1st Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to insurance; providing qualifications and 1.3 procedures for the licensing of insurance producers; 1.4 prescribing a criminal penalty; making conforming 1.5 changes; amending Minnesota Statutes 2000, sections 1.6 13.7191, subdivision 6; 43A.317, subdivision 12; 1.7 60A.02, subdivision 7; 60A.14; 60A.171, subdivision 1; 1.8 60A.198, subdivision 3; 62A.41, subdivision 4; 62C.17, 1.9 subdivision 5; 62D.22, subdivision 8; 62H.10, 1.10 subdivision 4; 62L.12, subdivision 3; 62S.30; 64B.33; 1.11 65B.09, subdivision 1; 72A.07; 72A.125, subdivision 2; 1.12 72A.201, subdivision 3; 270B.07, subdivision 1; 1.13 proposing coding for new law in Minnesota Statutes, 1.14 chapter 60K; repealing Minnesota Statutes 2000, 1.15 sections 60K.01; 60K.02; 60K.03; 60K.04; 60K.05; 1.16 60K.06; 60K.07; 60K.081; 60K.09; 60K.10; 60K.11; 1.17 60K.12; 60K.13; 60K.14; 60K.15; 60K.16; 60K.17; 1.18 60K.18; 60K.19; 60K.20. 1.19 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.20 ARTICLE 1 1.21 INSURANCE PRODUCERS 1.22 Section 1. [60K.30] [PURPOSE AND SCOPE.] 1.23 (a) Sections 60K.30 to 60K.56 govern the qualifications and 1.24 procedures for the licensing of insurance producers. 1.25 (b) Except as to the underlying requirement that a surplus 1.26 lines agent or broker obtain an insurance producer license, this 1.27 chapter does not apply to surplus lines agents or brokers 1.28 licensed under sections 60A.195 to 60A.209, except as provided 1.29 in sections 60K.39 and 60K.53, subdivision 2. 1.30 Sec. 2. [60K.31] [DEFINITIONS.] 1.31 Subdivision 1. [SCOPE.] For purposes of sections 60K.31 to 1.32 60K.57, the terms in subdivisions 2 to 18 have the meanings 2.1 given them. The definitions in section 60A.02 are applicable to 2.2 terms not defined in this section, unless the language or 2.3 context clearly indicates that a different meaning is intended. 2.4 Subd. 2. [BUSINESS ENTITY.] "Business entity" means a 2.5 corporation, association, partnership, limited liability 2.6 company, limited liability partnership, or other legal entity. 2.7 Subd. 3. [COMMISSIONER.] "Commissioner" means the 2.8 commissioner of commerce. 2.9 Subd. 4. [HOME STATE.] "Home state" means the District of 2.10 Columbia and any state or territory of the United States in 2.11 which an insurance producer maintains the producer's principal 2.12 place of residence or principal place of business and is 2.13 licensed to act as an insurance producer. 2.14 Subd. 5. [INSURANCE.] "Insurance" means any of the lines 2.15 of authority in section 60A.06. 2.16 Subd. 6. [INSURANCE PRODUCER.] "Insurance producer" means 2.17 a person required to be licensed under the laws of this state to 2.18 sell, solicit, or negotiate insurance. 2.19 Subd. 7. [LICENSE.] "License" means a document issued by 2.20 the commissioner authorizing a person to act as an insurance 2.21 producer for the lines of authority specified in the document. 2.22 The license itself does not create any authority, actual, 2.23 apparent, or inherent, in the holder to represent or commit an 2.24 insurance carrier. 2.25 Subd. 8. [LIMITED LINE CREDIT INSURANCE.] "Limited line 2.26 credit insurance" includes credit life, credit disability, 2.27 credit property, credit unemployment, involuntary unemployment, 2.28 mortgage life, mortgage guaranty, mortgage disability, 2.29 guaranteed automobile protection insurance, and any other form 2.30 of insurance offered in connection with an extension of credit 2.31 that is limited to partially or wholly extinguishing that credit 2.32 obligation that the commissioner determines should be designated 2.33 a form of limited line credit insurance. 2.34 Subd. 9. [LIMITED LINE CREDIT INSURANCE 2.35 PRODUCER.] "Limited line credit insurance producer" means a 2.36 person who sells, solicits, or negotiates one or more forms of 3.1 limited line credit insurance coverage to individuals through a 3.2 master, corporate, group, or individual policy. 3.3 Subd. 10. [LIMITED LINES INSURANCE.] "Limited lines 3.4 insurance" means those lines of insurance defined in section 3.5 60K.38, subdivision 1, paragraph (c), or any other line of 3.6 insurance that the commissioner considers necessary to recognize 3.7 for the purposes of complying with section 60K.39, subdivision 5. 3.8 Subd. 11. [LIMITED LINES PRODUCER.] "Limited lines 3.9 producer" means a person authorized by the commissioner to sell, 3.10 solicit, or negotiate limited lines insurance. 3.11 Subd. 12. [NEGOTIATE.] "Negotiate" means the act of 3.12 conferring directly with or offering advice directly to a 3.13 purchaser or prospective purchaser of a particular contract of 3.14 insurance concerning any of the substantive benefits, terms, or 3.15 conditions of the contract if the person engaged in that act 3.16 either sells insurance or obtains insurance from insurers for 3.17 purchasers. 3.18 Subd. 13. [PERSON.] "Person" means an individual or a 3.19 business entity. 3.20 Subd. 14. [SELL.] "Sell" means to exchange a contract of 3.21 insurance by any means, for money or its equivalent, on behalf 3.22 of an insurance company. 3.23 Subd. 15. [SOLICIT.] "Solicit" means attempting to sell 3.24 insurance or asking or urging a person to apply for a particular 3.25 kind of insurance from a particular company. 3.26 Subd. 16. [TERMINATE.] "Terminate" means the cancellation 3.27 of the relationship between an insurance producer and the 3.28 insurer or the termination of a producer's authority to transact 3.29 insurance. 3.30 Subd. 17. [UNIFORM BUSINESS ENTITY APPLICATION.] "Uniform 3.31 Business Entity Application" means the current version of the 3.32 Uniform Business Entity Application for resident and nonresident 3.33 business entities of the National Association of Insurance 3.34 Commissioners. 3.35 Subd. 18. [UNIFORM APPLICATION.] "Uniform Application" 3.36 means the current version of the Uniform Application for 4.1 resident and nonresident producer licensing of the National 4.2 Association of Insurance Commissioners. 4.3 Sec. 3. [60K.32] [LICENSE REQUIRED.] 4.4 A person shall not sell, solicit, or negotiate insurance in 4.5 this state for any class or classes of insurance unless the 4.6 person is licensed for that line of authority under sections 4.7 60K.31 to 60K.57. The license itself does not create any 4.8 authority, actual, apparent, or inherent, in the holder to 4.9 represent or commit an insurance carrier. 4.10 Sec. 4. [60K.33] [CRIMINAL PENALTY.] 4.11 A person who acts or assumes to act as an insurance 4.12 producer without a license issued under this chapter is guilty 4.13 of a gross misdemeanor. 4.14 Sec. 5. [60K.34] [EXCEPTIONS TO LICENSING.] 4.15 Subdivision 1. [LICENSE NOT REQUIRED.] Nothing in sections 4.16 60K.31 to 60K.57 requires an insurer to obtain an insurance 4.17 producer license. In this section, the term "insurer" does not 4.18 include an insurer's officers, directors, employees, 4.19 subsidiaries, or affiliates. 4.20 Subd. 2. [SPECIFIC EXCEPTIONS.] A license as an insurance 4.21 producer is not required of the following: 4.22 (1) a fraternal benefit society representative exempted 4.23 pursuant to section 60K.35; 4.24 (2) an officer, director, or employee of an insurer or of 4.25 an insurance producer if the officer, director, or employee does 4.26 not receive any commission on policies written or sold to insure 4.27 risks residing, located, or to be performed in this state and: 4.28 (i) the officer, director, or employee's activities are 4.29 executive, administrative, managerial, clerical, or a 4.30 combination of these, and are only indirectly related to the 4.31 sale, solicitation, or negotiation of insurance; 4.32 (ii) the officer, director, or employee's function relates 4.33 to underwriting, loss control, inspection, or the processing, 4.34 adjusting, investigating, or settling of a claim on a contract 4.35 of insurance; or 4.36 (iii) the officer, director, or employee is acting in the 5.1 capacity of a special agent or agency supervisor assisting 5.2 insurance producers where the person's activities are limited to 5.3 providing technical advice and assistance to licensed insurance 5.4 producers and do not include the sale, solicitation, or 5.5 negotiation of insurance; 5.6 (3) a person who secures and furnishes information for the 5.7 purpose of group life insurance, group property and casualty 5.8 insurance, group annuities, group or blanket accident and health 5.9 insurance; or for the purpose of enrolling individuals under 5.10 plans; issuing certificates under plans or otherwise assisting 5.11 in administering plans; or performs administrative services 5.12 related to mass marketed property and casualty insurance; where 5.13 no commission is paid to the person for the service; 5.14 (4) an employer or association or its officers, directors, 5.15 employees, or the trustees of an employee trust plan, to the 5.16 extent that the employers, officers, employees, director, or 5.17 trustees are engaged in the administration or operation of a 5.18 program of employee benefits for the employer's or association's 5.19 own employees or the employees of its subsidiaries or 5.20 affiliates, which program involves the use of insurance issued 5.21 by an insurer, as long as the employers, associations, officers, 5.22 directors, employees, or trustees are not in any manner 5.23 compensated, directly or indirectly, by the company issuing the 5.24 contracts; 5.25 (5) employees of insurers or organizations employed by 5.26 insurers who are engaging in the inspection, rating or 5.27 classification of risks, or in the supervision of the training 5.28 of insurance producers and who are not individually engaged in 5.29 the sale, solicitation, or negotiation of insurance; 5.30 (6) a person whose activities in this state are limited to 5.31 advertising without the intent to solicit insurance in this 5.32 state through communications in printed publications or other 5.33 forms of electronic mass media whose distribution is not limited 5.34 to residents of the state, if the person does not sell, solicit, 5.35 or negotiate insurance that would insure risks residing, 5.36 located, or to be performed in this state; 6.1 (7) a person who is not a resident of this state who sells, 6.2 solicits, or negotiates a contract of insurance for commercial 6.3 property and casualty risks to an insured with risks located in 6.4 more than one state insured under that contract, if the person 6.5 is otherwise licensed as an insurance producer to sell, solicit, 6.6 or negotiate that insurance in the state where the insured 6.7 maintains its principal place of business and the contract of 6.8 insurance insures risks located in that state; 6.9 (8) a salaried full-time employee who counsels or advises 6.10 the employee's employer relative to the insurance interests of 6.11 the employer or of the subsidiaries or business affiliates of 6.12 the employer if the employee does not sell or solicit insurance 6.13 or receive a commission; or 6.14 (9) rental vehicle companies and their employees in 6.15 connection with the offer of rental vehicle personal accident 6.16 insurance under section 72A.125. 6.17 Sec. 6. [60K.35] [FRATERNAL BENEFIT SOCIETY 6.18 REPRESENTATIVES.] 6.19 Representatives of fraternal benefit societies who solicit 6.20 and negotiate insurance contracts are considered to be insurance 6.21 producers and are subject to the licensing requirements of this 6.22 chapter, provided that no insurance producer's license is 6.23 required of: 6.24 (1) any officer, employee, or secretary of a fraternal 6.25 benefit society or of any subordinate lodge or branch who 6.26 devotes substantially all of that person's time to activities 6.27 other than the solicitation or negotiation of insurance 6.28 contracts and who receives no commission or other compensation 6.29 directly dependent upon the number or amount of contracts 6.30 solicited or negotiated; or 6.31 (2) any agent or representative of a fraternal benefit 6.32 society who devotes, or intends to devote, less than 50 percent 6.33 of that person's time to the solicitation and procurement of 6.34 insurance contracts for that society. Any person who in the 6.35 preceding calendar year has solicited and procured life 6.36 insurance in excess of $50,000 face amount, or, in the case of 7.1 any other kinds of insurance that the society may write, on the 7.2 persons of more than 25 individuals, and who has received or 7.3 will receive a commission or other compensation in the total 7.4 amount of $1,000 or more, is presumed to be devoting, or 7.5 intending to devote, 50 percent of that person's time to the 7.6 solicitation or procurement of insurance contracts for that 7.7 society. 