SF 2934

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; providing coverages, notice and 
  1.3             filing requirements, and rate increase disclosures; 
  1.4             regulating motor vehicle insurance contracts; 
  1.5             regulating workers' compensation self-insurance; 
  1.6             amending Minnesota Statutes 1998, sections 60A.085; 
  1.7             60A.09, subdivision 4a; 62A.024; 62A.105, subdivision 
  1.8             2; 62A.146; 62A.30, subdivision 2; 62A.31, by adding 
  1.9             subdivisions; 62A.315; 62A.316; 62A.65, subdivision 8; 
  1.10            62Q.107; 65B.16; 65B.29, subdivisions 2 and 3; 65B.44, 
  1.11            subdivision 3; 65B.55, subdivision 2; 72A.201, 
  1.12            subdivision 6; 79A.04, subdivisions 1, 2, 7, and 9; 
  1.13            and 79A.11, subdivision 2, and by adding a 
  1.14            subdivision; Minnesota Statutes 1999 Supplement, 
  1.15            section 65B.44, subdivision 2; proposing coding for 
  1.16            new law in Minnesota Statutes, chapter 72A. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18     Section 1.  Minnesota Statutes 1998, section 60A.085, is 
  1.19  amended to read: 
  1.20     60A.085 [CANCELLATION OF GROUP COVERAGE; NOTIFICATION TO 
  1.21  COVERED PERSONS.] 
  1.22     (a) No cancellation of any group life, group accidental 
  1.23  death and dismemberment, group disability income, or group 
  1.24  medical expense policy, plan, or contract regulated under 
  1.25  chapter 62A or, 62C, 62L, or 62Q is effective unless the insurer 
  1.26  has made a good faith effort to notify all covered persons of 
  1.27  the cancellation at least 30 days before the effective 
  1.28  cancellation date.  For purposes of this section, an insurer has 
  1.29  made a good faith effort to notify all covered persons if the 
  1.30  insurer has notified all the persons included on the list 
  1.31  required by paragraph (b) at the home address given and only if 
  2.1   the list has been updated within the last 12 months. 
  2.2      (b) At the time of the application for coverage subject to 
  2.3   paragraph (a), the insurer shall obtain an accurate list of the 
  2.4   names and home addresses of all persons to be covered.  
  2.5      (c) Paragraph (a) does not apply if the group policy, plan, 
  2.6   or contract is replaced, or if the insurer has reasonable 
  2.7   evidence to indicate that it will be replaced, by a 
  2.8   substantially similar policy, plan, or contract. 
  2.9      (d) In no event shall this section extend coverage under a 
  2.10  group policy, plan, or contract more than 120 days beyond the 
  2.11  date coverage would otherwise cancel based on the terms of the 
  2.12  group policy, plan, or contract.  
  2.13     (e) If coverage under the group policy, plan, or contract 
  2.14  is extended by this section, then the time period during which 
  2.15  affected members may exercise any conversion privilege provided 
  2.16  for in the group policy, plan, or contract is extended for the 
  2.17  same length of time, plus 30 days. 
  2.18     Sec. 2.  Minnesota Statutes 1998, section 60A.09, 
  2.19  subdivision 4a, is amended to read: 
  2.20     Subd. 4a.  [ASSUMPTION TRANSACTIONS REGULATED.] No company, 
  2.21  whether domestic, foreign, or alien, shall perform an assumption 
  2.22  transaction, including an assumption reinsurance agreement, with 
  2.23  respect to a policy issued to a Minnesota resident, unless: 
  2.24     (1) the assumption agreement has been filed with the 
  2.25  commissioner; 
  2.26     (2) the assumption agreement specifically provides that the 
  2.27  original insurer remains liable to the insured in the event the 
  2.28  assuming insurer is unable to fulfill its obligations or the 
  2.29  original insurer acknowledges in writing to the commissioner 
  2.30  that it remains liable to the insured in the event the assuming 
  2.31  insurer is unable to fulfill its obligations; 
  2.32     (3) the proposed certificate of assumption to be provided 
  2.33  to the policyholder has been filed with the commissioner for 
  2.34  review and approval as provided in section 61A.02; and 
  2.35     (4) the proposed certificate of assumption contains, in 
  2.36  bold face type, the following language: 
  3.1      "Policyholder:  Please be advised that you retain all 
  3.2   rights with respect to your policy against your original insurer 
  3.3   in the event the assuming insurer is unable to fulfill its 
  3.4   obligations.  In such event, your original insurer remains 
  3.5   liable to you notwithstanding the terms of its assumption 
  3.6   agreement." 
  3.7      With respect to residents of Minnesota, the notice to 
  3.8   policyholders shall also include a statement as to the effect on 
  3.9   guaranty fund coverage, if any, that will result from the 
  3.10  transfer. 
  3.11     Clauses (2) and (4) above do not apply if the policyholder 
  3.12  consents in a signed writing to a release of the original 
  3.13  insurer from liability and to a waiver of the protections 
  3.14  provided in clauses (2) and (4) after being informed in writing 
  3.15  by the insurer of the circumstances relating to and the effect 
  3.16  of the assumption, provided that the consent form signed by the 
  3.17  policyholder has been filed with and approved by the 
  3.18  commissioner. 
  3.19     If a company is deemed by the commissioner to be in a 
  3.20  hazardous condition or is under a court ordered supervision, 
  3.21  rehabilitation, liquidation, conservation or receivership, and 
  3.22  the transfer of policies is in the best interest of the 
  3.23  policyholders, as determined by the commissioner, a transfer may 
  3.24  be effected notwithstanding the provisions in this subdivision 
  3.25  by using a different form of consent by policyholders.  This may 
  3.26  include a form of implied consent and adequate notification to 
  3.27  the policyholder of the circumstances requiring the transfer as 
  3.28  approved by the commissioner.  This paragraph does not apply 
  3.29  when a policy is transferred to the Minnesota life and health 
  3.30  guaranty association or to the Minnesota insurance guaranty 
  3.31  association. 
  3.32     This subdivision applies to other agreements, plans, or 
  3.33  arrangements not otherwise specifically regulated by statute if 
  3.34  the effect on policyholder rights is substantially similar to 
  3.35  assumption reinsurance. 
  3.36     Sec. 3.  Minnesota Statutes 1998, section 62A.024, is 
  4.1   amended to read: 
  4.2      62A.024 [EXPLANATIONS OF RATE INCREASES; ATTRIBUTION TO 
  4.3   STATUTORY CHANGES.] 
  4.4      The notice sent pursuant to section 62A.023 must disclose 
  4.5   the specific reasons for the rate change, such as medical cost 
  4.6   inflation, statutory changes, losses, or other reasons.  If any 
  4.7   health carrier, as defined in section 62A.011, informs a 
  4.8   policyholder or contract holder that a the notice attributes any 
  4.9   portion of the rate increase is due to a statutory change, the 
  4.10  health carrier must disclose the specific amount of the rate 
  4.11  increase directly due to the statutory change and must identify 
  4.12  the specific statutory change.  This disclosure must also 
  4.13  separate any rate increase due to medical inflation or other 
  4.14  reasons from the rate increase directly due to statutory changes 
  4.15  in this chapter, chapter 62C, 62D, 62E, 62H, 62J, 62L, or 64B. 
  4.16     Sec. 4.  Minnesota Statutes 1998, section 62A.105, 
  4.17  subdivision 2, is amended to read: 
  4.18     Subd. 2.  [REQUIREMENT.] If an issuer of policies or plans 
  4.19  referred to in subdivision 1 ceases to offer a particular policy 
  4.20  or subscriber contract to the general public or otherwise stops 
  4.21  adding new insureds to the group of covered persons, the issuer 
  4.22  shall allow any covered person to transfer to another 
  4.23  substantially similar policy or contract currently being sold by 
  4.24  the issuer.  The insurer shall notify each covered person when 
  4.25  the insurer stops adding new insureds to the group of covered 
  4.26  persons, and explain how the person can transfer to a similar 
  4.27  policy or contract.  The issuer shall permit the transfer 
  4.28  without any preexisting condition limitation, waiting period, or 
  4.29  other restriction of any type other than those which applied to 
  4.30  the insured under the prior policy or contract.  This section 
  4.31  does not apply to persons who were covered under an individual 
  4.32  policy or contract prior to July 1, 1994. 
