SF 3480

3rd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

1.1                                        A bill for an act
1.2     relating to commerce; regulating license education; regulating certain insurers, 
1.3     insurance forms, rates, minimum loss ratio guarantees, coverages, purchases, 
1.4     disclosures, filings, utilization reviews, and claims; enacting an interstate 
1.5     insurance product regulation compact; regulating the Minnesota uniform health 
1.6     care identification card; requiring health care provider pricing transparency; 
1.7     regulating charity care; requiring certain reports;amending Minnesota Statutes 
1.8     2004, sections 61A.02, subdivision 3; 61A.092, subdivision 3; 62A.02, 
1.9     subdivision 3, by adding a subdivision; 62A.021, subdivision 1; 62A.095, 
1.10    subdivision 1; 62A.27; 62A.3093; 62A.65, subdivision 3; 62C.14, subdivisions 
1.11    9, 10; 62E.13, subdivision 3; 62E.14, subdivision 5; 62J.60, subdivisions 2, 3; 
1.12    62J.81, subdivision 1; 62L.02, subdivision 24; 62L.03, subdivision 3; 62L.08, 
1.13    subdivision 4; 62M.01, subdivision 2; 62M.09, subdivision 9; 62S.05, by 
1.14    adding a subdivision; 62S.08, subdivision 3; 62S.081, subdivision 4; 62S.10, 
1.15    subdivision 2; 62S.13, by adding a subdivision; 62S.14, subdivision 2; 62S.15; 
1.16    62S.20, subdivision 1; 62S.24, subdivisions 1, 3, 4, by adding subdivisions; 
1.17    62S.25, subdivision 6, by adding a subdivision; 62S.26; 62S.266, subdivision 
1.18    2; 62S.29, subdivision 1; 62S.30; 65B.44, subdivision 3a; 70A.07; 72A.20, by 
1.19    adding a subdivision; 72C.10, subdivision 1; 79.01, by adding subdivisions; 
1.20    79.251, subdivision 1, by adding a subdivision; 79.252, by adding subdivisions; 
1.21    79A.23, subdivision 3; 79A.32; 123A.21, subdivision 7, by adding a subdivision; 
1.22    Minnesota Statutes 2005 Supplement, sections 45.22; 45.23; 62A.316; 
1.23    62J.052; 62L.12, subdivision 2; 72A.201, subdivision 6; 79A.04, subdivision 
1.24    2; 256B.0571;  Laws 2005, First Special Session chapter 4, article 7, section 
1.25    59; proposing coding for new law in Minnesota Statutes, chapters 60A; 62A; 
1.26    62J; 62M; 62Q; 62S; repealing Minnesota Statutes 2005 Supplement, section 
1.27    62Q.251; Minnesota Rules, parts 2781.0100; 2781.0200; 2781.0300; 2781.0400; 
1.28    2781.0500; 2781.0600.
1.29    BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.30        Section 1. Minnesota Statutes 2005 Supplement, section 45.22, is amended to read:
1.31    45.22 LICENSE EDUCATION APPROVAL.
1.32    (a) License education courses must be approved in advance by the commissioner. 
1.33    Each sponsor who offers a license education course must have at least one coordinator, 
2.1     approved by the commissioner, be approved by the commissioner. Each approved 
2.2     sponsor must have at least one coordinator who meets the criteria specified in Minnesota 
2.3     Rules, chapter 2809, and who is responsible for supervising the educational program 
2.4     and assuring compliance with all laws and rules. "Sponsor" means any person or entity 
2.5     offering approved education.
2.6     (b) For coordinators with an initial approval date before August 1, 2005, approval 
2.7     will expire on December 31, 2005. For courses with an initial approval date on or before 
2.8     December 31, 2000, approval will expire on April 30, 2006. For courses with an initial 
2.9     approval date after January 1, 2001, but before August 1, 2005, approval will expire 
2.10    on April 30, 2007.

2.11        Sec. 2. Minnesota Statutes 2005 Supplement, section 45.23, is amended to read:
2.12    45.23 LICENSE EDUCATION FEES.
2.13    The following fees must be paid to the commissioner:
2.14    (1) initial course approval, $10 for each hour or fraction of one hour of education 
2.15    course approval sought. Initial course approval expires on the last day of the 24th month 
2.16    after the course is approved;
2.17    (2) renewal of course approval, $10 per course. Renewal of course approval expires 
2.18    on the last day of the 24th month after the course is renewed;
2.19    (3) initial coordinator sponsor approval, $100. Initial coordinator approval expires 
2.20    on the last day of the 24th month after the coordinator is approved;  Initial sponsor 
2.21    approval issued under this section is valid for a period not to exceed 24 months and 
2.22    expires on January 31 of the renewal year assigned by the commissioner. Active sponsors 
2.23    who have at least one approved coordinator as of the effective date of this section are 
2.24    deemed to be approved sponsors and are not required to submit an initial application 
2.25    for sponsor approval; and
2.26    (4) renewal of coordinator sponsor approval, $10. Renewal of coordinator approval 
2.27    expires on the last day of the 24th month after the coordinator is renewed. Each renewal 
2.28    of sponsor approval is valid for a period of 24 months. Active sponsors who have at least 
2.29    one approved coordinator as of the effective date of this section will have an expiration 
2.30    date of January 31, 2008.
2.31    EFFECTIVE DATE.This section is effective the day following final enactment.

2.32        Sec. 3. [60A.99] INTERSTATE INSURANCE PRODUCT REGULATION 
2.33    COMPACT.
3.1         Subdivision 1. Enactment and form. The Interstate Insurance Product Regulation 
3.2     Compact is enacted into law and entered into with all other states legally joining in it in 
3.3     substantially the following form:
3.4     Article I. Purposes
3.5     The purposes of this Compact are, through means of joint and cooperative action 
3.6     among the Compacting States:
3.7     1. To promote and protect the interest of consumers of individual and group annuity, 
3.8     life insurance, disability income and long-term care insurance products;
3.9     2. To develop uniform standards for insurance products covered under the Compact;
3.10    3. To establish a central clearinghouse to receive and provide prompt review of 
3.11    insurance products covered under the Compact and, in certain cases, advertisements related 
3.12    thereto, submitted by insurers authorized to do business in one or more Compacting States;
3.13    4. To give appropriate regulatory approval to those product filings and 
3.14    advertisements satisfying the applicable uniform standard;
3.15    5. To improve coordination of regulatory resources and expertise between state 
3.16    insurance departments regarding the setting of uniform standards and review of insurance 
3.17    products covered under the Compact;
3.18    6. To create the Interstate Insurance Product Regulation Commission; and
3.19    7. To perform these and such other related functions as may be consistent with the 
3.20    state regulation of the business of insurance.
3.21    Article II. Definitions
3.22    For purposes of this Compact:
3.23    1. "Advertisement" means any material designed to create public interest in 
3.24    a Product, or induce the public to purchase, increase, modify, reinstate, borrow on, 
3.25    surrender, replace or retain a policy, as more specifically defined in the Rules and 
3.26    Operating Procedures of the Commission.
3.27    2. "Bylaws" mean those bylaws established by the Commission for its governance, 
3.28    or for directing or controlling the Commission's actions or conduct.
3.29    3. "Compacting State" means any State which has enacted this Compact legislation 
3.30    and which has not withdrawn pursuant to Article XIV, Section 1, or been terminated 
3.31    pursuant to Article XIV, Section 2.
3.32    4. "Commission" means the "Interstate Insurance Product Regulation Commission" 
3.33    established by this Compact.
3.34    5. "Commissioner" means the chief insurance regulatory official of a State including, 
3.35    but not limited to commissioner, superintendent, director or administrator.
4.1     6. "Domiciliary State" means the state in which an Insurer is incorporated or 
4.2     organized; or, in the case of an alien Insurer, its state of entry.
4.3     7. "Insurer" means any entity licensed by a State to issue contracts of insurance for 
4.4     any of the lines of insurance covered by this Act.
4.5     8. "Member" means the person chosen by a Compacting State as its representative 
4.6     to the Commission, or his or her designee.
4.7     9. "Noncompacting State" means any State which is not at the time a Compacting 
4.8     State.
4.9     10. "Operating Procedures" mean procedures promulgated by the Commission 
4.10    implementing a Rule, Uniform Standard, or a provision of this Compact.
4.11    11. "Product" means the form of a policy or contract, including any application, 
4.12    endorsement, or related form which is attached to and made a part of the policy or 
4.13    contract, and any evidence of coverage or certificate, for an individual or group annuity, 
4.14    life insurance, disability income or long-term care insurance product that an Insurer is 
4.15    authorized to issue.
4.16    12. "Rule" means a statement of general or particular applicability and future effect 
4.17    promulgated by the Commission, including a Uniform Standard developed pursuant to 
4.18    Article VII of this Compact, designed to implement, interpret, or prescribe law or policy 
4.19    or describing the organization, procedure, or practice requirements of the Commission, 
4.20    which shall have the force and effect of law in the Compacting States.
4.21    13. "State" means any state, district, or territory of the United States of America.
4.22    14. "Third Party Filer" means an entity that submits a Product filing to the 
4.23    Commission on behalf of an Insurer.
4.24    15. "Uniform Standard" means a standard adopted by the Commission for a 
4.25    Product line, pursuant to Article VII of this Compact, and shall include all of the Product 
4.26    requirements in aggregate; provided, that each Uniform Standard shall be construed, 
4.27    whether express or implied, to prohibit the use of any inconsistent, misleading or 
4.28    ambiguous provisions in a Product and the form of the Product made available to the public 
4.29    shall not be unfair, inequitable or against public policy as determined by the Commission.
4.30    Article III. Establishment of the Commission and Venue
4.31    1. The Compacting States hereby create and establish a joint public agency known 
4.32    as the "Interstate Insurance Product Regulation Commission." Pursuant to Article IV, 
4.33    the Commission will have the power to develop Uniform Standards for Product lines, 
4.34    receive and provide prompt review of Products filed therewith, and give approval to those 
4.35    Product filings satisfying applicable Uniform Standards; provided, it is not intended for 
4.36    the Commission to be the exclusive entity for receipt and review of insurance product 
5.1     filings. Nothing herein shall prohibit any Insurer from filing its product in any State 
5.2     wherein the Insurer is licensed to conduct the business of insurance; and any such filing 
5.3     shall be subject to the laws of the State where filed.
5.4     2. The Commission is a body corporate and politic, and an instrumentality of the 
5.5     Compacting States.
5.6     3. The Commission is solely responsible for its liabilities except as otherwise 
5.7     specifically provided in this Compact.
5.8     4. Venue is proper and judicial proceedings by or against the Commission shall be 
5.9     brought solely and exclusively in a Court of competent jurisdiction where the principal 
5.10    office of the Commission is located.
5.11    Article IV. Powers of the Commission
5.12    The Commission shall have the following powers:
5.13    1. To promulgate Rules, pursuant to Article VII of this Compact, which shall have 
5.14    the force and effect of law and shall be binding in the Compacting States to the extent and 
5.15    in the manner provided in this Compact;
5.16    2. To exercise its rulemaking authority and establish reasonable Uniform Standards 
5.17    for Products covered under the Compact, and Advertisement related thereto, which 
5.18    shall have the force and effect of law and shall be binding in the Compacting States, 
5.19    but only for those Products filed with the Commission, provided, that a Compacting 
5.20    State shall have the right to opt out of such Uniform Standard pursuant to Article VII, to 
5.21    the extent and in the manner provided in this Compact, and, provided further, that any 
5.22    Uniform Standard established by the Commission for long-term care insurance products 
5.23    may provide the same or greater protections for consumers as, but shall not provide less 
5.24    than, those protections set forth in the National Association of Insurance Commissioners' 
5.25    Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, 
5.26    respectively, adopted as of 2001. The Commission shall consider whether any subsequent 
5.27    amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care 
5.28    Insurance Model Regulation adopted by the NAIC require amending of the Uniform 
5.29    Standards established by the Commission for long-term care insurance products;
5.30    3. To receive and review in an expeditious manner Products filed with the 
5.31    Commission, and rate filings for disability income and long-term care insurance Products, 
5.32    and give approval of those Products and rate filings that satisfy the applicable Uniform 
5.33    Standard, where such approval shall have the force and effect of law and be binding on the 
5.34    Compacting States to the extent and in the manner provided in the Compact;
5.35    4. To receive and review in an expeditious manner Advertisement relating to 
5.36    long-term care insurance products for which Uniform Standards have been adopted by 
6.1     the Commission, and give approval to all Advertisement that satisfies the applicable 
6.2     Uniform Standard. For any product covered under this Compact, other than long-term 
6.3     care insurance products, the Commission shall have the authority to require an insurer 
6.4     to submit all or any part of its Advertisement with respect to that product for review or 
6.5     approval prior to use, if the Commission determines that the nature of the product is such 
6.6     that an Advertisement of the product could have the capacity or tendency to mislead the 
6.7     public. The actions of the Commission as provided in this section shall have the force 
6.8     and effect of law and shall be binding in the Compacting States to the extent and in the 
6.9     manner provided in the Compact;
6.10    5. To exercise its rulemaking authority and designate Products and Advertisement 
6.11    that may be subject to a self-certification process without the need for prior approval 
6.12    by the Commission;
6.13    6. To promulgate Operating Procedures, pursuant to Article VII of this Compact, 
6.14    which shall be binding in the Compacting States to the extent and in the manner provided 
6.15    in this compact;
6.16    7. To bring and prosecute legal proceedings or actions in its name as the 
6.17    Commission; provided, that the standing of any state insurance department to sue or be 
6.18    sued under applicable law shall not be affected;
6.19    8. To issue subpoenas requiring the attendance and testimony of witnesses and the 
6.20    production of evidence;
6.21    9. To establish and maintain offices;
6.22    10. To purchase and maintain insurance and bonds;
6.23    11. To borrow, accept or contract for services of personnel, including, but not limited 
6.24    to, employees of a Compacting State;
6.25    12. To hire employees, professionals or specialists, and elect or appoint officers, and 
6.26    to fix their compensation, define their duties and give them appropriate authority to carry 
6.27    out the purposes of the Compact, and determine their qualifications; and to establish the 
6.28    Commission's personnel policies and programs relating to, among other things, conflicts 
6.29    of interest, rates of compensation and qualifications of personnel;
6.30    13. To accept any and all appropriate donations and grants of money, equipment, 
6.31    supplies, materials and services, and to receive, utilize and dispose of the same; provided 
6.32    that at all times the Commission shall strive to avoid any appearance of impropriety;
6.33    14. To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, 
6.34    hold, improve or use, any property, real, personal or mixed; provided that at all times the 
6.35    Commission shall strive to avoid any appearance of impropriety;
7.1     15. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise 
7.2     dispose of any property, real, personal or mixed;
7.3     16. To remit filing fees to Compacting States as may be set forth in the Bylaws, 
7.4     Rules or Operating Procedures;
7.5     17. To enforce compliance by Compacting States with Rules, Uniform Standards, 
7.6     Operating Procedures and Bylaws;
7.7     18. To provide for dispute resolution among Compacting States;
7.8     19. To advise Compacting States on issues relating to Insurers domiciled or doing 
7.9     business in Noncompacting jurisdictions, consistent with the purposes of this Compact;
7.10    20. To provide advice and training to those personnel in state insurance departments 
7.11    responsible for product review, and to be a resource for state insurance departments;
7.12    21. To establish a budget and make expenditures;
7.13    22. To borrow money;
7.14    23. To appoint committees, including advisory committees comprising Members, 
7.15    state insurance regulators, state legislators or their representatives, insurance industry 
7.16    and consumer representatives, and such other interested persons as may be designated 
7.17    in the Bylaws;
7.18    24. To provide and receive information from, and to cooperate with law enforcement 
7.19    agencies;
7.20    25. To adopt and use a corporate seal; and
7.21    26. To perform such other functions as may be necessary or appropriate to achieve 
7.22    the purposes of this Compact consistent with the state regulation of the business of 
7.23    insurance.
7.24    Article V. Organization of the Commission
7.25    1. Membership, Voting and Bylaws
7.26    a. Each Compacting State shall have and be limited to one Member. Each Member 
7.27    shall be qualified to serve in that capacity pursuant to applicable law of the Compacting 
7.28    State. Any Member may be removed or suspended from office as provided by the law 
7.29    of the State from which he or she shall be appointed. Any vacancy occurring in the 
7.30    Commission shall be filled in accordance with the laws of the Compacting State wherein 
7.31    the vacancy exists. Nothing herein shall be construed to affect the manner in which a 
7.32    Compacting State determines the election or appointment and qualification of its own 
7.33    Commissioner.
7.34    b. Each Member shall be entitled to one vote and shall have an opportunity 
7.35    to participate in the governance of the Commission in accordance with the Bylaws. 
7.36    Notwithstanding any provision herein to the contrary, no action of the Commission with 
8.1     respect to the promulgation of a Uniform Standard shall be effective unless two-thirds of 
8.2     the Members vote in favor thereof.
8.3     c. The Commission shall, by a majority of the Members, prescribe Bylaws to govern 
8.4     its conduct as may be necessary or appropriate to carry out the purposes, and exercise the 
8.5     powers, of the Compact, including, but not limited to:
8.6     i. Establishing the fiscal year of the Commission;
8.7     ii. Providing reasonable procedures for appointing and electing members, as well as 
8.8     holding meetings, of the Management Committee;
8.9     iii. Providing reasonable standards and procedures: (i) for the establishment and 
8.10    meetings of other committees, and (ii) governing any general or specific delegation of any 
8.11    authority or function of the Commission;
8.12    iv. Providing reasonable procedures for calling and conducting meetings of the 
8.13    Commission that consist of a majority of Commission members, ensuring reasonable 
8.14    advance notice of each such meeting and providing for the right of citizens to attend each 
8.15    such meeting with enumerated exceptions designed to protect the public's interest, the 
8.16    privacy of individuals, and insurers' proprietary information, including trade secrets. The 
8.17    Commission may meet in camera only after a majority of the entire membership votes to 
8.18    close a meeting en toto or in part. As soon as practicable, the Commission must make 
8.19    public (i) a copy of the vote to close the meeting revealing the vote of each Member with 
8.20    no proxy votes allowed, and (ii) votes taken during such meeting;
8.21    v. Establishing the titles, duties and authority and reasonable procedures for the 
8.22    election of the officers of the Commission;
8.23    vi. Providing reasonable standards and procedures for the establishment of the 
8.24    personnel policies and programs of the Commission. Notwithstanding any civil service 
8.25    or other similar laws of any Compacting State, the Bylaws shall exclusively govern the 
8.26    personnel policies and programs of the Commission;
8.27    vii. Promulgating a code of ethics to address permissible and prohibited activities of 
8.28    commission members and employees; and 
8.29    viii. Providing a mechanism for winding up the operations of the Commission and 
8.30    the equitable disposition of any surplus funds that may exist after the termination of the 
8.31    Compact after the payment and/or reserving of all of its debts and obligations.
8.32    d. The Commission shall publish its bylaws in a convenient form and file a copy 
8.33    thereof and a copy of any amendment thereto, with the appropriate agency or officer in 
8.34    each of the Compacting States.
8.35    2. Management Committee, Officers and Personnel
9.1     a. A Management Committee comprising no more than 14 members shall be 
9.2     established as follows:
9.3     i. One member from each of the six Compacting States with the largest premium 
9.4     volume for individual and group annuities, life, disability income and long-term care 
9.5     insurance products, determined from the records of the NAIC for the prior year;
9.6     ii. Four members from those Compacting States with at least two percent of the 
9.7     market based on the premium volume described above, other than the six Compacting 
9.8     States with the largest premium volume, selected on a rotating basis as provided in the 
9.9     Bylaws; and
9.10    iii. Four members from those Compacting States with less than two percent of the 
9.11    market, based on the premium volume described above, with one selected from each of 
9.12    the four zone regions of the NAIC as provided in the Bylaws.
9.13    b. The Management Committee shall have such authority and duties as may be set 
9.14    forth in the Bylaws, including but not limited to:
9.15    i. Managing the affairs of the Commission in a manner consistent with the Bylaws 
9.16    and purposes of the Commission;
9.17    ii. Establishing and overseeing an organizational structure within, and appropriate 
9.18    procedures for, the Commission to provide for the creation of Uniform Standards and 
9.19    other Rules, receipt and review of product filings, administrative and technical support 
9.20    functions, review of decisions regarding the disapproval of a product filing, and the review 
9.21    of elections made by a Compacting State to opt out of a Uniform Standard; provided that a 
9.22    Uniform Standard shall not be submitted to the Compacting States for adoption unless 
9.23    approved by two-thirds of the members of the Management Committee;
9.24    iii. Overseeing the offices of the Commission; and
9.25    iv. Planning, implementing, and coordinating communications and activities with 
9.26    other state, federal and local government organizations in order to advance the goals 
9.27    of the Commission.
9.28    c. The Commission shall elect annually officers from the Management Committee, 
9.29    with each having such authority and duties, as may be specified in the Bylaws.
9.30    d. The Management Committee may, subject to the approval of the Commission, 
9.31    appoint or retain an executive director for such period, upon such terms and conditions 
9.32    and for such compensation as the Commission may deem appropriate. The executive 
9.33    director shall serve as secretary to the Commission, but shall not be a Member of the 
9.34    Commission. The executive director shall hire and supervise such other staff as may be 
9.35    authorized by the Commission.
9.36    3. Legislative and Advisory Committees
10.1    a. A legislative committee comprising state legislators or their designees shall be 
10.2    established to monitor the operations of, and make recommendations to, the Commission, 
10.3    including the Management Committee; provided that the manner of selection and term of 
10.4    any legislative committee member shall be as set forth in the Bylaws. Prior to the adoption 
10.5    by the Commission of any Uniform Standard, revision to the Bylaws, annual budget or 
10.6    other significant matter as may be provided in the Bylaws, the Management Committee 
10.7    shall consult with and report to the legislative committee.
10.8    b. The Commission shall establish two advisory committees, one of which shall 
10.9    comprise consumer representatives independent of the insurance industry, and the other 
10.10   comprising insurance industry representatives.
10.11   c. The Commission may establish additional advisory committees as its Bylaws may 
10.12   provide for the carrying out of its functions.
10.13   4. Corporate Records of the Commission
10.14   The Commission shall maintain its corporate books and records in accordance 
10.15   with the Bylaws.
10.16   5. Qualified Immunity, Defense, and Indemnification
10.17   a. The Members, officers, executive director, employees, and representatives of 
10.18   the Commission shall be immune from suit and liability, either personally or in their 
10.19   official capacity, for any claim for damage to or loss of property or personal injury or 
10.20   other civil liability caused by or arising out of any actual or alleged act, error or omission 
10.21   that occurred, or that the person against whom the claim is made had a reasonable 
10.22   basis for believing occurred within the scope of Commission employment, duties or 
10.23   responsibilities; provided, that nothing in this paragraph shall be construed to protect any 
10.24   such person from suit and/or liability for any damage, loss, injury or liability caused by 
10.25   the intentional or willful and wanton misconduct of that person.
10.26   b. The Commission shall defend any Member, officer, executive director, employee, 
10.27   or representative of the Commission in any civil action seeking to impose liability arising 
10.28   out of any actual or alleged act, error, or omission that occurred within the scope of 
10.29   Commission employment, duties, or responsibilities, or that the person against whom 
10.30   the claim is made had a reasonable basis for believing occurred within the scope of 
10.31   Commission employment, duties, or responsibilities; provided, that nothing herein shall 
10.32   be construed to prohibit that person from retaining his or her own counsel; and provided 
10.33   further, that the actual or alleged act, error, or omission did not result from that person's 
10.34   intentional or willful and wanton misconduct.
10.35   c. The Commission shall indemnify and hold harmless any Member, officer, 
10.36   executive director, employee, or representative of the Commission for the amount of any 
11.1    settlement or judgment obtained against that person arising out of any actual or alleged 
11.2    act, error, or omission that occurred within the scope of Commission employment, duties, 
11.3    or responsibilities, or that such person had a reasonable basis for believing occurred 
11.4    within the scope of Commission employment, duties, or responsibilities, provided, that the 
11.5    actual or alleged act, error, or omission did not result from the intentional or willful and 
11.6    wanton misconduct of that person.
11.7    Article VI. Meetings and Acts of the Commission
11.8    1. The Commission shall meet and take such actions as are consistent with the 
11.9    provisions of this Compact and the Bylaws.
11.10   2. Each Member of the Commission shall have the right and power to cast a vote to 
11.11   which that Compacting State is entitled and to participate in the business and affairs of the 
11.12   Commission. A Member shall vote in person or by such other means as provided in the 
11.13   Bylaws. The Bylaws may provide for Members' participation in meetings by telephone or 
11.14   other means of communication.
11.15   3. The Commission shall meet at least once during each calendar year. Additional 
11.16   meeting shall be held as set forth in the Bylaws.
11.17   Article VII. Rules and Operating Procedures: Rulemaking Functions
11.18   of the Commission and Opting Out of Uniform Standards
11.19   1. Rulemaking Authority. The Commission shall promulgate reasonable Rules, 
11.20   including Uniform Standards, and Operating Procedures in order to effectively and 
11.21   efficiently achieve the purposes of this Compact. Notwithstanding the foregoing, in the 
11.22   event the Commission exercises its rulemaking authority in a manner that is beyond the 
11.23   scope of the purposes of this Act, or the powers granted hereunder, then such an action by 
11.24   the Commission shall be invalid and have no force and effect.
11.25   2. Rulemaking Procedure. Rules and Operating Procedures shall be made pursuant 
11.26   to a rulemaking process that conforms to the Model State Administrative Procedure Act of 
11.27   1981 as amended, as may be appropriate to the operations of the Commission. Before 
11.28   the Commission adopts a Uniform Standard, the Commission shall give written notice 
11.29   to the relevant state legislative committee(s) in each Compacting State responsible for 
11.30   insurance issues of its intention to adopt the Uniform Standard. The Commission in 
11.31   adopting a Uniform Standard shall consider fully all submitted materials and issue a 
11.32   concise explanation of its decision.
11.33   3. Effective Date and Opt Out of a Uniform Standard. A Uniform Standard shall 
11.34   become effective 90 days after its promulgation by the Commission or such later date 
11.35   as the Commission may determine; provided, however, that a Compacting State may 
11.36   opt out of a Uniform Standard as provided in this Article. "Opt out" shall be defined as 
12.1    any action by a Compacting State to decline to adopt or participate in a promulgated 
12.2    Uniform Standard. All other Rules and Operating Procedures, and amendments thereto, 
12.3    shall become effective as of the date specified in each Rule, Operating Procedure, or 
12.4    amendment.
12.5    4. Opt Out Procedure. A Compacting State may opt out of a Uniform Standard, 
12.6    either by legislation or regulation duly promulgated by the Insurance Department under 
12.7    the Compacting State's Administrative Procedure Act. If a Compacting State elects to opt 
12.8    out of a Uniform Standard by regulation, it must (a) give written notice to the Commission 
12.9    no later than ten business days after the Uniform Standard is promulgated, or at the time 
12.10   the State becomes a Compacting State and (b) find that the Uniform Standard does not 
12.11   provide reasonable protections to the citizens of the State, given the conditions in the State. 
12.12   The Commissioner shall make specific findings of fact and conclusions of law, based on a 
12.13   preponderance of the evidence, detailing the conditions in the State which warrant a 
12.14   departure from the Uniform Standard and determining that the Uniform Standard would 
12.15   not reasonably protect the citizens of the State. The Commissioner must consider and 
12.16   balance the following factors and find that the conditions in the State and needs of the 
12.17   citizens of the State outweigh: (i) the intent of the legislature to participate in, and the 
12.18   benefits of, an interstate agreement to establish national uniform consumer protections for 
12.19   the Products subject to this Act; and (ii) the presumption that a Uniform Standard adopted 
12.20   by the Commission provides reasonable protections to consumers of the relevant Product.
12.21   Notwithstanding the foregoing, a Compacting State may, at the time of its enactment 
12.22   of this Compact, prospectively opt out of all Uniform Standards involving long-term care 
12.23   insurance products by expressly providing for such opt out in the enacted Compact, and 
12.24   such an opt out shall not be treated as a material variance in the offer or acceptance of 
12.25   any State to participate in this Compact. Such an opt out shall be effective at the time 
12.26   of enactment of this Compact by the Compacting State and shall apply to all existing 
12.27   Uniform Standards involving long-term care insurance products and those subsequently 
12.28   promulgated.
12.29   5. Effect of Opt Out. If a Compacting State elects to opt out of a Uniform Standard, 
12.30   the Uniform Standard shall remain applicable in the Compacting State electing to opt out 
12.31   until such time the opt out legislation is enacted into law or the regulation opting out 
12.32   becomes effective.
12.33   Once the opt out of a Uniform Standard by a Compacting State becomes effective 
12.34   as provided under the laws of that State, the Uniform Standard shall have no further 
12.35   force and effect in that State unless and until the legislation or regulation implementing 
12.36   the opt out is repealed or otherwise becomes ineffective under the laws of the State. If a 
13.1    Compacting State opts out of a Uniform Standard after the Uniform Standard has been 
13.2    made effective in that State, the opt out shall have the same prospective effect as provided 
13.3    under Article XIV for withdrawals.
13.4    6. Stay of Uniform Standard. If a Compacting State has formally initiated the 
13.5    process of opting out of a Uniform Standard by regulation, and while the regulatory 
13.6    opt out is pending, the Compacting State may petition the Commission, at least 15 days 
13.7    before the effective date of the Uniform Standard, to stay the effectiveness of the Uniform 
13.8    Standard in that State. The Commission may grant a stay if it determines the regulatory 
13.9    opt out is being pursued in a reasonable manner and there is a likelihood of success. If a 
13.10   stay is granted or extended by the Commission, the stay or extension thereof may postpone 
13.11   the effective date by up to 90 days, unless affirmatively extended by the Commission; 
13.12   provided, a stay may not be permitted to remain in effect for more than one year unless the 
13.13   Compacting State can show extraordinary circumstances which warrant a continuance of 
13.14   the stay, including, but not limited to, the existence of a legal challenge which prevents the 
13.15   Compacting State from opting out. A stay may be terminated by the Commission upon 
13.16   notice that the rulemaking process has been terminated.
13.17   7. Not later than 30 days after a Rule or Operating Procedure is promulgated, 
13.18   any person may file a petition for judicial review of the Rule or Operating Procedure; 
13.19   provided, that the filing of such a petition shall not stay or otherwise prevent the Rule or 
13.20   Operating Procedure from becoming effective unless the court finds that the petitioner 
13.21   has a substantial likelihood of success. The court shall give deference to the actions of 
13.22   the Commission consistent with applicable law and shall not find the Rule or Operating 
13.23   Procedure to be unlawful if the Rule or Operating Procedure represents a reasonable 
13.24   exercise of the Commission's authority.
13.25   Article VIII. Commission Records and Enforcement
13.26   1. The Commission shall promulgate Rules establishing conditions and procedures 
13.27   for public inspection and copying of its information and official records, except such 
13.28   information and records involving the privacy of individuals and insurers' trade secrets. 
13.29   The Commission may promulgate additional Rules under which it may make available to 
13.30   federal and state agencies, including law enforcement agencies, records and information 
13.31   otherwise exempt from disclosure, and may enter into agreements with such agencies to 
13.32   receive or exchange information or records subject to nondisclosure and confidentiality 
13.33   provisions.
13.34   2. Except as to privileged records, data and information, the laws of any Compacting 
13.35   State pertaining to confidentiality or nondisclosure shall not relieve any Compacting 
13.36   State Commissioner of the duty to disclose any relevant records, data or information to 
14.1    the Commission; provided, that disclosure to the Commission shall not be deemed to 
14.2    waive or otherwise affect any confidentiality requirement; and further provided, that, 
14.3    except as otherwise expressly provided in this Act, the Commission shall not be subject 
14.4    to the Compacting State's laws pertaining to confidentiality and nondisclosure with 
14.5    respect to records, data and information in its possession. Confidential information 
14.6    of the Commission shall remain confidential after such information is provided to any 
14.7    Commissioner.
14.8    3. The Commission shall monitor Compacting States for compliance with duly 
14.9    adopted Bylaws, Rules, including Uniform Standards, and Operating Procedures. 
14.10   The Commission shall notify any noncomplying Compacting State in writing of 
14.11   its noncompliance with Commission Bylaws, Rules or Operating Procedures. If a 
14.12   noncomplying Compacting State fails to remedy its noncompliance within the time 
14.13   specified in the notice of noncompliance, the Compacting State shall be deemed to be in 
14.14   default as set forth in Article XIV.
14.15   4. The Commissioner of any State in which an Insurer is authorized to do business, 
14.16   or is conducting the business of insurance, shall continue to exercise his or her authority 
14.17   to oversee the market regulation of the activities of the Insurer in accordance with the 
14.18   provisions of the State's law. The Commissioner's enforcement of compliance with the 
14.19   Compact is governed by the following provisions:
14.20   a. With respect to the Commissioner's market regulation of a Product or 
14.21   Advertisement that is approved or certified to the Commission, the content of the 
14.22   Product or Advertisement shall not constitute a violation of the provisions, standards or 
14.23   requirements of the Compact except upon a final order of the Commission, issued at the 
14.24   request of a Commissioner after prior notice to the Insurer and an opportunity for hearing 
14.25   before the Commission.
14.26   b. Before a Commissioner may bring an action for violation of any provision, 
14.27   standard or requirement of the Compact relating to the content of an Advertisement not 
14.28   approved or certified to the Commission, the Commission, or an authorized Commission 
14.29   officer or employee, must authorize the action. However, authorization pursuant to this 
14.30   paragraph does not require notice to the Insurer, opportunity for hearing or disclosure of 
14.31   requests for authorization or records of the Commission's action on such requests.
14.32   Article IX. Dispute Resolution
14.33   The Commission shall attempt, upon the request of a Member, to resolve any 
14.34   disputes or other issues that are subject to this Compact and which may arise between two 
14.35   or more Compacting States, or between Compacting States and Noncompacting States, 
15.1    and the Commission shall promulgate an Operating Procedure providing for resolution of 
15.2    such disputes.
15.3    Article X. Product Filing and Approval
15.4    1. Insurers and Third Party Filers seeking to have a Product approved by the 
15.5    Commission shall file the Product with, and pay applicable filing fees to, the Commission. 
15.6    Nothing in this Act shall be construed to restrict or otherwise prevent an insurer from 
15.7    filing its Product with the insurance department in any State wherein the insurer is licensed 
15.8    to conduct the business of insurance, and such filing shall be subject to the laws of the 
15.9    States where filed.
15.10   2. The Commission shall establish appropriate filing and review processes and 
15.11   procedures pursuant to Commission Rules and Operating Procedures. Notwithstanding 
15.12   any provision herein to the contrary, the Commission shall promulgate Rules to establish 
15.13   conditions and procedures under which the Commission will provide public access to 
15.14   Product filing information. In establishing such Rules, the Commission shall consider 
15.15   the interests of the public in having access to such information, as well as protection of 
15.16   personal medical and financial information and trade secrets, that may be contained in a 
15.17   Product filing or supporting information.
15.18   3. Any Product approved by the Commission may be sold or otherwise issued in 
15.19   those Compacting States for which the Insurer is legally authorized to do business.
15.20   Article XI. Review of Commission Decisions Regarding Filings
15.21   1. Not later than 30 days after the Commission has given notice of a disapproved 
15.22   Product or Advertisement filed with the Commission, the Insurer or Third Party Filer 
15.23   whose filing was disapproved may appeal the determination to a review panel appointed 
15.24   by the Commission. The Commission shall promulgate Rules to establish procedures for 
15.25   appointing such review panels and provide for notice and hearing. An allegation that the 
15.26   Commission, in disapproving a Product or Advertisement filed with the Commission, 
15.27   acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise 
15.28   not in accordance with the law, is subject to judicial review in accordance with Article 
15.29   III, Section 4.
15.30   2. The Commission shall have authority to monitor, review and reconsider Products 
15.31   and Advertisement subsequent to their filing or approval upon a finding that the product 
15.32   does not meet the relevant Uniform Standard. Where appropriate, the Commission may 
15.33   withdraw or modify its approval after proper notice and hearing, subject to the appeal 
15.34   process in Section 1 above.
15.35   Article XII. Finance
16.1    1. The Commission shall pay or provide for the payment of the reasonable expenses 
16.2    of its establishment and organization. To fund the cost of its initial operations, the 
16.3    Commission may accept contributions and other forms of funding from the National 
16.4    Association of Insurance Commissioners, Compacting States, and other sources. 
16.5    Contributions and other forms of funding from other sources shall be of such a nature 
16.6    that the independence of the Commission concerning the performance of its duties shall 
16.7    not be compromised.
16.8    2. The Commission shall collect a filing fee from each Insurer and Third Party Filer 
16.9    filing a product with the Commission to cover the cost of the operations and activities 
16.10   of the Commission and its staff in a total amount sufficient to cover the Commission's 
16.11   annual budget.
16.12   3. The Commission's budget for a fiscal year shall not be approved until it has been 
16.13   subject to notice and comment as set forth in Article VII of this Compact.
16.14   4. The Commission shall be exempt from all taxation in and by the Compacting 
16.15   states.
16.16   5. The Commission shall not pledge the credit of any Compacting State, except by 
16.17   and with the appropriate legal authority of that Compacting State.
16.18   6. The Commission shall keep complete and accurate accounts of all its internal 
16.19   receipts, including grants and donations, and disbursements of all funds under its control. 
16.20   The internal financial accounts of the Commission shall be subject to the accounting 
16.21   procedures established under its Bylaws. The financial accounts and reports including the 
16.22   system of internal controls and procedures of the Commission shall be audited annually by 
16.23   an independent certified public accountant. Upon the determination of the Commission, 
16.24   but no less frequently than every three years, the review of the independent auditor shall 
16.25   include a management and performance audit of the Commission. The Commission shall 
16.26   make an Annual Report to the Governor and legislature of the Compacting States, which 
16.27   shall include a report of the independent audit. The Commission's internal accounts shall 
16.28   not be confidential and such materials may be shared with the Commissioner of any 
16.29   Compacting State upon request provided, however, that any work papers related to any 
16.30   internal or independent audit and any information regarding the privacy of individuals and 
16.31   insurers' proprietary information, including trade secrets, shall remain confidential.
16.32   7. No Compacting State shall have any claim to or ownership of any property 
16.33   held by or vested in the Commission or to any Commission funds held pursuant to the 
16.34   provisions of this Compact.
16.35   Article XIII. Compacting States, Effective Date and Amendment
16.36   1. Any State is eligible to become a Compacting State.
17.1    2. The Compact shall become effective and binding upon legislative enactment 
17.2    of the Compact into law by two Compacting States; provided, the Commission shall 
17.3    become effective for purposes of adopting Uniform Standards for, reviewing, and giving 
17.4    approval or disapproval of, Products filed with the Commission that satisfy applicable 
17.5    Uniform Standards only after 26 States are Compacting States or, alternatively, by States 
17.6    representing greater than 40 percent of the premium volume for life insurance, annuity, 
17.7    disability income and long-term care insurance products, based on records of the NAIC 
17.8    for the prior year. Thereafter, it shall become effective and binding as to any other 
17.9    Compacting State upon enactment of the Compact into law by that State.
17.10   3. Amendments to the Compact may be proposed by the Commission for enactment 
17.11   by the Compacting States. No amendment shall become effective and binding upon the 
17.12   Commission and the Compacting States unless and until all Compacting States enact 
17.13   the amendment into law.
17.14   Article XIV. Withdrawal, Default and Termination
17.15   1. Withdrawal
17.16   a. Once effective, the Compact shall continue in force and remain binding upon each 
17.17   and every Compacting State; provided, that a Compacting State may withdraw from the 
17.18   Compact ("Withdrawing State") by enacting a statute specifically repealing the statute 
17.19   which enacted the Compact into law.
17.20   b. The effective date of withdrawal is the effective date of the repealing statute. 
17.21   However, the withdrawal shall not apply to any product filings approved or self-certified, 
17.22   or any Advertisement of such products, on the date the repealing statute becomes effective, 
17.23   except by mutual agreement of the Commission and the Withdrawing State unless the 
17.24   approval is rescinded by the Withdrawing State as provided in Paragraph e of this section.
17.25   c. The Commissioner of the Withdrawing State shall immediately notify the 
17.26   Management Committee in writing upon the introduction of legislation repealing this 
17.27   Compact in the Withdrawing State.
17.28   d. The Commission shall notify the other Compacting States of the introduction of 
17.29   such legislation within ten days after its receipt of notice thereof.
17.30   e. The Withdrawing State is responsible for all obligations, duties and liabilities 
17.31   incurred through the effective date of withdrawal, including any obligations, the 
17.32   performance of which extend beyond the effective date of withdrawal, except to the extent 
17.33   those obligations may have been released or relinquished by mutual agreement of the 
17.34   Commission and the Withdrawing State. The Commission's approval of Products and 
17.35   Advertisement prior to the effective date of withdrawal shall continue to be effective and 
17.36   be given full force and effect in the Withdrawing State, unless formally rescinded by 
18.1    the Withdrawing State in the same manner as provided by the laws of the Withdrawing 
18.2    State for the prospective disapproval of products or advertisement previously approved 
18.3    under state law.
18.4    f. Reinstatement following withdrawal of any Compacting State shall occur upon 
18.5    the effective date of the Withdrawing State reenacting the Compact.
18.6    2. Default
18.7    a. If the Commission determines that any Compacting State has at any time defaulted 
18.8    ("Defaulting State") in the performance of any of its obligations or responsibilities under 
18.9    this Compact, the Bylaws or duly promulgated Rules or Operating Procedures, then, after 
18.10   notice and hearing as set forth in the Bylaws, all rights, privileges and benefits conferred 
18.11   by this Compact on the Defaulting State shall be suspended from the effective date of 
18.12   default as fixed by the Commission. The grounds for default include, but are not limited 
18.13   to, failure of a Compacting State to perform its obligations or responsibilities, and any 
18.14   other grounds designated in Commission Rules. The Commission shall immediately 
18.15   notify the Defaulting State in writing of the Defaulting State's suspension pending a cure 
18.16   of the default. The Commission shall stipulate the conditions and the time period within 
18.17   which the Defaulting State must cure its default. If the Defaulting State fails to cure the 
18.18   default within the time period specified by the Commission, the Defaulting State shall 
18.19   be terminated form the Compact and all rights, privileges and benefits conferred by this 
18.20   Compact shall be terminated from the effective date of termination.
18.21   b. Product approvals by the Commission or product self-certifications, or any 
18.22   Advertisement in connection with such product, that are in force on the effective date of 
18.23   termination shall remain in force in the Defaulting State in the same manner as if the 
18.24   Defaulting State had withdrawn voluntarily pursuant to Section 1 of this article.
18.25   c. Reinstatement following termination of any Compacting State requires a 
18.26   reenactment of the Compact.
18.27   3. Dissolution of Compact
18.28   a. The Compact dissolves effective upon the date of the withdrawal or default of the 
18.29   Compacting State which reduces membership in the Compact to one Compacting State.
18.30   b. Upon the dissolution of this Compact, the Compact becomes null and void and 
18.31   shall be of no further force or effect, and the business and affairs of the Commission shall 
18.32   be wound up and any surplus funds shall be distributed in accordance with the Bylaws.
18.33   Article XV. Severability and Construction
18.34   1. The provisions of this Compact shall be severable; and if any phrase, clause, 
18.35   sentence, or provision is deemed unenforceable, the remaining provisions of the Compact 
18.36   shall be enforceable.
19.1    2. The provisions of this Compact shall be liberally construed to effectuate its 
19.2    purposes.
19.3    Article XVI. Binding Effect of Compact and Other Laws
19.4    1. Other Laws
19.5    a. Nothing herein prevents the enforcement of any other law of a Compacting State, 
19.6    except as provided in Paragraph b of this section.
19.7    b. For any Product approved or certified to the Commission, the Rules, Uniform 
19.8    Standards, and any other requirements of the Commission shall constitute the exclusive 
19.9    provisions applicable to the content, approval, and certification of such Products. For 
19.10   Advertisement that is subject to the Commission's authority, any Rule, Uniform Standard, 
19.11   or other requirement of the Commission which governs the content of the Advertisement 
19.12   shall constitute the exclusive provision that a Commissioner may apply to the content of 
19.13   the Advertisement. Notwithstanding the foregoing, no action taken by the Commission 
19.14   shall abrogate or restrict: (i) the access of any person to state courts; (ii) remedies available 
19.15   under state law related to breach of contract, tort, or other laws not specifically directed 
19.16   to the content of the Product; (iii) state law relating to the construction of insurance 
19.17   contracts; or (iv) the authority of the attorney general of the state, including but not limited 
19.18   to maintaining any actions or proceedings, as authorized by law.
19.19   c. All insurance products filed with individual States shall be subject to the laws 
19.20   of those States.
19.21   2. Binding Effect of this Compact
19.22   a. All lawful actions of the Commission, including all Rules and Operating 
19.23   Procedures promulgated by the Commission, are binding upon the Compacting States.
19.24   b. All agreements between the Commission and the Compacting States are binding 
19.25   in accordance with their terms.
19.26   c. Upon the request of a party to a conflict over the meaning or interpretation of 
19.27   Commission actions, and upon a majority vote of the Compacting States, the Commission 
19.28   may issue advisory opinions regarding the meaning or interpretation in dispute.
19.29   d. In the event any provision of this Compact exceeds the constitutional limits 
19.30   imposed on the legislature of any Compacting State, the obligations, duties, powers 
19.31   or jurisdiction sought to be conferred by that provision upon the Commission shall 
19.32   be ineffective as to that Compacting State, and those obligations, duties, powers, or 
19.33   jurisdiction shall remain in the Compacting State and shall be exercised by the agency 
19.34   thereof to which those obligations, duties, powers, or jurisdiction are delegated by law in 
19.35   effect at the time this Compact becomes effective.
20.1        Subd. 2. Commission representative. The commissioner of commerce is the 
20.2    representative of this state to the commission.

