Minnesota Session Laws - 1984, Regular Session

  

                         Laws of Minnesota 1984 

                        CHAPTER 555-S.F.No. 1862 
           An act relating to insurance; regulating insurance 
          claims settlement; defining terms; prescribing 
          penalties; providing for the venue for certain 
          injunction proceedings; amending Minnesota Statutes 
          1982, sections 72A.20, subdivisions 11 and 12, and by 
          adding a subdivision; 72A.23, subdivision 1; and 
          72A.25, subdivision 2.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 72A.20, 
subdivision 11, is amended to read:  
    Subd. 11.  [APPLICATION TO CERTAIN SECTIONS.] Violating any 
provision of the following sections of this chapter not set 
forth in subdivisions 1 to 10 15 shall constitute an unfair 
method of competition and an unfair and deceptive act or 
practice:  section 72A.12, subdivisions 2, 3, and 4, section 
72A.16, subdivision 2, sections 72A.03 and 72A.04, section 
72A.08, subdivision 1 as modified by section 72A.08, subdivision 
4, and section 65B.13.  
    Sec. 2.  Minnesota Statutes 1982, section 72A.20, 
subdivision 12, is amended to read:  
    Subd. 12.  [UNFAIR SERVICE.] Causing or permitting with 
such frequency to indicate a general business practice the 
claims and complaints of insureds to be processed in an 
unreasonable length of time, or in an unfair, deceptive, or 
fraudulent manner, or in violation of such rules as the 
commissioner of insurance shall make in the public interest to 
insure the prompt, fair, and honest processing of such claims 
and complaints, shall constitute an unfair method of competition 
and an unfair and deceptive act or practice any unfair, 
deceptive, or fraudulent act concerning any claim or complaint 
of an insured or claimant including, but not limited to, the 
following practices:  
    (1) misrepresenting pertinent facts or insurance policy 
provisions relating to coverages at issue;  
    (2) failing to acknowledge and act reasonably promptly upon 
communications with respect to claims arising under insurance 
policies;  
    (3) failing to adopt and implement reasonable standards for 
the prompt investigation of claims arising under insurance 
policies;  
    (4) refusing to pay claims without conducting a reasonable 
investigation based upon all available information;  
    (5) failing to affirm or deny coverage of claims within a 
reasonable time after proof of loss statements have been 
completed;  
     (6) not attempting in good faith to effectuate prompt, 
fair, and equitable settlements of claims in which liability has 
become reasonably clear;  
    (7) compelling insureds to institute litigation to recover 
amounts due under an insurance policy by offering substantially 
less than the amounts ultimately recovered in actions brought by 
the insureds; 
     (8) attempting to settle a claim for less than the amount 
to which a reasonable person would have believed he or she was 
entitled by reference to written or printed advertising material 
accompanying or made part of an application; 
     (9) attempting to settle claims on the basis of an 
application which was altered without notice to, or knowledge or 
consent of, the insured; 
     (10) making claims payments to insureds or beneficiaries 
not accompanied by a statement setting forth the coverage under 
which the payments are being made; 
     (11) making known to insureds or claimants a policy of 
appealing from arbitration awards in favor of insureds or 
claimants for the purpose of compelling them to accept 
settlements or compromises less than the amount awarded in 
arbitration; 
    (12) delaying the investigation or payment of claims by 
requiring an insured, claimant, or the physician of either to 
submit a preliminary claim report and then requiring the 
subsequent submission of formal proof of loss forms, both of 
which submissions contain substantially the same information; 
     (13) failing to promptly settle claims, where liability has 
become reasonably clear, under one portion of the insurance 
policy coverage in order to influence settlements under other 
portions of the insurance policy coverage;  
     (14) failing to promptly provide a reasonable explanation 
of the basis in the insurance policy in relation to the facts or 
applicable law for denial of a claim or for the offer of a 
compromise settlement. 
