SF 2137

as introduced - 87th Legislature (2011 - 2012) Posted on 03/22/2012 09:11am

A bill for an act
relating to insurance; regulating certain wealth-related claims practices;
amending Minnesota Statutes 2010, sections 65A.29, subdivisions 8, 11;
326B.081, subdivision 3; Minnesota Statutes 2011 Supplement, section 325E.66,
subdivisions 1, 2, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2010, section 65A.29, subdivision 8, is amended to read:

Subd. 8.

Rules.

(a) The commissioner may adopt rules pursuant to chapter 14, to
specify the grounds for nonrenewal, reduction in limits of coverage, or elimination of
coverage of a homeowner's policy. The rules must limit the grounds to the following
factors:

(1) reasons stated for cancellation in section 65A.01, subdivision 3a;

(2) reasons stated in section 72A.20, subdivision 13;

(3) insured's loss experience, not to include natural causes; and

(4) other factors deemed reasonable by the commissioner.

The rules may give consideration to the form and content of the termination notice
to the insured, a statement as to what constitutes receipt of the termination notice, and the
procedure by which the insured may appeal a termination notice.

The rules adopted under this subdivision may provide for imposition of a monetary
penalty not greater than $500 per occurrence upon insurers who are found to be in
violation of the law or the rules.

new text begin (b) Nothing in this section or the rules adopted pursuant to paragraph (a) prohibits an
insurer, at policy renewal, from (i) changing the policy premium due to loss experience
resulting from natural causes, such as lightning, wind, or hail; or (ii) adding a deductible
to a policy in an amount not to exceed two percent of the amount of coverage provided.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end In addition to any rules adopted under this subdivision, an insured may appeal
any nonrenewal under this section to the commissioner of commerce. If the commissioner
finds that the nonrenewal is unjustified, arbitrary, or capricious, the commissioner shall
order the insurer to reinstate the insured's policy. The commissioner's order may be
appealed pursuant to chapter 14. The insured's policy shall continue in force pending the
conclusion of the appeal to the commissioner. The insurer must notify the insured of the
insured's right to appeal the nonrenewal to the commissioner in the notice of nonrenewal
required under subdivision 7.

Sec. 2.

Minnesota Statutes 2010, section 65A.29, subdivision 11, is amended to read:

Subd. 11.

Nonrenewal.

Every insurer shall establish a plan that sets out the
minimum number and amount of claims during an experience period that may result
in a nonrenewal. For purposes of the plan, the insurer may not consider as a claim the
insured's inquiry about a hypothetical claim, or the insured's inquiry to the insured's agent
regarding a potential claim.

deleted text begin No homeowner's insurance policy may be nonrenewed based on the insured's loss
experience unless the insurer has sent a written notice that any future losses may result in
nonrenewal due to loss experience.
deleted text end

Any nonrenewal of a homeowner's insurance policy must, at a minimum, comply
with the requirements of subdivision 8 and the rules adopted by the commissioner.

Sec. 3.

Minnesota Statutes 2011 Supplement, section 325E.66, subdivision 1, is
amended to read:

Subdivision 1.

Payment or rebate of insurance deductible.

A residential
contractor providing deleted text begin the repair or replacement of residential roofing or siding deleted text end new text begin home repair
or improvement services new text end to be paid by an insured from the proceeds of a property or
casualty insurance policy shall not, as an inducement to the sale or provision of goods
or services to an insured, advertise or promise to pay, directly or indirectly, all or part of
any applicable insurance deductible or offer to compensate an insured for providing any
service to the insured. If a residential contractor violates this section, the insurer to whom
the insured tendered the claim shall not be obligated to consider the estimate prepared by
the residential contractor.

For purposes of this section, "residential contractor" means a residential roofer, as
defined in section 326B.802, subdivision 14; a residential new text begin building new text end contractor, as defined
in section 326B.802, subdivision 11; new text begin and new text end a residential remodeler, as defined in section
326B.802, subdivision 12 deleted text begin ; and a siding contractor registered under section 326B.802,
subdivision 15 deleted text end .

Sec. 4.

Minnesota Statutes 2011 Supplement, section 325E.66, is amended by adding a
subdivision to read:

new text begin Subd. 1a. new text end

new text begin Negotiation with insurance provider. new text end

new text begin A residential contractor shall not
represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an
owner or possessor of residential real estate on an insurance claim in connection with the
repair or replacement of roof systems, or the performance of any other exterior repair,
replacement, construction, or reconstruction work. Nothing in this section prohibits a
residential contractor from discussing with an insurer the specific terms of a written
contract executed between the residential contractor and a policyholder of the insurer once
the claim has been accepted by the insurer.
new text end

Sec. 5.

Minnesota Statutes 2011 Supplement, section 325E.66, subdivision 2, is
amended to read:

Subd. 2.

Private remedy.

If a residential contractor violates deleted text begin subdivision 1 deleted text end new text begin this
section new text end , the insured or the applicable insurer may bring an action against the residential
contractor in a court of competent jurisdiction for damages sustained by the insured or
insurer as a consequence of the residential contractor's violation.

Sec. 6.

Minnesota Statutes 2010, section 326B.081, subdivision 3, is amended to read:

Subd. 3.

Applicable law.

"Applicable law" means the provisions of sections new text begin
325E.66, new text end 327.31 to 327.36 and this chapter, and all rules, orders, stipulation agreements,
settlements, compliance agreements, licenses, registrations, certificates, and permits
adopted, issued, or enforced by the department under sections new text begin 325E.66, new text end 327.31 to 327.36
or this chapter.