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Key: (1) language to be deleted (2) new language


                         Laws of Minnesota 1983 

                        CHAPTER 203--S.F.No. 1168
           An act relating to insurance; covered claims under the 
          Insurance Guaranty Act; rulemaking power of 
          commissioner on nonrenewal of auto insurance and 
          self-insurance; application fee for self-insurers; 
          commissioner to adopt rules on nonrenewals of 
          policies; amending Minnesota Statutes 1982, sections 
          60C.09, subdivision 1; 65B.17; and 65B.48, subdivision 
          3, and by adding a subdivision. 
    Section 1.  Minnesota Statutes 1982, section 60C.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITION.] A covered claim is any unpaid 
claim, including one for unearned premium, which: 
    (a) Arises out of and is within the coverage of an 
insurance policy issued by a member insurer if the insurer 
becomes an insolvent insurer after April 30, 1979; 
    (b) Arises out of a class of business which is not excepted 
from the scope of Laws 1971, chapter 145 by section 60C.02; and 
    (c) Is made by: 
    (i) A policyholder, or an insured beneficiary under a 
policy, who, at the time of the insured event, was a resident of 
this state; or 
    (ii) A person designated in the policy as having an 
insurable interest in or related to property situated in this 
state at the time of the insured event; or 
    (iii) An obligee or creditor under any surety bond, who, at 
the time of default by the principal debtor or obligor, was a 
resident of this state; or 
    (iv) A third party claimant under a liability policy or 
surety bond, if: (a) the insured or the third party claimant was 
a resident of this state at the time of the insured event; (b) 
the claim is for bodily or personal injuries suffered in this 
state by a person who when he suffered the injuries was a 
resident of this state; or (c) the claim is for damages to real 
property situated in this state at the time of damage; or 
    (v) A direct or indirect assignee of a person who except 
for the assignment might have claimed under (i), (ii) or (iii). 
    A covered claim also includes any unpaid claim which arises 
or exists within 30 days after the time of entry of an order of 
liquidation with a finding of insolvency by a court of competent 
jurisdiction unless prior thereto the insured replaces the 
policy or causes its cancellation or the policy expires on its 
expiration date.  
    Sec. 2.  Minnesota Statutes 1982, section 65B.17, is 
amended to read: 
    Subdivision 1.  [GENERAL REGULATIONS.] No insurer shall 
fail to renew an automobile insurance policy unless it shall 
mail or deliver to the named insured, at the address shown in 
the policy, at least 60 days advance notice of its intention not 
to renew.  Said The notice shall must contain the specific 
underwriting or other reason or reasons for such the nonrenewal. 
When the failure to renew is based upon a termination of the 
agency contract, the notice shall must so state.  This section 
shall does not apply: 
    (a) If the insurer has manifested its willingness to renew; 
    (b) In case of nonpayment of the renewal premium; 
    Provided that, notwithstanding the failure of an insurer to 
comply with this section, the policy shall terminate terminates 
on the effective date of any other automobile insurance policy 
procured by the insured, with respect to any automobile 
designated in both policies.  Renewal of a policy shall does not 
constitute a waiver or estoppel with respect to grounds for 
cancellation which existed before the effective date of such the 
renewal.  No insurer shall fail to renew an automobile policy 
solely because of the age of the insured.  No insurer shall 
refuse to renew an automobile insurance policy for reasons which 
are arbitrary or capricious.  No insurer shall refuse to renew 
an automobile insurance policy in violation of rules adopted 
pursuant to subdivision 2.  An insurer may refuse to renew an 
automobile insurance policy in case of nonpayment of dues to an 
association or organization, other than an insurance association 
or organization, where payment of dues is a prerequisite to 
obtaining or continuing such insurance; provided, however, that 
this provision for nonrenewal for failure to pay dues shall not 
be applicable to persons who are retired at age 62 years of age 
or older or who are disabled, according to social security 
    No insurer shall take any action in regard to an automobile 
insurance policy on the statements or charges of any person made 
to the insurer concerning alleged unsafe driving habits of an 
insured unless the insurer shall concurrently disclose to the 
insured the name and address of the person from which the 
insurer received the information.  
    Subd. 2.  [RULEMAKING.] The commissioner may adopt rules 
pursuant to chapter 14, including temporary rules, to specify 
the grounds for nonrenewal of an automobile policy.  The rules 
must limit the basis for nonrenewal to the following factors:  
    (a) the reasons stated for cancellation in section 65B.15;  
    (b) payments made for collision, bodily injury liability, 
or property damage liability coverage;  
    (c) moving violations of a driver; and 
    (d) other factors deemed reasonable by the commissioner.  
     The rules must specify the manner in which these factors 
will be considered and may reflect the severity or reoccurrence 
of any moving violation, the amount of any payment made, and the 
number of vehicles insured.  
     Subd. 3.  [ADMINISTRATIVE PENALTY.] The rules adopted under 
this section may provide for imposition of a monetary penalty 
not greater than $500 per occurrence upon insurers who are found 
to be in violation of any rule provision. 
    Sec. 3.  Minnesota Statutes 1982, section 65B.48, 
subdivision 3, is amended to read: 
    Subd. 3.  Self-insurance, subject to approval of the 
commissioner, is effected by filing with the commissioner in 
satisfactory form: 
    (1) a continuing undertaking by the owner or other 
appropriate person to pay tort liabilities or basic economic 
loss benefits, or both, and to perform all other obligations 
imposed by sections 65B.41 to 65B.71; 
    (2) evidence that appropriate provision exists for prompt 
administration of all claims, benefits, and obligations provided 
by sections 65B.41 to 65B.71; and 
    (3) evidence that reliable financial arrangements, 
deposits, or commitments exist providing assurance, 
substantially equivalent to that afforded by a policy of 
insurance complying with sections 65B.41 to 65B.71, for payment 
of tort liabilities, basic economic loss benefits, and all other 
obligations imposed by sections 65B.41 to 65B.71.; and 
    (4) a nonrefundable application fee of $500.  
     Sec. 4.  Minnesota Statutes 1982, section 65B.48, is 
amended by adding a subdivision to read: 
     Subd. 3a.  To carry out the purposes of subdivision 3, the 
commissioner may adopt rules pursuant to chapter 14, including 
temporary rules.  These rules may:  
    (a) establish reporting requirements;  
    (b) establish standards or guidelines to assure the 
adequacy of the financing and administration of self-insurance 
    (c) establish bonding requirements or other provisions 
assuring the financial integrity of entities that self-insure; 
    (d) establish other reasonable requirements to further the 
purposes of this section.  
    Sec. 5.  [EFFECTIVE DATE.] 
    Sections 1 to 4 are effective the date after final 
    Approved May 20, 1983

Official Publication of the State of Minnesota
Revisor of Statutes