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Minnesota Legislature

Office of the Revisor of Statutes

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


  

                         Laws of Minnesota 1983 

                        CHAPTER 328--H.F.No. 674
           An act relating to commerce; providing for a program 
          of continuing education; authorizing a continuing 
          insurance education advisory task force; authorizing 
          the commissioner of insurance to promulgate rules to 
          implement the program; requiring certain disclosures 
          on credit insurance policies and application; 
          providing license and renewal fees for agents; 
          increasing fees for insurance companies; regulating 
          self-insurance plans and pools; appropriating money; 
          amending Minnesota Statutes 1982, sections 60A.02, 
          subdivision 7; 60A.03, subdivision 5; 60A.17, 
          subdivision 1 and by adding a subdivision; 60A.14, 
          subdivision 1; 60A.198, subdivision 3; 60A.23, 
          subdivision 8; 82.22, subdivision 13; 471.982, 
          subdivision 2; and proposing new law coded in 
          Minnesota Statutes, chapter 60A. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 60A.02, 
subdivision 7, is amended to read: 
    Subd. 7.  [INSURANCE AGENT.] An "insurance agent" is a 
person acting under express authority from, and an appointment 
pursuant to section 60A.17 by, an insurer and on its behalf to 
solicit insurance, or to appoint other agents to solicit 
insurance, or to write and countersign policies of insurance, or 
to collect premiums therefor within this state, or to exercise 
any or all these powers when so authorized by the insurer.  The 
term "person" includes a natural person, a partnership, or a 
corporation.  
    Sec. 2.  Minnesota Statutes 1982, section 60A.03, 
subdivision 5, is amended to read:  
    Subd. 5. [EXAMINATION FEES AND EXPENSES.] When any 
visitation, examination, or appraisal is made by order of the 
commissioner, an assistant, an actuary other than a consulting 
actuary appointed under subdivision 3, clause (3), an audit 
director, a supervisor of analysts, or a certified public 
accountant retained by the insurance division, the company being 
examined, visited or appraised, including fraternals, township 
mutuals and reciprocal exchanges, shall pay to the division of 
insurance $130 for each day necessarily spent by that person in 
such activities.  When the visitation, examination or appraisal 
is made by the principal auditor, senior auditor or rate analyst 
regularly employed in the division of insurance, the company 
being examined, visited or appraised, including fraternals, 
township mutuals, and reciprocal exchanges, shall pay to the 
division $80 for each day necessarily occupied by that person in 
such activities.  When the visitation, examination, or appraisal 
is made, or engaged in, by any other person regularly employed 
in the division of insurance, the company being examined, 
visited or appraised, including fraternals, township mutuals and 
reciprocal exchanges, shall pay to the division of insurance the 
sum of $65 for each day necessarily spent by that person in such 
activities.  In addition to the fees specified in this section, 
the company being examined, visited or appraised shall also pay 
to the division of insurance the necessary expenses of the 
persons engaged in the examination, visit or appraisal the 
company being examined, visited, or appraised, including 
fraternals, township mutuals, reciprocal exchanges, nonprofit 
service plan corporations, health maintenance organizations, 
vendors of risk management services licensed under section 
60A.23, or self-insurance plans or pools established under 
section 176.181 or 471.982, shall pay to the insurance division 
the necessary expenses of the persons engaged in the 
examination, visit, or appraisal plus the per diem salary fees 
of the employees of the division of insurance who are conducting 
or participating in the examination, visitation, or appraisal. 
The per diem salary fees may be based upon the approved 
examination fee schedules of the National Association of 
Insurance Commissioners or otherwise determined by the 
commissioner.  All of these fees and expenses shall must be paid 
into the general insurance division revolving fund.  The 
necessary expenses of the persons engaged in the examination, 
visit or appraisal shall be paid by the commissioner of finance 
at rates prescribed for state employees.  
