Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1987, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1987
CHAPTER 337-S.F.No. 478
An act relating to insurance; requiring notification
of group life or health coverage changes; allowing
mandatory temporary insurance agent licenses;
requiring those who solicit insurance to act as agent
for the insurer; regulating insurance continuing
education; providing for the definition of an
ineligible surplus lines insurer; regulating rates and
forms; regulating insurance plan administrators;
regulating trust funds; regulating the renewal,
nonrenewal, and cancellation of commercial liability
and property insurance policies; authorizing employers
to jointly self-insure for property or casualty
liability and regulating these plans; providing
continued group life coverage upon termination or
layoff; providing for the establishment and operation
of the insurance guaranty association and the life and
health guaranty association; regulating accident and
health insurance; regulating joint self-insurance
employee health plans; requiring the treatment of
pregnancy-related conditions in the same manner as
other illnesses; mandating certain coverages;
clarifying coverage for handicapped dependents;
providing continued group accident and health coverage
upon termination or layoff; requiring coverage of
current spouse and children; imposing surety bond or
security requirements on certain health benefit plans;
regulating Medicare supplement plan premium refunds;
regulating long-term care policies; providing for the
establishment and operation of the comprehensive
health association, the medical joint underwriting
association, and the joint underwriting association;
providing comprehensive health insurance coverage for
certain employees not eligible for Medicare;
regulating fraternal benefit associations; regulating
automobile insurance; providing for exemption from
certain legal process of cash value, proceeds, or
benefits under certain life insurance or annuity
contracts; limiting the cancellation of fire insurance
binders and policies; providing for administration of
the FAIR plan; requiring accident prevention course
premium reductions; limiting the grounds for
cancellation or reduction in limits during the policy
period; requiring the commissioner to set rates for
cooperative housing and neighborhood real estate trust
insurance; regulating no-fault automobile insurance;
providing for the priority of security for payment of
basic economic loss benefits; extending basic economic
loss benefit protection; requiring coverages for
former spouses; specifying membership on the assigned
claims bureau; extending no-fault benefits to
pedestrians who are struck by motorcycles; regulating
township mutual insurance companies; providing for
mandatory arbitration of certain claims; authorizing
investments in certain insurers; regulating rental
vehicle personal accident insurance; regulating trade
practices; requiring life and health insurers to
substantiate the underwriting standards they use;
providing assigned risk plan coverage for certain
vehicles used by the handicapped; establishing a
demonstration project to provide medical insurance to
certain low income persons; regulating certain
self-insurance by political subdivisions; clarifying
the statute of limitations applicable to actions
regarding manufacturers or suppliers of material
containing asbestos; granting immunity from liability
for volunteer coaches, managers, and officials;
requiring a home health care study; prescribing
penalties; amending Minnesota Statutes 1986, sections
16A.133, subdivision 1; 45.024, subdivision 2; 60A.17,
subdivisions 1a, 2c, 11, and 13; 60A.1701,
subdivisions 5, 7, and 8; 60A.196; 60A.198,
subdivision 3; 60A.23, subdivision 8; 60A.29,
subdivisions 2, 5, and 16, and by adding subdivisions;
60A.30; 60A.31; 60B.44, subdivisions 1, 4, 5, and 9;
60C.08, subdivision 1; 60C.09; 60C.12; 61A.28,
subdivision 12; 61B.09; 62A.041; 62A.043, by adding a
subdivision; 62A.141; 62A.146; 62A.152, subdivision 2;
62A.17; 62A.21; 62A.27; 62A.31, subdivision 1a;
62A.43, subdivision 2, and by adding a subdivision;
62A.46, by adding a subdivision; 62A.48, subdivisions
1, 2, 6, and by adding a subdivision; 62A.50,
subdivision 3; 62D.05, by adding a subdivision;
62D.102; 62E.06, subdivision 1; 62E.10, subdivision 2,
and by adding subdivisions; 62E.14, by adding a
subdivision; 62F.041, subdivision 2; 62F.06,
subdivision 1; 62H.01; 62H.02; 62H.04; 62I.02,
subdivisions 1 and 3; 62I.03, subdivision 5; 62I.04;
62I.12, subdivision 1; 62I.13, by adding a subdivision;
62I.16, subdivision 3; 62I.22, subdivision 2, and by
adding a subdivision; 64B.11, subdivision 4; 64B.18;
64B.27; 65A.01, subdivision 3a; 65A.03, subdivision 1;
65A.10; 65A.29, by adding a subdivision; 65A.35,
subdivision 5; 65A.39; 65B.03, subdivision 1; 65B.12;
65B.1311; 65B.15, subdivision 1; 65B.16; 65B.21,
subdivision 2; 65B.28; 65B.46; 65B.48, subdivision 1;
65B.49, by adding a subdivision; 65B.525, subdivision
1; 65B.63, subdivision 1; 67A.05, subdivision 2;
67A.06; 67A.231; 70A.06, by adding a subdivision;
70A.08, subdivision 3; 72A.20, subdivisions 11, 17,
and by adding subdivisions; 72A.31, subdivision 1;
169.045, subdivision 1, and by adding a subdivision;
471.98, subdivision 2; proposing coding for new law in
Minnesota Statutes, chapters 60A; 61A; 62A; 62E; 65A;
65B; 72A; 256B; 541; and 604; proposing coding for new
law as Minnesota Statutes, chapter 60F; repealing
Minnesota Statutes 1986, sections 62A.12; and 67A.43,
subdivision 3; and Minnesota Rules, parts 2700.2400 to
2700.2440.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1986, section 16A.133,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT UNION; ORGANIZATION; COMPANY.] An
agency head may, with the written request of an employee, deduct
from the pay of the employee a requested amount to be paid to
any state employees' credit union, or the Minnesota benefit
association, or to any organization contemplated by section
179A.06, of which the employee is a member, or to a company that
has contracted to insure the employee for the medical costs of
cancer or intensive care. If an employee is a member of more
than one such credit union or more than one such
organization, or is insured by more than one company, only one
credit union and one organization and one company may be paid
money by payroll deduction from the employee's pay. No
deduction may be made from the salary of an employee for payment
to a credit union or organization or company unless 100
employees request deductions for payment to the credit union or
organization or company. The 100 employee minimum does not
apply to credit unions and organizations which received
authorized payroll deduction payments on June 5, 1971.
Sec. 2. Minnesota Statutes 1986, section 45.024,
subdivision 2, is amended to read:
Subd. 2. [DELEGATION.] The commissioner of commerce may
delegate to one or more of the a deputy commissioners
commissioner, assistant commissioner, or director the exercise
of the commissioner's statutory powers and duties, including the
authority to decide and issue final orders in contested cases,
rulemaking proceedings, and other hearings held under chapter 14.
Sec. 3. [60A.084] [NOTIFICATION ON GROUP POLICIES.]
An employer providing life or health benefits may not
change benefits, limit coverage, or otherwise restrict
participation until the certificate holder or enrollee has been
notified of any changes, limitations, or restrictions. Notice
in a format which meets the requirements of the Employee
Retirement Income Security Act, 29 U.S.C.A., sections 1001 to
1461, is satisfactory for compliance with this section.
Sec. 4. Minnesota Statutes 1986, section 60A.17,
subdivision 1a, is amended to read:
Subd. 1a. [LICENSE APPLICATION.] (a) [PROCEDURE.] An
application for a license to act as an insurance agent shall be
made to the commissioner by the person who seeks to be
licensed. The application for license shall be accompanied by a
written appointment from an admitted insurer authorizing the
applicant to act as its agent under one or both classes of
license. The insurer must also submit its check payable to the
state treasurer for the amount of the appointment fee prescribed
by section 60A.14, subdivision 1, paragraph (c), clause (9) at
the time the agent becomes licensed. The application and
appointment shall be on forms prescribed by the commissioner.
If the applicant is a natural person, no license shall be
issued until that natural person has become qualified.
If the applicant is a partnership or corporation, no
license shall be issued until at least one natural person who is
a partner, director, officer, stockholder, or employee shall be
licensed as an insurance agent.
(b) [RESIDENT AGENT.] The commissioner shall issue a
resident insurance agent's license to a qualified resident of
this state as follows:
(1) a person may qualify as a resident of this state if
that person resides in this state or the principal place of
business of that person is maintained in this state.
Application for a license claiming residency in this state for
licensing purposes, shall constitute an election of residency in
this state. Any license issued upon an application claiming
residency in this state shall be void if the licensee, while
holding a resident license in this state, also holds, or makes
application for, a resident license in, or thereafter claims to
be a resident of, any other state or jurisdiction or if the
licensee ceases to be a resident of this state; provided,
however, if the applicant is a resident of a community or trade
area, the border of which is contiguous with the state line of
this state, the applicant may qualify for a resident license in
this state and at the same time hold a resident license from the
contiguous state;
(2) the commissioner shall subject each applicant who is a
natural person to a written examination as to the applicant's
competence to act as an insurance agent. The examination shall
be held at a reasonable time and place designated by the
commissioner;
(3) the examination shall be approved for use by the
commissioner and shall test the applicant's knowledge of the
lines of insurance, policies, and transactions to be handled
under the class of license applied for, of the duties and
responsibilities of the licensee, and pertinent insurance laws
of this state;
(4) the examination shall be given only after the applicant
has completed a program of classroom studies in a school, which
shall not include a school conducted by an admitted insurer
sponsored by, offered by, or affiliated with an insurance
company or its agents; except that this limitation does not
preclude a bona fide professional association of agents, not
acting on behalf of an insurer, from offering courses. The
course of study shall consist of 30 hours of classroom study
devoted to the basic fundamentals of insurance for those seeking
a Minnesota license for the first time, 15 hours devoted to
specific life and health topics for those seeking a life and
health license, and 15 hours devoted to specific property and
casualty topics for those seeking a property and casualty
license. The program of studies or study course shall have been
approved by the commissioner in order to qualify under this
clause. If the applicant has been previously licensed for the
particular line of insurance in the state of Minnesota, the
requirement of a program of studies or a study course shall be
waived. A certification of compliance by the organization
offering the course shall accompany the applicant's license
application. This program of studies in a school or a study
course shall not apply to farm property perils and farm
liability applicants, or to agents writing such other lines of
insurance as the commissioner may exempt from examination by
order;
(5) the applicant must pass the examination with a grade
determined by the commissioner to indicate satisfactory
knowledge and understanding of the class or classes of insurance
for which the applicant seeks qualification. The commissioner
shall inform the applicant as to whether or not the applicant
has passed;
(6) an applicant who has failed to pass an examination may
take subsequent examinations. Examination fees for subsequent
examinations shall not be waived; and
(7) any applicant for a license covering the same class or
classes of insurance for which the applicant was licensed under
a similar license in this state, other than a temporary license,
within the three years preceding the date of the application
shall be exempt from the requirement of a written examination,
unless the previous license was revoked or suspended by the
commissioner. An applicant whose license is not renewed under
subdivision 20 is exempt from the requirement of a written
examination.
(c) [NONRESIDENT AGENT.] The commissioner shall issue a
nonresident insurance agent's license to a qualified person who
is a resident of another state or country as follows:
(1) A person may qualify for a license under this section
as a nonresident only if that person holds a license in another
state, province of Canada, or other foreign country which, in
the opinion of the commissioner, qualifies that person for the
same activity as that for which a license is sought;
(2) The commissioner shall not issue a license to any
nonresident applicant until that person files with the
commissioner a designation of the commissioner and the
commissioner's successors in office as the applicant's true and
lawful attorney upon whom may be served all lawful process in
any action, suit, or proceeding instituted by or on behalf of
any interested person arising out of the applicant's insurance
business in this state. This designation shall constitute an
agreement that this service of process is of the same legal
force and validity as personal service of process in this state
upon that applicant.
Service of process upon any licensee in any action or
proceeding commenced in any court of competent jurisdiction of
this state may be made by serving the commissioner with
appropriate copies of the process along with payment of the fee
pursuant to section 60A.14, subdivision 1, paragraph (c), clause
(4). The commissioner shall forward a copy of the process by
registered or certified mail to the licensee at the last known
address of record or principal place of business of the
licensee; and
(3) A nonresident license shall terminate automatically
when the resident license for that class of license in the
state, province, or foreign country in which the licensee is a
resident is terminated for any reason.
(d) [DENIAL.] (1) If the commissioner finds that an
applicant for a resident or nonresident license has not fully
met the requirements for licensing, the commissioner shall
refuse to issue the license and shall promptly give written
notice to both the applicant and the appointing insurer of the
denial, stating the grounds for the denial. All fees which
accompanied the application and appointment shall be deemed
earned and shall not be refundable.
(2) The commissioner may also deny issuance of a license
for any cause that would subject the license of a licensee to
suspension or revocation. If a license is denied pursuant to
this clause, the provisions of subdivision 6c, paragraph (c)
apply.
(3) The applicant may make a written demand upon the
commissioner for a hearing within 30 days of the denial of a
license to determine whether the reasons stated for the denial
were lawful. The hearing shall be held pursuant to chapter 14.
(e) [TERM.] All licenses issued pursuant to this section
shall remain in force until voluntarily terminated by the
licensee, not renewed as prescribed in subdivision 1d, or until
suspended or revoked by the commissioner. A voluntary
termination shall occur when the license is surrendered to the
commissioner with the request that it be terminated or when the
licensee dies, or when the licensee is dissolved or its
existence is terminated. In the case of a nonresident license,
a voluntary termination shall also occur upon the happening of
the event described in paragraph (c), clause (3).
Every licensed agent shall notify the commissioner within
30 days of any change of name, address, or information contained
in the application.
(f) [SUBSEQUENT APPOINTMENTS.] A person who holds a valid
agent's license from this state may solicit applications for
insurance on behalf of an admitted insurer with which the
licensee does not have a valid appointment on file with the
commissioner; provided, that the licensee has permission from
the insurer to solicit insurance on its behalf and, provided
further, that the insurer upon receipt of the application for
insurance submits a written notice of appointment to the
commissioner accompanied by its check payable to the state
treasurer in the amount of the appointment fee prescribed by
section 60A.14, subdivision 1, paragraph (c), clause (9). The
notice of appointment shall be on a form prescribed by the
commissioner.
(g) [AMENDMENT OF LICENSE.] An application to the
commissioner to amend a license to reflect a change of name, or
to include an additional class of license, or for any other
reason, shall be on forms provided by the commissioner and shall
be accompanied by the applicant's surrendered license and a
check payable to the state treasurer for the amount of fee
specified in section 60A.14, subdivision 1, paragraph (c).
An applicant who surrenders an insurance license pursuant
to this clause retains licensed status until an amended license
is received.
(h) [EXCEPTIONS.] The following are exempt from the
general licensing requirements prescribed by this section:
(1) agents of township mutuals who are exempted pursuant to
subdivision 1b;
(2) fraternal beneficiary association representatives
exempted pursuant to subdivision 1c;
(3) any regular salaried officer or employee of a licensed
insurer, without license or other qualification, may act on
behalf of that licensed insurer in the negotiation of insurance
for that insurer; provided that a licensed agent must
participate in the sale of any such insurance;
(4) employers and their officers or employees, and the
trustees or employees of any trust plan, to the extent that the
employers, officers, employees, or trustees are engaged in the
administration or operation of any program of employee benefits
for the employees of the employers or employees of their
subsidiaries or affiliates involving the use of insurance issued
by a licensed insurance company; provided, that the activities
of the officers, employees and trustees are incidental to
clerical or administrative duties and their compensation does
not vary with the volume of insurance or applications therefor;
(5) employees of a creditor who enroll debtors for life or
accident and health insurance; provided the employees receive no
commission or fee therefor; and
(6) clerical or administrative employees of an insurance
agent who take insurance applications or receive premiums in the
office of their employer, if the activities are incidental to
clerical or administrative duties and the employee's
compensation does not vary with the volume of the applications
or premiums; and
(7) rental vehicle companies and their employees in
connection with the offer of rental vehicle personal accident
insurance under section 72A.125.
Sec. 5. Minnesota Statutes 1986, section 60A.17,
subdivision 2c, is amended to read:
Subd. 2c. [MANDATORY TEMPORARY LICENSES.] The commissioner
shall may grant a temporary insurance agent's license to a
person who has submitted an application for a resident license
which is accepted by the commissioner and who has successfully
completed the examination, if any, required by the
commissioner. The temporary license shall may be granted no
later than as of the date upon which the applicant receives
written notice from the commissioner that the application for
resident license has been accepted by the commissioner and that
the person has passed any required examination. A temporary
license will permit the applicant to act as an insurance agent
for the original appointing insurer for the class of business
specified therein until the earlier of (a) receipt by the
applicant of the resident license, or (b) the expiration of 90
days from the date on which the temporary license was granted.
Sec. 6. Minnesota Statutes 1986, section 60A.17,
subdivision 11, is amended to read:
Subd. 11. [LIFE COMPANY AGENTS INSURER'S AGENT.] Any
person who shall solicit an application for solicits insurance
upon the life of another shall, in any controversy between the
assured or the assured's beneficiary and the company issuing any
policy upon such application, be regarded as is the agent of the
company insurer and not the agent of the assured insured.
Sec. 7. Minnesota Statutes 1986, section 60A.17,
subdivision 13, is amended to read:
Subd. 13. [AGENTS; VARIABLE CONTRACTS.] (a) [LICENSE
REQUIRED.] No person shall sell or offer for sale a contract on
a variable basis unless prior to making any solicitation or sale
the person has obtained from the commissioner a license
therefor. The license shall only be granted, upon the written
requisition of an insurer, to a qualified person who holds a
current license authorizing the person to solicit and sell life
insurance and annuity contracts in this state. To become
qualified, a person shall complete a written application on a
form prescribed by the commissioner and shall take and pass an
examination prescribed by the commissioner. Prior to the taking
of the examination, or upon reexamination, the applicant shall
transmit to the commissioner, by money order or cashiers check
payable to the state treasurer, an examination fee of $10.
(b) [EXCEPTIONS.] (1) Any regularly salaried officer or
employee of a licensed insurer may, without license or other
qualification, act on behalf of that licensed insurer in the
negotiation of a contract on a variable basis, provided that a
licensed agent must participate in the sale of any contract.
(2) Any person who, on July 1, 1969, holds a valid license
authorizing the person to solicit and sell life insurance and
annuity contracts and who also holds a valid license issued by
the department of commerce authorizing the person to sell or
offer for sale contracts on a variable basis shall be issued a
license by the commissioner of commerce upon application
therefor and payment of a $2 fee, which license shall expire on
May 31, 1970, unless renewed by an insurer as provided in
paragraph (a).
(3) Any person who holds a valid license to solicit and
sell life insurance and annuity contracts may solicit and sell
contracts on a variable basis without acquiring a license under
this subdivision if the contract is based on an account which is
excluded from the definition of investment company under the
Investment Company Act of 1940, United States Code, title 15,
section 80a-3(11).
(c) [RULES.] The commissioner may by rules waive or modify
any of the foregoing requirements or prescribe additional
requirements deemed necessary for the proper sale and
solicitation of contracts on a variable basis.
