SF 1653

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:22am

A bill for an act
relating to commerce; regulating various licenses, forms, coverages, marketing
practices, and records; classifying certain data; prescribing a criminal penalty;
amending Minnesota Statutes 2008, sections 13.716, by adding a subdivision;
45.011, subdivision 1; 45.0135, subdivision 7; 58.02, subdivision 17; 59B.01;
60A.08, by adding a subdivision; 60A.198, subdivisions 1, 3; 60A.205,
subdivision 1; 60A.2085, subdivisions 1, 3, 7, 8; 60A.23, subdivision 8;
60A.235; 60A.32; 62A.011, subdivision 3; 62A.136; 62A.315; 62A.316; 62L.02,
subdivision 26; 62M.05, subdivision 3a; 65A.27, subdivision 1; 67A.191,
subdivision 2; 72A.139, subdivision 2; 72A.20, subdivisions 15, 26; 79A.04,
subdivision 1, by adding a subdivision; 79A.06, by adding a subdivision;
79A.24, subdivision 1, by adding a subdivision; 82.31, subdivision 4; 82B.08,
by adding a subdivision; 82B.20, subdivision 2; proposing coding for new law
in Minnesota Statutes, chapters 62A; 72A; 82B; repealing Minnesota Statutes
2008, sections 70A.07; 79.56, subdivision 4; 325E.311; 325E.312; 325E.313;
325E.314; 325E.315; 325E.316.

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

Section 1.

Minnesota Statutes 2008, section 13.716, is amended by adding a
subdivision to read:

new text begin Subd. 8. new text end

new text begin Insurance filings data. new text end

new text begin Insurance filings data received by the
commissioner of commerce are classified under section 60A.08, subdivision 15.
new text end

Sec. 2.

Minnesota Statutes 2008, section 45.011, subdivision 1, is amended to read:

Subdivision 1.

Scope.

As used in chapters 45 to 83, 155A, 332, 332A, 345, and 359,
and sections new text begin 123A.21, subdivisions 7 and 23, 123A.25; new text end 325D.30 to 325D.42 deleted text begin , deleted text end new text begin ; new text end 326B.802
to 326B.885 deleted text begin , and deleted text end new text begin ; new text end 386.61 to 386.78 deleted text begin , deleted text end new text begin ; new text end new text begin 471.617; and 471.982, new text end unless the context indicates
otherwise, the terms defined in this section have the meanings given them.

Sec. 3.

Minnesota Statutes 2008, section 45.0135, subdivision 7, is amended to read:

Subd. 7.

Assessment.

Each insurer authorized to sell insurance in the state of
Minnesota new text begin , including surplus lines carriers, and having Minnesota earned premium the
previous calendar year new text end shall remit an assessment to the commissioner for deposit in the
insurance fraud prevention account on or before June 1 of each year. The amount of the
assessment shall be based on the insurer's total assets and on the insurer's total written
Minnesota premium, for the preceding fiscal year, as reported pursuant to section 60A.13.
The assessment is calculated deleted text begin as follows deleted text end new text begin to be an amount up to the following new text end :

	Total Assets	Assessment
	Less than $100,000,000		$	200
	$100,000,000 to $1,000,000,000		$	750
	Over $1,000,000,000		$	2,000
	Minnesota Written Premium	Assessment
	Less than $10,000,000		$	200
	$10,000,000 to $100,000,000		$	750
	Over $100,000,000		$	2,000

For purposes of this subdivision, the following entities are not considered to be
insurers authorized to sell insurance in the state of Minnesota: risk retention groups; or
township mutuals organized under chapter 67A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2010.
new text end

Sec. 4.

Minnesota Statutes 2008, section 58.02, subdivision 17, is amended to read:

Subd. 17.

Person in control.

"Person in control" means any member of senior
management new text begin , including owners or officers, new text end and other persons who possess, directly
or indirectly, the power to direct or cause the direction of the management policies of
an applicant or licensee under this chapter, regardless of whether the person has any
ownership interest in the applicant or licensee. Control is presumed to exist if a person,
directly or indirectly, owns, controls, or holds with power to vote ten percent or more of
the voting stock of an applicant or licensee or of a person who owns, controls, or holds
with power to vote ten percent or more of the voting stock of an applicant or licensee.

Sec. 5.

Minnesota Statutes 2008, section 59B.01, is amended to read:

59B.01 SCOPE AND PURPOSE.

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

(b) The following are exempt from this chapter:

(1) warranties;

(2) maintenance agreements;

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

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

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

(6) service contracts for home security equipment installed by a licensed technology
systems contractor; and

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

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

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

new text begin (e) All warranty service contracts are deemed to be made in Minnesota for the
purpose of arbitration.
new text end

Sec. 6.

Minnesota Statutes 2008, section 60A.08, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Classification of insurance filings data. new text end

new text begin (1) All forms, rates, and related
information filed with the commissioner under section 61A.02 shall be nonpublic until the
filing becomes effective.
new text end

new text begin (2) All forms, rates, and related information filed with the commissioner under
section 62A.02 shall be nonpublic until the filing becomes effective.
new text end

new text begin (3) All forms, rates, and related information filed with the commissioner under
section 62C.14, subdivision 10, shall be nonpublic until the filing becomes effective.
new text end

new text begin (4) All forms, rates, and related information filed with the commissioner under
section 70A.06 shall be nonpublic until the filing becomes effective.
new text end

new text begin (5) All forms, rates, and related information filed with the commissioner under
section 79.56 shall be nonpublic until the filing becomes effective.
new text end

Sec. 7.

Minnesota Statutes 2008, section 60A.198, subdivision 1, is amended to read:

Subdivision 1.

License required.

A person, as defined in section 60A.02,
subdivision 7, shall not act in any other manner as an agent or broker in the transaction
of surplus lines insurance unless licensed under sections 60A.195 to 60A.209. A surplus
lines license is not required for a licensed deleted text begin resident deleted text end agent who assists in the deleted text begin procurement deleted text end
new text begin placement new text end of surplus lines insurance with a surplus lines licensee pursuant to sections
60A.195 to 60A.209.

Sec. 8.

Minnesota Statutes 2008, section 60A.198, subdivision 3, is amended to read:

Subd. 3.

Procedure for obtaining license.

A person licensed as an agent in this
state pursuant to other law may obtain a surplus lines license by doing the following:

(a) filing an application in the form and with the information the commissioner
may reasonably require to determine the ability of the applicant to act in accordance
with sections 60A.195 to 60A.209;

(b) maintaining an agent's license in this state;

new text begin (c) registering with the association created pursuant to section 60A.2085;
new text end

deleted text begin (c) deleted text end new text begin (d) new text end agreeing to file with the commissioner of revenue all returns required by
chapter 297I and paying to the commissioner of revenue all amounts required under
chapter 297I; deleted text begin and
deleted text end

new text begin (e) agreeing to file all documents required pursuant to section 60A.2086 and to pay
the stamping fee assessed pursuant to section 60A.2085, subdivision 7; and
new text end

deleted text begin (d) deleted text end new text begin (f) new text end paying a fee as prescribed by section 60K.55.

Sec. 9.

Minnesota Statutes 2008, section 60A.205, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

A surplus lines licensee may be compensated by
an eligible surplus lines insurer and the licensee may compensate a licensed deleted text begin resident deleted text end
agent in this state for obtaining surplus lines insurance business. A licensed deleted text begin resident deleted text end
agent authorized by the licensee may collect a premium on behalf of the licensee, and as
between the insured and the licensee, the licensee shall be considered to have received the
premium if the premium payment has been made to the agent.

Sec. 10.

Minnesota Statutes 2008, section 60A.2085, subdivision 1, is amended to read:

Subdivision 1.

Association created; duties.

There is hereby created a nonprofit
association to be known as the Surplus Lines Association of Minnesota. new text begin The association
is not a state agency for purposes of chapter 16A, 16B, 16C, or 43A. new text end All surplus lines
licensees are members of this association. Section 60A.208 deleted text begin , subdivision 5, deleted text end does not apply
to the new text begin association created pursuant to the new text end provisions of this section. The association shall
perform its functions under the plan of operation established under subdivision 3 and must
exercise its powers through a board of directors established under subdivision 2 new text begin as set
forth in the plan of operation new text end . The association shall be authorized and have the duty to:

(1) receive, record, and stamp all surplus lines insurance documents that surplus
lines licensees are required to file with the association;

(2) prepare and deliver monthly to the commissioners of revenue and commerce a
report regarding surplus lines business. The report must include a list of all the business
procured during the preceding month, in the form the commissioners prescribe;

(3) educate its members regarding the surplus lines law of this state including
insurance tax responsibilities and the rules and regulations of the commissioners of
revenue and commerce relative to surplus lines insurance;

(4) communicate with organizations of agents, brokers, and admitted insurers with
respect to the proper use of the surplus lines market;

(5) employ and retain persons necessary to carry out the duties of the association;

(6) borrow money necessary to effect the purposes of the association new text begin and grant a
security interest or mortgage in its assets, including the stamping fees charged pursuant to
subdivision 7 in order to secure the repayment of any such borrowed money new text end ;

(7) enter contracts necessary to effect the purposes of the association;

(8) provide other services to its members that are incidental or related to the
purposes of the association; deleted text begin and
deleted text end

new text begin (9) form and organize itself as a nonprofit corporation under chapter 317A, with the
powers set forth in section 317A.161 that are not otherwise limited by this section or in
its articles, bylaws, or plan of operation;
new text end

new text begin (10) file such applications and take such other action as necessary to establish and
maintain the association as tax exempt pursuant to the federal income tax code;
new text end

new text begin (11) recommend to the commissioner of commerce revisions to Minnesota law
relating to the regulation of surplus lines insurance in order to improve the efficiency
and effectiveness of that regulation; and
new text end

deleted text begin (9) deleted text end new text begin (12) new text end take other actions reasonably required to implement the provisions of this
section.

