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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1989 

                        CHAPTER 316-H.F.No. 162 
           An act relating to insurance; regulating insurance 
          information collection, use, disclosure, access, and 
          correction practices; requiring reasons for adverse 
          underwriting decisions; amending Minnesota Statutes 
          1988, section 72A.20, subdivision 11; proposing coding 
          for new law in Minnesota Statutes, chapter 72A. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1988, section 72A.20, 
subdivision 11, is amended to read: 
    Subd. 11.  [APPLICATION TO CERTAIN SECTIONS.] Violating any 
provision of the following sections of this chapter not set 
forth in this section shall constitute an unfair method of 
competition and an unfair and deceptive act or practice:  
sections 72A.12, subdivisions 2, 3, and 4, 72A.16, subdivision 
2, 72A.03 and 72A.04, 72A.08, subdivision 1, as modified by 
section sections 72A.08, subdivision 4, 72A.201, sections 2 to 
17, and 65B.13. 
    Sec. 2.  [72A.49] [SHORT TITLE.] 
    Sections 2 to 17 may be cited as the "Minnesota insurance 
fair information reporting act."  
    Sec. 3.  [72A.491] [DEFINITIONS.] 
    Subdivision 1.  [APPLICATION.] For the purposes of sections 
2 to 17, the following terms have the meanings given them. 
    Subd. 2.  [ADVERSE UNDERWRITING DECISION.] "Adverse 
underwriting decision" means any of the following actions with 
respect to insurance transactions involving insurance coverage 
that is individually underwritten:  
    (1) denial, in whole or in part, of coverage that was 
requested in writing to the insurer; 
    (2) termination or reduction of insurance coverage or 
policy; 
    (3) failure of an insurance agent to apply for coverage 
with a specific insurer that the agent represents and that is 
specifically requested by an applicant; 
    (4) placement by an insurer or insurance agent of a risk 
with a residual market mechanism, an unauthorized insurer, or an 
insurer that specializes in substandard risks; 
    (5) charging a higher rate on the basis of information that 
differs from that which the applicant or policyholder furnished 
for property or casualty coverage; 
    (6) an offer to insure at higher than standard rates for 
life, health, or disability coverage; or 
    (7) the rescission of a policy. 
    Subd. 3.  [AFFILIATE OR AFFILIATED.] "Affiliate" or 
"affiliated" means a person who directly, or indirectly through 
one or more intermediaries, controls, is controlled by, or is 
under common control with another person. 
    Subd. 4.  [APPLICANT.] "Applicant" means any person who 
seeks to contract for insurance coverage from an insurer.  
    Subd. 5.  [CONSUMER REPORT.] "Consumer report" means any 
written, oral, or other communication of information bearing on 
a person's credit worthiness, credit standing, credit capacity, 
character, general reputation, personal characteristics, or mode 
of living that is used or expected to be used in connection with 
an insurance transaction. 
    Subd. 6.  [CONSUMER REPORTING AGENCY.] "Consumer reporting 
agency" means any person who: 
    (1) regularly engages, in whole or in part, in the practice 
of assembling or preparing consumer reports for a monetary fee; 
    (2) obtains information primarily from sources other than 
insurers; and 
    (3) furnishes consumer reports to other persons.  
    Subd. 7.  [CONTROL.] "Control," "controlled by," or "under 
common control with" means the possession, direct or indirect, 
of the power to direct or cause the direction of the management 
and policies of a person, whether through the ownership of 
voting securities, by contract other than a commercial contract 
for goods or nonmanagement services, or otherwise, unless the 
power is the result of an official position with or corporate 
office held by the person. 
    Subd. 8.  [HEALTH CARE INSTITUTION.] "Health care 
institution" means any facility or institution that is licensed 
to provide health care services to natural persons.  
    Subd. 9.  [HEALTH PROFESSIONAL.] "Health professional" 
means any person licensed or certified to provide health care 
services to natural persons.  
    Subd. 10.  [HEALTH RECORD INFORMATION.] "Health record 
information" means personal information that: 
    (1) relates to an individual's physical or mental 
condition, health history, or health treatment; and 
    (2) is obtained from a health professional or health care 
institution, from the individual, or from the individual's 
spouse, parent, legal guardian, or other person. 
    Subd. 11.  [INDIVIDUAL.] "Individual" means any natural 
person who: 
    (1) in the case of property or casualty insurance is a 
past, present, or proposed named insured or certificate holder; 
    (2) in the case of life, health, or disability insurance is 
a past, present, or proposed principal insured or certificate 
holder; 
    (3) is a past, present, or proposed policy owner; 
    (4) is a past or present applicant; 
    (5) is a past or present claimant; or 
    (6) derived, derives, or is proposed to derive insurance 
coverage under an insurance policy or certificate subject to 
this act.  