20.3        Sec. 4. [60A.991] INTERSTATE INSURANCE PRODUCT REGULATION 
20.4    COMPACT OPT OUT ADMINISTRATION.
20.5        Subdivision 1. Access to courts. The commissioner must opt out by regulation of 
20.6    any uniform standard that permits a product to deny a consumer's access to the courts to 
20.7    resolve a dispute related to the product. In addition to opting out, the commissioner must 
20.8    petition the commission for a stay of the effective date of the standard.
20.9        Subd. 2. Deference by courts. A decision by the commissioner to opt out by 
20.10   regulation shall be given deference by the courts.

20.11       Sec. 5. Minnesota Statutes 2004, section 61A.02, subdivision 3, is amended to read:
20.12       Subd. 3. Disapproval. (a) The commissioner shall, within 60 days after the filing of 
20.13   any form, disapprove the form:
20.14   (1) if the benefits provided are unreasonable in relation to the premium charged;
20.15   (2) if the safety and soundness of the company would be threatened by the offering 
20.16   of an excess rate of interest on the policy or contract;
20.17   (3) if it contains a provision or provisions which are unlawful, unfair, inequitable, 
20.18   misleading, or encourages misrepresentation of the policy; or
20.19   (4) if the form, or its provisions, is otherwise not in the public interest. It shall 
20.20   be unlawful for the company to issue any policy in the form so disapproved. If the 
20.21   commissioner does not within 60 days after the filing of any form, disapprove or otherwise 
20.22   object, the form shall be deemed approved.
20.23   (b) When an insurer or the Minnesota Comprehensive Health Association fails to 
20.24   respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
20.25   A resubmission is required if action by the Department of Commerce is subsequently 
20.26   requested. An additional filing fee is required for the resubmission.
20.27   (c) For purposes of paragraph (a), clause (2), an excess rate of interest is a rate of 
20.28   interest exceeding the rate of interest determined by subtracting three percentage points 
20.29   from Moody's corporate bond yield average as most recently available.

20.30       Sec. 6. Minnesota Statutes 2004, section 61A.092, subdivision 3, is amended to read:
20.31       Subd. 3. Notice of options. Upon termination of or layoff from employment of a 
20.32   covered employee, the employer shall inform the employee of:
20.33   (1) the employee's right to elect to continue the coverage;
21.1    (2) the amount the employee must pay monthly to the employer to retain the 
21.2    coverage;
21.3    (3) the manner in which and the office of the employer to which the payment to 
21.4    the employer must be made; and
21.5    (4) the time by which the payments to the employer must be made to retain coverage.
21.6    The employee has 60 days within which to elect coverage. The 60-day period shall 
21.7    begin to run on the date coverage would otherwise terminate or on the date upon which 
21.8    notice of the right to coverage is received, whichever is later.
21.9    If the covered employee or covered dependent dies during the 60-day election period 
21.10   and before the covered employee makes an election to continue or reject continuation, then 
21.11   the covered employee will be considered to have elected continuation of coverage. The 
21.12   estate of beneficiary previously selected by the former employee or covered dependent 
21.13   would then be entitled to a death benefit equal to the amount of insurance that could have 
21.14   been continued less any unpaid premium owing as of the date of death.
21.15   Notice must be in writing and sent by first class mail to the employee's last known 
21.16   address which the employee has provided to the employer.
21.17   A notice in substantially the following form is sufficient: "As a terminated or laid 
21.18   off employee, the law authorizes you to maintain your group insurance benefits, in an 
21.19   amount equal to the amount of insurance in effect on the date you terminated or were laid 
21.20   off from employment, for a period of up to 18 months. To do so, you must notify your 
21.21   former employer within 60 days of your receipt of this notice that you intend to retain this 
21.22   coverage and must make a monthly payment of $............ at ............. by the ............. of 
21.23   each month."

21.24       Sec. 7. Minnesota Statutes 2004, section 62A.02, subdivision 3, is amended to read:
21.25       Subd. 3. Standards for disapproval. (a) The commissioner shall, within 60 days 
21.26   after the filing of any form or rate, disapprove the form or rate:
21.27   (1) if the benefits provided are not reasonable in relation to the premium charged;
21.28   (2) if it contains a provision or provisions which are unjust, unfair, inequitable, 
21.29   misleading, deceptive or encourage misrepresentation of the health plan form, or otherwise 
21.30   does not comply with this chapter, chapter 62L, or chapter 72A;
21.31   (3) if the proposed premium rate is excessive or not adequate; or
21.32   (4) the actuarial reasons and data submitted do not justify the rate.
21.33   The party proposing a rate has the burden of proving by a preponderance of the 
21.34   evidence that it does not violate this subdivision.
22.1    In determining the reasonableness of a rate, the commissioner shall also review 
22.2    all administrative contracts, service contracts, and other agreements to determine the 
22.3    reasonableness of the cost of the contracts or agreement and effect of the contracts on the 
22.4    rate. If the commissioner determines that a contract or agreement is not reasonable, the 
22.5    commissioner shall disapprove any rate that reflects any unreasonable cost arising out 
22.6    of the contract or agreement. The commissioner may require any information that the 
22.7    commissioner deems necessary to determine the reasonableness of the cost.
22.8    For the purposes of this subdivision, the commissioner shall establish by rule a 
22.9    schedule of minimum anticipated loss ratios which shall be based on (i) the type or types 
22.10   of coverage provided, (ii) whether the policy is for group or individual coverage, and 
22.11   (iii) the size of the group for group policies. Except for individual policies of disability 
22.12   or income protection insurance, the minimum anticipated loss ratio shall not be less 
22.13   than 50 percent after the first year that a policy is in force. All applicants for a policy 
22.14   shall be informed in writing at the time of application of the anticipated loss ratio of the 
22.15   policy. "Anticipated loss ratio" means the ratio at the time of filing, at the time of notice 
22.16   of withdrawal under subdivision 4a, or at the time of subsequent rate revision of the 
22.17   present value of all expected future benefits, excluding dividends, to the present value 
22.18   of all expected future premiums.
22.19   If the commissioner notifies a health carrier that has filed any form or rate that it 
22.20   does not comply with this chapter, chapter 62L, or chapter 72A, it shall be unlawful for 
22.21   the health carrier to issue or use the form or rate. In the notice the commissioner shall 
22.22   specify the reasons for disapproval and state that a hearing will be granted within 20 days 
22.23   after request in writing by the health carrier.
22.24   The 60-day period within which the commissioner is to approve or disapprove the 
22.25   form or rate does not begin to run until a complete filing of all data and materials required 
22.26   by statute or requested by the commissioner has been submitted.
22.27   However, if the supporting data is not filed within 30 days after a request by the 
22.28   commissioner, the rate is not effective and is presumed to be an excessive rate.
22.29   (b) When an insurer or the Minnesota Comprehensive Health Association fails to 
22.30   respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
22.31   A resubmission is required if action by the Department of Commerce is subsequently 
22.32   requested. An additional filing fee is required for the resubmission.

