SF 3717

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; providing recovery of damages and attorney fees for breach
of an insurance policy; amending Minnesota Statutes 2006, section 471.982,
subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 60A.

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

Section 1.

new text begin [60A.0811] BREACH OF INSURANCE POLICY; RECOVERY OF
DAMAGES AND ATTORNEY FEES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section:
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new text begin (1) "insurance policy" means an insurance policy or contract other than:
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new text begin (i) a workers' compensation insurance policy or contract;
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new text begin (ii) a policy or contract issued, executed, renewed, maintained, or delivered in this
state by a health carrier as defined in section 62A.011, subdivision 2; or
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new text begin (iii) a policy or contract issued by a township mutual fire insurance company or
farmers mutual fire insurance company operating under chapter 65A or 67A;
new text end

new text begin (2) "insured" means any named insured, additional insured, or insured under an
insurance policy; and
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new text begin (3) "insurer" means an insurer:
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new text begin (i) incorporated or organized in this state; or
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new text begin (ii) admitted to do business or doing business in this state but not incorporated
or organized in this state. Insurer does not include the joint underwriting association
operating under chapter 62F or 62I; or a township mutual fire insurance company or
farmers mutual fire insurance company operating under chapter 65A or 67A.
new text end

new text begin Subd. 2. new text end

new text begin Damages. new text end

new text begin (a) In addition to other damages, attorney fees, or costs
allowable under law or an insurance policy, an insured who prevails in any claim against
an insurer based on the insurer's breach, repudiation or denial of, failure to fulfill, or delay
in fulfilling, a duty to provide or pay benefits is entitled to recover:
new text end

new text begin (1) monetary consequential damages that foreseeably arise from the breach,
repudiation, denial, failure, or delay;
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new text begin (2) 18 percent per annum interest on monetary benefits due under the insurance
policy, calculated from the date the request for payment of those benefits was made to
the insurer; and
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new text begin (3) reasonable attorney fees and costs as provided under this section.
new text end

new text begin (b) Punitive damages or damages for nonmonetary losses are not recoverable
under this section.
new text end

new text begin Subd. 3. new text end

new text begin Effect of arbitration under section 65B.525. new text end

new text begin (a) If an insurer agrees to
liability for personal injury protection, uninsured, or underinsured benefits under a policy
of private passenger vehicle insurance under chapter 65B and only the amount of benefits
is disputed, the insured is not entitled to recover attorney fees under this section if the
insurer agrees to submit the dispute to binding arbitration or if binding arbitration is
required under section 65B.525.
new text end

new text begin Subd. 4. new text end

new text begin Factors to consider in awarding attorney fees. new text end

new text begin An award of attorney
fees and costs under this section may include consideration of the following factors: the
amount of time reasonably expended before and during the court action or arbitration
proceeding; reasonable hourly rates; the outcome obtained; and the nature and complexity
of the matter.
new text end

new text begin Subd. 5. new text end

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

new text begin A licensed insurance producer
is not liable for damages and attorney fees under this section for a breach of insurance
policy by the insurer that appointed the producer to transact on its behalf, except to the
extent the producer has caused or contributed to the breach.
new text end

new text begin Subd. 6. new text end

new text begin Application. new text end

new text begin This section applies to a court action or arbitration
proceeding, including an action seeking declaratory judgment.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2008, and applies to a
cause of action existing on or arising on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2006, section 471.982, subdivision 3, is amended to read:

Subd. 3.

Exemptions.

Self-insurance pools established and open for enrollment
on a statewide basis by the Minnesota League of Cities Insurance Trust, the Minnesota
School Boards Association Insurance Trust, the Minnesota Association of Townships
Insurance and Bond Trust, or the Minnesota Association of Counties Insurance Trust
and the political subdivisions that belong to them are exempt from the requirements of
this section and deleted text begin section deleted text end new text begin sections new text end 65B.48, subdivision 3 new text begin , and 60A.0811 new text end . In addition, the
Minnesota Association of Townships Insurance and Bond Trust and the townships that
belong to it are exempt from the requirement to hold the certificate of surety authorization
issued by the commissioner of commerce as provided in section 574.15.