Sec. 8. Minnesota Statutes 1986, section 60A.1701,
subdivision 5, is amended to read:
Subd. 5. [POWERS OF THE ADVISORY TASK FORCE.] (a)
Applications for accreditation of each course and for approval
of individuals responsible for monitoring course offerings must
be submitted to the commissioner on forms prescribed by the
commissioner and must be accompanied by a fee of not more than
$50 payable to the state of Minnesota for deposit in the general
fund. A fee of $5 for each hour or fraction of one hour of
course approval sought must be forwarded with the application
for course approval. 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.
Sec. 9. Minnesota Statutes 1986, section 60A.1701,
subdivision 7, is amended to read:
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, the art of selling, psychology, or time
management;
(5) unless the student attends classroom instruction
conducted by an instructor approved by the department of
commerce; or
(6) which can be completed by the student at home or
outside the classroom without the supervision of an instructor
approved by the department of commerce.
Sec. 10. Minnesota Statutes 1986, section 60A.1701,
subdivision 8, is amended to read:
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. No more than ten credit hours
per year may be credited to a person for courses sponsored by,
offered by, or affiliated with an insurance company or its
agents. Courses sponsored by, offered by, or affiliated with an
insurance company or agent may restrict its students to agents
of the company or agency.
Sec. 11. Minnesota Statutes 1986, section 60A.196, is
amended to read:
60A.196 [DEFINITIONS.]
Unless the context otherwise requires, the following terms
have the meanings given them for the purposes of sections
60A.195 to 60A.209:
(a) "Surplus lines insurance" means insurance placed with
an insurer permitted to transact the business of insurance in
this state only pursuant to sections 60A.195 to 60A.209.
(b) "Eligible surplus lines insurer" means an insurer
recognized as eligible to write insurance business under
sections 60A.195 to 60A.209 but not licensed by any other
Minnesota law to transact the business of insurance.
(c) "Ineligible surplus lines insurer" means an insurer not
recognized as an eligible surplus lines insurer pursuant to
sections 60A.195 to 60A.209 and not licensed by any other
Minnesota law to transact the business of
insurance. "Ineligible surplus lines insurer" includes a risk
retention group as defined under the Liability Risk Retention
Act, Public Law Number 99-563.
(d) "Surplus lines licensee" or "licensee" means a person
licensed under sections 60A.195 to 60A.209 to place insurance
with an eligible or ineligible surplus lines insurer.
(e) "Association" means an association registered under
section 60A.208.
(f) "Alien insurer" means any insurer which is incorporated
or otherwise organized outside of the United States.
(g) "Insurance laws" means chapters 60 to 79 inclusive.
Sec. 12. Minnesota Statutes 1986, section 60A.198,
subdivision 3, is amended to read:
Subd. 3. [PROCEDURE FOR OBTAINING LICENSE.] A person
licensed as a resident an 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 an agent's 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 the applicant in the immediately preceding
five years; and
(d) agreeing to file with the commissioner of revenue 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. 13. [60A.2095] [CONSTRUCTION.]
Nothing in sections 60A.195 to 60A.209 shall be construed
to permit the state to impose requirements beyond those granted
by the Liability Risk Retention Act, Public Law Number 99-563.
Sec. 14. Minnesota Statutes 1986, section 60A.23,
subdivision 8, is amended to read:
Subd. 8. [SELF-INSURANCE OR INSURANCE PLAN ADMINISTRATORS;
WHO ARE 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 or insurance plan. This subdivision does 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 an
entity which administers a program of health benefits
established pursuant to a collective bargaining agreement
between an employer, or group or association of employers, and a
union or unions.
(2) [DEFINITIONS.] For purposes of this subdivision the
following terms have the meanings given them.
(a) "Administering a self-insurance or 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 or 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 or 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 or 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 or insurance plan for an
employer.
(3) [LICENSE.] No vendor of risk management services or
entity administering a self-insurance or insurance plan may
transact 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 may 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 is $100. All licenses are for a period of two years.
(4) [REGULATORY RESTRICTIONS; POWERS OF THE COMMISSIONER.]
To assure that self-insurance or 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 insurance or self-insurance plans are subject to
the supervision and examination by the commissioner. Vendors of
risk management services, entities administering insurance or
self-insurance plans, and insurance or 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 adopt rules, including
emergency rules, pursuant to sections 14.01 to 14.70 14.69.
These rules may:
(a) establish reporting requirements for administrators of
insurance or self-insurance plans;
(b) establish standards and guidelines to assure the
adequacy of financing, reinsuring, and administration of
insurance or self-insurance plans;
(c) establish bonding requirements or other provisions
assuring the financial integrity of entities administering
insurance or self-insurance plans; or
(d) establish other reasonable requirements to further the
purposes of this subdivision.
Sec. 15. Minnesota Statutes 1986, section 60A.29,
subdivision 2, is amended to read:
Subd. 2. [PURPOSE.] The purpose of this section is to
authorize the establishment of trust funds for the purpose of
indemnifying nonprofit beneficiary organizations and their
officers, directors, and agents for financial loss due to the
imposition of legal liability or for damage or destruction of
property, and to regulate the operation of trust funds
established under this section.
Sec. 16. Minnesota Statutes 1986, section 60A.29,
subdivision 5, is amended to read:
Subd. 5. [INELIGIBLE RISKS.] No trust fund established
under this section shall indemnify any beneficiary for property
loss, liabilities incurred under the workers' compensation act,
or for benefits provided to employees pursuant to any medical,
dental, life, or disability income protection plan.
Sec. 17. Minnesota Statutes 1986, section 60A.29,
subdivision 16, is amended to read:
Subd. 16. [REINSURANCE.] Authorized trust funds may insure
or reinsure their obligations and liabilities with:
(1) insurance companies authorized to do business in
Minnesota, pursuant to section 60A.06, or with;
(2) insurance companies similarly authorized in any other
state of the United States;
(3) insurance companies not authorized in Minnesota or any
other state if the unauthorized insurance company establishes
reinsurance security in favor of the ceding trust fund
conforming to the general rules for allowance of reinsurance
credits stated in the Financial Condition Examiners Handbook
adopted by the National Association of Insurance Commissioners;
or
(4) other trust funds organized under this section or under
similar laws of any other state if the reinsuring trust fund
establishes reinsurance security as specified in clause (3) in
favor of the ceding trust fund.
Sec. 18. Minnesota Statutes 1986, section 60A.29, is
amended by adding a subdivision to read:
Subd. 22. [FOREIGN TRUST FUNDS.] A trust fund organized
and existing under the laws of another state for the sole
purpose of indemnifying nonprofit beneficiary organizations and
their officers, directors, and agents for financial loss due to
the imposition of legal liability or for damage or destruction
of property, as provided in subdivisions 2 and 4, may apply to
the commissioner for authority to operate within this state,
provided that:
(1) the trust fund has been continuously in operation for a
period of not less than five years prior to the date it applies
for authorization under this subdivision, during which period it
must have issued only nonassessable indemnification agreements
to its beneficiaries, and during each of those years the trust
fund received not less than $1,000,000 in contributions from
beneficiaries for protections afforded by the trust fund;
(2) the trust fund has been authorized by and is subject to
regulation and examination by the department of insurance of its
domiciliary state;
(3) the trust fund must file with the commissioner its
trust agreement, bylaws or plan of operation, schedule of
benefits, forms of indemnification agreements, and contribution
schedules applicable to beneficiaries in this state;
(4) the trust fund must be governed by a board of not fewer
than five trustees, all of whom must be elected by the
beneficiaries of the trust fund, and none of whom may receive
compensation for service as a trustee;
(5) the trust fund has, as of the last day of the calendar
year immediately prior to its application for authority, a net
fund balance surplus of not less than $1,000,000, as evidenced
by its financial statements certified by an independent
certified public accountant in accordance with generally
accepted accounting principles consistently applied; and
(6) the trust fund must, upon and at all times after
authorization by the commissioner, maintain a registered office
within this state.
Sec. 19. Minnesota Statutes 1986, section 60A.29, is
amended by adding a subdivision to read:
Subd. 23. [STANDARDS FOR AUTHORIZATION.] Within 60 days
after receipt of the documents specified under subdivision 22
and supporting evidence which establishes compliance with the
standards set forth under that subdivision, the commissioner
shall grant to the trust fund a certificate of authority to
conduct operations in this state. The operations in this state
are subject to the limitations and standards set forth in
subdivisions 4 to 22 of this section. In the event an
authorized foreign trust fund violates one of those subdivisions
or the rules of the commissioner applicable to foreign trust
funds, the commissioner may suspend or revoke the certificate of
authority.
Sec. 20. Minnesota Statutes 1986, section 60A.29, is
amended by adding a subdivision to read:
Subd. 24. [RULES.] The commissioner may adopt rules to
enforce and administer requirements of sections 18 and 19.
Sec. 21. Minnesota Statutes 1986, section 60A.30, is
amended to read:
60A.30 [RENEWAL OF INSURANCE POLICY WITH ALTERED RATES.]
If an insurance company licensed to do business in this
state offers or purports to offer to renew any commercial
liability and/or property insurance policy at less favorable
terms as to the dollar amount of coverage or deductibles, higher
rates, and/or higher rating plan, the new terms, the new rates
and/or rating plan may take effect on the renewal date of the
policy if the insurer has sent to the policyholder notice of the
new terms, new rates and/or rating plan at least 30 60 days
prior to the expiration date. If the insurer has not so
notified the policyholder, the policyholder may elect to cancel
the renewal policy within the 30-day 60-day period after receipt
of the notice. Earned premium for the period of coverage, if
any, shall be calculated pro rata upon the prior rate. This
subdivision does not apply to ocean marine insurance, accident
and health insurance, and reinsurance.
This section does not apply if the change relates to guide
"a" rates or excess rates also known as "consent to rates."
Sec. 22. Minnesota Statutes 1986, section 60A.31, is
amended to read:
60A.31 [MIDTERM CANCELLATION WORKER'S COMPENSATION
INSURANCE.]
In addition to the requirements of Minnesota Statutes 1984,
section 176.185, subdivision 1, no a policy of insurance issued
to cover the liability to pay compensation under Minnesota
Statutes 1984, chapter 176, shall be canceled by the insurer
within the policy period unless the insurer has also complied
with the requirements of such rules as the commissioner of
commerce may adopt in regard to the cancellation of commercial
liability and/ or commercial property insurance policies comply
with sections 60A.30 and 60A.35 to 60A.38.
Sec. 23. [60A.35] [SCOPE.]
Except as specifically limited in section 60A.30, sections
23 to 26 apply to all commercial liability and/or property
insurance policies issued by companies licensed to do business
in this state except ocean marine insurance, accident and health
insurance, excess insurance, surplus lines insurance, and
reinsurance.
Sec. 24. [60A.36] [MIDTERM CANCELLATION.]
Subdivision 1. [REASON FOR CANCELLATION.] No insurer may
cancel a policy of commercial liability and/or property
insurance during the term of the policy, except for one or more
of the following reasons:
(1) nonpayment of premium;
(2) misrepresentation or fraud made by or with the
knowledge of the insured in obtaining the policy or in pursuing
a claim under the policy;
(3) actions by the insured that have substantially
increased or substantially changed the risk insured;
(4) refusal of the insured to eliminate known conditions
that increase the potential for loss after notification by the
insurer that the condition must be removed;
(5) substantial change in the risk assumed, except to the
extent that the insurer should reasonably have foreseen the
change or contemplated the risk in writing the contract;
(6) loss of reinsurance by the insurer which provided
coverage to the insurer for a significant amount of the
underlying risk insured. A notice of cancellation under this
clause shall advise the policyholder that the policyholder has
ten days from the date of receipt of the notice to appeal the
cancellation to the commissioner of commerce and that the
commissioner will render a decision as to whether the
cancellation is justified because of the loss of reinsurance
within five business days after receipt of the appeal;
(7) a determination by the commissioner that the
continuation of the policy could place the insurer in violation
of the insurance laws of this state; or
(8) 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 the
insurance. This provision for cancellation for failure to pay
dues does not apply to persons who are retired at 62 years of
age or older or who are disabled according to social security
standards.
Subd. 2. [NOTICE.] Cancellation under subdivision 1,
clauses (2) to (8), shall not be effective before 60 days after
notice to the policyholder. The notice of cancellation shall
contain a specific reason for cancellation as provided in
subdivision 1.
A policy shall not be canceled for nonpayment of premium
pursuant to subdivision 1, clause (1), unless the insurer, at
least ten days before the effective cancellation date, has given
notice to the policyholder of the amount of premium due and the
due date. The notice shall state the effect of nonpayment by
the due date. No cancellation for nonpayment of premium shall
be effective if payment of the amount due is made before the
effective date in the notice.
Subd. 3. [NEW POLICIES.] Subdivisions 1 and 2 do not apply
to any insurance policy that has not been previously renewed if
the policy has been in effect less than 90 days at the time the
notice of cancellation is mailed or delivered. No cancellation
under this subdivision is effective until at least ten days
after the written notice to the policyholder.
Subd. 4. [LONGER TERM POLICIES.] A policy may be issued
for a term longer than one year or for an indefinite term with a
clause providing for cancellation by the insurer for the reasons
stated in subdivision 1 by giving notice as required by
subdivision 2 at least 60 days before any anniversary date.
Sec. 25. [60A.37] [NONRENEWAL.]
Subdivision 1. [NOTICE REQUIRED.] At least 60 days before
the date of expiration provided in the policy, a notice of
intention not to renew the policy beyond the agreed expiration
date must be made to the policyholder by the insurer. If the
notice is not given at least 60 days before the date of
expiration provided in the policy, the policy shall continue in
force until 60 days after a notice of intent not to renew is
received by the policyholder.
Subd. 2. [EXCEPTIONS.] This section does not apply if the
policyholder has insured elsewhere, has accepted replacement
coverage, or has requested or agreed to nonrenewal.
Sec. 26. [60A.38] [INTERPRETATION AND PENALTIES.]
Subdivision 1. [SECTIONS NOT EXCLUSIVE.] Sections 23 to 26
are not exclusive, and the commissioner may also consider other
provisions of Minnesota law to be applicable to the
circumstances or situations addressed by sections 23 to 26. The
rights provided by sections 23 to 26 are in addition to and do
not prejudice any other rights the policyholder may have at
common law, under statute, or rules.
Subd. 2. [PENALTIES.] A violation of any provisions of
sections 23 to 26 shall be deemed to be an unfair trade practice
in the business of insurance and shall subject the violator to
the penalties provided by sections 72A.17 to 72A.32 in addition
to any other penalty provided by law.
Subd. 3. [NOTICES REQUIRED.] All notices required by
sections 23 to 26 shall only be made by first class mail
addressed to the policyholder's last known address or by
delivery to the policyholder's last known address. Notice by
first class mail is effective upon deposit in the United States
mail. In addition to giving notice to the policyholder, the
insurer must also give notice to the agent of record, if any, in
the manner specified for the policyholder.
Sec. 27. Minnesota Statutes 1986, section 60B.44,
subdivision 1, is amended to read:
Subdivision 1. [DEDUCTIBLE PROVISION.] The distribution of
claims from the insurer's estate shall be in the order stated in
this section with a descending degree of preference for each
subdivision. The first $50 of the amount allowed on each claim
in the classes under subdivisions 3 to 7 shall be deducted from
the claim and included in the class under subdivision 9. Claims
may not be cumulated by assignment to avoid application of the
$50 deductible provision. Subject to the $50 deductible
provision, Every claim in each class shall be paid in full or
adequate funds retained for the payment before the members of
the next class receive any payment. No subclasses shall be
established within any class.
Sec. 28. Minnesota Statutes 1986, section 60B.44,
subdivision 4, is amended to read:
Subd. 4. [LOSS CLAIMS; INCLUDING CLAIMS NOT COVERED BY A
GUARANTY ASSOCIATION.] All claims under policies or contracts of
coverage for losses incurred including third party claims, and
all claims against the insurer for liability for bodily injury
or for injury to or destruction of tangible property which are
not under policies or contracts, except the first $200 of losses
otherwise payable to any claimant under this subdivision. All
claims under life insurance and annuity policies, whether for
death proceeds, annuity proceeds, or investment values, shall be
treated as loss claims. Claims may not be cumulated by
assignment to avoid application of the $200 deductible
provision. That portion of any loss for which indemnification
is provided by other benefits or advantages recovered or
recoverable by the claimant shall not be included in this class,
other than benefits or advantages recovered or recoverable in
discharge of familial obligations of support or by way of
succession at death or as proceeds of life insurance, or as
gratuities. No payment made by an employer to an employee shall
be treated as a gratuity. Claims not covered by a guaranty
association are loss claims. If any portion of a claim is
covered by a reinsurance treaty or similar contractual
obligation, that claim shall be entitled to a pro rata share,
based upon the relationship the claim amount bears to all claims
payable under the treaty or contract, of the proceeds received
under that treaty or contractual obligation.
Claims receiving pro rata payments shall not, as to any
remaining unpaid portion of their claim, be treated in a
different manner than if no such payment had been received.
Sec. 29. Minnesota Statutes 1986, section 60B.44,
subdivision 5, is amended to read:
Subd. 5. [UNEARNED PREMIUMS AND SMALL LOSS CLAIMS.] Claims
under nonassessable policies or contracts of coverage for
unearned premiums or subscription rates or other refunds and the
first $200 of loss excepted by the deductible provision in
subdivision 4.
Sec. 30. Minnesota Statutes 1986, section 60B.44,
subdivision 9, is amended to read:
Subd. 9. [MISCELLANEOUS SUBORDINATED CLAIMS.] The
remaining claims or portions of claims not already paid, with
interest as in subdivision 8.
(a) The first $50 of each claim in the classes under
subdivisions 3 to 7 subordinated under this section;
(b) Claims under section 60B.39, subdivision 2;
(c) (b) Claims subordinated by section 60B.61;
(d) (c) Except to the extent excused or otherwise permitted
pursuant to section 60B.37, claims filed late;
(e) (d) Portions of claims subordinated under subdivision
6; and
(f) (e) Claims or portions of claims payment of which is
provided by other benefits or advantages recovered or
recoverable by the claimant.
Sec. 31. Minnesota Statutes 1986, section 60C.08,
subdivision 1, is amended to read:
Subdivision 1. The board of directors of the association
shall consist of nine persons. Two of the directors shall be
public members and seven shall be insurer members. The public
members shall be appointed by the commissioner. Public members
may include licensed insurance agents. The insurer members of
the board shall be selected by association members subject to
the approval of the commissioner. Vacancies on the board shall
be filled for the remaining period of the term in the same
manner as initial appointments. The term of appointment for all
members is two years.
Sec. 32. Minnesota Statutes 1986, section 60C.09, is
amended to read:
60C.09 [COVERED CLAIMS.]
Subdivision 1. [DEFINITION.] A covered claim is any unpaid
claim, including one for unearned premium, which:
(a) (1) 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; or
(2) Would be within the coverage of an extended reporting
endorsement to a claims-made insurance policy if insolvency had
not prevented the member insurer from fulfilling its obligation
to issue the endorsement, if:
(i) the claims-made policy contained a provision affording
the insured the right to purchase a reporting endorsement;
(ii) coverage will be no greater than if a reporting
endorsement had been issued;
(iii) the insured has not purchased other insurance which
applies to the claim; and
(iv) the insured's deductible under the policy is increased
by an amount equal to the premium for the reporting endorsement,
as provided in the insured's claims-made policy, or if not so
provided, then as established by a rate service organization.