22.33       Sec. 8. Minnesota Statutes 2004, section 62A.02, is amended by adding a subdivision 
22.34   to read:
23.1        Subd. 3a. Individual policy rates file and use; minimum lifetime loss ratio 
23.2    guarantee. (a) Notwithstanding subdivisions 2, 3, 4a, 5a, and 6, individual premium 
23.3    rates may be used upon filing with the department of an individual policy form if the 
23.4    filing is accompanied by the individual policy form filing and a minimum lifetime loss 
23.5    ratio guarantee.  Insurers may use the filing procedure specified in this subdivision only if 
23.6    the affected individual policy forms disclose the benefit of a minimum lifetime loss ratio 
23.7    guarantee.  Insurers may amend individual policy forms to provide for a minimum lifetime 
23.8    loss ratio guarantee.  If an insurer elects to use the filing procedure in this subdivision for 
23.9    an individual policy rate, the insurer shall not use a filing of premium rates that does not 
23.10   provide a minimum lifetime loss ratio guarantee for that individual policy rate.
23.11   (b) The minimum lifetime loss ratio guarantee must be in writing and must contain 
23.12   at least the following:
23.13   (1) an actuarial memorandum specifying the expected loss ratio that complies with 
23.14   the standards as set forth in this subdivision;
23.15   (2) a statement certifying that all rates, fees, dues, and other charges are not 
23.16   excessive, inadequate, or unfairly discriminatory;
23.17   (3) detailed experience information concerning the policy forms;
23.18   (4) a step-by-step description of the process used to develop the minimum lifetime 
23.19   loss ratio, including demonstration with supporting data;
23.20   (5) guarantee of specific minimum lifetime loss ratio that must be greater than or 
23.21   equal to 65 percent for policies issued to individuals or for certificates issued to members 
23.22   of an association that does not offer coverage to small employers, taking into consideration 
23.23   adjustments for duration;
23.24   (6) a guarantee that the actual Minnesota loss ratio for the calendar year in which the 
23.25   new rates take effect, and for each year thereafter until new rates are filed, will meet or 
23.26   exceed the minimum lifetime loss ratio standards referred to in clause (5), adjusted for 
23.27   duration;
23.28   (7) a guarantee that the actual Minnesota lifetime loss ratio shall meet or exceed the 
23.29   minimum lifetime loss ratio standards referred to in clause (5); and 
23.30   (8) if the annual earned premium volume in Minnesota under the particular policy 
23.31   form is less than $2,500,000, the minimum lifetime loss ratio guarantee must be based 
23.32   partially on the Minnesota earned premium and other credible factors as specified by 
23.33   the commissioner.
23.34   (c) The actual Minnesota minimum loss ratio results for each year at issue must be 
23.35   independently audited at the insurer's expense, and the audit report must be filed with the 
23.36   commissioner not later than 120 days after the end of the year at issue.
24.1    (d) The insurer shall refund premiums in the amount necessary to bring the actual 
24.2    loss ratio up to the guaranteed minimum lifetime loss ratio. For the purpose of this 
24.3    paragraph, loss ratio and guaranteed minimum lifetime loss ratio are the expected 
24.4    aggregate loss ratio of all approved individual policy forms that provide for a minimum 
24.5    lifetime loss ratio guarantee.
24.6    (e) A Minnesota policyholder affected by the guaranteed minimum lifetime loss 
24.7    ratio shall receive a portion of the premium refund relative to the premium paid by the 
24.8    policyholder. The refund must be made to all Minnesota policyholders insured under the 
24.9    applicable policy form during the year at issue if the refund would equal $10 or more per 
24.10   policy.  The refund must include statutory interest from July 1 of the year at issue until 
24.11   the date of payment.  Payment must be made not later than 180 days after the end of the 
24.12   year at issue.
24.13   (f) Premium refunds of less than $10 per insured must be credited to the 
24.14   policyholder's account. 
24.15   (g) Subdivisions 2 and 3 do not apply if premium rates are filed with the department 
24.16   and accompanied by a minimum lifetime loss ratio guarantee that meets the requirements 
24.17   of this subdivision. Such filings are deemed approved. When determining a loss ratio for 
24.18   the purposes of a minimum lifetime loss ratio guarantee, the insurer shall divide the total 
24.19   of the claims incurred, plus preferred provider organization expenses, case management, 
24.20   and utilization review expenses, plus reinsurance premiums less reinsurance recoveries by 
24.21   the premiums earned less state and local taxes less other assessments. The insurer shall 
24.22   identify any assessment allocated.
24.23   (h) The policy form filing of an insurer using the filing procedure with a minimum 
24.24   lifetime loss ratio guarantee must disclose to the enrollee, member, or subscriber an 
24.25   explanation of the minimum lifetime loss ratio guarantee, and the actual loss ratio, and any 
24.26   adjustments for duration.
24.27   (i) The insurer who elects to use the filing procedure with a minimum lifetime loss 
24.28   ratio guarantee shall notify all policyholders of the refund calculation, the result of the 
24.29   refund calculation, the percentage of premium on an aggregate basis to be refunded, if 
24.30   any, any amount of the refund attributed to the payment of interests, and an explanation 
24.31   of amounts less than $10.

24.32       Sec. 9. Minnesota Statutes 2004, section 62A.021, subdivision 1, is amended to read:
24.33       Subdivision 1. Loss ratio standards.  (a) Notwithstanding section 62A.02, 
24.34   subdivision 3, relating to loss ratios, and except as otherwise authorized by section 
24.35   62A.02, subdivision 3a, for individual policies or certificates, health care policies or 
25.1    certificates shall not be delivered or issued for delivery to an individual or to a small 
25.2    employer as defined in section 62L.02, unless the policies or certificates can be expected, 
25.3    as estimated for the entire period for which rates are computed to provide coverage, to 
25.4    return to Minnesota policyholders and certificate holders in the form of aggregate benefits 
25.5    not including anticipated refunds or credits, provided under the policies or certificates, (1) 
25.6    at least 75 percent of the aggregate amount of premiums earned in the case of policies 
25.7    issued in the small employer market, as defined in section 62L.02, subdivision 27, 
25.8    calculated on an aggregate basis; and (2) at least 65 percent of the aggregate amount 
25.9    of premiums earned in the case of each policy form or certificate form issued in the 
25.10   individual market; calculated on the basis of incurred claims experience or incurred health 
25.11   care expenses where coverage is provided by a health maintenance organization on a 
25.12   service rather than reimbursement basis and earned premiums for the period and according 
25.13   to accepted actuarial principles and practices.  Assessments by the reinsurance association 
25.14   created in chapter 62L and all types of taxes, surcharges, or assessments created by Laws 
25.15   1992, chapter 549, or created on or after April 23, 1992, are included in the calculation of 
25.16   incurred claims experience or incurred health care expenses. The applicable percentage 
25.17   for policies and certificates issued in the small employer market, as defined in section 
25.18   62L.02, increases by one percentage point on July 1 of each year, beginning on July 1, 
25.19   1994, until an 82 percent loss ratio is reached on July 1, 2000.  The applicable percentage 
25.20   for policy forms and certificate forms issued in the individual market increases by one 
25.21   percentage point on July 1 of each year, beginning on July 1, 1994, until a 72 percent loss 
25.22   ratio is reached on July 1, 2000.  A health carrier that enters a market after July 1, 1993, 
25.23   does not start at the beginning of the phase-in schedule and must instead comply with the 
25.24   loss ratio requirements applicable to other health carriers in that market for each time 
25.25   period.  Premiums earned and claims incurred in markets other than the small employer 
25.26   and individual markets are not relevant for purposes of this section.
25.27   (b) All filings of rates and rating schedules shall demonstrate that actual expected 
25.28   claims in relation to premiums comply with the requirements of this section when 
25.29   combined with actual experience to date.  Filings of rate revisions shall also demonstrate 
25.30   that the anticipated loss ratio over the entire future period for which the revised rates 
25.31   are computed to provide coverage can be expected to meet the appropriate loss ratio 
25.32   standards, and aggregate loss ratio from inception of the policy form or certificate form 
25.33   shall equal or exceed the appropriate loss ratio standards.
25.34   (c) A health carrier that issues health care policies and certificates to individuals 
25.35   or to small employers, as defined in section 62L.02, in this state shall file annually its 
25.36   rates, rating schedule, and supporting documentation including ratios of incurred losses 
26.1    to earned premiums by policy form or certificate form duration for approval by the 
26.2    commissioner according to the filing requirements and procedures prescribed by the 
26.3    commissioner.  The supporting documentation shall also demonstrate in accordance with 
26.4    actuarial standards of practice using reasonable assumptions that the appropriate loss ratio 
26.5    standards can be expected to be met over the entire period for which rates are computed.  
26.6    The demonstration shall exclude active life reserves.  If the data submitted does not 
26.7    confirm that the health carrier has satisfied the loss ratio requirements of this section, 
26.8    the commissioner shall notify the health carrier in writing of the deficiency.  The health 
26.9    carrier shall have 30 days from the date of the commissioner's notice to file amended rates 
26.10   that comply with this section.  If the health carrier fails to file amended rates within the 
26.11   prescribed time, the commissioner shall order that the health carrier's filed rates for the 
26.12   nonconforming policy form or certificate form be reduced to an amount that would have 
26.13   resulted in a loss ratio that complied with this section had it been in effect for the reporting 
26.14   period of the supplement.  The health carrier's failure to file amended rates within the 
26.15   specified time or the issuance of the commissioner's order amending the rates does not 
26.16   preclude the health carrier from filing an amendment of its rates at a later time.  The 
26.17   commissioner shall annually make the submitted data available to the public at a cost not 
26.18   to exceed the cost of copying.  The data must be compiled in a form useful for consumers 
26.19   who wish to compare premium charges and loss ratios.
26.20   (d) Each sale of a policy or certificate that does not comply with the loss ratio 
26.21   requirements of this section is an unfair or deceptive act or practice in the business of 
26.22   insurance and is subject to the penalties in sections 72A.17 to 72A.32.
26.23   (e)(1) For purposes of this section, health care policies issued as a result of 
26.24   solicitations of individuals through the mail or mass media advertising, including both 
26.25   print and broadcast advertising, shall be treated as individual policies.
26.26   (2) For purposes of this section, (i) "health care policy" or "health care certificate" 
26.27   is a health plan as defined in section 62A.011; and (ii) "health carrier" has the meaning 
26.28   given in section 62A.011 and includes all health carriers delivering or issuing for delivery 
26.29   health care policies or certificates in this state or offering these policies or certificates 
26.30   to residents of this state.
26.31   (f) The loss ratio phase-in as described in paragraph (a) does not apply to individual 
26.32   policies and small employer policies issued by a health plan company that is assessed less 
26.33   than three percent of the total annual amount assessed by the Minnesota Comprehensive 
26.34   Health Association.  These policies must meet a 68 percent loss ratio for individual 
26.35   policies, a 71 percent loss ratio for small employer policies with fewer than ten employees, 
26.36   and a 75 percent loss ratio for all other small employer policies.
27.1    (g) Notwithstanding paragraphs (a) and (f), the loss ratio shall be 60 percent for a 
27.2    health plan as defined in section 62A.011, offered by an insurance company licensed under 
27.3    chapter 60A that is assessed less than ten percent of the total annual amount assessed 
27.4    by the Minnesota Comprehensive Health Association.  For purposes of the percentage 
27.5    calculation of the association's assessments, an insurance company's assessments include 
27.6    those of its affiliates.
27.7    (h) The commissioners of commerce and health shall each annually issue a 
27.8    public report listing, by health plan company, the actual loss ratios experienced in the 
27.9    individual and small employer markets in this state by the health plan companies that the 
27.10   commissioners respectively regulate.  The commissioners shall coordinate release of these 
27.11   reports so as to release them as a joint report or as separate reports issued the same day. 
27.12   The report or reports shall be released no later than June 1 for loss ratios experienced for 
27.13   the preceding calendar year.  Health plan companies shall provide to the commissioners 
27.14   any information requested by the commissioners for purposes of this paragraph. 

27.15       Sec. 10. Minnesota Statutes 2004, section 62A.095, subdivision 1, is amended to read:
27.16       Subdivision 1. Applicability. (a) No health plan shall be offered, sold, or issued to a 
27.17   resident of this state, or to cover a resident of this state, unless the health plan complies 
27.18   with subdivision 2.
27.19   (b) Health plans providing benefits under health care programs administered by the 
27.20   commissioner of human services are not subject to the limits described in subdivision 
27.21   2 but are subject to the right of subrogation provisions under section  256B.37 and the 
27.22   lien provisions under section  256.015;  256B.042;  256D.03, subdivision 8; or  256L.03, 
27.23   subdivision 6. 
27.24   For purposes of this section, "health plan" includes coverage that is excluded under 
27.25   section 62A.011, subdivision 3, clauses (4), (7), and (10).

27.26       Sec. 11. Minnesota Statutes 2004, section 62A.27, is amended to read:
27.27   62A.27 COVERAGE OF ADOPTED CHILDREN.
27.28   (a) A health plan that provides coverage to a Minnesota resident must cover adopted 
27.29   children of the insured, subscriber, participant, or enrollee on the same basis as other 
27.30   dependents. Consequently, the plan shall not contain any provision concerning preexisting 
27.31   condition limitations, insurability, eligibility, or health underwriting approval concerning 
27.32   children placed for adoption with the participant.
27.33   (b) The coverage required by this section is effective from the date of placement 
27.34   for adoption. For purposes of this section, placement for adoption means the assumption 
28.1    and retention by a person of a legal obligation for total or partial support of a child in 
28.2    anticipation of adoption of the child. The child's placement with a person terminates upon 
28.3    the termination of the legal obligation for total or partial support.
28.4    (c) For the purpose of this section, health plan includes:
28.5    (1) coverage offered by community integrated service networks;
28.6    (2) coverage that is designed solely to provide dental or vision care; and
28.7    (3) any plan under the federal Employee Retirement Income Security Act of 1974 
28.8    (ERISA), United States Code, title 29, sections 1001 to 1461.
28.9    (d) No policy or contract covered by this section may require notification to a health 
28.10   carrier as a condition for this dependent coverage. However, if the policy or contract 
28.11   mandates an additional premium for each dependent, the health carrier is entitled to 
28.12   all premiums that would have been collected had the health carrier been aware of the 
28.13   additional dependent. The health carrier may withhold payment of any health benefits 
28.14   for the new dependent until it has been compensated with the applicable premium 
28.15   which would have been owed if the health carrier had been informed of the additional 
28.16   dependent immediately.

28.17       Sec. 12. Minnesota Statutes 2004, section 62A.3093, is amended to read:
28.18   62A.3093 COVERAGE FOR DIABETES.
28.19       Subdivision 1. Required coverage. A health plan, including a plan providing the 
28.20   coverage specified in section  62A.011, subdivision 3, clause (10), must provide coverage 
28.21   for: (1) all physician prescribed medically appropriate and necessary equipment and 
28.22   supplies used in the management and treatment of diabetes; and (2) diabetes outpatient 
28.23   self-management training and education, including medical nutrition therapy, that is 
28.24   provided by a certified, registered, or licensed health care professional working in a 
28.25   program consistent with the national standards of diabetes self-management education as 
28.26   established by the American Diabetes Association. Coverage must include persons with 
28.27   gestational, type I or type II diabetes. Coverage required under this section is subject to 
28.28   the same deductible or coinsurance provisions applicable to the plan's hospital, medical 
28.29   expense, medical equipment, or prescription drug benefits. A health carrier may not 
28.30   reduce or eliminate coverage due to this requirement. 
28.31       Subd. 2. Medicare Part D exception. A health plan providing the coverage 
28.32   specified in section 62A.011, subdivision 3, clause (10), is not subject to the requirements 
28.33   of subdivision 1, clause (1), with respect to equipment and supplies covered under the 
28.34   Medicare Part D Prescription Drug program, whether or not the covered person is enrolled 
28.35   in a Medicare Part D plan.
29.1    This subdivision does not apply to a health plan providing the coverage specified in 
29.2    section 62A.011, subdivision 3, clause (10), that was in effect on December 31, 2005, if the 
29.3    covered person remains enrolled in the plan and does not enroll in a Medicare Part D plan.
29.4    EFFECTIVE DATE.This section is effective retroactive to January 1, 2006.

29.5        Sec. 13. Minnesota Statutes 2005 Supplement, section 62A.316, is amended to read:
29.6    62A.316 BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.
29.7    (a) The basic Medicare supplement plan must have a level of coverage that will 
29.8    provide:
29.9    (1) coverage for all of the Medicare Part A inpatient hospital coinsurance amounts, 
29.10   and 100 percent of all Medicare part A eligible expenses for hospitalization not covered 
29.11   by Medicare, after satisfying the Medicare Part A deductible;
29.12   (2) coverage for the daily co-payment amount of Medicare Part A eligible expenses 
29.13   for the calendar year incurred for skilled nursing facility care;
29.14   (3) coverage for the coinsurance amount, or in the case of outpatient department 
29.15   services paid under a prospective payment system, the co-payment amount, of Medicare 
29.16   eligible expenses under Medicare Part B regardless of hospital confinement, subject to 
29.17   the Medicare Part B deductible amount;
29.18   (4) 80 percent of the hospital and medical expenses and supplies incurred during 
29.19   travel outside the United States as a result of a medical emergency;
29.20   (5) coverage for the reasonable cost of the first three pints of blood, or equivalent 
29.21   quantities of packed red blood cells as defined under federal regulations under Medicare 
29.22   Parts A and B, unless replaced in accordance with federal regulations;
29.23   (6) 100 percent of the cost of immunizations not otherwise covered under Part D of 
29.24   the Medicare program and routine screening procedures for cancer screening including 
29.25   mammograms and pap smears; and
29.26   (7) 80 percent of coverage for all physician prescribed medically appropriate and 
29.27   necessary equipment and supplies used in the management and treatment of diabetes 
29.28   not otherwise covered under Part D of the Medicare program. Coverage must include 
29.29   persons with gestational, type I, or type II diabetes. Coverage under this clause is subject 
29.30   to section 62A.3093, subdivision 2. 
29.31   (b) Only the following optional benefit riders may be added to this plan:
29.32   (1) coverage for all of the Medicare Part A inpatient hospital deductible amount;
30.1    (2) a minimum of 80 percent of eligible medical expenses and supplies not covered 
30.2    by Medicare Part B, not to exceed any charge limitation established by the Medicare 
30.3    program or state law;
30.4    (3) coverage for all of the Medicare Part B annual deductible;
30.5    (4) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and 
30.6    customary prescription drug expenses. An outpatient prescription drug benefit must not 
30.7    be included for sale or issuance in a Medicare policy or certificate issued on or after 
30.8    January 1, 2006;
30.9    (5) preventive medical care benefit coverage for the following preventative health 
30.10   services not covered by Medicare:
30.11   (i) an annual clinical preventive medical history and physical examination that may 
30.12   include tests and services from clause (ii) and patient education to address preventive 
30.13   health care measures;
30.14   (ii) preventive screening tests or preventive services, the selection and frequency of 
30.15   which is determined to be medically appropriate by the attending physician.
30.16   Reimbursement shall be for the actual charges up to 100 percent of the 
30.17   Medicare-approved amount for each service, as if Medicare were to cover the service as 
30.18   identified in American Medical Association current procedural terminology (AMA CPT) 
30.19   codes, to a maximum of $120 annually under this benefit. This benefit shall not include 
30.20   payment for a procedure covered by Medicare;
30.21   (6) coverage for services to provide short-term at-home assistance with activities of 
30.22   daily living for those recovering from an illness, injury, or surgery:
30.23   (i) For purposes of this benefit, the following definitions apply:
30.24   (A) "activities of daily living" include, but are not limited to, bathing, dressing, 
30.25   personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally 
30.26   self-administered, and changing bandages or other dressings;
30.27   (B) "care provider" means a duly qualified or licensed home health aide/homemaker, 
30.28   personal care aid, or nurse provided through a licensed home health care agency or 
30.29   referred by a licensed referral agency or licensed nurses registry;
30.30   (C) "home" means a place used by the insured as a place of residence, provided 
30.31   that the place would qualify as a residence for home health care services covered by 
30.32   Medicare. A hospital or skilled nursing facility shall not be considered the insured's 
30.33   place of residence;
30.34   (D) "at-home recovery visit" means the period of a visit required to provide at-home 
30.35   recovery care, without limit on the duration of the visit, except each consecutive four 
30.36   hours in a 24-hour period of services provided by a care provider is one visit;
31.1    (ii) Coverage requirements and limitations:
31.2    (A) at-home recovery services provided must be primarily services that assist in 
31.3    activities of daily living;
31.4    (B) the insured's attending physician must certify that the specific type and 
31.5    frequency of at-home recovery services are necessary because of a condition for which a 
31.6    home care plan of treatment was approved by Medicare;
31.7    (C) coverage is limited to:
31.8    (I) no more than the number and type of at-home recovery visits certified as 
31.9    necessary by the insured's attending physician. The total number of at-home recovery 
31.10   visits shall not exceed the number of Medicare-approved home care visits under a 
31.11   Medicare-approved home care plan of treatment;
31.12   (II) the actual charges for each visit up to a maximum reimbursement of $40 per visit;
31.13   (III) $1,600 per calendar year;
31.14   (IV) seven visits in any one week;
31.15   (V) care furnished on a visiting basis in the insured's home;
31.16   (VI) services provided by a care provider as defined in this section;
31.17   (VII) at-home recovery visits while the insured is covered under the policy or 
31.18   certificate and not otherwise excluded;
31.19   (VIII) at-home recovery visits received during the period the insured is receiving 
31.20   Medicare-approved home care services or no more than eight weeks after the service date 
31.21   of the last Medicare-approved home health care visit;
31.22   (iii) Coverage is excluded for:
31.23   (A) home care visits paid for by Medicare or other government programs; and
31.24   (B) care provided by family members, unpaid volunteers, or providers who are 
31.25   not care providers;
31.26   (7) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and 
31.27   customary prescription drug expenses to a maximum of $1,200 paid by the issuer annually 
31.28   under this benefit. An issuer of Medicare supplement insurance policies that elects to 
31.29   offer this benefit rider shall also make available coverage that contains the rider specified 
31.30   in clause (4). An outpatient prescription drug benefit must not be included for sale or 
31.31   issuance in a Medicare policy or certificate issued on or after January 1, 2006.
31.32   EFFECTIVE DATE.This section is effective retroactively from January 1, 2006.

31.33       Sec. 14. [62A.3161] MEDICARE SUPPLEMENT PLAN WITH 50 PERCENT 
31.34   COVERAGE.
32.1    The Medicare supplement plan with 50 percent coverage must have a level of 
32.2    coverage that will provide:
32.3    (1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for 
32.4    365 days after Medicare benefits end;
32.5    (2) coverage for 50 percent of the Medicare Part A inpatient hospital deductible 
32.6    amount per benefit period until the out-of-pocket limitation is met as described in clause 
32.7    (8);
32.8    (3) coverage for 50 percent of the coinsurance amount for each day used from the 
32.9    21st through the 100th day in a Medicare benefit period for posthospital skilled nursing 
32.10   care eligible under Medicare Part A until the out-of-pocket limitation is met as described 
32.11   in clause (8);
32.12   (4) coverage for 50 percent of cost sharing for all Medicare Part A eligible expenses 
32.13   and respite care until the out-of-pocket limitation is met as described in clause (8);
32.14   (5) coverage for 50 percent, under Medicare Part A or B, of the reasonable cost 
32.15   of the first three pints of blood, or equivalent quantities of packed red blood cells, as 
32.16   defined under federal regulations, unless replaced according to federal regulations, until 
32.17   the out-of-pocket limitation is met as described in clause (8);
32.18   (6) except for coverage provided in this clause, coverage for 50 percent of the 
32.19   cost sharing otherwise applicable under Medicare Part B, after the policyholder pays 
32.20   the Medicare Part B deductible, until the out-of-pocket limitation is met as described 
32.21   in clause (8);
32.22   (7) coverage of 100 percent of the cost sharing for Medicare Part B preventive 
32.23   services and diagnostic procedures for cancer screening described in section 62A.30 after 
32.24   the policyholder pays the Medicare Part B deductible; and
32.25   (8) coverage of 100 percent of all cost sharing under Medicare Parts A and B for the 
32.26   balance of the calendar year after the individual has reached the out-of-pocket limitation 
32.27   on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed 
32.28   each year by the appropriate inflation adjustment by the secretary of the United States 
32.29   Department of Health and Human Services.

32.30       Sec. 15. [62A.3162] MEDICARE SUPPLEMENT PLAN WITH 75 PERCENT 
32.31   COVERAGE.
32.32   The basic Medicare supplement plan with 75 percent coverage must have a level of 
32.33   coverage that will provide:
32.34   (1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for 
32.35   365 days after Medicare benefits end;
33.1    (2) coverage for 75 percent of the Medicare Part A inpatient hospital deductible 
33.2    amount per benefit period until the out-of-pocket limitation is met as described in clause 
33.3    (8);
33.4    (3) coverage for 75 percent of the coinsurance amount for each day used from the 
33.5    21st through the 100th day in a Medicare benefit period for posthospital skilled nursing 
33.6    care eligible under Medicare Part A until the out-of-pocket limitation is met as described 
33.7    in clause (8); 
33.8    (4) coverage for 75 percent of cost sharing for all Medicare Part A eligible expenses 
33.9    and respite care until the out-of-pocket limitation is met as described in clause (8);
33.10   (5) coverage for 75 percent, under Medicare Part A or B, of the reasonable cost 
33.11   of the first three pints of blood, or equivalent quantities of packed red blood cells, as 
33.12   defined under federal regulations, unless replaced according to federal regulations until 
33.13   the out-of-pocket limitation is met as described in clause (8);
33.14   (6) except for coverage provided in this clause, coverage for 75 percent of the 
33.15   cost sharing otherwise applicable under Medicare Part B after the policyholder pays 
33.16   the Medicare Part B deductible until the out-of-pocket limitation is met as described 
33.17   in clause (8);
33.18   (7) coverage of 100 percent of the cost sharing for Medicare Part B preventive 
33.19   services and diagnostic procedures for cancer screening described in section 62A.30 after 
33.20   the policyholder pays the Medicare Part B deductible; and
33.21   (8) coverage of 100 percent of all cost sharing under Medicare Parts A and B for the 
33.22   balance of the calendar year after the individual has reached the out-of-pocket limitation 
33.23   on annual expenditures under Medicare Parts A and B of $2,000 in 2006, indexed 
33.24   each year by the appropriate inflation adjustment by the Secretary of the United States 
33.25   Department of Health and Human Services.