    Subd. 12.  [INSURANCE-SUPPORT ORGANIZATION.] (a) 
"Insurance-support organization" means any person who regularly 
engages, in whole or in part, in the practice of assembling or 
collecting information about persons for the primary purpose of 
providing the information to an insurer or insurance agent for 
insurance transactions, including: 
    (1) the furnishing of consumer reports or investigative 
consumer reports to an insurer or insurance agent for use in 
connection with an insurance transaction; and 
    (2) the collection of personal information from insurers, 
insurance agents, or other insurance-support organizations to 
detect or prevent fraud, material misrepresentation, or material 
nondisclosure in connection with insurance underwriting or 
insurance claim activity. 
    (b) Insurance-support organizations do not include 
insurance agents, government institutions, insurers, health care 
institutions, or health professionals. 
    Subd. 13.  [INSURANCE TRANSACTION.] "Insurance transaction" 
means any transaction that involves: 
    (1) the determination of an individual's eligibility for an 
insurance coverage, benefit, or payment; or 
    (2) the servicing of an insurance application, policy, 
contract, or certificate. 
    Subd. 14.  [INSURER.] "Insurer" means any insurance 
company, risk retention group as defined under section 60E.02, 
service plan corporation as defined under section 62C.02, health 
maintenance organization as defined under section 62D.02, 
fraternal benefit society regulated under chapter 64B, township 
mutual company regulated under chapter 67A, joint self-insurance 
plan or multiple employer trust regulated under chapter 60F, 
62H, or section 471.617, subdivision 2, and persons 
administering a self-insurance plan as defined under section 
60A.23, subdivision 8, paragraph (2), clauses (a) and (d).  
    Subd. 15.  [INSURER THAT SPECIALIZES IN SUBSTANDARD 
RISKS.] "Insurer that specializes in substandard risks" means an 
insurer whose rates and market orientation are directed at risks 
other than preferred or standard risks.  
    Subd. 16.  [INVESTIGATIVE CONSUMER REPORT.] "Investigative 
consumer report" means all or part of a consumer report in which 
information about a person's character, general reputation, 
personal characteristics, or mode of living is obtained through 
personal interviews with the person's neighbors, friends, 
associates, acquaintances, or others who may have knowledge 
concerning these items of information.  
    Subd. 17.  [PERSONAL INFORMATION.] "Personal information" 
means any individually identifiable information gathered in 
connection with an insurance transaction from which judgments 
can be made about an individual's character, habits, avocations, 
finances, occupation, general reputation, credit, health, or any 
other personal characteristics.  The term includes the 
individual's name and address and health record information, but 
does not include privileged information.  Personal information 
does not include health information maintained by a health 
maintenance organization as defined under section 62D.02, 
subdivision 4, in its capacity as a health provider.  
    Subd. 18.  [POLICYHOLDER.] "Policyholder" means any 
individual who is a present named insured, a present 
policyowner, or a present group certificate holder. 
    Subd. 19.  [PRIVILEGED INFORMATION.] (a) "Privileged 
information" means any individually identifiable information 
that: 
    (1) relates to a claim for insurance benefits or a civil or 
criminal proceeding; or 
    (2) is collected in connection with or in reasonable 
anticipation of a claim for insurance benefits or civil or 
criminal proceeding. 
    (b) Information otherwise meeting the definition of 
privileged information under paragraph (a) must be considered 
personal information if it is disclosed in violation of section 
14. 
    Subd. 20.  [RESIDUAL MARKET MECHANISM.] "Residual market 
mechanism" means an association, organization, or other entity 
created under the laws of this state to provide insurance 
coverage to any person who is unable to obtain coverage through 
ordinary methods in the normal insurance markets. 
    Subd. 21.  [TERMINATION OF INSURANCE COVERAGE OR 
POLICY.] "Termination of insurance coverage" or "termination of 
an insurance policy" means either a cancellation or nonrenewal 
of an insurance policy, in whole or in part, for any reason 
other than the failure to pay a premium as required by the 
policy. 
    Subd. 22.  [UNAUTHORIZED INSURER.] "Unauthorized insurer" 
means an insurance company that has not been granted a 
certificate of authority by the commissioner to transact the 
business of insurance in this state. 
    Sec. 4.  [72A.492] [SCOPE.] 