(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 injured 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).
For purposes of paragraph (c), item (i), unit owners of
condominiums, townhouses, or cooperatives are considered as
having an insurable interest.
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.
Subd. 2. [LIMITATION OF AMOUNT.] Payment of a covered
claim, except a claim for unearned premium by any single
claimant, whether upon a single policy or multiple policies of
insurance, is limited to the amount by which the allowance on
any claim exceeds $100 and is less than $300,000. In the case
of claim for unearned premium, the entire claim up to $300,000
shall be allowed. The limitation on the amount of payment for a
covered claim does not apply to claims for workers' compensation
insurance. In no event is the association obligated to the
policyholder or claimant in an amount in excess of the
obligation of the insurer under the policy from which the claim
arises.
Sec. 33. Minnesota Statutes 1986, section 60C.12, is
amended to read:
60C.12 [APPEAL AND REVIEW.]
Subdivision 1. [APPEAL.] A claimant whose claim has been
declared to be not covered or reduced by the board under section
60C.10 may appeal to the board within 30 days after the claimant
has been notified of the board's decision and of the rights of
the claimant under this section.
Subd. 2. [REVIEW.] Decisions of the board under
subdivision 1 are subject to judicial review appeal to the
commissioner of commerce who may overturn, affirm, or modify the
board's actions or take other action the commissioner considers
appropriate.
The appeal to the commissioner must be in the manner
provided in chapter 14.
Subd. 3. [JUDICIAL REVIEW.] A final action or order of the
commissioner under this subdivision is subject to judicial
review in the manner provided by chapter 14. In lieu of the
appeal to the commissioner under subdivision 2, a claimant may
seek judicial review of the board's actions.
Sec. 34. [60F.01] [ESTABLISHMENT.]
Any three or more employers, excluding the state and its
political subdivisions as described in section 471.617,
subdivision 1, who are authorized to transact business in
Minnesota may jointly self-insure for any property and/or
casualty or automobile liability. Joint plans must meet all
conditions and terms of this chapter.
Sec. 35. [60F.02] [EXCESS STOP-LOSS COVERAGE.]
A joint self-insurance plan must include aggregate excess
stop-loss coverage and individual excess stop-loss coverage
provided by an insurance company licensed by the state of
Minnesota. Aggregate excess stop-loss coverage must include
provisions to cover the excess claims of incurred, unpaid claim
liability even in the event of plan termination. The joint plan
must bear the risk of coverage for any member of the pool that
becomes insolvent with outstanding contribution due by providing
a surety bond from a Minnesota licensed surety in the amount of
one year's contribution. In addition, the plan of
self-insurance must have participants fund an amount at least
equal to the point at which the excess or stop-loss insurer must
assume 100 percent of the excess coverage limits of additional
liability. A joint self-insurance plan must submit its proposed
excess or stop-loss insurance contract to the commissioner of
commerce at least 30 days prior to the proposed plan's effective
date and at least 30 days subsequent to any renewal date. The
commissioner shall review the contract to determine if it meets
the standards established by this chapter and respond within a
30-day period. An excess or stop-loss insurance plan must be
noncancelable for a minimum term of one year.
Sec. 36. [60F.03] [LIMITATION ON ADMINISTRATIVE SERVICES.]
No joint self-insurance plan may offer marketing, risk
management, or administrative services unless these services are
provided by vendors duly licensed by the commissioner to provide
these services. No vendor of these services may be a trustee of
a joint self-insurance plan for which they provide marketing,
risk management, or administrative services.
Sec. 37. [60F.04] [APPLICABILITY OF PROVISIONS.]
A joint self-insurance plan is subject to the requirements
of the applicable parts of chapters 60A, 65A, 65B, 72B, and 72C,
and section 72A.20, unless otherwise specifically exempt. A
joint self-insurance plan must offer a plan which complies with
all applicable rules and statutes.
Sec. 38. [60F.05] [FUND MANAGEMENT.]
Funds collected from the participants under joint
self-insurance plans must be held in trust subject to the
following requirements:
(a) A board of trustees elected by the participants shall
serve as fund managers on behalf of participants. Trustees must
be plan participants. No participants may be represented by
more than one trustee. A minimum of three and a maximum of
seven trustees may be elected. Trustees shall receive no
remuneration, but they may be reimbursed for actual and
reasonable expenses incurred in connection with duties as
trustees.
(b) Trustees must be bonded in an amount not less than
$100,000 nor more than $500,000 from a licensed bonding company.
(c) Investment of plan funds is subject to the same
restrictions as are applicable to political subdivisions
pursuant to section 475.66. All investments must be managed by
a bank or other investment organization licensed to operate in
Minnesota.
(d) Trustees, on behalf of the fund, shall file annual
reports with the commissioner of commerce within 30 days
immediately following the end of each calendar year. The
reports must summarize the financial condition of the fund,
itemize collection from participants, and detail all fund
expenditures.
Sec. 39. [60F.06] [RULES.]
The commissioner of commerce shall adopt rules, including
emergency rules, to ensure the solvency and operation of all
self-insured plans subject to this chapter. The commissioner
may examine the joint self-insurance plans pursuant to sections
60A.03 and 60A.031.
Sec. 40. [60F.07] [REVENUE FEE.]
A joint self-insurance plan shall pay a two percent revenue
fee. This revenue must be computed based on two percent of the
paid claims level for the most recently completed calendar
year. This revenue must be deposited in the general fund.
Sec. 41. [60F.08] [APPLICABILITY.]
A joint self-insurance plan is not an insurer for purposes
of chapter 60C.
Sec. 42. [61A.092] [CONTINUATION OF COVERAGE FOR LIFE
INSURANCE.]
Subdivision 1. [CONTINUATION OF COVERAGE.] Every group
insurance policy issued or renewed within this state after
August 1, 1987, providing coverage for life insurance benefits
shall contain a provision that permits covered employees who are
voluntarily or involuntarily terminated or laid off from their
employment, if the policy remains in force for any active
employee of the employer, to elect to continue the coverage for
themselves and their dependents.
An employee is considered to be laid off from employment if
there is a reduction in hours to the point where the employee is
no longer eligible for coverage under the group life insurance
policy. Termination does not include discharge for gross
misconduct.
Subd. 2. [RESPONSIBILITY OF EMPLOYEE.] Every covered
employee electing to continue coverage shall pay the employee's
former employer, on a monthly basis, the cost of the continued
coverage. In no event shall the amount of premium charged
exceed 102 percent of the cost to the plan for such period of
coverage for other similarly situated employees with respect to
whom neither termination nor layoff has occurred, without
respect to whether such cost is paid by the employer or
employee. The employee is eligible to continue the coverage
until the employee obtains coverage under another group policy,
or for a period of 18 months after the termination or layoff
from employment, whichever is shorter.
Subd. 3. [NOTICE OF OPTIONS.] Upon termination of or
layoff from employment of a covered employee, the employer shall
inform the employee of:
(1) the employee's right to elect to continue the coverage;
(2) the amount the employee must pay monthly to the
employer to retain the coverage;
(3) the manner in which and the office of the employer to
which the payment to the employer must be made; and
(4) the time by which the payments to the employer must be
made to retain coverage.
The employee has 60 days within which to elect coverage.
The 60-day period shall begin to run on the date coverage would
otherwise terminate or on the date upon which notice of the
right to coverage is received, whichever is later.
Notice must be in writing and sent by first class certified
mail to the employee's last known address which the employee has
provided to the employer.
A notice in substantially the following form is
sufficient: "As a terminated or laid off employee, the law
authorizes you to maintain your group insurance benefits for a
period of up to 18 months. To do so, you must notify your
former employer within 60 days of your receipt of this notice
that you intend to retain this coverage and must make a monthly
payment of $............ at ............. by the .............
of each month."
Subd. 4. [RESPONSIBILITY OF EMPLOYER AND INSURER.] If the
employer fails to notify a covered employee of the options set
forth in subdivision 3, or if after timely receipt of the
monthly payment from a covered employee the employer fails to
make the payment to the insurer, with the result that the
employee's coverage is terminated, the employer is still liable
for the employee's coverage to the same extent as the insurer
would be if the coverage were still in effect.
Subd. 5. [CONVERSION TO INDIVIDUAL POLICY.] A group
insurance policy that provides posttermination or layoff
coverage as required by this section must also include a
provision allowing a covered employee, surviving spouse, or
dependent at the expiration of the posttermination or layoff
coverage provided by subdivision 2 to obtain from the insurer
offering the group policy, at the employee's, spouse's, or
dependent's option and expense, without further evidence of
insurability and without interruption of coverage, an individual
policy of insurance contract providing the same or substantially
similar benefits.
A policy providing reduced benefits at a reduced premium
rate may be accepted by the employee, the spouse, or a dependent
in lieu of the coverage otherwise required by this subdivision.
Sec. 43. Minnesota Statutes 1986, section 61A.28,
subdivision 12, is amended to read:
Subd. 12. [ADDITIONAL INVESTMENTS.] Investments of any
kind, without regard to the categories, conditions, standards,
or other limitations set forth in the foregoing subdivisions and
section 61A.31, subdivision 3, except that the prohibitions in
clause (d) of subdivision 3 remains applicable, may be made by a
domestic life insurance company in an amount not to exceed the
lesser of the following:
(1) Five percent of the company's total admitted assets as
of the end of the preceding calendar year, or
(2) Fifty percent of the amount by which its capital and
surplus as of the end of the preceding calendar year exceeds
$675,000. Provided, however, that a company's total investment
under this section in the common stock of any corporation, other
than the stock of the types of corporations specified in
subdivision 6(a), may not exceed ten percent of the common stock
of the corporation. Provided, further, that no investment may
be made under the authority of this clause or clause (1) by a
company that has not completed five years of actual operation
since the date of its first certificate of authority.
If, subsequent to being made under the provisions of this
subdivision, an investment is determined to have become
qualified or eligible under any of the other provisions of this
chapter, the company may consider the investment as being held
under the other provision and the investment need no longer be
considered as having been made under the provisions of this
subdivision.
In addition to the investments authorized by this
subdivision, a domestic life insurance company may make
qualified investments in any additional securities or property
of the type authorized by subdivision 6, paragraph (f), with the
written order of the commissioner. This approval is at the
discretion of the commissioner. This authorization does not
negate or reduce the investment authority granted in subdivision
6, paragraph (f), or this subdivision.
Sec. 44. Minnesota Statutes 1986, section 61B.09, is
amended to read:
61B.09 [DUTIES AND POWERS OF THE COMMISSIONER.]
(a) Subdivision 1. The commissioner shall:
(1) Notify the board of directors of the existence of an
impaired insurer within three days after a determination of
impairment is made or the commissioner receives notice of
impairment;
(2) Upon request of the board of directors, provide the
association with a statement of the premiums in the appropriate
states for each member insurer; and
(3) When an impairment is declared and the amount
determined, serve a demand upon the impaired insurer to make
good the impairment within a reasonable time. Notice to the
impaired insurer shall constitute notice to its shareholders.
The failure of the insurer to promptly comply with the demand
shall not excuse the association from performance under sections
61B.01 to 61B.16.
(b) Subd. 2. The commissioner may, after notice and
hearing, suspend or revoke the certificate of authority to
transact insurance in this state of any member insurer which
fails to pay an assessment when due or to comply with the plan
of operation. As an alternative, the commissioner may levy a
forfeiture on any member insurer which fails to pay an
assessment when due. A forfeiture shall not exceed five percent
of the unpaid assessment per month, but no forfeiture shall be
less than $100 per month.
(c) Subd. 3. Any action of the board of directors or the
association may be appealed to the commissioner by any member
insurer within 30 days of the occurrence notice of the action.
Any final action or order of the commissioner shall be subject
to judicial review in a court of competent jurisdiction, in the
manner provided by chapter 14. In lieu of the appeal to the
commissioner under this subdivision, a claimant may seek
judicial review of the board's actions.
(d) Subd. 4. The liquidator, rehabilitator, or conservator
of any impaired insurer may notify all interested persons of the
effect of sections 61B.01 to 61B.16.
Sec. 45. Minnesota Statutes 1986, section 62A.041, is
amended to read:
62A.041 [MATERNITY BENEFITS; UNMARRIED WOMEN.]
Each group policy of accident and health insurance and each
group health maintenance contract shall provide the same
coverage for maternity benefits to unmarried women and minor
female dependents that it provides to married women including
the wives of employees choosing dependent family coverage. If
an unmarried insured or an unmarried enrollee is a parent of a
dependent child, each group policy and each group contract shall
provide the same coverage for that child as that provided for
the child of a married employee choosing dependent family
coverage if the insured or the enrollee elects dependent family
coverage.
Each individual policy of accident and health insurance and
each individual health maintenance contract shall provide the
same coverage for maternity benefits to unmarried women and
minor female dependents as that provided for married women. If
an unmarried insured or an unmarried enrollee is a parent of a
dependent child, each individual policy and each individual
contract shall also provide the same coverage for that child as
that provided for the child of a married insured or a married
enrollee choosing dependent family coverage if the insured or
the enrollee elects dependent family coverage.
Except for policies which only provide coverage for
specified diseases, each group subscriber contract of accident
and health insurance or health maintenance contract, issued or
renewed after August 1, 1987, shall include maternity benefits
in the same manner as any other illness covered under the policy
or contract.
For the purposes of this section, the term "maternity
benefits" shall not include elective, induced abortion whether
performed in a hospital, other abortion facility, or the office
of a physician.
This section applies to policies and contracts issued,
delivered, or renewed after August 1, 1985, that cover Minnesota
residents.
Sec. 46. Minnesota Statutes 1986, section 62A.043, is
amended by adding a subdivision to read:
Subd. 3. Except for policies which only provide coverage
for specified diseases, no policy or certificate of health,
medical, hospitalization, or accident and sickness insurance
regulated under this chapter, or subscriber contract provided by
a nonprofit health service plan corporation regulated under
chapter 62C, or health maintenance organization regulated under
chapter 62D, shall be issued, renewed, continued, delivered,
issued for delivery, or executed in this state after August 1,
1987, unless the policy, plan, or contract specifically provides
coverage for surgical and nonsurgical treatment of
temporomandibular joint disorder and craniomandibular disorder.
Coverage shall be the same as that for treatment to any other
joint in the body, and shall apply if the treatment is
administered or prescribed by a physician or dentist.
Sec. 47. Minnesota Statutes 1986, section 62A.141, is
amended to read:
62A.141 [COVERAGE FOR HANDICAPPED DEPENDENTS.]
No group policy or plan of health and accident insurance
regulated under this chapter, chapter 62C, or 62D, which
provides for dependent coverage may be issued or renewed in this
state after August 1, 1983, unless it covers the handicapped
dependents of the insured, subscriber, or enrollee of the policy
or plan. Consequently, the policy or plan shall not contain any
provision concerning preexisting condition limitations,
insurability, eligibility, or health underwriting approval
concerning handicapped dependents.
If ordered by the commissioner of commerce, the insurer of
a Minnesota-domiciled nonprofit association which is composed
solely of agricultural members may restrict coverage under this
section to apply only to Minnesota residents.
Sec. 48. Minnesota Statutes 1986, section 62A.146, is
amended to read:
62A.146 [CONTINUATION OF BENEFITS TO SURVIVORS.]
No policy or plan of accident and health protection issued
by an insurer, nonprofit health service plan corporation, or
health maintenance organization, providing coverage of hospital
or medical expense on either an expense incurred basis or other
than an expense incurred basis which in addition to coverage of
the insured, subscriber, or enrollee, also provides coverage to
dependents, shall, except upon the written consent of the
survivor or survivors of the deceased insured, subscriber or
enrollee, terminate, suspend or otherwise restrict the
participation in or the receipt of benefits otherwise payable
under the policy or plan to the survivor or survivors until the
earlier of the following dates:
(a) the date of remarriage of the surviving spouse becomes
covered under another group health plan; or
(b) the date coverage would have terminated under the
policy or plan had the insured, subscriber, or enrollee lived.
The survivor or survivors, in order to have the coverage
and benefits extended, may be required to pay the entire cost of
the protection on a monthly basis. In no event shall the amount
of premium or fee contributions charged exceed 102 percent of
the cost to the plan for such period of coverage for other
similarly situated spouses and dependent children who are not
the survivors of a deceased insured, without regard to whether
such cost is paid by the employer or employee. Failure of the
survivor to make premium or fee payments within 90 days after
notice of the requirement to pay the premiums or fees shall be a
basis for the termination of the coverage without written
consent. In event of termination by reason of the survivor's
failure to make required premium or fee contributions, written
notice of cancellation must be mailed to the survivor's last
known address at least 30 days before the cancellation. If the
coverage is provided under a group policy or plan, any required
premium or fee contributions for the coverage shall be paid by
the survivor to the group policyholder or contract holder for
remittance to the insurer, nonprofit health service plan
corporation, or health maintenance organization.
Sec. 49. Minnesota Statutes 1986, section 62A.152,
subdivision 2, is amended to read:
Subd. 2. [MINIMUM BENEFITS.] All group policies and all
group subscriber contracts providing benefits for mental or
nervous disorder treatments in a hospital shall also provide
coverage, to on the same basis as coverage for other benefits
for at least the extent of 80 percent of the first $750 of the
cost of the usual and customary charges of the first ten hours
of treatment incurred over a 12-month benefit period, for mental
or nervous disorder consultation, diagnosis and treatment
services delivered while the insured person is not a bed patient
in a hospital, and at least 75 percent of the cost of the usual
and customary charges for any additional hours of treatment
during the same 12-month benefit period for serious and
persistent mental or nervous disorders, if the services are
furnished by (1) a licensed or accredited hospital, (2) a
community mental health center or mental health clinic approved
or licensed by the commissioner of human services or other
authorized state agency, or (3) a licensed consulting
psychologist licensed under the provisions of sections 148.87 to
148.98, or a psychiatrist licensed under chapter 147. Prior
authorization from an accident and health insurance company, or
a nonprofit health service corporation, shall be required for an
extension of coverage beyond ten hours of treatment. This prior
authorization must be based upon the severity of the disorder,
the patient's risk of deterioration without ongoing treatment
and maintenance, degree of functional impairment, and a concise
treatment plan. Authorization for extended treatment may not
exceed a maximum of 30 visit hours during any 12-month benefit
period.
For purposes of this section, covered treatment for a minor
shall include treatment for the family if family therapy is
recommended by a provider listed above in item (1), (2) or (3).
Sec. 50. Minnesota Statutes 1986, section 62A.17, is
amended to read:
62A.17 [TERMINATION OF OR LAYOFF FROM EMPLOYMENT.]
Subdivision 1. [CONTINUATION OF COVERAGE.] Every group
insurance policy, group subscriber contract, and health care
plan included within the provisions of section 62A.16, except
policies, contracts, or health care plans covering employees of
an agency of the federal government, shall contain a provision
which permits every eligible covered employee who is voluntarily
or involuntarily terminated or laid off from employment, if the
policy, contract, or health care plan remains in force for
active employees of the employer, to elect to continue the
coverage for the employee and dependents.