    Sec. 3.  Minnesota Statutes 1982, section 72A.20, is 
amended by adding a subdivision to read: 
    Subd. 12a.  [CLAIMS SETTLEMENT.] (a) [ADMINISTRATIVE 
ENFORCEMENT.] The commissioner may, in accordance with chapter 
14, adopt rules to insure the prompt, fair, and honest 
processing of claims and complaints.  The commissioner may, in 
accordance with sections 72A.22 to 72A.25, seek and impose 
appropriate administrative remedies, including fines, for (1) a 
violation of this subdivision or the rules adopted pusuant to 
this subdivision; or (2) a violation of section 72A.20, 
subdivision 12.  The commissioner need not show a general 
business practice in taking an administrative action for these 
violations.  
    No individual violation constitutes an unfair, 
discriminatory, or unlawful practice in business, commerce, or 
trade for purposes of section 8.31.  
    (b) [CONSTRUCTION.] The policy of the department of 
commerce, in interpreting and enforcing this subdivision, will 
be to take into consideration all pertinent facts and 
circumstances in determining the severity and appropriateness of 
the action to be taken in regard to any violation of this 
subdivision.  
    The magnitude of the harm to the claimant or insured, and 
any actions by the insured, claimant, or insurer that mitigate 
or exacerbate the impact of the violation may be considered.  
    Actions of the claimant or insured which impeded the 
insurer in processing or settling the claim, and actions of the 
insurer which increased the detriment to the claimant or insured 
may also be considered in determining the appropriate 
administrative action to be taken.  
    (c) [DEFINITIONS.] For the purposes of this subdivision, 
the following terms have the meanings given them.  
    (1) Adjuster or adjusters.  "Adjuster" or "adjusters" is as 
defined in Minnesota Statutes, section 72B.02.  
    (2) Agent.  "Agent" means insurance agents or insurance 
agencies licensed pursuant to Minnesota Statutes, section 
60A.17, and representatives of these agents or agencies.  
    (3) Claim.  "Claim" means a request or demand made with an 
insurer for the payment of funds or the provision of services 
under the terms of any policy, certificate, contract of 
insurance, binder, or other contracts of temporary insurance. 
The term does not include a claim under a health insurance 
policy made by a participating provider with an insurer in 
accordance with the participating provider's service agreement 
with the insurer which has been filed with the commissioner of 
commerce prior to its use.  
    (4) Claim settlement.  "Claim settlement" means all 
activities of an insurer related directly or indirectly to the 
determination of the extent of liabilities due or potentially 
due under coverages afforded by the policy, and which result in 
claim payment, claim acceptance, compromise, or other 
disposition.  
    (5) Claimant.  "Claimant" means any individual, 
corporation, association, partnership, or other legal entity 
asserting a claim against any individual, corporation, 
association, partnership, or other legal entity which is insured 
under an insurance policy or insurance contract of an insurer.  
    (6) Complaint.  "Complaint" means a communication primarily 
expressing a grievance.  
    (7) Insurance policy.  "Insurance policy" means any 
evidence of coverage issued by an insurer including all 
policies, contracts, certificates, riders, binders, and 
endorsements which provide or describe coverage.  The term 
includes any contract issuing coverage under a self-insurance 
plan, group self-insurance plan, or joint self-insurance 
employee health plans.  
    (8) Insured.  "Insured" means an individual, corporation, 
association, partnership, or other legal entity asserting a 
right to payment under their insurance policy or insurance 
contract arising out of the occurrence of the contingency or 
loss covered by the policy or contract.  The term does not apply 
to a person who acquires rights under a mortgage.  
    (9) Insurer.  "Insurer" includes any individual, 
corporation, association, partnership, reciprocal exchange, 
Lloyds, fraternal benefits society, self-insurer, surplus line 
insurer, self-insurance administrator, and nonprofit service 
plans under the jurisdiction of the department of commerce.  