33.26       Sec. 16. Minnesota Statutes 2004, section 62A.65, subdivision 3, is amended to read:
33.27       Subd. 3. Premium rate restrictions. No individual health plan may be offered, 
33.28   sold, issued, or renewed to a Minnesota resident unless the premium rate charged is 
33.29   determined in accordance with the following requirements:
33.30   (a) Premium rates must be no more than 25 percent above and no more than 25 
33.31   percent below the index rate charged to individuals for the same or similar coverage, 
33.32   adjusted pro rata for rating periods of less than one year. The premium variations 
33.33   permitted by this paragraph must be based only upon health status, claims experience, 
33.34   and occupation. For purposes of this paragraph, health status includes refraining from 
33.35   tobacco use or other actuarially valid lifestyle factors associated with good health, 
34.1    provided that the lifestyle factor and its effect upon premium rates have been determined 
34.2    by the commissioner to be actuarially valid and have been approved by the commissioner. 
34.3    Variations permitted under this paragraph must not be based upon age or applied 
34.4    differently at different ages. This paragraph does not prohibit use of a constant percentage 
34.5    adjustment for factors permitted to be used under this paragraph.
34.6    (b) Premium rates may vary based upon the ages of covered persons only as 
34.7    provided in this paragraph. In addition to the variation permitted under paragraph (a), 
34.8    each health carrier may use an additional premium variation based upon age of up to 
34.9    plus or minus 50 percent of the index rate.
34.10   (c) A health carrier may request approval by the commissioner to establish no 
34.11   more than three separate geographic regions determined by the health carrier and to 
34.12   establish separate index rates for each such region, provided that the index rates do not 
34.13   vary between any two regions by more than 20 percent. Health carriers that do not do 
34.14   business in the Minneapolis/St. Paul metropolitan area may request approval for no 
34.15   more than two geographic regions, and clauses (2) and (3) do not apply to approval of 
34.16   requests made by those health carriers. The commissioner may shall grant approval if the 
34.17   following conditions are met: (1) the geographic regions must be applied uniformly by 
34.18   the health carrier;
34.19   (2) one geographic region must be based on the Minneapolis/St. Paul metropolitan 
34.20   area;
34.21   (3) for each geographic region that is rural, the index rate for that region must not 
34.22   exceed the index rate for the Minneapolis/St. Paul metropolitan area; and
34.23   (2) each geographic region must be composed of no fewer than seven counties that 
34.24   create a contiguous region; and
34.25   (4) (3) the health carrier provides actuarial justification acceptable to the 
34.26   commissioner for the proposed geographic variations in index rates, establishing that the 
34.27   variations are based upon differences in the cost to the health carrier of providing coverage.
34.28   (d) Health carriers may use rate cells and must file with the commissioner the rate 
34.29   cells they use. Rate cells must be based upon the number of adults or children covered 
34.30   under the policy and may reflect the availability of Medicare coverage. The rates for 
34.31   different rate cells must not in any way reflect generalized differences in expected costs 
34.32   between principal insureds and their spouses.
34.33   (e) In developing its index rates and premiums for a health plan, a health carrier shall 
34.34   take into account only the following factors:
34.35   (1) actuarially valid differences in rating factors permitted under paragraphs (a) 
34.36   and (b); and
35.1    (2) actuarially valid geographic variations if approved by the commissioner as 
35.2    provided in paragraph (c).
35.3    (f) All premium variations must be justified in initial rate filings and upon request of 
35.4    the commissioner in rate revision filings. All rate variations are subject to approval by 
35.5    the commissioner.
35.6    (g) The loss ratio must comply with the section  62A.021 requirements for individual 
35.7    health plans. 
35.8    (h) The rates must not be approved, unless the commissioner has determined that the 
35.9    rates are reasonable. In determining reasonableness, the commissioner shall consider the 
35.10   growth rates applied under section  62J.04, subdivision 1, paragraph (b), to the calendar 
35.11   year or years that the proposed premium rate would be in effect, actuarially valid changes 
35.12   in risks associated with the enrollee populations, and actuarially valid changes as a result 
35.13   of statutory changes in Laws 1992, chapter 549. 
35.14   (i) An insurer may, as part of a minimum lifetime loss ratio guarantee filing under 
35.15   section 62A.02, subdivision 3a, include a rating practices guarantee as provided in this 
35.16   paragraph. The rating practices guarantee must be in writing and must guarantee that 
35.17   the policy form will be offered, sold, issued, and renewed only with premium rates and 
35.18   premium rating practices that comply with subdivisions 2, 3, 4, and 5. The rating practices 
35.19   guarantee must be accompanied by an actuarial memorandum that demonstrates that the 
35.20   premium rates and premium rating system used in connection with the policy form will 
35.21   satisfy the guarantee. The guarantee must guarantee refunds of any excess premiums to 
35.22   policyholders charged premiums that exceed those permitted under subdivision 2, 3, 4, 
35.23   or 5. An insurer that complies with this paragraph in connection with a policy form is 
35.24   exempt from the requirement of prior approval by the commissioner under paragraphs 
35.25   (c), (f), and (h).
35.26   EFFECTIVE DATE.The amendments to paragraph (c) of this section are effective 
35.27   January 1, 2007, and apply to policies issued or renewed on or after that date.

35.28       Sec. 17. Minnesota Statutes 2004, section 62C.14, subdivision 9, is amended to read:
35.29       Subd. 9. Required filing. No service plan corporation shall deliver or issue 
35.30   for delivery in this state any subscriber contract, endorsement, rider, amendment or 
35.31   application until a copy of the form thereof has been filed with the commissioner, subject 
35.32   to disapproval by the commissioner. Any such form issued or in use on August 1, 1971, if 
35.33   filed with the commissioner within 60 days after August 1, 1971, shall be deemed filed 
35.34   upon receipt by the commissioner. When an insurer, service plan corporation, or the 
35.35   Minnesota Comprehensive Health Association fails to respond to an objection or inquiry 
36.1    within 60 days, the filing is automatically disapproved. A resubmission is required if 
36.2    action by the Department of Commerce is subsequently requested. An additional filing 
36.3    fee is required for the resubmission. The commissioner also may by regulation exempt 
36.4    from filing those subscriber contracts issued to a group of not less than 300 subscribers, 
36.5    or to other groups upon such reasonable conditions and restrictions as the commissioner 
36.6    may require.

36.7        Sec. 18. Minnesota Statutes 2004, section 62C.14, subdivision 10, is amended to read:
36.8        Subd. 10. Filing or disapproval. Except as otherwise provided in subdivision 9, 
36.9    all forms received by the commissioner shall be deemed filed 60 days after received 
36.10   unless disapproved by order transmitted to the corporation stating that the form used in a 
36.11   specified respect is contrary to law, contains a provision or provisions which are unfair, 
36.12   inequitable, misleading, inconsistent or ambiguous, or is in part illegible. It shall be 
36.13   unlawful to issue or use a document disapproved by the commissioner. When an insurer, 
36.14   service plan corporation, or the Minnesota Comprehensive Health Association fails to 
36.15   respond to an objection or inquiry within 60 days, the filing is automatically disapproved. 
36.16   A resubmission is required if action by the Department of Commerce is subsequently 
36.17   requested. An additional filing fee is required for the resubmission.

36.18       Sec. 19. Minnesota Statutes 2004, section 62E.13, subdivision 3, is amended to read:
36.19       Subd. 3. Duties of writing carrier. The writing carrier shall perform all 
36.20   administrative and claims payment functions required by this section. The writing carrier 
36.21   shall provide these services for a period of three five years, unless a request to terminate 
36.22   is approved by the commissioner. The commissioner shall approve or deny a request to 
36.23   terminate within 90 days of its receipt. A failure to make a final decision on a request to 
36.24   terminate within the specified period shall be deemed to be an approval. Six months 
36.25   prior to the expiration of each three-year five-year period, the association shall invite 
36.26   submissions of policy forms from members of the association, including the writing 
36.27   carrier. The association shall follow the provisions of subdivision 2 in selecting a writing 
36.28   carrier for the subsequent three-year five-year period.

36.29       Sec. 20. Minnesota Statutes 2004, section 62E.14, subdivision 5, is amended to read:
36.30       Subd. 5. Terminated employees. An employee who is voluntarily or involuntarily 
36.31   terminated or laid off from employment and unable to exercise the option to continue 
36.32   coverage under section  62A.17, and who is a Minnesota resident and who is otherwise 
36.33   eligible, may enroll in the comprehensive health insurance plan, by submitting an 
37.1    application that is received by the writing carrier no later than 90 days after termination or 
37.2    layoff, with a waiver of the preexisting condition limitation set forth in subdivision 3 and a 
37.3    waiver of the evidence of rejection set forth in subdivision 1, paragraph (c). 
37.4    EFFECTIVE DATE.This section is effective the day following final enactment.

37.5        Sec. 21.  Minnesota Statutes 2005 Supplement, section 62J.052, is amended to read:
37.6    62J.052 PROVIDER COST DISCLOSURE.
37.7        Subdivision 1. Health care providers. (a) Each health care provider, as defined by 
37.8    section 62J.03, subdivision 8, except hospitals and outpatient surgical centers subject to 
37.9    the requirements of section 62J.823, shall provide the following information:
37.10   (1) the average allowable payment from private third-party payers for the 20 50 
37.11   services or procedures most commonly performed;
37.12   (2) the average payment rates for those services and procedures for medical 
37.13   assistance;
37.14   (3) the average charge for those services and procedures for individuals who have no 
37.15   applicable private or public coverage; and
37.16   (4) the average charge for those services and procedures, including all patients.
37.17   (b) This information shall be updated annually and be readily available at no cost to 
37.18   the public on site.
37.19       Subd. 2. Pharmacies. (a) Each pharmacy, as defined in section 151.01, subdivision 
37.20   2, shall provide the following information to a patient upon request:
37.21   (1) the pharmacy's own usual and customary price for a prescription drug;
37.22   (2) a record, including all transactions on record with the pharmacy both past and 
37.23   present, of all co-payments and other cost-sharing paid to the pharmacy by the patient 
37.24   for up to two years; and
37.25   (3) the total amount of all co-payments and other cost-sharing paid to the pharmacy 
37.26   by the patient over the previous two years.
37.27   (b) The information required under paragraph (a) must be readily available at no 
37.28   cost to the patient.
37.29   EFFECTIVE DATE.This section is effective October 1, 2006.

37.30       Sec. 22. Minnesota Statutes 2004, section 62J.60, subdivision 2, is amended to read:
37.31       Subd. 2. General characteristics. (a) The Minnesota uniform health care 
37.32   identification card must be a preprinted card constructed of plastic, paper, or any other 
37.33   medium that conforms with ANSI and ISO 7810 physical characteristics standards. The 
38.1    card dimensions must also conform to ANSI and ISO 7810 physical characteristics 
38.2    standard. The use of a signature panel is optional. The uniform prescription drug 
38.3    information contained on the card must conform with the format adopted by the NCPDP 
38.4    and, except as provided in subdivision 3, paragraph (a), clause (2), must include all of 
38.5    the fields required to submit a claim in conformance with the most recent pharmacy 
38.6    identification card implementation guide produced by the NCPDP. All information 
38.7    required to submit a prescription drug claim, exclusive of information provided on a 
38.8    prescription that is required by law, must be included on the card in a clear, readable, and 
38.9    understandable manner. If a health benefit plan requires a conditional or situational field, 
38.10   as defined by the NCPDP, the conditional or situational field must conform to the most 
38.11   recent pharmacy information card implementation guide produced by the NCPDP.
38.12   (b) The Minnesota uniform health care identification card must have an essential 
38.13   information window on the front side with the following data elements left justified in 
38.14   the following top to bottom sequence: card issuer name, electronic transaction routing 
38.15   information, card issuer identification number, cardholder (insured) identification number, 
38.16   and cardholder (insured) identification name. No optional data may be interspersed 
38.17   between these data elements. The window must be left justified.
38.18   (c) Standardized labels are required next to human readable data elements and must 
38.19   come before the human readable data elements.

38.20       Sec. 23. Minnesota Statutes 2004, section 62J.60, subdivision 3, is amended to read:
38.21       Subd. 3. Human readable data elements. (a) The following are the minimum 
38.22   human readable data elements that must be present on the front side of the Minnesota 
38.23   uniform health care identification card:
38.24   (1) card issuer name or logo, which is the name or logo that identifies the card issuer. 
38.25   The card issuer name or logo may be located at the top of the card. No standard label 
38.26   is required for this data element;
38.27   (2) complete electronic transaction routing information including, at a minimum, 
38.28   the international identification number. The standardized label of this data element 
38.29   is "RxBIN." Processor control numbers and group numbers are required if needed to 
38.30   electronically process a prescription drug claim. The standardized label for the process 
38.31   control numbers data element is "RxPCN" and the standardized label for the group 
38.32   numbers data element is "RxGrp," except that if the group number data element is a 
38.33   universal element to be used by all health care providers, the standardized label may be 
38.34   "Grp." To conserve vertical space on the card, the international identification number and 
38.35   the processor control number may be printed on the same line;
39.1    (3) card issuer identification number. The standardized label for this element is 
39.2    "Issuer";
39.3    (4) cardholder (insured) identification number, which is the unique identification 
39.4    number of the individual card holder established and defined under this section. The 
39.5    standardized label for the data element is "ID";
39.6    (5) (4) cardholder (insured) identification name, which is the name of the individual 
39.7    card holder. The identification name must be formatted as follows: first name, space, 
39.8    optional middle initial, space, last name, optional space and name suffix. The standardized 
39.9    label for this data element is "Name";
39.10   (6) (5) care type, which is the description of the group purchaser's plan product 
39.11   under which the beneficiary is covered. The description shall include the health plan 
39.12   company name and the plan or product name. The standardized label for this data element 
39.13   is "Care Type";
39.14   (7) (6) service type, which is the description of coverage provided such as hospital, 
39.15   dental, vision, prescription, or mental health. The standard label for this data element 
39.16   is "Svc Type"; and
39.17   (8) (7) provider/clinic name, which is the name of the primary care clinic the card 
39.18   holder is assigned to by the health plan company. The standard label for this field is 
39.19   "PCP." This information is mandatory only if the health plan company assigns a specific 
39.20   primary care provider to the card holder.
39.21   (b) The following human readable data elements shall be present on the back side 
39.22   of the Minnesota uniform health care identification card. These elements must be left 
39.23   justified, and no optional data elements may be interspersed between them:
39.24   (1) claims submission names and addresses, which are the names and addresses of 
39.25   the entity or entities to which claims should be submitted. If different destinations are 
39.26   required for different types of claims, this must be labeled;
39.27   (2) telephone numbers and names that pharmacies and other health care providers 
39.28   may call for assistance. These telephone numbers and names are required on the back 
39.29   side of the card only if one of the contacts listed in clause (3) cannot provide pharmacies 
39.30   or other providers with assistance or with the telephone numbers and names of contacts 
39.31   for assistance; and
39.32   (3) telephone numbers and names; which are the telephone numbers and names of the 
39.33   following contacts with a standardized label describing the service function as applicable:
39.34   (i) eligibility and benefit information;
39.35   (ii) utilization review;
39.36   (iii) precertification; or
40.1    (iv) customer services.
40.2    (c) The following human readable data elements are mandatory on the back 
40.3    side of the Minnesota uniform health care identification card for health maintenance 
40.4    organizations:
40.5    (1) emergency care authorization telephone number or instruction on how to receive 
40.6    authorization for emergency care. There is no standard label required for this information; 
40.7    and
40.8    (2) one of the following:
40.9    (i) telephone number to call to appeal to or file a complaint with the commissioner of 
40.10   health; or
40.11   (ii) for persons enrolled under section  256B.69,  256D.03, or  256L.12, the telephone 
40.12   number to call to file a complaint with the ombudsperson designated by the commissioner 
40.13   of human services under section  256B.69 and the address to appeal to the commissioner of 
40.14   human services. There is no standard label required for this information. 
40.15   (d) All human readable data elements not required under paragraphs (a) to (c) are 
40.16   optional and may be used at the issuer's discretion.

40.17       Sec. 24. Minnesota Statutes 2004, section 62J.81, subdivision 1, is amended to read:
40.18       Subdivision 1. Required disclosure of estimated payment. (a) A health care 
40.19   provider, as defined in section  62J.03, subdivision 8, or the provider's designee as agreed 
40.20   to by that designee, shall, at the request of a consumer, provide that consumer with a good 
40.21   faith estimate of the reimbursement the provider expects to receive from the health plan 
40.22   company in which the consumer is enrolled. Health plan companies must allow contracted 
40.23   providers, or their designee, to release this information. A good faith estimate must also be 
40.24   made available at the request of a consumer who is not enrolled in a health plan company. 
40.25   Payment information provided by a provider, or by the provider's designee as agreed to 
40.26   by that designee, to a patient pursuant to this subdivision does not constitute a legally 
40.27   binding estimate of the cost of services. 
40.28   (b) A health plan company, as defined in section 62J.03, subdivision 10, shall, at 
40.29   the request of an enrollee or the enrollee's designee, provide that enrollee with a good 
40.30   faith estimate of the reimbursement the health plan company would expect to pay to a 
40.31   specified provider within the network for a health care service specified by the enrollee. If 
40.32   requested by the enrollee, the health plan company shall also provide to the enrollee a 
40.33   good faith estimate of the enrollee's out-of-pocket cost for the health care service. An 
40.34   estimate provided to an enrollee under this paragraph is not a legally binding estimate of 
40.35   the reimbursement or out-of-pocket cost.
41.1    EFFECTIVE DATE.Paragraph (a) is effective the day following final enactment. 
41.2    Paragraph (b) is effective January 1, 2007.

41.3        Sec. 25. [62J.823] HOSPITAL PRICING TRANSPARENCY.
41.4        Subdivision 1. Short title. This section may be cited as the Hospital Pricing 
41.5    Transparency Act.
41.6        Subd. 2. Definition. For the purposes of this section, "estimate" means the actual 
41.7    price expected to be billed to the individual or to the individual's health plan company 
41.8    based on the specific diagnostic-related group code or specific procedure code or codes, 
41.9    reflecting any known discounts the individual would receive. 
41.10       Subd. 3. Applicability and scope. Any hospital, as defined in section 144.696, 
41.11   subdivision 3, and outpatient surgical center, as defined in section 144.696, subdivision 4, 
41.12   shall provide a written estimate of the cost of a specific service or stay upon the request of 
41.13   a patient, doctor, or the patient's representative. The request must include: 
41.14   (1) the health coverage status of the patient, including the specific health plan or 
41.15   other health coverage under which the patient is enrolled, if any; and
41.16   (2) at least one of the following:
41.17   (i) the specific diagnostic-related group code; 
41.18   (ii) the name of the procedure or procedures to be performed; 
41.19   (iii) the type of treatment to be received; or
41.20   (iv) any other information that will allow the hospital or outpatient surgical center to 
41.21   determine the specific diagnostic-related group or procedure code or codes.
41.22       Subd. 4. Estimate. (a) An estimate provided by the hospital or outpatient surgical 
41.23   center must contain: 
41.24   (1) the method used to calculate the estimate; 
41.25   (2) the specific diagnostic-related group or procedure code or codes used to calculate 
41.26   the estimate, and a description of the diagnostic-related group or procedure code or codes 
41.27   that is reasonably understandable to a patient; and
41.28   (3) a statement indicating that the estimate, while accurate, may not reflect the 
41.29   actual billed charges and that the final bill may be higher or lower depending on the 
41.30   patient's specific circumstances. 
41.31   (b) The estimate may be provided in any method that meets the needs of the patient 
41.32   and the hospital or outpatient surgical center, including electronically; however, a paper 
41.33   copy must be provided if specifically requested.
41.34   EFFECTIVE DATE.This section is effective October 1, 2006.

42.1        Sec. 26. [62J.83] REDUCED PAYMENT AMOUNTS PERMITTED.
42.2    (a) Notwithstanding any provision of chapter 148 or any other provision of law to 
42.3    the contrary, a health care provider may provide care to a patient at a discounted payment 
42.4    amount, including care provided for free.
42.5    (b) This section does not apply in a situation in which the discounted payment 
42.6    amount is not permitted under federal law.
42.7    EFFECTIVE DATE.This section is effective the day following final enactment.

42.8        Sec. 27. Minnesota Statutes 2004, section 62L.02, subdivision 24, is amended to read:
42.9        Subd. 24. Qualifying coverage. "Qualifying coverage" means health benefits or 
42.10   health coverage provided under:
42.11   (1) a health benefit plan, as defined in this section, but without regard to whether it is 
42.12   issued to a small employer and including blanket accident and sickness insurance, other 
42.13   than accident-only coverage, as defined in section  62A.11; 
42.14   (2) part A or part B of Medicare;
42.15   (3) medical assistance under chapter 256B;
42.16   (4) general assistance medical care under chapter 256D;
42.17   (5) MCHA;
42.18   (6) a self-insured health plan;
42.19   (7) the MinnesotaCare program established under section  256L.02; 
42.20   (8) a plan provided under section  43A.316,  43A.317, or  471.617; 
42.21   (9) the Civilian Health and Medical Program of the Uniformed Services 
42.22   (CHAMPUS) or other coverage provided under United States Code, title 10, chapter 55;
42.23   (10) coverage provided by a health care network cooperative under chapter 62R;
42.24   (11) a medical care program of the Indian Health Service or of a tribal organization;
42.25   (12) the federal Employees Health Benefits Plan, or other coverage provided under 
42.26   United States Code, title 5, chapter 89;
42.27   (13) a health benefit plan under section 5(e) of the Peace Corps Act, codified as 
42.28   United States Code, title 22, section 2504(e);
42.29   (14) a health plan; or
42.30   (15) a plan similar to any of the above plans provided in this state or in another 
42.31   state as determined by the commissioner.;
42.32   (16) any plan established or maintained by a state, the United States government, or 
42.33   a foreign country, or any political subdivision of a state, the United States government, or a 
42.34   foreign country that provides health coverage to individuals who are enrolled in the plan; or
42.35   (17) the State Children's Health Insurance Program (SCHIP).

43.1        Sec. 28. Minnesota Statutes 2004, section 62L.03, subdivision 3, is amended to read:
43.2        Subd. 3. Minimum participation and contribution. (a) A small employer that has 
43.3    at least 75 percent of its eligible employees who have not waived coverage participating in 
43.4    a health benefit plan and that contributes at least 50 percent toward the cost of coverage of 
43.5    each eligible employee must be guaranteed coverage on a guaranteed issue basis from any 
43.6    health carrier participating in the small employer market. The participation level of eligible 
43.7    employees must be determined at the initial offering of coverage and at the renewal date 
43.8    of coverage. A health carrier must not increase the participation requirements applicable 
43.9    to a small employer at any time after the small employer has been accepted for coverage. 
43.10   For the purposes of this subdivision, waiver of coverage includes only waivers due to: (1) 
43.11   coverage under another group health plan; (2) coverage under Medicare Parts A and B; (3) 
43.12   coverage under MCHA permitted under section  62E.141; or (4) coverage under medical 
43.13   assistance under chapter 256B or general assistance medical care under chapter 256D. 
43.14   (b) If a small employer does not satisfy the contribution or participation requirements 
43.15   under this subdivision, a health carrier may voluntarily issue or renew individual health 
43.16   plans, or a health benefit plan which must fully comply with this chapter. A health carrier 
43.17   that provides a health benefit plan to a small employer that does not meet the contribution 
43.18   or participation requirements of this subdivision must maintain this information in its files 
43.19   for audit by the commissioner. A health carrier may not offer an individual health plan, 
43.20   purchased through an arrangement between the employer and the health carrier, to any 
43.21   employee unless the health carrier also offers the individual health plan, on a guaranteed 
43.22   issue basis, to all other employees of the same employer. An arrangement permitted under 
43.23   section 62L.12, subdivision 2, paragraph (k), is not an arrangement between the employer 
43.24   and the health carrier for purposes of this paragraph.
43.25   (c) Nothing in this section obligates a health carrier to issue coverage to a small 
43.26   employer that currently offers coverage through a health benefit plan from another health 
43.27   carrier, unless the new coverage will replace the existing coverage and not serve as one 
43.28   of two or more health benefit plans offered by the employer. This paragraph does not 
43.29   apply if the small employer will meet the required participation level with respect to 
43.30   the new coverage.
43.31   EFFECTIVE DATE.This section is effective the day following final enactment.

43.32       Sec. 29. Minnesota Statutes 2004, section 62L.08, subdivision 4, is amended to read:
43.33       Subd. 4. Geographic premium variations. A health carrier may request approval 
43.34   by the commissioner to establish no more than three separate geographic regions 
43.35   determined by the health carrier and to establish separate index rates for each such region, 
44.1    provided that the index rates do not vary between any two regions by more than 20 
44.2    percent. Health carriers that do not do business in the Minneapolis/St. Paul metropolitan 
44.3    area may request approval for no more than two geographic regions, and clauses (2) and 
44.4    (3) do not apply to approval of requests made by those health carriers. A health carrier 
44.5    may also request approval to establish one or more additional geographic regions and one 
44.6    or more separate index rates for premiums for employees working and residing outside 
44.7    of Minnesota. The commissioner may shall grant approval if the following conditions 
44.8    are met:
44.9    (1) the geographic regions must be applied uniformly by the health carrier;
44.10   (2) one geographic region must be based on the Minneapolis/St. Paul metropolitan 
44.11   area;
44.12   (3) if one geographic region is rural, the index rate for the rural region must not 
44.13   exceed the index rate for the Minneapolis/St. Paul metropolitan area;
44.14   (2) each geographic region must be composed of no fewer than seven counties that 
44.15   create a contiguous region; and
44.16   (4) (3) the health carrier provides actuarial justification acceptable to the 
44.17   commissioner for the proposed geographic variations in index rates, establishing that the 
44.18   variations are based upon differences in the cost to the health carrier of providing coverage.
44.19   EFFECTIVE DATE.This section is effective January 1, 2007, and applies to 
44.20   policies issued or renewed on or after that date.