An employee shall be considered to be laid off from
employment if there is a reduction in hours to the point where
the employee is no longer eligible under the policy, contract,
or health care plan. Termination shall not include discharge
for gross misconduct.
Subd. 2. [RESPONSIBILITY OF EMPLOYEE.] Every eligible
covered employee electing to continue coverage shall pay the
former employer, on a monthly basis, the cost of the continued
coverage. If the policy, contract, or health care plan is
administered by a trust, every eligible covered employee
electing to continue coverage shall pay the trust the cost of
continued coverage according to the eligibility rules
established by the trust. In no event shall the amount of
premium charged exceed 102 percent of the cost to the plan for
such period of coverage for similarly situated employees with
respect to whom neither termination nor layoff has occurred,
without regard to whether such cost is paid by the employer or
employee. The employee shall be eligible to continue the
coverage until reemployed and eligible for health care coverage
under a group policy, contract, or plan sponsored by the same or
another employer the employee becomes covered under another
group health plan, or for a period of 12 18 months after the
termination of or lay off from employment, whichever is shorter.
Subd. 3. [ELIGIBILITY FOR CONTINUED COVERAGE.] An employee
shall be eligible to make the election for the employee and
dependents provided for in subdivision 1 if:
(a) In the period preceding the termination of or lay off
from employment, the employee and dependents were covered
through employment by a group insurance policy, subscriber's
contract, or health care plan included within the provisions of
section 62A.16;
(b) The termination of or lay off from employment was for
reasons other than the discontinuance of the business,
bankruptcy, or the employee's disability or retirement.
Subd. 4. [RESPONSIBILITY OF EMPLOYER.] After timely
receipt of the monthly payment from an eligible a covered
employee, if the employer, or the trustee, if the policy,
contract, or health care plan is administered by a trust, fails
to make the payment to the insurer, nonprofit health service
plan corporation, or health maintenance organization, with the
result that the employee's coverage is terminated, the employer
or trust shall become liable for the employee's coverage to the
same extent as the insurer, nonprofit health service plan
corporation, or health maintenance organization would be if the
coverage were still in effect.
In the case of a policy, contract or plan administered by a
trust, the employer must notify the trustee within 30 days of
the termination or layoff of a covered employee of the name and
last known address of the employee.
If the employer or trust fails to notify a covered
employee, the employer or trust shall continue to remain liable
for the employee's coverage to the same extent as the insurer
would be if the coverage were still in effect.
Subd. 5. [NOTICE OF OPTIONS.] Upon the termination of or
lay off from employment of an eligible employee, the employer
shall inform the employee within ten days after termination or
lay off of:
(a) the right to elect to continue the coverage;
(b) the amount the employee must pay monthly to the
employer to retain the coverage;
(c) the manner in which and the office of the employer to
which the payment to the employer must be made; and
(d) the time by which the payments to the employer must be
made to retain coverage.
If the policy, contract, or health care plan is
administered by a trust, the employer is relieved of the
obligation imposed by clauses (a) to (d). The trust shall
inform the employee of the information required by clauses (a)
to (d).
The employee shall have 60 days within which to elect
coverage. The 60-day period shall begin to run on the date plan
coverage would otherwise terminate or on the date upon which
notice of the right to coverage is received, whichever is later.
Notice may must be in writing and sent by first class mail
to the employee's last known address which the employee has
provided the employer or trust. If the employer or trust fails
to so notify the employee who is properly enrolled in the
program, the employee shall have the option to retain coverage
if the employee makes this election within 60 days of the date
terminated or laid off by making the proper payment to the
employer or trust to provide continuous coverage.
A notice in substantially the following form shall be
sufficient.: "As a terminated or laid off employee, the law
authorizes you to maintain your group medical insurance for a
period of up to 12 18 months. To do so you must notify your
former employer within ten 60 days of your receipt of this
notice that you intend to retain this coverage and must make a
monthly payment of $.......... to ........... at .......... by
the ............... of each month."
Subd. 6. [CONVERSION TO INDIVIDUAL POLICY.] A group
insurance policy that provides posttermination or layoff
coverage as required by this section shall also include a
provision allowing a covered employee, surviving spouse, or
dependent at the expiration of the posttermination or layoff
coverage provided by subdivision 2 to obtain from the insurer
offering the group policy or group subscriber contract, at the
employee's, spouse's, or dependent's option and expense, without
further evidence of insurability and without interruption of
coverage, an individual policy of insurance or an individual
subscriber contract providing at least the minimum benefits of a
qualified plan as prescribed by section 62E.06 and the option of
a number three qualified plan, a number two qualified plan, and
a number one qualified plan as provided by section 62E.06,
subdivisions 1 to 3, provided application is made to the insurer
within 30 days following notice of the expiration of the
continued coverage and upon payment of the appropriate premium.
The required conversion contract must treat pregnancy the same
as any other covered illness under the conversion contract. A
health maintenance contract issued by a health maintenance
organization that provides posttermination or layoff coverage as
required by this section shall also include a provision allowing
a former employee, surviving spouse, or dependent at the
expiration of the posttermination or layoff coverage provided in
subdivision 2 to obtain from the health maintenance
organization, at the former employee's, spouse's, or dependent's
option and expense, without further evidence of insurability and
without interruption of coverage, an individual health
maintenance contract. Effective January 1, 1985, enrollees who
have become nonresidents of the health maintenance
organization's service area shall be given the option, to be
arranged by the health maintenance organization, of a number
three qualified plan, a number two qualified plan, or a number
one qualified plan as provided by section 62E.06, subdivisions 1
to 3 if an arrangement with an insurer can reasonably be made by
the health maintenance organization. This option shall be made
available at the enrollee's expense, without further evidence of
insurability and without interruption of coverage.
A policy providing reduced benefits at a reduced premium
rate may be accepted by the employee, the spouse, or a dependent
in lieu of the optional coverage otherwise required by this
subdivision.
The individual policy or contract shall be renewable at the
covered under another qualified plan as defined in section
62E.02, subdivision 4, up to age 65 or to the day before the
date of eligibility for coverage under title XVIII of the Social
Security Act, as amended. Any revisions in the table of rate
for the individual policy shall apply to the covered person's
original age at entry and shall apply equally to all similar
policies issued by the insurer.
Sec. 51. [62A.20] [COVERAGE OF CURRENT SPOUSE AND
CHILDREN.]
Subdivision 1. [REQUIREMENT.] Every policy of accident and
health insurance providing coverage of hospital or medical
expense on either an expense-incurred basis or other than an
expense-incurred basis, which in addition to covering the
insured also provides coverage to the spouse and dependent
children of the insured shall contain:
(1) a provision which permits the spouse and dependent
children to elect to continue coverage when the insured becomes
enrolled for benefits under Title XVIII of the Social Security
Act (Medicare); and
(2) a provision which permits the dependent children to
continue coverage when they cease to be dependent children under
the generally applicable requirement of the plan.
Subd. 2. [CONTINUATION PRIVILEGE.] The coverage described
in subdivision 1 may be continued until the earlier of the
following dates:
(1) the date coverage would otherwise terminate under the
policy;
(2) 36 months after continuation by the spouse or dependent
was elected; or
(3) the spouse or dependent children become covered under
another group health plan.
If coverage is provided under a group policy, any required
premium contributions for the coverage shall be paid by the
insured on a monthly basis to the group policyholder for
remittance to the insurer. In no event shall the amount of
premium charged exceed 102 percent of the cost to the plan for
such period of coverage for other similarly situated spouse and
dependent children to whom subdivision 1 is not applicable,
without regard to whether such cost is paid by the employer or
employee.
Sec. 52. Minnesota Statutes 1986, section 62A.21, is
amended to read:
62A.21 [CONVERSION PRIVILEGES FOR INSURED FORMER SPOUSES
AND CHILDREN.]
Subdivision 1. No policy of accident and health insurance
providing coverage of hospital or medical expense on either an
expense incurred basis or other than an expense incurred basis,
which in addition to covering the insured also provides coverage
to the spouse of the insured shall contain a provision for
termination of coverage for a spouse covered under the policy
solely as a result of a break in the marital relationship except
by reason of an entry of a valid decree of dissolution of
marriage.
Subd. 2a. [CONTINUATION PRIVILEGE.] Every policy described
in subdivision 1 shall contain a provision which permits
continuation of coverage under the policy for the insured's
former spouse and dependent children upon entry of a valid
decree of dissolution of marriage, if the decree requires the
insured to provide continued coverage for those persons. The
coverage may shall be continued until the earlier of the
following dates:
(a) The date of remarriage of either the insured or the
insured's former spouse becomes covered under any other group
health plan; or
(b) The date coverage would otherwise terminate under the
policy.
If the coverage is provided under a group policy, any
required premium contributions for the coverage shall be paid by
the insured on a monthly basis to the group policyholder for
remittance to the insurer. In no event shall the amount of
premium charged exceed 102 percent of the cost to the plan for
such period of coverage for other similarly situated spouses and
dependent children with respect to whom the marital relationship
has not dissolved, without regard to whether such cost is paid
by the employer or employee.
Subd. 2b. [CONVERSION PRIVILEGE.] Every policy described
in subdivision 1 shall contain a provision allowing a former
spouse and dependent children of an insured, without providing
evidence of insurability, to obtain from the insurer at the
expiration of any continuation of coverage required under
subdivision 2a or section sections 62A.146 and 62A.20, or upon
termination of coverage by reason of an entry of a valid decree
of dissolution which does not require the insured to provide
continued coverage for the former spouse and dependent children,
conversion coverage providing at least the minimum benefits of a
qualified plan as prescribed by section 62E.06 and the option of
a number three qualified plan, a number two qualified plan, a
number one qualified plan as provided by section 62E.06,
subdivisions 1 to 3, provided application is made to the insurer
within 30 days following notice of the expiration of the
continued coverage and upon payment of the appropriate premium.
A policy providing reduced benefits at a reduced premium rate
may be accepted by the former spouse and dependent children in
lieu of the optional coverage otherwise required by this
subdivision. The individual policy shall be renewable at the
option of the former spouse as long as the former spouse is not
covered under another qualified plan as defined in section
62E.02, subdivision 4, up to age 65 or to the day before the
date of eligibility for coverage under Title XVIII of the Social
Security Act, as amended. Any revisions in the table of rate
for the individual policy shall apply to the former spouse's
original age at entry, and shall apply equally to all similar
policies issued by the insurer.
Subd. 3. Subdivision 1 applies to every policy of accident
and health insurance which is delivered, issued for delivery,
renewed or amended on or after July 19, 1977.
Subdivisions 2a and 2b apply to every policy of accident
and health insurance which is delivered, issued for delivery,
renewed, or amended on or after August 1, 1981.
Sec. 53. Minnesota Statutes 1986, section 62A.27, is
amended to read:
62A.27 [COVERAGE FOR ADOPTED CHILDREN.]
No individual or group policy or plan of health and
accident insurance regulated under this chapter or chapter 64B,
subscriber contract regulated under chapter 62C, or health
maintenance contract regulated under chapter 62D, providing
coverage for more than one person may be issued or renewed in
this state after August 1, 1983, unless the policy, plan, or
contract covers adopted children of the insured, subscriber, or
enrollee on the same basis as other dependents. Consequently,
the policy or plan shall not contain any provision concerning
preexisting condition limitations, insurability, eligibility, or
health underwriting approval concerning adopted children.
The coverage required by this section is effective from the
date of placement for the purpose of adoption and continues
unless the placement is disrupted prior to legal adoption and
the child is removed from placement.
Sec. 54. [62A.29] [SURETY BOND OR SECURITY FOR CERTAIN
HEALTH BENEFIT PLANS.]
Subdivision 1. [SURETY BOND OR SECURITY REQUIREMENT.] Any
employer, except the state and its political subdivisions as
defined in section 65B.43, subdivision 20, who provides a health
benefit plan to its Minnesota employees, which is to some extent
self-insured by the employer, and who purchases stop-loss
insurance coverage, or any other insurance coverage, in
connection with the health benefit plan, shall annually file
with the commissioner, within 60 days of the end of the
employer's fiscal year, security acceptable to the commissioner
in an amount specified under subdivision 2, or a surety bond in
the form and amount prescribed by subdivisions 2 and 3. An
acceptable surety bond is one issued by a corporate surety
authorized by the commissioner to transact this business in the
state of Minnesota for the purposes of this section. The term
"Minnesota employees" includes any Minnesota resident who is
employed by the employer.
Subd. 2. [AMOUNT OF SURETY BOND OR SECURITY.] The amount
of surety bond or acceptable security required by subdivision 1
shall be equal to one-fourth of the projected annual medical and
hospital expenses to be incurred by the employer or $1,000,
whichever is greater, with respect to its Minnesota employees by
reason of the portion of the employer's health benefit plan
which is self-insured by the employer.
Subd. 3. [FORM OF THE SURETY BOND.] The surety bond shall
provide as follows:
SURETY BOND
KNOW ALL PERSONS BY THESE PRESENTS: That (entity to be
bonded), of (location), (hereinafter called the "principal"), as
principal, and (bonding company name), a (name of state)
corporation, of (location) (hereinafter called the "surety"), as
surety are held and firmly bound unto the commissioner of
commerce of the state of Minnesota for the use and benefit of
Minnesota residents entitled to health benefits from the
principal in the sum of ($.........), for the payment of which
well and truly to be made, the principal binds itself, its
successor and assigns, and the surety binds itself and its
successors and assigns, jointly and severally, firmly by these
presents.
WHEREAS, in accordance with section (......) of the
Minnesota Statute, principal is required to file a surety bond
with the commissioner of commerce of the state of Minnesota.
NOW, THEREFORE, the condition of this obligation is such
that if the said principal shall, according to the terms,
provisions, and limitations of principals' health benefit
program for its Minnesota employees, pay all of its liabilities
and obligations, including all benefits as provided in the
attached plan, then, this obligation shall be null and void,
otherwise to remain in full force and effect, subject, however,
to the following terms and conditions:
1. The liability of the surety is limited to the payment
of the benefits of the employee benefit plan which are payable
by the principal and within the amount of the bond. The surety
shall be bound to payments owed by the principal for obligations
arising from a default of the principal or any loss incurred
during the period to which the bond applies.
2. In the event of any default on the part of the
principal to abide by the terms and provision of the attached
plan, the commissioner of commerce may, upon ten-days notice to
the surety and opportunity to be heard, require the surety to
pay all of the principal's past and future obligations under the
attached plan with respect to the principal's Minnesota
employees.
3. Service on the surety shall be deemed to be service on
the principals.
4. This bond shall be in effect from ............... to
................, and may not be canceled by either the surety
or the principal.
5. Any Minnesota employee of principal aggrieved by a
default of principal under the attached plan, and/or the
commissioner of commerce on behalf of any such employee, may
enforce the provisions of this bond.
6. This bond shall become effective at (time of day,
month, day, year).
IN TESTIMONY WHEREOF, said principals and said surety have
caused this instrument to be signed by their respective, duly
authorized officers and their corporate seals to be hereunto
affixed this (day, month, year).
Signed, sealed and delivered in
the presence of: Corporation Name
____________________
Bonding Company Name
By:
Subd. 4. [PENALTY FOR FAILURE TO COMPLY.] The commissioner
of revenue shall deny any business tax deduction to an employer
for the employer's contribution to a health plan for the period
which the employer fails to comply with this section. This
section does not apply to trusts established under chapter 62H
which have been approved by the commissioner.
Subd. 5. [PETITION TO REDUCE BOND OR SECURITY AMOUNT.] An
employer subject to this section may petition the commissioner
to, and the commissioner may, allow the use of a surety bond not
in the form specified in subdivision 3, or grant a reduction in
the amount of the surety bond or security required.
In reviewing a petition submitted under this subdivision,
the commissioner must consider, in addition to any other
factors, information provided by the petitioner in regard to the
following:
(1) the size of the petitioner's business;
(2) the number of employees;
(3) the cost of providing the bond or security and the
effect the cost will have on the petitioner's financial
condition;
(4) whether the cost of the bond or security will impair
the petitioner's ability to self-insure; and
(5) the petitioner's likelihood of being able to meet the
petitioner's future obligations in regard to the health plan.
Sec. 55. Minnesota Statutes 1986, section 62A.31,
subdivision 1a, is amended to read:
Subd. 1a. [APPLICATION TO CERTAIN POLICIES.] The
requirements of sections 62A.31 to 62A.44 shall not apply to
disability income protection insurance policies, long-term care
policies issued pursuant to sections 62A.46 to 62A.56, or group
policies of accident and health insurance which do not purport
to supplement medicare issued to any of the following groups:
(a) A policy issued to an employer or employers or to the
trustee of a fund established by an employer where only
employees or retirees, and dependents of employees or retirees,
are eligible for coverage.
(b) A policy issued to a labor union or similar employee
organization.
(c) A policy issued to an association, a trust or the
trustee of a fund established, created or maintained for the
benefit of members of one or more associations. The association
or associations shall have at the outset a minimum of 100
persons; shall have been organized and maintained in good faith
for purposes other than that of obtaining insurance; shall have
a constitution and bylaws which provide that (1) the association
or associations hold regular meetings not less frequently than
annually to further purposes of the members, (2) except for
credit unions, the association or associations collect dues or
solicit contributions from members, and (3) the members have
voting privileges and representation on the governing board and
committees, and (4) the members are not, within the first 30
days of membership, directly solicited, offered, or sold a
long-term care policy or Medicare supplement policy if the
policy is available as an association benefit. This clause does
not prohibit direct solicitations, offers, or sales made
exclusively by mail.
Sec. 56. Minnesota Statutes 1986, section 62A.43,
subdivision 2, is amended to read:
Subd. 2. [REFUNDS.] Notwithstanding the provisions of
section 62A.38, an insurer which issues a medicare supplement
plan to any person who has one plan then in effect, except as
permitted in subdivision 1, shall, at the request of the
insured, either refund the premiums or pay any claims on the
policy, whichever is greater. Any refund of premium pursuant to
this section or section 62A.38 shall be sent by the insurer
directly to the insured within 15 days of the request by the
insured.
Sec. 57. Minnesota Statutes 1986, section 62A.43, is
amended by adding a subdivision to read:
Subd. 4. [OTHER POLICIES NOT PROHIBITED.] The prohibition
in this section against the sale of duplicate Medicare
supplement coverage does not preclude the sale of insurance
coverage, such as travel, accident, and sickness coverage, the
effect or purpose of which is not to supplement Medicare
coverage. Notwithstanding this provision, if the commissioner
determines that the coverage being sold is in fact Medicare
supplement insurance, the commissioner shall notify the insurer
in writing of the determination. If the insurer does not
thereafter comply with sections 62A.31 to 62A.44, the
commissioner may, pursuant to chapter 14, revoke or suspend the
insurer's authority to sell accident and health insurance in
this state or impose a civil penalty not to exceed $10,000, or
both.