Sec. 11.

Minnesota Statutes 2008, section 60A.2085, subdivision 3, is amended to read:

Subd. 3.

Plan of operation.

(a) The plan of operation shall provide for the
formation, operation, and governance of the association new text begin as a nonprofit corporation
under chapter 317A new text end . The plan of operation must provide for the election of a board of
directors by the members of the association. The board of directors shall elect officers as
provided for in the plan of operation. The plan of operation shall establish the manner of
voting and may weigh each member's vote to reflect the annual surplus lines insurance
premium written by the member. Members employed by the same or affiliated employers
may consolidate their premiums written and delegate an individual officer or partner
to represent the member in the exercise of association affairs, including service on the
board of directors.

(b) The plan of operation shall provide for an independent audit once each year of all
the books and records of the association and a report of such independent audit shall be
made to the board of directors, the commissioner of revenue, and the commissioner of
commerce, with a copy made available to each member to review at the association office.

(c) The plan of operation and any amendments to the plan of operation shall be
submitted to the commissioner and shall be effective upon approval in writing by the
commissioner. The association and all members shall comply with the plan of operation or
any amendments to it. Failure to comply with the plan of operation or any amendments
shall constitute a violation for which the commissioner may issue an order requiring
discontinuance of the violation.

(d) If the interim board of directors fails to submit a suitable plan of operation
within 60 days following the creation of the interim board, or if at any time thereafter the
association fails to submit required amendments to the plan, the commissioner may submit
to the association a plan of operation or amendments to the plan, which the association
must follow. The plan of operation or amendments submitted by the commissioner shall
continue in force until amended by the commissioner or superseded by a plan of operation
or amendment submitted by the association and approved by the commissioner. A plan
of operation or an amendment submitted by the commissioner constitutes an order of
the commissioner.

Sec. 12.

Minnesota Statutes 2008, section 60A.2085, subdivision 7, is amended to read:

Subd. 7.

Stamping fee.

The services performed by the association shall be
funded by a stamping fee assessed for each premium-bearing document submitted to
the association. The stamping fee shall be established by the board of directors of the
association from time to time. The stamping fee shall be paid by the insured to the surplus
lines licensee and remitted deleted text begin electronically deleted text end to the association by the surplus lines licensee new text begin in
the manner established by the association new text end .

Sec. 13.

Minnesota Statutes 2008, section 60A.2085, subdivision 8, is amended to read:

Subd. 8.

Data classification.

Unless otherwise classified by statute, a temporary
classification under section 13.06, or federal law, information obtained by the
commissioner from the association is public, except that any data identifying insureds new text begin or
the Social Security number of a licensee or any information derived therefrom new text end is private
data on individuals or nonpublic data as defined in section 13.02, subdivisions 9 and 12.

Sec. 14.

Minnesota Statutes 2008, section 60A.23, subdivision 8, is amended to read:

Subd. 8.

Self-insurance or insurance plan administrators who are vendors
of risk management services.

(1) Scope. This subdivision applies to any vendor of
risk management services and to any entity which administers, for compensation, a
self-insurance or insurance plan. This subdivision does not apply (a) to an insurance
company authorized to transact insurance in this state, as defined by section 60A.06,
subdivision 1, clauses (4) and (5); (b) to a service plan corporation, as defined by section
62C.02, subdivision 6; (c) to a health maintenance organization, as defined by section
62D.02, subdivision 4; (d) to an employer directly operating a self-insurance plan for
its employees' benefits; (e) to an entity which administers a program of health benefits
established pursuant to a collective bargaining agreement between an employer, or group
or association of employers, and a union or unions; or (f) to an entity which administers a
self-insurance or insurance plan if a licensed Minnesota insurer is providing insurance
to the plan and if the licensed insurer has appointed the entity administering the plan as
one of its licensed agents within this state.

(2) Definitions. For purposes of this subdivision the following terms have the
meanings given them.

(a) "Administering a self-insurance or insurance plan" means (i) processing,
reviewing or paying claims, (ii) establishing or operating funds and accounts, or (iii)
otherwise providing necessary administrative services in connection with the operation of
a self-insurance or insurance plan.

(b) "Employer" means an employer, as defined by section 62E.02, subdivision 2.

(c) "Entity" means any association, corporation, partnership, sole proprietorship,
trust, or other business entity engaged in or transacting business in this state.

(d) "Self-insurance or insurance plan" means a plan new text begin for the benefit of employees
or members of an association new text end providing life, medical or hospital care, accident, sickness
or disability insurance deleted text begin for the benefit of employees or members of an association deleted text end new text begin , or
pharmacy benefits new text end , or a plan providing liability coverage for any other risk or hazard,
which is or is not directly insured or provided by a licensed insurer, service plan
corporation, or health maintenance organization.

(e) "Vendor of risk management services" means an entity providing for
compensation actuarial, financial management, accounting, legal or other services for the
purpose of designing and establishing a self-insurance or insurance plan for an employer.

(3) License. No vendor of risk management services or entity administering a
self-insurance or insurance plan may transact this business in this state unless it is licensed
to do so by the commissioner. An applicant for a license shall state in writing the type of
activities it seeks authorization to engage in and the type of services it seeks authorization
to provide. The license may be granted only when the commissioner is satisfied that the
entity possesses the necessary organization, background, expertise, and financial integrity
to supply the services sought to be offered. The commissioner may issue a license subject
to restrictions or limitations upon the authorization, including the type of services which
may be supplied or the activities which may be engaged in. The license fee is $1,500
for the initial application and $1,500 for each three-year renewal. All licenses are for
a period of three years.

(4) Regulatory restrictions; powers of the commissioner. To assure that
self-insurance or insurance plans are financially solvent, are administered in a fair and
equitable fashion, and are processing claims and paying benefits in a prompt, fair,
and honest manner, vendors of risk management services and entities administering
insurance or self-insurance plans are subject to the supervision and examination by the
commissioner. Vendors of risk management services, entities administering insurance or
self-insurance plans, and insurance or self-insurance plans established or operated by
them are subject to the trade practice requirements of sections 72A.19 to 72A.30. In lieu
of an unlimited guarantee from a parent corporation for a vendor of risk management
services or an entity administering insurance or self-insurance plans, the commissioner
may accept a surety bond in a form satisfactory to the commissioner in an amount equal to
120 percent of the total amount of claims handled by the applicant in the prior year. If at
any time the total amount of claims handled during a year exceeds the amount upon which
the bond was calculated, the administrator shall immediately notify the commissioner.
The commissioner may require that the bond be increased accordingly.

No contract entered into after July 1, 2001, between a licensed vendor of risk
management services and a group authorized to self-insure for workers' compensation
liabilities under section 79A.03, subdivision 6, may take effect until it has been filed
with the commissioner, and either (1) the commissioner has approved it or (2) 60 days
have elapsed and the commissioner has not disapproved it as misleading or violative of
public policy.

(5) Rulemaking authority. To carry out the purposes of this subdivision, the
commissioner may adopt rules pursuant to sections 14.001 to 14.69. These rules may:

(a) establish reporting requirements for administrators of insurance or self-insurance
plans;

(b) establish standards and guidelines to assure the adequacy of financing, reinsuring,
and administration of insurance or self-insurance plans;

(c) establish bonding requirements or other provisions assuring the financial integrity
of entities administering insurance or self-insurance plans; or

(d) establish other reasonable requirements to further the purposes of this
subdivision.

Sec. 15.

Minnesota Statutes 2008, section 60A.235, is amended to read:

60A.235 STANDARDS FOR DETERMINING WHETHER CONTRACTS
ARE HEALTH PLAN CONTRACTS OR STOP LOSS CONTRACTS.

Subdivision 1.

Findings and purpose.