44.21       Sec. 30. Minnesota Statutes 2005 Supplement, section 62L.12, subdivision 2, is 
44.22   amended to read:
44.23       Subd. 2. Exceptions. (a) A health carrier may sell, issue, or renew individual 
44.24   conversion policies to eligible employees otherwise eligible for conversion coverage under 
44.25   section 62D.104 as a result of leaving a health maintenance organization's service area.
44.26   (b) A health carrier may sell, issue, or renew individual conversion policies to 
44.27   eligible employees otherwise eligible for conversion coverage as a result of the expiration 
44.28   of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21, 
44.29   62C.142, 62D.101, and 62D.105.
44.30   (c) A health carrier may sell, issue, or renew conversion policies under section 
44.31   62E.16 to eligible employees.
44.32   (d) A health carrier may sell, issue, or renew individual continuation policies to 
44.33   eligible employees as required.
44.34   (e) A health carrier may sell, issue, or renew individual health plans if the coverage 
44.35   is appropriate due to an unexpired preexisting condition limitation or exclusion applicable 
45.1    to the person under the employer's group health plan or due to the person's need for health 
45.2    care services not covered under the employer's group health plan.
45.3    (f) A health carrier may sell, issue, or renew an individual health plan, if the 
45.4    individual has elected to buy the individual health plan not as part of a general plan to 
45.5    substitute individual health plans for a group health plan nor as a result of any violation of 
45.6    subdivision 3 or 4.
45.7    (g) Nothing in this subdivision relieves a health carrier of any obligation to provide 
45.8    continuation or conversion coverage otherwise required under federal or state law.
45.9    (h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage 
45.10   issued as a supplement to Medicare under sections 62A.31 to 62A.44, or policies or 
45.11   contracts that supplement Medicare issued by health maintenance organizations, or those 
45.12   contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social 
45.13   Security Act, United States Code, title 42, section 1395 et seq., as amended.
45.14   (i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual 
45.15   health plans necessary to comply with a court order.
45.16   (j) A health carrier may offer, issue, sell, or renew an individual health plan to 
45.17   persons eligible for an employer group health plan, if the individual health plan is a high 
45.18   deductible health plan for use in connection with an existing health savings account, in 
45.19   compliance with the Internal Revenue Code, section 223. In that situation, the same or 
45.20   a different health carrier may offer, issue, sell, or renew a group health plan to cover 
45.21   the other eligible employees in the group.
45.22   (k) A health carrier may offer, sell, issue, or renew an individual health plan to one 
45.23   or more employees of a small employer if the individual health plan is marketed directly to 
45.24   all employees of the small employer and the small employer does not contribute directly 
45.25   or indirectly to the premiums or facilitate the administration of the individual health plan. 
45.26   The requirement to market an individual health plan to all employees does not require the 
45.27   health carrier to offer or issue an individual health plan to any employee. For purposes 
45.28   of this paragraph, an employer is not contributing to the premiums or facilitating the 
45.29   administration of the individual health plan if the employer does not contribute to the 
45.30   premium and merely collects the premiums from an employee's wages or salary through 
45.31   payroll deductions and submits payment for the premiums of one or more employees in a 
45.32   lump sum to the health carrier. Except for coverage under section 62A.65, subdivision 5, 
45.33   paragraph (b), or 62E.16, at the request of an employee, the health carrier may bill the 
45.34   employer for the premiums payable by the employee, provided that the employer is not 
45.35   liable for payment except from payroll deductions for that purpose. If an employer is 
45.36   submitting payments under this paragraph, the health carrier shall provide a cancellation 
46.1    notice directly to the primary insured at least ten days prior to termination of coverage for 
46.2    nonpayment of premium. Individual coverage under this paragraph may be offered only 
46.3    if the small employer has not provided coverage under section 62L.03 to the employees 
46.4    within the past 12 months.
46.5    The employer must provide a written and signed statement to the health carrier that 
46.6    the employer is not contributing directly or indirectly to the employee's premiums. The 
46.7    health carrier may rely on the employer's statement and is not required to guarantee-issue 
46.8    individual health plans to the employer's other current or future employees.
46.9    EFFECTIVE DATE.This section is effective the day following final enactment.

46.10       Sec. 31. Minnesota Statutes 2004, section 62M.01, subdivision 2, is amended to read:
46.11       Subd. 2. Jurisdiction. Sections  62M.01 to  62M.16 apply to any insurance company 
46.12   licensed under chapter 60A to offer, sell, or issue a policy of accident and sickness 
46.13   insurance as defined in section  62A.01; a health service plan licensed under chapter 
46.14   62C; a health maintenance organization licensed under chapter 62D; the Minnesota 
46.15   Comprehensive Health Association created under chapter 62E; a community integrated 
46.16   service network licensed under chapter 62N; an accountable provider network operating 
46.17   under chapter 62T; a fraternal benefit society operating under chapter 64B; a joint 
46.18   self-insurance employee health plan operating under chapter 62H; a multiple employer 
46.19   welfare arrangement, as defined in section 3 of the Employee Retirement Income Security 
46.20   Act of 1974 (ERISA), United States Code, title 29, section 1103, as amended; a third 
46.21   party administrator licensed under section  60A.23, subdivision 8, that provides utilization 
46.22   review services for the administration of benefits under a health benefit plan as defined in 
46.23   section  62M.02; or any entity performing utilization review on behalf of a business entity 
46.24   in this state pursuant to a health benefit plan covering a Minnesota resident. 

46.25       Sec. 32. [62M.072] USE OF EVIDENCE-BASED STANDARDS.
46.26   If no independently developed evidence-based standards exist for a particular 
46.27   treatment, testing, or imaging procedure, then an insurer or utilization review organization 
46.28   shall not deny coverage of the treatment, testing, or imaging based solely on the grounds 
46.29   that the treatment, testing, or imaging does not meet an evidence-based standard. This 
46.30   section does not prohibit an insurer or utilization review organization from denying 
46.31   coverage for services that are investigational, experimental, or not medically necessary.

46.32       Sec. 33. Minnesota Statutes 2004, section 62M.09, subdivision 9, is amended to read:
47.1        Subd. 9. Annual report. A utilization review organization shall file an annual 
47.2    report with the annual financial statement it submits to the commissioner of commerce 
47.3    that includes:
47.4    (1) per 1,000 claims utilization reviews, the number and rate of claims denied 
47.5    determinations not to certify based on medical necessity for each procedure or service; and
47.6    (2) the number and rate of denials overturned on appeal.
47.7    A utilization review organization that is not a licensed health carrier must submit the 
47.8    annual report required by this subdivision on April 1 of each year.

47.9        Sec. 34. [62Q.645] DISTRIBUTION OF INFORMATION; ADMINISTRATIVE 
47.10   EFFICIENCY AND COVERAGE OPTIONS.
47.11   (a) The commissioner may use reports submitted by health  plan companies, service 
47.12   cooperatives, and the public employee  insurance program created in section 43A.316 
47.13   to compile entity specific administrative efficiency reports; may make these reports 
47.14   available on state agency Web sites,  including minnesotahealthinfo.com; and may include 
47.15   information  on: 
47.16   (1) number of covered lives;  
47.17   (2) covered services;  
47.18   (3) geographic availability;  
47.19   (4) whom to contact to obtain current premium rates;  
47.20   (5) administrative costs, using the definition of  administrative costs developed under 
47.21   section 62J.38;  
47.22   (6) Internet links to information on the health plan, if  available; and  
47.23   (7) any other information about the health plan identified  by the commissioner 
47.24   as being useful for employers, consumers,  providers, and others in evaluating health 
47.25   plan options. 
47.26   (b) This section does not apply to a health plan company  unless its annual Minnesota 
47.27   premiums exceed $50,000,000 based on the most recent assessment base of the Minnesota 
47.28   Comprehensive Health Association. For purposes of this  determination, the premiums of a 
47.29   health plan company include  those of its affiliates.

47.30       Sec. 35. [62Q.80] COMMUNITY-BASED HEALTH CARE COVERAGE 
47.31   PROGRAM.
47.32       Subdivision 1. Scope. (a) A community-based health care initiative may develop and 
47.33   operate a community-based health care coverage program that offers to eligible individuals 
47.34   and their dependents the option of purchasing through their employer health care coverage 
48.1    on a fixed prepaid basis without meeting the requirements of chapter 60A, 62A, 62C, 62D, 
48.2    62Q, or 62T, or any other law or rule that applies to entities licensed under these chapters.
48.3    (b) The initiative shall establish health outcomes to be achieved through the program 
48.4    and performance measurements in order to determine whether these outcomes have been 
48.5    met. The outcomes must include, but are not limited to:
48.6    (1) a reduction in uncompensated care provided by providers participating in the 
48.7    community-based health network; 
48.8    (2) an increase in the delivery of preventive health care services; and
48.9    (3) health improvement for enrollees with chronic health conditions through the 
48.10   management of these conditions.
48.11   In establishing performance measurements, the initiative shall use measures that are 
48.12   consistent with measures published by nonprofit Minnesota or national organizations that 
48.13   produce and disseminate health care quality measures.
48.14   (c) Any program established under this section shall not constitute a financial 
48.15   liability for the state, in that any financial risk involved in the operation or termination 
48.16   of the program shall be borne by the community-based initiative and the participating 
48.17   health care providers.
48.18       Subd. 2. Definitions.  For purposes of this section, the following definitions apply: 
48.19   (a) "Community-based" means located in or primarily relating to the community 
48.20   of geographically contiguous political subdivisions, as determined by the board of a 
48.21   community-based health initiative that is served by the community-based health care 
48.22   coverage program. 
48.23   (b) "Community-based health care coverage program" or "program" means a 
48.24   program administered by a community-based health initiative that provides health care 
48.25   services through provider members of a community-based health network or combination 
48.26   of networks to eligible individuals and their dependents who are enrolled in the program. 
48.27   (c) "Community-based health initiative" means a nonprofit corporation that is 
48.28   governed by a board that has at least 80 percent of its members residing in the community 
48.29   and includes representatives of the participating network providers and employers. 
48.30   (d) "Community-based health network" means a contract-based network of health 
48.31   care providers organized by the community-based health initiative to provide or support 
48.32   the delivery of health care services to enrollees of the community-based health care 
48.33   coverage program on a risk-sharing or nonrisk-sharing basis. 
48.34   (e) "Dependent" means an eligible employee's spouse or unmarried child who is 
48.35   under the age of 19 years. 
49.1        Subd. 3. Approval.  (a) Prior to the operation of a community-based health care 
49.2    coverage program, a community-based health initiative shall submit to the commissioner 
49.3    of health for approval the community-based health care coverage program developed by 
49.4    the initiative. The commissioner shall only approve a program that has been awarded 
49.5    a community access program grant from the United States Department of Health and 
49.6    Human Services. The commissioner shall ensure that the program meets the federal grant 
49.7    requirements and any requirements described in this section and is actuarially sound based 
49.8    on a review of appropriate records and methods utilized by the community-based health 
49.9    initiative in establishing premium rates for the community-based health care coverage 
49.10   program. 
49.11   (b) Prior to approval, the commissioner shall also ensure that:
49.12   (1) the benefits offered comply with subdivision 8 and that there are adequate 
49.13   numbers of health care providers participating in the community-based health network to 
49.14   deliver the benefits offered under the program;
49.15   (2) the activities of the program are limited to activities that are exempt under this 
49.16   section or otherwise from regulation by the commissioner of commerce;
49.17   (3) the complaint resolution process meets the requirements of subdivision 10; and 
49.18   (4) the data privacy policies and procedures comply with state and federal law.
49.19       Subd. 4. Establishment.  (a) The initiative shall establish and operate upon approval 
49.20   by the commissioner of health a community-based health care coverage program. The 
49.21   operational structure established by the initiative shall include, but is not limited to: 
49.22   (1) establishing a process for enrolling eligible individuals and their dependents; 
49.23   (2) collecting and coordinating premiums from enrollees and employers of enrollees;
49.24   (3) providing payment to participating providers; 
49.25   (4) establishing a benefit set according to subdivision 8 and establishing premium 
49.26   rates and cost-sharing requirements; 
49.27   (5) creating incentives to encourage primary care and wellness services; and 
49.28   (6) initiating disease management services, as appropriate. 
49.29   (b) The payments collected under paragraph (a), clause (2), may be used to capture 
49.30   available federal funds.
49.31       Subd. 5. Qualifying employees.  To be eligible for the community-based health 
49.32   care coverage program, an individual must: 
49.33   (1) reside in or work within the designated community-based geographic area 
49.34   served by the program; 
49.35   (2) be employed by a qualifying employer or be an employee's dependent; 
49.36   (3) not be enrolled in or have currently available health coverage; and 
50.1    (4) not be enrolled in medical assistance, general assistance medical care, 
50.2    MinnesotaCare, or Medicare.
50.3        Subd. 6. Qualifying employers.  (a) To qualify for participation in the 
50.4    community-based health care coverage program, an employer must: 
50.5    (1) employ at least one but no more than 50 employees at the time of initial 
50.6    enrollment in the program; 
50.7    (2) pay its employees a median wage of $12.50 per hour or less; and 
50.8    (3) not have offered employer-subsidized health coverage to its employees for 
50.9    at least 12 months prior to the initial enrollment in the program. For purposes of this 
50.10   section, "employer-subsidized health coverage" means health care coverage for which the 
50.11   employer pays at least 50 percent of the cost of coverage for the employee.
50.12   (b) To participate in the program, a qualifying employer agrees to: 
50.13   (1) offer health care coverage through the program to all eligible employees and 
50.14   their dependents regardless of health status; 
50.15   (2) participate in the program for an initial term of at least one year; 
50.16   (3) pay a percentage of the premium established by the initiative for the employee; 
50.17   and 
50.18   (4) provide the initiative with any employee information deemed necessary by the 
50.19   initiative to determine eligibility and premium payments. 
50.20       Subd. 7. Participating providers. Any health care provider participating in the 
50.21   community-based health network must accept as payment in full the payment rate 
50.22   established by the initiative and may not charge to or collect from an enrollee any amount 
50.23   in access of this amount for any service covered under the program.
50.24       Subd. 8. Coverage.  (a) The initiative shall establish the health care benefits offered 
50.25   through the community-based health care coverage program. The benefits established 
50.26   shall include, at a minimum: 
50.27   (1) child health supervision services up to age 18, as defined under section 62A.047; 
50.28   and 
50.29   (2) preventive services, including: 
50.30   (i) health education and wellness services; 
50.31   (ii) health supervision, evaluation, and follow-up; 
50.32   (iii) immunizations; and 
50.33   (iv) early disease detection. 
50.34   (b) Coverage of health care services offered by the program may be limited to 
50.35   participating health care providers or health networks. All services covered under the 
51.1    program must be services that are offered within the scope of practice of the participating 
51.2    health care providers. 
51.3    (c) The initiative may establish cost-sharing requirements. Any co-payment or 
51.4    deductible provisions established may not discriminate on the basis of age, sex, race, 
51.5    disability, economic status, or length of enrollment in the program. 
51.6    (d) If the initiative amends or alters the benefits offered through the program from 
51.7    the initial offering, the initiative must notify the commissioner of health and all enrollees 
51.8    of the benefit change.
51.9        Subd. 9. Enrollee information. (a) The initiative must provide an individual or 
51.10   family who enrolls in the program a clear and concise written statement that includes 
51.11   the following information: 
51.12   (1) health care services that are provided under the program; 
51.13   (2) any exclusions or limitations on the health care services offered, including any 
51.14   cost-sharing arrangements or prior authorization requirements; 
51.15   (3) a list of where the health care services can be obtained and that all health 
51.16   care services must be provided by or through a participating health care provider or 
51.17   community-based health network; 
51.18   (4) a description of the program's complaint resolution process, including how to 
51.19   submit a complaint; how to file a complaint with the commissioner of health; and how to 
51.20   obtain an external review of any adverse decisions as provided under subdivision 10; 
51.21   (5) the conditions under which the program or coverage under the program may 
51.22   be canceled or terminated; and 
51.23   (6) a precise statement specifying that this program is not an insurance product and, 
51.24   as such, is exempt from state regulation of insurance products.
51.25   (b) The commissioner of health must approve a copy of the written statement prior 
51.26   to the operation of the program. 
51.27       Subd. 10. Complaint resolution process. (a) The initiative must establish a 
51.28   complaint resolution process. The process must make reasonable efforts to resolve 
51.29   complaints and to inform complainants in writing of the initiative's decision within 60 
51.30   days of receiving the complaint. Any decision that is adverse to the enrollee shall include 
51.31   a description of the right to an external review as provided in paragraph (c) and how to 
51.32   exercise this right.
51.33   (b) The initiative must report any complaint that is not resolved within 60 days to the 
51.34   commissioner of health. 
52.1    (c) The initiative must include in the complaint resolution process the ability of an 
52.2    enrollee to pursue the external review process provided under section 62Q.73 with any 
52.3    decision rendered under this external review process binding on the initiative.
52.4        Subd. 11. Data privacy. The initiative shall establish data privacy policies and 
52.5    procedures for the program that comply with state and federal data privacy laws. 
52.6        Subd. 12. Limitations on enrollment. (a) The initiative may limit enrollment in the 
52.7    program. If enrollment is limited, a waiting list must be established. 
52.8    (b) The initiative shall not restrict or deny enrollment in the program except for 
52.9    nonpayment of premiums, fraud or misrepresentation, or as otherwise permitted under 
52.10   this section. 
52.11   (c) The initiative may require a certain percentage of participation from eligible 
52.12   employees of a qualifying employer before coverage can be offered through the program. 
52.13       Subd. 13. Report.  (a) The initiative shall submit quarterly status reports to the 
52.14   commissioner of health on January 15, April 15, July 15, and October 15 of each year, 
52.15   with the first report due January 15, 2007. The status report shall include:
52.16   (1) the financial status of the program, including the premium rates, cost per member 
52.17   per month, claims paid out, premiums received, and administrative expenses; 
52.18   (2) a description of the health care benefits offered and the services utilized; 
52.19   (3) the number of employers participating, the number of employees and dependents 
52.20   covered under the program, and the number of health care providers participating; 
52.21   (4) a description of the health outcomes to be achieved by the program and a status 
52.22   report on the performance measurements to be used and collected; and 
52.23   (5) any other information requested by the commissioner of health or commerce or 
52.24   the legislature. 
52.25   (b) The initiative shall contract with an independent entity to conduct an evaluation 
52.26   of the program to be submitted to the commissioners of health and commerce and the 
52.27   legislature by January 15, 2009. The evaluation shall include:
52.28   (1) an analysis of the health outcomes established by the initiative and the 
52.29   performance measurements to determine whether the outcomes are being achieved;
52.30   (2) an analysis of the financial status of the program, including the claims to 
52.31   premiums loss ratio and utilization and cost experience; 
52.32   (3) the demographics of the enrollees, including their age, gender, family income, 
52.33   and the number of dependents; 
52.34   (4) the number of employers and employees who have been denied access to the 
52.35   program and the basis for the denial; 
53.1    (5) specific analysis on enrollees who have aggregate medical claims totaling over 
53.2    $5,000 per year, including data on the enrollee's main diagnosis and whether all the 
53.3    medical claims were covered by the program; 
53.4    (6) number of enrollees referred to state public assistance programs; 
53.5    (7) a comparison of employer-subsidized health coverage provided in a comparable 
53.6    geographic area to the designated community-based geographic area served by the 
53.7    program, including, to the extent available: 
53.8    (i) the difference in the number of employers with 50 or fewer employees offering 
53.9    employer-subsidized health coverage; 
53.10   (ii) the difference in uncompensated care being provided in each area; and
53.11   (iii) a comparison of health care outcomes and measurements established by the 
53.12   initiative; and 
53.13   (8) any other information requested by the commissioner of health or commerce.
53.14       Subd. 14. Sunset. This section expires December 31, 2011.

53.15       Sec. 36. Minnesota Statutes 2004, section 62S.05, is amended by adding a subdivision 
53.16   to read:
53.17       Subd. 4. Extension of limitation periods. The commissioner may extend the 
53.18   limitation periods set forth in subdivisions 1 and 2 as to specific age group categories in 
53.19   specific policy forms upon finding that the extension is in the best interest of the public.
53.20   EFFECTIVE DATE.This section is effective July 1, 2006.

53.21       Sec. 37. Minnesota Statutes 2004, section 62S.08, subdivision 3, is amended to read:
53.22       Subd. 3. Mandatory format. The following standard format outline of coverage 
53.23   must be used, unless otherwise specifically indicated:
53.24   COMPANY NAME
53.25   ADDRESS - CITY AND STATE
53.26   TELEPHONE NUMBER
53.27   LONG-TERM CARE INSURANCE
53.28   OUTLINE OF COVERAGE
53.29   Policy Number or Group Master Policy and Certificate Number
53.30   (Except for policies or certificates which are guaranteed issue, the following caution 
53.31   statement, or language substantially similar, must appear as follows in the outline of 
53.32   coverage.)
53.33   CAUTION: The issuance of this long-term care insurance (policy) (certificate) 
53.34   is based upon your responses to the questions on your application. A copy of your 
53.35   (application) (enrollment form) (is enclosed) (was retained by you when you applied). 
54.1    If your answers are incorrect or untrue, the company has the right to deny benefits or 
54.2    rescind your policy. The best time to clear up any questions is now, before a claim 
54.3    arises. If, for any reason, any of your answers are incorrect, contact the company at this 
54.4    address: (insert address).
54.5    (1) This policy is (an individual policy of insurance) (a group policy) which was 
54.6    issued in the (indicate jurisdiction in which group policy was issued).
54.7    (2) PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides 
54.8    a very brief description of the important features of the policy. You should compare 
54.9    this outline of coverage to outlines of coverage for other policies available to you. This 
54.10   is not an insurance contract, but only a summary of coverage. Only the individual or 
54.11   group policy contains governing contractual provisions. This means that the policy or 
54.12   group policy sets forth in detail the rights and obligations of both you and the insurance 
54.13   company. Therefore, if you purchase this coverage, or any other coverage, it is important 
54.14   that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY.
54.15   (3) THIS PLAN IS INTENDED TO BE A QUALIFIED LONG-TERM CARE 
54.16   INSURANCE CONTRACT AS DEFINED UNDER SECTION 7702(B)(b) OF THE 
54.17   INTERNAL REVENUE CODE OF 1986.
54.18   (4) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE 
54.19   CONTINUED IN FORCE OR DISCONTINUED.
54.20   (a) (For long-term care health insurance policies or certificates describe one of the 
54.21   following permissible policy renewability provisions:)
54.22   (1) (Policies and certificates that are guaranteed renewable shall contain the 
54.23   following statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS 
54.24   GUARANTEED RENEWABLE. This means you have the right, subject to the terms of 
54.25   your policy, (certificate) to continue this policy as long as you pay your premiums on time. 
54.26   (Company name) cannot change any of the terms of your policy on its own, except that, in 
54.27   the future, IT MAY INCREASE THE PREMIUM YOU PAY.
54.28   (2) (Policies and certificates that are noncancelable shall contain the following 
54.29   statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS NONCANCELABLE. 
54.30   This means that you have the right, subject to the terms of your policy, to continue this 
54.31   policy as long as you pay your premiums on time. (Company name) cannot change any 
54.32   of the terms of your policy on its own and cannot change the premium you currently 
54.33   pay. However, if your policy contains an inflation protection feature where you choose 
54.34   to increase your benefits, (company name) may increase your premium at that time for 
54.35   those additional benefits.
55.1    (b) (For group coverage, specifically describe continuation/conversion provisions 
55.2    applicable to the certificate and group policy.)
55.3    (c) (Describe waiver of premium provisions or state that there are not such 
55.4    provisions.)
55.5    (5) TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS. 
55.6    (In bold type larger than the maximum type required to be used for the other 
55.7    provisions of the outline of coverage, state whether or not the company has a right to 
55.8    change the premium and, if a right exists, describe clearly and concisely each circumstance 
55.9    under which the premium may change.)
55.10   (6) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE 
55.11   RETURNED AND PREMIUM REFUNDED.
55.12   (a) (Provide a brief description of the right to return -- "free look" provision of 
55.13   the policy.)
55.14   (b) (Include a statement that the policy either does or does not contain provisions 
55.15   providing for a refund or partial refund of premium upon the death of an insured or 
55.16   surrender of the policy or certificate. If the policy contains such provisions, include a 
55.17   description of them.)
55.18   (5) (7) THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are 
55.19   eligible for Medicare, review the Medicare Supplement Buyer's Guide available from 
55.20   the insurance company.
55.21   (a) (For agents) neither (insert company name) nor its agents represent Medicare, the 
55.22   federal government, or any state government.
55.23   (b) (For direct response) (insert company name) is not representing Medicare, the 
55.24   federal government, or any state government.
55.25   (6) (8) LONG-TERM CARE COVERAGE. Policies of this category are designed to 
55.26   provide coverage for one or more necessary or medically necessary diagnostic, preventive, 
55.27   therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting 
55.28   other than an acute care unit of a hospital, such as in a nursing home, in the community, 
55.29   or in the home.
55.30   This policy provides coverage in the form of a fixed dollar indemnity benefit for 
55.31   covered long-term care expenses, subject to policy (limitations), (waiting periods), and 
55.32   (coinsurance) requirements. (Modify this paragraph if the policy is not an indemnity 
55.33   policy.)
55.34   (7) (9) BENEFITS PROVIDED BY THIS POLICY.
55.35   (a) (Covered services, related deductible(s), waiting periods, elimination periods, 
55.36   and benefit maximums.)
56.1    (b) (Institutional benefits, by skill level.)
56.2    (c) (Noninstitutional benefits, by skill level.)
56.3    (d) (Eligibility for payment of benefits.)
56.4    (Activities of daily living and cognitive impairment shall be used to measure an 
56.5    insured's need for long-term care and must be defined and described as part of the outline 
56.6    of coverage.)
56.7    (Any benefit screens must be explained in this section. If these screens differ for 
56.8    different benefits, explanation of the screen should accompany each benefit description. If 
56.9    an attending physician or other specified person must certify a certain level of functional 
56.10   dependency in order to be eligible for benefits, this too must be specified. If activities of 
56.11   daily living (ADLs) are used to measure an insured's need for long-term care, then these 
56.12   qualifying criteria or screens must be explained.)
56.13   (8) (10) LIMITATIONS AND EXCLUSIONS:
56.14   Describe:
56.15   (a) preexisting conditions;
56.16   (b) noneligible facilities/provider;
56.17   (c) noneligible levels of care (e.g., unlicensed providers, care or treatment provided 
56.18   by a family member, etc.);
56.19   (d) exclusions/exceptions; and
56.20   (e) limitations.
56.21   (This section should provide a brief specific description of any policy provisions 
56.22   which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify 
56.23   payment of the benefits described in paragraph (6) (8).)
56.24   THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH 
56.25   YOUR LONG-TERM CARE NEEDS.
56.26   (9) (11) RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs 
56.27   of long-term care services will likely increase over time, you should consider whether and 
56.28   how the benefits of this plan may be adjusted. As applicable, indicate the following:
56.29   (a) that the benefit level will not increase over time;
56.30   (b) any automatic benefit adjustment provisions;
56.31   (c) whether the insured will be guaranteed the option to buy additional benefits and 
56.32   the basis upon which benefits will be increased over time if not by a specified amount 
56.33   or percentage;
56.34   (d) if there is such a guarantee, include whether additional underwriting or health 
56.35   screening will be required, the frequency and amounts of the upgrade options, and any 
56.36   significant restrictions or limitations; and
57.1    (e) whether there will be any additional premium charge imposed and how that 
57.2    is to be calculated.
57.3    (10) (12) ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN 
57.4    DISORDERS. (State that the policy provides coverage for insureds clinically diagnosed as 
57.5    having Alzheimer's disease or related degenerative and dementing illnesses. Specifically, 
57.6    describe each benefit screen or other policy provision which provides preconditions to the 
57.7    availability of policy benefits for such an insured.)
57.8    (11) (13) PREMIUM.
57.9    (a) State the total annual premium for the policy.
57.10   (b) If the premium varies with an applicant's choice among benefit options, indicate 
57.11   the portion of annual premium which corresponds to each benefit option.
57.12   (12) (14) ADDITIONAL FEATURES.
57.13   (a) Indicate if medical underwriting is used.
57.14   (b) Describe other important features.
57.15   (15) CONTACT THE STATE DEPARTMENT OF COMMERCE OR SENIOR 
57.16   LINKAGE LINE IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM 
57.17   CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE 
57.18   SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE 
57.19   POLICY OR CERTIFICATE.
57.20   EFFECTIVE DATE.This section is effective July 1, 2006.

