SF 3287

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 06/14/2022 09:43am

A bill for an act
relating to commerce; modifying department enforcement powers; regulating
market conduct examinations; requiring a report; amending Minnesota Statutes
2020, sections 60A.031, subdivision 6, by adding subdivisions; 60A.033,
subdivisions 8, 9, by adding subdivisions; 70A.06, by adding a subdivision;
repealing Minnesota Statutes 2020, section 60A.033, subdivision 3.

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

Section 1.

Minnesota Statutes 2020, section 60A.031, subdivision 6, is amended to read:

Subd. 6.

Penalty.

new text begin (a) new text end Notwithstanding section 72A.05, any person who violates or aids
and abets any violation of a written order issued pursuant to this section may be fined not
more than $10,000 for each day the violation continues for each violation of the order and
the money so recovered shall be paid into the general fund.

new text begin (b) Unless the conduct involves a willful violation, the maximum total amount of civil
penalties imposed by the commissioner under this section for all violations of an identical
or substantially similar law, rule, or order related to conduct prohibited by chapters 60A to
79 during a calendar year must not exceed $25,000.
new text end

new text begin (c) For any applicable penalty imposed by the commissioner under this section, the
commissioner must consider whether corrective action for the consumer was taken promptly
after a violation was discovered or the violation was not part of a pattern or practice, and
shall reduce or eliminate the penalty accordingly.
new text end

Sec. 2.

Minnesota Statutes 2020, section 60A.031, is amended by adding a subdivision to
read:

new text begin Subd. 10. new text end

new text begin Limitation of enforcement actions or administrative proceedings. new text end

new text begin An
enforcement action or administrative proceeding brought by the commissioner against a
licensee who violates any law, rule, or order related to the duties and responsibilities entrusted
to the commissioner in chapters 60A to 79, including without limitation the issuance of an
order pursuant to chapters 60A to 79, must be commenced within six years of the date the
violation occurs unless the violation arises out of a contract that remains in force, in which
case the action or administrative proceeding must be commenced within two years of the
date of the discovery of the violation.
new text end

Sec. 3.

Minnesota Statutes 2020, section 60A.031, is amended by adding a subdivision to
read:

new text begin Subd. 11. new text end

new text begin Multistate examinations. new text end

new text begin If the commissioner elects to participate in an
examination of a licensee that involves multiple states, the commissioner is prohibited from
commencing, undertaking, or continuing an examination under this section against the
subject examinee related to the same alleged conduct, including without limitation incurring
or charging any examination costs, unless and until the multistate examination is complete
or Minnesota has formally withdrawn from that examination. With respect to any completed
multistate examination that Minnesota elected to participate in, the commissioner is prohibited
from taking action against a licensee that was subject to the multistate examination unless
the commissioner follows the procedures set forth in this section and section 60A.033, as
applicable.
new text end

Sec. 4.

Minnesota Statutes 2020, section 60A.033, subdivision 8, is amended to read:

Subd. 8.

Costs.

All bills for examination costs being charged to an insurance company
pursuant to subdivision 5 or section 60A.031, subdivision 3, paragraph (c), must:

(1) be itemized and, with respect to examiner billings, contain activity detail on a quarterly
hourly basis by an individual examiner and disclose the applicable hourly billing rates,
together with per-charge detail for related travel or other expenses; deleted text begin and
deleted text end

(2) provide a due date no less than 30 days from receipt of the bill new text begin ; and
new text end

new text begin (3) advise the company that it may request an administrative hearing pursuant to
subdivision 10 to dispute whether any amount so billed complies with this subdivision,
relates to the applicable examination, or the activity billed is otherwise reasonable in relation
to the requirements of the examination. The commissioner may not refer any billing to the
Department of Revenue for collection pursuant to chapter 16D during the pendency of any
such hearing or appeal new text end .

Sec. 5.

Minnesota Statutes 2020, section 60A.033, subdivision 9, is amended to read:

Subd. 9.

Completion of examination.

An examination under section 60A.031 must not
exceed 18 months from the date the commissioner receives the insurance company's first
submission pursuant to a scheduling order, unless:

(1) the commissioner determines that there has been a material lack of cooperation by
the insurance company new text begin and advises the company in writing of the specific instances
demonstrating a lack of cooperation new text end ;

(2) the examination is a multistate examination; or

(3) the commissioner determines that additional time is necessary to complete the
examination and the commissioner notifies the insurance company in writing of the reasons
why the examination requires additional time.

Sec. 6.

Minnesota Statutes 2020, section 60A.033, is amended by adding a subdivision to
read:

new text begin Subd. 11. new text end

new text begin Informal disposition. new text end

new text begin (a) The commissioner must make an attempt to
informally resolve any alleged violations of law identified during the examination or
investigation. An attempt to informally resolve a violation may consist of a consent order,
nonpublic letter of reprimand, or other informal resolution or disposition.
new text end

new text begin (b) The terms of a consent order or other informal disposition that prescribes compliance
requirements must be consistent with the requirements of Minnesota law.
new text end

Sec. 7.

Minnesota Statutes 2020, section 60A.033, is amended by adding a subdivision to
read:

new text begin Subd. 12. new text end

new text begin Report to the legislature. new text end

new text begin Each year by February 1, the commissioner must
report the following information to the chairs and ranking minority members of the house
of representatives and senate committees having jurisdiction over commerce: a listing of
the number of pending market conduct exams and the year the exams were commenced;
the number of exams closed during the prior year and the current total of costs charged to
the companies for each exam; whether the exam is being conducted, in whole or in part, by
third-party examiners; and other information that the chairs or ranking minority members
may reasonably request, subject to the limitations of section 60A.031, subdivision 4,
paragraph (f).
new text end

Sec. 8.

Minnesota Statutes 2020, section 70A.06, is amended by adding a subdivision to
read:

new text begin Subd. 6. new text end

new text begin Enforcement. new text end

new text begin With respect to any rate or form filed under this section that is
not disapproved under subdivision 1a or 2 or section 70A.11, upon a determination that the
rate or form violates Minnesota law the commissioner may only order a filer to prospectively
discontinue use of the rate or the form. The commissioner is prohibited from subjecting the
filer to a civil penalty or other sanction for any filed rate or form.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2020, section 60A.033, subdivision 3, new text end new text begin is repealed.
new text end

Sec. 10. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective July 1, 2022.
new text end

APPENDIX

Repealed Minnesota Statutes: S3287-1

60A.033 SCHEDULING CONFERENCE AND ORDER.

Subd. 3.

Exception.

A scheduling conference and order is not required under this section if the insurance company waives its right to a scheduling conference and order.