The purpose of this section is to establish
a standard for the determination of whether an insurance policy or other evidence or
coverage should be treated as a policy of accident and sickness insurance or a stop loss
policy for the purpose of the regulation of the business of insurance. The laws regulating
the business of insurance in Minnesota impose distinctly different requirements upon
accident and sickness insurance policies and stop loss policies. In particular, the regulation
of accident and sickness insurance in Minnesota includes measures designed to reform the
health insurance market, to minimize or prohibit selective rating or rejection of employee
groups or individual group members based upon health conditions, and to provide access
to affordable health insurance coverage regardless of preexisting health conditions. The
health care reform provisions enacted in Minnesota will only be effective if they are
applied to all insurers and health carriers who in substance, regardless of purported form,
engage in the business of issuing health insurance coverage to employees of an employee
group. This section applies to insurance companies and health carriers and the policies or
other evidence of coverage that they issue. This section does not apply to employers or the
benefit plans they establish for their employees.

Subd. 2.

Definitions.

For purposes of this section, the terms defined in this
subdivision have the meanings given.

(a) "Attachment point" means the claims amount new text begin incurred by an insured group
new text end beyond which the insurance company or health carrier incurs a liability for payment.

(b) "Direct coverage" means coverage under which an insurance company or health
carrier assumes a direct obligation to an individual, under the policy or evidence of
coverage, with respect to health care expenses incurred by the individual or a member
of the individual's family.

(c) "Expected claims" means the amount of claims that, in the absence of a stop loss
policy or other insurance or evidence of coverage, are projected to be incurred deleted text begin under deleted text end new text begin by new text end an
employer-sponsored plan covering health care expenses.

(d) "Expected plan claims" means the expected claims less the projected claims in
excess of the specific attachment point, adjusted to be consistent with the employer's
aggregate contract period.

(e) "Health plan" means a health plan as defined in section 62A.011 and includes
group coverage regardless of the size of the group.

(f) "Health carrier" means a health carrier as defined in section 62A.011.

Subd. 3.

Health plan policies issued as stop loss coverage.

(a) An insurance
company or health carrier issuing or renewing an insurance policy or other evidence of
coverage, that provides coverage to an employer for health care expenses incurred under
an employer-sponsored plan provided to the employer's employees, retired employees,
or their dependents, shall issue the policy or evidence of coverage as a health plan if the
policy or evidence of coverage:

(1) has a specific attachment point for claims incurred per individual that is lower
than deleted text begin $10,000 deleted text end new text begin $20,000 new text end ; or

(2) has an aggregate attachment point new text begin , for groups of 50 or fewer, new text end that is lower than
the deleted text begin sum deleted text end new text begin greater new text end of:

deleted text begin (i) 140 percent of the first $50,000 of expected plan claims;
deleted text end

deleted text begin (ii) 120 percent of the next $450,000 of expected plan claims; and
deleted text end

deleted text begin (iii) 110 percent of the remaining expected plan claims.
deleted text end

new text begin (i) $4,000 times the number of group members;
new text end

new text begin (ii) 120 percent of expected claims; or
new text end

new text begin (iii) $20,000; or
new text end

new text begin (3) has an aggregate attachment point for groups of 51 or more that is lower than
110 percent of expected claims.
new text end

(b) new text begin An insurer shall determine the number of persons in a group, for the purposes
of this section, on a consistent basis, at least annually. new text end Where the insurance policy or
evidence of coverage applies to a contract period of more than one year, the dollar
amounts set forth in paragraph (a), clauses (1) and (2), must be multiplied by the length
of the contract period expressed in years.

(c) The commissioner may adjust the constant dollar amounts provided in paragraph
(a), clauses (1) deleted text begin and deleted text end new text begin , new text end (2), new text begin and (3), new text end on January 1 of any year, based upon changes in
the medical component of the Consumer Price Index (CPI). Adjustments must be in
increments of $100 and must not be made unless at least that amount of adjustment is
required. The commissioner shall publish any change in these dollar amounts at least
deleted text begin three deleted text end new text begin six new text end months before their effective date.

(d) A policy or evidence of coverage issued by an insurance company or health
carrier that provides direct coverage of health care expenses of an individual including a
policy or evidence of coverage administered on a group basis is a health plan regardless of
whether the policy or evidence of coverage is denominated as stop loss coverage.

new text begin Subd. 3a. new text end

new text begin Actuarial certification. new text end

new text begin An insurer shall file with the commissioner
annually on or before March 15, an actuarial certification certifying that the insurer is in
compliance with sections 60A.235 and 60A.236. The certification shall be in a form and
manner, and shall contain information, specified by the commissioner. A copy of the
certification shall be retained by the insurer at its principal place of business.
new text end

Subd. 4.

Compliance.

(a) An insurance company or health carrier that is required to
issue a policy or evidence of coverage as a health plan under this section shall, even if the
policy or evidence of coverage is denominated as stop loss coverage, comply with all the
laws of this state that apply to the health plan, including, but not limited to, chapters 62A,
62C, 62D, 62E, 62L, and 62Q.

(b) With respect to an employer who had been issued a policy or evidence of
coverage denominated as stop loss coverage before deleted text begin June 2, 1995 deleted text end new text begin the effective date of this
section new text end , compliance with this section is required as of the first renewal date occurring on
or after deleted text begin June 2, 1995 deleted text end new text begin August 1, 2009, and applies to policies issued or renewed on or
after that date new text end .

Sec. 16.

Minnesota Statutes 2008, section 60A.32, is amended to read:

60A.32 RATE FILING FOR CROP HAIL INSURANCE.

new text begin Subdivision 1. new text end

new text begin Authority. new text end

An insurer issuing policies of insurance against crop
damage by hail in this state shall file its insurance rates with the commissioner new text begin using the
expedited filing procedure under subdivision 2 new text end . The insurance rates must be filed before
February 1 of the year in which a policy is issued.

new text begin Subd. 2. new text end

new text begin Compliance certifications. new text end

new text begin In addition to the proposed rates, an insurer
shall file with the Department of Commerce on a form prescribed by the commissioner a
written certification, signed by an officer of the insurer, that the rates comply with section
70A.04. Rates filed under this procedure are effective upon the date of receipt or on a
subsequent date requested by the insurer.
new text end

new text begin Subd. 3. new text end

new text begin Fee. new text end

new text begin In order to be effective, the filing must be accompanied by payment of
the applicable filing fee.
new text end

Sec. 17.

Minnesota Statutes 2008, section 62A.011, subdivision 3, is amended to read:

Subd. 3.

Health plan.

"Health plan" means a policy or certificate of accident and
sickness insurance as defined in section 62A.01 offered by an insurance company licensed
under chapter 60A; a subscriber contract or certificate offered by a nonprofit health
service plan corporation operating under chapter 62C; a health maintenance contract or
certificate offered by a health maintenance organization operating under chapter 62D; a
health benefit certificate offered by a fraternal benefit society operating under chapter
64B; or health coverage offered by a joint self-insurance employee health plan operating
under chapter 62H. Health plan means individual and group coverage, unless otherwise
specified. Health plan does not include coverage that is:

(1) limited to disability or income protection coverage;

(2) automobile medical payment coverage;

(3) supplemental to liability insurance;

(4) designed solely to provide payments on a per diem, fixed indemnity, or
non-expense-incurred basis;

(5) credit accident and health insurance as defined in section 62B.02;

(6) designed solely to provide new text begin hearing, new text end dental new text begin , new text end or vision care;

(7) blanket accident and sickness insurance as defined in section 62A.11;

(8) accident-only coverage;

(9) a long-term care policy as defined in section 62A.46 or 62S.01;

(10) issued as a supplement to Medicare, as defined in sections 62A.3099 to
62A.44, or policies, contracts, or certificates that supplement Medicare issued by health
maintenance organizations or those policies, contracts, or certificates governed by section
1833 or 1876 of the federal Social Security Act, United States Code, title 42, section
1395, et seq., as amended;

(11) workers' compensation insurance; or

(12) issued solely as a companion to a health maintenance contract as described in
section 62D.12, subdivision 1a, so long as the health maintenance contract meets the
definition of a health plan.

Sec. 18.

Minnesota Statutes 2008, section 62A.136, is amended to read:

62A.136 new text begin HEARING, new text end DENTAL new text begin , new text end AND VISION PLAN COVERAGE.

The following provisions do not apply to health plans as defined in section 62A.011,
subdivision 3, clause (6), providing new text begin hearing, new text end dental new text begin , new text end or vision coverage only: sections
62A.041; 62A.0411; 62A.047; 62A.149; 62A.151; 62A.152; 62A.154; 62A.155; 62A.17,
subdivision 6; 62A.21, subdivision 2b; 62A.26; 62A.28; 62A.285; 62A.30; 62A.304;
62A.3093; and 62E.16.

Sec. 19.

Minnesota Statutes 2008, section 62A.315, is amended to read:

62A.315 EXTENDED BASIC MEDICARE SUPPLEMENT PLAN;
COVERAGE.