    (10) Investigation.  "Investigation" means a reasonable 
procedure adopted by an insurer to determine whether to accept 
or reject a claim.  
    (11) Notification of claim.  "Notification of claim" means 
any communication to an insurer by a claimant or an insured 
which reasonably apprises the insurer of a claim brought under 
an insurance contract or policy issued by the insurer. 
Notification of claim to an agent of the insurer is notice to 
the insurer.  
    (12) Proof of loss.  "Proof of loss" means the necessary 
documentation required from the insured to establish entitlement 
to payment under a policy.  
    (13) Self-insurance administrator.  "Self-insurance 
administrator" means any vendor of risk management services or 
entities administering self-insurance plans, licensed pursuant 
to Minnesota Statutes, section 60A.23, subdivision 8.  
    (14) Self-insured or self-insurer.  "Self-insured" or 
"self-insurer" means any entity authorized pursuant to Minnesota 
Statutes, section 65B.48, subdivision 3; Minnesota Statutes, 
chapter 62H; Minnesota Statutes, section 176.181, subdivision 2; 
Laws of Minnesota 1983, chapter 290, section 171; Minnesota 
Statutes, section 471.617; or Minnesota Statutes, section 
471.981 and includes any entity which, for a fee, employs the 
services of vendors of risk management services in the 
administration of a self-insurance plan as defined by Minnesota 
Statutes, 60A.23, subdivision 8, clause (2), subclauses (a) and 
(d).  
    (d) [STANDARDS FOR CLAIM FILING AND HANDLING.] The 
following acts by an insurer, an adjuster, a self-insured, or a 
self-insurance administrator constitute unfair settlement 
practices:  
    (1) except for claims made under a health insurance policy, 
after receiving notification of claim from an insured or a 
claimant, failing to acknowledge receipt of the notification of 
the claim within ten business days, and failing to promptly 
provide all necessary claim forms and instructions to process 
the claim, unless the claim is settled within ten business 
days.  The acknowledgment must include the telephone number of 
the company representative who can assist the insured or the 
claimant in providing information and assistance that is 
reasonable so that the insured or claimant can comply with the 
policy conditions and the insurer's reasonable requirements.  If 
an acknowledgment is made by means other than writing, an 
appropriate notation of the acknowledgment must be made in the 
claim file of the insurer and dated.  An appropriate notation 
must include at least the following information where the 
acknowledgment is by telephone or oral contact:  
    (i) the telephone number called, if any;  
    (ii) the name of the person making the telephone call or 
oral contact;  
    (iii) the name of the person who actually received the 
telephone call or oral contact; 
    (iv) the time of the telephone call or oral contact; and 
    (v) the date of the telephone call or oral contact;  
    (2) failing to reply, within ten business days of receipt, 
to all other communications about a claim from an insured or a 
claimant that reasonably indicate a response is requested or 
needed;  
    (3) unless provided otherwise by law or in the policy, 
failing to complete its investigation and inform the insured or 
claimant of acceptance or denial of a claim within 30 business 
days after receipt of notification of claim unless the 
investigation cannot be reasonably completed within that time. 