  4.33     Sec. 5.  Minnesota Statutes 1998, section 62A.146, is 
  4.34  amended to read: 
  4.35     62A.146 [CONTINUATION OF BENEFITS TO SURVIVORS.] 
  4.36     No policy, contract, or plan of accident and health 
  5.1   protection issued by an insurer, nonprofit health service plan 
  5.2   corporation, or health maintenance organization, providing 
  5.3   coverage of hospital or medical expense on either an expense 
  5.4   incurred basis or other than an expense incurred basis which in 
  5.5   addition to coverage of the insured, subscriber, or enrollee, 
  5.6   also provides coverage to dependents, shall, except upon the 
  5.7   written consent of the survivor or survivors of the deceased 
  5.8   insured, subscriber, or enrollee, terminate, suspend, or 
  5.9   otherwise restrict the participation in or the receipt of 
  5.10  benefits otherwise payable under the policy, contract, or plan 
  5.11  to the survivor or survivors until the earlier of the following 
  5.12  dates:  
  5.13     (a) the date the surviving spouse becomes covered under 
  5.14  another group health plan; or 
  5.15     (b) the date coverage would have terminated under the 
  5.16  policy, contract, or plan had the insured, subscriber, or 
  5.17  enrollee lived.  
  5.18     The survivor or survivors, in order to have the coverage 
  5.19  and benefits extended, may be required to pay the entire cost of 
  5.20  the protection on a monthly basis.  The policy, contract, or 
  5.21  plan must require the insurer, nonprofit health service plan 
  5.22  corporation, or health maintenance organization and the group 
  5.23  policyholder or contract holder to, upon request, provide the 
  5.24  insured, subscriber, or enrollee with written verification from 
  5.25  the insurer of the cost of this coverage promptly at the time of 
  5.26  eligibility for this coverage and at any time during the 
  5.27  continuation period.  In no event shall the amount of premium or 
  5.28  fee contributions charged exceed 102 percent of the cost to the 
  5.29  plan for such period of coverage for other similarly situated 
  5.30  spouses and dependent children who are not the survivors of a 
  5.31  deceased insured, without regard to whether such cost is paid by 
  5.32  the employer or employee.  Failure of the survivor to make 
  5.33  premium or fee payments within 90 days after notice of the 
  5.34  requirement to pay the premiums or fees shall be a basis for the 
  5.35  termination of the coverage without written consent.  In event 
  5.36  of termination by reason of the survivor's failure to make 
  6.1   required premium or fee contributions, written notice of 
  6.2   cancellation must be mailed to the survivor's last known address 
  6.3   at least 30 days before the cancellation.  If the coverage is 
  6.4   provided under a group policy, contract, or plan, any required 
  6.5   premium or fee contributions for the coverage shall be paid by 
  6.6   the survivor to the group policyholder or contract holder for 
  6.7   remittance to the insurer, nonprofit health service plan 
  6.8   corporation, or health maintenance organization.  
  6.9      Sec. 6.  Minnesota Statutes 1998, section 62A.30, 
  6.10  subdivision 2, is amended to read: 
  6.11     Subd. 2.  [REQUIRED COVERAGE.] Every policy, plan, 
  6.12  certificate, or contract referred to in subdivision 1 issued or 
  6.13  renewed after August 1, 1988, that provides coverage to a 
  6.14  Minnesota resident must provide coverage for routine screening 
  6.15  procedures for cancer, including mammograms and, pap smears, 
  6.16  digital rectal examinations, and prostate-specific antigen tests 
  6.17  (PSA), including the cost of any office visit during which the 
  6.18  screening is performed, when ordered or provided by a physician 
  6.19  in accordance with the standard practice of medicine.  
  6.20     Sec. 7.  Minnesota Statutes 1998, section 62A.31, is 
  6.21  amended by adding a subdivision to read: 
  6.22     Subd. 1v.  [NOTICE BEFORE LAPSE OR TERMINATION.] No 
  6.23  individual Medicare supplement policy or certificate shall be 
  6.24  issued until the insurer has received from the applicant either 
  6.25  a written designation of at least one person, in addition to the 
  6.26  applicant, who is to receive notice of lapse or termination of 
  6.27  the policy or certificate for nonpayment of premium or a written 
  6.28  waiver dated and signed by the applicant electing not to 
  6.29  designate additional persons to receive notice.  The applicant 
  6.30  has the right to designate at least one person who is to receive 
  6.31  the notice of termination in addition to the insured.  
  6.32  Designation shall not constitute acceptance of any liability on 
  6.33  the third party for services provided to the insured.  The form 
  6.34  used for the written designation must provide space clearly 
  6.35  designated for listing at least one person.  The designation 
  6.36  shall include each person's full name and home address.  In the 
  7.1   case of an applicant who elects not to designate an additional 
  7.2   person, the waiver must state:  "Protection against unintended 
  7.3   lapse.  I understand that I have the right to designate at least 
  7.4   one person other than myself to receive notice of lapse or 
  7.5   termination of this Medicare supplement insurance policy for 
  7.6   nonpayment of premium.  I understand that notice will not be 
  7.7   given until 30 days after a premium is due and unpaid.  I elect 
  7.8   NOT to designate any person to receive such notice."  
  7.9      The insurer shall notify the insured of the right to change 
  7.10  this written designation at least once every two years.  
  7.11     Sec. 8.  Minnesota Statutes 1998, section 62A.31, is 
  7.12  amended by adding a subdivision to read: 
  7.13     Subd. 1w.  [NOTICE REQUIREMENTS.] No individual Medicare 
  7.14  supplement policy or certificate shall lapse or be terminated 
  7.15  for nonpayment of premium unless the insurer, at least 30 days 
  7.16  before the effective date of the lapse or termination, has given 
  7.17  notice to the insured and to those persons designated under 
  7.18  subdivision 1v, at the address provided by the insured for 
  7.19  purposes of receiving notice of lapse or termination.  Notice 
  7.20  must be given by first class United States mail, postage 
  7.21  prepaid, and notice may not be given until 30 days after a 
  7.22  premium is due and unpaid.  Notice is considered to have been 
  7.23  given as of five days after the date of mailing. 
  7.24     Sec. 9.  Minnesota Statutes 1998, section 62A.315, is 
  7.25  amended to read: 
  7.26     62A.315 [EXTENDED BASIC MEDICARE SUPPLEMENT PLAN; 