57.21       Sec. 38. Minnesota Statutes 2004, section 62S.081, subdivision 4, is amended to read:
57.22       Subd. 4. Forms. An insurer shall use the forms in Appendices B (Personal 
57.23   Worksheet) and F (Potential Rate Increase Disclosure Form) of the Long-term Care 
57.24   Insurance Model Regulation adopted by the National Association of Insurance 
57.25   Commissioners to comply with the requirements of subdivisions 1 and 2.
57.26   EFFECTIVE DATE.This section is effective July 1, 2006.

57.27       Sec. 39. Minnesota Statutes 2004, section 62S.10, subdivision 2, is amended to read:
57.28       Subd. 2. Contents. The summary must include the following information:
57.29   (1) an explanation of how the long-term care benefit interacts with other components 
57.30   of the policy, including deductions from death benefits;
57.31   (2) an illustration of the amount of benefits, the length of benefits, and the guaranteed 
57.32   lifetime benefits, if any, for each covered person; and
57.33   (3) any exclusions, reductions, and limitations on benefits of long-term care; and
58.1    (4) a statement that any long-term care inflation protection option required by section 
58.2    62S.23 is not available under this policy. 
58.3    EFFECTIVE DATE.This section is effective July 1, 2006.

58.4        Sec. 40. Minnesota Statutes 2004, section 62S.13, is amended by adding a subdivision 
58.5    to read:
58.6        Subd. 6. Death of insured. In the event of the death of the insured, this section shall 
58.7    not apply to the remaining death benefit of a life insurance policy that accelerates benefits 
58.8    for long-term care. In this situation, the remaining death benefits under these policies shall 
58.9    be governed by section 61A.03, subdivision 1, paragraph (c). In all other situations, this 
58.10   section shall apply to life insurance policies that accelerate benefits for long-term care.
58.11   EFFECTIVE DATE.This section is effective July 1, 2006.

58.12       Sec. 41. Minnesota Statutes 2004, section 62S.14, subdivision 2, is amended to read:
58.13       Subd. 2. Terms. The terms "guaranteed renewable" and "noncancelable" may not 
58.14   be used in an individual long-term care insurance policy without further explanatory 
58.15   language that complies with the disclosure requirements of section  62S.20. The term 
58.16   "level premium" may only be used when the insurer does not have the right to change 
58.17   the premium. 
58.18   EFFECTIVE DATE.This section is effective July 1, 2006.

58.19       Sec. 42. Minnesota Statutes 2004, section 62S.15, is amended to read:
58.20   62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.
58.21   No policy may be delivered or issued for delivery in this state as long-term care 
58.22   insurance if the policy limits or excludes coverage by type of illness, treatment, medical 
58.23   condition, or accident, except as follows:
58.24   (1) preexisting conditions or diseases;
58.25   (2) mental or nervous disorders; except that the exclusion or limitation of benefits on 
58.26   the basis of Alzheimer's disease is prohibited;
58.27   (3) alcoholism and drug addiction;
58.28   (4) illness, treatment, or medical condition arising out of war or act of war; 
58.29   participation in a felony, riot, or insurrection; service in the armed forces or auxiliary 
58.30   units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying 
58.31   aviation; and
59.1    (5) treatment provided in a government facility unless otherwise required by 
59.2    law, services for which benefits are available under Medicare or other government 
59.3    program except Medicaid, state or federal workers' compensation, employer's liability 
59.4    or occupational disease law, motor vehicle no-fault law; services provided by a member 
59.5    of the covered person's immediate family; and services for which no charge is normally 
59.6    made in the absence of insurance; and
59.7    (6) expenses for services or items available or paid under another long-term care 
59.8    insurance or health insurance policy.
59.9    This subdivision does not prohibit exclusions and limitations by type of provider or 
59.10   territorial limitations.
59.11   EFFECTIVE DATE.This section is effective July 1, 2006.

59.12       Sec. 43. Minnesota Statutes 2004, section 62S.20, subdivision 1, is amended to read:
59.13       Subdivision 1. Renewability. (a) Individual long-term care insurance policies 
59.14   must contain a renewability provision that is appropriately captioned, appears on the first 
59.15   page of the policy, and clearly states the duration, where limited, of renewability and the 
59.16   duration of the term of coverage for which the policy is issued and for which it may be 
59.17   renewed that the coverage is guaranteed renewable or noncancelable. This subdivision 
59.18   does not apply to policies which are part of or combined with life insurance policies 
59.19   which do not contain a renewability provision and under which the right to nonrenew is 
59.20   reserved solely to the policyholder.
59.21   (b) A long-term care insurance policy or certificate, other than one where the insurer 
59.22   does not have the right to change the premium, shall include a statement that premium 
59.23   rates may change.
59.24   EFFECTIVE DATE.This section is effective July 1, 2006.

59.25       Sec. 44. Minnesota Statutes 2004, section 62S.24, subdivision 1, is amended to read:
59.26       Subdivision 1. Required questions. An application form must include the following 
59.27   questions designed to elicit information as to whether, as of the date of the application, the 
59.28   applicant has another long-term care insurance policy or certificate in force or whether a 
59.29   long-term care policy or certificate is intended to replace any other accident and sickness 
59.30   or long-term care policy or certificate presently in force. A supplementary application 
59.31   or other form to be signed by the applicant and agent, except where the coverage is sold 
59.32   without an agent, containing the following questions may be used. If a replacement policy 
59.33   is issued to a group as defined under section   62S.01, subdivision 15, clause (1), the 
60.1    following questions may be modified only to the extent necessary to elicit information 
60.2    about long-term care insurance policies other than the group policy being replaced; 
60.3    provided, however, that the certificate holder has been notified of the replacement: 
60.4    (1)  do you have another long-term care insurance policy or certificate in force 
60.5    (including health care service contract or health maintenance organization contract)?;
60.6    (2) did you have another long-term care insurance policy or certificate in force 
60.7    during the last 12 months?;
60.8    (i) if so, with which company?; and
60.9    (ii) if that policy lapsed, when did it lapse?; and
60.10   (3) are you covered by Medicaid?; and 
60.11   (4) do you intend to replace any of your medical or health insurance coverage with 
60.12   this policy (certificate)?
60.13   EFFECTIVE DATE.This section is effective July 1, 2006.

60.14       Sec. 45. Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
60.15   to read:
60.16       Subd. 1a. Other health insurance policies sold by agent. Agents shall list all other 
60.17   health insurance policies they have sold to the applicant that are still in force or were sold 
60.18   in the past five years and are no longer in force.
60.19   EFFECTIVE DATE.This section is effective July 1, 2006.

60.20       Sec. 46. Minnesota Statutes 2004, section 62S.24, subdivision 3, is amended to read:
60.21       Subd. 3. Solicitations other than direct response. After determining that a 
60.22   sale will involve replacement, an insurer, other than an insurer using direct response 
60.23   solicitation methods or its agent, shall furnish the applicant, before issuance or delivery of 
60.24   the individual long-term care insurance policy, a notice regarding replacement of accident 
60.25   and sickness or long-term care coverage. One copy of the notice must be retained by the 
60.26   applicant and an additional copy signed by the applicant must be retained by the insurer. 
60.27   The required notice must be provided in the following manner:
60.28   NOTICE TO APPLICANT REGARDING REPLACEMENT OF
60.29   INDIVIDUAL ACCIDENT AND SICKNESS OR LONG-TERM 
60.30   CARE INSURANCE
60.31   (Insurance company's name and address)
60.32   SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
60.33   According to (your application) (information you have furnished), you intend to 
60.34   lapse or otherwise terminate existing accident and sickness or long-term care insurance 
61.1    and replace it with an individual long-term care insurance policy to be issued by (company 
61.2    name) insurance company. Your new policy provides 30 days within which you may 
61.3    decide, without cost, whether you desire to keep the policy. For your own information and 
61.4    protection, you should be aware of and seriously consider certain factors which may affect 
61.5    the insurance protection available to you under the new policy.
61.6    You should review this new coverage carefully, comparing it with all accident 
61.7    and sickness or long-term care insurance coverage you now have, and terminate your 
61.8    present policy only if, after due consideration, you find that purchase of this long-term 
61.9    care coverage is a wise decision.
61.10   STATEMENT TO APPLICANT BY AGENT
61.11   (BROKER OR OTHER REPRESENTATIVE):
61.12   (Use additional sheets, as necessary.)
61.13   I have reviewed your current medical health insurance coverage. I believe the 
61.14   replacement of insurance involved in this transaction materially improves your position. 
61.15   My conclusion has taken into account the following considerations, which I call to your 
61.16   attention:
61.17   (a) Health conditions which you presently have (preexisting conditions) may not 
61.18   be immediately or fully covered under the new policy. This could result in denial or 
61.19   delay in payment of benefits under the new policy, whereas a similar claim might have 
61.20   been payable under your present policy.
61.21   (b) State law provides that your replacement policy or certificate may not contain 
61.22   new preexisting conditions or probationary periods. The insurer will waive any time 
61.23   periods applicable to preexisting conditions or probationary periods in the new policy (or 
61.24   coverage) for similar benefits to the extent such time was spent (depleted) under the 
61.25   original policy.
61.26   (c)  If you are replacing existing accident and sickness or long-term care insurance 
61.27   coverage, you may wish to secure the advice of your present insurer or its agent regarding 
61.28   the proposed replacement of your present policy. This is not only your right, but it is also 
61.29   in your best interest to make sure you understand all the relevant factors involved in 
61.30   replacing your present coverage.
61.31   (d)  If, after due consideration, you still wish to terminate your present policy and 
61.32   replace it with new coverage, be certain to truthfully and completely answer all questions 
61.33   on the application concerning your medical health history. Failure to include all material 
61.34   medical information on an application may provide a basis for the company to deny any 
61.35   future claims and to refund your premium as though your policy had never been in force. 
61.36   After the application has been completed and before you sign it, reread it carefully to be 
61.37   certain that all information has been properly recorded.
62.1     .......................................................... 
62.2    (Signature of Agent, Broker, or Other Representative)
62.3    (Typed Name and Address of Agency or Broker)
62.4    The  above "Notice to Applicant" was delivered to me on:
62.5                                                                                              
62.6                                                                                        (Date)
62.7                                                                                              
62.8                                                                       (Applicant's Signature)
62.9    EFFECTIVE DATE.This section is effective July 1, 2006.

62.10       Sec. 47. Minnesota Statutes 2004, section 62S.24, subdivision 4, is amended to read:
62.11       Subd. 4. Direct response solicitations. Insurers using direct response solicitation 
62.12   methods shall deliver a notice regarding replacement of long-term care coverage to 
62.13   the applicant upon issuance of the policy. The required notice must be provided in the 
62.14   following manner:
62.15   NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT 
62.16   AND SICKNESS OR LONG-TERM CARE INSURANCE
62.17   (Insurance  company's name and address)
62.18   SAVE THIS NOTICE! IT MAY BE
62.19   IMPORTANT TO YOU IN THE FUTURE.
62.20   According to (your application) (information you have furnished), you intend to 
62.21   lapse or otherwise terminate existing accident and sickness or long-term care insurance 
62.22   and replace it with the long-term care insurance policy delivered herewith issued by 
62.23   (company name) insurance company.
62.24   Your new policy provides 30 days within which you may decide, without cost, 
62.25   whether you desire to keep the policy. For your own information and protection, you 
62.26   should be aware of and seriously consider certain factors which may affect the insurance 
62.27   protection available to you under the new policy.
62.28   You should review this new coverage carefully, comparing it with all long-term care 
62.29   insurance coverage you now have, and terminate your present policy only if, after due 
62.30   consideration, you find that purchase of this long-term care coverage is a wise decision.
62.31   (a) Health conditions which you presently have (preexisting conditions) may not 
62.32   be immediately or fully covered under the new policy. This could result in denial or 
62.33   delay in payment of benefits under the new policy, whereas a similar claim might have 
62.34   been payable under your present policy.
63.1    (b) State law provides that your replacement policy or certificate may not contain 
63.2    new preexisting conditions or probationary periods. Your insurer will waive any time 
63.3    periods applicable to preexisting conditions or probationary periods in the new policy (or 
63.4    coverage) for similar benefits to the extent such time was spent (depleted) under the 
63.5    original policy.
63.6    (c) If you are replacing existing accident and sickness or long-term care insurance 
63.7    coverage, you may wish to secure the advice of your present insurer or its agent regarding 
63.8    the proposed replacement of your present policy. This is not only your right, but it is also 
63.9    in your best interest to make sure you understand all the relevant factors involved in 
63.10   replacing your present coverage.
63.11   (d) (To be included only if the application is attached to the policy.)
63.12   If,  after due consideration, you still wish to terminate your present policy and replace 
63.13   it with new coverage, read the copy of the application attached to your new policy and be 
63.14   sure that all questions are answered fully and correctly. Omissions or misstatements in 
63.15   the application could cause an otherwise valid claim to be denied. Carefully check the 
63.16   application and write to (company name and address) within 30 days if any information is 
63.17   not correct and complete, or if any past medical history has been left out of the application.
63.18                                                                                             
63.19                                                                               (Company Name)
63.20   EFFECTIVE DATE.This section is effective July 1, 2006.

63.21       Sec. 48. Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
63.22   to read:
63.23       Subd. 7. Life insurance policies. Life insurance policies that accelerate benefits for 
63.24   long-term care shall comply with this section if the policy being replaced is a long-term 
63.25   care insurance policy. If the policy being replaced is a life insurance policy, the insurer 
63.26   shall comply with the replacement requirements of sections 61A.53 to 61A.60. If a 
63.27   life insurance policy that accelerates benefits for long-term care is replaced by another 
63.28   such policy, the replacing insurer shall comply with both the long-term care and the life 
63.29   insurance replacement requirements.
63.30   EFFECTIVE DATE.This section is effective July 1, 2006.

63.31       Sec. 49.  Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
63.32   to read:
64.1        Subd. 8. Exchange for long-term care partnership policy; addition of policy 
64.2    rider. (a) If authorized by federal law or a federal waiver is granted with respect to the 
64.3    long-term care partnership program referenced in section 256B.0571, issuers of long-term 
64.4    care policies may voluntarily exchange a current long-term care insurance policy for a 
64.5    long-term care partnership policy that meets the requirements of Public Law 109-171, 
64.6    section 6021, after the effective date of the state plan amendment implementing the 
64.7    partnership program in this state.
64.8    (b) If authorized by federal law or a federal waiver is granted with respect to the 
64.9    long-term care partnership program referenced in section 256B.0571 allowing an existing 
64.10   long-term care insurance policy to qualify as a partnership policy by addition of a policy 
64.11   rider, the issuer of the policy is authorized to add the rider to the policy after the effective 
64.12   date of the state plan amendment implementing the partnership program in this state.
64.13   (c) The commissioner, in cooperation with the commissioner of human services, 
64.14   shall pursue any federal law changes or waivers necessary to allow the implementation 
64.15   of paragraphs (a) and (b).
64.16   EFFECTIVE DATE.This section is effective July 1, 2006.

64.17       Sec. 50. Minnesota Statutes 2004, section 62S.25, subdivision 6, is amended to read:
64.18       Subd. 6. Claims denied. Each insurer shall report annually by June 30 the number 
64.19   of claims denied for any reason during the reporting period for each class of business, 
64.20   expressed as a percentage of claims denied, other than claims denied for failure to meet 
64.21   the waiting period or because of any applicable preexisting condition. For purposes of 
64.22   this subdivision, "claim" means a request for payment of benefits under an in-force policy 
64.23   regardless of whether the benefit claimed is covered under the policy or any terms or 
64.24   conditions of the policy have been met.
64.25   EFFECTIVE DATE.This section is effective July 1, 2006.

64.26       Sec. 51. Minnesota Statutes 2004, section 62S.25, is amended by adding a subdivision 
64.27   to read:
64.28       Subd. 7. Reports.  Reports under this section shall be done on a statewide basis and 
64.29   filed with the commissioner. They shall include, at a minimum, the information in the 
64.30   format contained in Appendix E (Claim Denial Reporting Form) and in Appendix G 
64.31   (Replacement and Lapse Reporting Form) of the Long-Term Care Model Regulation 
64.32   adopted by the National Association of Insurance Commissioners.
64.33   EFFECTIVE DATE.This section is effective July 1, 2006.

65.1        Sec. 52. Minnesota Statutes 2004, section 62S.26, is amended to read:
65.2    62S.26 LOSS RATIO.
65.3        Subdivision 1. Minimum loss ratio.  (a) The minimum loss ratio must be at least 60 
65.4    percent, calculated in a manner which provides for adequate reserving of the long-term 
65.5    care insurance risk. In evaluating the expected loss ratio, the commissioner shall give 
65.6    consideration to all relevant factors, including:
65.7    (1) statistical credibility of incurred claims experience and earned premiums;
65.8    (2) the period for which rates are computed to provide coverage;
65.9    (3) experienced and projected trends;
65.10   (4) concentration of experience within early policy duration;
65.11   (5) expected claim fluctuation;
65.12   (6) experience refunds, adjustments, or dividends;
65.13   (7) renewability features;
65.14   (8) all appropriate expense factors;
65.15   (9) interest;
65.16   (10) experimental nature of the coverage;
65.17   (11) policy reserves;
65.18   (12) mix of business by risk classification; and
65.19   (13) product features such as long elimination periods, high deductibles, and high 
65.20   maximum limits.
65.21       Subd. 2. Life insurance policies. Subdivision 1 shall not apply to life insurance 
65.22   policies that accelerate benefits for long-term care. A life insurance policy that funds 
65.23   long-term care benefits entirely by accelerating the death benefit is considered to provide 
65.24   reasonable benefits in relation to premiums paid, if the policy complies with all of the 
65.25   following provisions:
65.26   (1) the interest credited internally to determine cash value accumulations, including 
65.27   long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest 
65.28   rate for cash value accumulations without long-term care set forth in the policy;
65.29   (2) the portion of the policy that provides life insurance benefits meets the 
65.30   nonforfeiture requirements of section 61A.24;
65.31   (3) the policy meets the disclosure requirements of sections 62S.09, 62S.10, and 
65.32   62S.11; and 
65.33   (4) an actuarial memorandum is filed with the commissioner that includes:
65.34   (i) a description of the basis on which the long-term care rates were determined;
65.35   (ii) a description of the basis for the reserves;
66.1    (iii) a summary of the type of policy, benefits, renewability, general marketing 
66.2    method, and limits on ages of issuance;
66.3    (iv) a description and a table of each actuarial assumption used. For expenses, 
66.4    an insurer must include percentage of premium dollars per policy and dollars per unit 
66.5    of benefits, if any;
66.6    (v) a description and a table of the anticipated policy reserves and additional reserves 
66.7    to be held in each future year for active lives;
66.8    (vi) the estimated average annual premium per policy and the average issue age; 
66.9    (vii) a statement as to whether underwriting is performed at the time of application. 
66.10   The statement shall indicate whether underwriting is used and, if used, the statement 
66.11   shall include a description of the type or types of underwriting used, such as medical 
66.12   underwriting or functional assessment underwriting. Concerning a group policy, the 
66.13   statement shall indicate whether the enrollee or any dependent will be underwritten and 
66.14   when underwriting occurs; and
66.15   (viii) a description of the effect of the long-term care policy provision on the required 
66.16   premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both 
66.17   for active lives and those in long-term care claim status.
66.18       Subd. 3. Nonapplication.  (b) This section does not apply to policies or certificates 
66.19   that are subject to sections  62S.021,  62S.081, and  62S.265, and that comply with those 
66.20   sections. 
66.21   EFFECTIVE DATE.This section is effective July 1, 2006.

66.22       Sec. 53. Minnesota Statutes 2004, section 62S.266, subdivision 2, is amended to read:
66.23       Subd. 2. Requirement. (a) An insurer must offer each prospective policyholder a 
66.24   nonforfeiture benefit in compliance with the following requirements:
66.25   (1) a policy or certificate offered with nonforfeiture benefits must have coverage 
66.26   elements, eligibility, benefit triggers, and benefit length that are the same as coverage to be 
66.27   issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer must 
66.28   be the benefit described in subdivision 5; and
66.29   (2)  the offer must be in writing if the nonforfeiture benefit is not otherwise described 
66.30   in the outline of coverage or other materials given to the prospective policyholder.
66.31   (b) When a group long-term care insurance policy is issued, the offer required in 
66.32   paragraph (a) shall be made to the group policy holder. However, if the policy is issued as 
66.33   group long-term care insurance as defined in section 62S.01, subdivision 15, clause (4), 
66.34   other than to a continuing care retirement community or other similar entity, the offering 
66.35   shall be made to each proposed certificate holder. 
67.1    EFFECTIVE DATE.This section is effective July 1, 2006.

67.2        Sec. 54. Minnesota Statutes 2004, section 62S.29, subdivision 1, is amended to read:
67.3        Subdivision 1. Requirements. An insurer or other entity marketing long-term care 
67.4    insurance coverage in this state, directly or through its producers, shall:
67.5    (1) establish marketing procedures and agent training requirements to assure that a 
67.6    any marketing activities, including any comparison of policies by its agents or other 
67.7    producers, are fair and accurate;
67.8    (2) establish marketing procedures to assure excessive insurance is not sold or issued;
67.9    (3) display prominently by type, stamp, or other appropriate means, on the first page 
67.10   of the outline of coverage and policy, the following:
67.11   "Notice to buyer: This policy may not cover all of the costs associated with 
67.12   long-term care incurred by the buyer during the period of coverage. The buyer is advised 
67.13   to review carefully all policy limitations.";
67.14   (4) provide copies of the disclosure forms required in section 62S.081, subdivision 
67.15   4, to the applicant;
67.16   (5) inquire and otherwise make every reasonable effort to identify whether a 
67.17   prospective applicant or enrollee for long-term care insurance already has long-term care 
67.18   insurance and the types and amounts of the insurance;
67.19   (5) (6) establish auditable procedures for verifying compliance with this subdivision; 
67.20   and
67.21   (6) (7) if applicable, provide written notice to the prospective policyholder and 
67.22   certificate holder, at solicitation, that a senior insurance counseling program approved 
67.23   by the commissioner is available and the name, address, and telephone number of the 
67.24   program;
67.25   (8) use the terms "noncancelable" or "level premium" only when the policy or 
67.26   certificate conforms to section 62S.14; and
67.27   (9) provide an explanation of contingent benefit upon lapse provided for in section 
67.28   62S.266.
67.29   EFFECTIVE DATE.This section is effective July 1, 2006.

