficiary; 16.5 (g) A statement that alternative methods for the payment of 16.6 group life policy proceeds of $15,000 or more must be offered to 16.7 beneficiaries in lieu of a lump sum distribution, at their 16.8 request. Alternative payment methods which must be offered at 16.9 the request of the beneficiaries must include, but are not 16.10 limited to, a life income option, an income option for fixed 16.11 amounts or fixed time periods, and the option to select an 16.12 interest-bearing account with the company with the right to 16.13 select another option at a later date; 16.14 (h) In the case of a group term insurance policy if the 16.15 policy provides that insurance of the certificate holder will 16.16 terminate, in case of a policy issued to an employer, by reason 16.17 of termination of the certificate holder's employment, or in 16.18 case of a policy issued to an organization of which the 16.19 certificate holder is a member, by reason of termination of 16.20 membership, a provision to the effect that in case of 16.21 termination of employment or membership, or in case of 16.22 termination of the group policy, the certificate holder shall be 16.23 entitled to have issued by the insurer, without evidence of 16.24 insurability, upon application made to the insurer within 31 16.25 days after the termination, and upon payment of the premium 16.26 applicable to the class of risk to which that person belongs and 16.27 to the form and amount of the policy at that person's then 16.28 attained age, a policy of life insurance only, in any one of the 16.29 forms customarily issued by the insurerexcept term insurance, 16.30 in an amount equal to the amount of the life insurance 16.31 protection under such group insurance policy at the time of such 16.32 termination; and shall contain a further provision to the effect 16.33 that upon the death of the certificate holder during such 31-day 16.34 period and before any such individual policy has become 16.35 effective, the amount of insurance for which the certificate 16.36 holder was entitled to make application shall be payable as a 17.1 death benefit by the insurer. Any policy offered in compliance 17.2 with the requirements of this paragraph must be guaranteed 17.3 renewable. Nothing in this subdivision requires an insurer to 17.4 offer term insurance as a conversion option. 17.5 This section applies to a policy, certificate of insurance, 17.6 or similar evidence of coverage issued to a Minnesota resident 17.7 or issued to provide coverage to a Minnesota resident. This 17.8 section does not apply to a certificate of insurance or similar 17.9 evidence of coverage that meets the conditions of section 17.10 61A.093, subdivision 2. 17.11 [EFFECTIVE DATE.] This section is effective the day 17.12 following final enactment. 17.13 Sec. 11. Minnesota Statutes 2000, section 62A.04, 17.14 subdivision 2, is amended to read: 17.15 Subd. 2. [REQUIRED PROVISIONS.] Except as provided in 17.16 subdivision 4 each such policy delivered or issued for delivery 17.17 to any person in this state shall contain the provisions 17.18 specified in this subdivision in the words in which the same 17.19 appear in this section. The insurer may, at its option, 17.20 substitute for one or more of such provisions corresponding 17.21 provisions of different wording approved by the commissioner 17.22 which are in each instance not less favorable in any respect to 17.23 the insured or the beneficiary. Such provisions shall be 17.24 preceded individually by the caption appearing in this 17.25 subdivision or, at the option of the insurer, by such 17.26 appropriate individual or group captions or subcaptions as the 17.27 commissioner may approve. 17.28 (1) A provision as follows: 17.29 ENTIRE CONTRACT; CHANGES: This policy, including the 17.30 endorsements and the attached papers, if any, constitutes the 17.31 entire contract of insurance. No change in this policy shall be 17.32 valid until approved by an executive officer of the insurer and 17.33 unless such approval be endorsed hereon or attached hereto. No 17.34 agent has authority to change this policy or to waive any of its 17.35 provisions. 17.36 (2) A provision as follows: 18.1 TIME LIMIT ON CERTAIN DEFENSES: (a) After two years from 18.2 the date of issue of this policy no misstatements, except 18.3 fraudulent misstatements, made by the applicant in the 18.4 application for such policy shall be used to void the policy or 18.5 to deny a claim for loss incurred or disability (as defined in 18.6 the policy) commencing after the expiration of such two year 18.7 period. 18.8 The foregoing policy provision shall not be so construed as 18.9 to affect any legal requirement for avoidance of a policy or 18.10 denial of a claim during such initial two year period, nor to 18.11 limit the application of clauses (1), (2), (3), (4) and (5), in 18.12 the event of misstatement with respect to age or occupation or 18.13 other insurance. A policy which the insured has the right to 18.14 continue in force subject to its terms by the timely payment of 18.15 premium (1) until at least age 50 or, (2) in the case of a 18.16 policy issued after age 44, for at least five years from its 18.17 date of issue, may contain in lieu of the foregoing the 18.18 following provisions (from which the clause in parentheses may 18.19 be omitted at the insurer's option) under the caption 18.20 "INCONTESTABLE": 18.21 After this policy has been in force for a period of two 18.22 years during the lifetime of the insured (excluding any period 18.23 during which the insured is disabled), it shall become 18.24 incontestable as to the statements contained in the application. 18.25 (b) No claim for loss incurred or disability (as defined in 18.26 the policy) commencing after two years from the date of issue of 18.27 this policy shall be reduced or denied on the ground that a 18.28 disease or physical condition not excluded from coverage by name 18.29 or specific description effective on the date of loss had 18.30 existed prior to the effective date of coverage of this policy. 18.31 In the absence of fraud, all claims for loss incurred or 18.32 disability beginning after two years from the date of issue of 18.33 the policy must be paid unless excluded from coverage by name or 18.34 specific description. 18.35 (3) A provision as follows: 18.36 GRACE PERIOD: A grace period of ..... (insert a number not 19.1 less than "7" for weekly premium policies, "10" for monthly 19.2 premium policies and "31" for all other policies) days will be 19.3 granted for the payment of each premium falling due after the 19.4 first premium, during which grace period the policy shall 19.5 continue in force. 19.6 A policy which contains a cancellation provision may add, 19.7 at the end of the above provision, 19.8 subject to the right of the insurer to cancel in accordance 19.9 with the cancellation provision hereof. 19.10 A policy in which the insurer reserves the right to refuse 19.11 any renewal shall have, at the beginning of the above provision, 19.12 Unless not less than five days prior to the premium due 19.13 date the insurer has delivered to the insured or has mailed to 19.14 the insured's last address as shown by the records of the 19.15 insurer written notice of its intention not to renew this policy 19.16 beyond the period for which the premium has been accepted. 19.17 (4) A provision as follows: 19.18 REINSTATEMENT: If any renewal premium be not paid within 19.19 the time granted the insured for payment, a subsequent 19.20 acceptance of premium by the insurer or by any agent duly 19.21 authorized by the insurer to accept such premium, without 19.22 requiring in connection therewith an application for 19.23 reinstatement, shall reinstate the policy. If the insurer or 19.24 such agent requires an application for reinstatement and issues 19.25 a conditional receipt for the premium tendered, the policy will 19.26 be reinstated upon approval of such application by the insurer 19.27 or, lacking such approval, upon the forty-fifth day following 19.28 the date of such conditional receipt unless the insurer has 19.29 previously notified the insured in writing of its disapproval of 19.30 such application. For health plans described in section 19.31 62A.011, subdivision 3, clause (10), an insurer must accept 19.32 payment of a renewal premium and reinstate the policy, if the 19.33 insured applies for reinstatement no later than 60 days after 19.34 the due date for the premium payment, unless: 19.35 (1) the insured has in the interim left the state or the 19.36 insurer's service area; or 20.1 (2) the insured has applied for reinstatement on two or 20.2 more prior occasions. 20.3 The reinstated policy shall cover only loss resulting from 20.4 such accidental injury as may be sustained after the date of 20.5 reinstatement and loss due to such sickness as may begin more 20.6 than ten days after such date. In all other respects the 20.7 insured and insurer shall have the same rights thereunder as 20.8 they had under the policy immediately before the due date of the 20.9 defaulted premium, subject to any provisions endorsed hereon or 20.10 attached hereto in connection with the reinstatement. Any 20.11 premium accepted in connection with a reinstatement shall be 20.12 applied to a period for which premium has not been previously 20.13 paid, but not to any period more than 60 days prior to the date 20.14 of reinstatement. The last sentence of the above provision may 20.15 be omitted from any policy which the insured has the right to 20.16 continue in force subject to its terms by the timely payment of 20.17 premiums (1) until at least age 50, or, (2) in the case of a 20.18 policy issued after age 44, for at least five years from its 20.19 date of issue. 20.20 (5) A provision as follows: 20.21 NOTICE OF CLAIM: Written notice of claim must be given to 20.22 the insurer within 20 days after the occurrence or commencement 20.23 of any loss covered by the policy, or as soon thereafter as is 20.24 reasonably possible. Notice given by or on behalf of the 20.25 insured or the beneficiary to the insurer at ..... (insert the 20.26 location of such office as the insurer may designate for the 20.27 purpose), or to any authorized agent of the insurer, with 20.28 information sufficient to identify the insured, shall be deemed 20.29 notice to the insurer. 