  7.27  COVERAGE.] 
  7.28     The extended basic Medicare supplement plan must have a 
  7.29  level of coverage so that it will be certified as a qualified 
  7.30  plan pursuant to section 62E.07, and will provide: 
  7.31     (1) coverage for all of the Medicare part A inpatient 
  7.32  hospital deductible and coinsurance amounts, and 100 percent of 
  7.33  all Medicare part A eligible expenses for hospitalization not 
  7.34  covered by Medicare; 
  7.35     (2) coverage for the daily copayment amount of Medicare 
  7.36  part A eligible expenses for the calendar year incurred for 
  8.1   skilled nursing facility care; 
  8.2      (3) coverage for the copayment amount of Medicare eligible 
  8.3   expenses under Medicare part B regardless of hospital 
  8.4   confinement, and the Medicare part B deductible amount; 
  8.5      (4) 80 percent of the usual and customary hospital and 
  8.6   medical expenses and supplies described in section 62E.06, 
  8.7   subdivision 1, not to exceed any charge limitation established 
  8.8   by the Medicare program or state law, the usual and customary 
  8.9   hospital and medical expenses and supplies, described in section 
  8.10  62E.06, subdivision 1, while in a foreign country, and 
  8.11  prescription drug expenses, not covered by Medicare; 
  8.12     (5) coverage for the reasonable cost of the first three 
  8.13  pints of blood, or equivalent quantities of packed red blood 
  8.14  cells as defined under federal regulations under Medicare parts 
  8.15  A and B, unless replaced in accordance with federal regulations; 
  8.16     (6) 100 percent of the cost of immunizations and routine 
  8.17  screening procedures for cancer, including mammograms and pap 
  8.18  smears, digital rectal examinations, and prostate-specific 
  8.19  antigen tests (PSA); 
  8.20     (7) preventive medical care benefit:  coverage for the 
  8.21  following preventive health services: 
  8.22     (i) an annual clinical preventive medical history and 
  8.23  physical examination that may include tests and services from 
  8.24  clause (ii) and patient education to address preventive health 
  8.25  care measures; 
  8.26     (ii) any one or a combination of the following preventive 
  8.27  screening tests or preventive services, the frequency of which 
  8.28  is considered medically appropriate: 
  8.29     (A) fecal occult blood test and/or digital rectal 
  8.30  examination; 
  8.31     (B) dipstick urinalysis for hematuria, bacteriuria, and 
  8.32  proteinuria; 
  8.33     (C) pure tone (air only) hearing screening test 
  8.34  administered or ordered by a physician; 
  8.35     (D) serum cholesterol screening every five years; 
  8.36     (E) thyroid function test; 
  9.1      (F) diabetes screening; 
  9.2      (iii) any other tests or preventive measures determined 
  9.3   appropriate by the attending physician.  
  9.4      Reimbursement shall be for the actual charges up to 100 
  9.5   percent of the Medicare-approved amount for each service as if 
  9.6   Medicare were to cover the service as identified in American 
  9.7   Medical Association current procedural terminology (AMA CPT) 
  9.8   codes to a maximum of $120 annually under this benefit.  This 
  9.9   benefit shall not include payment for any procedure covered by 
  9.10  Medicare; 
  9.11     (8) at-home recovery benefit:  coverage for services to 
  9.12  provide short-term at-home assistance with activities of daily 
  9.13  living for those recovering from an illness, injury, or surgery: 
  9.14     (i) for purposes of this benefit, the following definitions 
  9.15  shall apply: 
  9.16     (A) "activities of daily living" include, but are not 
  9.17  limited to, bathing, dressing, personal hygiene, transferring, 
  9.18  eating, ambulating, assistance with drugs that are normally 
  9.19  self-administered, and changing bandages or other dressings; 
  9.20     (B) "care provider" means a duly qualified or licensed home 
  9.21  health aide/homemaker, personal care aide, or nurse provided 
  9.22  through a licensed home health care agency or referred by a 
  9.23  licensed referral agency or licensed nurses registry; 
  9.24     (C) "home" means a place used by the insured as a place of 
  9.25  residence, provided that the place would qualify as a residence 
  9.26  for home health care services covered by Medicare.  A hospital 
  9.27  or skilled nursing facility shall not be considered the 
  9.28  insured's place of residence; 
  9.29     (D) "at-home recovery visit" means the period of a visit 
  9.30  required to provide at-home recovery care, without limit on the 
  9.31  duration of the visit, except each consecutive four hours in a 
  9.32  24-hour period of services provided by a care provider is one 
  9.33  visit; 
  9.34     (ii) coverage requirements and limitations: 
  9.35     (A) at-home recovery services provided must be primarily 
  9.36  services that assist in activities of daily living; 
 10.1      (B) the insured's attending physician must certify that the 
 10.2   specific type and frequency of at-home recovery services are 
 10.3   necessary because of a condition for which a home care plan of 
 10.4   treatment was approved by Medicare; 
 10.5      (C) coverage is limited to: 
 10.6      (I) no more than the number and type of at-home recovery 
 10.7   visits certified as medically necessary by the insured's 
 10.8   attending physician.  The total number of at-home recovery 
 10.9   visits shall not exceed the number of Medicare-approved home 
 10.10  health care visits under a Medicare-approved home care plan of 
 10.11  treatment; 
 10.12     (II) the actual charges for each visit up to a maximum 
 10.13  reimbursement of $40 per visit; 
 10.14     (III) $1,600 per calendar year; 
 10.15     (IV) seven visits in any one week; 
 10.16     (V) care furnished on a visiting basis in the insured's 
 10.17  home; 
 10.18     (VI) services provided by a care provider as defined in 
 10.19  this section; 
 10.20     (VII) at-home recovery visits while the insured is covered 
 10.21  under the policy or certificate and not otherwise excluded; 
 10.22     (VIII) at-home recovery visits received during the period 
 10.23  the insured is receiving Medicare-approved home care services or 
 10.24  no more than eight weeks after the service date of the last 
 10.25  Medicare-approved home health care visit; 
 10.26     (iii) coverage is excluded for: 
 10.27     (A) home care visits paid for by Medicare or other 
 10.28  government programs; and 
 10.29     (B) care provided by family members, unpaid volunteers, or 
 10.30  providers who are not care providers. 
 10.31     Sec. 10.  Minnesota Statutes 1998, section 62A.316, is 
 10.32  amended to read: 
 10.33     62A.316 [BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.] 
 10.34     (a) The basic Medicare supplement plan must have a level of 
 10.35  coverage that will provide: 
 10.36     (1) coverage for all of the Medicare part A inpatient 
 11.1   hospital coinsurance amounts, and 100 percent of all Medicare 
 11.2   part A eligible expenses for hospitalization not covered by 
 11.3   Medicare, after satisfying the Medicare part A deductible; 
 11.4      (2) coverage for the daily copayment amount of Medicare 
 11.5   part A eligible expenses for the calendar year incurred for 
 11.6   skilled nursing facility care; 
 11.7      (3) coverage for the copayment amount of Medicare eligible 
 11.8   expenses under Medicare part B regardless of hospital 
 11.9   confinement, subject to the Medicare part B deductible amount; 
 11.10     (4) 80 percent of the hospital and medical expenses and 
 11.11  supplies incurred during travel outside the United States as a 
 11.12  result of a medical emergency; 
 11.13     (5) coverage for the reasonable cost of the first three 
 11.14  pints of blood, or equivalent quantities of packed red blood 
 11.15  cells as defined under federal regulations under Medicare parts 
 11.16  A and B, unless replaced in accordance with federal regulations; 
 11.17     (6) 100 percent of the cost of immunizations and routine 
 11.18  screening procedures for cancer screening including mammograms 
 11.19  and pap smears, digital rectal examinations, and 
 11.20  prostate-specific antigen tests (PSA); and 
 11.21     (7) 80 percent of coverage for all physician prescribed 
 11.22  medically appropriate and necessary equipment and supplies used 
 11.23  in the management and treatment of diabetes.  Coverage must 
 11.24  include persons with gestational, type I, or type II diabetes. 
 11.25     (b) Only the following optional benefit riders may be added 
 11.26  to this plan: 
 11.27     (1) coverage for all of the Medicare part A inpatient 
 11.28  hospital deductible amount; 
 11.29     (2) a minimum of 80 percent of eligible medical expenses 
 11.30  and supplies not covered by Medicare part B, not to exceed any 
 11.31  charge limitation established by the Medicare program or state 
 11.32  law; 
 11.33     (3) coverage for all of the Medicare part B annual 
 11.34  deductible; 
 11.35     (4) coverage for at least 50 percent, or the equivalent of 
 11.36  50 percent, of usual and customary prescription drug expenses; 
 12.1      (5) coverage for the following preventive health services: 
 12.2      (i) an annual clinical preventive medical history and 
 12.3   physical examination that may include tests and services from 
 12.4   clause (ii) and patient education to address preventive health 
 12.5   care measures; 
 12.6      (ii) any one or a combination of the following preventive 
 12.7   screening tests or preventive services, the frequency of which 
 12.8   is considered medically appropriate: 
 12.9      (A) fecal occult blood test and/or digital rectal 
 12.10  examination; 
 12.11     (B) dipstick urinalysis for hematuria, bacteriuria, and 
 12.12  proteinuria; 
 12.13     (C) pure tone (air only) hearing screening test, 
 12.14  administered or ordered by a physician; 
 12.15     (D) serum cholesterol screening every five years; 
 12.16     (E) thyroid function test; 
 12.17     (F) diabetes screening; 
 12.18     (iii) any other tests or preventive measures determined 
 12.19  appropriate by the attending physician. 