The extended basic Medicare supplement plan must have a level of coverage so that
it will be certified as a qualified plan pursuant to section 62E.07, and will provide:

(1) coverage for all of the Medicare Part A inpatient hospital deductible and
coinsurance amounts, and 100 percent of all Medicare Part A eligible expenses for
hospitalization not covered by Medicare;

(2) coverage for the daily co-payment amount of Medicare Part A eligible expenses
for the calendar year incurred for skilled nursing facility care;

(3) coverage for the coinsurance amount or in the case of hospital outpatient
department services paid under a prospective payment system, the co-payment amount, of
Medicare eligible expenses under Medicare Part B regardless of hospital confinement, and
the Medicare Part B deductible amount;

(4) 80 percent of the usual and customary hospital and medical expenses and
supplies described in section 62E.06, subdivision 1, not to exceed any charge limitation
established by the Medicare program or state law, the usual and customary hospital
and medical expenses and supplies, described in section 62E.06, subdivision 1, while
in a foreign country; and prescription drug expenses, not covered by Medicare. An
outpatient prescription drug benefit must not be included for sale or issuance in a Medicare
supplement policy or certificate issued on or after January 1, 2006;

(5) coverage for the reasonable cost of the first three pints of blood, or equivalent
quantities of packed red blood cells as defined under federal regulations under Medicare
Parts A and B, unless replaced in accordance with federal regulations;

(6) 100 percent of the cost of immunizations not otherwise covered under Part
D of the Medicare program and routine screening procedures for cancer, including
mammograms and pap smears;

(7) preventive medical care benefit: coverage for the following preventive health
services not covered by Medicare:

(i) an annual clinical preventive medical history and physical examination that may
include tests and services from clause (ii) and patient education to address preventive
health care measures;

(ii) preventive screening tests or preventive services, the selection and frequency of
which is determined to be medically appropriate by the attending physician.

Reimbursement shall be for the actual charges up to 100 percent of the
Medicare-approved amount for each service as if Medicare were to cover the service as
identified in American Medical Association current procedural terminology (AMA CPT)
codes to a maximum of $120 annually under this benefit. This benefit shall not include
payment for any procedure covered by Medicare;

deleted text begin (8) at-home recovery benefit: coverage for services to provide short-term at-home
assistance with activities of daily living for those recovering from an illness, injury, or
surgery:
deleted text end

deleted text begin (i) for purposes of this benefit, the following definitions shall apply:
deleted text end

deleted text begin (A) "activities of daily living" include, but are not limited to, bathing, dressing,
personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings;
deleted text end

deleted text begin (B) "care provider" means a duly qualified or licensed home health aide/homemaker,
personal care aide, or nurse provided through a licensed home health care agency or
referred by a licensed referral agency or licensed nurses registry;
deleted text end

deleted text begin (C) "home" means a place used by the insured as a place of residence, provided
that the place would qualify as a residence for home health care services covered by
Medicare. A hospital or skilled nursing facility shall not be considered the insured's
place of residence;
deleted text end

deleted text begin (D) "at-home recovery visit" means the period of a visit required to provide at-home
recovery care, without limit on the duration of the visit, except each consecutive four
hours in a 24-hour period of services provided by a care provider is one visit;
deleted text end

deleted text begin (ii) coverage requirements and limitations:
deleted text end

deleted text begin (A) at-home recovery services provided must be primarily services that assist in
activities of daily living;
deleted text end

deleted text begin (B) the insured's attending physician must certify that the specific type and frequency
of at-home recovery services are necessary because of a condition for which a home care
plan of treatment was approved by Medicare;
deleted text end

deleted text begin (C) coverage is limited to:
deleted text end

deleted text begin (I) no more than the number and type of at-home recovery visits certified as
medically necessary by the insured's attending physician. The total number of at-home
recovery visits shall not exceed the number of Medicare-approved home health care visits
under a Medicare-approved home care plan of treatment;
deleted text end

deleted text begin (II) the actual charges for each visit up to a maximum reimbursement of $100 per
visit;
deleted text end

deleted text begin (III) $4,000 per calendar year;
deleted text end

deleted text begin (IV) seven visits in any one week;
deleted text end

deleted text begin (V) care furnished on a visiting basis in the insured's home;
deleted text end

deleted text begin (VI) services provided by a care provider as defined in this section;
deleted text end

deleted text begin (VII) at-home recovery visits while the insured is covered under the policy or
certificate and not otherwise excluded;
deleted text end

deleted text begin (VIII) at-home recovery visits received during the period the insured is receiving
Medicare-approved home care services or no more than eight weeks after the service date
of the last Medicare-approved home health care visit;
deleted text end

deleted text begin (iii) coverage is excluded for:
deleted text end

deleted text begin (A) home care visits paid for by Medicare or other government programs; and
deleted text end

deleted text begin (B) care provided by unpaid volunteers or providers who are not care providers.
deleted text end

new text begin (8) coverage of cost sharing for all Medicare Part A eligible hospice care and respite
care expenses; and
new text end

new text begin (9) coverage for cost sharing for Medicare Part A or B home health care services
and medical supplies.
new text end

Sec. 20.

Minnesota Statutes 2008, section 62A.316, is amended to read:

62A.316 BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.

(a) The basic Medicare supplement plan must have a level of coverage that will
provide:

(1) coverage for all of the Medicare Part A inpatient hospital coinsurance amounts,
and 100 percent of all Medicare part A eligible expenses for hospitalization not covered
by Medicare, after satisfying the Medicare Part A deductible;

(2) coverage for the daily co-payment amount of Medicare Part A eligible expenses
for the calendar year incurred for skilled nursing facility care;

(3) coverage for the coinsurance amount, or in the case of outpatient department
services paid under a prospective payment system, the co-payment amount, of Medicare
eligible expenses under Medicare Part B regardless of hospital confinement, subject to
the Medicare Part B deductible amount;

(4) 80 percent of the hospital and medical expenses and supplies incurred during
travel outside the United States as a result of a medical emergency;

(5) coverage for the reasonable cost of the first three pints of blood, or equivalent
quantities of packed red blood cells as defined under federal regulations under Medicare
Parts A and B, unless replaced in accordance with federal regulations;

(6) 100 percent of the cost of immunizations not otherwise covered under Part D of
the Medicare program and routine screening procedures for cancer screening including
mammograms and pap smears; deleted text begin and
deleted text end

(7) 80 percent of coverage for all physician prescribed medically appropriate and
necessary equipment and supplies used in the management and treatment of diabetes
not otherwise covered under Part D of the Medicare program. Coverage must include
persons with gestational, type I, or type II diabetes. Coverage under this clause is subject
to section 62A.3093, subdivision 2 deleted text begin . deleted text end new text begin ; new text end

new text begin (8) coverage of cost sharing for all Medicare Part A eligible hospice care and respite
care expenses; and
new text end

new text begin (9) coverage for cost sharing for Medicare Part A or B home health care services and
medical supplies subject to the Medicare Part B deductible amount.
new text end

(b) deleted text begin Only deleted text end The following deleted text begin optional deleted text end benefit riders deleted text begin may be added to deleted text end new text begin must be offered
with new text end this plan:

(1) coverage for all of the Medicare Part A inpatient hospital deductible amount;

(2) deleted text begin a minimum of 80 percent of eligible medical expenses and supplies not covered
by Medicare Part B deleted text end new text begin 100 percent of the Medicare Part B excess charges coverage for
all of the difference between the actual Medicare Part B charges as billed new text end , not to
exceed any charge limitation established by the Medicare program or state law new text begin , and the
Medicare-approved Part B charge new text end ;

(3) coverage for all of the Medicare Part B annual deductible; new text begin and
new text end

deleted text begin (4) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and
customary prescription drug expenses. An outpatient prescription drug benefit must not
be included for sale or issuance in a Medicare policy or certificate issued on or after
January 1, 2006;
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end preventive medical care benefit coverage for the following preventative
health services not covered by Medicare:

(i) an annual clinical preventive medical history and physical examination that may
include tests and services from clause (ii) and patient education to address preventive
health care measures;

(ii) preventive screening tests or preventive services, the selection and frequency of
which is determined to be medically appropriate by the attending physician.