20.30 In a policy providing a loss-of-time benefit which may be 20.31 payable for at least two years, an insurer may at its option 20.32 insert the following between the first and second sentences of 20.33 the above provision: 20.34 Subject to the qualifications set forth below, if the 20.35 insured suffers loss of time on account of disability for which 20.36 indemnity may be payable for at least two years, the insured 21.1 shall, at least once in every six months after having given 21.2 notice of claim, give to the insurer notice of continuance of 21.3 said disability, except in the event of legal incapacity. The 21.4 period of six months following any filing of proof by the 21.5 insured or any payment by the insurer on account of such claim 21.6 or any denial of liability in whole or in part by the insurer 21.7 shall be excluded in applying this provision. Delay in the 21.8 giving of such notice shall not impair the insured's right to 21.9 any indemnity which would otherwise have accrued during the 21.10 period of six months preceding the date on which such notice is 21.11 actually given. 21.12 (6) A provision as follows: 21.13 CLAIM FORMS: The insurer, upon receipt of a notice of 21.14 claim, will furnish to the claimant such forms as are usually 21.15 furnished by it for filing proofs of loss. If such forms are 21.16 not furnished within 15 days after the giving of such notice the 21.17 claimant shall be deemed to have complied with the requirements 21.18 of this policy as to proof of loss upon submitting, within the 21.19 time fixed in the policy for filing proofs of loss, written 21.20 proof covering the occurrence, the character and the extent of 21.21 the loss for which claim is made. 21.22 (7) A provision as follows: 21.23 PROOFS OF LOSS: Written proof of loss must be furnished to 21.24 the insurer at its said office in case of claim for loss for 21.25 which this policy provides any periodic payment contingent upon 21.26 continuing loss within 90 days after the termination of the 21.27 period for which the insurer is liable and in case of claim for 21.28 any other loss within 90 days after the date of such loss. 21.29 Failure to furnish such proof within the time required shall not 21.30 invalidate nor reduce any claim if it was not reasonably 21.31 possible to give proof within such time, provided such proof is 21.32 furnished as soon as reasonably possible and in no event, except 21.33 in the absence of legal capacity, later than one year from the 21.34 time proof is otherwise required. 21.35 (8) A provision as follows: 21.36 TIME OF PAYMENT OF CLAIMS: Indemnities payable under this 22.1 policy for any loss other than loss for which this policy 22.2 provides periodic payment will be paid immediately upon receipt 22.3 of due written proof of such loss. Subject to due written proof 22.4 of loss, all accrued indemnities for loss for which this policy 22.5 provides periodic payment will be paid ..... (insert period for 22.6 payment which must not be less frequently than monthly) and any 22.7 balance remaining unpaid upon the termination of liability will 22.8 be paid immediately upon receipt of due written proof. 22.9 (9) A provision as follows: 22.10 PAYMENT OF CLAIMS: Indemnity for loss of life will be 22.11 payable in accordance with the beneficiary designation and the 22.12 provisions respecting such payment which may be prescribed 22.13 herein and effective at the time of payment. If no such 22.14 designation or provision is then effective, such indemnity shall 22.15 be payable to the estate of the insured. Any other accrued 22.16 indemnities unpaid at the insured's death may, at the option of 22.17 the insurer, be paid either to such beneficiary or to such 22.18 estate. All other indemnities will be payable to the insured. 22.19 The following provisions, or either of them, may be 22.20 included with the foregoing provision at the option of the 22.21 insurer: 22.22 If any indemnity of this policy shall be payable to the 22.23 estate of the insured, or to an insured or beneficiary who is a 22.24 minor or otherwise not competent to give a valid release, the 22.25 insurer may pay such indemnity, up to an amount not exceeding 22.26 $..... (insert an amount which shall not exceed $1,000), to any 22.27 relative by blood or connection by marriage of the insured or 22.28 beneficiary who is deemed by the insurer to be equitably 22.29 entitled thereto. Any payment made by the insurer in good faith 22.30 pursuant to this provision shall fully discharge the insurer to 22.31 the extent of such payment. 22.32 Subject to any written direction of the insured in the 22.33 application or otherwise all or a portion of any indemnities 22.34 provided by this policy on account of hospital, nursing, 22.35 medical, or surgical services may, at the insurer's option and 22.36 unless the insured requests otherwise in writing not later than 23.1 the time of filing proofs of such loss, be paid directly to the 23.2 hospital or person rendering such services; but it is not 23.3 required that the service be rendered by a particular hospital 23.4 or person. 23.5 (10) A provision as follows: 23.6 PHYSICAL EXAMINATIONS AND AUTOPSY: The insurer at its own 23.7 expense shall have the right and opportunity to examine the 23.8 person of the insured when and as often as it may reasonably 23.9 require during the pendency of a claim hereunder and to make an 23.10 autopsy in case of death where it is not forbidden by law. 23.11 (11) A provision as follows: 23.12 LEGAL ACTIONS: No action at law or in equity shall be 23.13 brought to recover on this policy prior to the expiration of 60 23.14 days after written proof of loss has been furnished in 23.15 accordance with the requirements of this policy. No such action 23.16 shall be brought after the expiration of three years after the 23.17 time written proof of loss is required to be furnished. 23.18 (12) A provision as follows: 23.19 CHANGE OF BENEFICIARY: Unless the insured makes an 23.20 irrevocable designation of beneficiary, the right to change of 23.21 beneficiary is reserved to the insured and the consent of the 23.22 beneficiary or beneficiaries shall not be requisite to surrender 23.23 or assignment of this policy or to any change of beneficiary or 23.24 beneficiaries, or to any other changes in this policy. The 23.25 first clause of this provision, relating to the irrevocable 23.26 designation of beneficiary, may be omitted at the insurer's 23.27 option. 23.28 [EFFECTIVE DATE.] This section is effective the day 23.29 following final enactment. 23.30 Sec. 12. Minnesota Statutes 2000, section 62A.17, 23.31 subdivision 1, is amended to read: 23.32 Subdivision 1. [CONTINUATION OF COVERAGE.] Every group 23.33 insurance policy, group subscriber contract, and health care 23.34 plan included within the provisions of section 62A.16, except 23.35 policies, contracts, or health care plans covering employees of 23.36 an agency of the federal government, shall contain a provision 24.1 which permits every covered employee who is voluntarily or 24.2 involuntarily terminated or laid off from employment, if the 24.3 policy, contract, or health care plan remains in force for 24.4 active employees of the employer, to elect to continue the 24.5 coverage for the employee and dependents. 24.6 An employee shall be considered to be laid off from 24.7 employment if there is a reduction in hours to the point where 24.8 the employee is no longer eligible under the policy, contract, 24.9 or health care plan. Termination shall not include discharge 24.10 for gross misconduct. 24.11 Upon request by the terminated or laid off employee, a 24.12 health carrier must provide the instructions necessary to enable 24.13 the employee to elect continuation of coverage. 24.14 [EFFECTIVE DATE.] This section is effective the day 24.15 following final enactment. 24.16 Sec. 13. Minnesota Statutes 2000, section 62A.20, 24.17 subdivision 1, is amended to read: 24.18 Subdivision 1. [REQUIREMENT.] Every policy of accident and 24.19 health insurance providing coverage of hospital or medical 24.20 expense on either an expense-incurred basis or other than an 24.21 expense-incurred basis, which in addition to covering the 24.22 insured also provides coverage to the spouse and dependent 24.23 children of the insured shall contain: 24.24 (1) a provision whichpermitsallows the spouse and 24.25 dependent children to elect to continue coverage when the 24.26 insured becomes enrolled for benefits under Title XVIII of the 24.27 Social Security Act (Medicare); and 24.28 (2) a provision whichpermitsallows the dependent children 24.29 to continue coverage when they cease to be dependent children 24.30 under the generally applicable requirement of the plan. 24.31 Upon request by the insured or the insured's spouse or 24.32 dependent child, a health carrier must provide the instructions 24.33 necessary to enable the spouse or child to elect continuation of 24.34 coverage. 24.35 [EFFECTIVE DATE.] This section is effective the day 24.36 following final enactment. 25.1 Sec. 14. Minnesota Statutes 2000, section 62A.21, 25.2 subdivision 2a, is amended to read: 25.3 Subd. 2a. [CONTINUATION PRIVILEGE.] Every policy described 25.4 in subdivision 1 shall contain a provision which permits 25.5 continuation of coverage under the policy for the insured's 25.6 former spouse and dependent children upon entry of a valid 25.7 decree of dissolution of marriage. The coverage shall be 25.8 continued until the earlier of the following dates: 25.9 (a) the date the insured's former spouse becomes covered 25.10 under any other group health plan; or 25.11 (b) the date coverage would otherwise terminate under the 25.12 policy. 25.13 If the coverage is provided under a group policy, any 25.14 required premium contributions for the coverage shall be paid by 25.15 the insured on a monthly basis to the group policyholder for 25.16 remittance to the insurer. The policy must require the group 25.17 policyholder to, upon request, provide the insured with written 25.18 verification from the insurer of the cost of this coverage 25.19 promptly at the time of eligibility for this coverage and at any 25.20 time during the continuation period. In no event shall the 25.21 amount of premium charged exceed 102 percent of the cost to the 25.22 plan for such period of coverage for other similarly situated 25.23 spouses and dependent children with respect to whom the marital 25.24 relationship has not dissolved, without regard to whether such 25.25 cost is paid by the employer or employee. 