    Sec. 3.  Minnesota Statutes 1982, section 60A.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [FEES OTHER THAN EXAMINATION FEES.] In 
addition to the fees and charges provided for examinations, the 
following fees shall must be paid to the commissioner for 
deposit in the general fund: 
    (a) by township mutual fire insurance companies: 
    (1) for filing certificate of incorporation $25 and 
amendments thereto, $10; 
    (2) for filing annual statements, $15; 
    (3) for each annual certificate of authority, $15; 
    (4) for filing bylaws $25 and amendments thereto, $10. 
    (b) by other domestic and foreign companies including 
fraternals and reciprocal exchanges: 
    (1) for filing certified copy of certificate of articles of 
incorporation, $50; 
    (2) for filing annual statement, $30; 
    (3) for filing certified copy of amendment to certificate 
or articles of incorporation, $50; 
    (4) for filing bylaws, $25 or amendments thereto, $10; 
    (5) for each company's certificate of authority, $30 $40, 
annually. 
    (c) the following general fees apply: 
    (1) for each certificate, including certified copy of 
certificate of authority, renewal, valuation of life policies, 
corporate condition or qualification, $5; 
    (2) for each copy of paper on file in the commissioner's 
office 50 cents per page, and $2.50 for certifying the same; 
    (3) for license to procure insurance in unadmitted foreign 
companies, $10 $40; 
    (4) for receiving and forwarding each notice, proof of 
loss, summons, complaint or other process served upon the 
commissioner of insurance, as attorney for service of process 
upon any non-resident agent or insurance company, including 
reciprocal exchanges, $5 $15, which amount shall must be paid by 
the party serving the same notice and may be taxed as other 
costs in the action; 
    (5) for valuing the policies of life insurance companies, 
one cent per one thousand dollars of insurance so valued.  The 
commissioner may, in lieu of a valuation of the policies of any 
foreign life insurance company admitted, or applying for 
admission, to do business in this state, accept a certificate of 
valuation from the company's own actuary or from the 
commissioner of insurance of the state or territory in which the 
company is domiciled; 
    (6) for receiving and filing certificates of policies by 
the company's actuary, or by the commissioner of insurance of 
any other state or territory, $50; 
    (7) for issuing a an initial license to an individual 
agent, $15 $20, for issuing an initial agent's license to a 
partnership or corporation, $50, and for issuing an amended or 
duplicate license, $3 $25;  
    (8) for an application, examination, or re-examination for 
one class of license, $15 and an additional $15 for an 
application, examination, or re-examination for the second class 
of license;  
    (9) for each appointment of an agent filed with the 
commissioner, a domestic insurer shall remit $5 annually and all 
other insurers shall remit $3 annually;  
    (10) for renewing an individual agent's license, $20, and 
for renewing a license issued to a corporation or partnership, 
$50;  
    (11) for issuing and renewing a surplus lines agent's 
license, $500.  
    Sec. 4.  Minnesota Statutes 1982, section 60A.17, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LICENSE.] (a) [REQUIREMENT.] No person 
shall act or assume to act as an insurance agent in the 
solicitation or procurement of applications for insurance, nor 
in the sale of insurance or policies of insurance, nor in any 
manner aid as an insurance agent in the negotiation of insurance 
by or with an insurer, including resident agents or reciprocal 
or interinsurance exchanges and fraternal beneficiary 
associations, until that person shall obtain obtains from the 
commissioner a license therefor.  The license shall must 
specifically set forth the name of the person so authorized to 
act as agent and the class or classes of insurance for which 
that person is authorized to solicit or countersign policies.  
An insurance agent may qualify for a license in the following 
classes:  (1) life and health; and (2) property and casualty.  
    No insurer shall appoint or reappoint any natural person, 
partnership, or corporation to act as an insurance agent on its 
behalf until that natural person, partnership, or corporation 
obtains a license as an insurance agent. 
    (b) [PARTNERSHIPS AND CORPORATIONS.] A license issued to a 
partnership or corporation shall must be solely in the name of 
the entity to which it is issued; provided, that each partner, 
director, officer, stockholder, or employee of the licensed 
entity who is personally engaged in the solicitation or 
negotiation of a policy of insurance on behalf of the licensed 
entity shall be personally licensed as an insurance agent.  