7.8 Sec. 7. [60K.36] [EXAMINATIONS.] 7.9 Subdivision 1. [REQUIREMENT.] A resident individual 7.10 applying for an insurance producer license shall pass a written 7.11 examination unless exempt under subdivision 2 or section 7.12 60K.40. The examination must test the knowledge of the 7.13 individual concerning the lines of authority for which the 7.14 application is made, the duties and responsibilities of an 7.15 insurance producer, and the insurance laws and rules of this 7.16 state. Examinations required by this section must be approved 7.17 by the commissioner. 7.18 Subd. 2. [EXAMINATION NOT REQUIRED.] A resident individual 7.19 applying for a limited lines credit insurance, title insurance, 7.20 travel baggage insurance, or bail bonds license is not required 7.21 to take a written examination. 7.22 Subd. 3. [ADMINISTRATION.] The commissioner may make 7.23 arrangements, including contracting with an outside testing 7.24 service, for administering examinations. 7.25 Subd. 4. [COURSE OF STUDY.] The examination must be given 7.26 only after the applicant has completed a program of classroom 7.27 studies in a school, which must not include a school sponsored 7.28 by, offered by, or affiliated with an insurance company or its 7.29 producers; except that this limitation does not preclude a bona 7.30 fide professional association of insurance producers, not acting 7.31 on behalf of an insurer, from offering courses. The course of 7.32 study must consist of 30 hours of classroom study devoted to the 7.33 basic fundamentals of insurance for those seeking a Minnesota 7.34 license for the first time and 7.5 hours devoted to the line in 7.35 which the producer seeks to be licensed. The program of studies 7.36 or study course must have been approved by the commissioner in 8.1 order to qualify under this subdivision. If the applicant has 8.2 been previously licensed for the particular line of insurance in 8.3 the state of Minnesota, the requirement of a program of studies 8.4 or a study course must be waived. A certification of compliance 8.5 by the organization offering the course must accompany the 8.6 applicant's license application. This program of studies in a 8.7 school or a study course does not apply to limited lines farm 8.8 property liability applicants or to variable life and variable 8.9 annuity applicants. 8.10 Subd. 5. [FAILURE TO APPEAR OR PASS.] An individual who 8.11 fails to appear for the examination as scheduled or fails to 8.12 pass the examination shall reapply for an examination and remit 8.13 all required fees and forms before being rescheduled for another 8.14 examination. 8.15 Subd. 6. [RESULTS; VALIDITY.] Examination results are 8.16 valid for three years from the date of the examination. 8.17 Sec. 8. [60K.37] [APPLICATION FOR LICENSE.] 8.18 Subdivision 1. [RESIDENT INSURANCE PRODUCER.] A person is 8.19 a resident of this state if that person resides in this state or 8.20 the principal place of business of that person is maintained in 8.21 this state. Application for a license claiming residency in 8.22 this state constitutes an election of residency in this state. 8.23 A license issued upon an application claiming residency in this 8.24 state is void if the licensee, while holding a resident license 8.25 in this state, obtains a resident license in, or claims to be a 8.26 resident of, any other state or jurisdiction or if the licensee 8.27 ceases to be a resident of this state. However, if the 8.28 applicant is a resident of a community or trade area, the border 8.29 of which is contiguous with the state line of this state, the 8.30 applicant may qualify for a resident license in this state and 8.31 at the same time hold a resident license from the contiguous 8.32 state. 8.33 Subd. 2. [INDIVIDUALS.] A person applying for a resident 8.34 insurance producer license shall make application to the 8.35 commissioner on the Uniform Application and declare under 8.36 penalty of refusal, suspension, or revocation of the license 9.1 that the statements made in the application are true, correct, 9.2 and complete to the best of the individual's knowledge and 9.3 belief. Before approving the application, the commissioner 9.4 shall find that the individual: 9.5 (1) is at least 18 years of age; 9.6 (2) has not committed any act that is a ground for denial, 9.7 suspension, or revocation set forth in section 60K.43; 9.8 (3) has completed, where required by the commissioner, a 9.9 prelicensing course of study for the lines of authority for 9.10 which the person has applied; 9.11 (4) has paid the fees set forth in section 60K.55; and 9.12 (5) has successfully passed the examinations for the lines 9.13 of authority for which the person has applied. 9.14 Subd. 3. [BUSINESSES.] (a) A business entity acting as an 9.15 insurance producer is required to obtain an insurance producer 9.16 license. Application must be made using the Uniform Business 9.17 Entity Application. Before approving the application, the 9.18 commissioner shall find that: 9.19 (1) the business entity has paid the fees set forth in 9.20 section 60K.55; and 9.21 (2) the business entity has designated an individual 9.22 licensed producer responsible for the business entity's 9.23 compliance with the insurance laws and rules of this state. 9.24 (b) A business entity insurance producer license does not 9.25 grant authority to any individual officer, director, partner, 9.26 member, or employee to act as an insurance producer. 9.27 Subd. 4. [SERVICE OF PROCESS.] Application for a license 9.28 under this chapter constitutes appointment of the commissioner 9.29 as the person's agent for service of process under section 9.30 45.028. 9.31 Subd. 5. [ADDITIONAL DOCUMENTATION.] The commissioner may 9.32 require any documents reasonably necessary to verify the 9.33 information contained in an application. 9.34 Subd. 6. [LIMITED LINE CREDIT INSURANCE INSTRUCTION.] An 9.35 insurer that sells, solicits, or negotiates any form of limited 9.36 line credit insurance shall provide to each individual whose 10.1 duties will include selling, soliciting, or negotiating limited 10.2 line credit insurance a program of instruction that may be 10.3 approved by the commissioner. 10.4 Subd. 7. [VARIABLE LIFE AND VARIABLE ANNUITY.] A resident 10.5 individual applying for a variable life and variable annuity 10.6 license shall demonstrate that the applicant holds a current 10.7 license as a life insurance producer. 10.8 Sec. 9. [60K.38] [LICENSE.] 10.9 Subdivision 1. [ISSUANCE.] (a) Unless denied a license 10.10 under section 60K.43, a person who has met the requirements of 10.11 sections 60K.36 and 60K.37 must be issued an insurance producer 10.12 license. An insurance producer may receive qualification for a 10.13 license in one or more of the lines of authority in paragraphs 10.14 (b) and (c). 10.15 (b) An individual insurance producer may receive 10.16 qualification for a license in one or more of the following 10.17 major lines: 10.18 (1) life insurance: coverage on human lives including 10.19 benefits of endowment and annuities, and may include benefits in 10.20 the event of death or dismemberment by accident and benefits for 10.21 disability income; 10.22 (2) accident and health or sickness insurance: coverage 10.23 for sickness, bodily injury, or accidental death, and may 10.24 include benefits for disability income; 10.25 (3) property insurance: coverage for the direct or 10.26 consequential loss or damage to property of every kind; 10.27 (4) casualty insurance: coverage against legal liability, 10.28 including that for death, injury, or disability, or damage to 10.29 real or personal property; 10.30 (5) variable life and variable annuity products insurance: 10.31 coverage provided under variable life insurance contracts and 10.32 variable annuities; and 10.33 (6) personal lines: property and casualty insurance 10.34 coverage sold to individuals and families for primarily 10.35 noncommercial purposes. 10.36 (c) An individual insurance producer may receive 11.1 qualification for a license in one or more of the following 11.2 limited lines: 11.3 (1) limited line credit insurance; 11.4 (2) farm property and liability insurance; 11.5 (3) title insurance; 11.6 (4) travel baggage insurance; 11.7 (5) bail bonds; and 11.8 (6) any other line of insurance permitted under state laws 11.9 or rules. 11.10 Subd. 2. [PERIOD OF EFFECTIVENESS.] An insurance producer 11.11 license remains in effect unless revoked or suspended as long as 11.12 the fee set forth in section 60K.55 is paid, continuing 11.13 education requirements for resident individual producers are 11.14 met, and all additional documentation required by the 11.15 commissioner is provided by the renewal date. 11.16 Subd. 3. [LAPSED LICENSE.] An individual insurance 11.17 producer who allows the license to lapse may, within 12 months 11.18 from the due date of the renewal fee, reinstate the license 11.19 without the necessity of passing a written examination. 11.20 However, a penalty in the amount of twice the unpaid renewal fee 11.21 must be paid by the individual for any renewal fee received 11.22 after the due date. 11.23 Subd. 4. [WAIVERS.] A licensed insurance producer who is 11.24 unable to comply with license renewal procedures due to military 11.25 service or some other extenuating circumstance, such as a 11.26 long-term medical disability, may request a waiver of those 11.27 procedures. The producer may also request a waiver of any 11.28 examination requirement or any other fine or sanction imposed 11.29 for failure to comply with renewal procedures. 11.30 Subd. 5. [CONTENTS.] The license must contain the 11.31 licensee's name, address, producer license number, and the date 11.32 of issuance, the lines of authority, the expiration date, and 11.33 any other information the commissioner considers necessary. 11.34 Subd. 6. [NAME OR ADDRESS CHANGES.] Licensees shall inform 11.35 the commissioner, by any means acceptable to the commissioner, 11.36 of a change of name or address within ten days of the change. 12.1 Subd. 7. [ADMINISTRATIVE ASSISTANCE TO THE 12.2 COMMISSIONER.] In order to assist in the performance of the 12.3 commissioner's duties, the commissioner may contract with 12.4 nongovernmental entities, including the National Association of 12.5 Insurance Commissioners (NAIC) or any affiliates or subsidiaries 12.6 that the NAIC oversees, to perform any ministerial functions, 12.7 including the collection of fees, related to producer licensing 12.8 that the commissioner and the nongovernmental entity consider 12.9 appropriate. 12.10 Sec. 10. [60K.39] [NONRESIDENT LICENSING.] 12.11 Subdivision 1. [ISSUANCE.] Unless denied a license under 12.12 section 62K.41, a nonresident person shall receive a nonresident 12.13 producer license if: 12.14 (1) the person is currently licensed as a resident and in 12.15 good standing in the person's home state; 12.16 (2) the person has submitted the proper request for 12.17 licensure and has paid the fees required by section 60K.55; 12.18 (3) the person has submitted or transmitted to the 12.19 commissioner the application for licensure that the person 12.20 submitted to the person's home state, or in lieu of the same, a 12.21 completed Uniform Application; and 12.22 (4) the person's home state awards nonresident producer 12.23 licenses to residents of this state on the same basis. 12.24 Subd. 2. [VERIFICATION OF LICENSING STATUS.] The 12.25 commissioner may verify the producer's licensing status through 12.26 the producer database maintained by the National Association of 12.27 Insurance Commissioners, its affiliates, or subsidiaries. 