25.26 Upon request by the insured's former spouse or dependent 25.27 child, a health carrier must provide the instructions necessary 25.28 to enable the child or former spouse to elect continuation of 25.29 coverage. 25.30 [EFFECTIVE DATE.] This section is effective the day 25.31 following final enactment. 25.32 Sec. 15. Minnesota Statutes 2000, section 62A.302, is 25.33 amended to read: 25.34 62A.302 [COVERAGE OF DEPENDENTS.] 25.35 Subdivision 1. [SCOPE OF COVERAGE.] This section applies 25.36 toall health plans as defined in section 62A.011: 26.1 (1) a health plan as defined in section 62A.011; 26.2 (2) coverage described in section 62A.011, subdivision 3, 26.3 clauses (4), (6), (7), (8), (9), and (10); and 26.4 (3) a policy, contract, or certificate issued by a 26.5 community integrated service network licensed under chapter 62N. 26.6 Subd. 2. [REQUIRED COVERAGE.] Every health plan included 26.7 in subdivision 1 that provides dependent coverage must define 26.8 "dependent" no more restrictively than the definition provided 26.9 in section 62L.02. 26.10 Sec. 16. Minnesota Statutes 2000, section 62A.31, 26.11 subdivision 1a, is amended to read: 26.12 Subd. 1a. [MINIMUM COVERAGE.] The policy must provide a 26.13 minimum of the coverage set out in subdivision 2 and for an 26.14 extended basic plan, the additional requirements of section 26.15 62E.07. 26.16 [EFFECTIVE DATE.] This section is effective the day 26.17 following final enactment. 26.18 Sec. 17. Minnesota Statutes 2000, section 62A.31, 26.19 subdivision 1i, is amended to read: 26.20 Subd. 1i. [REPLACEMENT COVERAGE.] If a Medicare supplement 26.21 policy or certificate replaces another Medicare supplement 26.22 policy or certificate, the issuer of the replacing policy or 26.23 certificate shall waive any time periods applicable to 26.24 preexisting conditions, waiting periods, elimination periods, 26.25 and probationary periods in the new Medicare supplement policy 26.26 or certificate for benefits to the extent the time was spent 26.27 under the original policy or certificate. For purposes of this 26.28 subdivision, "Medicare supplement policy or certificate" means 26.29 all coverage described in section 62A.011, subdivision43, 26.30 clause (10). 26.31 [EFFECTIVE DATE.] This section is effective the day 26.32 following final enactment. 26.33 Sec. 18. Minnesota Statutes 2000, section 62A.31, 26.34 subdivision 3, is amended to read: 26.35 Subd. 3. [DEFINITIONS.] (a) The definitions provided in 26.36 this subdivision apply to sections 62A.31 to 62A.44. 27.1 (b) "Accident," "accidental injury," or "accidental means" 27.2 means to employ "result" language and does not include words 27.3 that establish an accidental means test or use words such as 27.4 "external," "violent," "visible wounds," or similar words of 27.5 description or characterization. 27.6 (1) The definition shall not be more restrictive than the 27.7 following: "Injury or injuries for which benefits are provided 27.8 means accidental bodily injury sustained by the insured person 27.9 which is the direct result of an accident, independent of 27.10 disease or bodily infirmity or any other cause, and occurs while 27.11 insurance coverage is in force." 27.12 (2) The definition may provide that injuries shall not 27.13 include injuries for which benefits are provided or available 27.14 under a workers' compensation, employer's liability or similar 27.15 law, or motor vehicle no-fault plan, unless prohibited by law. 27.16 (c) "Applicant" means: 27.17 (1) in the case of an individual Medicare supplement policy 27.18 or certificate, the person who seeks to contract for insurance 27.19 benefits; and 27.20 (2) in the case of a group Medicare supplement policy or 27.21 certificate, the proposed certificate holder. 27.22 (d) "Bankruptcy" means a situation in which a 27.23 Medicare+Choice organization that is not an issuer has filed, or 27.24 has had filed against it, a petition for declaration of 27.25 bankruptcy and has ceased doing business in the state. 27.26 (e) "Benefit period" or "Medicare benefit period" shall not 27.27 be defined more restrictively than as defined in the Medicare 27.28 program. 27.29 (f) "Certificate" means a certificate delivered or issued 27.30 for delivery in this state or offered to a resident of this 27.31 state under a group Medicare supplement policy or certificate. 27.32 (g) "Certificate form" means the form on which the 27.33 certificate is delivered or issued for delivery by the issuer. 27.34 (h) "Convalescent nursing home," "extended care facility," 27.35 or "skilled nursing facility" shall not be defined more 27.36 restrictively than as defined in the Medicare program. 28.1 (i) "Employee welfare benefit plan" means a plan, fund, or 28.2 program of employee benefits as defined in United States Code, 28.3 title 29, section 1002 (Employee Retirement Income Security Act). 28.4 (j) "Health care expenses" means expenses of health 28.5 maintenance organizations associated with the delivery of health 28.6 care services which are analogous to incurred losses of 28.7 insurers. The expenses shall not include: 28.8 (1) home office and overhead costs; 28.9 (2) advertising costs; 28.10 (3) commissions and other acquisition costs; 28.11 (4) taxes; 28.12 (5) capital costs; 28.13 (6) administrative costs; and 28.14 (7) claims processing costs. 28.15 (k) "Hospital" may be defined in relation to its status, 28.16 facilities, and available services or to reflect its 28.17 accreditation by the joint commission on accreditation of 28.18 hospitals, but not more restrictively than as defined in the 28.19 Medicare program. 28.20 (l) "Insolvency" means a situation in which an issuer, 28.21 licensed to transact the business of insurance in this state, 28.22 including the right to transact business as any type of issuer, 28.23 has had a final order of liquidation entered against it with a 28.24 finding of insolvency by a court of competent jurisdiction in 28.25 the issuer's state of domicile. 28.26 (m) "Issuer" includes insurance companies, fraternal 28.27 benefit societies, health service plan corporations, health 28.28 maintenance organizations, and any other entity delivering or 28.29 issuing for delivery Medicare supplement policies or 28.30 certificates in this state or offering these policies or 28.31 certificates to residents of this state. 28.32 (n) "Medicare" shall be defined in the policy and 28.33 certificate. Medicare may be defined as the Health Insurance 28.34 for the Aged Act, title XVIII of the Social Security Amendments 28.35 of 1965, as amended, or title I, part I, of Public Law Number 28.36 89-97, as enacted by the 89th Congress of the United States of 29.1 America and popularly known as the Health Insurance for the Aged 29.2 Act, as amended. 29.3 (o) "Medicare eligible expenses" means health care expenses 29.4 covered by Medicare, to the extent recognized as reasonable and 29.5 medically necessary by Medicare. 29.6 (p) "Medicare+Choice plan" means a plan of coverage for 29.7 health benefits under Medicare part C as defined in section 1859 29.8 of the federal Social Security Act, United States Code, title 29.9 42, section 1395w-28, and includes: 29.10 (1) coordinated care plans which provide health care 29.11 services, including, but not limited to, health maintenance 29.12 organization plans, with or without a point-of-service option, 29.13 plans offered by provider-sponsored organizations, and preferred 29.14 provider organization plans; 29.15 (2) medical savings account plans coupled with a 29.16 contribution into a Medicare+Choice medical savings account; and 29.17 (3) Medicare+Choice private fee-for-service plans. 29.18 (q) "Medicare-related coverage" means a policy, contract, 29.19 or certificate issued as a supplement to Medicare, regulated 29.20 under sections 62A.31 to 62A.44, including Medicare select 29.21 coverage; policies, contracts, or certificates that supplement 29.22 Medicare issued by health maintenance organizations; or 29.23 policies, contracts, or certificates governed by section 1833 29.24 (known as "cost" or "HCPP" contracts) or 1876 (known as "TEFRA" 29.25 or "risk" contracts) of the federal Social Security Act, United 29.26 States Code, title 42, section 1395, et seq., as amended.; or 29.27 Section 4001 of the Balanced Budget Act of 1997 (BBA)(Public Law 29.28 105-33), Sections 1851 to 1859 of the Social Security Act 29.29 establishing Part C of the Medicare program, known as the 29.30 "Medicare+Choice program." 29.31 (r) "Medicare supplement policy or certificate" means a 29.32 group or individual policy of accident and sickness insurance or 29.33 a subscriber contract of hospital and medical service 29.34 associations or health maintenance organizations, or those 29.35 policies or certificates covered by section 1833 of the federal 29.36 Social Security Act, United States Code, title 42, section 1395, 30.1 et seq., or an issued policy under a demonstration project 30.2 specified under amendments to the federal Social Security Act, 30.3 which is advertised, marketed, or designed primarily as a 30.4 supplement to reimbursements under Medicare for the hospital, 30.5 medical, or surgical expenses of persons eligible for Medicare. 30.6 (s) "Physician" shall not be defined more restrictively 30.7 than as defined in the Medicare program or section 62A.04, 30.8 subdivision 1, or 62A.15, subdivision 3a. 30.9 (t) "Policy form" means the form on which the policy is 30.10 delivered or issued for delivery by the issuer. 30.11 (u) "Secretary" means the Secretary of the United States 30.12 Department of Health and Human Services. 30.13 (v) "Sickness" shall not be defined more restrictively than 30.14 the following: 30.15 "Sickness means illness or disease of an insured person 30.16 which first manifests itself after the effective date of 30.17 insurance and while the insurance is in force." 