SF 1865

as introduced - 93rd Legislature (2023 - 2024) Posted on 07/05/2023 03:50pm

A bill for an act
relating to commerce; regulating post-loss assignment of rights related to certain
services performed on residential real estate covered by property and casualty
insurance; proposing coding for new law in Minnesota Statutes, chapter 325E.

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

Section 1.

new text begin [325E.67] POST-LOSS ASSIGNMENT OF BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this subdivision
have the meanings given.
new text end

new text begin (b) "Residential contractor" means a residential roofer, as defined in section 326B.802,
subdivision 14; a residential building contractor, as defined in section 326B.802, subdivision
11; or a residential remodeler, as defined in section 326B.802, subdivision 12.
new text end

new text begin (c) "Residential real estate" means a new or existing building, including appurtenant
structures, constructed for habitation by at least one family but no more than four families.
new text end

new text begin Subd. 2. new text end

new text begin Post-loss assignment. new text end

new text begin A post-loss assignment of rights or benefits to a residential
contractor under a property and casualty insurance policy insuring residential real estate
must comply with the following:
new text end

new text begin (1) the assignment must only authorize a residential contractor to be named as a copayee
for the payment of benefits under a property and casualty insurance policy covering
residential real estate;
new text end

new text begin (2) the assignment must include all of the following:
new text end

new text begin (i) an itemized description of the work to be performed;
new text end

new text begin (ii) an itemized description of materials, labor, and fees for the work to be performed;
and
new text end

new text begin (iii) a total itemized amount to be paid for the work to be performed;
new text end

new text begin (3) the assignment must include a statement that the residential contractor has made no
assurances that the claimed loss is fully covered by an insurance contract and must include
the following notice in capitalized 14-point type:
new text end

new text begin "YOU ARE AGREEING TO ASSIGN CERTAIN RIGHTS YOU HAVE UNDER
YOUR INSURANCE POLICY. THE ITEMIZED DESCRIPTION OF THE WORK
PERFORMED, AS SET FORTH IN THIS ASSIGNMENT FORM, HAS NOT BEEN
AGREED TO BY THE INSURER. PLEASE READ AND UNDERSTAND THIS
DOCUMENT BEFORE SIGNING. THE INSURER MAY ONLY PAY FOR THE
REASONABLE COST TO REPAIR OR REPLACE DAMAGED PROPERTY CAUSED
BY A COVERED PERIL, SUBJECT TO THE TERMS OF THE POLICY.";
new text end

new text begin (4) the named insured has the right to cancel the assignment within ten business days
after receipt of the scope of work by the insurance company. The cancellation must be made
in writing or a comparable digital format. Within ten business days of the date of the written
cancellation, the residential contractor must tender to the named insured, the landowner, or
the possessor of the real estate any payments, partial payments, or deposits that have been
made by that person;
new text end

new text begin (5) the assignment must include the following notice in capitalized 14-point type, located
in the immediate proximity of the space reserved in the assignment for the signature of the
named insured:
new text end

new text begin "YOU MAY CANCEL THIS ASSIGNMENT WITHOUT PENALTY WITHIN TEN
(10) BUSINESS DAYS FROM THE LATER OF THE DATE THE ASSIGNMENT IS
EXECUTED OR THE DATE ON WHICH YOU RECEIVE A COPY OF THE EXECUTED
ASSIGNMENT. YOU MUST CANCEL THE ASSIGNMENT IN WRITING AND THE
CANCELLATION MUST BE DELIVERED TO [insert the name and address of residential
contractor as provided by the residential contractor]. IF MAILED, THE CANCELLATION
MUST BE POSTMARKED ON OR BEFORE THE FIVE (5) BUSINESS DAY DEADLINE.
IF YOU CANCEL THIS ASSIGNMENT, THE RESIDENTIAL CONTRACTOR HAS
UP TO TEN (10) BUSINESS DAYS TO RETURN ANY PAYMENTS OR DEPOSITS
YOU HAVE MADE.";
new text end

new text begin (6) the assignment must not impair the interests of a mortgagee or other parties with any
legal interests listed on the declarations page of the property and casualty insurance policy
that is the subject of the assignment; and
new text end

new text begin (7) the assignment must not prevent or inhibit an insurer from communicating with the
named insured or mortgagee listed on the declarations page of the property and casualty
insurance policy that is the subject of the assignment.
new text end

new text begin Subd. 3. new text end

new text begin Other requirements. new text end

new text begin A residential contractor receiving the assignment described
in subdivision 2 must:
new text end

new text begin (1) deliver a copy of the assignment to the insurer of the residential real estate within
five business days of the date the assignment is executed;
new text end

new text begin (2) cooperate with the insurer of the residential real estate in an investigation into the
claim by providing documents and records requested by the insurer and complying with the
post-loss duties under the insurance policy; and
new text end

new text begin (3) comply with section 325E.66.
new text end

new text begin Subd. 4. new text end

new text begin Certain assignments void. new text end

new text begin A post-loss assignment of benefits entered into
with a residential contractor that violates any provision of the federal Insured Homeowner's
Protection Act of 1998, Public Law 105-216, as amended, is void.
new text end