12.28 Subd. 3. [CHANGE OF ADDRESS.] A nonresident producer who 12.29 moves from one state to another state or a resident producer who 12.30 moves from this state to another state shall file a change of 12.31 address and provide certification from the new resident state 12.32 within ten days of the change of legal residence. No fee or 12.33 license application is required. 12.34 Subd. 4. [TERMINATION; RESIDENT LICENSE.] A nonresident 12.35 producer license terminates automatically when the person's 12.36 resident license is terminated for any reason. 13.1 Subd. 5. [SURPLUS LINES PRODUCERS.] (a) Notwithstanding 13.2 any other provision of sections 60K.31 to 60K.57, a person 13.3 licensed as a surplus lines producer in the person's home state 13.4 shall receive a nonresident surplus lines producer license under 13.5 subdivision 1. Except as to subdivision 1, nothing in this 13.6 section otherwise amends or supersedes any provision of sections 13.7 60A.195 to 60A.209. 13.8 (b) No surplus lines agent or broker licensed under 13.9 sections 60A.195 to 60A.209 may do business in this state unless 13.10 the agent or broker has complied with the requirements set forth 13.11 in section 60A.198, subdivision 3, paragraphs (b) to (d). 13.12 Subd. 6. [LIMITED LINES PRODUCER.] Notwithstanding any 13.13 other provision of sections 60K.31 to 60K.57, a person licensed 13.14 as a limited line credit insurance or other type of limited 13.15 lines producer in the person's home state shall receive a 13.16 nonresident limited lines producer license, under subdivision 1, 13.17 granting the same scope of authority as granted under the 13.18 license issued by the producer's home state. For the purposes 13.19 of this subdivision, limited line insurance is any authority 13.20 granted by the home state that restricts the authority of the 13.21 license to less than the total authority prescribed in the 13.22 associated major lines pursuant to section 60K.38, subdivision 13.23 1, clauses (1) to (6). 13.24 Sec. 11. [60K.40] [INDIVIDUALS LICENSED IN ANOTHER STATE; 13.25 EXEMPTION FROM EXAMINATION.] 13.26 Subdivision 1. [AVAILABILITY.] An individual who applies 13.27 for an insurance producer license in this state who was 13.28 previously licensed for the same lines of authority in another 13.29 state is not required to complete any prelicensing education or 13.30 examination. This exemption is only available if the person is 13.31 currently licensed in that state or if the application is 13.32 received within 90 days of the cancellation of the applicant's 13.33 previous license and if the prior state issues a certification 13.34 that, at the time of cancellation, the applicant was in good 13.35 standing in that state or the state's Producer Database records, 13.36 maintained by the National Association of Insurance 14.1 Commissioners, its affiliates or subsidiaries, indicate that the 14.2 producer is or was licensed in good standing for the line of 14.3 authority requested. 14.4 Subd. 2. [REQUIRED APPLICATION.] If a person licensed as 14.5 an insurance producer in another state who moves to this state 14.6 makes application within 90 days of establishing legal residence 14.7 to become a resident licensee under section 60K.37, no 14.8 prelicensing education or examination is required of that person 14.9 to obtain any line of authority previously held in the prior 14.10 state. 14.11 Sec. 12. [60K.41] [ASSUMED NAMES.] 14.12 An insurance producer doing business under any name other 14.13 than the producer's legal name shall provide the commissioner 14.14 with documentation that the assumed name has been properly filed 14.15 with the secretary of state before using the assumed name. 14.16 Sec. 13. [60K.42] [TEMPORARY LICENSING.] 14.17 Subdivision 1. [COMMISSIONER'S AUTHORITY TO GRANT.] The 14.18 commissioner may issue a temporary insurance producer license 14.19 for a period not to exceed 180 days without requiring an 14.20 examination if the commissioner considers the temporary license 14.21 necessary for the servicing of an insurance business in the 14.22 following cases: 14.23 (1) to the surviving spouse or court-appointed personal 14.24 representative of a licensed insurance producer who dies or 14.25 becomes mentally or physically disabled to allow adequate time 14.26 for the sale of the insurance business owned by the producer or 14.27 for the recovery or return of the producer to the business or to 14.28 provide for the training and licensing of new personnel to 14.29 operate the producer's business; 14.30 (2) to a member or employee of a business entity licensed 14.31 as an insurance producer, upon the death or disability of an 14.32 individual designated in the business entity application or the 14.33 license; 14.34 (3) to the designee of a licensed insurance producer 14.35 entering active service in the armed forces of the United States 14.36 of America; or 15.1 (4) in any other circumstance where the commissioner 15.2 considers that the public interest will best be served by the 15.3 issuance of this license. 15.4 Subd. 2. [LIMITATIONS.] The commissioner may by order 15.5 limit the authority of any temporary licensee in any way 15.6 considered necessary to protect insureds and the public. The 15.7 commissioner may require the temporary licensee to have a 15.8 suitable sponsor who is a licensed producer or insurer and who 15.9 assumes responsibility for all acts of the temporary licensee 15.10 and may impose other similar requirements designed to protect 15.11 insureds and the public. The commissioner may by order revoke a 15.12 temporary license if the interests of insureds or the public are 15.13 endangered. A temporary license may not continue after the 15.14 owner or the personal representative disposes of the business. 15.15 Sec. 14. [60K.43] [LICENSE DENIAL, NONRENEWAL, OR 15.16 REVOCATION.] 15.17 Subdivision 1. [CAUSES.] The commissioner may, by order, 15.18 restrict, censure, suspend, revoke, or refuse to issue or renew 15.19 an insurance producer's license or may levy a civil penalty 15.20 under section 45.027 or any combination of actions, for any one 15.21 or more of the following causes: 15.22 (1) providing incorrect, misleading, incomplete, or 15.23 materially untrue information in the licensing application 15.24 (2) violating any insurance laws, including chapter 45 or 15.25 chapters 60A to 72A, or violating any regulation, subpoena, or 15.26 order of the commissioner or of another state's insurance 15.27 commissioner; 15.28 (3) obtaining or attempting to obtain a license through 15.29 misrepresentation or fraud; 15.30 (4) improperly withholding, misappropriating, or converting 15.31 any money or properties received in the course of doing 15.32 insurance business; 15.33 (5) misrepresenting the terms of an actual or proposed 15.34 insurance contract or application for insurance; 15.35 (6) having pled guilty, with or without explicitly 15.36 admitting guilt, pled nolo contendere, or been convicted of a 16.1 felony, gross misdemeanor, or misdemeanor involving moral 16.2 turpitude, including, but not limited to, assault or similar 16.3 conduct; 16.4 (7) having admitted or been found to have committed any 16.5 insurance unfair trade practice or fraud; 16.6 (8) using fraudulent, coercive, or dishonest practices, or 16.7 demonstrating incompetence, untrustworthiness, or financial 16.8 irresponsibility whether or not involving the business of 16.9 insurance in this state or elsewhere; 16.10 (9) having an insurance producer license, or its 16.11 equivalent, denied, suspended, or revoked, or having been the 16.12 subject of a fine or any other discipline in any other state, 16.13 province, district, or territory; 16.14 (10) forging another's name to an application for insurance 16.15 or to any document, whether or not related to an insurance 16.16 transaction; 16.17 (11) improperly using notes or any other reference material 16.18 to complete an examination for an insurance license; 16.19 (12) knowingly accepting insurance business from an 16.20 individual who is not licensed; 16.21 (13) failing to comply with an administrative or court 16.22 order imposing a child support obligation; 16.23 (14) failing to pay state income tax or comply with any 16.24 administrative or court order directing payment of state income 16.25 tax; 16.26 (15) being permanently or temporarily enjoined by any court 16.27 of competent jurisdiction from engaging in or continuing any 16.28 conduct or practice involving any aspect of the insurance 16.29 business; 16.30 (16) making any communication to a potential buyer that 16.31 gives the impression that the producer is acting on behalf of a 16.32 government agency; or 16.33 (17) while performing residential mortgage activity 16.34 regulated under chapter 58, violating any notification, 16.35 disclosure, or recordkeeping requirement, or any standard of 16.36 conduct imposed by chapter 58. 17.1 Subd. 2. [HEARING RIGHTS.] (a) If the commissioner 17.2 determines that the producer is in violation of this section, 17.3 the commissioner may issue an order requiring a licensee to show 17.4 cause why any or all of the following should not occur: 17.5 (1) the revocation or suspension of the license; 17.6 (2) the censuring of the licensee; or 17.7 (3) the imposition of a civil penalty. 17.8 The order must be calculated to give reasonable notice of 17.9 the time and place for hearing on the matter and must state the 17.10 reasons for the entry of the order. The commissioner may, by 17.11 order, summarily suspend a license pending final determination 17.12 of any order to show cause. If a license is suspended pending 17.13 final determination of an order to show cause, a hearing on the 17.14 merits must be held within 30 days of the issuance of the order 17.15 of suspension. All hearings must be conducted in accordance 17.16 with the provisions of chapter 14. After the hearing, the 17.17 commissioner shall enter an order disposing of the matter as the 17.18 facts require. If the licensee fails to appear at a hearing 17.19 after having been duly notified of it, the licensee shall be 17.20 considered in default, and the proceeding may be determined 17.21 against the licensee upon consideration of the order to show 17.22 cause, the allegations of which may be considered to be true. 17.23 (b) In the event that the action by the commissioner is to 17.24 nonrenew or to deny an application for a license, the 17.25 commissioner shall notify the applicant or licensee and advise, 17.26 in writing, the applicant or licensee of the reason for the 17.27 denial or nonrenewal of the applicant's or licensee's license. 17.28 The applicant or licensee may make written demand upon the 17.29 commissioner within 30 days for a hearing to determine the 17.30 reasonableness of the commissioner's action. The hearing must 17.31 be held within 30 days and must be held pursuant to the 17.32 contested case provisions of chapter 14. If no hearing is 17.33 requested within 30 days of service of the notice of nonrenewal 17.34 or denial, the nonrenewal or denial becomes final. 17.35 Subd. 3. [ACTIONS AGAINST BUSINESS ENTITY.] The license of 17.36 a business entity may be suspended, revoked, or refused if the 18.1 commissioner finds, after hearing, that an individual licensee's 18.2 violation was known or should have been known by one or more of 18.3 the partners, officers, or managers acting on behalf of the 18.4 partnership or corporation and the violation was not reported to 18.5 the commissioner in a timely manner. 18.6 Subd. 4. [FINE.] In addition to or in lieu of any 18.7 applicable denial, suspension, or revocation of a license, a 18.8 person may, after hearing, be subject to a civil fine according 18.9 to section 45.027, subdivision 6. 18.10 Subd. 5. [OTHER AUTHORITY OF THE COMMISSIONER.] If a 18.11 license lapses, is surrendered, withdrawn, terminated, or 18.12 otherwise becomes ineffective, the commissioner may institute a 18.13 proceeding under this subdivision within two years after the 18.14 license was last effective and enter a revocation or suspension 18.15 order as of the last date on which the license was in effect, or 18.16 impose a civil penalty as provided for in section 45.027, 18.17 subdivision 6. 