Minnesota Session Laws - 1987, Regular Session

  

                         Laws of Minnesota 1987 

                        CHAPTER 107-S.F.No. 1313 
           An act relating to insurance; liquor liability 
          assigned risk plan; regulating assigned risk plan 
          premiums; amending Minnesota Statutes 1986, section 
          340A.409, subdivision 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 340A.409, 
subdivision 3, is amended to read:  
    Subd. 3.  [ASSIGNED RISK PLAN.] (a) The purpose of the 
assigned risk plan is to provide coverage required by 
subdivision 1 to persons rejected under this subdivision. 
    (b) An insurer who offers liquor liability insurance that 
refuses to write the coverage required by subdivision 1 shall 
furnish the applicant with a written notice of refusal.  The 
rejected applicant shall file a copy of the notice of refusal 
with the commissioner of public safety at the time of 
application for coverage to the assigned risk plan and the 
market assistance program.  
    A written notice of refusal must be provided to any 
applicant who has requested only liquor liability insurance if 
the insurer chooses to only offer liquor liability insurance in 
combination with other types of insurance. 
    A written notice of refusal must be provided by an insurer 
to any applicant who receives an offer of coverage from that 
insurer that is in excess of the rate charged by the assigned 
risk plan for similar coverage and risk.  A notice is not 
required if the rate for the coverage offered is less than 20 
percent in excess of the assigned risk plan rates, provided that 
the offered rate is the rate that the insurer has filed with the 
commissioner of commerce if the insurer is required to file its 
rates with the commissioner.  If the insurer is not required to 
file its rates with the commissioner, the offered rate must be 
the rate generally charged by the insurer for similar coverage 
and risk. 
    A notice of refusal is not required to be filed if there is 
not an insurer offering liquor liability insurance in the state. 
    To be eligible to participate in the assigned risk plan an 
applicant must apply for coverage through the market assistance 
program.  Application to the market assistance program must be 
made no later than the time of application to the assigned risk 
plan.  If the market assistance program is unable to secure 
coverage then coverage may be extended by the assigned risk plan.
    (c) The commissioner of commerce may enter into service 
contracts as necessary or beneficial to accomplish the purposes 
of the assigned risk plan including servicing of policies or 
contracts of coverage, data management, and assessment 
collections.  Services related to the administration of policies 
or contracts of coverages must be performed by one or more 
qualified insurance companies licensed pursuant to section 
60A.06, subdivision 1, clause (13), or a qualified vendor of 
risk management services.  A qualified insurer or vendor of risk 
management services must possess sufficient financial, 
professional, administrative, and personnel resources to provide 
the services required for operation of the plan.  The cost of 
all services contracted for are an obligation of the assigned 
risk plan. 
    (d) The commissioner of commerce may assess all insurers 
licensed under section 60A.06, subdivision 1, clause (13), an 
amount sufficient to fully fund the obligations of the assigned 
risk plan if the commissioner determines that the assets of the 
assigned risk plan are insufficient to meet its obligations.  
The assessment of each insurer must be in a proportion equal to 
the proportion which the amount of insurance written as reported 
on page 14 of the annual statement under line 5, commercial 
multiperil, and line 17, other liability, during the preceding 
calendar year by that insurer bears to the total written by all 
such carriers for such lines. 
    (e) Policies and contracts of coverage issued under this 
subdivision must contain the usual and customary provisions of 
liability insurance policies, and must contain at least the 
minimum coverage required by subdivision 1 or the local 
governing unit. 
    (f) Assigned risk policies and contracts of coverage are 
subject to premium tax pursuant to section 60A.15. 
    (g) Insureds served by the assigned risk plan must be 
charged premiums based upon a rating plan approved by the 
commissioner of commerce.  Assigned risk premiums may not must 
be lower than rates generally charged by insurers for the 
business on an actuarially sound basis.  The rating plan 
approved by the commissioner shall provide for surcharge factors 
based upon claims reported and losses paid.  The commissioner of 
commerce shall fix the compensation received by the agent of 
record. 
    (h) The rating plan may be amended by rule pursuant to 
chapter 14 or by the following expedited procedures: 
    (1) Any person may, by written petition served upon the 
commissioner, request that a hearing be held to amend the rating 
plan. 
    (2) The commissioner shall forward a copy of the petition 
to the chief administrative law judge within three business days 
of its receipt.  The chief administrative law judge shall, 
within three business days of receipt of the copy of the 
petition or a request for a hearing by the commissioner, set a 
hearing date, assign an administrative law judge to hear the 
matter, and notify the commissioner of the hearing date and the 
administrative law judge assigned to hear the matter.  The 
hearing date must be set no less than 60 days nor more than 90 
days from the date of receipt of the petition by the 
commissioner. 
    (3) The commissioner of commerce shall publish a notice of 
the hearing in the State Register at least 30 days before the 
hearing date.  The notice should be similar to that used for 
rulemaking under the administrative procedure act.  Approval by 
the administrative law judge of the notice prior to publication 
is not required.  
    (4) The hearing and all matters taking place after the 
hearing are a contested case under chapter 14.  Within 45 days 
from the commencement of the hearing and within 15 days of the 
completion of the hearing the administrative law judge shall 
submit a report to the commissioner of commerce.  The parties, 
or the administrative law judge, if the parties cannot agree, 
shall adjust all time requirements under the contested case 
procedure to conform with the 45-day requirement. 
    (5) The commissioner shall render a decision within ten 
business days of the receipt of the administrative law judge's 
report. 
    (6) If all parties to the proceeding agree, any of the 
previous requirements may be waived or modified. 
    (7) A petition for a hearing to amend the rating plan 
received by the commissioner within 180 days of the date of the 
commissioner's decision in a prior proceeding to amend the 
rating plan is invalid and requires no action. 
    (i) A liquor vendor shall be denied or terminated from 
coverage through the assigned risk plan if the liquor vendor 
disregards safety standards, laws, rules, or ordinances 
pertaining to the offer, sale, or other distribution of liquor. 
    The commissioner may by rule establish other conditions for 
denial or termination from coverage through the assigned risk 
plan. 
    (j) The commissioner of commerce shall adopt rules needed 
to implement this subdivision.  The rules may include: 
    (1) appeal procedures from actions of the assigned risk 
plan; 
    (2) formation of an advisory committee composed of 
insurers, vendors of risk management services and licensees, to 
advise the commissioner of commerce regarding operation of the 
plan; and 
    (3) applicable rating plans and rating standards. 
    Approved May 13, 1987