In the event that the investigation cannot reasonably be 
completed within that time, the insurer shall notify the insured 
or claimant within the time period of the reasons why the 
investigation is not complete and the expected date the 
investigation will be complete.  For claims made under a health 
policy the notification of claim must be in writing;  
    (4) where evidence of suspected fraud is present, the 
requirement to disclose their reasons for failure to complete 
the investigation within the time period set forth in clause (3) 
need not be specific.  The insurer must make this evidence 
available to the department of commerce if requested;  
    (5) failing to notify an insured who has made a 
notification of claim of all available benefits or coverages 
which he or she may be eligible to receive under the terms of a 
policy and of the documentation which the insured must supply in 
order to ascertain eligibility;  
    (6) unless otherwise provided by law or in the policy, 
requiring an insured to give written notice of loss or proof of 
loss within a specified time, and thereafter seeking to relieve 
the insurer of its obligations if the time limit is not complied 
with, unless the failure to comply with the time limit 
prejudices the insurer's rights and then only if the insurer 
gave prior notice to the insured of the potential prejudice;  
    (7) advising an insured or a claimant not to obtain the 
services of an attorney or an adjuster, or representing that 
payment will be delayed if an attorney or an adjuster is 
retained by the insured or the claimant;  
    (8) failing to advise in writing an insured or claimant who 
has filed a notification of claim known to be unresolved, and 
who has not retained an attorney, of the expiration of a statute 
of limitations at least 60 days prior to that expiration.  For 
the purposes of this clause, any claim on which the insurer has 
received no communication from the insured or claimant for a 
period of two years preceding the expiration of the applicable 
statute of limitations shall not be considered to be known to be 
unresolved and notice need not be sent pursuant to this clause;  
    (9) demanding information which would not affect the 
settlement of the claim;  
    (10) unless expressly permitted by law or the policy, 
refusing to settle a claim of an insured on the basis that the 
responsibility should be assumed by others;  
    (11) failing, within 60 business days after receipt of a 
properly executed proof of loss, to advise the insured of the 
acceptance or denial of the claim by the insurer.  No insurer 
shall deny a claim on the grounds of a specific policy 
provision, condition, or exclusion unless reference to the 
provision, condition, or exclusion is included in the denial. 
The denial must be given to the insured in writing with a copy 
filed in the claim file;  
    (12) denying or reducing a claim on the basis of an 
application which was altered or falsified by the agent or 
insurer without the knowledge of the insured;  
    (13) failing to notify the insured of the existence of the 
additional living expense coverage when an insured under a 
homeowners policy sustains a loss by reason of a covered 
occurrence and the damage to the dwelling is such that it is not 
habitable;  
    (14) failing to inform an insured or a claimant that the 
insurer will pay for an estimate of repair if the insurer 
requested the estimate and the insured or claimant had 
previously submitted two estimates of repair.  
    (e) [STANDARDS FOR FAIR SETTLEMENT OFFERS AND AGREEMENTS.] 
The following acts by an insurer, an adjuster, a self-insured, 
or a self-insurance administrator constitute unfair settlement 
practices:  
    (1) making any partial or final payment, settlement, or 
offer of settlement, which does not include an explanation of 
what the payment, settlement, or offer of settlement is for;  
    (2) making an offer to an insured of partial or total 
settlement of one part of a claim contingent upon agreement to 
settle another part of the claim;  
    (3) refusing to pay one or more elements of a claim by an 
insured for which there is no good faith dispute;  
    (4) threatening cancellation, rescission, or nonrenewal of 
a policy as an inducement to settlement of a claim;  
    (5) failing to issue payment for any amount finally agreed 
upon in settlement of all or part of any claim within five 
business days from the receipt of the agreement by the insurer 
or from the date of the performance by the claimant of any 
conditions set by such agreement, whichever is later;  
    (6) failing to inform the insured of the policy provision 
or provisions under which payment is made;  
    (7) settling or attempting to settle a claim or part of a 
claim with an insured under actual cash value provisions for 
less than the value of the property immediately preceding the 
loss, including all applicable taxes and license fees.  In no 
case may an insurer be required to pay an amount greater than 
the amount of insurance;  
    (8) except where limited by policy provisions, settling or 
offering to settle a claim or part of a claim with an insured 
under replacement value provisions for less than the sum 
necessary to replace the damaged item with one of like kind and 
quality, including all applicable taxes, license, and transfer 
fees;  
    (9) reducing or attempting to reduce for depreciation any 
settlement or any offer of settlement for items not adversely 
affected by age, use, or obsolescence;  
    (10) reducing or attempting to reduce for betterment any 
settlement or any offer of settlement unless the resale value of 
the item has increased over the preloss value by the repair of 
the damage.  