    Upon request by the commissioner, each partnership and 
corporation licensed as an insurance agent shall provide the 
commissioner with a list of the names of each partner, director, 
officer, stockholder, and employee who is required to hold a 
valid insurance agent's license.  
    (c) [TRANSITION.] (1) Any agent who is qualified for life 
or accident and health as of June 1, 1981 shall be deemed to 
have is qualified for a life and health license under Laws 1981, 
chapter 307 and been is appointed by an insurer which has 
submitted a written requisition for a license for that agent as 
of June 1, 1981.  
    (2) Any agent who is qualified for one or more lines of 
insurance, excluding life or accident and health and farm 
property liability as of June 1, 1981 shall be deemed to have is 
qualified for a property and casualty license under Laws 1981, 
chapter 307 and been is appointed by any insurer which has 
submitted a written requisition for a license for that agent as 
of June 1, 1981.  
    Sec. 5.  Minnesota Statutes 1982, section 60A.17, is 
amended by adding a subdivision to read:  
    Subd. 1d.  [RENEWAL FEE.] Each agent licensed pursuant to 
this section shall annually pay in accordance with the procedure 
adopted by the commissioner a renewal fee as prescribed by 
section 60A.14, subdivision 1, paragraph (c), clause (10).  
    Sec. 6.  [60A.1701] [CONTINUING INSURANCE EDUCATION.] 
    Subdivision 1.  [DEFINITION.] For the purposes of this 
section, "course" means a course, program of instruction, or 
seminar of continuing insurance education.  
    Subd. 2.  [APPLICABILITY.] This section applies to all 
natural persons licensed by this state to sell classes of 
insurance for which licensing examinations are required.  
    Subd. 3.  [EXEMPTIONS.] This section does not apply to:  
    (a) persons soliciting or selling solely on behalf of 
companies organized and operating according to chapter 67A; or 
    (b) persons holding life and health, or property and 
casualty licenses who, by February 28 of each year, certify to 
the commissioner in writing that they will sell only credit 
life, credit health, and credit property insurance, during that 
year and do in fact so limit their sale of insurance.  
    Subd. 4.  [CONTINUING INSURANCE EDUCATION ADVISORY TASK 
FORCE.] The commissioner of insurance may appoint a continuing 
insurance education advisory task force consisting of 13 
members.  All members must be residents of Minnesota.  Three 
members must neither be employed by an insurance company nor 
licensed as an insurance agent.  These three members are not 
eligible to be chairperson and are compensated according to 
section 15.059, subdivision 6.  Each of the other ten members 
must be actively engaged in some activity in the insurance 
industry in this state and have a principal office located in 
this state.  These ten members serve without compensation, but 
are paid reasonable and necessary expenses incurred in the 
performance of their duties in the same amount and in the same 
manner as state employees.  Three of these ten members must be 
employed in capacities other than as licensed agents by 
insurance companies authorized to do business in this state. The 
remaining seven members must be licensed insurance agents 
actively engaged in the solicitation and sale of insurance and 
currently subject to continuing education requirements. 
Membership on the advisory task force must represent, to the 
extent possible, the various phases of the insurance industry 
and especially the several classes of insurance.  
    The commissioner shall appoint the members of the task 
force.  Before making appointments to the advisory task force, 
the commissioner shall solicit nominations from the several 
professional organizations representing persons selling 
insurance in this state and from the organizations representing 
companies authorized to do business in this state.  
    Subd. 5.  [POWERS OF THE ADVISORY TASK FORCE.] (a) 
Applications for accreditation of each course must be submitted 
to the commissioner on forms prescribed by the commissioner and 
must be accompanied by a fee of not more than $10 payable to the 
state of Minnesota for deposit in the general fund.  If the 
advisory task force is created, it shall make recommendations to 
the commissioner regarding the accreditation of courses 
sponsored by institutions, both public and private, which 
satisfy the criteria established by this section, the number of 
credit hours to be assigned to the courses, and rules which may 
be promulgated by the commissioner.  The advisory task force 
shall seek out and encourage the presentation of courses.  