Reimbursement shall be for the actual charges up to 100 percent of the
Medicare-approved amount for each service, as if Medicare were to cover the service as
identified in American Medical Association current procedural terminology (AMA CPT)
codes, to a maximum of $120 annually under this benefit. This benefit shall not include
payment for a procedure covered by Medicare deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (6) coverage for services to provide short-term at-home assistance with activities of
daily living for those recovering from an illness, injury, or surgery:
deleted text end

deleted text begin (i) For purposes of this benefit, the following definitions apply:
deleted text end

deleted text begin (A) "activities of daily living" include, but are not limited to, bathing, dressing,
personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings;
deleted text end

deleted text begin (B) "care provider" means a duly qualified or licensed home health aide/homemaker,
personal care aid, or nurse provided through a licensed home health care agency or
referred by a licensed referral agency or licensed nurses registry;
deleted text end

deleted text begin (C) "home" means a place used by the insured as a place of residence, provided
that the place would qualify as a residence for home health care services covered by
Medicare. A hospital or skilled nursing facility shall not be considered the insured's
place of residence;
deleted text end

deleted text begin (D) "at-home recovery visit" means the period of a visit required to provide at-home
recovery care, without limit on the duration of the visit, except each consecutive four
hours in a 24-hour period of services provided by a care provider is one visit;
deleted text end

deleted text begin (ii) Coverage requirements and limitations:
deleted text end

deleted text begin (A) at-home recovery services provided must be primarily services that assist in
activities of daily living;
deleted text end

deleted text begin (B) the insured's attending physician must certify that the specific type and frequency
of at-home recovery services are necessary because of a condition for which a home care
plan of treatment was approved by Medicare;
deleted text end

deleted text begin (C) coverage is limited to:
deleted text end

deleted text begin (I) no more than the number and type of at-home recovery visits certified as
necessary by the insured's attending physician. The total number of at-home recovery
visits shall not exceed the number of Medicare-approved home care visits under a
Medicare-approved home care plan of treatment;
deleted text end

deleted text begin (II) the actual charges for each visit up to a maximum reimbursement of $40 per visit;
deleted text end

deleted text begin (III) $1,600 per calendar year;
deleted text end

deleted text begin (IV) seven visits in any one week;
deleted text end

deleted text begin (V) care furnished on a visiting basis in the insured's home;
deleted text end

deleted text begin (VI) services provided by a care provider as defined in this section;
deleted text end

deleted text begin (VII) at-home recovery visits while the insured is covered under the policy or
certificate and not otherwise excluded;
deleted text end

deleted text begin (VIII) at-home recovery visits received during the period the insured is receiving
Medicare-approved home care services or no more than eight weeks after the service date
of the last Medicare-approved home health care visit;
deleted text end

deleted text begin (iii) Coverage is excluded for:
deleted text end

deleted text begin (A) home care visits paid for by Medicare or other government programs; and
deleted text end

deleted text begin (B) care provided by family members, unpaid volunteers, or providers who are
not care providers;
deleted text end

deleted text begin (7) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and
customary prescription drug expenses to a maximum of $1,200 paid by the issuer annually
under this benefit. An issuer of Medicare supplement insurance policies that elects to
offer this benefit rider shall also make available coverage that contains the rider specified
in clause (4). An outpatient prescription drug benefit must not be included for sale or
issuance in a Medicare policy or certificate issued on or after January 1, 2006.
deleted text end

Sec. 21.

new text begin [62A.3163] MEDICARE SUPPLEMENT PLAN WITH 50 PERCENT
PART A DEDUCTIBLE COVERAGE.
new text end

new text begin The Medicare supplement plan with 50 percent Part A deductible coverage must
have a level of coverage that will provide:
new text end

new text begin (1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for
365 days after Medicare benefits end;
new text end

new text begin (2) coverage for 50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period;
new text end

new text begin (3) coverage for the coinsurance amount for each day used from the 21st through
the 100th day in a Medicare benefit period for post-hospital skilled nursing care eligible
under Medicare Part A;
new text end

new text begin (4) coverage for cost sharing for all Medicare Part A eligible hospice and respite
care expenses;
new text end

new text begin (5) coverage under Medicare Part A or B for the reasonable cost of the first three
pints of blood, or equivalent quantities of packed red blood cells, as defined under federal
regulations;
new text end

new text begin (6) coverage for 100 percent of the cost sharing otherwise applicable under Medicare
Part B, after the policyholder pays the Medicare Part B deductible;
new text end

new text begin (7) coverage of 100 percent of the cost sharing for Medicare Part B preventive
services and diagnostic procedures for cancer screening described in section 62A.30 after
the policyholder pays the Medicare Part B deductible;
new text end

new text begin (8) coverage of 80 percent of the hospital and medical expenses and supplies
incurred during travel outside of the United States as a result of a medical emergency; and
new text end

new text begin (9) coverage for 100 percent of the Medicare Part A or B home health care services
and medical supplies after the policyholder pays the Medicare Part B deductible.
new text end

Sec. 22.

new text begin [62A.3164] MEDICARE SUPPLEMENT PLAN WITH $20 AND $50
CO-PAYMENT MEDICARE PART B COVERAGE.
new text end

new text begin The Medicare supplement plan with $20 and $50 co-payment Medicare Part B
coverage must have a level of coverage that will provide:
new text end

new text begin (1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for
365 days after Medicare benefits end;
new text end

new text begin (2) coverage for the Medicare Part A inpatient hospital deductible amount per
benefit period;
new text end

new text begin (3) coverage for the coinsurance amount for each day used from the 21st through
the 100th day in a Medicare benefit period for post-hospital skilled nursing care eligible
under Medicare Part A;
new text end

new text begin (4) coverage for the cost sharing for all Medicare Part A eligible hospice and respite
care expenses;
new text end

new text begin (5) coverage for Medicare Part A or B of the reasonable cost of the first three pints
of blood, or equivalent quantities of packed red blood cells, as defined under federal
regulations, unless replaced according to federal regulations;
new text end

new text begin (6) coverage for 100 percent of the cost sharing otherwise applicable under Medicare
Part B except for the lesser of $20 or the Medicare Part B coinsurance or co-payment
for each covered health care provider office visit and the lesser of $50 or the Medicare
Part B coinsurance or co-payment for each covered emergency room visit; however, this
co-payment shall be waived if the insured is admitted to any hospital and the emergency
visit is subsequently covered as a Medicare Part A expense;
new text end

new text begin (7) coverage of 100 percent of the cost sharing for Medicare Part B preventive
services and diagnostic procedures for cancer screening described in section 62A.30 after
the policyholder pays the Medicare Part B deductible;
new text end

new text begin (8) coverage of 80 percent of the hospital and medical expenses and supplies
incurred during travel outside of the United States as a result of a medical emergency; and
new text end

new text begin (9) coverage for Medicare Part A or B home health care services and medical
supplies after the policyholder pays the Medicare Part B deductible.
new text end

Sec. 23.

new text begin [62A.3165] MEDICARE SUPPLEMENT PLAN WITH HIGH
DEDUCTIBLE COVERAGE.
new text end

new text begin The Medicare supplement plan will pay 100 percent coverage upon payment of the
annual high deductible. The annual deductible shall consist of out-of-pocket expenses,
other than premiums, for services covered. This plan must have a level of coverage that
will provide:
new text end

new text begin (1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for
365 days after Medicare benefits end;
new text end

new text begin (2) coverage for 100 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period;
new text end

new text begin (3) coverage for 100 percent of the coinsurance amount for each day used from the
21st through the 100th day in a Medicare benefit period for post-hospital skilled nursing
care eligible under Medicare Part A;
new text end

new text begin (4) coverage for 100 percent of cost sharing for all Medicare Part A eligible
expenses and respite care;
new text end

new text begin (5) coverage for 100 percent, under Medicare Part A or B, of the reasonable cost of
the first three pints of blood, or equivalent quantities of packed red blood cells, as defined
under federal regulations, unless replaced according to federal regulations;
new text end

new text begin (6) except for coverage provided in this clause, coverage for 100 percent of the cost
sharing otherwise applicable under Medicare Part B;
new text end

new text begin (7) coverage of 100 percent of the cost sharing for Medicare Part B preventive
services and diagnostic procedures for cancer screening described in section 62A.30 after
the policyholder pays the Medicare Part B deductible;
new text end

new text begin (8) coverage of 100 percent of the hospital and medical expenses and supplies
incurred during travel outside of the United States as a result of a medical emergency;
new text end

new text begin (9) coverage for 100 percent of Medicare Part A and B home health care services
and medical supplies; and
new text end

new text begin (10) the basis for the deductible shall be $1,860 and shall be adjusted annually from
2010 by the secretary of the United States Department of Health and Human Services to
reflect the change in the Consumer Price Index for all urban consumers for the 12-month
period ending with August of the preceding year, and rounded to the nearest multiple of
$10.
new text end

Sec. 24.

Minnesota Statutes 2008, section 62L.02, subdivision 26, is amended to read:

Subd. 26.

Small employer.

(a) "Small employer" means, with respect to a calendar
year and a plan year, a person, firm, corporation, partnership, association, or other entity
actively engaged in business new text begin in Minnesota new text end , including a political subdivision of the state,
that employed an average of no fewer than two nor more than 50 current employees on
business days during the preceding calendar year and that employs at least two current
employees on the first day of the plan year. If an employer has only one eligible employee
who has not waived coverage, the sale of a health plan to or for that eligible employee
is not a sale to a small employer and is not subject to this chapter and may be treated as
the sale of an individual health plan. A small employer plan may be offered through a
domiciled association to self-employed individuals and small employers who are members
of the association, even if the self-employed individual or small employer has fewer than
two current employees. Entities that are treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the federal Internal Revenue Code are considered a single
employer for purposes of determining the number of current employees. Small employer
status must be determined on an annual basis as of the renewal date of the health benefit
plan. The provisions of this chapter continue to apply to an employer who no longer meets
the requirements of this definition until the annual renewal date of the employer's health
benefit plan. If an employer was not in existence throughout the preceding calendar year,
the determination of whether the employer is a small employer is based upon the average
number of current employees that it is reasonably expected that the employer will employ
on business days in the current calendar year. For purposes of this definition, the term
employer includes any predecessor of the employer. An employer that has more than 50
current employees but has 50 or fewer employees, as "employee" is defined under United
States Code, title 29, section 1002(6), is a small employer under this subdivision.

