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 musthave at least one coordinator,2.1approved 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, approval2.7will 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) initialcoordinatorsponsor approval, $100.Initial coordinator approval expires2.20on 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 ofcoordinatorsponsor approval, $10.Renewal of coordinator approval2.27expires 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 21.12estate ofbeneficiary 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 establishno34.11more than threeseparate 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 not34.13vary between any two regions by more than 20 percent. Health carriers that do not do34.14business in the Minneapolis/St. Paul metropolitan area may request approval for no34.15more than two geographic regions, and clauses (2) and (3) do not apply to approval of34.16requests made by those health carriers. The commissionermayshall 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 metropolitan34.20area;34.21(3) for each geographic region that is rural, the index rate for that region must not34.22exceed the index rate for the Minneapolis/St. Paul metropolitan area; and34.23 (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 ofthreefive 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 eachthree-yearfive-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 subsequentthree-yearfive-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 3and a37.3waiver 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 the2050 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 elementsleft justified in38.14the 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 elementsand must38.19come 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 is39.2"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 element39.16is "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;or42.30 (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 establishno more than threeseparate geographic regions 43.35 determined by the health carrier and to establish separate index rates for each such region,44.1provided that the index rates do not vary between any two regions by more than 2044.2percent. Health carriers that do not do business in the Minneapolis/St. Paul metropolitan44.3area may request approval for no more than two geographic regions, and clauses (2) and44.4(3) do not apply to approval of requests made by those health carriers. A health carrier44.5may also request approval to establish one or more additional geographic regions and one44.6or more separate index rates for premiums for employees working and residing outside44.7of Minnesota. The commissionermayshall 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 metropolitan44.11area;44.12(3) if one geographic region is rural, the index rate for the rural region must not44.13exceed 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 1,000claimsutilization reviews, the number and rate ofclaims denied47.5 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;and57.33 (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;and59.1 (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 statesthe duration, where limited, of renewability and the59.16duration of the term of coverage for which the policy is issued and for which it may be59.17renewedthat 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?;and60.10 (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 thata67.6 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; 67.20and67.21(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.30APPROPRIATENESS OF RECOMMENDED PURCHASE67.32 SUITABILITY. 68.1In recommending the purchase or replacement of a long-term care insurance policy68.2or certificate, an agent shall comply with section60K.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 of6560 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 completedwithin 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 givesYou 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 approved9060 days after filing 74.24 unless disapproved by the commissioner within the90-day60-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 surplus79.17distribution of a commercial self-insurance group's first fund year or no later than after79.18the 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 TOMINNESOTA WORKERS' COMPENSATION79.30INSURERS' ASSOCIATIONLICENSED DATA SERVICE ORGANIZATIONS. 79.31Subdivision 1.Required activity.Each self-insurer shall perform the following79.32activities:79.33(1) maintain membership in and report loss experience data to the Minnesota79.34Workers' Compensation Insurers Association, or a licensed data service organization,80.1in accordance with the statistical plan and rules of the organization as approved by the80.2commissioner;80.3(2) establish a plan for merit rating which shall be consistently applied to all80.4insureds, provided that members of a data service organization may use merit rating plans80.5developed by that data service organization;80.6(3) provide an annual report to the commissioner containing the information and80.7prepared in the form required by the commissioner; and80.8(4) keep a record of the losses paid by the self-insurers and premiums for the80.9group self-insurers.80.10 Subd. 2. Permitted activity.In addition to any other activities not prohibited by80.11this chapter, self-insurers mayThrough 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;80.20and80.21(3) develop rules for the assignment of risks to classifications.80.22Subd. 3.Delayed reporting.Private self-insurers established under sections80.2379A.01to79A.18prior to August 1, 1995, need not begin filing the reports required80.24under 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. 82.19Subd. 2.Home care service."Home care service" means care described in section82.20144A.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. 