Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 130-S.F.No. 886 
           An act relating to insurance; township mutuals; 
          permitting the directors to choose a manager who need 
          not be a member of the board; expanding the 
          permissible duties of the treasurer and manager; 
          permitting township mutual fire insurance companies to 
          cover certain secondary property; permitting township 
          mutual insurance companies to insure secondary 
          property outside the companies' territory under 
          certain circumstances; setting forth a director's 
          personal liability; amending Minnesota Statutes 1988, 
          sections 67A.09, subdivision 1; 67A.12, subdivision 1; 
          67A.14, subdivisions 1 and 5; and 67A.17, subdivisions 
          2 and 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 67A.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [HOW ELECTED OR CHOSEN.] The directors 
shall choose one of their number as president, one as 
vice-president, and one as secretary; they shall also choose a 
treasurer, who may or may need not be a member of the board, but 
must be a member of the company.  They may also choose a 
manager, who need not be a member of the board, and need not be 
a member of the company.  The offices of secretary and treasurer 
may be held by the same person.  
    The board of directors may appoint other officers as it 
deems necessary for the conduct of business.  
    Sec. 2.  Minnesota Statutes 1988, section 67A.12, 
subdivision 1, is amended to read: 
    Subdivision 1.  [WHO MAY ACCEPT.] The president and, 
secretary of a company, treasurer, or chosen manager may accept 
all applications and sign and issue policies, agreeing in the 
name of the company to pay all losses and damages, not exceeding 
the sums named in the policies, sustained by reason of the 
perils named, for the term therein specified.  
    Sec. 3.  Minnesota Statutes 1988, section 67A.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [KINDS OF PROPERTY.] (a) Township mutual 
fire insurance companies may insure qualified property.  
Qualified property means dwellings, household goods, appurtenant 
structures, farm buildings, farm personal property, churches, 
church personal property, county fair buildings, community and 
township meeting halls and their usual contents. 
    (b) Township mutual fire insurance companies may extend 
coverage to include an insured's secondary property if the 
township mutual fire insurance company covers qualified property 
belonging to the insured.  Secondary property means any real or 
personal property that is not considered qualified property for 
a township mutual fire insurance company to cover under chapter 
67A.  The maximum amount of coverage that a township mutual fire 
insurance company may write for secondary property is 25 percent 
of the total limit of liability of the policy issued to an 
insured covering the qualified property. 
    Sec. 4.  Minnesota Statutes 1988, section 67A.14, 
subdivision 5, is amended to read: 
    Subd. 5.  [WHAT MAY NOT BE INSURED; PROPERTY OUTSIDE 
DESIGNATED TERRITORY; EXCEPTIONS.] (a) No township mutual 
insurance company shall insure any property in cities of the 
first or second class.  
    (b) If by annexation or other growth in population a city, 
town, township or unorganized territory or any portion thereof 
is reclassified into a city of the second class, a township 
mutual insurance company may continue to do business in that 
portion of the city in which it was authorized to do business 
prior to the reclassification.  
    (c) No A township mutual insurance company shall may insure 
any real or personal property, including qualified or secondary 
property, subject to the limitations in subdivision 1, paragraph 
(b), located outside of the limits of the territory in which the 
company is authorized by its certificate or articles of 
incorporation to transact business, if the company is already 
covering qualified property belonging to the insured, inside the 
limits of the company's territory. 
    (d) The prohibition in clause (c) shall not apply to any A 
township mutual fire insurance company may insure property 
temporarily outside of the authorized territory of the township 
mutual insurance company. 
    Sec. 5.  Minnesota Statutes 1988, section 67A.17, 
subdivision 2, is amended to read: 
    Subd. 2.  [SECRETARY'S DUTIES.] It shall be the duty of the 
secretary or chosen manager, when after the assessment shall 
have been is completed, to immediately notify every person 
composing the company, by letter sent to the person's usual post 
office address, of the amount of the loss, and the sum due as 
the person's share thereof, and of the time when and to whom the 
payment is to be made, but this time shall not be less than 60, 
nor more than 90, days from the date of the notice, and every 
person designated to receive this money may demand and receive 
two percent in addition to the amount due on the assessment, as 
aforesaid, for fees in receiving and paying over the same.  
    Sec. 6.  Minnesota Statutes 1988, section 67A.17, 
subdivision 3, is amended to read: 
    Subd. 3.  [MEMBER SUBJECT TO SUIT AND DIRECTORS' 
LIABILITY.] Suits at law may be brought against any member of 
the company who shall refuse or neglect refuses or neglects to 
pay any assessment.  The directors of any company so formed who 
shall willfully neglect or refuse to perform the duties imposed 
upon them by law shall be liable in their individual capacities 
to the person sustaining the loss.  The articles may eliminate 
or limit a director's personal liability to the company or its 
members for monetary damages for breach of fiduciary duty as a 
director.  The articles shall not eliminate or limit the 
liability of a director: 
    (1) for breach of loyalty to the company or its members; 
    (2) for acts or omissions made in bad faith or with 
intentional misconduct or knowing violation of law; 
    (3) for transactions from which the director derived an 
improper personal benefit; or 
    (4) for acts or omissions occurring before the date that 
the provisions in the articles eliminating or limiting liability 
become effective. 
    Presented to the governor May 12, 1989 
    Signed by the governor May 15, 1989, 5:41 p.m.