(b) Where an association, as defined in section 62L.045, comprised of employers
contracts with a health carrier to provide coverage to its members who are small employers,
the association and health benefit plans it provides to small employers, are subject to
section 62L.045, with respect to small employers in the association, even though the
association also provides coverage to its members that do not qualify as small employers.

(c) If an employer has employees covered under a trust specified in a collective
bargaining agreement under the federal Labor-Management Relations Act of 1947,
United States Code, title 29, section 141, et seq., as amended, or employees whose health
coverage is determined by a collective bargaining agreement and, as a result of the
collective bargaining agreement, is purchased separately from the health plan provided
to other employees, those employees are excluded in determining whether the employer
qualifies as a small employer. Those employees are considered to be a separate small
employer if they constitute a group that would qualify as a small employer in the absence
of the employees who are not subject to the collective bargaining agreement.

Sec. 25.

Minnesota Statutes 2008, section 62M.05, subdivision 3a, is amended to read:

Subd. 3a.

Standard review determination.

(a) Notwithstanding subdivision 3b, an
initial determination on all requests for utilization review must be communicated to the
provider and enrollee in accordance with this subdivision within ten business days of the
request, provided that all information reasonably necessary to make a determination on the
request has been made available to the utilization review organization.

(b) When an initial determination is made to certify, notification must be provided
promptly by telephone to the provider. The utilization review organization shall send
written notification to the provider or shall maintain an audit trail of the determination
and telephone notification. For purposes of this subdivision, "audit trail" includes
documentation of the telephone notification, including the date; the name of the person
spoken to; the enrollee; the service, procedure, or admission certified; and the date of
the service, procedure, or admission. If the utilization review organization indicates
certification by use of a number, the number must be called the "certification number." new text begin
For purposes of this subdivision, notification may also be made by facsimile to a verified
number or by electronic mail to a secure electronic mailbox. These electronic forms of
notification satisfy the "audit trail" requirement of this paragraph.
new text end

(c) When an initial determination is made not to certify, notification must be
provided by telephone new text begin , by facsimile to a verified number, or by electronic mail to a
secure electronic mailbox new text end within one working day after making the determination to
the attending health care professional and hospital deleted text begin and a written deleted text end new text begin as applicable. Written
new text end notification must new text begin also new text end be sent to the hospital deleted text begin , deleted text end new text begin as applicable and new text end attending health care
professional deleted text begin , and enrollee deleted text end new text begin if notification occurred by telephone new text end . new text begin For purposes of this
subdivision, notification may be made by facsimile to a verified number or by electronic
mail to a secure electronic mailbox. Written notification must be sent to the enrollee and
may be sent by United States mail, facsimile to a verified number, or by electronic mail to
a secure mailbox. new text end The written notification must include the principal reason or reasons
for the determination and the process for initiating an appeal of the determination. Upon
request, the utilization review organization shall provide the provider or enrollee with the
criteria used to determine the necessity, appropriateness, and efficacy of the health care
service and identify the database, professional treatment parameter, or other basis for the
criteria. Reasons for a determination not to certify may include, among other things,
the lack of adequate information to certify after a reasonable attempt has been made to
contact the provider or enrollee.

(d) When an initial determination is made not to certify, the written notification must
inform the enrollee and the attending health care professional of the right to submit an
appeal to the internal appeal process described in section 62M.06 and the procedure
for initiating the internal appeal.

Sec. 26.

Minnesota Statutes 2008, section 65A.27, subdivision 1, is amended to read:

Subdivision 1.

Scope.

For purposes of sections 65A.27 to deleted text begin 65A.30 deleted text end new text begin 65A.302, new text end the
following terms have the meanings given.

Sec. 27.

Minnesota Statutes 2008, section 67A.191, subdivision 2, is amended to read:

Subd. 2.

Homeowner's risks.

A township mutual fire insurance company may issue
policies known as "homeowner's insurance" as defined in section 65A.27, subdivision
4, only in combination with a policy issued by an insurer authorized to sell property
and casualty insurance in this state. All portions of the combination policy providing
homeowner's insurance, including those issued by a township mutual insurance company,
deleted text begin shall be deleted text end new text begin are new text end subject to the provisions of chapter 65A new text begin and sections 72A.20 and 72A.201 new text end .

Sec. 28.

Minnesota Statutes 2008, section 72A.139, subdivision 2, is amended to read:

Subd. 2.

Definitions.

(a) As used in this section, "commissioner" means the
commissioner of commerce for health plan companies and other insurers regulated by
that commissioner and the commissioner of health for health plan companies regulated by
that commissioner.

(b) As used in this section, a "genetic test" means a presymptomatic test of a person's
genes, gene products, or chromosomes for the purpose of determining the presence or
absence of a gene or genes that exhibit abnormalities, defects, or deficiencies, including
carrier status, that are known to be the cause of a disease or disorder, or are determined to
be associated with a statistically increased risk of development of a disease or disorder.
"Genetic test" does not include a cholesterol test or other test not conducted for the
purpose of determining the presence or absence of a person's gene or genes.

(c) As used in this section, "health plan" has the meaning given in section 62Q.01,
subdivision 3 new text begin , and includes a plan providing the coverage described in section 62A.011,
subdivision 3, clause (10) new text end .

(d) As used in this section, "health plan company" has the meaning given in section
62Q.01, subdivision 4.

(e) As used in this section, "individual" means an applicant for coverage or a person
already covered by the health plan company or other insurer.

Sec. 29.

Minnesota Statutes 2008, section 72A.20, subdivision 15, is amended to read:

Subd. 15.

Practices not held to be discrimination or rebates.

Nothing in
subdivision 8, 9, or 10, or in section 72A.12, subdivisions 3 and 4, shall be construed as
including within the definition of discrimination or rebates any of the following practices:

(1) in the case of any contract of life insurance or annuity, paying bonuses to
policyholders or otherwise abating their premiums in whole or in part out of surplus
accumulated from nonparticipating insurance, provided that any bonuses or abatement
of premiums shall be fair and equitable to policyholders and for the best interests of the
company and its policyholders;

(2) in the case of life insurance policies issued on the industrial debit plan, making
allowance, to policyholders who have continuously for a specified period made premium
payments directly to an office of the insurer, in an amount which fairly represents the
saving in collection expense;

(3) readjustment of the rate of premium for a group insurance policy based on the
loss or expense experienced thereunder, at the end of the first or any subsequent policy
year of insurance thereunder, which may be made retroactive only for such policy year;

(4) in the case of an individual or group health insurance policy, the payment of
differing amounts of reimbursement to insureds who elect to receive health care goods
or services from providers designated by the insurer deleted text begin , provided that each insurer shall on
or before August 1 of each year file with the commissioner summary data regarding the
financial reimbursement offered to providers so designated deleted text end .

deleted text begin Any insurer which proposes to offer an arrangement authorized under this clause
shall disclose prior to its initial offering and on or before August 1 of each year thereafter
as a supplement to its annual statement submitted to the commissioner pursuant to section
60A.13, subdivision 1, the following information:
deleted text end

deleted text begin (a) the name which the arrangement intends to use and its business address;
deleted text end

deleted text begin (b) the name, address, and nature of any separate organization which administers the
arrangement on the behalf of the insurers; and
deleted text end

deleted text begin (c) the names and addresses of all providers designated by the insurer under this
clause and the terms of the agreements with designated health care providers.
deleted text end

deleted text begin The commissioner shall maintain a record of arrangements proposed under this
clause, including a record of any complaints submitted relative to the arrangements.
deleted text end

If the commissioner requests copies of contracts with a provider under this clause
and the provider requests a determination, all information contained in the contracts that
the commissioner determines may place the provider or health care plan at a competitive
disadvantage is nonpublic data.

Sec. 30.

Minnesota Statutes 2008, section 72A.20, subdivision 26, is amended to read:

Subd. 26.

Loss experience.

An insurer shall without cost to the insured provide an
insured with the loss or claims experience of that insured for the current policy period and
for the two policy periods preceding the current one for which the insurer has provided
coverage, within 30 days of a request for the information by the policyholder. new text begin Whenever
reporting loss experience data, actual claims paid on behalf of the insured must be reported
separately from claims incurred but not paid, pooling charges for catastrophic claim
protection, and any other administrative fees or charges that may be charged as an incurred
claim expense. new text end Claims experience data must be provided to the insured in accordance with
state and federal requirements regarding the confidentiality of medical data. The insurer
shall not be responsible for providing information without cost more often than once in
a 12-month period. The insurer is not required to provide the information if the policy
covers the employee of more than one employer and the information is not maintained
separately for each employer and not all employers request the data.

An insurer, health maintenance organization, or a third-party administrator may not
request more than three years of loss or claims experience as a condition of submitting an
application or providing coverage.

