language to be deleted (2) new language
Laws of Minnesota 1989 CHAPTER 170-H.F.No. 1354 An act relating to insurance; regulating cancellations of insurance agency contracts; prohibiting insurance companies from terminating agents who contact the commerce department; amending Minnesota Statutes 1988, sections 60A.172; and 72A.20, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 60A. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 1988, section 60A.172, is amended to read: 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 exclusively80 percent or more of their gross annual insurance business for one company or any or all of its subsidiaries, and are not in the direct employ of the company. Sec. 2. [60A.175] [AGENT COMMISSIONS.] An insurer that cancels a written agreement with an agent under section 60A.171 or 60A.172 must pay to the agent terminated all commissions earned by that agent prior to or after termination. Sec. 3. Minnesota Statutes 1988, section 72A.20, is amended by adding a subdivision to read: Subd. 20. [CONTACT WITH DEPARTMENT.] An insurance company may not terminate or otherwise penalize an insurance agent solely because the agent contacted any government department or agency regarding a problem that the agent or an insured may be having with an insurance company. Sec. 4. [EFFECTIVE DATE.] Sections 1, 2, and 3 are effective the day following final enactment. Presented to the governor May 16, 1989 Signed by the governor May 17, 1989, 6:30 p.m.