30.18 The definition may be further modified to exclude 30.19 sicknesses or diseases for which benefits are provided under a 30.20 workers' compensation, occupational disease, employer's 30.21 liability, or similar law. 30.22 [EFFECTIVE DATE.] This section is effective the day 30.23 following final enactment. 30.24 Sec. 19. Minnesota Statutes 2000, section 62A.65, 30.25 subdivision 8, is amended to read: 30.26 Subd. 8. [CESSATION OF INDIVIDUAL BUSINESS.] 30.27 Notwithstanding the provisions of subdivisions 1 to 7, a health 30.28 carrier may elect to cease doing business in the individual 30.29 health plan market in this state if it complies with the 30.30 requirements of this subdivision. For purposes of this section, 30.31 "cease doing business" means to discontinue issuing new 30.32 individual health plans and to refuse to renew all of the health 30.33 carrier's existing individual health plans issued in this state 30.34 whose terms permit refusal to renew under the circumstances 30.35 specified in this subdivision. This subdivision does not permit 30.36 cancellation of an individual health plan, unless the terms of 31.1 the health plan permit cancellation under the circumstances 31.2 specified in this subdivision. A health carrier electing to 31.3 cease doing business in the individual health plan market in 31.4 this state shall notify the commissioner 180 days prior to the 31.5 effective date of the cessation. Within 30 days after the 31.6 termination, the health carrier shall submit to the commissioner 31.7 a complete list of policyholders that have been terminated. The 31.8 cessation of business does not include the failure of a health 31.9 carrier to offer or issue new business in the individual health 31.10 plan market or continue an existing product line in that market, 31.11 provided that a health carrier does not terminate, cancel, or 31.12 fail to renew its current individual health plan business. A 31.13 health carrier electing to cease doing business in the 31.14 individual health plan market shall provide 120 days' written 31.15 notice to each policyholder covered by an individual health plan 31.16 issued by the health carrier. This notice must also inform each 31.17 policyholder of the existence of the Minnesota Comprehensive 31.18 Health Association, the requirements for being accepted, the 31.19 procedures for applying for coverage, and the telephone numbers 31.20 at the department of health and the department of commerce for 31.21 information about private individual or family health coverage. 31.22 A health carrier that ceases to write new business in the 31.23 individual health plan market shall continue to be governed by 31.24 this section with respect to continuing individual health plan 31.25 business conducted by the health carrier. A health carrier that 31.26 ceases to do business in the individual health plan market after 31.27 July 1, 1994, is prohibited from writing new business in the 31.28 individual health plan market in this state for a period of five 31.29 years from the date of notice to the commissioner. This 31.30 subdivision applies to any health maintenance organization that 31.31 ceases to do business in the individual health plan market in 31.32 one service area with respect to that service area only. 31.33 Nothing in this subdivision prohibits an affiliated health 31.34 maintenance organization from continuing to do business in the 31.35 individual health plan market in that same service area. The 31.36 right to refuse to renew an individual health plan under this 32.1 subdivision does not apply to individual health plans issued on 32.2 a guaranteed renewable basis that does not permit refusal to 32.3 renew under the circumstances specified in this subdivision. 32.4 Sec. 20. Minnesota Statutes 2000, section 62E.04, 32.5 subdivision 4, is amended to read: 32.6 Subd. 4. [MAJOR MEDICAL COVERAGE.] Each insurer and 32.7 fraternal shall affirmatively offer coverage of major medical 32.8 expenses to every applicant who applies to the insurer or 32.9 fraternal for a new unqualified policy, which has a lifetime 32.10 benefit limit of less than $1,000,000, at the time of 32.11 application and annually to every holder of such an unqualified 32.12 policy of accident and health insurance renewed by the insurer 32.13 or fraternal. The coverage shall provide that when a covered 32.14 individual incurs out-of-pocket expenses of $5,000 or more 32.15 within a calendar year for services covered in section 62E.06, 32.16 subdivision 1, benefits shall be payable, subject to any 32.17 copayment authorized by the commissioner, up to a maximum 32.18 lifetime limit of$500,000not less than $1,000,000. The offer 32.19 of coverage of major medical expenses may consist of the offer 32.20 of a rider on an existing unqualified policy or a new policy 32.21 which is a qualified plan. 32.22 Sec. 21. Minnesota Statutes 2000, section 62E.06, 32.23 subdivision 1, is amended to read: 32.24 Subdivision 1. [NUMBER THREE PLAN.] A plan of health 32.25 coverage shall be certified as a number three qualified plan if 32.26 it otherwise meets the requirements established by chapters 62A 32.27and, 62C, and 62Q, and the other laws of this state, whether or 32.28 not the policy is issued in Minnesota, and meets or exceeds the 32.29 following minimum standards: 32.30 (a) The minimum benefits for a covered individual shall, 32.31 subject to the other provisions of this subdivision, be equal to 32.32 at least 80 percent of the cost of covered services in excess of 32.33 an annual deductible which does not exceed $150 per person. The 32.34 coverage shall include a limitation of $3,000 per person on 32.35 total annual out-of-pocket expenses for services covered under 32.36 this subdivision. The coverage shall be subject to a maximum 33.1 lifetime benefit of not less than$500,000$1,000,000. 33.2 The $3,000 limitation on total annual out-of-pocket 33.3 expenses and the$500,000$1,000,000 maximum lifetime benefit 33.4 shall not be subject to change or substitution by use of an 33.5 actuarially equivalent benefit. 33.6 (b) Covered expenses shall be the usual and customary 33.7 charges for the following services and articles when prescribed 33.8 by a physician: 33.9 (1) hospital services; 33.10 (2) professional services for the diagnosis or treatment of 33.11 injuries, illnesses, or conditions, other than dental, which are 33.12 rendered by a physician or at the physician's direction; 33.13 (3) drugs requiring a physician's prescription; 33.14 (4) services of a nursing home for not more than 120 days 33.15 in a year if the services would qualify as reimbursable services 33.16 under Medicare; 33.17 (5) services of a home health agency if the services would 33.18 qualify as reimbursable services under Medicare; 33.19 (6) use of radium or other radioactive materials; 33.20 (7) oxygen; 33.21 (8) anesthetics; 33.22 (9) prostheses other than dental but including scalp hair 33.23 prostheses worn for hair loss suffered as a result of alopecia 33.24 areata; 33.25 (10) rental or purchase, as appropriate, of durable medical 33.26 equipment other than eyeglasses and hearing aids; 33.27 (11) diagnostic X-rays and laboratory tests; 33.28 (12) oral surgery for partially or completely unerupted 33.29 impacted teeth, a tooth root without the extraction of the 33.30 entire tooth, or the gums and tissues of the mouth when not 33.31 performed in connection with the extraction or repair of teeth; 33.32 (13) services of a physical therapist; 33.33 (14) transportation provided by licensed ambulance service 33.34 to the nearest facility qualified to treat the condition; or a 33.35 reasonable mileage rate for transportation to a kidney dialysis 33.36 center for treatment; and 34.1 (15) services of an occupational therapist. 34.2 (c) Covered expenses for the services and articles 34.3 specified in this subdivision do not include the following: 34.4 (1) any charge for care for injury or disease either (i) 34.5 arising out of an injury in the course of employment and subject 34.6 to a workers' compensation or similar law, (ii) for which 34.7 benefits are payable without regard to fault under coverage 34.8 statutorily required to be contained in any motor vehicle, or 34.9 other liability insurance policy or equivalent self-insurance, 34.10 or (iii) for which benefits are payable under another policy of 34.11 accident and health insurance, Medicare, or any other 34.12 governmental program except as otherwise provided by section 34.13 62A.04, subdivision 3, clause (4); 34.14 (2) any charge for treatment for cosmetic purposes other 34.15 than for reconstructive surgery when such service is incidental 34.16 to or follows surgery resulting from injury, sickness, or other 34.17 diseases of the involved part or when such service is performed 34.18 on a covered dependent child because of congenital disease or 34.19 anomaly which has resulted in a functional defect as determined 34.20 by the attending physician; 34.21 (3) care which is primarily for custodial or domiciliary 34.22 purposes which would not qualify as eligible services under 34.23 Medicare; 34.24 (4) any charge for confinement in a private room to the 34.25 extent it is in excess of the institution's charge for its most 34.26 common semiprivate room, unless a private room is prescribed as 34.27 medically necessary by a physician, provided, however, that if 34.28 the institution does not have semiprivate rooms, its most common 34.29 semiprivate room charge shall be considered to be 90 percent of 34.30 its lowest private room charge; 34.31 (5) that part of any charge for services or articles 34.32 rendered or prescribed by a physician, dentist, or other health 34.33 care personnel which exceeds the prevailing charge in the 34.34 locality where the service is provided; and 34.35 (6) any charge for services or articles the provision of 34.36 which is not within the scope of authorized practice of the 35.1 institution or individual rendering the services or articles. 35.2 (d) The minimum benefits for a qualified plan shall 35.3 include, in addition to those benefits specified in clauses (a) 35.4 and (e), benefits for well baby care, effective July 1, 1980, 35.5 subject to applicable deductibles, coinsurance provisions, and 35.6 maximum lifetime benefit limitations. 