This subdivision only applies to group life policies and group health policies.

Sec. 31.

new text begin [72A.204] PROHIBITED USES OF SENIOR-SPECIFIC
CERTIFICATIONS AND PROFESSIONAL DESIGNATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose and scope. new text end

new text begin The purpose of this section is to set forth
standards to protect consumers from misleading and fraudulent marketing practices with
respect to the use of senior-specific certifications and professional designations in:
new text end

new text begin (1) the solicitation, sale, or purchase of a life insurance or annuity product; or
new text end

new text begin (2) the provision of advice in connection with the solicitation, sale, or purchase of a
life insurance or annuity product.
new text end

new text begin Subd. 2. new text end

new text begin Insurance producer. new text end

new text begin For purposes of this section, "insurance producer"
means a person required to be licensed under the laws of this state to sell, solicit, or
negotiate insurance, including annuities.
new text end

new text begin Subd. 3. new text end

new text begin Prohibited uses of senior-specific certifications and professional
designations. new text end

new text begin (a) It is an unfair and deceptive act or practice in the business of insurance
for an insurance producer to use a senior-specific certification or professional designation
that indicates or implies in such a way as to mislead a client or prospective client that the
insurance producer has special certification or training in advising or servicing seniors in
connection with the solicitation, sale, or purchase of a life insurance or annuity product or
in the provision of advice as to the value of or the advisability of purchasing or selling a
life insurance or annuity product, either directly or indirectly, including the provision of
advice through publications or writings or by issuing or promulgating analyses or reports
related to a life insurance or annuity product.
new text end

new text begin (b) The prohibited use of senior-specific certifications or professional designations
includes, but is not limited to, the following:
new text end

new text begin (1) use of a certification or professional designation by an insurance producer who
has not actually earned or is otherwise ineligible to use such certification or designation;
new text end

new text begin (2) use of a nonexistent or self-conferred certification or professional designation;
new text end

new text begin (3) use of a certification or professional designation that indicates or implies a level
of occupational qualifications obtained through education, training, or experience that the
insurance producer using the certification or designation does not have; and
new text end

new text begin (4) use of a certification or professional designation that was obtained from a
certifying or designating organization that:
new text end

new text begin (i) is primarily engaged in the business of instruction in sales or marketing;
new text end

new text begin (ii) does not have reasonable standards or procedures for ensuring the competency of
its certificants or designees;
new text end

new text begin (iii) does not have reasonable standards or procedures for monitoring and
disciplining its certificants or designees for improper or unethical conduct; or
new text end

new text begin (iv) does not have reasonable continuing education requirements for its certificants
or designees in order to maintain the certificate or designation.
new text end

new text begin (c) There is a rebuttable presumption that a certifying or designating organization is
not disqualified solely for the purposes of paragraph (b), clause (4), when the certification
or designation issued from the organization does not primarily apply to sales or marketing
and when the organization or the certification or designation in question has been
accredited by:
new text end

new text begin (1) the American National Standards Institute (ANSI);
new text end

new text begin (2) the National Commission for Certifying Agencies; or
new text end

new text begin (3) any organization that is on the United States Department of Education list
entitled "Accrediting Agencies Recognized for Title IV Purposes."
new text end

new text begin (d) In determining whether a combination of words or an acronym standing for a
combination of words constitutes a certification or professional designation indicating or
implying that a person has special certification or training in advising or servicing seniors,
factors to be considered must include:
new text end

new text begin (1) use of one or more words such as "senior," "retirement," "elder," or like words
combined with one or more words such as "certified," "registered," "chartered," "adviser,"
"specialist," "consultant," "planner," or like words, in the name of the certification or
professional designation; and
new text end

new text begin (2) the manner in which those words are combined.
new text end

new text begin (e) For purposes of this section, a job title within an organization that is licensed or
registered by a state or federal financial services regulatory agency is not a certification or
professional designation, unless it is used in a manner that would confuse or mislead a
reasonable consumer, when the job title:
new text end

new text begin (1) indicates seniority or standing within the organization; or
new text end

new text begin (2) specifies an individual's area of specialization within the organization.
new text end

new text begin (f) For purposes of paragraph (e), "financial services regulatory agency" includes,
but is not limited to, an agency that regulates insurers, insurance producers, broker-dealers,
investment advisers, or investment companies as defined under the Investment Company
Act of 1940.
new text end

Sec. 32.

Minnesota Statutes 2008, section 79A.04, subdivision 1, is amended to read:

Subdivision 1.

Annual securing of liability.

Each year every private self-insuring
employer shall secure incurred liabilities for the payment of compensation and the
performance of its obligations and the obligations of all self-insuring employers imposed
under chapter 176 by renewing the prior year's security deposit or by making a new
deposit of security. If a new deposit is made, it must be posted deleted text begin within 60 days of the filing
of the self-insured employer's annual report with the commissioner, but in no event later
than July 1 deleted text end new text begin in the following manner: within 60 days of the filing of the annual report, the
security posting for all prior years plus one-third of the posting for the current year; by
July 31, one-third of the posting for the current year; by October 31, the final one-third of
the posting for the current year new text end .

Sec. 33.

Minnesota Statutes 2008, section 79A.04, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Exceptions. new text end

new text begin Notwithstanding the requirements of subdivisions 1
and 2, the commissioner may, until the next annual securing of liability, adjust this
required security deposit for the portion attributable to the current year only, if in the
commissioner's judgment, the self-insurer will be able to meet its obligations under this
chapter until the next annual securing of liability.
new text end

Sec. 34.

Minnesota Statutes 2008, section 79A.06, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Insolvency of a self-insurance group insurer. new text end

new text begin In the event of the
insolvency of the insurer of a self-insurance group issued a policy under section 79A.06,
subdivision 5, including a policy covering only a portion of the period of self-insurance,
eligibility for chapter 60C coverage under the policy shall be determined by applying the
requirements of section 60C.09, subdivision 2, clause (3), to each self-insurance group
member, rather than to the net worth of the self-insurance group entity or the aggregate net
worth of all members of the self-insurance group entity.
new text end

Sec. 35.

Minnesota Statutes 2008, section 79A.24, subdivision 1, is amended to read:

Subdivision 1.

Annual securing of liability.

Each year every commercial
self-insurance group shall secure its estimated future liability for the payment of
compensation and the performance of the obligations of its membership imposed under
chapter 176. A new deposit must be posted deleted text begin within 30 days of the filing of the commercial
self-insurance group's annual actuarial report with the commissioner deleted text end new text begin in the following
manner: within 30 days of the filing of the annual report, the security posting for all prior
years plus one-third of the posting for the current year; by July 31, one-third of the posting
for the current year; by October 31, the final one-third of the posting for the current year new text end .

Sec. 36.

Minnesota Statutes 2008, section 79A.24, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Exceptions. new text end

new text begin Notwithstanding the requirements of subdivisions 1
and 2, the commissioner may, until the next annual securing of liability, adjust this
required security deposit for the portion attributable to the current year only, if in the
commissioner's judgment, the self-insurer will be able to meet its obligations under this
chapter until the next annual securing of liability.
new text end

Sec. 37.

Minnesota Statutes 2008, section 82.31, subdivision 4, is amended to read:

Subd. 4.

Corporate and partnership licenses.

(a) A corporation applying for
a license shall have at least one officer individually licensed to act as broker for the
corporation. The corporation broker's license shall extend no authority to act as broker
to any person other than the corporate entity. Each officer who intends to act as a broker
shall obtain a license.

(b) A partnership applying for a license shall have at least one partner individually
licensed to act as broker for the partnership. Each partner who intends to act as a broker
shall obtain a license.

(c) Applications for a license made by a corporation shall be verified by the president
and one other officer. Applications made by a partnership shall be verified by at least
two partners.

(d) Any partner or officer who ceases to act as broker for a partnership or corporation
shall notify the commissioner upon said termination. The individual licenses of all
salespersons acting on behalf of a corporation or partnership, are automatically ineffective
upon the revocation or suspension of the license of the partnership or corporation.
The commissioner may suspend or revoke the license of an officer or partner without
suspending or revoking the license of the corporation or partnership.

(e) The application of all officers of a corporation or partners in a partnership who
intend to act as a broker on behalf of a corporation or partnership shall accompany the
initial license application of the corporation or partnership. Officers or partners intending
to act as brokers subsequent to the licensing of the corporation or partnership shall procure
an individual real estate broker's license prior to acting in the capacity of a broker. No
corporate officer new text begin , or partner, new text end who maintains a salesperson's license may exercise any
authority over any trust account administered by the broker nor may they be vested with
any supervisory authority over the broker.

(f) The corporation or partnership applicant shall make available upon request, such
records and data required by the commissioner for enforcement of this chapter.

(g) The commissioner may require further information, as the commissioner deems
appropriate, to administer the provisions and further the purposes of this chapter.