    Subdivision 1.  [COVERED POLICIES.] The obligations imposed 
by sections 2 to 17 apply to insurers, insurance agents, and 
insurance-support organizations that:  
    (1) collect, receive, or maintain information in connection 
with insurance transactions that pertains to persons who are 
residents of this state; or 
    (2) engage in insurance transactions with applicants, 
individuals, or policyholders who are residents of this state.  
    Subd. 2.  [COVERED PERSONS.] The rights granted by sections 
2 to 17 extend to: 
    (1) a person who is a resident of this state and is the 
subject of information collected, received, or maintained in 
connection with an insurance transaction; and 
    (2) a person who is a resident of this state and engages in 
or seeks to engage in an insurance transaction.  
    Subd. 3.  [EXCEPTIONS.] (a) Sections 2 to 17 do not apply 
to information collected from the public records of a 
governmental authority and maintained by an insurance company or 
its representatives to insure the title to real property located 
in this state. 
    (b) Nothing in sections 2 to 17 gives a patient access to 
the health records pertaining to the patient maintained by the 
patient's health provider, or gives the patient the right to 
alter or amend those health records, unless otherwise provided 
by law.  
     (c) Sections 2 to 17 do not apply to any insurance 
transactions involving property and casualty insurance primarily 
for business or professional needs. 
    Sec. 5.  [72A.493] [OBTAINING INFORMATION BY IMPROPER 
MEANS.] 
    An insurer, insurance agent, or insurance-support 
organization must not obtain information or authorize another 
person to obtain information in connection with an insurance 
transaction by:  
    (1) pretending to be someone he or she is not; 
    (2) pretending to represent a person he or she is not in 
fact representing; 
    (3) misrepresenting the true purpose of the interview; or 
    (4) refusing to identify himself or herself upon request. 
    Sec. 6.  [72A.494] [NOTICE.] 
    Subdivision 1.  [REQUIRED.] Each insurer or insurance agent 
shall provide a notice relating to information practices to each 
applicant or policyholder in the manner and at the time required 
by this section.  
     Subd. 2.  [EXEMPTION.] A notice is not required to be 
provided under this section for:  
    (1) a group policy or contract that is not individually 
underwritten; or 
    (2) a renewal, reinstatement, or a change in benefits for a 
policy or contract if no personal information is to be collected 
other than from the applicant or policyholder, or from public 
records. 
    Subd. 3.  [TIMING.] (a) In the case of an application for 
insurance coverage, the notice must be provided to the applicant 
or policyholder no later than the time application is made for 
the coverage, renewal, reinstatement, or change in benefits.  
     (b) If personal information is to be collected only from 
the applicant or from public records, the notice may be provided 
at the time of delivery of the policy or the certificate. 
    Subd. 4.  [CONTENT OF NOTICE.] The notice required by this 
section must be in writing and state: 
    (1) whether personal information may be collected from 
persons other than the individual or individuals proposed for 
coverage; 
    (2) the types of personal information that may be collected 
and the types of sources and investigative techniques that may 
be used to collect the information; 
    (3) the types of disclosures of personal information that 
may be made under section 13 and the circumstances under which 
the disclosures may be made without prior authorization; except 
that only those circumstances which occur with such frequency as 
to indicate a general business practice must be described; 
    (4) a description of the rights established under sections 
9 and 10 and the manner in which those rights may be exercised; 
and 
    (5) that information obtained from a report prepared by an 
insurance-support organization may be retained by the 
insurance-support organization and disclosed to other persons.  
     Subd. 5.  [ABBREVIATED NOTICE.] In lieu of the notice 
required under subdivision 4, the insurer or insurance agent may 
provide an abbreviated notice informing the applicant or 
policyholder that: 
    (1) personal information may be collected from persons 
other than the person or persons proposed for coverage; 
    (2) the information collected by the insurer or insurance 
agent may in certain circumstances be disclosed to third parties 
without authorization; 
    (3) the person has a right to see their personal records 
and correct personal information collected; and 
    (4) the person will be furnished the detailed notice 
required under subdivision 4 upon request. 
    Subd. 6.  [OTHER COMPANIES OR AGENCIES ACTING ON ITS 
BEHALF.] The obligations imposed by this section upon an insurer 
or insurance agent may be satisfied by another insurer or 
insurance agent authorized to act on its behalf.  
    Sec. 7.  [72A.495] [MARKETING AND RESEARCH SURVEYS.] 
    An insurer or insurance agent shall clearly specify any 
questions designed to obtain information solely for marketing or 
research purposes from an individual in connection with an 
insurance transaction, and state that responses to the questions 
are not required to obtain coverage. 
    Sec. 8.  [72A.496] [INVESTIGATIVE CONSUMER REPORTS.] 
