Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 125-H.F.No. 812 
           An act relating to insurance; life; allowing insurance 
          policies to contain a rider providing for early 
          payment of benefits; amending Minnesota Statutes 1988, 
          section 60A.06, subdivisions 1 and 3; proposing coding 
          for new law in Minnesota Statutes, chapter 61A. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 60A.06, 
subdivision 1, is amended to read: 
    Subdivision 1.  [STATUTORY LINES.] Insurance corporations 
may be authorized to transact in any state or territory in the 
United States, in the Dominion of Canada, and in foreign 
countries, when specified in their charters or certificates of 
incorporation, either as originally granted or as thereafter 
amended, any of the following kinds of business, upon the stock 
plan, or upon the mutual plan when the formation of such mutual 
companies is otherwise authorized by law; and business trusts as 
authorized by law of this state shall only be authorized to 
transact in this state the following kind of business 
hereinafter specified in clause (7) hereof when specified in 
their "declaration of trust": 
    (1) To insure against loss or damage to property on land 
and against loss of rents and rental values, leaseholds of 
buildings, use and occupancy and direct or consequential loss or 
damage caused by fire, smoke or smudge, water or other fluid or 
substance, lightning, windstorm, tornado, cyclone, earthquake, 
collapse and slippage, rain, hail, frost, snow, freeze, change 
of temperature, weather or climatic conditions, excess or 
deficiency of moisture, floods, the rising of waters, oceans, 
lakes, rivers or their tributaries, bombardment, invasion, 
insurrection, riot, civil war or commotion, military or usurped 
power, electrical power interruption or electrical breakdown 
from any cause, railroad equipment, motor vehicles or aircraft, 
accidental injury to sprinklers, pumps, conduits or containers 
or other apparatus erected for extinguishing fires, explosion, 
whether fire ensues or not, except explosions on risks specified 
in clause (3); provided, however, that there may be insured 
hereunder the following:  (a) explosion of any kind originating 
outside the insured building or outside of the building 
containing the property insured, (b) explosion of pressure 
vessels which do not contain steam or which are not operated 
with steam coils or steam jackets; and (c) risks under home 
owners multiple peril policies; 
    (2) (a) To insure vessels, freight, goods, wares, 
merchandise, specie, bullion, jewels, profits, commissions, bank 
notes, bills of exchange, and other evidences of debt, bottomry 
and respondentia interest, and every insurance appertaining to 
or connected with risks of transportation and navigation on and 
under water, on land or in the air; 
    (b) To insure all personal property floater risks; 
    (3) To insure against any loss from either direct or 
indirect damage to any property or interest of the assured or of 
another, resulting from the explosion of or injury to (a) any 
boiler, heater or other fired pressure vessel; (b) any unfired 
pressure vessel; (c) pipes or containers connected with any of 
said boilers or vessels; (d) any engine, turbine, compressor, 
pump or wheel; (e) any apparatus generating, transmitting or 
using electricity; (f) any other machinery or apparatus 
connected with or operated by any of the previously named 
boilers, vessels or machines; and including the incidental power 
to make inspections of and to issue certificates of inspection 
upon, any such boilers, apparatus, and machinery, whether 
insured or otherwise; 
    (4) To make contracts of life and endowment insurance, to 
grant, purchase, or dispose of annuities or endowments of any 
kind; and, in such contracts, or in contracts supplemental 
thereto to provide for additional benefits in event of death of 
the insured by accidental means, total permanent disability of 
the insured, or specific dismemberment or disablement suffered 
by the insured, or acceleration of life or endowment or annuity 
benefits in advance of the time they would otherwise be payable; 
    (5) (a) To insure against loss or damage by the sickness, 
bodily injury or death by accident of the assured or dependents; 
    (b) To insure against the legal liability, whether imposed 
by common law or by statute or assumed by contract, of employers 
for the death or disablement of, or injury to, employees; 
    (6) To guarantee the fidelity of persons in fiduciary 
positions, public or private, or to act as surety on official 
and other bonds, and for the performance of official or other 
obligations; 
    (7) To insure owners and others interested in real estate 
against loss or damage, by reason of defective titles, 
encumbrances, or otherwise; 
    (8) To insure against loss or damage by breakage of glass, 
located or in transit; 
    (9) (a) To insure against loss by burglary, theft, or 
forgery; 
    (b) To insure against loss of or damage to moneys, coins, 
bullion, securities, notes, drafts, acceptance or any other 
valuable paper or document, resulting from any cause, except 
while in the custody or possession of and being transported by 
any carrier for hire or in the mail; 
    (c) To insure individuals by means of an all risk type of 
policy commonly known as the "personal property floater" against 
any kind and all kinds of loss of or damage to, or loss of use 
of, any personal property other than merchandise; 
    (d) To insure against loss or damage by water or other 
fluid or substance; 
    (10) To insure against loss from death of domestic animals 
and to furnish veterinary service; 
    (11) To guarantee merchants and those engaged in business, 
and giving credit, from loss by reason of giving credit to those 
dealing with them; this shall be known as credit insurance; 
    (12) To insure against loss or damage to automobiles or 
other vehicles or aircraft and their contents, by collision, 
fire, burglary, or theft, and other perils of operation, and 
against liability for damage to persons, or property of others, 
by collision with such vehicles or aircraft, and to insure 
against any loss or hazard incident to the ownership, operation, 
or use of motor or other vehicles or aircraft; 
    (13) To insure against liability for loss or damage to the 
property or person of another caused by the insured or by those 
for whom the insured is responsible, including insurance of 
medical, hospital, surgical, funeral or other related expense of 
the insured or other person injured, irrespective of legal 
liability of the insured, when issued with or supplemental to 
policies of liability insurance; 
    (14) To insure against loss of or damage to any property of 
the insured, resulting from the ownership, maintenance or use of 
elevators, except loss or damage by fire; 
    (15) To insure against attorneys fees, court costs, witness 
fees and incidental expenses incurred in connection with the use 
of the professional services of attorneys at law.  