    (f) [STANDARDS FOR AUTOMOBILE INSURANCE CLAIMS HANDLING, 
SETTLEMENT OFFERS, AND AGREEMENTS.] In addition to the acts 
specified in paragraphs (d), (e), (g), (h), and (i), the 
following acts by an insurer, adjuster, or a self-insured or 
self-insurance administrator constitute unfair settlement 
practices:  
    (1) if an automobile insurance policy provides for the 
adjustment and settlement of an automobile total loss on the 
basis of actual cash value or replacement with like kind and 
quality and the insured is not an automobile dealer, failing to 
offer one of the following methods of settlement:  
    (a) comparable and available replacement automobile, with 
all applicable taxes, license fees, at least pro rata for the 
unexpired term of the replaced automobile's license, and other 
fees incident to the transfer or evidence of ownership of the 
automobile paid, at no cost to the insured other than the 
deductible amount as provided in the policy;  
    (b) a cash settlement based upon the actual cost of 
purchase of a comparable automobile, including all applicable 
taxes, license fees, at least pro rata for the unexpired term of 
the replaced automobile's license, and other fees incident to 
transfer of evidence of ownership, less the deductible amount as 
provided in the policy.  The costs must be determined by:  
    (i) the cost of a comparable automobile, adjusted for 
mileage, condition, and options, in the local market area of the 
insured, if such an automobile is available in that area; or 
    (ii) one of two or more quotations obtained from two or 
more qualified sources located within the local market area when 
a comparable automobile is not available in the local market 
area.  The insured shall be provided the information contained 
in all quotations prior to settlement; or 
    (iii) any settlement or offer of settlement which deviates 
from the procedure above must be documented and justified in 
detail.  The basis for the settlement or offer of settlement 
must be explained to the insured;  
    (2) if an automobile insurance policy provides for the 
adjustment and settlement of an automobile partial loss on the 
basis of repair or replacement with like kind and quality and 
the insured is not an automobile dealer, failing to offer one of 
the following methods of settlement:  
    (a) to assume all costs, including reasonable towing costs, 
for the satisfactory repair of the motor vehicle.  Satisfactory 
repair includes repair of both obvious and hidden damage as 
caused by the claim incident.  This assumption of cost may be 
reduced by applicable policy provision; or 
    (b) to offer a cash settlement sufficient to pay for 
satisfactory repair of the vehicle.  Satisfactory repair 
includes repair of obvious and hidden damage caused by the claim 
incident, and includes reasonable towing costs;  
    (3) regardless of whether the loss was total or partial, in 
the event that a damaged vehicle of an insured cannot be safely 
driven, failing to exercise the right to inspect automobile 
damage prior to repair within five business days following 
receipt of notification of claim.  In other cases the inspection 
must be made in 15 days;  
    (4) regardless of whether the loss was total or partial, 
requiring unreasonable travel of a claimant or insured to 
inspect a replacement automobile, to obtain a repair estimate, 
to allow an insurer to inspect a repair estimate, to allow an 
insurer to inspect repairs made pursuant to policy requirements, 
or to have the automobile repaired;  
    (5) regardless of whether the loss was total or partial, if 
loss of use coverage exists under the insurance policy, failing 
to notify an insured at the time of the insurer's 
acknowledgement of claim, or sooner if inquiry is made, of the 
fact of the coverage, including the policy terms and conditions 
affecting the coverage and the manner in which the insured can 
apply for this coverage;  
    (6) regardless of whether the loss was total or partial, 
failing to include the insured's deductible in the insurer's 
demands under its subrogation rights.  Subrogation recovery must 
be shared at least on a proportionate basis with the insured, 
unless the deductible amount has been otherwise recovered by the 
insured.  No deduction for expenses may be made from the 
deductible recovery unless an attorney is retained to collect 
the recovery, in which case deduction may be made only for a pro 
rata share of the cost of retaining the attorney;  
    (7) requiring as a condition of payment of a claim that 
repairs to any damaged vehicle must be made by a particular 
contractor or repair shop;  
    (8) where liability is reasonably clear, failing to inform 
the claimant in an automobile property damage liability claim 
that he or she may have a claim for loss of use of the vehicle;  
    (9) failing to make a good faith assignment of comparative 
negligence percentages in ascertaining the issue of liability;  
    (10) failing to pay any interest required by statute on 
overdue payment for an automobile personal injury protection 
claim;  
    (11) if an automobile insurance policy contains either or 
both of the time limitation provisions as permitted by Minnesota 
Statutes, section 65B.55, subdivisions 1 and 2, failing to 
notify the insured in writing of those limitations at least 60 
days prior to the expiration of that time limitation;  
    (12) if an insurer chooses to have an insured examined as 
permitted by Minnesota Statutes, section 65B.56, subdivision 1, 
failing to notify the insured of all of his or her rights and 
obligations under that statute, including the right to request, 
in writing, and to receive a copy of the report of the 
examination.  