Sec. 38.

new text begin [82B.071] RECORDS.
new text end

new text begin Subdivision 1. new text end

new text begin Examination of records. new text end

new text begin The commissioner may make examinations
within or without this state of each real estate appraiser's records at such reasonable time
and in such scope as is necessary to enforce the provisions of this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Retention. new text end

new text begin Licensees shall keep a separate work file for each appraisal
assignment, which is to include copies of all contracts engaging his or her services for
the real estate appraisal, appraisal reports, and all data, information, and documentation
assembled and formulated by the appraiser to support the appraiser's opinions and
conclusions and to show compliance with USPAP, for a period of five years after
preparation, or at least two years after final disposition of any judicial proceedings in
which the appraiser provided testimony or was the subject of litigation related to the
assignment, whichever period expires last. Appropriate work file access and retrieval
arrangements must be made between any trainee and supervising appraiser if only one
party maintains custody of the work file.
new text end

Sec. 39.

Minnesota Statutes 2008, section 82B.08, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Initial application. new text end

new text begin The initial application for licensing of a trainee
real property appraiser must identify the name and address of the supervisory appraiser
or appraisers. Trainee real property appraisers licensed prior to the effective date of this
provision must identify the name and address of their supervisory appraiser or appraisers
at the time of license renewal. A trainee must notify the commissioner in writing within
ten days of terminating or changing their relationship with any supervisory appraiser.
new text end

new text begin The initial application for licensing of a certified residential real property appraiser
and certified general real property appraiser who intends to act in the capacity of a
supervisory appraiser must identify the name and address of the trainee real property
appraiser or appraisers they intend to supervise. A certified residential real property
appraiser and certified general real property appraiser licensed and acting in the capacity
of a supervisory appraiser prior to the effective date of this provision must, at the time of
license renewal, identify the name and address of any trainee real property appraiser or
appraisers under their supervision.
new text end

Sec. 40.

new text begin [82B.093] TRAINEE REAL PROPERTY APPRAISER.
new text end

new text begin (a) A trainee real property appraiser shall be subject to direct supervision by a
certified residential real property appraiser or certified general real property appraiser in
good standing.
new text end

new text begin (b) A trainee real property appraiser is permitted to have more than one supervising
appraiser.
new text end

new text begin (c) The scope of practice for the trainee real property appraiser classification is the
appraisal of those properties which the supervising appraiser is permitted by his or her
current credential and that the supervising appraiser is qualified and competent to appraise.
new text end

new text begin (d) A trainee real property appraiser must have a supervisor signature on each
appraisal that he or she signs, or must be named in the appraisal as providing significant
real property appraisal assistance to receive credit for experience hours on his or her
experience log.
new text end

new text begin (e) The trainee real property appraiser must maintain copies of appraisal reports he
or she signed or copies of appraisal reports where he or she was named as providing
significant real property appraisal assistance.
new text end

new text begin (f) The trainee real property appraiser must maintain copies of work files relating to
appraisal reports he or she signed.
new text end

new text begin (g) Separate appraisal logs must be maintained for each supervising appraiser.
new text end

Sec. 41.

new text begin [82B.094] SUPERVISION OF TRAINEE REAL PROPERTY
APPRAISERS.
new text end

new text begin (a) A certified residential real property appraiser or a certified general real property
appraiser, in good standing, may engage a trainee real property appraiser to assist in the
performance of real estate appraisals, provided that the certified residential real property
appraiser or a certified general real property appraiser:
new text end

new text begin (1) has not been the subject of any license or certificate suspension or revocation or
has not been prohibited from supervising activities in this state or any other state within
the previous two years;
new text end

new text begin (2) has no more than three trainee real property appraisers working under supervision
at any one time;
new text end

new text begin (3) actively and personally supervises the trainee real property appraiser, which
includes ensuring that research of general and specific data has been adequately conducted
and properly reported, application of appraisal principles and methodologies has been
properly applied, that the analysis is sound and adequately reported, and that any analyses,
opinions, or conclusions are adequately developed and reported so that the appraisal
report is not misleading;
new text end

new text begin (4) discusses with the trainee real property appraiser any necessary and appropriate
changes that are made to a report, involving any trainee appraiser, before it is transmitted
to the client. Changes not discussed with the trainee real property appraiser that are made
by the supervising appraiser must be provided in writing to the trainee real property
appraiser upon completion of the appraisal report;
new text end

new text begin (5) accompanies the trainee real property appraiser on the inspections of the subject
properties and drive-by inspections of the comparable sales on all appraisal assignments
for which the trainee will perform work until the trainee appraiser is determined to be
competent, in accordance with the competency rule of USPAP for the property type;
new text end

new text begin (6) accepts full responsibility for the appraisal report by signing and certifying
that the report complies with USPAP; and
new text end

new text begin (7) reviews and signs the trainee real property appraiser's appraisal report or reports
or if the trainee appraiser is not signing the report, states in the appraisal the name of the
trainee and scope of the trainee's significant contribution to the report.
new text end

new text begin (b) The supervising appraiser must review and sign the applicable experience log
required to be kept by the trainee real property appraiser.
new text end

new text begin (c) The supervising appraiser must notify the commissioner within ten days when
the supervision of a trainee real property appraiser has terminated or when the trainee
appraiser is no longer under the supervision of the supervising appraiser.
new text end

new text begin (d) The supervising appraiser must maintain a separate work file for each appraisal
assignment.
new text end

new text begin (e) The supervising appraiser must verify that any trainee real property appraiser that
is subject to supervision is properly licensed and in good standing with the commissioner.
new text end

Sec. 42.

Minnesota Statutes 2008, section 82B.20, subdivision 2, is amended to read:

Subd. 2.

Conduct prohibited.

No person may:

(1) obtain or try to obtain a license under this chapter by knowingly making a
false statement, submitting false information, refusing to provide complete information
in response to a question in an application for license, or through any form of fraud or
misrepresentation;

(2) fail to meet the minimum qualifications established by this chapter;

(3) be convicted, including a conviction based upon a plea of guilty or nolo
contendere, of a crime that is substantially related to the qualifications, functions, and
duties of a person developing real estate appraisals and communicating real estate
appraisals to others;

(4) engage in an act or omission involving dishonesty, fraud, or misrepresentation
with the intent to substantially benefit the license holder or another person or with the
intent to substantially injure another person;

(5) engage in a violation of any of the standards for the development or
communication of real estate appraisals as provided in this chapter;

(6) fail or refuse without good cause to exercise reasonable diligence in developing
an appraisal, preparing an appraisal report, or communicating an appraisal;

(7) engage in negligence or incompetence in developing an appraisal, in preparing
an appraisal report, or in communicating an appraisal;

(8) willfully disregard or violate any of the provisions of this chapter or the rules of
the commissioner for the administration and enforcement of the provisions of this chapter;

(9) accept an appraisal assignment when the employment itself is contingent upon
the appraiser reporting a predetermined estimate, analysis, or opinion, or where the fee
to be paid is contingent upon the opinion, conclusion, or valuation reached, or upon the
consequences resulting from the appraisal assignment;

(10) violate the confidential nature of governmental records to which the person
gained access through employment or engagement as an appraiser by a governmental
agency;

(11) offer, pay, or give, and no person shall accept, any compensation or other thing
of value from a real estate appraiser by way of commission-splitting, rebate, finder's fee,
or otherwise in connection with a real estate appraisal. This prohibition does not apply
to transactions among persons licensed under this chapter if the transactions involve
appraisals for which the license is required;

(12) engage or authorize a person, except a person licensed under this chapter, to act
as a real estate appraiser on the appraiser's behalf;

(13) violate standards of professional practice;

(14) make an oral appraisal report without also making a written report within a
reasonable time after the oral report is made;

(15) represent a market analysis to be an appraisal report;

(16) give an appraisal in any circumstances where the appraiser has a conflict of
interest, as determined under rules adopted by the commissioner; or

(17) engage in other acts the commissioner by rule prohibits.

new text begin No person, including a mortgage originator, appraisal management company, real
estate broker or salesperson, appraiser, or other licensee, registrant, or certificate holder
regulated by the commissioner may improperly influence or attempt to improperly
influence the development, reporting, result, or review of a real estate appraisal. Prohibited
acts include blacklisting, boycotting, intimidation, coercion, and any other means that
impairs or may impair the independent judgment of the appraiser, including but not
limited to the withholding or threatened withholding of payment for an appraisal fee, or
the conditioning of the payment of any appraisal fee upon the opinion, conclusion, or
valuation to be reached, or a request that the appraiser report a predetermined opinion,
conclusion, or valuation, or the desired valuation of any person, or withholding or
threatening to withhold future work in order to obtain a desired value on a current or
proposed appraisal assignment.
new text end

Sec. 43. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, sections 70A.07; 79.56, subdivision 4; 325E.311;
325E.312; 325E.313; 325E.314; 325E.315; and 325E.316, new text end new text begin are repealed.
new text end

Sec. 44. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin Sections 19 to 23 apply to plans and certificates with an effective date for coverage
on or after June 10, 2010. Sections 32 to 36 are effective the day following the final
enactment.
new text end