 12.20     Reimbursement shall be for the actual charges up to 100 
 12.21  percent of the Medicare-approved amount for each service, as if 
 12.22  Medicare were to cover the service as identified in American 
 12.23  Medical Association current procedural terminology (AMA CPT) 
 12.24  codes, to a maximum of $120 annually under this benefit.  This 
 12.25  benefit shall not include payment for a procedure covered by 
 12.26  Medicare; 
 12.27     (6) coverage for services to provide short-term at-home 
 12.28  assistance with activities of daily living for those recovering 
 12.29  from an illness, injury, or surgery: 
 12.30     (i) For purposes of this benefit, the following definitions 
 12.31  apply: 
 12.32     (A) "activities of daily living" include, but are not 
 12.33  limited to, bathing, dressing, personal hygiene, transferring, 
 12.34  eating, ambulating, assistance with drugs that are normally 
 12.35  self-administered, and changing bandages or other dressings; 
 12.36     (B) "care provider" means a duly qualified or licensed home 
 13.1   health aide/homemaker, personal care aid, or nurse provided 
 13.2   through a licensed home health care agency or referred by a 
 13.3   licensed referral agency or licensed nurses registry; 
 13.4      (C) "home" means a place used by the insured as a place of 
 13.5   residence, provided that the place would qualify as a residence 
 13.6   for home health care services covered by Medicare.  A hospital 
 13.7   or skilled nursing facility shall not be considered the 
 13.8   insured's place of residence; 
 13.9      (D) "at-home recovery visit" means the period of a visit 
 13.10  required to provide at-home recovery care, without limit on the 
 13.11  duration of the visit, except each consecutive four hours in a 
 13.12  24-hour period of services provided by a care provider is one 
 13.13  visit; 
 13.14     (ii) Coverage requirements and limitations: 
 13.15     (A) at-home recovery services provided must be primarily 
 13.16  services that assist in activities of daily living; 
 13.17     (B) the insured's attending physician must certify that the 
 13.18  specific type and frequency of at-home recovery services are 
 13.19  necessary because of a condition for which a home care plan of 
 13.20  treatment was approved by Medicare; 
 13.21     (C) coverage is limited to: 
 13.22     (I) no more than the number and type of at-home recovery 
 13.23  visits certified as necessary by the insured's attending 
 13.24  physician.  The total number of at-home recovery visits shall 
 13.25  not exceed the number of Medicare-approved home care visits 
 13.26  under a Medicare-approved home care plan of treatment; 
 13.27     (II) the actual charges for each visit up to a maximum 
 13.28  reimbursement of $40 per visit; 
 13.29     (III) $1,600 per calendar year; 
 13.30     (IV) seven visits in any one week; 
 13.31     (V) care furnished on a visiting basis in the insured's 
 13.32  home; 
 13.33     (VI) services provided by a care provider as defined in 
 13.34  this section; 
 13.35     (VII) at-home recovery visits while the insured is covered 
 13.36  under the policy or certificate and not otherwise excluded; 
 14.1      (VIII) at-home recovery visits received during the period 
 14.2   the insured is receiving Medicare-approved home care services or 
 14.3   no more than eight weeks after the service date of the last 
 14.4   Medicare-approved home health care visit; 
 14.5      (iii) Coverage is excluded for: 
 14.6      (A) home care visits paid for by Medicare or other 
 14.7   government programs; and 
 14.8      (B) care provided by family members, unpaid volunteers, or 
 14.9   providers who are not care providers; 
 14.10     (7) coverage for at least 50 percent, or the equivalent of 
 14.11  50 percent, of usual and customary prescription drug expenses to 
 14.12  a maximum of $1,200 paid by the issuer annually under this 
 14.13  benefit.  An issuer of Medicare supplement insurance policies 
 14.14  that elects to offer this benefit rider shall also make 
 14.15  available coverage that contains the rider specified in clause 
 14.16  (4). 
 14.17     Sec. 11.  Minnesota Statutes 1998, section 62A.65, 
 14.18  subdivision 8, is amended to read: 
 14.19     Subd. 8.  [CESSATION OF INDIVIDUAL BUSINESS.] 
 14.20  Notwithstanding the provisions of subdivisions 1 to 7, a health 
 14.21  carrier may elect to cease doing business in the individual 
 14.22  health plan market in this state if it complies with the 
 14.23  requirements of this subdivision.  For purposes of this section, 
 14.24  "cease doing business" means to discontinue issuing new 
 14.25  individual health plans and to refuse to renew all of the health 
 14.26  carrier's existing individual health plans issued in this state 
 14.27  whose terms permit refusal to renew under the circumstances 
 14.28  specified in this subdivision.  This subdivision does not permit 
 14.29  cancellation of an individual health plan, unless the terms of 
 14.30  the health plan permit cancellation under the circumstances 
 14.31  specified in this subdivision.  A health carrier electing to 
 14.32  cease doing business in the individual health plan market in 
 14.33  this state shall notify the commissioner 180 days prior to the 
 14.34  effective date of the cessation.  Within 30 days after the 
 14.35  termination, the health carrier shall submit to the commissioner 
 14.36  a complete list of policyholders that have been terminated.  The 
 15.1   cessation of business does not include the failure of a health 
 15.2   carrier to offer or issue new business in the individual health 
 15.3   plan market or continue an existing product line in that market, 
 15.4   provided that a health carrier does not terminate, cancel, or 
 15.5   fail to renew its current individual health plan business.  A 
 15.6   health carrier electing to cease doing business in the 
 15.7   individual health plan market shall provide 120 days' written 
 15.8   notice to each policyholder covered by an individual health plan 
 15.9   issued by the health carrier.  This notice must also inform each 
 15.10  policyholder of the existence of the Minnesota comprehensive 
 15.11  health association, the requirements for being accepted, the 
 15.12  procedures for applying for coverage, and the telephone numbers 
 15.13  at the department of health and the department of commerce for 
 15.14  information about private individual or family health coverage.  
 15.15  A health carrier that ceases to write new business in the 
 15.16  individual health plan market shall continue to be governed by 
 15.17  this section with respect to continuing individual health plan 
 15.18  business conducted by the health carrier.  A health carrier that 
 15.19  ceases to do business in the individual health plan market after 
 15.20  July 1, 1994, is prohibited from writing new business in the 
 15.21  individual health plan market in this state for a period of five 
 15.22  years from the date of notice to the commissioner.  This 
 15.23  subdivision applies to any health maintenance organization that 
 15.24  ceases to do business in the individual health plan market in 
 15.25  one service area with respect to that service area only.  
 15.26  Nothing in this subdivision prohibits an affiliated health 
 15.27  maintenance organization from continuing to do business in the 
 15.28  individual health plan market in that same service area.  The 
 15.29  right to refuse to renew an individual health plan under this 
 15.30  subdivision does not apply to individual health plans issued on 
 15.31  a guaranteed renewable basis that does not permit refusal to 
 15.32  renew under the circumstances specified in this subdivision.  
 15.33     Sec. 12.  Minnesota Statutes 1998, section 62Q.107, is 
 15.34  amended to read: 
 15.35     62Q.107 [PROHIBITED PROVISION; JUDICIAL REVIEW.] 