Sec. 58. Minnesota Statutes 1986, section 62A.46, is
amended by adding a subdivision to read:
Subd. 11. [BENEFIT PERIOD.] "Benefit period" means one or
more separate or combined periods of confinement covered by a
long-term care policy in a nursing facility or at home while
receiving home care services. A benefit period begins on the
first day the insured receives a benefit under the policy and
ends when the insured has received no benefits for the same or
related cause for an interval of 180 consecutive days.
Sec. 59. Minnesota Statutes 1986, section 62A.48,
subdivision 1, is amended to read:
Subdivision 1. [POLICY REQUIREMENTS.] No individual or
group policy, certificate, subscriber contract, or other
evidence of coverage of nursing home care or other long-term
care services shall be offered, issued, delivered, or renewed in
this state, whether or not the policy is issued in this state,
unless the policy is offered, issued, delivered, or renewed by a
qualified insurer and the policy satisfies the requirements of
sections 62A.46 to 62A.56. A long-term care policy must cover
medically prescribed long-term care in nursing facilities and at
least the medically prescribed long-term home care services in
section 62A.46, subdivision 4, clauses (1) to (5), provided by a
home health agency. Coverage under a long-term care policy AA
must include: a maximum lifetime benefit limit of at least
$100,000 for services, and nursing facility and home care
coverages must not be subject to separate lifetime maximums, and
a requirement of prior hospitalization for up to one day may be
imposed only for long-term care in a nursing facility. Coverage
under a long-term care policy A must include: a maximum
lifetime benefit limit of at least $50,000 for services, nursing
facility and home care coverages must not be subject to separate
lifetime maximums, and a requirement of prior hospitalization
for up to three days may be imposed for long-term care in a
nursing facility or home care services. If long-term care
policies require the policyholder to be admitted to a nursing
facility or begin home care services within a specified period
after discharge from a hospital, that period may be no less than
30 days.
Coverage under either policy designation must cover
preexisting conditions during the first six months of coverage
if the insured was not diagnosed or treated for the particular
condition during the 90 days immediately preceding the effective
date of coverage. Coverage under either policy designation may
include a waiting period of up to 90 days before benefits are
paid, but there must be no more than one waiting period per
benefit period. No policy may exclude coverage for mental or
nervous disorders which have a demonstrable organic cause, such
as Alzheimer's and related dementias. No policy may require the
insured to meet a prior hospitalization test more than once
during a single benefit period. The policy must include a
provision that the plan will not be canceled or renewal refused
except on the grounds of nonpayment of the premium, provided
that the insurer may change the premium rate on a class basis on
any policy anniversary date. Policy options include A provision
that the policyholder may elect to have the premium paid in full
at age 65 by payment of a higher premium up to age 65 and may be
offered. A provision that the premium would be waived during
any period in which benefits are being paid to the
insured during confinement in a nursing facility must be
included. A nongroup policyholder may return a policy within 30
days of its delivery and have the premium refunded in full, less
any benefits paid under the policy, if the policyholder is not
satisfied for any reason.
Sec. 60. Minnesota Statutes 1986, section 62A.48,
subdivision 2, is amended to read:
Subd. 2. [PER DIEM COVERAGE.] If benefits are provided on
a per diem basis, the minimum daily benefit for care in a
nursing facility must be the lesser of $60 or actual charges
under a long-term care policy AA or the lesser of $40 or actual
charges under a long-term care policy A and the minimum daily
benefit per visit for home care under a long-term care policy AA
or A must be the lesser of $25 or actual charges under a
long-term care policy AA or the lesser of $25 or actual charges
for nurse and therapy services and $20 for home health aide and
nonmedical services under a long-term care policy A. If home
care services are provided less frequently than daily, the
minimum benefit is the lesser of actual charges or an amount
determined by multiplying the number of days of the period
during which services will be provided, or a reasonable interval
of the service period, by $25 and dividing the resulting amount
by the number of days during this period on which home care
services were rendered. The home care services benefit must
cover at least seven paid visits per week.
Sec. 61. Minnesota Statutes 1986, section 62A.48,
subdivision 6, is amended to read:
Subd. 6. [COORDINATION OF BENEFITS.] A long-term care
policy shall may be secondary coverage for services provided
under sections 62A.46 to 62A.56. Nothing in sections 62A.46 to
62A.56 shall require the secondary payor to pay the obligations
of the primary payor nor shall it prevent the secondary payor
from recovering from the primary payor the amount of any
obligation of the primary payor that the secondary payor elects
to pay.
There shall be no coordination of benefits between a
long-term care policy and a policy designed primarily to provide
coverage payable on a per diem, fixed indemnity or
nonexpense-incurred basis, or a policy that provides only
accident coverage.
Sec. 62. Minnesota Statutes 1986, section 62A.48, is
amended by adding a subdivision to read:
Subd. 7. [EXISTING POLICIES.] Nothing in sections 62A.46
to 62A.56 prohibits the renewal of policies sold outside the
state of Minnesota to persons who at the time of sale were not
residents of the state of Minnesota.
Sec. 63. Minnesota Statutes 1986, section 62A.50,
subdivision 3, is amended to read:
Subd. 3. [DISCLOSURES.] No long-term care policy shall be
offered or delivered in this state, whether or not the policy is
issued in this state, and no certificate of coverage under a
group long-term care policy shall be offered or delivered in
this state, unless a statement containing at least the following
information is delivered to the applicant at the time the
application is made:
(1) a description of the benefits and coverage provided by
the policy and the differences between this policy, a
supplemental medicare policy and the benefits to which an
individual is entitled under parts A and B of medicare and the
differences between policy designations A and AA;
(2) a statement of the exceptions and limitations in the
policy including the following language, as applicable, in bold
print: "THIS POLICY DOES NOT COVER ALL NURSING CARE FACILITIES
OR NURSING HOME OR HOME CARE EXPENSES AND DOES NOT COVER
RESIDENTIAL CARE. READ YOUR POLICY CAREFULLY TO DETERMINE WHICH
FACILITIES AND EXPENSES ARE COVERED BY YOUR POLICY.";
(3) a statement of the renewal provisions including any
reservation by the insurer of the right to change premiums;
(4) a statement that the outline of coverage is a summary
of the policy issued or applied for and that the policy should
be consulted to determine governing contractual provisions;
(5) an explanation of the policy's loss ratio including at
least the following language: "This means that, on the average,
policyholders may expect that $........ of every $100 in premium
will be returned as benefits to policyholders over the life of
the contract."; and
(6) a statement of the out-of-pocket expenses, including
deductibles and copayments for which the insured is responsible,
and an explanation of the specific out-of-pocket expenses that
may be accumulated toward any out-of-pocket maximum as specified
in the policy.
Sec. 64. Minnesota Statutes 1986, section 62D.05, is
amended by adding a subdivision to read:
Subd. 6. [SUPPLEMENTAL BENEFITS.] A health maintenance
organization may, as a supplemental benefit, provide coverage to
its enrollees for health care services and supplies received
from providers who are not employed by, under contract with, or
otherwise affiliated with the health maintenance organization.
The commissioner may, pursuant to chapter 14, adopt, enforce,
and administer rules relating to this subdivision, including:
rules insuring that these benefits are supplementary and not
substitutes for comprehensive health maintenance services; rules
relating to protection against insolvency, including the
establishment of necessary financial reserves; rules relating to
appropriate standards for claims processing; rules relating to
marketing practices; and other rules necessary for the effective
and efficient administration of this subdivision. The
commissioner, in adopting rules, shall give consideration to
existing laws and rules administered and enforced by the
department of commerce relating to health insurance plans.
Except as otherwise provided by law, a health maintenance
organization may not advertise, offer, or enter into contracts
for the coverage described in this subdivision until 30 days
after the effective date of rules adopted by the commissioner of
health to implement this subdivision.
Sec. 65. Minnesota Statutes 1986, section 62D.102, is
amended to read:
62D.102 [MINIMUM BENEFITS.]
In addition to minimum requirements established in other
sections, all group health maintenance contracts providing
benefits for mental or nervous disorder treatments in a hospital
shall also provide coverage for at least ten hours of treatment
over a 12-month period with a copayment not to exceed the
greater of $10 or 20 percent of the applicable usual and
customary charge for mental or nervous disorder consultation,
diagnosis and treatment services delivered while the enrollee is
not a bed patient in a hospital and at least 75 percent of the
cost of the usual and customary charges for any additional hours
of ambulatory mental health treatment during the same 12-month
benefit period for serious and persistent mental or nervous
disorders.
Prior authorization may be required for an extension of
coverage beyond ten hours of treatment. This prior
authorization must be based upon the severity of the disorder,
the patient's risk of deterioration without ongoing treatment
and maintenance, degree of functional impairment, and a concise
treatment plan. Authorization for extended treatment may not
exceed a maximum of 30 visit hours during any 12-month benefit
period.
For purposes of this section, covered treatment for a minor
shall include treatment for the family if family therapy is
recommended by a health maintenance organization provider.
Sec. 66. Minnesota Statutes 1986, section 62E.06,
subdivision 1, is amended to read:
Subdivision 1. [NUMBER THREE PLAN.] A plan of health
coverage shall be certified as a number three qualified plan if
it otherwise meets the requirements established by chapters 62A
and 62C, and the other laws of this state, whether or not the
policy is issued in Minnesota, and meets or exceeds the
following minimum standards:
(a) The minimum benefits for a covered individual shall,
subject to the other provisions of this subdivision, be equal to
at least 80 percent of the cost of covered services in excess of
an annual deductible which does not exceed $150 per person. The
coverage shall include a limitation of $3,000 per person on
total annual out-of-pocket expenses for services covered under
this subdivision. The coverage shall be subject to a maximum
lifetime benefit of not less than $250,000.
The $3,000 limitation on total annual out-of-pocket
expenses and the $250,000 maximum lifetime benefit shall not be
subject to change or substitution by use of an actuarially
equivalent benefit.
(b) Covered expenses shall be the usual and customary
charges for the following services and articles when prescribed
by a physician:
(1) hospital services;
(2) professional services for the diagnosis or treatment of
injuries, illnesses, or conditions, other than outpatient mental
or dental, which are rendered by a physician or at the
physician's direction;
(3) drugs requiring a physician's prescription;
(4) services of a nursing home for not more than 120 days
in a year if the services would qualify as reimbursable services
under medicare;
(5) services of a home health agency if the services would
qualify as reimbursable services under medicare;
(6) use of radium or other radioactive materials;
(7) oxygen;
(8) anesthetics;
(9) prostheses other than dental;
(10) rental or purchase, as appropriate, of durable medical
equipment other than eyeglasses and hearing aids;
(11) diagnostic X-rays and laboratory tests;
(12) oral surgery for partially or completely unerupted
impacted teeth, a tooth root without the extraction of the
entire tooth, or the gums and tissues of the mouth when not
performed in connection with the extraction or repair of teeth;
(13) services of a physical therapist; and
(14) transportation provided by licensed ambulance service
to the nearest facility qualified to treat the condition; or a
reasonable mileage rate for transportation to a kidney dialysis
center for treatment; and
(15) services of an occupational therapist.
(c) Covered expenses for the services and articles
specified in this subdivision do not include the following:
(1) any charge for care for injury or disease either (i)
arising out of an injury in the course of employment and subject
to a workers' compensation or similar law, (ii) for which
benefits are payable without regard to fault under coverage
statutorily required to be contained in any motor vehicle, or
other liability insurance policy or equivalent self-insurance,
or (iii) for which benefits are payable under another policy of
accident and health insurance, medicare or any other
governmental program except as otherwise provided by law;
(2) any charge for treatment for cosmetic purposes other
than for reconstructive surgery when such service is incidental
to or follows surgery resulting from injury, sickness or other
diseases of the involved part or when such service is performed
on a covered dependent child because of congenital disease or
anomaly which has resulted in a functional defect as determined
by the attending physician;
(3) care which is primarily for custodial or domiciliary
purposes which would not qualify as eligible services under
medicare;
(4) any charge for confinement in a private room to the
extent it is in excess of the institution's charge for its most
common semiprivate room, unless a private room is prescribed as
medically necessary by a physician, provided, however, that if
the institution does not have semiprivate rooms, its most common
semiprivate room charge shall be considered to be 90 percent of
its lowest private room charge;
(5) that part of any charge for services or articles
rendered or prescribed by a physician, dentist, or other health
care personnel which exceeds the prevailing charge in the
locality where the service is provided; and
(6) any charge for services or articles the provision of
which is not within the scope of authorized practice of the
institution or individual rendering the services or articles.
(d) The minimum benefits for a qualified plan shall
include, in addition to those benefits specified in clauses (a)
and (e), benefits for well baby care, effective July 1, 1980,
subject to applicable deductibles, coinsurance provisions, and
maximum lifetime benefit limitations.
(e) Effective July 1, 1979, the minimum benefits of a
qualified plan shall include, in addition to those benefits
specified in clause (a), a second opinion from a physician on
all surgical procedures expected to cost a total of $500 or more
in physician, laboratory and hospital fees, provided that the
coverage need not include the repetition of any diagnostic tests.
(f) Effective August 1, 1985, the minimum benefits of a
qualified plan must include, in addition to the benefits
specified in clauses (a), (d), and (e), coverage for special
dietary treatment for phenylketonuria when recommended by a
physician.
(g) Outpatient mental health coverage is subject to section
62A.152, subdivision 2.
Sec. 67. Minnesota Statutes 1986, section 62E.10,
subdivision 2, is amended to read:
Subd. 2. [BOARD OF DIRECTORS; ORGANIZATION.] The board of
directors of the association shall be made up of seven
individuals nine members as follows: five insurer directors
selected by participating members, subject to approval by the
commissioner and two; four public members appointed by the
governor directors selected by the commissioner. Public members
may include licensed insurance agents. In determining voting
rights at members' meetings, each member shall be entitled to
vote in person or proxy. The vote shall be a weighted vote
based upon the member's cost of self-insurance, accident and
health insurance premium, subscriber contract charges, or health
maintenance contract payment derived from or on behalf of
Minnesota residents in the previous calendar year, as determined
by the commissioner. In approving members directors of the
board, the commissioner shall consider, among other things,
whether all types of members are fairly represented. Members of
the board Insurer directors may be reimbursed from the money of
the association for expenses incurred by them as members
directors, but shall not otherwise be compensated by the
association for their services. The costs of conducting
meetings of the association and its board of directors shall be
borne by members of the association.
Sec. 68. Minnesota Statutes 1986, section 62E.10, is
amended by adding a subdivision to read:
Subd. 2a. [APPEALS.] A person may appeal to the
commissioner within 30 days after notice of an action, ruling,
or decision by the board.
A final action or order of the commissioner under this
subdivision is subject to judicial review in the manner provided
by chapter 14.
In lieu of the appeal to the commissioner, a person may
seek judicial review of the board's action.
Sec. 69. Minnesota Statutes 1986, section 62E.10, is
amended by adding a subdivision to read:
Subd. 9. [EXPERIMENTAL DELIVERY METHOD.] The association
may petition the commissioner of commerce for a waiver to allow
the experimental use of alternative means of health care
delivery. The commissioner may approve the use of the
alternative means the commissioner considers appropriate. The
commissioner may waive any of the requirements of chapters 60A,
62A, 62D, and 62E in granting the waiver. The commissioner may
also grant to the association any additional powers as are
necessary to facilitate the specific waiver.
This subdivision is effective until August 1, 1989.
Sec. 70. Minnesota Statutes 1986, section 62E.14, is
amended by adding a subdivision to read:
Subd. 5. [TERMINATED EMPLOYEES.] An employee who is
voluntarily or involuntarily terminated or laid off from
employment and unable to exercise the option to continue
coverage under section 62A.17 may enroll, within 60 days of
termination or lay-off, with a waiver of the preexisting
condition limitation set forth in subdivision 3 and a waiver of
the evidence of rejection set forth in subdivision 1, paragraph
(c).
Sec. 71. [62E.18] [HEALTH INSURANCE FOR RETIRED EMPLOYEES
NOT ELIGIBLE FOR MEDICARE.]
A Minnesota resident who is age 65 or over and is not
eligible for the health insurance benefits of the federal
Medicare program is entitled to purchase the benefits of a
qualified plan, one or two, offered by the Minnesota
comprehensive health association without any of the limitations
set forth in section 62E.14, subdivision 1, paragraph (c), and
subdivision 3.
Sec. 72. Minnesota Statutes 1986, section 62F.041,
subdivision 2, is amended to read:
Subd. 2. This section shall expire on June 30, 1987 1989.
Sec. 73. Minnesota Statutes 1986, section 62F.06,
subdivision 1, is amended to read:
Subdivision 1. A policy issued by the association shall
provide for a continuous period of coverage beginning with its
effective date and terminating automatically at 12:01 a.m. on
September 1, 1988, or sooner as provided in sections 62F.01 to
62F.14 may not extend beyond a period of one year from the date
on which the authorization under section 62F.04 ends. The
policy shall be issued subject to the group retrospective rating
plan and the stabilization reserve fund authorized by section
62F.09. The policy shall be written to apply to claims first
made against the insured and reported to the association during
the policy period. No policy form shall be used by the
association unless it has been filed with the commissioner, and
the commissioner may disapprove the form within 30 days if the
commissioner determines it is misleading or violates public
policy.
Sec. 74. Minnesota Statutes 1986, section 62H.01, is
amended to read:
62H.01 [JOINT SELF-INSURANCE EMPLOYEE HEALTH PLAN.]
Any three or more employers, excluding the state and its
political subdivisions as described in 471.617, subdivision 1,
who are authorized to transact business in Minnesota may jointly
self-insure employee health, dental, or short-term disability
benefits. Joint plans must have a minimum of 250 covered
employees and meet all conditions and terms of sections 62H.01
to 62H.08. Joint plans covering employers not resident in
Minnesota must meet the requirements of sections 62H.01 to
62H.08 as if the portion of the plan covering Minnesota resident
employees was treated as a separate plan. A plan may cover
employees resident in other states only if the plan complies
with the applicable laws of that state.
Sec. 75. Minnesota Statutes 1986, section 62H.02, is
amended to read:
62H.02 [REQUIRED PROVISIONS.]
A joint self-insurance plan must include aggregate excess
stop-loss coverage and individual excess stop-loss coverage
provided by an insurance company licensed by the state of
Minnesota. Aggregate excess stop-loss coverage must include
provisions to cover incurred, unpaid claim liability in the
event of plan termination. The excess or stop-loss insurer must
bear the risk of coverage for any member of the pool that
becomes insolvent with outstanding contribution due. In
addition, the plan of self-insurance must have participating
employers fund an amount at least equal to the point at which
the excess or stop-loss insurer must has contracted to assume
100 percent of additional liability. A joint self-insurance plan
must submit its proposed excess or stop-loss insurance contract
to the commissioner of commerce at least 30 days prior to the
proposed plan's effective date and at least 30 days subsequent
to any renewal date. The commissioner shall review the contract
to determine if they meet the standards established by sections
62H.01 to 62H.08 and respond within a 30-day period. Any excess
or stop-loss insurance plan must be noncancelable for a minimum
term of two years contain a provision that the excess or
stop-loss insurer will give the plan and the commissioner of
commerce a minimum of 180 days notice of termination or
nonrenewal. If the plan fails to secure replacement coverage
within 60 days after receipt of the notice of cancellation or
nonrenewal, the commissioner shall issue an order providing for
the orderly termination of the plan.