    (b) If the advisory task force is created, it shall make 
recommendations and provide subsequent evaluations to the 
commissioner regarding procedures for reporting compliance with 
the minimum education requirement.  
    Subd. 6.  [POWERS OF THE COMMISSIONER.] (a) The 
commissioner shall make the final determination as to 
accreditation and assignment of credit hours for courses.  
    (b) The commissioner shall adopt procedures for reporting 
compliance with the minimum education requirement.  These 
procedures are not subject to the rulemaking provisions of 
chapter 14.  
    (c) The commissioner shall promulgate rules according to 
chapter 14 to carry out the purposes of this section.  
    Subd. 7.  [CRITERIA FOR COURSE ACCREDITATION.] (a) The 
commissioner may accredit a course only to the extent it is 
designed to impart substantive and procedural knowledge of the 
insurance field.  The burden of demonstrating that the course 
satisfies this requirement is on the individual or organization 
seeking accreditation.  The commissioner shall approve any 
educational program approved by Minnesota Continuing Legal 
Education relating to the insurance field.  
    (b) The commissioner may not accredit a course:  
    (1) that is designed to prepare students for a license 
examination;  
    (2) in mechanical office or business skills, including 
typing, speedreading, use of calculators, or other machines or 
equipment;  
    (3) in sales promotion, including meetings held in 
conjunction with the general business of the licensed agent; or 
    (4) in motivation, salesmanship, psychology, or time 
management.  
    Subd. 8.  [MINIMUM EDUCATION REQUIREMENT.] Each person 
subject to this section shall complete annually a minimum of 20 
credit hours of courses accredited by the commissioner.  Any 
person teaching or lecturing at an accredited course qualifies 
for 1-1/2 times the number of credit hours that would be granted 
to a person completing the accredited course.  Credit hours over 
20 earned in any one year may be carried forward for the 
following two years.  The commissioner may recognize accredited 
courses completed in 1983, 1984, or 1985 for the minimum 
education requirement for 1985.  
    Subd. 9.  [WAIVER OF REQUIREMENTS.] (a) The commissioner 
may grant a waiver or an extension of time up to 90 days to 
complete the minimum education requirement to an individual upon 
a showing of good cause.  It is the licensed person's 
responsibility to request a waiver or extension on a form 
prescribed by the commissioner.  As of the day the licensed 
person properly files a request for a waiver or extension, the 
license remains in effect until the commissioner notifies the 
licensed person of the commissioner's decision.  The 
commissioner may approve a waiver or extension subject to any 
reasonable conditions.  The person's license remains in effect 
during the compliance period determined by the commissioner.  If 
the licensed person fails to comply with any reasonable 
conditions imposed by the commissioner, the commissioner shall 
terminate the license.  If the request for a waiver or extension 
is denied by the commissioner, the licensed person shall have 30 
days within which to satisfy the minimum education requirement 
involved in the request for a waiver or extension.  If the 
minimum education requirement is not satisfied within the 
compliance period, the commissioner shall terminate the person's 
license.  
    (b) Upon application on a form prescribed by the 
commissioner, the commissioner may grant a waiver of the minimum 
education requirement to a group or class of licensed persons 
upon a showing of good cause.  
    Subd. 10.  [REPORTING.] (a) After completing the minimum 
education requirement, each person subject to this section shall 
file or cause to be filed a compliance report annually in 
accordance with the procedures adopted by the commissioner.  
    (b) Each compliance report must be accompanied by an annual 
continuing education fee of $5 payable to the state of Minnesota 
for deposit in the general fund.  
    (c) An institution offering an accredited course shall 
comply with the procedure for reporting compliance adopted by 
the commissioner.  