18.18 Subd. 6. [CONDITIONS FOR RELICENSURE.] A revocation of a 18.19 license prohibits the licensee from making a new application for 18.20 a license for at least two years from the effective date of the 18.21 revocation. Further, the commissioner shall, as a condition of 18.22 reapplication, require the applicant to obtain a performance 18.23 bond issued by an insurer authorized to transact business in 18.24 this state in the amount of $20,000 or a greater amount the 18.25 commissioner considers appropriate for the protection of 18.26 citizens of this state in the event the commissioner grants the 18.27 application. The bond must be filed with the commissioner, with 18.28 the state of Minnesota as obligee, conditioned for the prompt 18.29 payment to any aggrieved person entitled to payment of any 18.30 amounts received by the licensee or to protect any aggrieved 18.31 person from loss resulting from fraudulent, deceptive, 18.32 dishonest, or other prohibited practices arising out of any 18.33 transaction when the licensee was licensed or performed acts for 18.34 which a license is required under this chapter. The bond 18.35 remains operative for as long as that licensee is licensed. The 18.36 bond required by this subdivision must provide coverage for all 19.1 matters arising during the period of licensure. 19.2 Sec. 15. [60K.44] [TAX CLEARANCE CERTIFICATE.] 19.3 Subdivision 1. [REQUIREMENT FOR ISSUANCE OR RENEWAL OF 19.4 LICENSE.] In addition to the provisions of section 60K.43, the 19.5 commissioner may not issue or renew a license if the 19.6 commissioner of revenue notifies the commissioner and the 19.7 licensee or applicant for a license that the licensee or 19.8 applicant owes the state delinquent taxes in the amount of $500 19.9 or more. The commissioner may issue or renew the license only 19.10 if: 19.11 (1) the commissioner of revenue issues a tax clearance 19.12 certificate; and 19.13 (2) the commissioner of revenue or the licensee or 19.14 applicant forwards a copy of the clearance certificate to the 19.15 commissioner. 19.16 The commissioner of revenue may issue a clearance certificate 19.17 only if the licensee or applicant does not owe the state any 19.18 uncontested delinquent taxes. 19.19 Subd. 2. [DEFINITIONS.] For purposes of this section, the 19.20 following terms have the meanings given them: 19.21 (1) "taxes" are all taxes payable to the commissioner of 19.22 revenue, including penalties and interest due on those taxes; 19.23 and 19.24 (2) "delinquent taxes" do not include a tax liability if (i) 19.25 an administrative or court action that contests the amount or 19.26 validity of the liability has been filed or served, (ii) the 19.27 appeal period to contest the tax liability has not expired, or 19.28 (iii) the licensee or applicant has entered into a payment 19.29 agreement to pay the liability and is current with the payments. 19.30 Subd. 3. [CONTESTED CASE HEARING.] In lieu of the notice 19.31 and hearing requirements of section 60K.43, when a licensee or 19.32 applicant is required to obtain a clearance certificate under 19.33 this section, a contested case hearing must be held if the 19.34 licensee or applicant requests a hearing in writing to the 19.35 commissioner of revenue within 30 days of the date of the notice 19.36 provided in subdivision 1. The hearing must be held within 45 20.1 days of the date the commissioner of revenue refers the case to 20.2 the office of administrative hearings. Notwithstanding any law 20.3 to the contrary, the licensee or applicant must be served with 20.4 20 days' notice in writing specifying the time and place of the 20.5 hearing and the allegations against the licensee or applicant. 20.6 The notice may be served personally or by mail. 20.7 Subd. 4. [IDENTIFICATION REQUIRED.] The commissioner shall 20.8 require all licensees or applicants to provide their social 20.9 security number and Minnesota business identification number on 20.10 all license applications. Upon request of the commissioner of 20.11 revenue, the commissioner must provide to the commissioner of 20.12 revenue a list of all licensees and applicants, including the 20.13 name and address, social security number, and business 20.14 identification number. The commissioner of revenue may request 20.15 a list of the licensees and applicants no more than once each 20.16 calendar year. 20.17 Sec. 16. [60K.45] [SURRENDER OF LICENSE.] 20.18 The commissioner shall promptly notify the licensee and all 20.19 appointing insurers, where applicable, of any suspension, 20.20 revocation, or termination of the licensee's producer license by 20.21 the commissioner. Upon receipt of the notice of suspension or 20.22 revocation of a license, the licensee shall immediately deliver 20.23 it to the commissioner. 20.24 Sec. 17. [60K.46] [REQUIRED ACTS.] 20.25 Subdivision 1. [PERSONAL SOLICITATION OF INSURANCE 20.26 SALES.] (a) For the purpose of this section, "personal 20.27 solicitation" means any contact by a producer, or any person 20.28 acting on behalf of a producer, made for the purpose of selling 20.29 or attempting to sell insurance, when either the producer or the 20.30 person acting for the producer contacts the buyer in person, by 20.31 telephone, or by electronic means, except: 20.32 (1) an attempted sale in which the buyer personally knows 20.33 the identity of the producer, the name of the general agency, if 20.34 any, which the producer represents, and the fact that the 20.35 producer is an insurance producer; 20.36 (2) an attempted sale in which the prospective purchaser of 21.1 insurance initiated the contact; or 21.2 (3) a personal contact which takes place at the producer's 21.3 place of business. 21.4 (b) Before a personal solicitation, the producer or person 21.5 acting for a producer shall, at the time of initial personal 21.6 contact with the potential buyer, clearly and expressly disclose 21.7 in writing: 21.8 (1) the name of the person making the contact; 21.9 (2) the name of the producer, general agency, or insurer 21.10 that the person represents; and 21.11 (3) the fact that the producer, agency, or insurer is in 21.12 the business of selling insurance. 21.13 If the initial personal contact is made by telephone, the 21.14 disclosures required by this subdivision need not be made in 21.15 writing. 21.16 Subd. 2. [FEES FOR SERVICES.] No person shall charge a fee 21.17 for any services rendered in connection with the solicitation, 21.18 negotiation, or servicing of any insurance contract unless: 21.19 (1) before rendering the services, a written statement is 21.20 provided disclosing: 21.21 (i) the services for which fees are charged; 21.22 (ii) the amount of the fees; 21.23 (iii) that the fees are charged in addition to premiums; 21.24 and 21.25 (iv) that premiums include a commission; and 21.26 (2) all fees charged are reasonable in relation to the 21.27 services rendered. 21.28 Subd. 3. [COMMISSIONS OR COMPENSATION.] A duly licensed 21.29 producer may pay commissions or assign or direct that 21.30 commissions be paid to a partnership of which the producer is a 21.31 member, employee, or agent, or to a corporation of which the 21.32 producer is an officer, employee, or agent. 21.33 Subd. 4. [SUITABILITY OF INSURANCE.] In recommending the 21.34 purchase of any life, endowment, individual accident and 21.35 sickness, long-term care, annuity, life-endowment, or Medicare 21.36 supplement insurance to a customer, a producer must have 22.1 reasonable grounds for believing that the recommendation is 22.2 suitable for the customer and must make reasonable inquiries to 22.3 determine suitability. The suitability of a recommended 22.4 purchase of insurance will be determined by reference to the 22.5 totality of the particular customer's circumstances, including, 22.6 but not limited to, the customer's income, the customer's need 22.7 for insurance, and the values, benefits, and costs of the 22.8 customer's existing insurance program, if any, when compared to 22.9 the values, benefits, and costs of the recommended policy or 22.10 policies. This subdivision does not apply to limited lines 22.11 insurance under section 60K.38, subdivision 1, paragraph (c). 22.12 Subd. 5. [PREMIUMS.] All premiums or other money received 22.13 by a producer from an insured or applicant for insurance must be 22.14 promptly deposited directly in a business checking, savings, or 22.15 other similar account maintained by the producer or agency, 22.16 unless the money is forwarded directly to the designated insurer. 22.17 Subd. 6. [PRIVACY OF INSURED.] Except as otherwise 22.18 provided by law, no insurance producer may disclose or cause to 22.19 be disclosed to any other person the identity of a person 22.20 insured through the producer without the consent of the insured. 22.21 Subd. 7. [ALTERING EXISTING POLICIES; WRITTEN BINDERS 22.22 REQUIRED.] An insurance producer having express authority to 22.23 bind coverage, who orally agrees on behalf of an insurer to 22.24 provide insurance coverage, or to alter an existing insurance 22.25 agreement, shall execute and deliver a written memorandum or 22.26 binder containing the terms of the oral agreement to the insured 22.27 within three business days from the time the oral agreement is 22.28 entered. 22.29 Sec. 18. [60K.47] [LIABILITY FOR PLACING INSURANCE IN 22.30 UNAUTHORIZED COMPANY.] 22.31 Any person, whether or not licensed as an insurance 22.32 producer, who participates in any manner in the sale of any 22.33 insurance policy or certificate, or any other contract providing 22.34 benefits, for or on behalf of any company that is required to 22.35 be, but that is not authorized to engage in the business of 22.36 insurance in this state, other than pursuant to sections 60A.195 23.1 to 60A.209, is personally liable for all premiums, whether 23.2 earned or unearned, paid by the insured, and the premiums may be 23.3 recovered by the insured. In addition, that person is 23.4 personally liable for any loss the insured has sustained or may 23.5 sustain if the loss is one resulting from a risk or hazard 23.6 covered in the issued policy, certificate, or contract, or which 23.7 would have been covered if the policy, certificate, or contract 23.8 had been issued to the purchaser of the insurance. 23.9 Sec. 19. [60K.48] [COMMISSIONS.] 23.10 Subdivision 1. [PAYMENT PROHIBITED.] An insurance company 23.11 or insurance producer shall not pay a commission, service fee, 23.12 brokerage, or other valuable consideration to a person for 23.13 selling, soliciting, or negotiating insurance in this state if 23.14 that person is required to be licensed under sections 60K.31 to 23.15 60K.57 and is not so licensed. 23.16 Subd. 2. [ACCEPTANCE PROHIBITED.] A person shall not 23.17 accept a commission, service fee, brokerage, or other valuable 23.18 consideration for selling, soliciting, or negotiating insurance 23.19 in this state if that person is required to be licensed under 23.20 sections 60K.31 to 60K.57 and is not so licensed. 23.21 Subd. 3. [EXCEPTIONS.] (a) Renewal or other deferred 23.22 commissions may be paid to a person for selling, soliciting, or 23.23 negotiating insurance in this state if the person was required 23.24 to be licensed under sections 60K.31 to 60K.57 at the time of 23.25 the sale, solicitation, or negotiation and was so licensed at 23.26 that time. 23.27 (b) An insurer or insurance producer may pay or assign 23.28 commissions, service fees, brokerages, or other valuable 23.29 consideration to an insurance agency or to persons who do not 23.30 sell, solicit, or negotiate insurance in this state, unless the 23.31 payment would constitute an illegal rebate or otherwise violate 23.32 section 72A.20, subdivision 10. A duly licensed producer may 23.33 pay commissions or assign or direct that commissions be paid to 23.34 a partnership of which the producer is a member, employee, or 23.35 agent, or to a corporation of which the agent is an officer, 23.36 employee, or agent. 24.1 Sec. 20. [60K.49] [APPOINTMENTS.] 