 15.36     Beginning January 1, 1999, no health plan, including the 
 16.1   coverages described in section 62A.011, subdivision 3, clauses 
 16.2   (1), (7), and (10), may specify a standard of review upon which 
 16.3   a court may review denial of a claim or of any other decision 
 16.4   made by a health plan company with respect to an enrollee.  This 
 16.5   section prohibits limiting court review to a determination of 
 16.6   whether the health plan company's decision is arbitrary and 
 16.7   capricious, an abuse of discretion, or any other standard less 
 16.8   favorable to the enrollee than a preponderance of the evidence.  
 16.9      Sec. 13.  Minnesota Statutes 1998, section 65B.16, is 
 16.10  amended to read: 
 16.11     65B.16 [STATEMENT OF REASONS FOR CANCELLATION OR 
 16.12  REDUCTION.] 
 16.13     No notice of cancellation or reduction in the limits of 
 16.14  liability of coverage of an automobile insurance policy under 
 16.15  section 65B.15 shall be effective unless the specific 
 16.16  underwriting or other reason or reasons for such cancellation or 
 16.17  reduction in the limits of liability of coverage are stated in 
 16.18  such notice and the notice is mailed or delivered by the insurer 
 16.19  to the named insured at least 30 days prior to the effective 
 16.20  date of cancellation; provided, however, that when nonpayment of 
 16.21  premium is the reason for cancellation or when the company is 
 16.22  exercising its right to cancel insurance which has been in 
 16.23  effect for less than 60 days the notice must be mailed or 
 16.24  delivered by the insurer to the named insured at least ten days' 
 16.25  notice 15 days before the effective date of cancellation, and 
 16.26  the reasons for the cancellation, shall be given.  Information 
 16.27  regarding moving traffic violations or motor vehicle accidents 
 16.28  must be specifically requested on the application in order for a 
 16.29  company to use those incidents to exercise its right to cancel 
 16.30  within the first 59 days of coverage.  When nonpayment of 
 16.31  premiums is the reason for cancellation, the reason must be 
 16.32  given to the insured with the notice of cancellation; and if the 
 16.33  company is exercising its right to cancel within the first 59 
 16.34  days of coverage and notice is given with less than ten 15 days 
 16.35  remaining in the 59-day period, the coverage must be extended, 
 16.36  to expire ten 15 days after notice was mailed.  
 17.1      Sec. 14.  Minnesota Statutes 1998, section 65B.29, 
 17.2   subdivision 2, is amended to read: 
 17.3      Subd. 2.  [INSURANCE REQUIRED.] No motor vehicle service 
 17.4   contract may be issued, sold, or offered for sale in this state 
 17.5   unless the provider of the service contract is insured under a 
 17.6   motor vehicle service contract reimbursement insurance policy 
 17.7   issued by an insurer authorized to do business in this 
 17.8   state.  Insurers issuing such a policy are required to have 
 17.9   capital and surplus equal to at least $10,000,000 at the end of 
 17.10  the preceding year.  Capital and surplus must be calculated 
 17.11  using the accounting standards required by section 60A.13. 
 17.12     Sec. 15.  Minnesota Statutes 1998, section 65B.29, 
 17.13  subdivision 3, is amended to read: 
 17.14     Subd. 3.  [FILING REQUIREMENTS.] No motor vehicle service 
 17.15  contract may be issued, sold, or offered for sale in this state 
 17.16  unless a true and correct copy of the service contract and the 
 17.17  provider's reimbursement insurance policy have been filed with 
 17.18  the commissioner and either (1) the commissioner has approved it 
 17.19  or (2) 60 days have elapsed and the commissioner has not 
 17.20  disapproved it as misleading or violative of public policy.  The 
 17.21  commissioner may, by written notice to the provider, extend the 
 17.22  review for an additional period not to exceed 60 days.  
 17.23     Sec. 16.  Minnesota Statutes 1999 Supplement, section 
 17.24  65B.44, subdivision 2, is amended to read: 
 17.25     Subd. 2.  [MEDICAL EXPENSE BENEFITS.] (a) Medical expense 
 17.26  benefits shall reimburse all reasonable expenses for necessary: 
 17.27     (1) medical, surgical, psychological, x-ray, optical, 
 17.28  dental, chiropractic, and rehabilitative services, including 
 17.29  prosthetic devices; 
 17.30     (2) prescription drugs; 
 17.31     (3) ambulance and all other transportation expenses 
 17.32  incurred in traveling to receive other covered medical expense 
 17.33  benefits; 
 17.34     (4) sign interpreting and language translation services, 
 17.35  other than such services provided by a family member of the 
 17.36  patient, related to the receipt of medical, surgical, x-ray, 
 18.1   optical, dental, chiropractic, hospital, extended care, nursing, 
 18.2   and rehabilitative services; and 
 18.3      (5) hospital, extended care, and nursing services.  
 18.4      (b) Hospital room and board benefits may be limited, except 
 18.5   for intensive care facilities, to the regular daily semiprivate 
 18.6   room rates customarily charged by the institution in which the 
 18.7   recipient of benefits is confined.  
 18.8      (c) Such benefits shall also include necessary remedial 
 18.9   treatment and services recognized and permitted under the laws 
 18.10  of this state for an injured person who relies upon spiritual 
 18.11  means through prayer alone for healing in accordance with that 
 18.12  person's religious beliefs.  
 18.13     (d) Medical expense loss includes medical expenses accrued 
 18.14  prior to the death of a person notwithstanding the fact that 
 18.15  benefits are paid or payable to the decedent's survivors.  
 18.16     (e) Medical expense benefits for rehabilitative services 
 18.17  shall be subject to the provisions of section 65B.45. 
 18.18     Sec. 17.  Minnesota Statutes 1998, section 65B.44, 
 18.19  subdivision 3, is amended to read: 
 18.20     Subd. 3.  [DISABILITY AND INCOME LOSS BENEFITS.] Disability 
 18.21  and income loss benefits shall provide compensation for 85 
 18.22  percent of the injured person's loss of present and future gross 
 18.23  income from inability to work proximately caused by the nonfatal 
 18.24  injury subject to a maximum of $250 $500 per week.  Loss of 
 18.25  income includes the costs incurred by a self-employed person to 
 18.26  hire substitute employees to perform tasks which are necessary 
 18.27  to maintain the income of the injured person, which are normally 
 18.28  performed by the injured person, and which cannot be performed 
 18.29  because of the injury.  
 18.30     If the injured person is unemployed at the time of injury 
 18.31  and is receiving or is eligible to receive reemployment 
 18.32  compensation benefits under chapter 268, but the injured person 
 18.33  loses eligibility for those benefits because of inability to 
 18.34  work caused by the injury, disability and income loss benefits 
 18.35  shall provide compensation for the lost benefits in an amount 
 18.36  equal to the reemployment compensation benefits which otherwise 
 19.1   would have been payable, subject to a maximum of $250 per week.  
 19.2      Compensation under this subdivision shall be reduced by any 
 19.3   income from substitute work actually performed by the injured 
 19.4   person or by income the injured person would have earned in 
 19.5   available appropriate substitute work which the injured person 
 19.6   was capable of performing but unreasonably failed to undertake. 
 19.7      For the purposes of this section "inability to work" means 
 19.8   disability which prevents the injured person from engaging in 
 19.9   any substantial gainful occupation or employment on a regular 
 19.10  basis, for wage or profit, for which the injured person is or 
 19.11  may by training become reasonably qualified.  If the injured 
 19.12  person returns to employment and is unable by reason of the 
 19.13  injury to work continuously, compensation for lost income shall 
 19.14  be reduced by the income received while the injured person is 
 19.15  actually able to work.  The weekly maximums may not be prorated 
 19.16  to arrive at a daily maximum, even if the injured person does 
 19.17  not incur loss of income for a full week.  