    (d) If a person subject to this section completes a 
nonaccredited course, he may submit a written report to the 
advisory committee accompanied by a fee of not more than $10 
payable to the state of Minnesota for deposit in the general 
fund.  This report must be accompanied by proof satisfactory to 
the commissioner that the person has completed the minimum 
education requirement for the annual period during which the 
nonaccredited course was completed.  Upon the recommendation of 
the advisory committee that the course satisfies the criteria 
for course accreditation, the commissioner may approve the 
nonaccredited course and shall so inform the person.  If the 
nonaccredited course is approved by the commissioner, it may be 
used to satisfy the minimum education requirement for the 
person's next annual compliance period.  
    Subd. 11.  [ENFORCEMENT.] If a person subject to this 
section fails to complete the minimum education or reporting 
requirement or to pay the prescribed fees for any annual period, 
no license may be renewed or continued in force for that person 
for any class of insurance until the person has demonstrated to 
the satisfaction of the commissioner that all requirements of 
this section have been complied with or that a waiver or 
extension has been obtained.  
    If a person subject to this section fails to file a 
compliance request or a request for a waiver or extension with 
the commissioner within 30 days of the date on which the person 
is required to report, the commissioner may issue an order 
summarily suspending that person's license.  The order is 
effective upon service on the person by first class mail at his 
last known address on file with the commissioner.  A person 
whose license has been summarily suspended under this 
subdivision may, within 15 days of the date of the order, 
request a hearing to be conducted according to the provisions of 
chapter 14.  The hearing must be held within 15 days of the 
commissioner's receipt of the request, but the person may agree 
to an extension.  The summary suspension remains in effect 
pending the outcome of the hearing.  
    Sec. 7.  Minnesota Statutes 1982, section 60A.198, 
subdivision 3, is amended to read: 
    Subd. 3.  [PROCEDURE FOR OBTAINING LICENSE.] A person 
licensed as a resident agent in this state pursuant to other law 
may obtain a surplus lines license by doing the following:  
    (a) Filing an application in the form and with the 
information the commissioner may reasonably require to determine 
the ability of the applicant to act in accordance with sections 
60A.195 to 60A.209;  
    (b) Maintaining a resident agent license in this state;  
    (c) Delivering to the commissioner a financial guarantee 
bond from a surety acceptable to the commissioner for the 
greater of the following:  
    (1) $5,000; or 
    (2) The largest semiannual surplus lines premium tax 
liability incurred by him in the immediately preceding five 
years; and 
    (d) Agreeing to file with the commissioner no later than 
February 15 and August 15 annually, a sworn statement of the 
charges for insurance procured or placed and the amounts 
returned on the insurance canceled under the license for the 
preceding six month period ending December 31 and June 30 
respectively, and at the time of the filing of this statement, 
paying the commissioner a tax on premiums equal to three percent 
of the total written premiums less cancellations; and 
    (e) annually paying a fee as prescribed by section 60A.14, 
subdivision 1, paragraph (c), clause (11).  
    Sec. 8.  Minnesota Statutes 1982, section 60A.23, 
subdivision 8, is amended to read: 
    Subd. 8.  [SELF INSURANCE PLAN ADMINISTRATORS; VENDORS OF 
RISK MANAGEMENT SERVICES.] (1) [SCOPE.] This subdivision applies 
to any vendor of risk management services and to any entity 
which administers, for compensation, a self insurance plan.  
This subdivision shall not apply (a) to an insurance company 
authorized to transact insurance in this state, as defined by 
section 60A.06, subdivision 1, clauses (4) and (5); (b) to a 
service plan corporation, as defined by section 62C.02, 
subdivision 6; (c) to a health maintenance organization, as 
defined by section 62D.02, subdivision 4; (d) to an employer 
directly operating a self insurance plan for its employees' 
benefits or (e) to a nonprofit insurance trust administered and 
operated for the benefit of employer participants and 
established prior to January 1, 1979.  
    (2) [DEFINITIONS.] For purposes of this subdivision the 
following terms have the meanings given them. 
    (a) "Administering a self insurance plan" means (i) 
processing, reviewing or paying claims, (ii) establishing or 
operating funds and accounts, or (iii) otherwise providing 
necessary administrative services in connection with the 
operation of a self insurance plan. 