35.7 (e) Effective July 1, 1979, the minimum benefits of a 35.8 qualified plan shall include, in addition to those benefits 35.9 specified in clause (a), a second opinion from a physician on 35.10 all surgical procedures expected to cost a total of $500 or more 35.11 in physician, laboratory, and hospital fees, provided that the 35.12 coverage need not include the repetition of any diagnostic tests. 35.13 (f) Effective August 1, 1985, the minimum benefits of a 35.14 qualified plan must include, in addition to the benefits 35.15 specified in clauses (a), (d), and (e), coverage for special 35.16 dietary treatment for phenylketonuria when recommended by a 35.17 physician. 35.18 (g) Outpatient mental health coverage is subject to section 35.19 62A.152, subdivision 2. 35.20 Sec. 22. Minnesota Statutes 2000, section 62I.07, 35.21 subdivision 1, is amended to read: 35.22 Subdivision 1. [GENERAL ASSESSMENT.] Each member of the 35.23 association that is authorized to write property and casualty 35.24 insurance in the state shall participate in its losses and 35.25 expenses in the proportion that the direct written premiums of 35.26 the member on the kinds of insurance in that account bears to 35.27 the total aggregate direct written premiums written in this 35.28 state by all members on the kinds of insurance in that account. 35.29 The members' participation in the association shall be 35.30 determined annually on the direct written premiums written 35.31 during the preceding calendar year as reported on the annual 35.32 statements and other reports filed by the member with the 35.33 commissioner. Direct written premiums mean that amount at page 35.341415, column (2), lines5.15.2, 8, 9, 17, 21.2, 22, 23, 24, 35.35 25, 26, and 27 of the annual statement filed annually with the 35.36 department of commerce under section 60A.13. 36.1 Sec. 23. Minnesota Statutes 2000, section 62J.60, 36.2 subdivision 3, is amended to read: 36.3 Subd. 3. [HUMAN READABLE DATA ELEMENTS.] (a) The following 36.4 are the minimum human readable data elements that must be 36.5 present on the front side of the Minnesota health care 36.6 identification card: 36.7 (1) card issuer name or logo, which is the name or logo 36.8 that identifies the card issuer. The card issuer name or logo 36.9 may be the card's front background. No standard label is 36.10 required for this data element; 36.11 (2) claim submission number. The standardized label for 36.12 this element is "Clm Subm #"; 36.13 (3) identification number, which is the unique 36.14 identification number of the individual card holder established 36.15 and defined under this section. The standardized label for the 36.16 data element is "ID"; 36.17 (4) identification name, which is the name of the 36.18 individual card holder. The identification name must be 36.19 formatted as follows: first name, space, optional middle 36.20 initial, space, last name, optional space and name suffix. The 36.21 standardized label for this data element is "Name"; 36.22 (5) account number(s), which is any other number, such as a 36.23 group number, if required for part of the identification or 36.24 claims process. The standardized label for this data element is 36.25 "Account"; 36.26 (6) care type, which is the description of the group 36.27 purchaser's plan product under which the beneficiary is 36.28 covered. The description shall include the health plan company 36.29 name and the plan or product name. The standardized label for 36.30 this data element is "Care Type"; 36.31 (7) service type, which is the description of coverage 36.32 provided such as hospital, dental, vision, prescription, or 36.33 mental health. The standard label for this data element is "Svc 36.34 Type"; and 36.35 (8) provider/clinic name, which is the name of the primary 36.36 care clinic the card holder is assigned to by the health plan 37.1 company. The standard label for this field is "PCP." This 37.2 information is mandatory only if the health plan company assigns 37.3 a specific primary care provider to the card holder. 37.4 (b) The following human readable data elements shall be 37.5 present on the back side of the Minnesota health identification 37.6 card. These elements must be left justified, and no optional 37.7 data elements may be interspersed between them: 37.8 (1) claims submission name(s) and address(es), which are 37.9 the name(s) and address(es) of the entity or entities to which 37.10 claims should be submitted. If different destinations are 37.11 required for different types of claims, this must be labeled; 37.12 and 37.13 (2) telephone number(s) and name(s); which are the 37.14 telephone number(s) and name(s) of the following contact(s) with 37.15 a standardized label describing the service function as 37.16 applicable: 37.17 (i) eligibility and benefit information; 37.18 (ii) utilization review; 37.19 (iii) precertification; or 37.20 (iv) customer services. 37.21 (c) The following human readable data elements are 37.22 mandatory on the back side of the card for healthmaintenance37.23organizationsplan companies: 37.24 (1) emergency care authorization telephone number or 37.25 instruction on how to receive authorization for emergency care. 37.26 There is no standard label required for this information; and 37.27 (2) one of the following: 37.28 (i) telephone number to call to appeal to or file a 37.29 complaint with the commissioner of commerce or health; or 37.30 (ii) for persons enrolled under section 256B.69, 256D.03, 37.31 or 256L.12, the telephone number to call to file a complaint 37.32 with the ombudsperson designated by the commissioner of human 37.33 services under section 256B.69 and the address to appeal to the 37.34 commissioner of human services. There is no standard label 37.35 required for this information. 37.36 (d) All human readable data elements not required under 38.1 paragraphs (a) to (c) are optional and may be used at the 38.2 issuer's discretion. 38.3 [EFFECTIVE DATE.] This section is effective January 1, 2003. 38.4 Sec. 24. Minnesota Statutes 2000, section 62L.05, 38.5 subdivision 1, is amended to read: 38.6 Subdivision 1. [TWO SMALL EMPLOYER PLANS.] Each health 38.7 carrier in the small employer market must make available, on a 38.8 guaranteed issue basis, to any small employer that satisfies the 38.9 contribution and participation requirements of section 62L.03, 38.10 subdivision 3, both of the small employer plans described in 38.11 subdivisions 2 and 3. Under subdivisions 2 and 3, coinsurance 38.12 and deductibles do not apply to child health supervision 38.13 services and prenatal services, as defined by section 62A.047. 38.14 The maximum out-of-pocket costs for covered services must be 38.15 $3,000 per individual and $6,000 per family per year. The 38.16 maximum lifetime benefit must be$500,000not less than 38.17 $1,000,000. 38.18 Sec. 25. Minnesota Statutes 2000, section 62L.05, 38.19 subdivision 2, is amended to read: 38.20 Subd. 2. [DEDUCTIBLE-TYPE SMALL EMPLOYER PLAN.] The 38.21 benefits of the deductible-type small employer plan offered by a 38.22 health carrier must be equal to 80 percent of the charges, as 38.23 specified in subdivision 10, for health care services, supplies, 38.24 or other articles covered under the small employer plan, in 38.25 excess of an annual deductible which must be$500$2,250 per 38.26 individual and$1,000$4,500 per family. 38.27 Sec. 26. Minnesota Statutes 2000, section 62M.02, is 38.28 amended by adding a subdivision to read: 38.29 Subd. 12b. [HEALTH CARE SERVICES.] "Health care services" 38.30 means services for the diagnosis, prevention, treatment, cure, 38.31 or relief of a health condition, illness, injury, or disease. 38.32 [EFFECTIVE DATE.] This section is effective the day 38.33 following final enactment. 38.34 Sec. 27. Minnesota Statutes 2000, section 62M.03, 38.35 subdivision 2, is amended to read: 38.36 Subd. 2. [NONLICENSED UTILIZATION REVIEW ORGANIZATION.] An 39.1 organization that meets the definition of a utilization review 39.2 organization under section 62M.02, subdivision 21, that is not 39.3 licensed in this state that performs utilization review services 39.4 for Minnesota residents must register with the commissioner of 39.5 commerce and must certify compliance with sections 62M.01 to 39.6 62M.16. 39.7 Initial registration must occur no later than January 1, 39.8 1993. The registration is effective for two years and may be 39.9 renewed for another two years by written request. Each 39.10 utilization review organization registered under this chapter 39.11 shall notify the commissioner of commerce within 30 days of any 39.12 change in the name, address, or ownership of the 39.13 organization. The organization shall pay to the commissioner of 39.14 commerce a fee of $1,000 for the initial registration 39.15 application and $1,000 for each two-year renewal. 39.16 Sec. 28. Minnesota Statutes 2000, section 62M.05, 39.17 subdivision 5, is amended to read: 39.18 Subd. 5. [NOTIFICATION TO CLAIMS ADMINISTRATOR.] If the 39.19 utilization review organization and the claims administrator are 39.20 separate entities, the utilization review organization must 39.21 forward, electronically or in writing, a notification of 39.22 certification or determination not to certify to the appropriate 39.23 claims administrator for the health benefit plan. If it is 39.24 determined by the claims administrator that the certified health 39.25 care service is not covered by the health benefit plan, the 39.26 claims administrator must promptly notify the claimant and 39.27 provider of this information. 39.28 Sec. 29. Minnesota Statutes 2000, section 62Q.01, 39.29 subdivision 6, is amended to read: 39.30 Subd. 6. [MEDICARE-RELATED COVERAGE.] "Medicare-related 39.31 coverage" means a policy, contract, or certificate issued as a 39.32 supplement to Medicare, regulated under sections 62A.31 to 39.33 62A.44, including Medicare select coverage; policies, contracts, 39.34 or certificates that supplement Medicare issued by health 39.35 maintenance organizations; or policies, contracts, or 39.36 certificates governed by section 1833 (known as "cost" or "HCPP" 40.1 contracts) or 1876 (known as "TEFRA" or "risk" contracts) of the 40.2 federal Social Security Act, United States Code, title 42, 40.3 section 1395, et seq., as amended.; or Section 4001 of the 40.4 Balanced Budget Act of 1997 (BBA)(Public Law 105-33), Sections 40.5 1851 to 1859 of the Social Security Act establishing Part C of 40.6 the Medicare program, known as the "Medicare+Choice program." 