Minnesota Session Laws - 1987, Regular Session

  

                         Laws of Minnesota 1987 

                        CHAPTER 288-H.F.No. 1304 
           An act relating to insurance; regulating cancellations 
          of insurance agency contracts; proposing coding for 
          new law in Minnesota Statutes, chapter 60A.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [60A.172] [INSURANCE AGENCY CONTRACTS; 
CANCELLATION.] 
    (a) An insurer may not cancel a written agreement with an 
agent or, without the agent's written approval at the time of a 
reduction or restriction, reduce or restrict an agent's 
underwriting authority with respect to property or casualty 
insurance, based solely on the loss ratio experience on that 
agent's book of business, if:  the insurer required the agent to 
submit the application for underwriting approval, all material 
information on the application was fully completed, and the 
agent has not omitted or altered any information provided by the 
applicant. 
    (b) For purposes of this section, "loss ratio experience" 
means the ratio of premiums paid divided by the claims paid 
during the previous two-year period. 
    (c) This section applies only to agents who write insurance 
business exclusively for one company and are not in the direct 
employ of the company. 
    Sec. 2.  [60A.173] [EFFECTIVE DATE.] 
    Section 1 is effective January 1, 1987, and applies to 
cancellations begun as of that date.  As a condition of doing 
business in the state of Minnesota, an insurer shall promptly 
reinstate any agreements canceled under section 1 and shall 
restore any authority reduced or restricted under section 1 from 
January 1, 1987, until the day following final enactment of this 
act. 
    Sec. 3.  [60A.174] [SEVERABILITY.] 
    If section 2 is determined by a final, nonappealable order 
of any Minnesota or federal court of competent jurisdiction to 
be invalid or unconstitutional, section 1 is effective the day 
following final enactment. 
    Approved May 28, 1987