 19.18     For the purposes of this section, an injured person who is 
 19.19  "unable by reason of the injury to work continuously" includes, 
 19.20  but is not limited to, a person who misses time from work, 
 19.21  including reasonable travel time, and loses income, vacation, or 
 19.22  sick leave benefits, to obtain medical treatment for an injury 
 19.23  arising out of the maintenance or use of a motor vehicle. 
 19.24     Sec. 18.  Minnesota Statutes 1998, section 65B.55, 
 19.25  subdivision 2, is amended to read: 
 19.26     Subd. 2.  A plan of reparation security may provide that in 
 19.27  any instance where a lapse occurs in the period of disability or 
 19.28  in the medical treatment of a person with respect to whose 
 19.29  injury basic economic loss benefits have been paid and a person 
 19.30  subsequently claims additional benefits based upon an alleged 
 19.31  recurrence of the injury for which the original claim for 
 19.32  benefits was made, the obligor may require reasonable medical 
 19.33  proof of such alleged recurrence; provided, that in no event 
 19.34  shall the aggregate benefits payable to any person exceed the 
 19.35  maximum limits specified in the plan of security, and provided 
 19.36  further that such coverages may contain a provision terminating 
 20.1   eligibility for benefits after a prescribed period of lapse of 
 20.2   disability and medical treatment, which period shall not be less 
 20.3   than one year.  Notification to the insured of the impending 
 20.4   termination of benefits must be provided from the reparation 
 20.5   obligor no sooner than 60 days, nor later than 30 days, before 
 20.6   the one-year lapse in treatment. 
 20.7      Sec. 19.  Minnesota Statutes 1998, section 72A.201, 
 20.8   subdivision 6, is amended to read: 
 20.9      Subd. 6.  [STANDARDS FOR AUTOMOBILE INSURANCE CLAIMS 
 20.10  HANDLING, SETTLEMENT OFFERS, AND AGREEMENTS.] In addition to the 
 20.11  acts specified in subdivisions 4, 5, 7, 8, and 9, the following 
 20.12  acts by an insurer, adjuster, or a self-insured or 
 20.13  self-insurance administrator constitute unfair settlement 
 20.14  practices:  
 20.15     (1) if an automobile insurance policy provides for the 
 20.16  adjustment and settlement of an automobile total loss on the 
 20.17  basis of actual cash value or replacement with like kind and 
 20.18  quality and the insured is not an automobile dealer, failing to 
 20.19  offer one of the following methods of settlement:  
 20.20     (a) comparable and available replacement automobile, with 
 20.21  all applicable taxes, license fees, at least pro rata for the 
 20.22  unexpired term of the replaced automobile's license, and other 
 20.23  fees incident to the transfer or evidence of ownership of the 
 20.24  automobile paid, at no cost to the insured other than the 
 20.25  deductible amount as provided in the policy; 
 20.26     (b) a cash settlement based upon the actual cost of 
 20.27  purchase of a comparable automobile, including all applicable 
 20.28  taxes, license fees, at least pro rata for the unexpired term of 
 20.29  the replaced automobile's license, and other fees incident to 
 20.30  transfer of evidence of ownership, less the deductible amount as 
 20.31  provided in the policy.  The costs must be determined by:  
 20.32     (i) the cost of a comparable automobile, adjusted for 
 20.33  mileage, condition, and options, in the local market area of the 
 20.34  insured, if such an automobile is available in that area; or 
 20.35     (ii) one of two or more quotations obtained from two or 
 20.36  more qualified sources located within the local market area when 
 21.1   a comparable automobile is not available in the local market 
 21.2   area.  The insured shall be provided the information contained 
 21.3   in all quotations prior to settlement; or 
 21.4      (iii) any settlement or offer of settlement which deviates 
 21.5   from the procedure above must be documented and justified in 
 21.6   detail.  The basis for the settlement or offer of settlement 
 21.7   must be explained to the insured; 
 21.8      (2) if an automobile insurance policy provides for the 
 21.9   adjustment and settlement of an automobile partial loss on the 
 21.10  basis of repair or replacement with like kind and quality and 
 21.11  the insured is not an automobile dealer, failing to offer one of 
 21.12  the following methods of settlement:  
 21.13     (a) to assume all costs, including reasonable towing costs, 
 21.14  for the satisfactory repair of the motor vehicle.  Satisfactory 
 21.15  repair includes repair of both obvious and hidden damage as 
 21.16  caused by the claim incident.  This assumption of cost may be 
 21.17  reduced by applicable policy provision; or 
 21.18     (b) to offer a cash settlement sufficient to pay for 
 21.19  satisfactory repair of the vehicle.  Satisfactory repair 
 21.20  includes repair of obvious and hidden damage caused by the claim 
 21.21  incident, and includes reasonable towing costs; 
 21.22     (3) regardless of whether the loss was total or partial, in 
 21.23  the event that a damaged vehicle of an insured cannot be safely 
 21.24  driven, failing to exercise the right to inspect automobile 
 21.25  damage prior to repair within five business days following 
 21.26  receipt of notification of claim.  In other cases the inspection 
 21.27  must be made in 15 days; 
 21.28     (4) regardless of whether the loss was total or partial, 
 21.29  requiring unreasonable travel of a claimant or insured to 
 21.30  inspect a replacement automobile, to obtain a repair estimate, 
 21.31  to allow an insurer to inspect a repair estimate, to allow an 
 21.32  insurer to inspect repairs made pursuant to policy requirements, 
 21.33  or to have the automobile repaired; 
 21.34     (5) regardless of whether the loss was total or partial, if 
 21.35  loss of use coverage exists under the insurance policy, failing 
 21.36  to notify an insured at the time of the insurer's acknowledgment 
 22.1   of claim, or sooner if inquiry is made, of the fact of the 
 22.2   coverage, including the policy terms and conditions affecting 
 22.3   the coverage and the manner in which the insured can apply for 
 22.4   this coverage; 
 22.5      (6) regardless of whether the loss was total or partial, 
 22.6   failing to include the insured's deductible in the insurer's 
 22.7   demands under its subrogation rights.  Subrogation recovery must 
 22.8   be shared at least on a proportionate basis with the insured, 
 22.9   unless the deductible amount has been otherwise recovered by the 
 22.10  insured, except that when an insurer is recovering directly from 
 22.11  an uninsured third party by means of installments, the insured 
 22.12  must receive the full deductible share as soon as that amount is 
 22.13  collected and before any part of the total recovery is applied 
 22.14  to any other use.  No deduction for expenses may be made from 
 22.15  the deductible recovery unless an attorney is retained to 
 22.16  collect the recovery, in which case deduction may be made only 
 22.17  for a pro rata share of the cost of retaining the attorney.  An 
 22.18  insured is not bound by any settlement of its insurer's 
 22.19  subrogation claim with respect to the deductible amount, unless 
 22.20  the insured receives, as a result of the subrogation settlement, 
 22.21  the full amount of the deductible.  Recovery by the insurer and 
 22.22  receipt by the insured of less than all of the insured's 
 22.23  deductible amount does not affect the insured's rights to 
 22.24  recover any unreimbursed portion of the deductible from parties 
 22.25  liable for the loss; 
 22.26     (7) requiring as a condition of payment of a claim that 
 22.27  repairs to any damaged vehicle must be made by a particular 
 22.28  contractor or repair shop or that parts, other than window 
 22.29  glass, must be replaced with parts other than original equipment 
 22.30  parts; 
 22.31     (8) where liability is reasonably clear, failing to inform 
 22.32  the claimant in an automobile property damage liability claim 
 22.33  that the claimant may have a claim for loss of use of the 
 22.34  vehicle; 
 22.35     (9) failing to make a good faith assignment of comparative 
 22.36  negligence percentages in ascertaining the issue of liability; 
 23.1      (10) failing to pay any interest required by statute on 
