SF 2173

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to civil actions; requiring insurers to act in good faith in connection
with claims practices; proposing coding for new law in Minnesota Statutes,
chapter 604.

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

Section 1.

new text begin [604.18] GOOD FAITH INSURANCE PRACTICES.
new text end

new text begin Subdivision 1. new text end

new text begin Required conduct. new text end

new text begin (a) An insurer shall act in good faith involving a
claim under an insurance policy.
new text end

new text begin (b) An insurer does not act in good faith if the insurer delays or denies benefits
offered or paid without an objectively reasonable basis for its offer, delay, or denial. An
insurer also does not act in good faith if the insurer engages in any fraud, false pretense,
false promise, misrepresentation, misleading statement, or deceptive practice that others
rely on in connection with any matter involving a claim under an insurance policy.
new text end

new text begin (c) For purposes of this section:
new text end

new text begin (1) "insurance policy" means an insurance policy or contract issued, executed,
renewed, maintained, or delivered in this state, other than a workers' compensation
insurance policy or contract or other policy or contract of a health carrier as defined in
section 62A.011; and
new text end

new text begin (2) "insurer" means an insurance company: (i) incorporated or organized in this
state; or (ii) admitted to do business in this state but not incorporated or organized in
this state. The term does not include a political subdivision providing self-insurance or
establishing a pool under section 471.981, subdivision 3.
new text end

new text begin Subd. 2. new text end

new text begin Penalties and remedies. new text end

new text begin A person violating subdivision 1 is acting against
the public interest and is liable to the injured party for costs, damages, and reasonable
attorney fees.
new text end

new text begin Subd. 3. new text end

new text begin Insurance producers; liability limited. new text end

new text begin A licensed insurance producer
is not liable under this section for errors, acts, or omissions attributed to the insurer that
appointed the producer to transact business on its behalf, except to the extent the producer
has caused or contributed to the error, act, or omission.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2007, and applies to causes
of action commenced on or after that date.
new text end