    (g) [STANDARDS FOR RELEASES.] The following acts by an 
insurer, adjuster, or self-insured or self-insurance 
administrator constitute unfair settlement practices:  
    (1) requesting or requiring an insured or a claimant to 
sign a release that extends beyond the subject matter that gave 
rise to the claim payment;  
    (2) issuing a check or draft in payment of a claim that 
contains any language or provision that implies or states that 
acceptance of the check or draft constitutes a final settlement 
or release of any or all future obligations arising out of the 
loss.  
    (h) [STANDARDS FOR CLAIM DENIAL.] The following acts by an 
insurer, adjuster, or self-insured, or self-insurance 
administrator constitute unfair settlement practices:  
    (1) denying a claim or any element of a claim on the 
grounds of a specific policy provision, condition, or exclusion, 
without informing the insured of the policy provision, 
condition, or exclusion on which the denial is based;  
    (2) denying a claim without having made a reasonable 
investigation of the claim;  
    (3) denying a liability claim because the insured has 
requested that the claim be denied;  
    (4) denying a liability claim because the insured has 
failed or refused to report the claim, unless an independent 
evaluation of available information indicates there is no 
liability;  
    (5) denying a claim without including the following 
information:  
    (i) the basis for the denial;  
    (ii) the name, address, and telephone number of the 
insurer's claim service office or the claim representative of 
the insurer to whom the insured or claimant may take any 
questions or complaints about the denial; and 
    (iii) the claim number and the policy number of the insured;
    (6) denying a claim because the insured or claimant failed 
to exhibit the damaged property unless:  
    (i) the insurer, within a reasonable time period, made a 
written demand upon the insured or claimant to exhibit the 
property; and 
    (ii) the demand was reasonable under the circumstances in 
which it was made.  
    (i) [STANDARDS FOR COMMUNICATIONS WITH THE DEPARTMENT.] In 
addition to the acts specified elsewhere in this section, the 
following acts by an insurer, adjuster, or a self-insured or 
self-insurance administrator constitute unfair settlement 
practices:  
    (1) failure to respond, within 15 working days after 
receipt of an inquiry from the commissioner, about a claim, to 
the commissioner;  
    (2) failure, upon request by the commissioner, to make 
specific claim files available to the commissioner;  
    (3) failure to include in the claim file all written 
communications and transactions emanating from, or received by, 
the insurer, as well as all notes and work papers relating to 
the claim.  All written communications and notes referring to 
verbal communications must be dated by the insurer;  
    (4) failure to submit to the commissioner, when requested, 
any summary of complaint data reasonably required;  
    (5) failure to compile and maintain a file on all 
complaints.  If the complaint deals with a loss, the file must 
contain adequate information so as to permit easy retrieval of 
the entire file.  If the complaint alleges that the company, or 
agent of the company, or any agent producing business written by 
the company is engaged in any unfair, false, misleading, 
dishonest, fraudulent, untrustworthy, coercive, or financially 
irresponsible practice, or has violated any insurance law or 
rule, the file must indicate what investigation or action was 
taken by the company.  The complaint file must be maintained for 
at least four years after the date of the complaint.  