67.30       Sec. 55. Minnesota Statutes 2004, section 62S.30, is amended to read:
67.31   62S.30 APPROPRIATENESS OF RECOMMENDED PURCHASE 
67.32   SUITABILITY.
68.1    In recommending the purchase or replacement of a long-term care insurance policy 
68.2    or certificate, an agent shall comply with section  60K.46, subdivision 4. 
68.3        Subdivision 1. Standards. Every insurer or other entity marketing long-term care 
68.4    insurance shall:
68.5    (1) develop and use suitability standards to determine whether the purchase or 
68.6    replacement of long-term care insurance is appropriate for the needs of the applicant; 
68.7    (2) train its agents in the use of its suitability standards; and 
68.8    (3) maintain a copy of its suitability standards and make them available for 
68.9    inspection upon request by the commissioner.
68.10       Subd. 2. Procedures. (a) To determine whether the applicant meets the standards 
68.11   developed by the insurer or other entity marketing long-term care insurance, the agent 
68.12   and insurer or other entity marketing long-term care insurance shall develop procedures 
68.13   that take the following into consideration:
68.14   (1) the ability to pay for the proposed coverage and other pertinent financial 
68.15   information related to the purchase of the coverage;
68.16   (2) the applicant's goals or needs with respect to long-term care and the advantages 
68.17   and disadvantages of insurance to meet those goals or needs; and 
68.18   (3) the values, benefits, and costs of the applicant's existing insurance, if any, when 
68.19   compared to the values, benefits, and costs of the recommended purchase or replacement.
68.20   (b) The insurer or other entity marketing long-term care insurance, and the agent, 
68.21   where an agent is involved, shall make reasonable efforts to obtain the information set 
68.22   forth in paragraph (a). The efforts shall include presentation to the applicant, at or prior 
68.23   to application, of the "Long-Term Care Insurance Personal Worksheet." The personal 
68.24   worksheet used by the insurer or other entity marketing long-term care insurance shall 
68.25   contain, at a minimum, the information in the format contained in Appendix B of the 
68.26   Long-Term Care Model Regulation adopted by the National Association of Insurance 
68.27   Commissioners, in not less than 12-point type. The insurer or other entity marketing 
68.28   long-term care insurance may request the applicant to provide additional information to 
68.29   comply with its suitability standards. The insurer or other entity marketing long-term care 
68.30   insurance shall file a copy of its personal worksheet with the commissioner.
68.31   (c) A completed personal worksheet shall be returned to the insurer or other entity 
68.32   marketing long-term care insurance prior to consideration of the applicant for coverage, 
68.33   except the personal worksheet need not be returned for sales of employer group long-term 
68.34   care insurance to employees and their spouses. The sale or dissemination by the insurer 
68.35   or other entity marketing long-term care insurance, or the agent, of information obtained 
68.36   through the personal worksheet is prohibited.
69.1    (d) The insurer or other entity marketing long-term care insurance shall use the 
69.2    suitability standards it has developed under this section in determining whether issuing 
69.3    long-term care insurance coverage to an applicant is appropriate. Agents shall use the 
69.4    suitability standards developed by the insurer or other entity marketing long-term care 
69.5    insurance in marketing long-term care insurance.
69.6    (e) At the same time as the personal worksheet is provided to the applicant, the 
69.7    disclosure form entitled "Things You Should Know Before You Buy Long-Term Care 
69.8    Insurance" shall be provided. The form shall be in the format contained in Appendix C of 
69.9    the Long-Term Care Insurance Model Regulation adopted by the National Association of 
69.10   Insurance Commissioners in not less than 12-point type.
69.11   (f) If the insurer or other entity marketing long-term care insurance determines 
69.12   that the applicant does not meet its financial suitability standards, or if the applicant has 
69.13   declined to provide the information, the insurer or other entity marketing long-term 
69.14   care insurance may reject the application. In the alternative, the insurer or other entity 
69.15   marketing long-term care insurance shall send the applicant a letter similar to Appendix D 
69.16   of the Long-Term Care Insurance Model Regulation adopted by the National Association 
69.17   of Insurance Commissioners. However, if the applicant has declined to provide financial 
69.18   information, the insurer or other entity marketing long-term care insurance may use some 
69.19   other method to verify the applicant's intent. The applicant's returned letter or a record of 
69.20   the alternative method of verification shall be made part of the applicant's file.
69.21       Subd. 3. Reports. The insurer or other entity marketing long-term care insurance 
69.22   shall report annually to the commissioner the total number of applications received from 
69.23   residents of this state, the number of those who declined to provide information on the 
69.24   personal worksheet, the number of applicants who did not meet the suitability standards, 
69.25   and the number of those who chose to confirm after receiving a suitability letter.
69.26       Subd. 4. Application. This section shall not apply to life insurance policies that 
69.27   accelerate benefits for long-term care.
69.28   EFFECTIVE DATE.This section is effective July 1, 2006.

69.29       Sec. 56. [62S.315] PRODUCER TRAINING.
69.30   The commissioner shall approve insurer and producer training requirements 
69.31   according to the NAIC Long-Term Care Insurance Model Act provisions. The 
69.32   commissioner of human services shall provide technical assistance and information to the 
69.33   commissioner according to Public Law 109-171, section 6021.
69.34   EFFECTIVE DATE.This section is effective July 1, 2006.

70.1        Sec. 57. Minnesota Statutes 2004, section 65B.44, subdivision 3a, is amended to read:
70.2        Subd. 3a. Disability and income loss benefits election; senior citizens. A plan of 
70.3    reparation security issued to or renewed with a person who has attained the age of 65 or 
70.4    who has attained the age of 60 years and is retired and receiving a pension, must provide 
70.5    disability and income loss benefits under section  65B.44, subdivision 3, unless the insured 
70.6    elects not to have this coverage. An election by the insured not to have this coverage 
70.7    remains in effect until revoked by the insured. The reparation obligor shall notify a person 
70.8    of the person's rights under this section at the time of the sale or the first renewal of the 
70.9    policy after the insured has attained the age of 65 60 years, and at least annually after that. 
70.10   The rate for any plan for which coverage has been excluded or reduced pursuant to this 
70.11   section must be reduced accordingly. This section does apply to self-insurance. 
70.12   EFFECTIVE DATE.This section is effective August 1, 2006, and applies to plans 
70.13   of reparation security issued or renewed on or after that date.

70.14       Sec. 58. Minnesota Statutes 2004, section 70A.07, is amended to read:
70.15   70A.07 RATES AND FORMS OPEN TO INSPECTION.
70.16   All rates, supplementary rate information, and forms furnished to the commissioner 
70.17   under this chapter shall, as soon as the commissioner's review has been completed within 
70.18   ten days after their effective date, be open to public inspection at any reasonable time.

70.19       Sec. 59. Minnesota Statutes 2004, section 72A.20, is amended by adding a subdivision 
70.20   to read:
70.21       Subd. 39. Discounted payments by health care providers; effect on use of 
70.22   usual and customary payments. An insurer, including, but not limited to, a health plan 
70.23   company as defined in section 62Q.01, subdivision 4; a reparation obligor as defined in 
70.24   section 65B.43, subdivision 9; and a workers' compensation insurer shall not consider in 
70.25   determining a health care provider's usual and customary payment, standard payment, or 
70.26   allowable payment used as a basis for determining the provider's payment by the insurer, 
70.27   the following discounted payment situations:
70.28   (1) care provided to relatives of the provider;
70.29   (2) care for which a discount or free care is given in hardship situations; and
70.30   (3) care for which a discount is given in exchange for cash payment.
70.31   For purposes of this subdivision, "health care provider" and "provider" have the 
70.32   meaning given in section 62J.03, subdivision 8.
70.33   EFFECTIVE DATE.This section is effective the day following final enactment.

71.1        Sec. 60. Minnesota Statutes 2005 Supplement, section 72A.201, subdivision 6, is 
71.2    amended to read:
71.3        Subd. 6. Standards for automobile insurance claims handling, settlement offers, 
71.4    and agreements. In addition to the acts specified in subdivisions 4, 5, 7, 8, and 9, the 
71.5    following acts by an insurer, adjuster, or a self-insured or self-insurance administrator 
71.6    constitute unfair settlement practices:
71.7    (1) if an automobile insurance policy provides for the adjustment and settlement 
71.8    of an automobile total loss on the basis of actual cash value or replacement with like 
71.9    kind and quality and the insured is not an automobile dealer, failing to offer one of the 
71.10   following methods of settlement:
71.11   (a) comparable and available replacement automobile, with all applicable taxes, 
71.12   license fees, at least pro rata for the unexpired term of the replaced automobile's license, 
71.13   and other fees incident to the transfer or evidence of ownership of the automobile paid, at 
71.14   no cost to the insured other than the deductible amount as provided in the policy;
71.15   (b) a cash settlement based upon the actual cost of purchase of a comparable 
71.16   automobile, including all applicable taxes, license fees, at least pro rata for the unexpired 
71.17   term of the replaced automobile's license, and other fees incident to transfer of evidence 
71.18   of ownership, less the deductible amount as provided in the policy. The costs must be 
71.19   determined by:
71.20   (i) the cost of a comparable automobile, adjusted for mileage, condition, and options, 
71.21   in the local market area of the insured, if such an automobile is available in that area; or
71.22   (ii) one of two or more quotations obtained from two or more qualified sources 
71.23   located within the local market area when a comparable automobile is not available in 
71.24   the local market area. The insured shall be provided the information contained in all 
71.25   quotations prior to settlement; or
71.26   (iii) any settlement or offer of settlement which deviates from the procedure above 
71.27   must be documented and justified in detail. The basis for the settlement or offer of 
71.28   settlement must be explained to the insured;
71.29   (2) if an automobile insurance policy provides for the adjustment and settlement 
71.30   of an automobile partial loss on the basis of repair or replacement with like kind and 
71.31   quality and the insured is not an automobile dealer, failing to offer one of the following 
71.32   methods of settlement:
71.33   (a) to assume all costs, including reasonable towing costs, for the satisfactory repair 
71.34   of the motor vehicle. Satisfactory repair includes repair of both obvious and hidden 
71.35   damage as caused by the claim incident. This assumption of cost may be reduced by 
71.36   applicable policy provision; or
72.1    (b) to offer a cash settlement sufficient to pay for satisfactory repair of the vehicle. 
72.2    Satisfactory repair includes repair of obvious and hidden damage caused by the claim 
72.3    incident, and includes reasonable towing costs;
72.4    (3) regardless of whether the loss was total or partial, in the event that a damaged 
72.5    vehicle of an insured cannot be safely driven, failing to exercise the right to inspect 
72.6    automobile damage prior to repair within five business days following receipt of 
72.7    notification of claim. In other cases the inspection must be made in 15 days;
72.8    (4) regardless of whether the loss was total or partial, requiring unreasonable travel 
72.9    of a claimant or insured to inspect a replacement automobile, to obtain a repair estimate, 
72.10   to allow an insurer to inspect a repair estimate, to allow an insurer to inspect repairs made 
72.11   pursuant to policy requirements, or to have the automobile repaired;
72.12   (5) regardless of whether the loss was total or partial, if loss of use coverage 
72.13   exists under the insurance policy, failing to notify an insured at the time of the insurer's 
72.14   acknowledgment of claim, or sooner if inquiry is made, of the fact of the coverage, 
72.15   including the policy terms and conditions affecting the coverage and the manner in which 
72.16   the insured can apply for this coverage;
72.17   (6) regardless of whether the loss was total or partial, failing to include the insured's 
72.18   deductible in the insurer's demands under its subrogation rights. Subrogation recovery 
72.19   must be shared at least on a proportionate basis with the insured, unless the deductible 
72.20   amount has been otherwise recovered by the insured, except that when an insurer is 
72.21   recovering directly from an uninsured third party by means of installments, the insured 
72.22   must receive the full deductible share as soon as that amount is collected and before any 
72.23   part of the total recovery is applied to any other use. No deduction for expenses may be 
72.24   made from the deductible recovery unless an attorney is retained to collect the recovery, in 
72.25   which case deduction may be made only for a pro rata share of the cost of retaining the 
72.26   attorney. An insured is not bound by any settlement of its insurer's subrogation claim with 
72.27   respect to the deductible amount, unless the insured receives, as a result of the subrogation 
72.28   settlement, the full amount of the deductible. Recovery by the insurer and receipt by the 
72.29   insured of less than all of the insured's deductible amount does not affect the insured's 
72.30   rights to recover any unreimbursed portion of the deductible from parties liable for the loss;
72.31   (7) requiring as a condition of payment of a claim that repairs to any damaged 
72.32   vehicle must be made by a particular contractor or repair shop or that parts, other than 
72.33   window glass, must be replaced with parts other than original equipment parts or engaging 
72.34   in any act or practice of intimidation, coercion, threat, incentive, or inducement for or 
72.35   against an insured to use a particular contractor or repair shop. Consumer benefits included 
72.36   within preferred vendor programs must not be considered an incentive or inducement. 
73.1    At the time a claim is reported, the insurer must provide the following advisory to the 
73.2    insured or claimant:
73.3    "Minnesota law gives You have the legal right to choose a repair shop to fix your 
73.4    vehicle. Your policy will cover the reasonable costs of repairing your vehicle to its 
73.5    pre-accident condition no matter where you have repairs made. Have you selected a 
73.6    repair shop or would you like a referral?"
73.7    After an insured has indicated that the insured has selected a repair shop, the insurer 
73.8    must cease all efforts to influence the insured's or claimant's choice of repair shop;
73.9    (8) where liability is reasonably clear, failing to inform the claimant in an automobile 
73.10   property damage liability claim that the claimant may have a claim for loss of use of 
73.11   the vehicle;
73.12   (9) failing to make a good faith assignment of comparative negligence percentages 
73.13   in ascertaining the issue of liability;
73.14   (10) failing to pay any interest required by statute on overdue payment for an 
73.15   automobile personal injury protection claim;
73.16   (11) if an automobile insurance policy contains either or both of the time limitation 
73.17   provisions as permitted by section 65B.55, subdivisions 1 and 2, failing to notify the 
73.18   insured in writing of those limitations at least 60 days prior to the expiration of that time 
73.19   limitation;
73.20   (12) if an insurer chooses to have an insured examined as permitted by section 
73.21   65B.56, subdivision 1, failing to notify the insured of all of the insured's rights and 
73.22   obligations under that statute, including the right to request, in writing, and to receive 
73.23   a copy of the report of the examination;
73.24   (13) failing to provide, to an insured who has submitted a claim for benefits 
73.25   described in section 65B.44, a complete copy of the insurer's claim file on the insured, 
73.26   excluding internal company memoranda, all materials that relate to any insurance fraud 
73.27   investigation, materials that constitute attorney work-product or that qualify for the 
73.28   attorney-client privilege, and medical reviews that are subject to section 145.64, within ten 
73.29   business days of receiving a written request from the insured. The insurer may charge 
73.30   the insured a reasonable copying fee. This clause supersedes any inconsistent provisions 
73.31   of sections 72A.49 to 72A.505;
73.32   (14) if an automobile policy provides for the adjustment or settlement of an 
73.33   automobile loss due to damaged window glass, failing to provide payment to the insured's 
73.34   chosen vendor based on a competitive price that is fair and reasonable within the local 
73.35   industry at large.
74.1    Where facts establish that a different rate in a specific geographic area actually served 
74.2    by the vendor is required by that market, that geographic area must be considered. This 
74.3    clause does not prohibit an insurer from recommending a vendor to the insured or from 
74.4    agreeing with a vendor to perform work at an agreed-upon price, provided, however, 
74.5    that before recommending a vendor, the insurer shall offer its insured the opportunity to 
74.6    choose the vendor. If the insurer recommends a vendor, the insurer must also provide 
74.7    the following advisory:
74.8    "Minnesota law gives you the right to go to any glass vendor you choose, and 
74.9    prohibits me from pressuring you to choose a particular vendor.";
74.10   (15) requiring that the repair or replacement of motor vehicle glass and related 
74.11   products and services be made in a particular place or shop or by a particular entity, or by 
74.12   otherwise limiting the ability of the insured to select the place, shop, or entity to repair or 
74.13   replace the motor vehicle glass and related products and services; or
74.14   (16) engaging in any act or practice of intimidation, coercion, threat, incentive, or 
74.15   inducement for or against an insured to use a particular company or location to provide 
74.16   the motor vehicle glass repair or replacement services or products. For purposes of this 
74.17   section, a warranty shall not be considered an inducement or incentive.

74.18       Sec. 61. Minnesota Statutes 2004, section 72C.10, subdivision 1, is amended to read:
74.19       Subdivision 1. Readability compliance; filing and approval. No insurer shall 
74.20   make, issue, amend, or renew any policy or contract after the dates specified in section  
74.21   72C.11 for the applicable type of policy unless the contract is in compliance with the 
74.22   requirements of sections  72C.06 to  72C.09 and unless the contract is filed with the 
74.23   commissioner for approval. The contract shall be deemed approved 90  60 days after filing 
74.24   unless disapproved by the commissioner within the 90-day 60-day period. When an 
74.25   insurer, service plan corporation, or the Minnesota Comprehensive Health Association 
74.26   fails to respond to an objection or inquiry within 60 days, the filing is automatically 
74.27   disapproved. A resubmission is required if action by the Department of Commerce 
74.28   is subsequently requested. An additional filing fee is required for the resubmission. 
74.29   The commissioner shall not unreasonably withhold approval. Any disapproval shall be 
74.30   delivered to the insurer in writing, stating the grounds therefor. Any policy filed with the 
74.31   commissioner shall be accompanied by a Flesch scale readability analysis and test score 
74.32   and by the insurer's certification that the policy or contract is in its judgment readable 
74.33   based on the factors specified in sections  72C.06 to  72C.08. 

75.1        Sec. 62. Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision 
75.2    to read:
75.3        Subd. 1a. Assigned risk plan. "Assigned risk plan" means:
75.4    (1) the method to provide workers' compensation coverage to employers unable to 
75.5    obtain coverage through licensed workers' compensation companies; and
75.6    (2) the procedures established by the commissioner to implement that method of 
75.7    providing coverage including administration of all assigned risk losses and reserves.

75.8        Sec. 63. Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision 
75.9    to read:
75.10       Subd. 1b. Employer. "Employer" has the meaning given in section 176.011, 
75.11   subdivision 10.

75.12       Sec. 64. Minnesota Statutes 2004, section 79.251, subdivision 1, is amended to read:
75.13       Subdivision 1. General duties of commissioner. (a)(1) The commissioner shall 
75.14   have all the usual powers and authorities necessary for the discharge of the commissioner's 
75.15   duties under this section and may contract with individuals in discharge of those duties. 
75.16   The commissioner shall audit the reserves established (a) for individual cases arising 
75.17   under policies and contracts of coverage issued under subdivision 4 and (b) for the total 
75.18   book of business issued under subdivision 4. If the commissioner determines on the basis 
75.19   of an audit that there is an excess surplus in the assigned risk plan, the commissioner must 
75.20   notify the commissioner of finance who shall transfer assets of the plan equal to the excess 
75.21   surplus to the budget reserve account in the general fund.
75.22   (2) The commissioner shall monitor the operations of section  79.252 and this section 
75.23   and shall periodically make recommendations to the governor and legislature when 
75.24   appropriate, for improvement in the operation of those sections. 
75.25   (3) All insurers and self-insurance administrators issuing policies or contracts under 
75.26   subdivision 4 shall pay to the commissioner a .25 percent assessment on premiums for 
75.27   policies and contracts of coverage issued under subdivision 4 for the purpose of defraying 
75.28   the costs of performing the duties under clauses (1) and (2). Proceeds of the assessment 
75.29   shall be deposited in the state treasury and credited to the general fund.
75.30   (4) The assigned risk plan shall not be deemed a state agency.
75.31   (5) The commissioner shall monitor and have jurisdiction over all reserves 
75.32   maintained for assigned risk plan losses.
76.1    (b) As used in this subdivision, "excess surplus" means the amount of assigned 
76.2    risk plan assets in excess of the amount needed to pay all current liabilities of the plan, 
76.3    including, but not limited to:
76.4    (1) administrative expenses;
76.5    (2) benefit claims; and
76.6    (3) if the assigned risk plan is dissolved under subdivision 8, the amounts that would 
76.7    be due insurers who have paid assessments to the plan.

76.8        Sec. 65. Minnesota Statutes 2004, section 79.251, is amended by adding a subdivision 
76.9    to read:
76.10       Subd. 2a. Assigned risk rating plan. (a) Employers insured through the assigned 
76.11   risk plan are subject to paragraphs (b) and (c).
76.12   (b) Classifications must be assigned according to a uniform classification system 
76.13   approved by the commissioner.
76.14   (c) Rates must be modified according to an experience rating plan approved by the 
76.15   commissioner. Any experience rating plan is subject to Minnesota Rules, parts 2700.2800 
76.16   and 2700.2900.

76.17       Sec. 66. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
76.18   to read:
76.19       Subd. 2a. Minimum qualifications. Any employer that (1) is required to carry 
76.20   workers' compensation insurance pursuant to chapter 176 and (2) has a current written 
76.21   notice of refusal to insure pursuant to subdivision 2, is entitled to coverage upon making 
76.22   written application to the assigned risk plan, and paying the applicable premium.

76.23       Sec. 67. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
76.24   to read:
76.25       Subd. 3a. Disqualifying factors. An employer may be denied or terminated from 
76.26   coverage through the assigned risk plan if the employer:
76.27   (1) applies for coverage for only a portion of the employer's statutory liability under 
76.28   chapter 176, excluding wrap-up policies;
76.29   (2) has an outstanding debt due and owing to the assigned risk plan at the time of 
76.30   renewal arising from a prior policy;
76.31   (3) persistently refuses to permit completion of an adequate payroll audit;
76.32   (4) repeatedly submits misleading or erroneous payroll information; or
77.1    (5) flagrantly disregards safety or loss control recommendations. Cancellation for 
77.2    nonpayment of premium may be initiated by the service contractor upon 60 days' written 
77.3    notice to the employer pursuant to section 176.185, subdivision 1. 

77.4        Sec. 68. Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision 
77.5    to read:
77.6        Subd. 3b. Occupational disease exposure. An employer having a significant 
77.7    occupational disease exposure, as determined by the commissioner, to be entitled to 
77.8    coverage shall have physical examinations made:
77.9    (a) of employees who have not been examined within one year of the date of 
77.10   application for assignment;
77.11   (b) of new employees before hiring; and
77.12   (c) of terminated employees. Upon request, the findings and reports of doctors 
77.13   making examinations, together with x-rays and other original exhibits, must be furnished 
77.14   to the assigned risk plan or the Department of Labor and Industry.

77.15       Sec. 69. Minnesota Statutes 2005 Supplement, section 79A.04, subdivision 2, is 
77.16   amended to read:
77.17       Subd. 2. Minimum deposit. The minimum deposit is 110 percent of the private 
77.18   self-insurer's estimated future liability. The deposit may be used to secure payment of 
77.19   all administrative and legal costs, and unpaid assessments required by section 79A.12, 
77.20   subdivision 2, relating to or arising from its or other employers' self-insuring. As used 
77.21   in this section, "private self-insurer" includes both current and former members of the 
77.22   self-insurers' security fund; and "private self-insurers' estimated future liability" means 
77.23   the private self-insurers' total of estimated future liability as determined by an Associate 
77.24   or Fellow of the Casualty Actuarial Society every year for group member private 
77.25   self-insurers and, for a nongroup member private self-insurer's authority to self-insure, 
77.26   every year for the first five years. After the first five years, the nongroup member's total 
77.27   shall be as determined by an Associate or Fellow of the Casualty Actuarial Society at least 
77.28   every two years, and each such actuarial study shall include a projection of future losses 
77.29   during the period until the next scheduled actuarial study, less payments anticipated to 
77.30   be made during that time.
77.31   All data and information furnished by a private self-insurer to an Associate or 
77.32   Fellow of the Casualty Actuarial Society for purposes of determining private self-insurers' 
77.33   estimated future liability must be certified by an officer of the private self-insurer to be 
77.34   true and correct with respect to payroll and paid losses, and must be certified, upon 
78.1    information and belief, to be true and correct with respect to reserves. The certification 
78.2    must be made by sworn affidavit. In addition to any other remedies provided by law, 
78.3    the certification of false data or information pursuant to this subdivision may result in a 
78.4    fine imposed by the commissioner of commerce on the private self-insurer up to the 
78.5    amount of $5,000, and termination of the private self-insurers' authority to self-insure. 
78.6    The determination of private self-insurers' estimated future liability by an Associate or 
78.7    Fellow of the Casualty Actuarial Society shall be conducted in accordance with standards 
78.8    and principles for establishing loss and loss adjustment expense reserves by the Actuarial 
78.9    Standards Board, an affiliate of the American Academy of Actuaries. The commissioner 
78.10   may reject an actuarial report that does not meet the standards and principles of the 
78.11   Actuarial Standards Board, and may further disqualify the actuary who prepared the report 
78.12   from submitting any future actuarial reports pursuant to this chapter. Within 30 days after 
78.13   the actuary has been served by the commissioner with a notice of disqualification, an 
78.14   actuary who is aggrieved by the disqualification may request a hearing to be conducted in 
78.15   accordance with chapter 14. Based on a review of the actuarial report, the commissioner 
78.16   of commerce may require an increase in the minimum security deposit in an amount the 
78.17   commissioner considers sufficient.
78.18   In addition, the Minnesota self-insurers' security fund may, at its sole discretion 
78.19   and cost, undertake an independent actuarial review or an actuarial study of a private 
78.20   self-insurer's estimated future liability as defined in this subdivision. The review or 
78.21   study must be conducted by an associate or fellow of the Casualty Actuarial Society. 
78.22   The actuary has the right to receive and review data and information of the self-insurer 
78.23   necessary for the actuary to complete its review or study. A copy of this report must be 
78.24   filed with the commissioner and a copy must be furnished to the self-insurer.
78.25   Estimated future liability is determined by first taking the total amount of the 
78.26   self-insured's future liability of workers' compensation claims and then deducting the 
78.27   total amount which is estimated to be returned to the self-insurer from any specific 
78.28   excess insurance coverage, aggregate excess insurance coverage, and any supplementary 
78.29   benefits or second injury benefits which are estimated to be reimbursed by the special 
78.30   compensation fund. However, in the determination of estimated future liability, the 
78.31   actuary for the self-insurer shall not take a credit for any excess insurance or reinsurance 
78.32   which is provided by a captive insurance company which is wholly owned by the 
78.33   self-insurer. Supplementary benefits or second injury benefits will not be reimbursed by 
78.34   the special compensation fund unless the special compensation fund assessment pursuant 
78.35   to section 176.129 is paid and the reports required thereunder are filed with the special 
78.36   compensation fund. In the case of surety bonds, bonds shall secure administrative and 
79.1    legal costs in addition to the liability for payment of compensation reflected on the face of 
79.2    the bond. In no event shall the security be less than the last retention limit selected by the 
79.3    self-insurer with the Workers' Compensation Reinsurance Association, provided that the 
79.4    commissioner may allow former members to post less than the Workers' Compensation 
79.5    Reinsurance Association retention level if that amount is adequate to secure payment 
79.6    of the self-insurers' estimated future liability, as defined in this subdivision, including 
79.7    payment of claims, administrative and legal costs, and unpaid assessments required by 
79.8    section 79A.12, subdivision 2. The posting or depositing of security pursuant to this 
79.9    section shall release all previously posted or deposited security from any obligations under 
79.10   the posting or depositing and any surety bond so released shall be returned to the surety. 
79.11   Any other security shall be returned to the depositor or the person posting the bond.
79.12   As a condition for the granting or renewing of a certificate to self-insure, the 
79.13   commissioner may require a private self-insurer to furnish any additional security the 
79.14   commissioner considers sufficient to insure payment of all claims under chapter 176.