Sec. 76. Minnesota Statutes 1986, section 62H.04, is
amended to read:
62H.04 [COMPLIANCE WITH OTHER LAWS.]
A joint self-insurance plan is subject to the requirements
of chapter chapters 62A, and 62E, and sections 72A.17 to 72A.32
unless otherwise specifically exempt. A joint self-insurance
plan must not offer less than a number two qualified plan or its
actuarial equivalent.
Sec. 77. Minnesota Statutes 1986, section 62I.02,
subdivision 1, is amended to read:
Subdivision 1. [CREATION.] The Minnesota joint
underwriting association is created to provide insurance
coverage to any person or entity unable to obtain insurance
through ordinary methods if the insurance is required by
statute, ordinance, or otherwise required by law, or is
necessary to earn a livelihood or conduct a business and serves
a public purpose. Prudent business practice or mere desire to
have insurance coverage is not a sufficient standard for the
association to offer insurance coverage to a person or entity.
For purposes of this subdivision, directors' and officers'
liability insurance is considered to be a business necessity and
not merely a prudent business practice. The association shall
be specifically authorized to provide insurance coverage to day
care providers, foster parents, foster homes, developmental
achievement centers, group homes, and sheltered workshops for
mentally, emotionally, or physically handicapped persons, and
citizen participation groups established pursuant to the housing
and community redevelopment act of 1974, Public Law Number
93-383. Because the activities of certain persons or entities
present a risk that is so great, the association shall not offer
insurance coverage to any person or entity the board of
directors of the association determines is outside the intended
scope and purpose of the association because of the gravity of
the risk of offering insurance coverage. The association shall
not offer environmental impairment liability or product
liability insurance. The association shall not offer coverage
for activities that are conducted substantially outside the
state of Minnesota unless the insurance is required by statute,
ordinance, or otherwise required by law. Every insurer
authorized to write property and casualty insurance in this
state shall be a member of the association as a condition to
obtaining and retaining a license to write insurance in this
state.
Sec. 78. Minnesota Statutes 1986, section 62I.02,
subdivision 3, is amended to read:
Subd. 3. [REAUTHORIZATION.] The authorization to issue
insurance to day care providers, foster parents, foster homes,
developmental activity centers, group homes, and sheltered
workshops for mentally, emotionally, or physically handicapped
persons, and citizen participation groups established pursuant
to the housing and community redevelopment act of 1974, Public
Law Number 93-383, is valid for a period of two years from the
date it was made. The commissioner may reauthorize the issuance
of insurance for these groups and other classes of business for
additional two-year periods pursuant to sections 62I.21 and
62I.22. This subdivision is not a limitation on the number of
times the commissioner may reauthorize the issuance of
insurance. Insurance may not be offered pursuant to this
section to persons or entities other than those listed in this
subdivision after December 31, 1989.
Sec. 79. Minnesota Statutes 1986, section 62I.03,
subdivision 5, is amended to read:
Subd. 5. [DEFICIT.] "Deficit" means, for a particular
policy year and line or type of insurance, that amount by which
total paid and outstanding losses and loss adjustment expenses
exceed premium revenue, including retrospective premium revenue.
Sec. 80. Minnesota Statutes 1986, section 62I.04, is
amended to read:
62I.04 [POLICY ISSUANCE.]
Any person or entity that is a resident of the state of
Minnesota who has a current written notice of refusal to insure
from an insurer licensed to offer insurance in the state of
Minnesota may make written application to the association for
coverage. The applicable premium or required portion of it must
be paid prior to coverage by the association.
The application shall be filed simultaneously with the
association and the market assistance plan for the association.
The association is authorized to (1) issue or cause to be
issued insurance policies to applicants subject to limits
specified in the plan of operation; (2) underwrite the insurance
and adjust and pay losses with respect to it, or appoint service
companies to perform those functions; (3) assume reinsurance
from its members; and (4) cede reinsurance.
Sec. 81. Minnesota Statutes 1986, section 62I.12,
subdivision 1, is amended to read:
Subdivision 1. [ADMINISTRATOR.] The association shall be
administered by a qualified insurer or vendor of risk management
services selected by the commissioner. If the commissioner
deems it necessary, the commissioner may select more than one
person to administer the association. At the option of the
board, employees may participate in the state retirement plan
and the state deferred compensation plan for employees in the
unclassified service, and an insurance plan administered by the
commissioner of employee relations under chapter 43A.
Sec. 82. Minnesota Statutes 1986, section 62I.13, is
amended by adding a subdivision to read:
Subd. 6. Notwithstanding any order of the commissioner or
inconsistent provisions of this chapter, the board of directors
may decline to offer coverage to any class of business or a
member of a class of business upon a reasonable underwriting
basis.
Sec. 83. Minnesota Statutes 1986, section 62I.16,
subdivision 3, is amended to read:
Subd. 3. [SUPERVISION.] All money paid into the fund shall
be held in trust by the corporate trustee selected by the board
of directors. The corporate trustee may invest the money held
in trust subject to the approval of the board. All investment
income shall be credited to the fund. All expenses of the
administration of the fund shall be charged against the fund.
The money held in trust shall be used solely for the purpose of
discharging when due any retrospective premium charges payable
by policyholders and any retrospective premium refunds payable
to policyholders under the group retrospective rating plan.
Payment of retrospective premium charges shall be made upon
certification of the amount due. If all money accruing to the
fund is exhausted in payment of retrospective premium charges,
all liability and obligations of the association's policyholders
with respect to the payment of retrospective premium charges
shall terminate and shall be conclusively presumed to have been
discharged. Any stabilization reserve fund charges from a
particular policy year and line or type of insurance not used to
pay retrospective premiums must be returned to policyholders
after all claims and expense obligations from that particular
policy year and line or type of insurance are satisfied.
Sec. 84. Minnesota Statutes 1986, section 62I.22,
subdivision 2, is amended to read:
Subd. 2. [NOTICE.] The commissioner of commerce shall
publish notice of the hearing in the State Register at least 30
days before the hearing date. The notice should be that used
for rulemaking under chapter 14. Approval by the administrative
law judge of the notice prior to publication is not
required. The notice must contain a statement that anyone
wishing to oppose activation beyond 180 days for any particular
class, must file a petition to intervene with the administrative
law judge at least ten days before the hearing date. If no
notice to intervene is filed for a class, then the class is
activated beyond the 180-day period without further action.
Sec. 85. Minnesota Statutes 1986, section 62I.22, is
amended by adding a subdivision to read:
Subd. 6. [CASE PRESENTATION.] The department of commerce,
upon request by small businesses as defined by section 14.115,
subdivision 1, shall assist small businesses in any specific
class requesting continuation of coverage beyond the 180-day
period, in coordinating the class and presenting the case in the
contested hearing.
Sec. 86. Minnesota Statutes 1986, section 64B.11,
subdivision 4, is amended to read:
Subd. 4. [FILING OF AMENDMENTS BY FOREIGN OR ALIEN
SOCIETY.] Every foreign or alien society authorized to do
business in this state shall file with the commissioner a duly
certified copy of all amendments of, or additions to, its laws
within 90 days after the enactment of same be subject to the
requirements of section 72A.061, subdivision 2, as to amendments
or additions to its bylaws.
Sec. 87. Minnesota Statutes 1986, section 64B.18, is
amended to read:
64B.18 [BENEFITS NOT ATTACHABLE.]
Except as provided in chapter 256B, the money or other
benefits, charity, relief, or aid to be paid, provided, or
rendered by any society authorized to do business under this
chapter shall, neither before nor after being paid, be liable to
attachment, garnishment, or other process and shall not be
ceased, taken, appropriated, or applied by any legal or
equitable process or operation of laws to pay any debt or
liability of a certificate holder or of any beneficiary named in
the certificate, or of any person who may have any right
thereunder. The cash value, proceeds, or benefits under any
matured or unmatured life insurance or annuity contract issued
before, on, or after the effective date of this section, by any
society authorized to do business under this chapter, is exempt
from attachment, garnishment, execution, or other legal process
to the extent provided by section 550.37, subdivisions 10, 23,
and 24.
Sec. 88. Minnesota Statutes 1986, section 64B.27, is
amended to read:
64B.27 [ANNUAL LICENSE.]
Societies that are now authorized to transact business in
this state may continue this business until the first day of
June next succeeding August 1, 1985. The authority of the
societies and all societies hereafter licensed, may thereafter
be renewed annually, subject to section 60A.13, subdivisions 1,
5, 6, and 7. However, a license so issued shall continue in
full force and effect until the new license is issued or
specifically refused. For each license or renewal the society
shall pay the commissioner $20. A duly certified copy or
duplicate of the license is prima facie evidence that the
licensee is a fraternal benefit society within the meaning of
this chapter.
Sec. 89. Minnesota Statutes 1986, section 65A.01,
subdivision 3a, is amended to read:
Subd. 3a. [CANCELLATION.] (1) There shall be printed in
the policy or an endorsement attached to the policy a printed
form in the following words:
When this policy has been issued to cover buildings used
for residential purposes other than a hotel or motel and has
been in effect for at least six months 60 days, or if it has
been renewed, this policy shall not be canceled, except for one
or more of the following reasons which shall be stated in the
notice of cancellation:
(a) Nonpayment of premium;
(b) Misrepresentation or fraud made by or with the
knowledge of the insured in obtaining the policy or in pursuing
a claim thereunder;
(c) An act or omission of the insured which materially
increases the risk originally accepted;
(d) Physical changes in the insured property which are not
corrected or restored within a reasonable time after they occur
and which result in the property becoming uninsurable; or
(e) 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 the
insurance.
Provided, however, that this limitation on cancellation
shall not apply to additional coverages in a divisible policy,
other than a policy of fire and extended coverage insurance. If
this company cancels the additional coverages, it may issue a
new, separate fire policy at a premium calculated on a pro rata
basis for the remaining period of the original policy.
(2) The provisions of clause (1)(e) shall not be included
in the language of the policy or endorsement unless the payment
of dues to an association or organization, other than an
insurance association or organization, is a prerequisite to
obtaining or continuing the insurance.
Sec. 90. Minnesota Statutes 1986, section 65A.03,
subdivision 1, is amended to read:
65A.03 [BINDERS, TEMPORARY INSURANCE.]
Subdivision 1. [GENERALLY.] Binders or other contracts for
temporary insurance may be made orally or in writing, and shall
be deemed to include all the terms of such standard fire
insurance policy and all such applicable endorsements as may be
designated in such contract of temporary insurance; except that
the cancellation clause of such standard fire insurance policy
and the clause specifying the hour of the day at which the
insurance shall commence, may be superseded by the express terms
of such contract of temporary insurance.
Sec. 91. Minnesota Statutes 1986, section 65A.10, is
amended to read:
65A.10 [LIMITATION.]
Nothing contained in sections 65A.08 and 65A.09 shall be
construed to preclude insurance against the cost, in excess of
actual cash value at the time any loss or damage occurs, of
actually repairing, rebuilding or replacing the insured
property. Subject to any applicable policy limits, where an
insurer offers replacement cost insurance, the insurance must
cover the cost of replacing, rebuilding, or repairing any loss
or damaged property in accordance with the minimum code as
required by state or local authorities. In the case of a
partial loss, unless more extensive coverage is otherwise
specified in the policy, this coverage applies only to the
damaged portion of the property.
Sec. 92. Minnesota Statutes 1986, section 65A.29, is
amended by adding a subdivision to read:
Subd. 10. [RETURN OF UNEARNED PREMIUM.] Cancellation of a
policy of homeowner's insurance pursuant to this section is not
effective unless any unearned premium due the insured is
returned to the insured with the notice of cancellation or is
delivered or sent by mail to the insured so as to be received by
the insured not later than the effective date of cancellation.
If the premium has been paid by the insured's agent and debited
to the agent's account with the company, upon cancellation, the
unearned premium must be credited to the agent's account with
the company.
Sec. 93. Minnesota Statutes 1986, section 65A.35,
subdivision 5, is amended to read:
Subd. 5. [ADMINISTRATION.] (1) The facility shall be
administered by a governing committee board of five members nine
directors, five of whom are elected annually by the members of
the facility, and four additional members who represent the
public. Public directors may include licensed insurance
agents. Public directors are appointed by the commissioner, at
least three of whom shall be public members. At least one
elected member of the governing committee director shall be a
domestic stock insurer, and at least one elected member of the
governing committee director shall be a domestic nonstock
insurer. In the election of members of the governing
committee directors, each member of the facility shall be
allotted votes bearing the same ratio to the total number of
votes to be cast as its degree of participation in the facility
bears to the total participation. Pending the determination of
the degree of participation of the members in the facility, each
member of the facility shall be allotted votes bearing the same
ratio to the total number of votes to be cast as each member's
written premium on basic property insurance during calendar year
1968 bears to the statewide total written premium for basic
property insurance during such year. The first governing
committee shall be elected at a meeting of the members or their
authorized representatives.
(2) Any vacancy among the elected members on the governing
committee directors shall be filled by a vote of the other
elected members of the governing committee directors.
(3) If at any time the members directors fail to elect the
required number of members to the governing committee board, or
a vacancy remains unfilled for more than 15 days, the
commissioner may appoint the members necessary to constitute a
full governing committee board of directors.
(4) Vacancies among directors appointed by the commissioner
shall be filled by appointment by the commissioner. A person so
appointed serves until the end of the term of the member they
are replacing.
(5) All directors serve for a period of two years. The
terms of all directors begin on January 1 of the year their
appointment begins.
(6) The plan of operation must provide for adequate
compensation of directors. A per diem amount and a procedure
for reimbursement of expenses incurred in the discharge of their
duties must be included in the plan. Directors whose employers
compensate them while serving on the board or who would submit
their compensation to their employer are not eligible for
compensation under the plan.
Sec. 94. [65A.375] [RATES FOR COOPERATIVE HOUSING AND
NEIGHBORHOOD REAL ESTATE TRUST INSURANCE.]
The commissioner shall set the insurance rates for
cooperative housing, organized under chapter 308, and for
neighborhood real estate trusts, characterized as nonprofit
ownership of real estate with resident control. The rates must
be actuarially sound.
Sec. 95. Minnesota Statutes 1986, section 65A.39, is
amended to read:
65A.39 [RIGHT OF APPEAL.]
(a) Any applicant or participating insurer shall have the
right of appeal to the governing committee board of directors,
which shall promptly determine said the appeal. A decision of
the committee board may be appealed to the commissioner within
30 days from notice of the action or decision of the committee,
and. The commissioner shall promptly determine said the
appeal. Each denial of insurance shall be accompanied by a
statement that the applicant has the right of appeal to
the governing committee board and the commissioner and setting
forth the procedures to be followed for such the appeal. A
final action of the commissioner is subject to judicial review
as provided in chapter 14.
(b) In lieu of the appeal to the commissioner under
paragraph (a), an applicant or insurer may seek judicial review
of the board's action.
Sec. 96. Minnesota Statutes 1986, section 65B.03,
subdivision 1, is amended to read:
Subdivision 1. [MEMBERSHIP.] The commissioner shall direct
that an election be held among every insurer subject to this
chapter, for the election of a insurer representatives on the
facility governing committee. The governing committee shall be
made up of eight nine individuals selected, five of whom shall
be elected by participating members of the facility and one
public member appointed by the governor to two-year terms four
who shall be public members. Public members may include
licensed insurance agents. The public members shall be
appointed by the commissioner. Each insurer member of the
governing committee shall be a participating member. The term
of office for members of the governing committee is two years.
Each participating member serving on the governing
committee shall be represented by a salaried employee of that
participating member, and not more than one participating member
in a group under the same management shall serve on the
governing committee at the same time. The commissioner of
commerce or a designee shall be an ex officio member of the
governing committee.
Sec. 97. Minnesota Statutes 1986, section 65B.12, is
amended to read:
65B.12 [RIGHT TO HEARING; CONSTRUCTION OF PLAN OF
OPERATION.]
Subdivision 1. Any participating member, applicant or
person insured under a policy placed through the facility may
request a formal hearing and ruling by the governing committee
on any alleged violation of the plan of operation or any alleged
improper act or ruling of the facility directly affecting its
assessment, premium or coverage furnished, provided that such
right to hearing shall not apply to any claim arising out of
insurance provided by any participating member. Such The
request for hearing must be filed within 30 days after the date
of the alleged act or decision.
Subd. 2. The plan of operation shall provide for prompt
and fair hearings, and shall prescribe the procedure to be
followed in such the hearings.
Subd. 3. Any formal ruling by the governing committee may
be appealed to the commissioner by filing notice of appeal with
the facility and the commissioner within 30 days after issuance
of the ruling. Such a The hearing shall be governed by the
procedures for contested cases.
Subd. 4. Upon a hearing pursuant to Laws 1971, chapter 813
chapter 14, the commissioner shall issue an order approving or
disapproving the action or decision of the governing committee
or directing the governing committee to reconsider the ruling.
Subd. 4a. In lieu of the appeal to the commissioner, a
member, applicant, or person may seek judicial review of the
governing committee's action.
Subd. 5. The plan of operation shall be interpreted to
conform to the laws of this state with respect to automobile
insurance coverage and any changes therein in the laws, unless
the facility is specifically excluded from the applicability
of such these laws.
Sec. 98. Minnesota Statutes 1986, section 65B.1311, is
amended to read:
65B.1311 [COVERAGE FOR FORMER SPOUSE.]
Subdivision 1. [NEW POLICY ISSUED.] If the former spouse
of a named insured under a policy of private passenger vehicle
insurance applies within 60 days of entry of a valid decree of
dissolution of the marriage and the former spouse was an insured
driver under the policy for at least 12 months prior to entry of
the decree, the insurer must issue a policy, upon payment of the
appropriate premium, to the former spouse only on the basis of
the driving record applicable to the former spouse and any
person who is to be an insured, as defined in section 65B.43,
under the policy to be issued, provided the person or persons to
be insured meets the insurer's eligibility standards An insurer
must issue a policy of private passenger insurance to the former
spouse of a named insured, within the provisions of subdivision
2 of this section, if the following conditions are met:
(1) the former spouse has been an insured driver under the
former policy for at least the six months immediately preceding
the entry of a valid decree of dissolution of marriage;
(2) the former spouse makes application for a policy before
the end of the policy period or within 60 days after the entry
of the decree of dissolution of marriage, whichever is later;
(3) the appropriate premium is paid; and
(4) the former spouse and any person or persons who are to
be an insured, as defined in section 65B.43, meets the insurer's
eligibility standards for renewal policies.
Subd. 2. [NAMED INSURED.] A named insured under a policy
of private passenger vehicle insurance shall have the premium
determined at the first and any subsequent renewals of the
policy after entry of a valid decree of dissolution of the
marriage of the named insured only on the basis of the driving
record and rating classification applicable to the named insured
and any person who is to be an insured, as defined in section
65B.43, under the policy to be renewed.