    (j) [SCOPE.] This subdivision does not apply to workers' 
compensation insurance.  Nothing in this subdivision abrogates 
any policy provisions.  
    Sec. 4.  Minnesota Statutes 1982, section 72A.23, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DETERMINATION BY COMMISSIONER; FINDINGS.] 
Whenever it appears to the commissioner that any person has 
engaged or is about to engage in any act or practice 
constituting a violation of this chapter or any rule or order 
hereunder:  
    (a) He may issue and cause to be served upon the person an 
order requiring the person to cease and desist from violations 
of section 72A.19 or 72A.20.  The order must be calculated to 
give reasonable notice of the rights of the person to request a 
hearing thereon and must state the reasons for the entry of the 
order.  A hearing must be held not later than seven days after 
the request for the hearing is received by the commissioner 
after which and within 20 days of the date of the hearing the 
commissioner shall issue a further order vacating the cease and 
desist order or making it permanent as the facts require.  If no 
hearing is requested within 30 days of service of the order, the 
order will become final and will remain in effect until it is 
modified or vacated by the commissioner.  All hearings must be 
conducted in accordance with the provisions of chapter 14.  If 
the person to whom a cease and desist order is issued fails to 
appear at the hearing after being duly notified, the person 
shall be deemed in default, and the proceeding may be determined 
against him upon consideration of the cease and desist order, 
the allegations of which may be deemed to be true.  The 
commissioner may adopt rules of procedure concerning all 
proceedings conducted pursuant to this subdivision; and 
    (b) If, after a hearing, as provided in section 72A.22, the 
commissioner shall determine that the method of competition or 
the act or practice in question is defined in section 72A.20 or 
any rules adopted pursuant to section 72A.19 or 72A.20, and that 
the person complained of has engaged in that method of 
competition, act, or practice, in violation of sections 72A.17 
to 72A.32 he shall reduce his findings to writing and shall 
issue and cause to be served upon the person charged with the 
violation an order requiring him to cease and desist from 
engaging in that method of competition, act or practice, and may 
impose a civil penalty of not more than $2,000 for each 
offense.  If the commissioner determines that an insurer has 
engaged in an act or practice defined in section 72A.20, 
subdivision 13, the cease and desist order may also require the 
insurer to write or renew the homeowner's insurance coverage 
sought by the insured or prospective insured for a specified 
period of up to three years without cancellation or nonrenewal 
by the insurer for a reason not specified in section 65A.01; 
after the specified period expires, cancellation or nonrenewal 
of the coverage may be made only as permitted by law. 
    Sec. 5.  Minnesota Statutes 1982, section 72A.25, 
subdivision 2, is amended to read: 
    Subd. 2.  [APPLICATION FOR INJUNCTION.] If the report 
charges a violation of sections 72A.17 to 72A.32 and if the 
method of competition, act, or practice charged by him has not 
been discontinued, the commissioner may, through the attorney 
general, at any time after 20 days after the service of the 
report, cause a petition to be filed in the district court 
within the district wherein the person against whom the charges 
were made resides, or that wherein he has his principal place of 
business of Ramsey County, to enjoin and restrain that person 
from engaging in the method, act, or practice charged.  A 
transcript of the proceedings before the commissioner, including 
all evidence taken and the report and findings, shall be filed 
with the petition.  Upon the filing of the petition and 
transcript the court shall have jurisdiction of the proceedings 
and shall have power to make and enter appropriate orders in 
connection therewith and to issue such writs as are ancillary to 
its jurisdiction or necessary in its judgment to prevent injury 
to the public pendente lite. 
     Sec. 6.  [EFFECTIVE DATE.] 
     Sections 1 to 5 are effective the day following final 
enactment. 
    Approved April 25, 1984