 23.2   overdue payment for an automobile personal injury protection 
 23.3   claim; 
 23.4      (11) if an automobile insurance policy contains either or 
 23.5   both of the time limitation provisions as permitted by section 
 23.6   65B.55, subdivisions 1 and 2, failing to notify the insured in 
 23.7   writing of those limitations at least 60 days prior to the 
 23.8   expiration of that time limitation; 
 23.9      (12) if an insurer chooses to have an insured examined as 
 23.10  permitted by section 65B.56, subdivision 1, failing to notify 
 23.11  the insured of all of the insured's rights and obligations under 
 23.12  that statute, including the right to request, in writing, and to 
 23.13  receive a copy of the report of the examination; 
 23.14     (13) failing to provide, to an insured who has submitted a 
 23.15  claim for benefits described in section 65B.44, a complete copy 
 23.16  of the insurer's claim file on the insured, excluding internal 
 23.17  company memoranda, all materials that relate to any insurance 
 23.18  fraud investigation, materials that constitute attorney 
 23.19  work-product or that qualify for the attorney-client privilege, 
 23.20  and medical reviews that are subject to section 145.64, within 
 23.21  ten business days of receiving a written request from the 
 23.22  insured.  The insurer may charge the insured a reasonable 
 23.23  copying fee.  This clause supersedes any inconsistent provisions 
 23.24  of sections 72A.49 to 72A.505; 
 23.25     (14) if an automobile policy provides for the adjustment or 
 23.26  settlement of an automobile loss due to damaged window glass, 
 23.27  failing to assume all reasonable costs sufficient to pay the 
 23.28  insured's chosen vendor for the repair or replacement of 
 23.29  comparable window glass.  This clause does not prohibit an 
 23.30  insurer from recommending a vendor to the insured or from 
 23.31  agreeing with a vendor to perform work at an agreed-upon price, 
 23.32  provided, however, that before recommending a vendor, the 
 23.33  insurer shall offer its insured the opportunity to choose the 
 23.34  vendor; 
 23.35     (15) requiring that the repair or replacement of motor 
 23.36  vehicle glass and related products and services be made in a 
 24.1   particular place or shop or by a particular entity, or by 
 24.2   otherwise limiting the ability of the insured to select the 
 24.3   place, shop, or entity to repair or replace the motor vehicle 
 24.4   glass and related products and services; or 
 24.5      (16) engaging in any act or practice of intimidation, 
 24.6   coercion, threat, incentive, or inducement for or against an 
 24.7   insured to use a particular company or location to provide the 
 24.8   motor vehicle glass repair or replacement services or products.  
 24.9   For purposes of this section, a warranty shall not be considered 
 24.10  an inducement or incentive; or 
 24.11     (17) failing to provide written notification to an insured 
 24.12  of a liability claim paid on an insured's policy.  The 
 24.13  notification must include the policy number, the name of the 
 24.14  claimant, the date of loss, the amount and type of payment, and 
 24.15  the basis for the payment.  The notification must be provided to 
 24.16  the insured within ten days following payment of a liability 
 24.17  claim. 
 24.18     Sec. 20.  [72A.208] [EXPLANATION OF RATE INCREASES; 
 24.19  ATTRIBUTION TO STATUTORY CHANGES.] 
 24.20     If any insurer, as defined in section 72A.201, subdivision 
 24.21  3, clause (9), informs a policyholder or contract holder that a 
 24.22  rate increase is due to either a statutory change or a decision 
 24.23  of the commissioner, the insurer must disclose the specific 
 24.24  amount of the rate increase directly due to the commissioner's 
 24.25  directive or statutory change, and must identify the specific 
 24.26  statutory change.  This disclosure must also separate any rate 
 24.27  increase due to medical inflation or other reasons from the rate 
 24.28  increase directly due to statutory change in this chapter or 
 24.29  chapter 62C, 62D, 62E, 62H, 62J, 62L, 62Q, or 64B. 
 24.30     Sec. 21.  Minnesota Statutes 1998, section 79A.04, 
 24.31  subdivision 1, is amended to read: 
 24.32     Subdivision 1.  [ANNUAL SECURING OF LIABILITY.] Each year 
 24.33  every private self-insuring employer shall secure incurred 
 24.34  liabilities for the payment of compensation and the performance 
 24.35  of the its obligations and the obligations of all self-insuring 
 24.36  employers imposed under chapter 176 by renewing the prior year's 
 25.1   security deposit or by making a new deposit of security.  If a 
 25.2   new deposit is made, it must be posted within 60 days of the 
 25.3   filing of the self-insured employer's annual report with the 
 25.4   commissioner, but in no event later than July 1. 
 25.5      Sec. 22.  Minnesota Statutes 1998, section 79A.04, 
 25.6   subdivision 2, is amended to read: 
 25.7      Subd. 2.  [MINIMUM DEPOSIT.] The minimum deposit is 110 
 25.8   percent of the private self-insurer's estimated future liability.
 25.9   Up to ten percent of that The deposit may be used to secure 
 25.10  payment of all administrative and legal costs, and unpaid 
 25.11  assessments required by section 79A.12, subdivision 2, relating 
 25.12  to or arising from the employer's its or other employers' 
 25.13  self-insuring.  As used in this section, "private self-insurer" 
 25.14  includes both current and former members of the self-insurers' 
 25.15  security fund; and "private self-insurers' estimated future 
 25.16  liability" means the private self-insurers' total of estimated 
 25.17  future liability as determined by an Associate or Fellow of the 
 25.18  Casualty Actuarial Society every year for group member private 
 25.19  self-insurers and, for a nongroup member private self-insurer's 
 25.20  authority to self-insure, every year for the first five years.  
 25.21  After the first five years, the nongroup member's total shall be 
 25.22  as determined by an Associate or Fellow of the Casualty 
 25.23  Actuarial Society at least every two years, and each such 
 25.24  actuarial study shall include a projection of future losses 
 25.25  during the period until the next scheduled actuarial study, less 
 25.26  payments anticipated to be made during that time.  
 25.27     All data and information furnished by a private 
 25.28  self-insurer to an Associate or Fellow of the Casualty Actuarial 
 25.29  Society for purposes of determining private self-insurers' 
 25.30  estimated future liability must be certified by an officer of 
 25.31  the private self-insurer to be true and correct with respect to 
 25.32  payroll and paid losses, and must be certified, upon information 
 25.33  and belief, to be true and correct with respect to reserves.  
 25.34  The certification must be made by sworn affidavit.  In addition 
 25.35  to any other remedies provided by law, the certification of 
 25.36  false data or information pursuant to this subdivision may 
 26.1   result in a fine imposed by the commissioner of commerce on the 
 26.2   private self-insurer up to the amount of $5,000, and termination 
 26.3   of the private self-insurers' authority to self-insure.  The 
 26.4   determination of private self-insurers' estimated future 
 26.5   liability by an Associate or Fellow of the Casualty Actuarial 
 26.6   Society shall be conducted in accordance with standards and 
 26.7   principles for establishing loss and loss adjustment expense 
 26.8   reserves by the Actuarial Standards Board, an affiliate of the 
 26.9   American Academy of Actuaries.  The commissioner may reject an 
 26.10  actuarial report that does not meet the standards and principles 
 26.11  of the Actuarial Standards Board, and may further disqualify the 
 26.12  actuary who prepared the report from submitting any future 
 26.13  actuarial reports pursuant to this chapter.  Within 30 days 
 26.14  after the actuary has been served by the commissioner with a 
 26.15  notice of disqualification, an actuary who is aggrieved by the 
 26.16  disqualification may request a hearing to be conducted in 
 26.17  accordance with chapter 14.  Based on a review of the actuarial 
 26.18  report, the commissioner of commerce may require an increase in 
 26.19  the minimum security deposit in an amount the commissioner 
 26.20  considers sufficient. 