Sec. 99. Minnesota Statutes 1986, section 65B.15,
subdivision 1, is amended to read:
Subdivision 1. No cancellation or reduction in the limits
of liability of coverage during the policy period of any policy
shall be effective unless notice thereof is given and unless
based on one or more reasons stated in the policy which shall be
limited to the following:
1. Nonpayment of premium; or
2. The policy was obtained through a material
misrepresentation; or
3. Any insured made a false or fraudulent claim or
knowingly aided or abetted another in the presentation of such a
claim; or
4. The named insured failed to disclose fully motor
vehicle accidents and moving traffic violations of the named
insured for the preceding 36 months if called for in the written
application; or
5. The named insured failed to disclose in the written
application any requested information necessary for the
acceptance or proper rating of the risk; or
6. The named insured knowingly failed to give any required
written notice of loss or notice of lawsuit commenced against
the named insured, or, when requested, refused to cooperate in
the investigation of a claim or defense of a lawsuit; or
7. The named insured or any other operator who either
resides in the same household, unless the other operator is
identified by name in any other policy as an insured; or
customarily operates an automobile insured under such policy:
(a) has, within the 36 months prior to the notice of
cancellation, had that person's driver's license under
suspension or revocation; or
(b) is or becomes subject to epilepsy or heart attacks, and
such individual does not produce a written opinion from a
physician testifying to that person's medical ability to operate
a motor vehicle safely, such opinion to be based upon a
reasonable medical probability; or
(c) has an accident record, conviction record (criminal or
traffic), physical condition or mental condition, any one or all
of which are such that the person's operation of an automobile
might endanger the public safety; or
(d) has been convicted, or forfeited bail, during the 24
months immediately preceding the notice of cancellation for
criminal negligence in the use or operation of an automobile, or
assault arising out of the operation of a motor vehicle, or
operating a motor vehicle while in an intoxicated condition or
while under the influence of drugs; or leaving the scene of an
accident without stopping to report; or making false statements
in an application for a driver's license, or theft or unlawful
taking of a motor vehicle; or
(e) has been convicted of, or forfeited bail for, one or
more violations within the 18 months immediately preceding the
notice of cancellation, of any law, ordinance, or rule which
justify a revocation of a driver's license.
8. The insured automobile is:
(1) so mechanically defective that its operation might
endanger public safety; or
(2) used in carrying passengers for hire or compensation,
provided however that the use of an automobile for a car pool
shall not be considered use of an automobile for hire or
compensation; or
(3) used in the business of transportation of flammables or
explosives; or
(4) an authorized emergency vehicle; or
(5) subject to an inspection law and has not been inspected
or, if inspected, has failed to qualify within the period
specified under such inspection law; or
(6) substantially changed in type or condition during the
policy period, increasing the risk substantially, such as
conversion to a commercial type vehicle, a dragster, sports car
or so as to give clear evidence of a use other than the original
use.
Sec. 100. Minnesota Statutes 1986, section 65B.16, is
amended to read:
65B.16 [STATEMENT OF REASONS FOR CANCELLATION OR
REDUCTION.]
No notice of cancellation or reduction in the limits of
liability of coverage of an automobile insurance policy under
section 65B.15 shall be effective unless the specific
underwriting or other reason or reasons for such cancellation or
reduction in the limits of liability of coverage are stated in
such notice and the notice is mailed or delivered by the insurer
to the named insured at least 30 days prior to the effective
date of cancellation; provided, however, that when nonpayment of
premium is the reason for cancellation or when the company is
exercising its right to cancel insurance which has been in
effect for less than 60 days at least ten days notice of
cancellation, and the reasons for the cancellation, shall be
given. Information regarding moving traffic violations or motor
vehicle accidents must be specifically requested on the
application in order for a company to use those incidents to
exercise its right to cancel within the first 59 days of
coverage. When nonpayment of premiums is the reason for
cancellation, the reason must be given to the insured with the
notice of cancellation; and if the company is exercising its
right to cancel within the first 59 days of coverage and notice
is given with less than ten days remaining in the 59-day period,
the coverage must be extended, to expire ten days after notice
was mailed.
Sec. 101. [65B.162] [NOTICE OF POSSIBLE CANCELLATION.]
A written notice shall be provided to all applicants for
private passenger insurance, at the time the application is
submitted, containing the following language in bold print:
"THE INSURER MAY ELECT TO CANCEL COVERAGE AT ANY TIME DURING THE
FIRST 59 DAYS FOLLOWING ISSUANCE OF THE COVERAGE FOR ANY REASON
WHICH IS NOT SPECIFICALLY PROHIBITED BY STATUTE."
Sec. 102. Minnesota Statutes 1986, section 65B.21,
subdivision 2, is amended to read:
Subd. 2. Upon receipt of a written objection pursuant to
the provisions herein, the commissioner shall may notify the
insurer of receipt of such objection and of the right of the
insurer to file a written response thereto within ten days of
receipt of such notification. The commissioner may also order
an investigation of the objection or complaint, the submission
of additional information by the insured or the insurer about
the action by the insurer or the objections of the insured, or
such other procedure as the commissioner deems appropriate or
necessary. Within 23 days of receipt of such written objection
by an insured the commissioner shall approve or disapprove the
insurer's action and shall notify the insured and insurer of the
final decision. Either party may institute proceedings for
judicial review of the commissioner's decision; provided,
however, that the commissioner's final decision shall be binding
pending judicial review.
Sec. 103. Minnesota Statutes 1986, section 65B.28, is
amended to read:
65B.28 [ACCIDENT PREVENTION COURSE PREMIUM REDUCTIONS.]
Subdivision 1. [REQUIRED REDUCTION.] An insurer must
provide an appropriate premium reduction of at least ten percent
on its policies of private passenger vehicle insurance, as
defined in section 65B.001, subdivision 2, issued, delivered, or
renewed in this state after January 1, 1985, to insureds 65 55
years old and older who successfully complete an accident
prevention course established under subdivision 2.
Subd. 2. [ACCIDENT PREVENTION COURSE; RULES.] The
commissioner of public safety shall, by January 1, 1985, adopt
rules establishing and regulating a motor vehicle accident
prevention course for persons 65 55 years old and older. The
rules must, at a minimum, include provisions:
(1) establishing curriculum requirements;
(2) establishing the number of hours required for
successful completion of the course;
(3) providing for the issuance of a course completion
certification and requiring its submission to an insured as
evidence of completion of the course; and
(4) requiring persons 65 55 years old and older to retake
the course every three years to remain eligible for a premium
reduction.
Sec. 104. Minnesota Statutes 1986, section 65B.46, is
amended to read:
65B.46 [RIGHT TO BENEFITS.]
Subdivision 1. If the accident causing injury occurs in
this state, every person suffering loss from injury arising out
of maintenance or use of a motor vehicle or as a result of being
struck as a pedestrian by a motorcycle has a right to basic
economic loss benefits.
Subd. 2. If the accident causing injury occurs outside
this state in the United States, United States possessions, or
Canada, the following persons and their surviving dependents
suffering loss from injury arising out of maintenance or use of
a motor vehicle or as a result of being struck as a pedestrian
by a motorcycle have a right to basic economic loss benefits:
(1) Insureds, and
(2) the driver and other occupants of a secured vehicle,
other than (a) a vehicle which is regularly used in the course
of the business of transporting persons or property and which is
one of five or more vehicles under common ownership, or (b) a
vehicle owned by a government other than this state, its
political subdivisions, municipal corporations, or public
agencies. The reparation obligor may, if the policy expressly
states, extend the basic economic loss benefits to any stated
area beyond the limits of the United States, United States
possessions and Canada.
Subd. 3. For the purposes of sections 65B.41 to 65B.71,
injuries suffered by a person while on, mounting or alighting
from a motorcycle do not arise out of the maintenance or use of
a motor vehicle although a motor vehicle is involved in the
accident causing the injury.
Sec. 105. Minnesota Statutes 1986, section 65B.48,
subdivision 1, is amended to read:
Subdivision 1. Every owner of a motor vehicle of a type
which is required to be registered or licensed or is principally
garaged in this state shall maintain during the period in which
operation or use is contemplated a plan of reparation security
under provisions approved by the commissioner, insuring against
loss resulting from liability imposed by law for injury and
property damage sustained by any person arising out of the
ownership, maintenance, operation or use of the vehicle. The
plan of reparation security shall provide for basic economic
loss benefits and residual liability coverage in amounts not
less than those specified in section 65B.49, subdivision 3,
clauses (1) and (2). The nonresident owner of a motor vehicle
which is not required to be registered or licensed, or which is
not principally garaged in this state, shall maintain such
security in effect continuously throughout the period of the
operation, maintenance or use of such motor vehicle within this
state with respect to accidents occurring in this state; such
security shall include coverage for property damage to a motor
vehicle rented or leased within this state by a nonresident.
Sec. 106. Minnesota Statutes 1986, section 65B.49, is
amended by adding a subdivision to read:
Subd. 5a. [RENTAL VEHICLES.] (a) No plan of reparation
security may be issued or renewed after August 1, 1987, unless
the plan provides that all coverages under the plan are extended
to any motor vehicle while being rented by the named insured.
The plan must also provide that all or any part of the
obligation of the named insured for property damage to a rented
vehicle would be covered by the collision or comprehensive
portion of the plan. The plan must provide that any deductible
will not apply to claims that arise while a motor vehicle is
being rented by a named insured.
(b) A vehicle is rented for purposes of this subdivision if
the rate for the use of the vehicle is determined on a weekly or
daily basis. A vehicle is not rented for purposes of this
subdivision if the rate for the vehicle's use is determined on a
monthly or longer period or the vehicle is rented principally
for business purposes.
(c) The policy or certificate issued by the plan must
inform the insured of the application of the plan to rental
vehicles and that the insured may not need to purchase
additional coverage from the rental company.
(d) Where an insured has two or more plans of reparation
security containing the rented motor vehicle coverage required
under paragraph (a), claims must be made against the plan
covering the motor vehicle most often driven by the insured.
(e) A notice advising the insured of rental vehicle
coverage must be given to each current insured with the first
renewal notice after January 1, 1988. The notice must be
approved by the commissioner of commerce. The commissioner may
specify the form of the notice. A form approved by the
commissioner must be reasonably calculated to put the insured on
notice of the coverage.
(f) When a motor vehicle is rented or leased in this state,
the rental contract must contain a written notice in at least
ten-point bold type, if printed, or in capital letters, if
typewritten, which states:
Under Minnesota law, a personal automobile insurance policy
issued in Minnesota must cover the rental of a motor
vehicle unless the rental is principally for business use
or rented on a monthly or longer basis. Therefore,
purchase of any collision damage waiver or other insurance
affected in this rental contract may not be necessary if
your policy was issued in Minnesota.
No collision damage waiver or other insurance offered as part of
or in conjunction with a rental of a motor vehicle may be sold
unless the person renting the vehicle provides a written
acknowledgment that the above consumer protection notice has
been read and understood.
Sec. 107. [65B.491] [SENIOR CITIZENS.]
After August 1, 1987, no plan of reparation security issued
to or renewed with a person who has attained the age of 65 years
may provide coverage for wage loss reimbursement that the
insured will not reasonably be expected to be able to receive.
It is the responsibility of the person issuing or renewing the
plan to inquire as to the applicability of this section. The
rate for any plan for which coverage has been excluded or
reduced pursuant to this section must be reduced accordingly.
This section does apply to self-insurance.
Sec. 108. Minnesota Statutes 1986, section 65B.525,
subdivision 1, is amended to read:
Subdivision 1. The supreme court and the several courts of
general trial jurisdiction of this state shall by rules of court
or other constitutionally allowable device, provide for the
mandatory submission to arbitration of all cases at issue
where a the claim at the commencement of arbitration is in an
amount of $5,000 or less is made by a motor vehicle accident
victim, whether in an action to recover economic loss or
noneconomic detriment for the allegedly negligent operation,
maintenance, or use of a motor vehicle within this state, or
against any insured's reparation obligor for benefits as
provided in sections 65B.41 to 65B.71 for no-fault benefits or
comprehensive or collision damage coverage.
Sec. 109. Minnesota Statutes 1986, section 65B.63,
subdivision 1, is amended to read:
Subdivision 1. Reparation obligors providing basic
economic loss insurance in this state shall organize and
maintain, subject to approval and regulation by the
commissioner, an assigned claims bureau and an assigned claims
plan, and adopt rules for their operation and for the assessment
of costs on a fair and equitable basis consistent with sections
65B.41 to 65B.71. The assigned claims bureau shall be managed
by a governing committee made up of four individuals selected by
the insurer members, one individual selected by the self-insurer
members, and two public members appointed by the governor to
two-year terms. Public members may include licensed insurance
agents. If such obligors do not organize and continuously
maintain an assigned claims bureau and an assigned claims plan
in a manner considered by the commissioner of commerce to be
consistent with sections 65B.41 to 65B.71, the commissioner
shall organize and maintain an assigned claims bureau and an
assigned claims plan. Each reparation obligor providing basic
economic loss insurance in this state shall participate in the
assigned claims bureau and the assigned claims plan. Costs
incurred shall be allocated fairly and equitably among the
reparation obligors.
A ruling, action, or decision of the governing committee
may be appealed to the commissioner within 30 days. A final
action or order of the commissioner is subject to judicial
review in the manner provided by chapter 14. In lieu of an
appeal to the commissioner, judicial review of the governing
committee's ruling, action, or decision may be sought.
Sec. 110. Minnesota Statutes 1986, section 67A.05,
subdivision 2, is amended to read:
Subd. 2. [FILING OF BYLAWS AND AMENDMENTS THERETO.] Every
township mutual fire insurance company doing business within
this state shall cause a copy of its bylaws to be certified to
by its president and its secretary and file the same with the
commissioner and thereafter every amendment to the bylaws of any
township mutual fire insurance company, duly certified to by its
president and its secretary, shall within a reasonable time
after its adoption be filed in the office of the commissioner be
subject to the requirements of section 72A.061, subdivision 2,
as to amendments or additions to its bylaws.
Sec. 111. Minnesota Statutes 1986, section 67A.06, is
amended to read:
67A.06 [POWERS OF CORPORATION.]
Every corporation formed under the provisions of sections
67A.01 to 67A.26, shall have power:
(1) To have succession by its corporate name for the time
stated in its certificate of incorporation;
(2) To sue and be sued in any court;
(3) To have and use a common seal and alter the same at
pleasure;
(4) To acquire, by purchase or otherwise, and to hold,
enjoy, improve, lease, encumber, and convey all real and
personal property necessary for the purpose of its organization,
subject to such limitations as may be imposed by law or by its
articles of incorporation;
(5) To elect or appoint in such manner as it may determine
all necessary or proper officers, agents, boards, and
committees, fix their compensation, and define their powers and
duties;
(6) To make and amend consistently with law bylaws
providing for the management of its property and the regulation
and government of its affairs;
(7) To wind up and liquidate its business in the manner
provided by chapter 60B; and
(8) To indemnify certain persons against expenses and
liabilities as provided in section 300.082 300.083. In applying
section 300.082 300.083 for this purpose, the term "members"
shall be substituted for the terms "shareholders" and
"stockholders."
Sec. 112. Minnesota Statutes 1986, section 67A.231, is
amended to read:
67A.231 [DEPOSIT OF FUNDS; INVESTMENT; LIMITATIONS.]
The directors of any township mutual insurance company may
authorize the treasurer to invest any of its funds and
accumulations in:
(a) Bonds, notes, mortgages, or other obligations
guaranteed by the full faith and credit of the United States of
America and those for which the credit of the United States is
pledged to pay principal, interest or dividends, including
United States agency and instrumentality bonds, debentures, or
obligations;
(b) Bonds, notes, evidence of indebtedness, or other public
authority obligations guaranteed by this state;
(c) Bonds, notes, evidence of the indebtedness or other
obligations guaranteed by the full faith and credit of any
county, municipality, school district, or other duly authorized
political subdivision of this state;
(d) Bonds or other interest bearing obligations, payable
from revenues, provided that the bonds or other interest bearing
obligations are at the time of purchase rated among the highest
four quality categories used by a nationally recognized rating
agency for rating the quality of similar bonds or other interest
bearing obligations, and are not rated lower by any other such
agency; or obligations of a United States agency or
instrumentality that have been determined to be investment grade
(as indicated by a "yes" rating) by the Securities Valuation
Office of the National Association of Insurance Commissioners.
This is not applicable to bonds or other interest bearing
obligations in default as to principal;
(e) Investments in the obligations stated in paragraphs
(a), (b), (c), and (d), may be made either directly or in the
form of securities of, or other interests in, an investment
company registered under the Federal Investment Company Act of
1940. Investment company shares authorized pursuant to this
subdivision shall not exceed 20 percent of the company's
surplus. These obligations must be carried at the lower of cost
or market on the annual statement filed with the commissioner
and adjusted to market on an annual basis;
(d) (f) Loans upon improved and unencumbered real property
in this state worth at least twice the amount loaned thereon,
not including buildings, unless insured by property insurance
policies payable to and held by the security holder;
(e) (g) Real estate, including land, buildings and
fixtures, located in this state and used primarily as home
office space for the insurance company;
(f) (h) Demand or time deposits or savings accounts in
federally insured depositories located in this state to the
extent that the deposit or investment is insured by the Federal
Deposit Insurance Corporation, Federal Savings and Loan
Corporation, or the National Credit Union Administration;
(g) (i) Guarantee fund certificates of a mutual insurer
which reinsures the business of the township mutual insurance
company. The commissioner may by rule limit the amount of
guarantee fund certificates which the township mutual insurance
company may purchase and this limit may be a function of the
size of the township mutual insurance company; and
(j) Up to $1,500 in stock of an insurer which issues
directors and officers liability insurance to township mutual
insurance company directors and officers.
Sec. 113. Minnesota Statutes 1986, section 70A.06, is
amended by adding a subdivision to read:
Subd. 1a. Whenever an insurer files a change in a rate
that will result in a 25 percent or more increase in a 12-month
period over existing rates, the commissioner may hold a hearing
to determine if the change is excessive. The hearing must be
conducted under chapter 14. The commissioner must give notice
of intent to hold a hearing within 60 days of the filing of the
change. It shall be the responsibility of the insurer to show
the rate is not excessive. The rate is effective unless it is
determined as a result of the hearing that the rate is excessive.
Sec. 114. Minnesota Statutes 1986, section 70A.08,
subdivision 3, is amended to read:
Subd. 3. Until January 1, 1988, The commissioner may
restrict approval on claims-made policies to forms filed by a
rate service organization which have been approved.
Sec. 115. [72A.125] [RENTAL VEHICLE PERSONAL ACCIDENT
INSURANCE; SPECIAL REQUIREMENTS.]
Subdivision 1. [DEFINITION.] (a) "Auto rental company"
means a corporation, partnership, individual, or other person
that is engaged primarily in the renting of motor vehicles at
per diem rates.
(b) "Rental vehicle personal accident insurance" means
accident only insurance providing accidental death benefits,
dismemberment benefits and/or reimbursement for medical expenses
which is issued by an insurer authorized in this state to issue
accident and health insurance. These coverages are nonqualified
plans under chapter 62E.