    (b) "Employer" means an employer, as defined by section 
62E.02, subdivision 2. 
    (c) "Entity" means any association, corporation, 
partnership, sole proprietorship, trust, or other business 
entity engaged in or transacting business in this state. 
    (d) "Self insurance plan" means a plan providing life, 
medical or hospital care, accident, sickness or disability 
insurance, as an employee fringe benefit, or a plan providing 
liability coverage for any other risk or hazard, which is not 
directly insured or provided by a licensed insurer, service plan 
corporation, or health maintenance organization. 
    (e) "Vendor of risk management services" means an entity 
providing for compensation actuarial, financial management, 
accounting, legal or other services for the purpose of designing 
and establishing a self insurance plan for an employer. 
    (3) [LICENSE.] No vendor of risk management services or 
entity administering a self insurance plan may transact such 
this business in this state unless it is licensed to do so by 
the commissioner.  An applicant for a license shall state in 
writing the type of activities it seeks authorization to engage 
in and the type of services it seeks authorization to provide.  
The license shall be granted only when the commissioner is 
satisfied that the entity possesses the necessary organization, 
background, expertise, and financial integrity to supply the 
services sought to be offered.  The commissioner may issue a 
license subject to restrictions or limitations upon the 
authorization, including the type of services which may be 
supplied or the activities which may be engaged in.  The license 
fee shall be $100.  All licenses are for a period of two years. 
    (4) [REGULATORY RESTRICTIONS; POWERS OF THE COMMISSIONER.] 
To assure that self insurance plans are financially solvent, are 
administered in a fair and equitable fashion, and are processing 
claims and paying benefits in a prompt, fair, and honest manner, 
vendors of risk management services and entities administering 
self insurance plans are subject to the supervision and 
examination by the commissioner.  Vendors of risk management 
services, entities administering self insurance plans, and self 
insurance plans established or operated by them are subject to 
the trade practice requirements of sections 72A.19 to 72A.30. 
    (5) [RULE MAKING AUTHORITY.] To carry out the purposes of 
this subdivision, the commissioner may promulgate administrative 
rules, including emergency rules, pursuant to sections 14.01 to 
14.70.  These rules may: 
    (a) Establish reporting requirements for administrators of 
self insurance plans; 
    (b) Establish standards and guidelines to assure the 
adequacy of financing, reinsuring, and administration of self 
insurance plans; 
    (c) Establish bonding requirements or other provisions 
assuring the financial integrity of entities administering self 
insurance plans; or 
    (d) Establish other reasonable requirements to further the 
purposes of this subdivision. 
    Sec. 9.  Minnesota Statutes 1982, section 82.22, 
subdivision 13, is amended to read:  
    Subd. 13.  [CONTINUING EDUCATION.] (a) After July 1, 1978, 
all real estate salespersons not subject to or who have 
completed the educational requirements contained in subdivision 
6 and all real estate brokers shall be required to successfully 
complete 45 hours of real estate education, either as a student 
or a lecturer, in courses of study approved by the commissioner, 
within three years after their annual renewal date. 
    (b) For the purposes of administration, the commissioner 
shall classify by lot, the real estate brokers and salespersons 
subject to (a) above, in three classifications of substantially 
equal size.  The first class shall complete 15 hours of approved 
real estate study between July 1, 1978 and June 30, 1979 
inclusive.  The second class shall complete 30 hours of approved 
real estate study between the dates of July 1, 1978 and June 30, 
1980 inclusive.  The third class shall complete 45 hours of 
approved real estate study between the dates of July 1, 1978 and 
June 30, 1981.  After the first period, each class shall 
complete the prescribed educational requirements during 
successive three year periods. 
    (c) The commissioner shall adopt rules defining the 
standards for course and instructor approval, and may adopt 
rules for the proper administration of this subdivision. 
     (d) Any program approved by Minnesota Continuing Legal 
Education shall be approved by the commissioner of securities 
and real estate for continuing education for real estate brokers 
if the program or any part thereof relates to real estate.  