24.2 Subdivision 1. [AGENT OF INSURER.] A person performing 24.3 acts requiring a producer license under this chapter is at all 24.4 times the agent of the insurer and not the insured. 24.5 Subd. 2. [REQUIREMENTS.] Except as described in 24.6 subdivision 3, a licensed insurance producer shall not engage in 24.7 the business of insurance with an insurer unless the producer 24.8 either: 24.9 (1) has been appointed by that insurer; or 24.10 (2) has the permission of the insurer to transact business 24.11 on its behalf and obtains an appointment from the insurer within 24.12 15 days after the first application is submitted to the insurer. 24.13 Subd. 3. [EXCEPTION.] A licensed insurance producer may, 24.14 in response to the needs of a customer, procure insurance in a 24.15 class of insurance for which the producer is licensed from an 24.16 insurer by which the producer is not appointed, if the 24.17 transaction is consummated through an appointed agent of the 24.18 insurer. 24.19 Subd. 4. [PROCEDURE.] To appoint a producer as its agent, 24.20 the appointing insurer shall file, in a format approved by the 24.21 commissioner, a notice of appointment within 15 days from the 24.22 date the agency contract is executed or the first insurance 24.23 application is submitted. An insurer may also elect to appoint 24.24 a producer to all or some insurers within the insurer's holding 24.25 company system or group by the filing of a single appointment 24.26 request. No insurer shall appoint a producer until the producer 24.27 obtains a license under this chapter. 24.28 Subd. 5. [ELIGIBILITY.] Upon receipt of the notice of 24.29 appointment, the commissioner shall verify within a reasonable 24.30 time not to exceed 30 days that the insurance producer is 24.31 eligible for appointment. If the insurance producer is 24.32 determined to be ineligible for appointment, the commissioner 24.33 shall notify the insurer within five days of its determination. 24.34 Subd. 6. [FEES.] An insurer shall pay an appointment fee, 24.35 in the amount and method of payment set forth in section 60A.14, 24.36 subdivision 1, for each insurance producer appointed by the 25.1 insurer. 25.2 Subd. 7. [PERIOD OF EFFECTIVENESS.] Appointments shall 25.3 remain in force until voluntarily terminated by the insurer or 25.4 the producer, or until the license of the producer has been 25.5 terminated for any reason. An insurer may terminate the 25.6 appointment at any time by notifying the commissioner and the 25.7 producer under section 60K.51. If the insurer does not specify 25.8 an effective date, the termination is effective on the date the 25.9 notice is received by the commissioner. Within 30 days after 25.10 the insurer gives notice to the commissioner, the insurer shall 25.11 furnish the producer with a current statement of the producer's 25.12 commission account. 25.13 Sec. 21. [60K.50] [LIMITATION ON APPOINTMENTS.] 25.14 No insurer or representative of an insurer shall knowingly 25.15 appoint a producer who is known to the insurer or representative 25.16 to have engaged in any of the activities in section 60K.43 or to 25.17 be otherwise unqualified or unfit. Upon discovery by the 25.18 insurer or a representative of the insurer that an appointed 25.19 producer has engaged in any of the activities in section 60K.43 25.20 or is otherwise unqualified or unfit, the insurer shall 25.21 immediately terminate the appointment and notify the 25.22 commissioner as set forth in section 60K.51. No insurer shall 25.23 employ a producer whose license has been revoked. 25.24 Sec. 22. [60K.51] [NOTIFICATION TO COMMISSIONER OF 25.25 TERMINATION.] 25.26 Subdivision 1. [TERMINATION FOR CAUSE.] An insurer or 25.27 authorized representative of the insurer that terminates the 25.28 appointment, employment, contract, or other insurance business 25.29 relationship with a producer shall notify the commissioner 25.30 within 30 days following the effective date of the termination, 25.31 using a format acceptable to the commissioner, if the reason for 25.32 termination is one of the reasons set forth in section 60K.43 or 25.33 the insurer has knowledge that the producer was found by a 25.34 court, government body, or self-regulatory organization 25.35 authorized by law to have engaged in any of the activities in 25.36 section 60K.43. Upon the written request of the commissioner, 26.1 the insurer shall provide additional information, documents, 26.2 records, or other data pertaining to the termination or activity 26.3 of the producer. 26.4 Subd. 2. [TERMINATION WITHOUT CAUSE.] An insurer or 26.5 authorized representative of the insurer that terminates the 26.6 appointment, employment, or contract with a producer for any 26.7 reason not set forth in section 60K.43 shall notify the 26.8 commissioner within 30 days following the effective date of the 26.9 termination, using a format acceptable to the commissioner. 26.10 Upon written request of the commissioner, the insurer shall 26.11 provide additional information, documents, records, or other 26.12 data pertaining to the termination. 26.13 Subd. 3. [ONGOING NOTIFICATION REQUIREMENT.] The insurer 26.14 or the authorized representative of the insurer shall promptly 26.15 notify the commissioner in a format acceptable to the 26.16 commissioner if, upon further review or investigation, the 26.17 insurer discovers additional information that would have been 26.18 reportable to the commissioner under subdivision 1 had the 26.19 insurer then known of its existence. 26.20 Subd. 4. [COPY OF NOTIFICATION TO BE PROVIDED TO 26.21 PRODUCER.] (a) Within 15 days after making the notification 26.22 required by subdivisions 1 to 3, the insurer shall mail a copy 26.23 of the notification to the producer at the producer's last known 26.24 address. If the producer is terminated for cause for any of the 26.25 reasons listed in section 60K.43, the insurer shall provide a 26.26 copy of the notification to the producer at the producer's last 26.27 known address by certified mail, return receipt requested, 26.28 postage prepaid, or by overnight delivery using a nationally 26.29 recognized carrier. 26.30 (b) Within 30 days after the producer has received the 26.31 original or additional notification, the producer may file 26.32 written comments concerning the substance of the notification 26.33 with the commissioner. The producer shall, by the same means, 26.34 simultaneously send a copy of the comments to the reporting 26.35 insurer. The comments become a part of the commissioner's file 26.36 and must accompany every copy of a report distributed or 27.1 disclosed for any reason about the producer as permitted under 27.2 subdivision 6. 27.3 Subd. 5. [IMMUNITIES.] (a) In the absence of actual 27.4 malice, an insurer, the authorized representative of the 27.5 insurer, a producer, the commissioner, or an organization of 27.6 which the commissioner is a member and that compiles the 27.7 information and makes it available to other insurance 27.8 commissioners or regulatory or law enforcement agencies is not 27.9 subject to civil liability, and no civil cause of action arises 27.10 against these entities or their respective agents or employees, 27.11 as a result of any statement or information required by or 27.12 provided pursuant to this section or any information relating to 27.13 any statement that may be requested in writing by the 27.14 commissioner, from an insurer or producer. The immunity granted 27.15 in this subdivision extends to a statement by a terminating 27.16 insurer or producer to an insurer or producer limited solely and 27.17 exclusively to whether a termination for cause under subdivision 27.18 1 was reported to the commissioner, provided that the propriety 27.19 of any termination for cause under subdivision 1 is certified in 27.20 writing by an officer or authorized representative of the 27.21 insurer or producer terminating the relationship. 27.22 (b) In any action brought against a person that may have 27.23 immunity under paragraph (a) for making any statement required 27.24 by this section or providing any information relating to any 27.25 statement that may be requested by the commissioner, the party 27.26 bringing the action shall plead specifically in any allegation 27.27 that paragraph (a) does not apply because the person making the 27.28 statement or providing the information did so with actual malice. 27.29 (c) Paragraph (a) or (b) does not abrogate or modify any 27.30 existing statutory or common law privileges or immunities. 27.31 Subd. 6. [CLASSIFICATION OF INVESTIGATIVE DATA.] Any 27.32 documents, materials, or other information in the control or 27.33 possession of the department of commerce that is furnished by an 27.34 insurer, producer, or an employee or agent of an insurer or 27.35 producer acting on behalf of the insurer or producer, or 27.36 obtained by the commissioner in an investigation pursuant to 28.1 this section is classified as confidential or private data 28.2 pursuant to section 13.41, subdivision 2. 28.3 Sec. 23. [60K.52] [USE AND SHARING OF LICENSING AND 28.4 INVESTIGATIVE DATA.] 28.5 Subdivision 1. [COMMISSIONER'S AUTHORITY.] In order to 28.6 assist in the performance of the commissioner's duties under 28.7 sections 60K.31 to 60K.57, the commissioner: 28.8 (1) may share licensing data or any active or inactive 28.9 investigative data with other state, federal, and international 28.10 regulatory agencies, with the National Association of Insurance 28.11 Commissioners, its affiliates or subsidiaries, and with state, 28.12 federal, and international law enforcement authorities if the 28.13 recipient agrees to maintain the data in a manner consistent 28.14 with its data classification; 28.15 (2) may receive documents, materials, or information, 28.16 including otherwise confidential and privileged documents, 28.17 materials, or information, from the National Association of 28.18 Insurance Commissioners, its affiliates or subsidiaries, and 28.19 from regulatory and law enforcement officials of other foreign 28.20 or domestic jurisdictions, and shall maintain as confidential or 28.21 privileged any document, material, or information received with 28.22 notice or the understanding that it is confidential or 28.23 privileged under the laws of the jurisdiction that is the source 28.24 of the document, material, or information; and 28.25 (3) may enter into agreements governing sharing and use of 28.26 information consistent with this subdivision. 28.27 No waiver of any applicable privilege or claim of 28.28 confidentiality in the documents, materials, or information 28.29 occurs as a result of disclosure to the commissioner under this 28.30 section or as a result of sharing as authorized in this 28.31 subdivision. 28.32 Nothing in sections 60K.31 to 60K.57 prohibits the 28.33 commissioner from releasing information concerning final, 28.34 adjudicated actions, including for-cause terminations, to a 28.35 database or other clearinghouse service maintained by the 28.36 National Association of Insurance Commissioners, its affiliates, 29.1 or subsidiaries of the National Association of Insurance 29.2 Commissioners. 29.3 Subd. 2. [PENALTIES FOR FAILING TO REPORT.] An insurer, 29.4 the authorized representative of the insurer, or a producer that 29.5 fails to report as required under this section or that is found 29.6 to have reported with actual malice by a court of competent 29.7 jurisdiction may, after notice and hearing, have its license or 29.8 certificate of authority suspended or revoked and may be fined 29.9 in accordance with section 45.027. 29.10 Sec. 24. [60K.53] [RECIPROCITY.] 29.11 Subdivision 1. [NONRESIDENT LICENSE WAIVER.] The 29.12 commissioner shall waive any requirements for a nonresident 29.13 license applicant with a valid license from the applicant's home 29.14 state, except the requirements imposed by section 60K.39, if the 29.15 applicant's home state awards nonresident licenses to residents 29.16 of this state on the same basis. 