79.15       Sec. 70. Minnesota Statutes 2004, section 79A.23, subdivision 3, is amended to read:
79.16       Subd. 3. Operational audit. (a) The commissioner, prior to authorizing surplus 
79.17   distribution of a commercial self-insurance group's first fund year or no later than after 
79.18   the third anniversary of the group's authority to self-insure, may conduct an operational 
79.19   audit of the commercial self-insurance group's claim handling and reserve practices as 
79.20   well as its underwriting procedures to determine if they adhere to the group's business 
79.21   plan and sound business practices. The commissioner may select outside consultants to 
79.22   assist in conducting the audit. After completion of the audit, the commissioner shall either 
79.23   renew or revoke the commercial self-insurance group's authority to self-insure. The 
79.24   commissioner may also order any changes deemed necessary in the claims handling, 
79.25   reserving practices, or underwriting procedures of the group.
79.26   (b) The cost of the operational audit shall be borne by the commercial self-insurance 
79.27   group.

79.28       Sec. 71. Minnesota Statutes 2004, section 79A.32, is amended to read:
79.29   79A.32 REPORTING TO MINNESOTA WORKERS' COMPENSATION 
79.30   INSURERS' ASSOCIATION LICENSED DATA SERVICE ORGANIZATIONS.
79.31       Subdivision 1. Required activity. Each self-insurer shall perform the following 
79.32   activities:
79.33   (1) maintain membership in and report loss experience data to the Minnesota 
79.34   Workers' Compensation Insurers Association, or a licensed data service organization, 
80.1    in accordance with the statistical plan and rules of the organization as approved by the 
80.2    commissioner;
80.3    (2) establish a plan for merit rating which shall be consistently applied to all 
80.4    insureds, provided that members of a data service organization may use merit rating plans 
80.5    developed by that data service organization;
80.6    (3) provide an annual report to the commissioner containing the information and 
80.7    prepared in the form required by the commissioner; and
80.8    (4) keep a record of the losses paid by the self-insurers and premiums for the 
80.9    group self-insurers.
80.10       Subd. 2. Permitted activity. In addition to any other activities not prohibited by 
80.11   this chapter, self-insurers may Through data service organizations licensed under chapter 
80.12   79, self insurers may:
80.13   (1) through licensed data service organizations, individually, or with self-insurers 
80.14   commonly owned, managed, or controlled, conduct research and collect statistics to 
80.15   investigate, identify, and classify information relating to causes or prevention of losses; and
80.16   (2) at the request of a private self insurer or self insurer group, submit and collect 
80.17   data, including payroll and loss data; and perform calculations, including calculations of 
80.18   experience modifications of individual self-insured employers.
80.19   (2) develop and use classification plans and rates based upon any reasonable factors; 
80.20   and
80.21   (3) develop rules for the assignment of risks to classifications.
80.22       Subd. 3. Delayed reporting. Private self-insurers established under sections  
80.23   79A.01 to  79A.18 prior to August 1, 1995, need not begin filing the reports required 
80.24   under subdivision 1 until January 1, 1998.

80.25       Sec. 72. Minnesota Statutes 2004, section 123A.21, subdivision 7, is amended to read:
80.26       Subd. 7. Educational programs and services. (a) The board of directors of each 
80.27   SC shall submit annually a plan to the members. The plan shall identify the programs and 
80.28   services which are suggested for implementation by the SC during the following year and 
80.29   shall contain components of long-range planning determined by the SC. These programs 
80.30   and services may include, but are not limited to, the following areas:
80.31   (1) administrative services;
80.32   (2) curriculum development;
80.33   (3) data processing;
80.34   (4) distance learning and other telecommunication services;
80.35   (5) evaluation and research;
81.1    (6) staff development;
81.2    (7) media and technology centers;
81.3    (8) publication and dissemination of materials;
81.4    (9) pupil personnel services;
81.5    (10) planning;
81.6    (11) secondary, postsecondary, community, adult, and adult vocational education;
81.7    (12) teaching and learning services, including services for students with special 
81.8    talents and special needs;
81.9    (13) employee personnel services;
81.10   (14) vocational rehabilitation;
81.11   (15) health, diagnostic, and child development services and centers;
81.12   (16) leadership or direction in early childhood and family education;
81.13   (17) community services;
81.14   (18) shared time programs;
81.15   (19) fiscal services and risk management programs, including health insurance 
81.16   programs providing reinsurance or stop loss coverage;
81.17   (20) technology planning, training, and support services;
81.18   (21) health and safety services;
81.19   (22) student academic challenges; and
81.20   (23) cooperative purchasing services.
81.21   An SC is subject to regulation and oversight by the commissioner of commerce 
81.22   under the insurance laws of this state when operating a health reinsurance program 
81.23   pursuant to clause (19) providing reinsurance or stop loss coverage.
81.24   (b) A group health, dental, or long-term disability coverage program provided by 
81.25   one or more service cooperatives may provide coverage to nursing homes licensed under 
81.26   chapter 144A and to boarding care homes licensed under sections 144.50 to 144.56 and 
81.27   certified for participation in the medical assistance program located in this state.
81.28   (c) A group health, dental, or long-term disability coverage program provided by 
81.29   one or more service cooperatives:
81.30   (1) must rebid contracts for insurance and third-party administration at least every 
81.31   four years. The contracts may be regional or statewide in the discretion of the SC; and
81.32   (2) may determine premiums for its health, dental, or long-term disability coverage 
81.33   individually for specific employers or may determine them on a pooled or other basis 
81.34   established by the SC.
81.35   EFFECTIVE DATE.This section is effective the day following final enactment.

82.1        Sec. 73. Minnesota Statutes 2004, section 123A.21, is amended by adding a 
82.2    subdivision to read:
82.3        Subd. 12. Health Coverage Pool Comparison Shopping. (a) Service cooperatives 
82.4    must permit school districts and other political subdivisions participating in a service 
82.5    cooperative health coverage pool to solicit bids and other information from competing 
82.6    sources of health coverage at any time other than within five months prior to the end of a 
82.7    master agreement.
82.8    (b) A service cooperative must not impose a fine or other penalty against an enrolled 
82.9    entity for soliciting a bid or other information during the allowed period. The service 
82.10   cooperative may prohibit the entity from participating in service cooperative coverage for 
82.11   a period of up to one year, if the entity leaves the service cooperative pool and obtains 
82.12   other health coverage.
82.13   (c) A service cooperative must provide each enrolled entity with the entity's monthly 
82.14   claims data. This paragraph applies notwithstanding section 13.203.

82.15       Sec. 74. Minnesota Statutes 2005 Supplement, section 256B.0571, is amended to read:
82.16   256B.0571 LONG-TERM CARE PARTNERSHIP PROGRAM.
82.17       Subdivision 1. Definitions. For purposes of this section, the following terms have 
82.18   the meanings given them.
82.19       Subd. 2. Home care service. "Home care service" means care described in section 
82.20   144A.43.
82.21       Subd. 3. Long-term care insurance. "Long-term care insurance" means a policy 
82.22   described in section 62S.01.
82.23       Subd. 4. Medical assistance. "Medical assistance" means the program of medical 
82.24   assistance established under section 256B.01.
82.25       Subd. 5. Nursing home. "Nursing home" means a nursing home as described 
82.26   in section 144A.01.
82.27       Subd. 6. Partnership policy. "Partnership policy" means a long-term care insurance 
82.28   policy that meets the requirements under subdivision 10 or 11, regardless of when the 
82.29   policy and was first issued on or after the effective date of the state plan amendment 
82.30   implementing the partnership program in Minnesota.
82.31       Subd. 7. Partnership program. "Partnership program" means the Minnesota 
82.32   partnership for long-term care program established under this section.
82.33       Subd. 7a. Protected assets. "Protected assets" means assets or proceeds of assets 
82.34   that are protected from recovery under subdivisions 13 and 15.
83.1        Subd. 8. Program established. (a) The commissioner, in cooperation with the 
83.2    commissioner of commerce, shall establish the Minnesota partnership for long-term care 
83.3    program to provide for the financing of long-term care through a combination of private 
83.4    insurance and medical assistance.
83.5    (b) An individual who meets the requirements in this paragraph is eligible to 
83.6    participate in the partnership program. The individual must:
83.7    (1) be a Minnesota resident at the time coverage first became effective under the 
83.8    partnership policy;
83.9    (2) purchase a partnership policy that is delivered, issued for delivery, or renewed on 
83.10   or after the effective date of Laws 2005, First Special Session chapter 4, article 7, section 
83.11   5, and maintain the partnership policy in effect throughout the period of participation 
83.12   in the partnership program be a beneficiary of a partnership policy  that (i) is issued on 
83.13   or after the effective date of the state plan amendment implementing the partnership 
83.14   program in Minnesota, or (ii) qualifies as a partnership policy under the provisions of 
83.15   subdivision 8a; and
83.16   (3) exhaust the minimum have exhausted all of the benefits under the partnership 
83.17   policy as described in this section. Benefits received under a long-term care insurance 
83.18   policy before the effective date of Laws 2005, First Special Session chapter 4, article 7, 
83.19   section 5 July 1, 2006, do not count toward the exhaustion of benefits required in this 
83.20   subdivision.
83.21       Subd. 8a. Exchange for long-term care partnership policy; addition of policy 
83.22   rider. (a) If authorized by federal law or if federal approval is granted with respect to 
83.23   the partnership program established in this section, a long-term care insurance policy 
83.24   that was issued before the effective date of the state plan amendment implementing the 
83.25   partnership program in Minnesota that was exchanged after the effective date of the state 
83.26   plan amendment for a long-term care partnership policy that meets the requirements of 
83.27   Public Law 109-171, section 6021, qualifies as a long-term care partnership policy under 
83.28   this section, unless the policy is paying benefits on the date the policy is exchanged.
83.29   (b) If authorized by federal law or if federal approval is granted with respect to the 
83.30   partnership program established in this section, a long-term care insurance policy that was 
83.31   issued before the effective date of the state plan amendment implementing the partnership 
83.32   program in Minnesota that has a rider added after the effective date of the state plan 
83.33   amendment that meets the requirements of Public Law 109-171, section 6021, qualifies 
83.34   as a long-term care partnership policy under this section, unless the policy is paying 
83.35   benefits on the date the rider is added.
84.1        Subd. 9. Medical assistance eligibility. (a) Upon application of for medical 
84.2    assistance program payment of long-term care services by an individual who meets the 
84.3    requirements described in subdivision 8, the commissioner shall determine the individual's 
84.4    eligibility for medical assistance according to paragraphs (b) and (c) to (i).
84.5    (b) After disregarding financial determining assets exempted under medical 
84.6    assistance eligibility requirements subject to the asset limit under section 256B.056, 
84.7    subdivision 3 or 3c, or 256B.057, subdivision 9 or 10, the commissioner shall disregard an 
84.8    additional amount of financial assets equal allow the individual to designate assets to be 
84.9    protected from recovery under subdivisions 13 and 15 up to the dollar amount of coverage 
84.10   the benefits utilized under the partnership policy. Designated assets shall be disregarded 
84.11   for purposes of determining eligibility for payment of long-term care services.
84.12   (c) The commissioner shall consider the individual's income according to medical 
84.13   assistance eligibility requirements. The individual shall identify the designated assets and 
84.14   the full fair market value of those assets and designate them as assets to be protected at 
84.15   the time of initial application for medical assistance. The full fair market value of real 
84.16   property or interests in real property shall be based on the most recent full assessed value 
84.17   for property tax purposes for the real property, unless the individual provides a complete 
84.18   professional appraisal by a licensed appraiser to establish the full fair market value. The 
84.19   extent of a life estate in real property shall be determined using the life estate table in the 
84.20   health care program's manual. Ownership of any asset in joint tenancy shall be treated as 
84.21   ownership as tenants in common for purposes of its designation as a disregarded asset. 
84.22   The unprotected value of any protected asset is subject to estate recovery according to 
84.23   subdivisions 13 and 15.
84.24   (d) The right to designate assets to be protected is personal to the individual and 
84.25   ends when the individual dies, except as otherwise provided in subdivisions 13 and 
84.26   15. It does not include the increase in the value of the protected asset and the income, 
84.27   dividends, or profits from the asset. It may be exercised by the individual or by anyone 
84.28   with the legal authority to do so on the individual's behalf. It shall not be sold, assigned, 
84.29   transferred, or given away.
84.30   (e) If the dollar amount of the benefits utilized under a partnership policy is greater 
84.31   than the full fair market value of all assets protected at the time of the application for 
84.32   medical assistance long-term care services, the individual may designate additional assets 
84.33   that become available during the individual's lifetime for protection under this section. 
84.34   The individual must make the designation in writing to the county agency no later than 
84.35   the last date on which the individual must report a change in circumstances to the county 
84.36   agency, as provided for under the medical assistance program. Any excess used for this 
85.1    purpose shall not be available to the individual's estate to protect assets in the estate from 
85.2    recovery under section 256B.15 or 524.3-1202, or otherwise.
85.3    (f) This section applies only to estate recovery under United States Code, title 42, 
85.4    section 1396p, subsections (a) and (b), and does not apply to recovery authorized by other 
85.5    provisions of federal law, including, but not limited to, recovery from trusts under United 
85.6    States Code, title 42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from 
85.7    annuities, or similar legal instruments, subject to section 6012, subsections (a) and (b), of 
85.8    the Deficit Reduction Act of 2005, Public Law 109-171.
85.9    (g) An individual's protected assets owned by the individual's spouse who applies 
85.10   for payment of medical assistance long-term care services shall not be protected assets or 
85.11   disregarded for purposes of eligibility of the individual's spouse solely because they were 
85.12   protected assets of the individual.
85.13   (h) Assets designated under this subdivision shall not be subject to penalty under 
85.14   section 256B.0595.
85.15   (i) The commissioner shall otherwise determine the individual's eligibility 
85.16   for payment of long-term care services according to medical assistance eligibility 
85.17   requirements.
85.18       Subd. 10. Dollar-for-dollar asset protection policies Long-term care partnership 
85.19   policy inflation protection. (a) A dollar-for-dollar asset protection policy must meet all 
85.20   of the requirements in paragraphs (b) to (e).
85.21   (b) The policy must satisfy the requirements of chapter 62S.
85.22   (c) The policy must offer an elimination period of not more than 180 days for an 
85.23   adjusted premium.
85.24   (d) The policy must satisfy the requirements established by the commissioner of 
85.25   human services under subdivision 14.
85.26   (e) Minimum daily benefits shall be $130 for nursing home care or $65 for home 
85.27   care, with inflation protection provided in the policy as described in section 62S.23, 
85.28   subdivision 1, clause (1). These minimum daily benefit amounts shall be adjusted by the 
85.29   commissioner on October 1 of each year by a percentage equal to the inflation protection 
85.30   feature described in section 62S.23, subdivision 1, clause (1), for purposes of setting 
85.31   minimum requirements that a policy must meet in future years in order to initially qualify 
85.32   as an approved policy under this subdivision. Adjusted minimum daily benefit amounts 
85.33   shall be rounded to the nearest whole dollar. A long-term care partnership policy must 
85.34   provide the inflation protection described in this subdivision. If the policy is sold to an 
85.35   individual who:
86.1    (1) has not attained age 61 as of the date of purchase, the policy must provide 
86.2    compound annual inflation protection;
86.3    (2) has attained age 61, but has not attained age 76 as of such date, the policy must 
86.4    provide some level of inflation protection; and
86.5    (3) has attained age 76 as of such date, the policy may, but is not required to, provide 
86.6    some level of inflation protection.
86.7        Subd. 11. Total asset protection policies. (a) A total asset protection policy must 
86.8    meet all of the requirements in subdivision 10, paragraphs (b) to (d), and this subdivision.
86.9    (b) Minimum coverage shall be for a period of not less than three years and for a 
86.10   dollar amount equal to 36 months of nursing home care at the minimum daily benefit rate 
86.11   determined and adjusted under paragraph (c).
86.12   (c) Minimum daily benefits shall be $150 for nursing home care or $75 for home 
86.13   care, with inflation protection provided in the policy as described in section 62S.23, 
86.14   subdivision 1, clause (1). These minimum daily benefit amounts shall also be adjusted 
86.15   by the commissioner on October 1 of each year by a percentage equal to the inflation 
86.16   protection feature described in section 62S.23, subdivision 1, clause (1), for purposes of 
86.17   setting minimum requirements that a policy must meet in future years in order to initially 
86.18   qualify as an approved policy under this subdivision. Adjusted minimum daily benefit 
86.19   amounts shall be rounded to the nearest whole dollar.
86.20   (d) The policy must cover all of the following services:
86.21   (1) nursing home stay;
86.22   (2) home care service; and
86.23   (3) care management.
86.24       Subd. 12. Compliance with federal law. An issuer of a partnership policy must 
86.25   comply with any federal law authorizing partnership policies in Minnesota Public Law 
86.26   109-171, section 6021, including any federal regulations, as amended, adopted under that 
86.27   law. This subdivision does not require compliance with any provision of this federal 
86.28   law until the date upon which the law requires compliance with the provision. The 
86.29   commissioner has authority to enforce this subdivision.
86.30       Subd. 13. Limitations on estate recovery. (a) For an individual who exhausts the 
86.31   minimum benefits of a dollar-for-dollar asset protection policy under subdivision 10, and 
86.32   is determined eligible for medical assistance under subdivision 9, the state shall limit 
86.33   recovery under the provisions of section 256B.15 against the estate of the individual or 
86.34   individual's spouse for medical assistance benefits received by that individual to an amount 
86.35   that exceeds the dollar amount of coverage utilized under the partnership policy. Protected 
86.36   assets of the individual shall not be subject to recovery under section 256B.15 or section 
87.1    524.3-1201 for medical assistance or alternative care paid on behalf of the individual. 
87.2    Protected assets of the individual in the estate of the individual's surviving spouse shall 
87.3    not be liable to pay a claim for recovery of medical assistance paid for the predeceased 
87.4    individual that is filed in the estate of the surviving spouse under section 256B.15. 
87.5    Protected assets of the individual shall not be protected assets in the surviving spouse's 
87.6    estate by reason of the preceding sentence and shall be subject to recovery under section 
87.7    256B.15 or 524.3-1201 for medical assistance paid on behalf of the surviving spouse.
87.8    (b) For an individual who exhausts the minimum benefits of a total asset protection 
87.9    policy under subdivision 11, and is determined eligible for medical assistance under 
87.10   subdivision 9, the state shall not seek recovery under the provisions of section 256B.15 
87.11   against the estate of the individual or individual's spouse for medical assistance benefits 
87.12   received by that individual. The personal representative may protect the full fair market 
87.13   value of an individual's unprotected assets in the individual's estate in an amount equal 
87.14   to the unused amount of asset protection the individual had on the date of death. The 
87.15   personal representative shall apply the asset protection so that the full fair market value of 
87.16   any unprotected asset in the estate is protected. When or if the asset protection available 
87.17   to the personal representative is or becomes less than the full fair market value of any 
87.18   remaining unprotected asset, it shall be applied to partially protect one unprotected asset.
87.19   (c) The asset protection described in paragraph (a) terminates with respect to an asset 
87.20   includable in the individual's estate under chapter 524 or section 256B.15:
87.21   (1) when the estate distributes the asset; or
87.22   (2) if the estate of the individual has not been probated within one year from the 
87.23   date of death.
87.24   (d) If an individual owns a protected asset on the date of death and the estate is 
87.25   opened for probate more than one year after death, the state or a county agency may file 
87.26   and collect claims in the estate under section 256B.15, and no statute of limitations in 
87.27   chapter 524 that would otherwise limit or bar the claim shall apply.
87.28   (e) Except as otherwise provided, nothing in this section shall limit or prevent 
87.29   recovery of medical assistance.
87.30       Subd. 14. Implementation. (a) If federal law is amended or a federal waiver is 
87.31   granted to permit implementation of this section, the commissioner, in consultation with 
87.32   the commissioner of commerce, may alter the requirements of subdivisions 10 and 11, 
87.33   and may establish additional requirements for approved policies in order to conform with 
87.34   federal law or waiver authority. In establishing these requirements, the commissioner shall 
87.35   seek to maximize purchase of qualifying policies by Minnesota residents while controlling 
87.36   medical assistance costs.
88.1    (b) The commissioner is authorized to suspend implementation of this section 
88.2    until the next session of the legislature if the commissioner, in consultation with the 
88.3    commissioner of commerce, determines that the federal legislation or federal waiver 
88.4    authorizing a partnership program in Minnesota is likely to impose substantial unforeseen 
88.5    costs on the state budget.
88.6    (c) The commissioner must take action under paragraph (a) or (b) within 45 days of 
88.7    final federal action authorizing a partnership policy in Minnesota.
88.8    (d) The commissioner must notify the appropriate legislative committees of 
88.9    action taken under this subdivision within 50 days of final federal action authorizing a 
88.10   partnership policy in Minnesota.
88.11   (e) The commissioner must publish a notice in the State Register of implementation 
88.12   decisions made under this subdivision as soon as practicable.
88.13   (a) The commissioner, in cooperation with the commissioner of commerce, may alter 
88.14   the requirements of this section so as to be in compliance with forthcoming requirements 
88.15   of the Department of Health and Human Services and the National Association of 
88.16   Insurance Commissioners necessary to implement the long-term care partnership program 
88.17   requirements of Public Law 109-171, section 6021.
88.18   (b) The commissioner shall submit a state plan amendment to the federal government 
88.19   to implement the long-term care partnership program in accordance with this section.
88.20       Subd. 15. Limitation on liens. (a) An individual's interest in real property shall 
88.21   not be subject to a medical assistance lien or a notice of potential claim while and to the 
88.22   extent it is protected under subdivision 9.
88.23   (b) Medical assistance liens or liens arising under notices of potential claims against 
88.24   an individual's interests in real property in the individual's estate that are designated as 
88.25   protected under subdivision 13, paragraph (b), shall be released to the extent of the dollar 
88.26   value of the protection applied to the interest.
88.27   (c) If an interest in real property is protected from a lien for recovery of medical 
88.28   assistance paid on behalf of the individual under paragraph (a) or (b), no lien for recovery 
88.29   of medical assistance paid on behalf of that individual shall be filed against the protected 
88.30   interest in real property after it is distributed to the individual's heirs or devisees.
88.31       Subd. 16. Burden of proof. Any individual or the personal representative of the 
88.32   individual's estate who asserts that an asset is a disregarded or protected asset under 
88.33   this section in connection with any determination of eligibility for benefits under the 
88.34   medical assistance program or any appeal, case, controversy, or other proceedings, shall 
88.35   have the initial burden of:
89.1    (1) documenting and proving by clear and convincing evidence that the asset or 
89.2    source of funds for the asset in question was designated as disregarded or protected;
89.3    (2) tracing the asset and the proceeds of the asset from that time forward; and 
89.4    (3) documenting that the asset or proceeds of the asset remained disregarded or 
89.5    protected at all relevant times.
89.6    EFFECTIVE DATE.This section is effective July 1, 2006.

89.7        Sec. 75. Laws 2005, First Special Session chapter 4, article 7, section 59, is amended 
89.8    to read:
89.9    Sec. 59.  REPORT TO LEGISLATURE.  
89.10   The commissioner shall report to the legislature by  December 15, 2006, on the 
89.11   redesign of case management services.  In preparing the report, the commissioner 
89.12   shall consult with  representatives for consumers, consumer advocates, counties, labor 
89.13   organizations representing county social service workers, and  service providers.  The 
89.14   report shall include draft legislation  for case management changes that will:  
89.15   (1) streamline administration;  
89.16   (2) improve consumer access to case management services;  
89.17   (3) address the use of a comprehensive universal assessment  protocol for persons 
89.18   seeking community supports;  
89.19   (4) establish case management performance measures;  
89.20   (5) provide for consumer choice of the case management  service vendor; and  
89.21   (6) provide a method of payment for case management  services that is cost-effective 
89.22   and best supports the draft  legislation in clauses (1) to (5).

89.23       Sec. 76. MEDICAL MALPRACTICE INSURANCE REPORT.
89.24   (a) The commissioner of commerce shall provide to the legislature annually a brief 
89.25   written report on the status of the market for medical malpractice insurance in Minnesota. 
89.26   The report must summarize, interpret, explain, and analyze information on that subject 
89.27   available to the commissioner, through annual statements filed by insurance companies, 
89.28   information obtained under paragraph (c), and other sources. 
89.29   (b) The annual report must consider, to the extent possible, using definitions 
89.30   developed by the commissioner, Minnesota-specific data on market shares; premiums 
89.31   received; amounts paid to settle claims that were not litigated, claims that were settled 
89.32   after litigation began, and claims that were litigated to court judgment; amounts spent 
89.33   on processing, investigation, litigation, and otherwise handling claims; other sales and 
89.34   administrative costs; and the loss ratios of the insurers. 
90.1    (c) Each insurance company that provides medical malpractice insurance in this state 
90.2    shall, no later than June 1 each year, file with the commissioner of commerce, on a form 
90.3    prescribed by the commissioner and using definitions developed by the commissioner, 
90.4    the Minnesota-specific data referenced in paragraph (b), other than market share, for the 
90.5    previous calendar year for that insurance company, shown separately for various categories 
90.6    of coverages including, if possible, hospitals, medical clinics, nursing homes, physicians 
90.7    who provide emergency medical care, obstetrician gynecologists, and ambulance services. 
90.8    An insurance company need not comply with this paragraph if its direct premium written 
90.9    in the state for the previous calendar year is less than $2,000,000.

90.10       Sec. 77.  REPEALER.
90.11   (a) Minnesota Statutes 2005 Supplement, section 62Q.251, is repealed, effective the 
90.12   day following final enactment.
90.13   (b) Minnesota Rules, parts 2781.0100; 2781.0200; 2781.0300; 2781.0400; 
90.14   2781.0500; and 2781.0600, are repealed, effective July 1, 2006.