40.7 [EFFECTIVE DATE.] This section is effective the day 40.8 following final enactment. 40.9 Sec. 30. Minnesota Statutes 2000, section 62Q.73, 40.10 subdivision 3, is amended to read: 40.11 Subd. 3. [RIGHT TO EXTERNAL REVIEW.] (a) Any enrollee or 40.12 anyone acting on behalf of an enrollee who has received an 40.13 adverse determination may submit a written request for an 40.14 external review of the adverse determination, if applicable 40.15 under section 62Q.68, subdivision 1, or 62M.06, to the 40.16 commissioner of health if the request involves a health plan 40.17 company regulated by that commissioner or to the commissioner of 40.18 commerce if the request involves a health plan company regulated 40.19 by that commissioner. Notification of the enrollee's right to 40.20 external review must accompany the denial issued by the insurer. 40.21 The written request must be accompanied by a filing fee of $25. 40.22 The fee may be waived by the commissioner of health or commerce 40.23 in cases of financial hardship. 40.24 (b) Nothing in this section requires the commissioner of 40.25 health or commerce to independently investigate an adverse 40.26 determination referred for independent external review. 40.27 (c) If an enrollee requests an external review, the health 40.28 plan company must participate in the external review. The cost 40.29 of the external review in excess of the filing fee described in 40.30 paragraph (a) shall be borne by the health plan company. 40.31 Sec. 31. [62Q.80] [BOARD FEES LIMITATION.] 40.32 No health plan company operated on a nonprofit basis shall 40.33 pay a salary, fee, or other remuneration to any member of a 40.34 board of directors in excess of $66 per meeting. 40.35 Sec. 32. Minnesota Statutes 2000, section 65A.29, 40.36 subdivision 7, is amended to read: 41.1 Subd. 7. [RENEWAL; NOTICE REQUIREMENT.] No insurer shall 41.2 refuse to renew, or reduce limits of coverage, or eliminate any 41.3 coverage in a homeowner's insurance policy unless it mails or 41.4 delivers to the insured, at the address shown in the policy, at 41.5 least 60 days' advance notice of its intention. The notice must 41.6 contain the specific underwriting or other reason or reasons for 41.7 the indicated action and must state the name of the insurer and 41.8 the date the notice is issued. 41.9 Proof of mailing this notice to the insured at the address 41.10 shown in the policy is sufficient proof that the notice required 41.11 by this section has been given. 41.12 [EFFECTIVE DATE.] This section is effective the day 41.13 following final enactment. 41.14 Sec. 33. Minnesota Statutes 2000, section 65A.30, is 41.15 amended to read: 41.16 65A.30 [DAY CARE SERVICES; COVERAGE.] 41.17 There shall be no coverage under the liability coverage 41.18 provisions of a day care provider's homeowner's insurance for 41.19 losses or damages arising out of the operation of day care 41.20 services unless: 41.21 (1) specifically covered in a policy; or 41.22 (2) covered by a rider for business coverage attached to a 41.23 policy. 41.24 For purposes of this section, "day care" means "family day 41.25 care" and "group family day care" as defined in Minnesota Rules, 41.26 part 9502.0315. "Day care" does not include care provided by an 41.27 individual who is related, as defined in Minnesota Rules, part 41.28 9502.0315, to the person being cared for or care provided by an 41.29 unrelated individual to persons from a single family of persons 41.30 related to each other. 41.31 [EFFECTIVE DATE.] This section is effective the day 41.32 following final enactment. 41.33 Sec. 34. Minnesota Statutes 2000, section 65B.04, 41.34 subdivision 3, is amended to read: 41.35 Subd. 3. [AMENDMENTS.] The plan of operation may be 41.36 amended by a majority vote of the governing committee,and the 42.1 approval of the commissionerand ratification by a majority of42.2the members. An order by the commissioner disapproving an 42.3 amendment to the plan of operation must be issued within 30 days 42.4 of receipt by the commissioner of the proposed amendment, 42.5 certified by the governing committee as having been adopted by 42.6 that committee by a majority vote, or the amendment shall be 42.7 deemed approved by the commissioner. An order of disapproval 42.8 may be appealed as provided in chapter 14. 42.9 [EFFECTIVE DATE.] This section is effective the day 42.10 following final enactment. 42.11 Sec. 35. Minnesota Statutes 2000, section 65B.06, 42.12 subdivision 1, is amended to read: 42.13 Subdivision 1. With respect to private passenger, nonfleet 42.14 automobiles, the facility shall provide for the equitable 42.15 distribution of qualified applicants to members in accordance 42.16 with the participation ratio or among these insurance companies 42.17 as selected under the provisions of the plan of operation. 42.18 [EFFECTIVE DATE.] This section is effective the day 42.19 following final enactment. 42.20 Sec. 36. Minnesota Statutes 2000, section 65B.06, 42.21 subdivision 4, is amended to read: 42.22 Subd. 4. Coverage made available under this section shall 42.23 be thestandardautomobile policy and endorsement forms, as 42.24 approved by the commissioner, with such changes, additions and 42.25 amendments as are adopted by the governing committee and 42.26 approved by the commissioner. 42.27 [EFFECTIVE DATE.] This section is effective the day 42.28 following final enactment. 42.29 Sec. 37. Minnesota Statutes 2000, section 65B.16, is 42.30 amended to read: 42.31 65B.16 [STATEMENT OF REASONS FOR CANCELLATION OR 42.32 REDUCTION.] 42.33 No notice of cancellation or reduction in the limits of 42.34 liability of coverage of an automobile insurance policy under 42.35 section 65B.15 shall be effective unless the specific 42.36 underwriting or other reason or reasons for such cancellation or 43.1 reduction in the limits of liability of coverage are stated in 43.2 such notice and the notice is mailed or delivered by the insurer 43.3 so as to provide the named insured with at least 30daysdays' 43.4 notice prior to the effective date of cancellation; provided, 43.5 however, that when nonpayment of premium is the reason for 43.6 cancellation or when the company is exercising its right to 43.7 cancel insurance which has been in effect for less than 60 days 43.8 at least ten days' notice of cancellation, and the reasons for 43.9 the cancellation, shall be given. Information regarding moving 43.10 traffic violations or motor vehicle accidents must be 43.11 specifically requested on the application in order for a company 43.12 to use those incidents to exercise its right to cancel within 43.13 the first 59 days of coverage. When nonpayment of premiums is 43.14 the reason for cancellation, the reason must be given to the 43.15 insured with the notice of cancellation; and if the company is 43.16 exercising its right to cancel within the first 59 days of 43.17 coverage and notice is given with less than ten days remaining 43.18 in the 59-day period, the coverage must be extended, to expire 43.19 ten days after notice was mailed. 43.20 Sec. 38. Minnesota Statutes 2000, section 65B.19, 43.21 subdivision 2, is amended to read: 43.22 Subd. 2. [NOTICE OF RIGHT TO COMPLAIN.] When the insurer 43.23 notifies the policyholder of nonrenewal, cancellation or 43.24 reduction in the limits of liability of coverage under section 43.25 65B.16 or 65B.17, the insurer shall also notify the named 43.26 insured of the right to complain within 30 days of receipt by 43.27 the named insured of notice of nonrenewal, cancellation or 43.28 reduction in the limits of liability to the commissioner of such 43.29 action and of the nature of and possible eligibility for 43.30 insurance through the Minnesota automobile insurance plan. Such 43.31 notice shall be included in the notice of nonrenewal, 43.32 cancellation or reduction in the limits of liability of 43.33 coverage, and shall state that such notice of the insured's 43.34 right of complaint to the commissioner and of the availability 43.35 of insurance through the Minnesota automobile insurance plan is 43.36 given pursuant to sections 65B.14 to 65B.21. The notice must 44.1 state the name of the insurer and the date the notice is issued. 44.2 Sec. 39. Minnesota Statutes 2000, section 65B.44, 44.3 subdivision 3, is amended to read: 44.4 Subd. 3. [DISABILITY AND INCOME LOSS BENEFITS.] Disability 44.5 and income loss benefits shall provide compensation for 85 44.6 percent of the injured person's loss of present and future gross 44.7 income from inability to work proximately caused by the nonfatal 44.8 injury subject to a maximum of$250$500 per week. Loss of 44.9 income includes the costs incurred by a self-employed person to 44.10 hire substitute employees to perform tasks which are necessary 44.11 to maintain the income of the injured person, which are normally 44.12 performed by the injured person, and which cannot be performed 44.13 because of the injury. 44.14 If the injured person is unemployed at the time of injury 44.15 and is receiving or is eligible to receive unemployment benefits 44.16 under chapter 268, but the injured person loses eligibility for 44.17 those benefits because of inability to work caused by the 44.18 injury, disability and income loss benefits shall provide 44.19 compensation for the lost benefits in an amount equal to the 44.20 unemployment benefits which otherwise would have been payable, 44.21 subject to a maximum of$250$500 per week. 44.22 Compensation under this subdivision shall be reduced by any 44.23 income from substitute work actually performed by the injured 44.24 person or by income the injured person would have earned in 44.25 available appropriate substitute work which the injured person 44.26 was capable of performing but unreasonably failed to undertake. 