29.17 Subd. 2. [CONTINUING EDUCATION REQUIREMENTS.] A 29.18 nonresident producer's satisfaction of that person's home 29.19 state's continuing education requirements for licensed insurance 29.20 producers constitutes satisfaction of this state's continuing 29.21 education requirements if the nonresident producer's home state 29.22 recognizes the satisfaction of its continuing education 29.23 requirements imposed upon producers from this state on the same 29.24 basis. 29.25 Sec. 25. [60K.54] [REPORTING OF ACTIONS.] 29.26 Subdivision 1. [ADMINISTRATIVE ACTIONS.] A producer shall 29.27 report to the commissioner any administrative action taken 29.28 against the producer in another jurisdiction or by another 29.29 governmental agency in this state within 30 days of the final 29.30 disposition of the matter. This report must include a copy of 29.31 the order, consent to order, or other relevant legal documents. 29.32 Subd. 2. [CRIMINAL PROSECUTIONS.] Within 30 days of the 29.33 initial pretrial hearing date, a producer shall report to the 29.34 commissioner any criminal prosecution of the producer taken in 29.35 any jurisdiction. The report must include a copy of the initial 29.36 complaint filed, the order resulting from the hearing, and any 30.1 other relevant legal documents. In addition, a producer shall 30.2 report to the commissioner within ten days any conviction, 30.3 guilty plea, or plea of nolo contendere to any felony or gross 30.4 misdemeanor. 30.5 Sec. 26. [60K.55] [FEES.] 30.6 Subdivision 1. [RENEWAL FEES.] Each producer licensed 30.7 under this chapter shall pay a renewal fee as prescribed by 30.8 subdivision 2. 30.9 Subd. 2. [LICENSING FEES.] (a) In addition to fees 30.10 provided for examinations, each insurance producer licensed 30.11 under this chapter shall pay to the commissioner a fee of: 30.12 (1) $40 for an initial life, accident and health, property, 30.13 or casualty license issued to an individual insurance producer, 30.14 and a fee of $40 for each renewal; 30.15 (2) $75 for an initial variable life and variable annuity 30.16 license issued to an individual insurance producer, and a fee of 30.17 $50 for each renewal; 30.18 (3) $80 for an initial personal lines license issued to an 30.19 individual insurance producer, and a fee of $80 for each 30.20 renewal; 30.21 (4) $80 for an initial limited lines license issued to an 30.22 individual insurance producer, and a fee of $80 for each 30.23 renewal; 30.24 (5) $200 for an initial license issued to a business 30.25 entity, and a fee of $150 for each renewal; and 30.26 (6) $500 for an initial surplus lines license, and a fee of 30.27 $500 for each renewal. 30.28 (b) Initial licenses issued under this chapter are valid 30.29 for a period not to exceed 24 months and expire on October 31 of 30.30 the renewal year assigned by the commissioner. Each renewal 30.31 insurance producer license is valid for a period of 24 months. 30.32 Licensees who submit renewal applications postmarked or 30.33 delivered on or before October 15 of the renewal year may 30.34 continue to transact business whether or not the renewal license 30.35 has been received by November 1. Licensees who submit 30.36 applications postmarked or delivered after October 15 of the 31.1 renewal year must not transact business after the expiration 31.2 date of the license until the renewal license has been received. 31.3 (c) All fees are nonreturnable, except that an overpayment 31.4 of any fee may be refunded upon proper application. 31.5 Sec. 27. [60K.56] [CONTINUING INSURANCE EDUCATION.] 31.6 Subdivision 1. [DEFINITION.] For the purposes of this 31.7 section, "course" means a course, program of instruction, or 31.8 seminar of continuing insurance education. A "professional 31.9 designation examination" means a written, proctored, and graded 31.10 examination the passage of which leads to a bona fide insurance 31.11 or financial planning professional designation used by insurance 31.12 producers. 31.13 Subd. 2. [APPLICABILITY.] This section applies to all 31.14 natural persons licensed by this state to sell lines of 31.15 insurance for which licensing examinations are required. 31.16 Subd. 3. [EXEMPTIONS.] This section does not apply to 31.17 persons soliciting or selling solely on behalf of companies 31.18 organized and operating according to chapter 67A. 31.19 Subd. 4. [POWERS OF THE COMMISSIONER.] (a) The 31.20 commissioner shall make the final determination as to 31.21 accreditation and assignment of credit hours for courses. 31.22 (b) The commissioner shall adopt procedures for reporting 31.23 compliance with the minimum education requirement. 31.24 (c) The commissioner shall adopt rules according to chapter 31.25 14 to carry out the purposes of this section. 31.26 Subd. 5. [CRITERIA FOR COURSE ACCREDITATION.] (a) The 31.27 commissioner may accredit a course only to the extent it is 31.28 designed to impart substantive and procedural knowledge of the 31.29 insurance field. The burden of demonstrating that the course 31.30 satisfies this requirement is on the individual or organization 31.31 seeking accreditation. The commissioner shall approve any 31.32 educational program approved by Minnesota Continuing Legal 31.33 Education relating to the insurance field. The commissioner is 31.34 authorized to establish a procedure for renewal of course 31.35 accreditation. 31.36 (b) The commissioner shall approve or disapprove 32.1 professional designation examinations that are recommended for 32.2 approval by the advisory task force. In order for an insurance 32.3 producer to receive full continuing education credit for a 32.4 professional designation examination, the producer must pass the 32.5 examination. A producer may not receive credit for classroom 32.6 instruction preparing for the professional designation 32.7 examination and also receive continuing education credit for 32.8 passing the professional designation examination. 32.9 (c) The commissioner may not accredit a course: 32.10 (1) that is designed to prepare students for a license 32.11 examination; 32.12 (2) in mechanical office or business skills, including 32.13 typing, speedreading, use of calculators, or other machines or 32.14 equipment; 32.15 (3) in sales promotion, including meetings held in 32.16 conjunction with the general business of the licensed agent; or 32.17 (4) in motivation, the art of selling, psychology, or time 32.18 management. 32.19 Subd. 6. [MINIMUM EDUCATION REQUIREMENT.] Each person 32.20 subject to this section shall complete a minimum of 30 credit 32.21 hours of courses accredited by the commissioner during each 32.22 24-month licensing period. Any person whose initial licensing 32.23 period extends more than six months shall complete 15 hours of 32.24 courses accredited by the commissioner during the initial 32.25 license period. Any person teaching or lecturing at an 32.26 accredited course qualifies for 1-1/2 times the number of credit 32.27 hours that would be granted to a person completing the 32.28 accredited course. No more than 15 credit hours per licensing 32.29 period may be credited to a person for courses sponsored by, 32.30 offered by, or affiliated with an insurance company or its 32.31 agents. Courses sponsored by, offered by, or affiliated with an 32.32 insurance company or agent may restrict its students to agents 32.33 of the company or agency. 32.34 Subd. 7. [WAIVER OF REQUIREMENTS.] (a) The commissioner 32.35 may grant a waiver or an extension of time up to 90 days to 32.36 complete the minimum education requirement to an individual upon 33.1 a showing of good cause. It is the licensed person's 33.2 responsibility to request a waiver or extension on a form 33.3 prescribed by the commissioner. As of the day the licensed 33.4 person properly files a request for a waiver or extension, the 33.5 license remains in effect until the commissioner notifies the 33.6 licensed person of the commissioner's decision. The 33.7 commissioner may approve a waiver or extension subject to any 33.8 reasonable conditions. The person's license remains in effect 33.9 during the compliance period determined by the commissioner. If 33.10 the licensed person fails to comply with any reasonable 33.11 conditions imposed by the commissioner, the commissioner shall 33.12 terminate the license. If the request for a waiver or extension 33.13 is denied by the commissioner, the licensed person shall have 30 33.14 days within which to satisfy the minimum education requirement 33.15 involved in the request for a waiver or extension. If the 33.16 minimum education requirement is not satisfied within the 33.17 compliance period, the commissioner shall terminate the person's 33.18 license. 33.19 (b) Upon application on a form prescribed by the 33.20 commissioner, the commissioner may grant a waiver of the minimum 33.21 education requirement to a licensee who is no longer actively 33.22 engaged in the solicitation and sale of insurance. A licensed 33.23 person seeking a waiver from the requirements of this section 33.24 may be required to submit information to the commissioner that 33.25 substantiates the person's retirement or inactive status. A 33.26 licensed person receiving a waiver from the commissioner may 33.27 maintain and renew a license but may not solicit or sell new 33.28 insurance business while this waiver is in effect. A licensee 33.29 may, for a fee, continue to service an insurance policy for 33.30 which the licensee is the producer of record, if the policy is 33.31 in force at the time the waiver is granted. An insurer may not 33.32 terminate a service contract or refuse to pay compensation 33.33 because the waiver does not allow the licensee to solicit or 33.34 sell new insurance. 33.35 For the purposes of receiving renewal commissions and other 33.36 benefits or compensation from insurers, an agent receiving a 34.1 waiver under this paragraph is considered to be the holder of a 34.2 valid insurance producer license in this state. 34.3 Subd. 8. [REPORTING.] (a) After completing the minimum 34.4 education requirement, each person subject to this section shall 34.5 file or cause to be filed a compliance report in accordance with 34.6 the procedures adopted by the commissioner. The compliance 34.7 report must not claim credit for continuing education not 34.8 actually completed at the date of filing the report. 34.9 (b) An institution offering an accredited course shall 34.10 comply with the procedure for reporting compliance adopted by 34.11 the commissioner. 34.12 (c) If a person subject to this section completes a 34.13 nonaccredited course, that person may submit a written report to 34.14 the advisory committee accompanied by a fee of not more than $10 34.15 payable to the state of Minnesota for deposit in the general 34.16 fund. This report must be accompanied by proof satisfactory to 34.17 the commissioner that the person has completed the minimum 34.18 education requirement for the annual period during which the 34.19 nonaccredited course was completed. Upon the recommendation of 34.20 the advisory committee that the course satisfies the criteria 34.21 for course accreditation, the commissioner may approve the 34.22 nonaccredited course and shall so inform the person. If the 34.23 nonaccredited course is approved by the commissioner, it may be 34.24 used to satisfy the minimum education requirement for the 34.25 person's next annual compliance period. 34.26 Subd. 9. [ENFORCEMENT.] If a person subject to this 34.27 section fails to complete the minimum education or reporting 34.28 requirement or to pay the prescribed fees for any licensing 34.29 period, no license may be renewed or continued in force for that 34.30 person for any class of insurance beginning June 1 of the year 34.31 due and that person may not act as an insurance producer until 34.32 the person has demonstrated to the satisfaction of the 34.33 commissioner that all requirements of this section have been 34.34 complied with or that a waiver or extension has been obtained. 34.35 Sec. 28. [REPEALER.] 34.36 Minnesota Statutes 2000, sections 60K.01; 60K.02; 60K.03; 35.1 60K.04; 60K.05; 60K.06; 60K.07; 60K.081; 60K.09; 60K.10; 60K.11; 35.2 60K.12; 60K.13; 60K.14; 60K.15; 60K.16; 60K.17; 60K.18; 60K.19; 35.3 and 60K.20, are repealed. 35.4 Sec. 29. [EFFECTIVE DATE.] 35.5 Sections 1 to 28 are effective July 1, 2002. 35.6 ARTICLE 2 35.7 CORRECTIVE, CONFORMING, AND OTHER PROVISIONS 35.8 Section 1. Minnesota Statutes 2000, section 13.7191, 35.9 subdivision 6, is amended to read: 35.10 Subd. 6. [INSURANCE