    Sec. 10.  Minnesota Statutes 1982, section 471.982, 
subdivision 2, is amended to read:  
    Subd. 2.  The commissioner of insurance is authorized to 
promulgate administrative rules, including emergency rules 
pursuant to sections 14.01 to 14.70.  These rules may provide 
standards or guidelines governing the formation, operation, 
administration, dissolution of self insurance pools, and other 
reasonable requirements to further the purpose of this section 
and shall at a minimum require the following:  
    (a) All participants in the pool are jointly and severally 
liable for all claims and expenses of the pool;  
    (b) Each pool shall contract with a service company 
licensed by the commissioner to provide or contract for all 
administrative services required by the pool.  No vendor of risk 
management services or entity administering a self insurance 
plan under this section may transact such business in this state 
unless it is licensed to do so by the commissioner.  An 
applicant for a license shall state in writing the type of 
activities it seeks authorization to engage in and the type of 
services it seeks authorization to provide.  The license shall 
be granted only when the commissioner is satisfied that the 
entity possesses the necessary organization, background, 
expertise, and financial integrity to supply the services sought 
to be offered.  The commissioner may issue a license subject to 
restrictions or limitations upon the authorization, including 
the type of services which may be supplied or the activities 
which may be engaged in.  The license fee shall be $100.  All 
licenses shall be for a period of two years pursuant to section 
60A.23, subdivision 8;  
    (c) The service company has sole responsibility for the 
settlement of all claims against the pool or its members for 
which the pool may provide indemnification;  
    (d) A minimum premium volume for each pool shall be 
established.  The minimum premium volume may differ because of 
the kinds of coverage provided, and the limits of liability for 
the coverage;  
    (e) All premiums or other assessments due to the pool from 
members shall be payable prior to the period for which coverage 
is being provided, or at equal intervals throughout the period;  
             (f) Premiums shall either be established by an actuary 
approved by the commissioner or shall be premiums filed by a 
licensed rate service organization with reductions permitted 
solely for administrative or premium tax savings; 
             (g) The commissioner may require each pool to purchase 
excess insurance above certain limits and in a particular form.  
The limits or form of the excess insurance may differ based on 
the kinds of coverage offered by a pool, the limits of liability 
of the coverage, and the revenues available to pool members for 
the payment of premiums or assessments;  
             (h) Each pool shall be audited annually by a certified 
public accountant;  
             (i) Limitations on the payment of dividends to pool 
members may be established as necessary to assure the solvency 
of the pool;  
    (j) No participant may withdraw from a pool for a period of 
at least three years after its initial entry into the pool;  
    (k) The amount of any liabilities in excess of assets shall 
be assessed to members of the pool within 30 days after a 
deficiency is identified and shall be payable by the member 
within 90 days;  
    (l) The investment policies of the pool shall be governed 
by the laws governing investments by cities pursuant to section 
475.66;  
    (m) Pools shall be subject to the standards of unfair 
methods of competition and unfair or deceptive acts or practices 
established in chapter 72A;  
    (n) Other requirements that are necessary to protect the 
solvency of the pool, the rights and privileges of claimants 
against the pool, and citizens of the members of the pool shall 
be included in the rules.  
    Sec. 11.  [APPROPRIATIONS:  COMPLEMENT INCREASE.] 
    There is appropriated from the general fund to the 
department of commerce for its insurance division the sum of 
$30,000 for fiscal year 1984 and $30,000 for fiscal year 1985.  
    The approved complement of the insurance division of the 
department of commerce is increased by one.  
    Sec. 12.  [EFFECTIVE DATES.] 
    Sections 1; 2; 6, subdivisions 1 to 7; 7; 8; and 10; are 
effective the day following final enactment.  Sections 3 and 5, 
are effective July 1, 1983.  Section 6, subdivisions 8 and 9, 
are effective January 1, 1985.  Sections 4 and 6, subdivisions 
10 and 11, are effective January 1, 1986. 
    Approved June 14, 1983