44.27 For the purposes of this section "inability to work" means 44.28 disability which prevents the injured person from engaging in 44.29 any substantial gainful occupation or employment on a regular 44.30 basis, for wage or profit, for which the injured person is or 44.31 may by training become reasonably qualified. If the injured 44.32 person returns to employment and is unable by reason of the 44.33 injury to work continuously, compensation for lost income shall 44.34 be reduced by the income received while the injured person is 44.35 actually able to work. The weekly maximums may not be prorated 44.36 to arrive at a daily maximum, even if the injured person does 45.1 not incur loss of income for a full week. 45.2 For the purposes of this section, an injured person who is 45.3 "unable by reason of the injury to work continuously" includes, 45.4 but is not limited to, a person who misses time from work, 45.5 including reasonable travel time, and loses income, vacation, or 45.6 sick leave benefits, to obtain medical treatment for an injury 45.7 arising out of the maintenance or use of a motor vehicle. 45.8 Sec. 40. Minnesota Statutes 2000, section 67A.20, is 45.9 amended by adding a subdivision to read: 45.10 Subd. 3. [WITH LICENSED INSURERS.] Township mutual fire 45.11 insurance companies may enter into reinsurance agreements with 45.12 any Minnesota licensed insurer authorized to write the same 45.13 lines of business. 45.14 [EFFECTIVE DATE.] This section is effective the day 45.15 following final enactment. 45.16 Sec. 41. Minnesota Statutes 2000, section 70A.07, is 45.17 amended to read: 45.18 70A.07 [RATES AND FORMS OPEN TO INSPECTION.] 45.19 All ratesand, supplementary rate information, and forms, 45.20 furnished to the commissioner under this chapter shall, as soon 45.21as the rates are reviewed by the commissioneras the 45.22 commissioner's review has been completed, be open to public 45.23 inspection at any reasonable time. 45.24 [EFFECTIVE DATE.] This section is effective the day 45.25 following final enactment. 45.26 Sec. 42. Minnesota Statutes 2000, section 79A.02, 45.27 subdivision 1, is amended to read: 45.28 Subdivision 1. [MEMBERSHIP.] For the purposes of assisting 45.29 the commissioner, there is established a workers' compensation 45.30 self-insurers' advisory committee of five members that are 45.31 employers authorized to self-insure in Minnesota. Three of the 45.32 members and three alternates shall be elected by the 45.33 self-insurers' security fund board of trustees and two members 45.34 and two alternates shall be appointed by the 45.35 commissioner. Notwithstanding section 15.059, subdivision 5a, 45.36 the advisory committee does not expire June 30, 2001. 46.1 [EFFECTIVE DATE.] This section is effective the day 46.2 following final enactment. 46.3 Sec. 43. Minnesota Statutes 2000, section 79A.03, 46.4 subdivision 7, is amended to read: 46.5 Subd. 7. [FINANCIAL STANDARDS.] A self-insurer group shall 46.6 have and maintain: 46.7 (a) A combined net worth of all of the members of an amount 46.8 at least equal to the greater of ten times the retention 46.9 selected with the workers' compensation reinsurance association 46.10 or one-third of the current annual modified premium of the 46.11 members. 46.12 (b) Sufficient assets, net worth, and liquidity to promptly 46.13 and completely meet all obligations of its members under chapter 46.14 176 or this chapter. In determining whether a group is in sound 46.15 financial condition, consideration shall be given to the 46.16 combined net worth of the member companies; the consolidated 46.17 long-term and short-term debt to equity ratios of the member 46.18 companies; any excess insurance other than reinsurance with the 46.19 workers' compensation reinsurance association, purchased by the 46.20 group from an insurer licensed in Minnesota or from an 46.21 authorized surplus line carrier; other financial data requested 46.22 by the commissioner or submitted by the group; and the combined 46.23 workers' compensation experience of the group for the last four 46.24 years. 46.25 No authority to self-insure will be granted unless, over 46.26 the term of the policy year, at least 65 percent of total 46.27 revenues from all sources for the year are available for the 46.28 payment of its claim and assessment obligations, and insurance 46.29 premiums for stop loss coverage. For purposes of this 46.30 calculation, claim and assessment obligations include the cost 46.31 of allocated loss expenses as well as special compensation fund 46.32 and self-insurers' security fund assessments but exclude the 46.33 cost of unallocated loss expenses. 46.34 [EFFECTIVE DATE.] This section is effective July 1, 2001. 46.35 Sec. 44. Minnesota Statutes 2000, section 79A.04, 46.36 subdivision 16, is amended to read: 47.1 Subd. 16. [CERTIFICATE TO SELF-INSURE; REVOCATION.] If, 47.2 following a private self-insurer's bankruptcy, insolvency, or 47.3 certificate of default, the commissioner calls its security and 47.4 proceeds in accordance with this section, the commissioner shall 47.5 revoke the certificate to self-insure of the private 47.6 self-insurer as soon as practicable but no later than 30 days 47.7 after its security has been called. No insolvent self-insurer, 47.8 as defined in section 79A.01, subdivision 4, shall be eligible 47.9 to receive another grant of authority to self-insure unless 47.10 either: (1) the insolvent self-insurer's posted security was 47.11 sufficient to pay all direct and indirect administrative and 47.12 professional expenses of the security fund related to the 47.13 insolvent self-insurer, and all losses, including estimated 47.14 future liability, allocated loss expense, and unallocated loss 47.15 expense of the insolvent self-insurer; or (2) the insolvent 47.16 self-insurer pays the security fund an amount equal to all such 47.17 losses and expenses the security fund has paid or will be 47.18 required to pay related to this insolvent self-insurer. 47.19 Sec. 45. Minnesota Statutes 2000, section 79A.15, is 47.20 amended to read: 47.21 79A.15 [SURETY BOND FORM.] 47.22 The form for the surety bond under this chapter shall be: 47.23 STATE OF MINNESOTA 47.24 DEPARTMENT OF COMMERCE 47.25 SURETY BOND OF SELF-INSURER OF WORKERS' COMPENSATION 47.26 47.27 IN THE MATTER OF THE CERTIFICATE OF ) 47.28 ) 47.29 ) SURETY BOND 47.30 ) NO. ............. 47.31 ) PREMIUM: ........ 47.32 ) 47.33 Employer, Certificate No: .............. ) 47.34 KNOW ALL PERSONS BY THESE PRESENTS: 47.35 That ..................................................... 47.36 (Employer) 47.37 whose address is .............................................. 47.38 as Principal, and ............................................. 47.39 (Surety) 47.40 a corporation organized under the laws of ..................... 48.1 and authorized to transact a general surety business in the 48.2 State of Minnesota, as Surety, are held and firmly bound to the 48.3 State of Minnesota in the penal sum of 48.4 ...........................dollars ($..........) for which 48.5 payment we bind ourselves, our heirs, executors, administrators, 48.6 successors, and assigns, jointly and severally, firmly by these 48.7 presents. 48.8 WHEREAS in accordance with Minnesota Statutes, chapter 176, 48.9 the principal elected to self-insure, and made application for, 48.10 or received from the commissioner of commerce of the state of 48.11 Minnesota, a certificate to self-insure, upon furnishing of 48.12 proof satisfactory to the commissioner of commerce of ability to 48.13 self-insure and to compensate any or all employees of said 48.14 principal for injury or disability, and their dependents for 48.15 death incurred or sustained by said employees pursuant to the 48.16 terms, provisions, and limitations of said statute; 48.17 NOW THEREFORE, the conditions of this bond or obligation 48.18 are such that if principal shall pay and furnish compensation, 48.19 pursuant to the terms, provisions, and limitations of said 48.20 statute to its employees for injury or disability, and to the 48.21 dependents of its employees, then this bond or obligation shall 48.22 be null and void; otherwise to remain in full force and effect. 48.23 FURTHERMORE, it is understood and agreed that: 48.24 1. This bond may be amended, by agreement between the 48.25 parties hereto and the commissioner of commerce as to the 48.26 identity of the principal herein named; and, by agreement of the 48.27 parties hereto, as to the premium or rate of premium. Such 48.28 amendment must be by endorsement upon, or rider to, this bond, 48.29 executed by the surety and delivered to or filed with the 48.30 commissioner. 48.31 2. The surety does, by these presents, undertake and agree 48.32 that the obligation of this bond shall cover and extend to all 48.33 past, present, existing, and potential liability of said 48.34 principal, as a self-insurer, to the extent of the penal sum 48.35 herein named without regard to specific injuries, date or dates 48.36 of injuries, happenings or events. 49.1 3. The penal sum of this bond may be increased or 49.2 decreased, by agreement between the parties hereto and the 49.3 commissioner of commerce, without impairing the obligation 49.4 incurred under this bond for the overall coverage of the said 49.5 principal, for all past, present, existing, and potential 49.6 liability, as a self-insurer, without regard to specific 49.7 injuries, date or dates of injuries, happenings or events, to 49.8 the extent, in the aggregate, of the penal sum as increased or 49.9 decreased. Such amendment must be by endorsement. 49.10 4. The aggregate liability of the surety hereunder on all 49.11 claims whatsoever shall not exceed the penal sum of this bond in 49.12 any event. 49.13 5. This bond shall be continuous in form and shall remain 49.14 in full force and effect unless terminated as follows: 49.15 (a) The obligation of this bond shall terminate upon 49.16 written notice of cancellation from the surety, given by 49.17 registered or certified mail to the commissioner of commerce, 49.18 state of Minnesota, save and except as to all past, present, 49.19 existing, and potential liability of the principal incurred, 49.20 including obligations resulting from claims which are incurred 49.21 but not yet reported, as a self-insurer prior to effective date 49.22 of termination. This termination is effective 60 days after 49.23 receipt of notice of cancellation by the commissioner of 49.24 commerce, state of Minnesota. 