AGENTPRODUCER LICENSING; 35.11 TERMINATION.] Access to data on insurance agentproducer 35.12 terminations held by the commissioner of commerce is governed by 35.13 section 60K.1060K.51. 35.14 Sec. 2. Minnesota Statutes 2000, section 43A.317, 35.15 subdivision 12, is amended to read: 35.16 Subd. 12. [STATUS OF AGENTS.] Notwithstanding sections 35.17 60K.03, subdivision 5,60K.49 and 72A.07, the program may use, 35.18 and pay referral fees, commissions, or other compensation to, 35.19 agents licensed as life and health agentsinsurance producers 35.20 under chapter 60K or licensed under section 62C.17, regardless 35.21 of whether the agents are appointed to represent the particular 35.22 health carriers or community integrated service networks that 35.23 provide the coverage available through the program. When acting 35.24 under this subdivision, an agent is not an agent of the health 35.25 carrier or community integrated service network, with respect to 35.26 that transaction. 35.27 Sec. 3. Minnesota Statutes 2000, section 60A.02, 35.28 subdivision 7, is amended to read: 35.29 Subd. 7. [INSURANCE AGENT OR INSURANCE AGENCY.] An 35.30 "insurance agent" or "insurance agency" is a personan insurance 35.31 producer licensed under sections 60K.30 to 60K.56 acting under 35.32 express authority from, and an appointment pursuant to section35.33 60K.02by, an insurer and on its behalf to solicit insurance, or 35.34 to appoint other agentsinsurance producers to solicit 35.35 insurance, or to write and countersign policies of insurance, or 35.36 to collect premiums therefor within this state, or to exercise 36.1 any or all these powers when so authorized by the insurer. The 36.2 term "person" includes a natural person, a partnership, a 36.3 corporation, or other entity, including an insurance agency. 36.4 Sec. 4. Minnesota Statutes 2000, section 60A.14, is 36.5 amended to read: 36.6 60A.14 [FEES.] 36.7 Subdivision 1. [FEES OTHER THAN EXAMINATION FEES.] In 36.8 addition to the fees and charges provided for examinations, the 36.9 following fees must be paid to the commissioner for deposit in 36.10 the general fund: 36.11 (a) by township mutual fire insurance companies: 36.12 (1) for filing certificate of incorporation $25 and 36.13 amendments thereto, $10; 36.14 (2) for filing annual statements, $15; 36.15 (3) for each annual certificate of authority, $15; 36.16 (4) for filing bylaws $25 and amendments thereto, $10. 36.17 (b) by other domestic and foreign companies including 36.18 fraternals and reciprocal exchanges: 36.19 (1) for filing certified copy of certificate of articles of 36.20 incorporation, $100; 36.21 (2) for filing annual statement, $225; 36.22 (3) for filing certified copy of amendment to certificate 36.23 or articles of incorporation, $100; 36.24 (4) for filing bylaws, $75 or amendments thereto, $75; 36.25 (5) for each company's certificate of authority, $575, 36.26 annually. 36.27 (c) the following general fees apply: 36.28 (1) for each certificate, including certified copy of 36.29 certificate of authority, renewal, valuation of life policies, 36.30 corporate condition or qualification, $25; 36.31 (2) for each copy of paper on file in the commissioner's 36.32 office 50 cents per page, and $2.50 for certifying the same; 36.33 (3) for license to procure insurance in unadmitted foreign 36.34 companies, $575; 36.35 (4) for valuing the policies of life insurance companies, 36.36 one cent per $1,000 of insurance so valued, provided that the 37.1 fee shall not exceed $13,000 per year for any company. The 37.2 commissioner may, in lieu of a valuation of the policies of any 37.3 foreign life insurance company admitted, or applying for 37.4 admission, to do business in this state, accept a certificate of 37.5 valuation from the company's own actuary or from the 37.6 commissioner of insurance of the state or territory in which the 37.7 company is domiciled; 37.8 (5) for receiving and filing certificates of policies by 37.9 the company's actuary, or by the commissioner of insurance of 37.10 any other state or territory, $50; 37.11 (6) for each appointment of an agent filed with the 37.12 commissioner, a domestic insurer shall remit $5 and all other37.13 insurers shall remit $3$10; 37.14 (7) for filing forms and rates, $75 per filing; 37.15 (8) for annual renewal of surplus lines insurer license, 37.16 $300. 37.17 The commissioner shall adopt rules to define filings that 37.18 are subject to a fee. 37.19 Subd. 2. [RETALIATORY PROVISIONS.] When, by the laws of 37.20 any other state or nation, any fines, penalties, licenses, or 37.21 fees additional to, or in excess of, those imposed by this 37.22 section upon foreign insurance companies and their agents, are 37.23 imposed upon insurance companies of this state or their agents 37.24 doing business in such state, the same fines, penalties, 37.25 licenses, and fees shall be imposed upon all insurance companies 37.26 of that state and their agents doing business in this state, so 37.27 long as such laws of such other state remain in force. This 37.28 subdivision does not apply to agent appointment fees required 37.29 under subdivision 1, clause (6). 37.30 Sec. 5. Minnesota Statutes 2000, section 60A.171, 37.31 subdivision 1, is amended to read: 37.32 Subdivision 1. (a) After an agency contractual 37.33 relationship has been in effect for a period of three years, an 37.34 insurance company writing fire or casualty loss insurance in 37.35 this state may not terminate the agency contractual relationship 37.36 with any appointed agent unless the company has attempted to 38.1 rehabilitate the agent as provided in subdivision 4. The 38.2 insurer shall provide written notice of intent to rehabilitate. 38.3 (b) If the agent and company are not able to reach a 38.4 mutually acceptable plan of rehabilitation, the company may 38.5 terminate the agency contractual relationship after providing 38.6 written notice of termination to the agent at least 90 days in 38.7 advance. 38.8 (c) The notice of termination must include the reasons for 38.9 termination and a copy of the notice of intent to rehabilitate. 38.10 (d) An insurance company may not terminate an agency 38.11 contract based upon any of the following: 38.12 (1) an adverse loss experience for a single year; 38.13 (2) the geographic location of the agent's auto and 38.14 homeowners insurance business; or 38.15 (3) the performance of obligations required of an insurer 38.16 under Minnesota Statutes. 38.17 (e) For purposes of this section, "fire or casualty loss 38.18 insurance" means any line of insurance which an insurance agent 38.19 with a personal lines, property, or casualty license under 38.20 sections 60K.30 to 60K.56 may write in this state. 38.21 Sec. 6. Minnesota Statutes 2000, section 60A.198, 38.22 subdivision 3, is amended to read: 38.23 Subd. 3. [PROCEDURE FOR OBTAINING LICENSE.] A person 38.24 licensed as an agent in this state pursuant to other law may 38.25 obtain a surplus lines license by doing the following: 38.26 (a) filing an application in the form and with the 38.27 information the commissioner may reasonably require to determine 38.28 the ability of the applicant to act in accordance with sections 38.29 60A.195 to 60A.209; 38.30 (b) maintaining an agent's license in this state; 38.31 (c) agreeing to file with the commissioner of revenue all 38.32 returns required by chapter 297I and paying to the commissioner 38.33 of revenue all amounts required under chapter 297I; and 38.34 (d) paying a fee as prescribed by section 60K.06,38.35 subdivision 2, paragraph (a), clause (4)60K.55. 38.36 Sec. 7. Minnesota Statutes 2000, section 62A.41, 39.1 subdivision 4, is amended to read: 39.2 Subd. 4. [UNLICENSED SALES.] Notwithstanding section 39.3 60K.02, subdivision 160K.32, a person who acts or assumes to 39.4 act as an insurance agentproducer without a valid license for 39.5 the purpose of selling or attempting to sell Medicare supplement 39.6 insurance, and the person who aids or abets the actor, is guilty 39.7 of a felony and is subject to a civil penalty of not more than 39.8 $5,000 per violation. 39.9 Sec. 8. Minnesota Statutes 2000, section 62C.17, 39.10 subdivision 5, is amended to read: 39.11 Subd. 5. A person shall not be qualified for a license if 39.12 upon examination or reexamination it is determined that the 39.13 person is incompetent to act as an agent or solicitora 39.14 producer, if the person has acted in any manner which would 39.15 disqualify a person to hold a license as an insurance agent or39.16 solicitorproducer under sections 60K.01 to 60K.1860K.30 to 39.17 60K.56, or if the person fails to produce documents subpoenaed 39.18 by the commissioner, or fails to appear at a hearing to which 39.19 the person is a party or has been subpoenaed, if the production 39.20 of documents or appearance is lawfully required. 39.21 Sec. 9. Minnesota Statutes 2000, section 62D.22, 39.22 subdivision 8, is amended to read: 39.23 Subd. 8. [INSURANCE AGENTS.] All agents, solicitors, and 39.24 brokers engaged in soliciting or dealing with enrollees or 39.25 prospective enrollees of a health maintenance organization, 39.26 whether employees or under contract to the health maintenance 39.27 organization, shall be subject to the provisions of sections 39.28 60K.01 to 60K.1860K.30 to 60K.56, concerning the licensure 39.29 of healthinsurance agents, solicitors, and brokers,producers 39.30 and lawful rules thereunder. Medical doctors and others who 39.31 merely explain the operation of health maintenance organizations 39.32 shall be exempt from the provisions of sections 60K.01 to 60K.1839.33 60K.30 to 60K.56. Section 60K.0360K.37, subdivision 21, 39.34 shall not apply except as to provide for an examination of an 39.35 applicant in the applicant's knowledge concerning the operations 39.36 and benefits of health maintenance organizations and related 40.1 insurance matters. 40.2 Sec. 10. Minnesota Statutes 2000, section 62H.10, 40.3 subdivision 4, is amended to read: 40.4 Subd. 4. [BROKER.] "Broker" means an agent engaged in 40.5 brokerage business pursuant to section 60K.08160K.49. 40.6 Sec. 11. Minnesota Statutes 2000, section 62L.12, 40.7 subdivision 3, is amended to read: 40.8 Subd. 3. [AGENT'S LICENSURE.] An agent licensed under 40.9 chapter 60K or section 62C.17 who knowingly and willfully breaks 40.10 apart a small group for the purpose of selling individual health 40.11 plans to eligible employees and dependents of a small employer 40.12 that meets the participation and contribution requirements of 40.13 section 62L.03, subdivision 3, is guilty of an unfair trade 40.14 practice and subject to disciplinary action, including the 40.15 revocation or suspension of license, under section 60K.1160K.43 40.16 or 62C.17. The action must be by order and subject to the 40.17 notice, hearing, and appeal procedures specified in 40.18 section 60K.1160K.43. The action of the commissioner is 40.19 subject to judicial review as provided under chapter 14. 40.20 Sec. 12. Minnesota Statutes 2000, section 62S.30, is 40.21 amended to read: 40.22 62S.30 [APPROPRIATENESS OF RECOMMENDED PURCHASE.] 40.23 In recommending the purchase or replacement of a long-term 40.24 care insurance policy or certificate, an agent shall comply with 40.25 section 60K.1460K.46, subdivision 4. 40.26 Sec. 13. Minnesota Statutes 2000, section 64B.33, is 40.27 amended to read: 40.28 64B.33 [LICENSING OF AGENTS.] 40.29 Agents of societies shall be licensed in accordance with 40.30 the provisions of chapters 60A and 60K regulating the licensing, 40.31 revocation, suspension, or termination of license of resident 40.32 and nonresident agents, except as otherwise provided in section 40.33 60K.0560K.35. 