 26.21     Estimated future liability is determined by first taking 
 26.22  the total amount of the self-insured's future liability of 
 26.23  workers' compensation claims and then deducting the total amount 
 26.24  which is estimated to be returned to the self-insurer from any 
 26.25  specific excess insurance coverage, aggregate excess insurance 
 26.26  coverage, and any supplementary benefits or second injury 
 26.27  benefits which are estimated to be reimbursed by the special 
 26.28  compensation fund. Supplementary benefits or second injury 
 26.29  benefits will not be reimbursed by the special compensation fund 
 26.30  unless the special compensation fund assessment pursuant to 
 26.31  section 176.129 is paid and the reports required thereunder are 
 26.32  filed with the special compensation fund.  In the case of surety 
 26.33  bonds, bonds shall secure administrative and legal costs in 
 26.34  addition to the liability for payment of compensation reflected 
 26.35  on the face of the bond.  In no event shall the security be less 
 26.36  than the last retention limit selected by the self-insurer with 
 27.1   the workers' compensation reinsurance association, provided that 
 27.2   the commissioner may allow former members to post less than the 
 27.3   workers' compensation reinsurance association retention level if 
 27.4   that amount is adequate to secure payment of the self-insurers' 
 27.5   estimated future liability, as defined in this subdivision, 
 27.6   including payment of claims, administrative and legal costs, and 
 27.7   unpaid assessments required by section 79A.12, subdivision 2.  
 27.8   The posting or depositing of security pursuant to this section 
 27.9   shall release all previously posted or deposited security from 
 27.10  any obligations under the posting or depositing and any surety 
 27.11  bond so released shall be returned to the surety.  Any other 
 27.12  security shall be returned to the depositor or the person 
 27.13  posting the bond. 
 27.14     As a condition for the granting or renewing of a 
 27.15  certificate to self-insure, the commissioner may require a 
 27.16  private self-insurer to furnish any additional security the 
 27.17  commissioner considers sufficient to insure payment of all 
 27.18  claims under chapter 176. 
 27.19     Sec. 23.  Minnesota Statutes 1998, section 79A.04, 
 27.20  subdivision 7, is amended to read: 
 27.21     Subd. 7.  [PERFECTION OF SECURITY.] Upon the commissioner 
 27.22  sending a request to renew, request to post, or request to 
 27.23  increase a security deposit, a perfected security interest is 
 27.24  created in the private self-insured's assets in favor of the 
 27.25  commissioner to the extent of any then unsecured portion of the 
 27.26  self-insured's incurred liabilities.  That perfected security 
 27.27  interest is transferred to any cash or securities thereafter 
 27.28  posted by the private self-insured with the state treasurer and 
 27.29  is released only upon either of the following: 
 27.30     (1) the acceptance by the commissioner of a surety bond or 
 27.31  irrevocable letter of credit for the full amount of the incurred 
 27.32  liabilities for the payment of compensation; or 
 27.33     (2) the return of cash or securities by the commissioner. 
 27.34     The private self-insured employer loses all right, title, 
 27.35  and interest in and any right to control all assets or 
 27.36  obligations posted or left on deposit as security.  In the event 
 28.1   of a declaration of bankruptcy or insolvency by a court of 
 28.2   competent jurisdiction that a private self-insurer is the 
 28.3   subject of a voluntary or involuntary petition under the United 
 28.4   States Bankruptcy Code, title 11, or a court of competent 
 28.5   jurisdiction has declared the private self-insurer to be 
 28.6   bankrupt or insolvent, or in the event of the issuance of a 
 28.7   certificate of default by the commissioner, the commissioner 
 28.8   shall liquidate the deposit as provided in this chapter, and 
 28.9   transfer it to the self-insurer's security fund for application 
 28.10  to the self-insured employer's incurred liability and other 
 28.11  current or future obligations of the self-insurers' security 
 28.12  fund.  In the event that a private self-insurer is the subject 
 28.13  of a voluntary or involuntary petition under the United States 
 28.14  Bankruptcy Code, title 11, or a court of competent jurisdiction 
 28.15  has declared the private self-insurer to be bankrupt or 
 28.16  insolvent, or in the event of the issuance of a certificate of 
 28.17  default by the commissioner, all right, title, and interest in 
 28.18  and any right to control all assets or obligations which have 
 28.19  been posted or deposited as security must be transferred to the 
 28.20  self-insurers' security fund. 
 28.21     Sec. 24.  Minnesota Statutes 1998, section 79A.04, 
 28.22  subdivision 9, is amended to read: 
 28.23     Subd. 9.  [INSOLVENCY, BANKRUPTCY, OR DEFAULT; UTILIZATION 
 28.24  OF SECURITY DEPOSIT.] The commissioner of labor and industry 
 28.25  shall notify the commissioner and the security fund if the 
 28.26  commissioner of labor and industry has knowledge that any 
 28.27  private self-insurer has failed to pay workers' compensation 
 28.28  benefits as required by chapter 176.  If the commissioner 
 28.29  determines that a private self-insurer is the subject of a 
 28.30  voluntary or involuntary petition under the United States 
 28.31  Bankruptcy Code, title 11, or the commissioner determines that a 
 28.32  court of competent jurisdiction has declared the private 
 28.33  self-insurer to be bankrupt or insolvent, and the private 
 28.34  self-insurer has failed to pay workers' compensation as required 
 28.35  by chapter 176 or, if the commissioner issues a certificate of 
 28.36  default against a private self-insurer for failure to pay 
 29.1   workers' compensation as required by chapter 176, or failure to 
 29.2   pay an assessment to the self-insurers' security fund when due, 
 29.3   then the security deposit shall be utilized to administer and 
 29.4   pay the private self-insurers' workers' compensation or 
 29.5   assessment obligations or any other current or future 
 29.6   obligations of the self-insurers' security fund.  
 29.7      Sec. 25.  Minnesota Statutes 1998, section 79A.11, 
 29.8   subdivision 2, is amended to read: 
 29.9      Subd. 2.  [SECURITY DEPOSITS.] The security fund shall have 
 29.10  the right and obligation to obtain from and retain the security 
 29.11  deposit of an insolvent private self-insurer the amount of to 
 29.12  apply to the private self-insurer's current or future 
 29.13  compensation obligations, including reasonable administrative 
 29.14  and legal costs, paid or assumed by the security fund and to 
 29.15  other current or future obligations of the security fund.  
 29.16  Reimbursement of administrative costs, including legal costs, 
 29.17  shall be subject to approval by a majority of the security 
 29.18  fund's voting trustees.  The security fund shall be a party in 
 29.19  interest in any action to obtain the security deposit for the 
 29.20  payment of compensation obligations of an insolvent self-insurer.
 29.21     Sec. 26.  Minnesota Statutes 1998, section 79A.11, is 
 29.22  amended by adding a subdivision to read: 
 29.23     Subd. 2a.  [REPLACEMENT INSURANCE POLICY.] The insolvent 
 29.24  self-insurer may obtain an insurance policy as described in 
 29.25  section 79A.06, subdivision 5, to discharge further workers' 
 29.26  compensation obligations assumed by the self-insurers' security 
 29.27  fund on behalf of the insolvent insurer.  At the self-insurers' 
 29.28  security fund's option and in its sole discretion, any part of 
 29.29  the insolvent self-insurers' security deposit may be used to 
 29.30  fund the acquisition of this policy.  After the security deposit 
 29.31  has been used to:  (1) fund the acquisition of this policy; (2) 
 29.32  pay all direct and indirect administrative and professional 
 29.33  expenses of the fund related to the insolvent self-insurer; and 
 29.34  (3) to the extent not covered by the insurance policy, pay the 
 29.35  insolvent self-insurers' losses, allocated loss expense and 
 29.36  unallocated loss expense, any part of the insolvent 
 30.1   self-insurers' security deposit that remains must be promptly 
 30.2   returned to the insolvent self-insurer. 
 30.3      Sec. 27.  [EFFECTIVE DATES.] 
 30.4      Sections 2, 6, 9, and 10 are effective the day after final 
 30.5   enactment.  Section 14 is effective December 1, 1999.