49.25 (b) This bond shall also terminate upon the revocation of 49.26 the certificate to self-insure, save and except as to all past, 49.27 present, existing, and potential liability of the principal 49.28 incurred, including obligations resulting from claims which are 49.29 incurred but not yet reported, as a self-insurer prior to 49.30 effective date of termination. The principal and the surety, 49.31 herein named, shall be immediately notified in writing by said 49.32 commissioner, in the event of such revocation. 49.33 6. Where the principal posts with the commissioner of 49.34 commerce, state of Minnesota, or the state treasurer, state of 49.35 Minnesota, a replacement security deposit, in the form of a 49.36 surety bond, irrevocable letter of credit, cash, securities, or 50.1 any combination thereof, in the full amount as may be required 50.2 by the commissioner of commerce, state of Minnesota, to secure 50.3 all incurred liabilities for the payment of compensation of said 50.4 principal under Minnesota Statutes, chapter 176, the surety is 50.5 released from obligations under the surety bond upon the date of 50.6 acceptance by the commissioner of commerce, state of Minnesota, 50.7 of said replacement security deposit. 50.8 7. If the said principal shall suspend payment of workers' 50.9 compensation benefits or shall become insolvent or a receiver 50.10 shall be appointed for its business, or the commissioner of 50.11 commerce, state of Minnesota, issues a certificate of default, 50.12 the undersigned surety will become liable for the workers' 50.13 compensation obligations of the principal on the date benefits 50.14 are suspended. The surety shall begin payments within 14 days 50.15 under paragraph 8, or 30 days under paragraph 10, after receipt 50.16 of written notification by certified mail from the commissioner 50.17 of commerce, state of Minnesota, to begin payments under the 50.18 terms of this bond. 50.19 8. If the surety exercises its option to administer 50.20 claims, it shall pay benefits due to the principal's injured 50.21 workers within 14 days of the receipt of the notification by the 50.22 commissioner of commerce, state of Minnesota, pursuant to 50.23 paragraph 7, without a formal award of a compensation judge, the 50.24 commissioner of labor and industry, any intermediate appellate 50.25 court, or the Minnesota supreme court and such payment will be a 50.26 charge against the penal sum of the bond. Administrative and 50.27 legal costs and payment of assessments incurred by the surety in 50.28 discharging its obligations and payment of the principal's 50.29 obligations for administration and legal expenses and payment of 50.30 assessments under Minnesota Statutes, chapters 79A and 176, 50.31 shall also be a charge against the penal sum of the bond;50.32however, the total amount of this surety bond set aside for the50.33payment of said administrative and legal expenses and payment of50.34assessments shall be limited to a maximum ten percent of the50.35total penal sum of the bond unless otherwise authorized by the50.36security fund. 51.1 9. If any part or provision of this bond shall be declared 51.2 unenforceable or held to be invalid by a court of proper 51.3 jurisdiction, such determination shall not affect the validity 51.4 or enforceability of the other provisions or parts of this bond. 51.5 10. If the surety does not give notice to the 51.6 (self-insurer's security fund) (commercial self-insurance group 51.7 security fund) and the commissioner of commerce, state of 51.8 Minnesota, within two business days of receipt of written 51.9 notification from the commissioner of commerce, state of 51.10 Minnesota, pursuant to paragraph 7, to exercise its option to 51.11 administer claims pursuant to paragraph 8, then the 51.12 (self-insurer's security fund) (commercial self-insurance 51.13 security fund) will assume the payments of the workers' 51.14 compensation obligations of the principal pursuant to Minnesota 51.15 Statutes, chapter 176. Administrative, legal, actuarial, and 51.16 other direct costs attributed to the principal shall also be a 51.17 charge against the penal sum of the bond. The surety shall pay, 51.18 within 30 days of the receipt of the notification by the 51.19 commissioner of commerce, state of Minnesota, pursuant to 51.20 paragraph 7, to the (self-insurer's security fund) (commercial 51.21 self-insurance group security fund) as an initial deposit an 51.22 amount equal toten50 percent of the penal sum of the bond, and 51.23 shall thereafter, upon notification from the (self-insurer's 51.24 security fund) (commercial self-insurance group security fund) 51.25 that the balance of the initial deposit, including interest 51.26 earned as provided below with respect to the segregated account, 51.27 had fallen tooneten percent of the penal sum of the bond, 51.28 remit to the (self-insurer's security fund) (commercial 51.29 self-insurance group security fund) an amount equal tothe51.30payments made by the (self-insurer's security fund) (commercial51.31self-insurance group security fund) in the three calendar months51.32immediately preceding said notification.an additional ten 51.33 percent of the penal sum of the bond. All such payments will be 51.34 a charge against the penal sum of the bond. The initial deposit 51.35 and all subsequent deposits shall be deposited by the 51.36 (self-insurer's security fund) (commercial self-insurance group 52.1 security fund) into a segregated, interest-bearing account. 52.2 These deposits, together with any interest earned thereon, shall 52.3 be used to satisfy all obligations of the surety hereunder. 52.4 Upon determination that there are no remaining reserves for any 52.5 known claims covered under the bond, the balance of the account, 52.6 including any interest earned thereon, shall be paid to the 52.7 surety. 52.8 Said repayment of the funds to the surety will not 52.9 discharge the bond, which shall remain in full force and effect 52.10 as to all past, present, existing, and potential liability of 52.11 the principal incurred, including obligations resulting from 52.12 claims which are incurred but not yet reported, as a 52.13 self-insurer prior to the effective date of termination of the 52.14 bond. 52.15 11. Disputes concerning the posting, renewal, termination, 52.16 exoneration, or return of all or any portion of the principal's 52.17 security deposit or any liability arising out of the posting or 52.18 failure to post security, or the adequacy of the security or the 52.19 reasonableness of administrative costs, including legal costs, 52.20 arising between or among a surety, the issuer of an agreement of 52.21 assumption and guarantee of workers' compensation liabilities, 52.22 the issuer of a letter of credit, any custodian of the security 52.23 deposit, the principal, or the (self-insurer's security fund) 52.24 (commercial self-insurance group security fund) shall be 52.25 resolved by the commissioner of commerce pursuant to Minnesota 52.26 Statutes, chapters 79A and 176. 52.27 12. Written notification to the surety required by this 52.28 bond shall be sent to: 52.29 ......................... 52.30 Name of Surety 52.31 ......................... 52.32 To the attention of Person or 52.33 Position 52.34 ......................... 52.35 Address 52.36 ......................... 52.37 City, State, Zip 52.38 Written notification to the principal required by this bond 53.1 shall be sent to: 53.2 ......................... 53.3 Name of Principal 53.4 ......................... 53.5 To the attention of Person or 53.6 Position 53.7 ......................... 53.8 Address 53.9 ......................... 53.10 City, State, Zip 53.11 13. This bond is executed by the surety to comply with 53.12 Minnesota Statutes, chapter 176, and said bond shall be subject 53.13 to all terms and provisions thereof. 53.14 ......................... 53.15 Name of Surety 53.16 ......................... 53.17 Address 53.18 ......................... 53.19 City, State, Zip 53.20 THIS bond is executed under an unrevoked appointment or 53.21 power of attorney. 53.22 I certify (or declare) under penalty of perjury under the 53.23 laws of the state of Minnesota that the foregoing is true and 53.24 correct. 53.25 53.26 .............. ............................. 53.27 Date Signature of Attorney-In-Fact 53.29 ............................. 53.30 Printed or Typed Name of 53.31 Attorney-In-Fact 53.32 A copy of the transcript or record of the unrevoked 53.33 appointment, power of attorney, bylaws, or other instrument, 53.34 duly certified by the proper authority and attested by the seal 53.35 of the insurer entitling or authorizing the person who executed 53.36 the bond to do so for and in behalf of the insurer, must be 53.37 filed in the office of the commissioner of commerce or must be 53.38 included with this bond for such filing. 53.39 [EFFECTIVE DATE.] This section is effective for bonds 53.40 posted on or after January 1, 2002. 53.41 Sec. 46. Minnesota Statutes 2000, section 471.617, 53.42 subdivision 1, is amended to read: 54.1 Subdivision 1. [IF MORE THAN 100 EMPLOYEES; CONDITIONS.] A 54.2 statutory or home rule charter city, county, school district, or 54.3 instrumentality thereof which has more than 100 employees, may 54.4 by ordinance or resolution self-insure for any employee health 54.5 benefits including long-term disability, but not for employee 54.6 life benefits. Any self-insurance plan shall provide all 54.7 benefits which are required by law to be provided by group 54.8 health insurance policies. Self-insurance plansshallmust be 54.9 certified as provided by section 62E.05 and must be filed and 54.10 certified by the department of commerce before they are issued 54.11 or delivered to any person in this state. 54.12 [EFFECTIVE DATE.] This section is effective the day 54.13 following final enactment. 54.14 Sec. 47. [REPEALER.] 54.15 Minnesota Statutes 2000, sections 13.7191, subdivision 11; 54.16 60A.111; 62G.01; 62G.02; 62G.03; 62G.04; 62G.05; 62G.06; 62G.07; 54.17 62G.08; 62G.09; 62G.10; 62G.11; 62G.12; 62G.13; 62G.14; 62G.15; 54.18 62G.16; 62G.17; 62G.18; 62G.19; 62G.20; 62G.21; 62G.22; 62G.23; 54.19 62G.24; and 62G.25, are repealed. 54.20 [EFFECTIVE DATE.] This section is effective the day 54.21 following final enactment.