Subd. 2. [SALE BY AUTO RENTAL COMPANIES.] An auto rental
company that offers or sells rental vehicle personal accident
insurance in this state in conjunction with the rental of a
vehicle shall only sell these products if the forms and rates
have met the relevant requirements of section 62A.02, taking
into account the possible infrequency and severity of loss that
may be incurred. Sections 60A.17 and 60A.1701 do not apply if
the persons engaged in the sale of these products are employees
of the auto rental company who do not receive commissions or
other remuneration for selling the product in addition to their
regular compensation. Compensation may not be determined in any
part by the sale of insurance products. The auto rental company
before engaging in the sale of the product must file with the
commissioner the following documents:
(1) an appointment of the commissioner as agent for service
of process;
(2) an agreement that the auto rental company assumes all
responsibility for the authorized actions of all unlicensed
employees who sell the insurance product on its behalf in
conjunction with the rental of its vehicles;
(3) an agreement that the auto rental company with respect
to itself and its employees will be subject to this chapter
regarding the marketing of the insurance products and the
conduct of those persons involved in the sale of insurance
products in the same manner as if it were a licensed agent.
An auto rental company failing to file the documents in
clauses (1) to (3) is guilty of an individual violation as to
the unlicensed sale of insurance for each sale that occurs after
the effective date of this section until they make the required
filings. Each individual sale after the effective date of this
section and prior to the filing required by this section is
subject to, in addition to any other penalties allowable by law,
up to a $100 per violation fine. Further, the sale of the
insurance product by an auto rental company or any employee or
agent of the company after the effective date of this section
without having complied with this section shall be deemed to be
in acceptance of the provisions of this section.
Insurance sold pursuant to this subdivision must be limited
in availability to rental vehicle customers though coverage may
extend to the customer, other drivers, and passengers using or
riding in the rented vehicles; and limited in duration to a
period equal to and concurrent with that of the vehicle rental.
Persons purchasing rental vehicle personal accident
insurance may be provided a certificate summarizing the policy
provisions in lieu of a copy of the policy if a copy of the
policy is available for inspection at the place of sale and a
free copy of the policy may be obtained from the auto rental
company's home office.
The commissioner may, after a hearing, revoke an auto
rental company's right to operate under this section if the
company has repeatedly violated the insurance laws of this state
and the revocation is in the public interest.
Sec. 116. Minnesota Statutes 1986, 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 15 this section shall constitute an
unfair method of competition and an unfair and deceptive act or
practice: sections 72A.12, subdivisions 2, 3, and 4, 72A.16,
subdivision 2, 72A.03 and 72A.04, 72A.08, subdivision 1 as
modified by section 72A.08, subdivision 4, and 65B.13.
Sec. 117. Minnesota Statutes 1986, section 72A.20,
subdivision 17, is amended to read:
Subd. 17. [RETURN OF PREMIUMS UPON DEATH OF INSURED.] (a)
Refusing, upon surrender of an individual policy of life
insurance, to refund to the estate of the insured all unearned
premiums paid on the policy covering the insured as of the time
of the insured's death if the unearned premium is for a period
of more than one month.
The insurer may deduct from the premium any previously
accrued claim for loss or damage under the policy.
For the purposes of this section, a premium is unearned
during the period of time the insurer has not been exposed to
any risk of loss.
(b) Refusing, upon termination or cancellation of a policy
of automobile insurance under section 65B.14, subdivision 2, or
a policy of homeowner's insurance under section 65A.27,
subdivision 4, or a policy of accident and sickness insurance
under section 62A.01, or a policy of comprehensive health
insurance under chapter 62E, to refund to the insured all
unearned premiums paid on the policy covering the insured as of
the time of the termination or cancellation if the unearned
premium is for a period of more than one month.
The insurer may deduct from the premium any previously
accrued claim for loss or damage under the policy.
For purposes of this section, a premium is unearned during
the period of time the insurer has not been exposed to any risk
of loss.
Sec. 118. Minnesota Statutes 1986, section 72A.20, is
amended by adding a subdivision to read:
Subd. 18. [IMPROPER BUSINESS PRACTICES.] (a) Improperly
withholding, misappropriating, or converting any money belonging
to a policyholder, beneficiary, or other person when received in
the course of the insurance business; or (b) engaging in
fraudulent, coercive, or dishonest practices in connection with
the insurance business, shall constitute an unfair method of
competition and an unfair and deceptive act or practice.
Sec. 119. Minnesota Statutes 1986, section 72A.20, is
amended by adding a subdivision to read:
Subd. 19. [SUPPORT FOR UNDERWRITING STANDARDS.] No life or
health insurance company doing business in this state shall
engage in any selection or underwriting process unless the
insurance company establishes beforehand substantial data,
actuarial projections, or claims experience which support the
underwriting standards used by the insurance company. The data,
projections, or claims experience used to support the selection
or underwriting process is not limited to only that of the
company. The experience, projections, or data of other
companies or a rate service organization may be used as well.
Sec. 120. Minnesota Statutes 1986, section 72A.31,
subdivision 1, is amended to read:
Subdivision 1. No person, firm or corporation engaged in
the business of financing the purchase of real or personal
property or of lending money on the security of real or personal
property or who acts as agent or broker for one who purchases
real property and borrows money on the security thereof, and no
trustee, director, officer, agent or other employee of any such
person, firm, or corporation shall directly or indirectly:
(1) require, as a condition precedent to such purchase or
financing the purchase of such property or to loaning money upon
the security of a mortgage thereon, or as a condition
prerequisite for the renewal or extension of any such loan or
mortgage or for the performance of any other act in connection
therewith, that the person, firm or corporation making such
purchase or for whom such purchase is to be financed or to whom
the money is to be loaned or for whom such extension, renewal or
other act is to be granted or performed negotiate any policy of
insurance or renewal thereof covering such property through a
particular agent, or insurer, or
(2) refuse to accept any policy of insurance covering such
property because it was not negotiated through or with any
particular agent, or insurer, or
(3) refuse to accept any policy of insurance covering the
property issued by an insurer that is a member insurer as
defined by section 60C.03, subdivision 6, or
(4) require any policy of insurance covering the property
to exceed the replacement cost of the buildings on the mortgaged
premises.
This section shall not prevent the disapproval of the
insurer or a policy of insurance by any such person, firm,
corporation, trustee, director, officer, agent or employee where
there are reasonable grounds for believing that the insurer is
insolvent or that such insurance is unsatisfactory as to
placement with an unauthorized insurer, the financial solvency
of the insurer, adequacy of the coverage, adequacy of the
insurer to assume the risk to be insured, the assessment
features to which the policy is subject, or other grounds which
are based on the nature of the coverage and which are not
arbitrary, unreasonable or discriminatory, nor shall this
section prevent a mortgage lender or mortgage servicer from
requiring that a policy of insurance or renewal thereof be in
conformance with standards of the federal national mortgage
association or the federal home loan mortgage corporation, nor
shall this section forbid the securing of insurance or a renewal
thereof at the request of the borrower or because of the
borrower's failure to furnish the necessary insurance or renewal
thereof. For purposes of this section, "insurer" includes a
township mutual fire insurance company operating under sections
67A.01 to 67A.26 and a farmers mutual fire insurance company
operating under sections 67A.27 to 67A.39.
Upon notice of any such disapproval of or refusal to accept
an insurer or a policy of insurance, the commissioner may order
the approval of the insurer or the acceptance of the tendered
policy of insurance, or both, if the commissioner determines
such disapproval or refusal to accept is not in accordance with
the foregoing requirements. Failure to comply with such an
order of the commissioner of commerce shall be deemed a
violation of this section.
Sec. 121. Minnesota Statutes 1986, section 169.045,
subdivision 1, is amended to read:
Subdivision 1. [DESIGNATION OF ROADWAYS, PERMIT.] The
governing body of any home rule charter or statutory city or
town may by ordinance authorize the operation of motorized golf
carts, or four-wheel all-terrain vehicles, on designated
roadways or portions thereof under its jurisdiction.
Authorization to operate a motorized golf cart or four-wheel
all-terrain vehicle is by permit only. Permits are restricted
to physically handicapped persons defined in section 169.345,
subdivision 2. For purposes of this section, a four-wheel
all-terrain vehicle is a motorized flotation-tired vehicle with
four low-pressure tires that is limited in engine displacement
of less than 800 cubic centimeters and total dry weight less
than 600 pounds.
Sec. 122. Minnesota Statutes 1986, section 169.045, is
amended by adding a subdivision to read:
Subd. 8. [INSURANCE.] In the event persons operating a
motorized golf cart or four-wheel, all-terrain vehicle under
this section cannot obtain liability insurance in the private
market, that person may purchase automobile insurance, including
no-fault coverage, from the Minnesota Automobile Assigned Risk
Plan at a rate to be determined by the commissioner of commerce.
Sec. 123. [256B.73] [DEMONSTRATION PROJECT FOR UNINSURED
LOW INCOME PERSONS.]
Subdivision 1. [PURPOSE.] The purpose of the demonstration
project is to determine the need for and the feasibility of
establishing a statewide program of medical insurance for
uninsured low income persons.
Subd. 2. [ESTABLISHMENT: GEOGRAPHIC AREA.] The
commissioner of human services shall establish a demonstration
project to provide low cost medical insurance to uninsured low
income persons in Cook, Lake, St. Louis, Carlton, Aitkin, Pine,
Itasca, and Koochiching counties except an individual county may
be excluded as determined by the county board of commissioners.
Subd. 3. [DEFINITIONS.] For the purposes of this section,
the following terms have the meanings given:
(1) "commissioner" means the commissioner of human services;
(2) "coalition" means an organization comprised of members
representative of small business, health care providers, county
social service departments, health consumer groups, and the
health industry, established to serve the purposes of this
demonstration;
(3) "demonstration provider" means a Minnesota corporation
regulated under chapter 62A, 62C, or 62D;
(4) "individual provider" means a medical provider under
contract to the demonstration provider to provide medical care
to enrollees; and
(5) "enrollee" means a person eligible to receive coverage
according to subdivision 4.
Subd. 4. [ENROLLEE ELIGIBILITY REQUIREMENTS.] To be
eligible for participation in the demonstration project, an
enrollee must:
(1) not be eligible for medicare, medical assistance, or
general assistance medical care;
(2) have an income not more than 200 percent of the
Minnesota income standards by family size used in the aid to
families with dependent children program; and
(3) have no medical insurance or health benefits plan
available through employment or other means that would provide
coverage for the same medical services as provided by this
demonstration.
Subd. 5. [ENROLLEE BENEFITS.] Eligible persons enrolled by
a demonstration provider shall receive a health services benefit
package that includes health services which the enrollees might
reasonably require to be maintained in good health, including
emergency care, inpatient hospital and physician care,
outpatient health services, and preventive health services,
except that services related to chemical dependency, mental
illness, vision care, dental care, and other benefits may be
excluded or limited upon approval by the commissioner. The
commissioner, the coalition, and demonstration providers shall
work together to design a package of benefits or packages or
benefits that can be provided to enrollees for an affordable
monthly premium.
Subd. 6. [ENROLLEE PARTICIPATION.] An enrollee is not
required to furnish evidence of good health. The demonstration
provider shall accept all persons applying for coverage who meet
the criteria in subdivision 4, subject to the following
provisions:
(a) Enrollees will be required to pay a sliding fee on a
monthly basis for health coverage through the demonstration
project. Except for any required co-payments, the sliding fee
should be considered payment in full for the coverage provided.
The sliding fee shall be based on the enrollee's income and
shall not exceed 50 percent of the rate that would be paid to a
prepaid plan serving general assistance medical care recipients
in the same geographic area.
(b) The demonstration provider may terminate the coverage
for an enrollee who has not made payment within the first ten
calendar days of the month for which coverage is being
purchased. The termination for nonpayment shall be retroactive
to the first day of the month for which no payment has been made
by the enrollee.
(c) An enrollee who either requests termination of coverage
under the demonstration or who allows coverage to terminate due
to nonpayment of the required monthly fee may be required to
furnish evidence of good health prior to being reinstated in the
demonstration. As an alternative to evidence of good health,
the enrollee may furnish evidence of having been eligible for
health care services under a plan with similar benefits.
(d) The demonstration provider shall establish limits of
enrollment which allow for a sufficient number of enrollees to
constitute a reasonable demonstration project. These limits
shall be established by county within the project area.
Subd. 7. [CONTRACT WITH DEMONSTRATION PROVIDER.] The
commissioner shall contract with the demonstration provider for
the duration of the project. This contract shall be for 24
months with an option to renew for no more than 12 months. This
contract may be canceled without cause by the commissioner upon
90 days' written notice to the demonstration provider or by the
demonstration provider with 90 days' written notice to the
commissioner. The commissioner shall assure the cooperation of
the county human services or social services staff in all
counties participating in the project.
Subd. 8. [MEDICAL ASSISTANCE AND GENERAL ASSISTANCE
MEDICAL CARE COORDINATION.] To assure enrollees of uninterrupted
delivery of health care services, the commissioner may pay the
premium to the demonstration provider for persons who become
eligible for medical assistance or general assistance medical
care. To determine eligibility for medical assistance, any
medical expenses for eligible services incurred by the
demonstration provider shall be considered as evidence of
satisfying the medical expense requirements of section 256B.06,
subdivision 1, paragraphs (14) and (15). To determine
eligibility for general assistance medical care, any medical
expenses for eligible services incurred by the demonstration
provider shall be considered as evidence of satisfying the
medical expense requirements of section 256D.03, subdivision 3.
Subd. 9. [WAIVER REQUIRED.] No part of the demonstration
project shall become operational until waivers of appropriate
federal regulation are obtained from the health care financing
administration.
Subd. 10. [COORDINATION OF DEMONSTRATION WITH REGION.] The
commissioner shall consult with a health insurance coalition
formed locally with members from the demonstration area. This
coalition will work with the commissioner and potential
demonstration providers as well as other private and public
organizations to suggest program design, to secure additional
funding support, and to ensure the program's local applicability.
Sec. 124. Minnesota Statutes 1986, section 471.98,
subdivision 2, is amended to read:
Subd. 2. "Political subdivision" includes a statutory or
home rule charter city, a county, a school district, a town, a
watershed management organization as defined in section 473.876,
subdivision 9, or an instrumentality thereof having independent
policy making and appropriating authority. For the purposes of
this section and section 471.981, the governing body of a town
is the town board.
Sec. 125. [541.22] [LIMITATION ON ASBESTOS CLAIMS.]
Subdivision 1. [FINDINGS AND PURPOSE.] The legislature
finds that it is in the interest of the general public,
particularly those persons who may bring claims regarding
materials containing asbestos and those against whom the claims
may be brought, to set a specific date by which building owners
must bring a cause of action for removal or other abatement
costs associated with the presence of asbestos in their
building. By enactment of this statute of limitations the
legislature does not imply that suits would otherwise be barred
by an existing limitations period.
Subd. 2. [LIMITATION ON CERTAIN ASBESTOS
ACTIONS.] Notwithstanding any other law to the contrary, an
action against a manufacturer or supplier of asbestos or
material containing asbestos to recover for (1) removal of
asbestos or materials containing asbestos from a building, (2)
other measures taken to locate, correct, or ameliorate any
problem related to asbestos in a building, or (3) reimbursement
for removal, correction, or amelioration of an asbestos problem
that would otherwise be barred before July 1, 1990, as a result
of expiration of the applicable period of limitation, is revived
or extended. An asbestos action revived or extended under this
subdivision may be begun before July 1, 1990.
Sec. 126. [604.08] [VOLUNTEER ATHLETIC COACHES AND
OFFICIALS; IMMUNITY FROM LIABILITY.]
Subdivision 1. [GRANT.] No individual who provides
services or assistance without compensation as an athletic
coach, manager, or official for a sports team that is organized
or performing under a nonprofit charter, and no community-based,
voluntary nonprofit athletic association, or any volunteer of
the nonprofit athletic association, is liable for money damages
to a player or participant as a result of an individual's acts
or omissions in the providing of that service or assistance.
This section applies to organized sports competitions and
practice and instruction in that sport.
For purposes of this section, "compensation" does not
include reimbursement for expenses.
Subd. 2. [LIMITATION.] Subdivision 1 does not apply:
(1) to the extent that the acts or omissions are covered
under an insurance policy issued to the entity for whom the
coach, manager, or official serves;
(2) if the individual acts in a willful and wanton or
reckless manner in providing the services or assistance;
(3) if the acts or omissions arise out of the operation,
maintenance, or use of a motor vehicle;
(4) to an athletic coach, manager, or official who provides
services or assistance as part of a public or private
educational institution's athletic program; and
(5) if the individual acts in violation of federal, state,
or local law.
The limitation in clause (1) constitutes a waiver of the
defense of immunity to the extent of the liability stated in the
policy, but has no effect on the liability of the individual
beyond the coverage provided.
Sec. 127. [SPECIAL STUDY.]
The commissioner of health, with the advice and assistance
of the commissioners of commerce and human services, shall
prepare a report to the legislature which addresses the issues
concerning reimbursement by third-party payors of home health
care benefits for individuals with a medical condition which
would require inpatient hospital services in the absence of home
or community-based care, and who are dependent upon medical
technology in order to avoid death or serious injury.
Development of the report must include participation by home
care providers and third-party payors. The report must include
recommendations for the adoption of definitions of home care,
minimum standards of home care services, the costs of providing
home care, and resolution of the issue of cost-shifting of home
care. The report must be delivered to the legislature by
January 15, 1988.
Sec. 128. [RULE CHANGES.]
The commissioner shall adopt rule amendments to Minnesota
Rules, chapter 2725, as necessary to effect the changes required
by the legislature in sections 8 to 10.
These rules are exempt from the rulemaking provisions of
chapter 14. The commissioner must comply with section 14.38,
subdivision 7, when adopting these rule amendments.
Sec. 129. [APPLICATION.]
Sections 49, 65, and 66 apply to all group policies, all
group subscriber contracts, all health maintenance contracts,
and all qualified plans within the scope of Minnesota Statutes,
chapters 62A, 62C, 62D, and 62E, that are issued, delivered or
renewed in this state after August 1, 1987.
Sec. 130. [SEVERABILITY.]
The provisions of Minnesota Statutes, section 645.20 apply
to this act.
Sec. 131. [REPEALER.]
Minnesota Statutes 1986, sections 62A.12; and 67A.43,
subdivision 3, are repealed.
Minnesota Rules, parts 2700.2400; 2700.2410; 2700.2420;
2700.2430; and 2700.2440, are repealed.
Section 123 is repealed effective July 1, 1988, if the
project implementation phase has not begun by that date.
Sec. 132. [EFFECTIVE DATE.]
Section 10 is effective May 31, 1987. Credits earned and
reported to the department before May 31, 1988, may be carried
forward and used to fulfill continuing education requirements
until May 31, 1989.
Sections 2, 5, 6, 15 to 20, 43, 57 to 63, 69 to 75, 77, 81,
82, 87, 102, 116, and 122 to 125 are effective the day following
final enactment.
Section 126 is effective August 1, 1987, and applies to
claims arising from incidents occurring on or after that date.
Approved June 1, 1987
Official Publication of the State of Minnesota
Revisor of Statutes