    Sec. 2.  Minnesota Statutes 1988, section 60A.06, 
subdivision 3, is amended to read: 
    Subd. 3.  [LIMITATION ON COMBINATION POLICIES.] (a) Unless 
specifically authorized by subdivision 1, clause (4), it is 
unlawful to combine in one policy coverage permitted by 
subdivision 1, clauses (4) and (5)(a).  This subdivision does 
not prohibit the simultaneous sale of these products, but the 
sale must involve two separate and distinct policies.  
     (b) This subdivision does not apply to group policies.  
     (c) This subdivision does not apply to policies permitted 
by subdivision 1, clause (4), that contain benefits providing 
acceleration of life, endowment, or annuity benefits in advance 
of the time they would otherwise be payable.  
     Sec. 3.  [61A.072] [POLICIES WITH ACCELERATED BENEFITS.] 
    Subdivision 1.  [DISCLOSURE.] A life insurance contract or 
supplemental contract that contains a provision to permit the 
accelerated payment of benefits as authorized under section 
60A.06, subdivision 1, clause (4), must contain the following 
disclosure:  "This is a life insurance policy which pays 
accelerated death benefits at your option under conditions 
specified in the policy.  This policy is not a long-term care 
policy meeting the requirements of sections 62A.46 to 62A.56."  
    Subd. 2.  [ADVERTISEMENTS.] Any advertisement related to a 
contract or supplemental contract providing for the payment of 
accelerated benefits must be approved by the commissioner prior 
to its use.  The commissioner shall not approve the 
advertisement if it is likely to lead a prospective purchaser to 
believe that it is a long-term care policy.  
    Subd. 3.  [PROHIBITION.] No contract or supplemental 
contract providing for the payment of accelerated benefits may 
be offered or sold to an individual over the age of 65 years.  
    Subd. 4.  [LONG-TERM CARE EXPENSES.] If the right to 
receive accelerated benefits is contingent upon the insured 
receiving long-term care services, the contract or supplemental 
contract shall include the following provisions:  
    (1) the minimum accelerated benefit shall be $1,200 per 
month if the insured is receiving nursing facility services and 
$750 per month if the insured is receiving home services with a 
minimum lifetime benefit limit of $50,000; 
    (2) coverage is effective immediately and benefits shall 
commence with the receipt of services as defined in section 
62A.46, subdivision 3, 4, or 5, but may include a waiting period 
of not more than 90 days, provided that no more than one waiting 
period may be required per benefit period as defined in section 
62A.46, subdivision 11; 
    (3) premium shall be waived during any period in which 
benefits are being paid to the insured during confinement to a 
nursing home facility; 
    (4) coverage may not be canceled or renewal refused except 
on the grounds of nonpayment of premium; 
    (5) coverage must include 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; 
    (6) the contract or supplemental contract shall contain the 
following disclosure:  
    "THE ACCELERATED LIFE INSURANCE BENEFITS PROVIDED UNDER 
THIS CONTRACT MAY NOT COVER ALL NURSING HOME, HOME CARE, OR 
ADULT DAY CARE EXPENSES.  BENEFITS ARE NOT PAYABLE UPON RECEIPT 
OF RESIDENTIAL CARE.  READ YOUR POLICY CAREFULLY TO DETERMINE 
YOUR BENEFIT AMOUNT."; 
    (7) coverage must include mental or nervous disorders which 
have a demonstrable organic cause such as Alzheimer's and 
related dementias; 
    (8) no prior hospitalization requirement shall be allowed 
unless a similar requirement is allowed by section 62A.48, 
subdivision 1; and 
    (9) the contract shall include a cancellation provision 
that meets the requirements of section 62A.50, subdivision 2. 
     Sec. 4.  [EFFECTIVE DATE.] 
     Sections 1 to 3 are effective the day following final 
enactment. 
    Presented to the governor May 12, 1989 
    Signed by the governor May 16, 1989, 4:28 p.m.