82.25Subd. 5.Nursing home."Nursing home" means a nursing home as described82.26in section144A.01.82.27 Subd. 6. Partnership policy. "Partnership policy" means a long-term care insurance 82.28 policy that meets the requirements under subdivision 10or 11, regardless of when the82.29policyand wasfirstissued 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 on83.10or after the effective date of Laws 2005, First Special Session chapter 4, article 7, section83.115, and maintain the partnership policy in effect throughout the period of participation83.12in the partnership programbe 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 minimumhave 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 beforethe effective date of Laws 2005, First Special Session chapter 4, article 7,83.19section 5July 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 applicationoffor 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) Afterdisregarding financialdetermining assetsexempted under medical84.6assistance eligibility requirementssubject to the asset limit under section 256B.056, 84.7 subdivision 3 or 3c, or 256B.057, subdivision 9 or 10, the commissioner shalldisregard an84.8additional amount of financial assets equalallow the individual to designate assets to be 84.9 protected from recovery under subdivisions 13 and 15 up to the dollar amount ofcoverage84.10 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 medical84.13assistance 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 policiesLong-term care partnership 85.19 policy inflation protection.(a) A dollar-for-dollar asset protection policy must meet all85.20of 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 an85.23adjusted premium.85.24(d) The policy must satisfy the requirements established by the commissioner of85.25human services under subdivision 14.85.26(e) Minimum daily benefits shall be $130 for nursing home care or $65 for home85.27care, with inflation protection provided in the policy as described in section62S.23,85.28subdivision 1, clause (1). These minimum daily benefit amounts shall be adjusted by the85.29commissioner on October 1 of each year by a percentage equal to the inflation protection85.30feature described in section62S.23, subdivision 1, clause (1), for purposes of setting85.31minimum requirements that a policy must meet in future years in order to initially qualify85.32as an approved policy under this subdivision. Adjusted minimum daily benefit amounts85.33shall 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. 86.7Subd. 11.Total asset protection policies.(a) A total asset protection policy must86.8meet 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 a86.10dollar amount equal to 36 months of nursing home care at the minimum daily benefit rate86.11determined and adjusted under paragraph (c).86.12(c) Minimum daily benefits shall be $150 for nursing home care or $75 for home86.13care, with inflation protection provided in the policy as described in section62S.23,86.14subdivision 1, clause (1). These minimum daily benefit amounts shall also be adjusted86.15by the commissioner on October 1 of each year by a percentage equal to the inflation86.16protection feature described in section62S.23, subdivision 1, clause (1), for purposes of86.17setting minimum requirements that a policy must meet in future years in order to initially86.18qualify as an approved policy under this subdivision. Adjusted minimum daily benefit86.19amounts 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; and86.23(3) care management.86.24 Subd. 12. Compliance with federal law. An issuer of a partnership policy must 86.25 comply withany federal law authorizing partnership policies in MinnesotaPublic 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 federal86.28law until the date upon which the law requires compliance with the provision. The86.29commissioner has authority to enforce this subdivision.86.30 Subd. 13. Limitations on estate recovery. (a)For an individual who exhausts the86.31minimum benefits of adollar-for-dollar asset protectionpolicy under subdivision 10, and86.32is determined eligible for medical assistance under subdivision 9, the state shall limit86.33recovery under the provisions of section256B.15against the estate of the individual or86.34individual's spouse for medical assistance benefits received by that individual to an amount86.35that 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 protection87.9policy under subdivision 11, and is determined eligible for medical assistance under87.10subdivision 9, the state shall not seek recovery under the provisions of section256B.1587.11against the estate of the individual or individual's spouse for medical assistance benefits87.12received 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 is87.31granted to permit implementation of this section, the commissioner, in consultation with87.32the commissioner of commerce, may alter the requirements of subdivisions 10 and 11,87.33and may establish additional requirements for approved policies in order to conform with87.34federal law or waiver authority. In establishing these requirements, the commissioner shall87.35seek to maximize purchase of qualifying policies by Minnesota residents while controlling87.36medical assistance costs.88.1(b) The commissioner is authorized to suspend implementation of this section88.2until the next session of the legislature if the commissioner, in consultation with the88.3commissioner of commerce, determines that the federal legislation or federal waiver88.4authorizing a partnership program in Minnesota is likely to impose substantial unforeseen88.5costs on the state budget.88.6(c) The commissioner must take action under paragraph (a) or (b) within 45 days of88.7final federal action authorizing a partnership policy in Minnesota.88.8(d) The commissioner must notify the appropriate legislative committees of88.9action taken under this subdivision within 50 days of final federal action authorizing a88.10partnership policy in Minnesota.88.11(e) The commissioner must publish a notice in the State Register of implementation88.12decisions 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.