40.34 Sec. 14. Minnesota Statutes 2000, section 65B.09, 40.35 subdivision 1, is amended to read: 40.36 Subdivision 1. [AGENTS' RESPONSIBILITY.] Every person 41.1 licensed under sections 60K.02 and 60K.0360K.30 to 60K.56 who 41.2 is authorized to solicit, negotiate or effect automobile 41.3 insurance on behalf of any member shall: 41.4 (1) offer to place coverage through the facility for any 41.5 qualified applicant who is ineligible or unacceptable for 41.6 coverage in the insurer or insurers for whom the agent is 41.7 authorized to solicit, negotiate or effect automobile 41.8 insurance. Provided, that the failure of an agent to make such 41.9 an offer to a qualified applicant shall not subject the agent to 41.10 any liability to the applicant; 41.11 (2) forward to the facility all applications and any 41.12 deposit premiums which are required by the plan of operation, 41.13 rules and procedures of the facility, if the qualified applicant 41.14 accepts the offer to have coverage placed through the facility; 41.15 (3) be entitled to receive compensation for placing 41.16 insurance through the facility at the uniform rates of 41.17 compensation as provided in the plan of operation, and all 41.18 members shall pay such compensation. 41.19 Sec. 15. Minnesota Statutes 2000, section 72A.07, is 41.20 amended to read: 41.21 72A.07 [VIOLATIONS OF LAWS RELATING TO AGENTS, PENALTIES.] 41.22 Any person, firm, or corporation violating, or failing to 41.23 comply with, any of the provisions of sections 60K.01 to 60K.1841.24 60K.30 to 60K.56 and any person who acts in any manner in the 41.25 negotiation or transaction of unlawful insurance with an 41.26 insurance company not licensed to do business in the state, or 41.27 who, as principal or agent, violates any provision of law 41.28 relating to the negotiation or effecting of contracts of 41.29 insurance, shall be guilty of a misdemeanor. Upon the filing of 41.30 a complaint by the commissioner of commerce in a court of 41.31 competent jurisdiction against any person violating any 41.32 provisions of this section, the county attorney of the county in 41.33 which the violation occurred shall prosecute the person. Upon 41.34 the conviction of any agent of any violation of the provisions 41.35 of sections 60K.01 to 60K.1860K.30 to 60K.56, the commissioner 41.36 shall suspend the authority of the agent to transact any 42.1 insurance business within the state for a period of not less 42.2 than three months. Any insurer employing an agent and failing 42.3 to procure an appointment, as required by sections 60K.01 to42.4 60K.1860K.30 to 60K.56, or allowing the agent to transact 42.5 business for it within the state before an appointment has been 42.6 procured, shall pay the commissioner, for the use of the state, 42.7 a penalty of $25 for each offense. Each sale of an insurance 42.8 policy by an agent who is not appointed by an insurance company 42.9 shall constitute a separate offense, but no insurer shall be 42.10 required to pay more than $300 in penalties as a result of the 42.11 activities of a single unappointed agent. In the event of 42.12 failure to pay a penalty within ten days' after notice from the 42.13 commissioner, the authority of the insurer to do business in 42.14 this state shall be revoked by the commissioner until the 42.15 penalty is paid. No insurer whose authority is revoked shall be 42.16 readmitted until it shall have complied with all the terms and 42.17 conditions imposed for admission in the first instance. Any 42.18 action taken by the commissioner under this section shall be 42.19 subject to review by the district court of the county in which 42.20 the office of the commissioner is located. 42.21 Sec. 16. Minnesota Statutes 2000, section 72A.125, 42.22 subdivision 2, is amended to read: 42.23 Subd. 2. [SALE BY AUTO RENTAL COMPANIES.] An auto rental 42.24 company that offers or sells rental vehicle personal accident 42.25 insurance, personal effects insurance, or liability insurance in 42.26 this state in conjunction with the rental of a vehicle shall 42.27 only sell these products if the forms and rates have met the 42.28 relevant requirements of section 61A.02, 62A.02, or other 42.29 relevant sections requiring approval of forms and rates taking 42.30 into account the possible infrequency and severity of loss that 42.31 may be incurred. An auto rental company offering insurance 42.32 products for sale shall conduct a training program for its 42.33 agents or employees, which must be submitted to the commissioner 42.34 for approval. Sections 60K.01 to 60K.1960K.30 to 60K.56 do not 42.35 apply if the persons engaged in the sale of these products are 42.36 employees of the auto rental company who do not receive 43.1 commissions or other remuneration for selling the product in 43.2 addition to their regular compensation. Compensation may not be 43.3 determined in any part by the sale of insurance products. The 43.4 auto rental company before engaging in the sale of the product 43.5 must file with the commissioner the following documents: 43.6 (1) an appointment of the commissioner as agent for service 43.7 of process; 43.8 (2) an agreement that the auto rental company assumes all 43.9 responsibility for the authorized actions of all unlicensed 43.10 employees who sell the insurance product on its behalf in 43.11 conjunction with the rental of its vehicles; 43.12 (3) an agreement that the auto rental company with respect 43.13 to itself and its employees will be subject to this chapter 43.14 regarding the marketing of the insurance products and the 43.15 conduct of those persons involved in the sale of insurance 43.16 products in the same manner as if it were a licensed agent. 43.17 An auto rental company failing to file the documents in 43.18 clauses (1) to (3) is guilty of an individual violation as to 43.19 the unlicensed sale of insurance for each sale that occurs after 43.20 August 1, 1987, until they make the required filings. Each 43.21 individual sale after August 1, 1987, and prior to the filing 43.22 required by this section is subject to, in addition to any other 43.23 penalties allowable by law, up to a $200 per violation fine. 43.24 Further, the sale of the insurance product by an auto rental 43.25 company or any employee or agent of the company after August 1, 43.26 1987, without having complied with this section shall be deemed 43.27 to be in acceptance of the provisions of this section. 43.28 Insurance sold pursuant to this subdivision must be limited 43.29 in availability to rental vehicle customers though coverage may 43.30 extend to the customer, other drivers, and passengers using or 43.31 riding in the rented vehicles; and limited in duration to a 43.32 period equal to and concurrent with that of the vehicle rental. 43.33 Persons purchasing rental vehicle personal accident 43.34 insurance, personal effects insurance, or liability insurance 43.35 may be provided a certificate summarizing the policy provisions 43.36 in lieu of a copy of the policy if a copy of the policy is 44.1 available for inspection at the place of sale and a free copy of 44.2 the policy may be obtained from the auto rental company's home 44.3 office. 44.4 The commissioner may, after a hearing, revoke an auto 44.5 rental company's right to operate under this section if the 44.6 company has violated the insurance laws of this state and the 44.7 revocation is in the public interest. 44.8 Sec. 17. Minnesota Statutes 2000, section 72A.201, 44.9 subdivision 3, is amended to read: 44.10 Subd. 3. [DEFINITIONS.] For the purposes of this section, 44.11 the following terms have the meanings given them. 44.12 (1) [ADJUSTER OR ADJUSTERS.] "Adjuster" or "adjusters" is 44.13 as defined in section 72B.02. 44.14 (2) [AGENT.] "Agent" means insurance agents or insurance 44.15 agencies licensed pursuant to sections 60K.01 to 60K.1860K.30 44.16 to 60K.56, and representatives of these agents or agencies. 44.17 (3) [CLAIM.] "Claim" means a request or demand made with an 44.18 insurer for the payment of funds or the provision of services 44.19 under the terms of any policy, certificate, contract of 44.20 insurance, binder, or other contracts of temporary insurance. 44.21 The term does not include a claim under a health insurance 44.22 policy made by a participating provider with an insurer in 44.23 accordance with the participating provider's service agreement 44.24 with the insurer which has been filed with the commissioner of 44.25 commerce prior to its use. 44.26 (4) [CLAIM SETTLEMENT.] "Claim settlement" means all 44.27 activities of an insurer related directly or indirectly to the 44.28 determination of the extent of liabilities due or potentially 44.29 due under coverages afforded by the policy, and which result in 44.30 claim payment, claim acceptance, compromise, or other 44.31 disposition. 44.32 (5) [CLAIMANT.] "Claimant" means any individual, 44.33 corporation, association, partnership, or other legal entity 44.34 asserting a claim against any individual, corporation, 44.35 association, partnership, or other legal entity which is insured 44.36 under an insurance policy or insurance contract of an insurer. 45.1 (6) [COMPLAINT.] "Complaint" means a communication 45.2 primarily expressing a grievance. 45.3 (7) [INSURANCE POLICY.] "Insurance policy" means any 45.4 evidence of coverage issued by an insurer including all 45.5 policies, contracts, certificates, riders, binders, and 45.6 endorsements which provide or describe coverage. The term 45.7 includes any contract issuing coverage under a self-insurance 45.8 plan, group self-insurance plan, or joint self-insurance 45.9 employee health plans. 45.10 (8) [INSURED.] "Insured" means an individual, corporation, 45.11 association, partnership, or other legal entity asserting a 45.12 right to payment under their insurance policy or insurance 45.13 contract arising out of the occurrence of the contingency or 45.14 loss covered by the policy or contract. The term does not apply 45.15 to a person who acquires rights under a mortgage. 45.16 (9) [INSURER.] "Insurer" includes any individual, 45.17 corporation, association, partnership, reciprocal exchange, 45.18 Lloyds, fraternal benefits society, self-insurer, surplus line 45.19 insurer, self-insurance administrator, and nonprofit service 45.20 plans under the jurisdiction of the department of commerce. 45.21 (10) [INVESTIGATION.] "Investigation" means a reasonable 45.22 procedure adopted by an insurer to determine whether to accept 45.23 or reject a claim. 45.24 (11) [NOTIFICATION OF CLAIM.] "Notification of claim" means 45.25 any communication to an insurer by a claimant or an insured 45.26 which reasonably apprises the insurer of a claim brought under 45.27 an insurance contract or policy issued by the insurer. 45.28 Notification of claim to an agent of the insurer is notice to 45.29 the insurer. 45.30 (12) [PROOF OF LOSS.] "Proof of loss" means the necessary 45.31 documentation required from the insured to establish entitlement 45.32 to payment under a policy. 45.33 (13) [SELF-INSURANCE ADMINISTRATOR.] "Self-insurance 45.34 administrator" means any vendor of risk management services or 45.35 entities administering self-insurance plans, licensed pursuant 45.36 to section 60A.23, subdivision 8. 46.1 (14) [SELF-INSURED OR SELF-INSURER.] "Self-insured" or 46.2 "self-insurer" means any entity authorized pursuant to section 46.3 65B.48, subdivision 3; chapter 62H; section 176.181, subdivision 46.4 2; Laws of Minnesota 1983, chapter 290, section 171; section 46.5 471.617; or section 471.981 and includes any entity which, for a 46.6 fee, employs the services of vendors of risk management services 46.7 in the administration of a self-insurance plan as defined by 46.8 section 60A.23, subdivision 8, clause (2), subclauses (a) and 46.9 (d). 46.10 Sec. 18. Minnesota Statutes 2000, section 270B.07, 46.11 subdivision 1, is amended to read: 46.12 Subdivision 1. [DISCLOSURE TO LICENSING AUTHORITIES.] The 46.13 commissioner may disclose return information with respect to 46.14 returns filed under Minnesota tax laws to licensing authorities 46.15 of the state or political subdivisions of the state to the 46.16 extent necessary to enforce the license clearance programs under 46.17 sections 60K.1260K.44, 82.27, 147.091, 148.10, 150A.08, and 46.18 270.72. 46.19 Sec. 19. [EFFECTIVE DATE.] 46.20 Sections 1 to 18 are effective July 1, 2002.