    Subdivision 1.  [NOTICE.] An insurer, insurance agent, or 
insurance-support organization must not prepare or request an 
investigative consumer report about an individual in connection 
with an insurance transaction involving an application for 
insurance, a policy renewal, a policy reinstatement, or a change 
in insurance benefits, unless the insurer or insurance agent 
informs the person:  
    (1) that the individual may request to be interviewed in 
connection with the preparation of the investigative consumer 
report; and 
    (2) that, upon a request pursuant to section 9, the 
individual is entitled to receive a copy of the investigative 
consumer report. 
    Subd. 2.  [REPORTS PREPARED BY INSURERS.] If an 
investigative consumer report is to be prepared by an insurer or 
insurance agent, the insurer or insurance agent shall institute 
reasonable procedures to conduct a personal interview requested 
by an individual.  
    Subd. 3.  [REPORTS PREPARED BY INSURANCE-SUPPORT 
ORGANIZATIONS.] If an investigative consumer report is to be 
prepared by an insurance-support organization, the insurer or 
insurance agent desiring the report shall inform the 
insurance-support organization whether a personal interview has 
been requested by the individual.  The insurance-support 
organization shall institute reasonable procedures for 
conducting an interview, if requested. 
    Sec. 9.  [72A.497] [ACCESS TO PERSONAL INFORMATION.] 
    Subdivision 1.  [REQUEST.] (a) If an individual, after 
proper identification, submits a written request to an insurer, 
insurance agent, or insurance-support organization for access to 
personal information about the individual, the insurer, 
insurance agent, or insurance-support organization shall within 
30 business days from the date the request is received: 
    (1) inform the individual of the nature and substance of 
the personal information that they possess in writing, by 
telephone, or by other oral communication, whichever the 
insurer, insurance agent, or insurance-support organization 
elects; 
    (2) permit the individual to see and copy, in person, the 
personal information pertaining to that person; 
    (3) permit the individual to obtain by mail a copy of all 
of the personal information or a reasonably described portion 
thereof, whichever the individual requests; 
    (4) disclose to the individual the identity of those 
persons to whom the insurer, insurance agent, or 
insurance-support organization has disclosed the personal 
information within two years before the request; and 
    (5) provide the individual with a summary of the procedures 
by which the person may request correction, amendment, or 
deletion of personal information, as provided under section 10. 
    (b) If the personal information is in coded form, an 
accurate translation in plain language must be provided in 
writing.  
    (c) If credit information is requested that federal law 
prohibits an insurer to disclose, the insurer must disclose that 
the individual has the right to receive the credit information 
from the credit reporting agency.  The insurer must disclose the 
name, address, and telephone number of the credit reporting 
agency that supplied the insurer with the credit information. 
    Subd. 2.  [SOURCE.] Any personal information collected must 
specifically identify the source of the information.  
    Subd. 3.  [HEALTH RECORDS.] (a) Health record information 
requested under subdivision 1 that has been supplied by a health 
care institution or a health professional must provide the 
identity of the health professional or health care institution 
that supplied the information.  The health record information 
must be provided either directly to the individual or to a 
health professional designated by the person who is licensed to 
provide health care with respect to the condition to which the 
information relates, whichever the individual elects.  If the 
information is provided to a designated health professional, the 
insurer, insurance agent, or insurance-support organization 
shall notify the person, at the time of the disclosure, that the 
information has been provided to the health professional. 
    (b) If a health professional or a health care institution 
has provided health information to an insurer, insurance-support 
organization, or insurance agent that the health professional or 
health care institution has determined and indicates in writing 
that the release of the health record information is detrimental 
to the physical or mental health of the person, or is likely to 
cause the individual to inflict self-harm or to harm another, 
the insurer, insurance agent, or insurance-support organization 
may provide that information directly to the individual only 
with the approval of the health professional with treatment 
responsibility for the condition to which the information 
relates.  If approval is not obtained, the information must be 
provided to the health professional designated by the individual.
    (c) Nothing in this section may reduce or affect a 
patient's rights under section 144.335.  
     Subd. 4.  [FEE.] An insurer, insurance agent, or 
insurance-support organization may charge a reasonable fee, not 
to exceed the actual costs, to copy information provided under 
this section.  If an individual is requesting information as a 
result of an adverse underwriting decision, the insurer, 
insurance agent, or insurance-support organization must provide 
the information free of any charge. 
    Subd. 5.  [OTHER COMPANIES OR AGENTS ACTING ON ITS BEHALF.] 
The obligations imposed by this section upon an insurer or 
insurance agent may be satisfied by another insurer or insurance 
agent authorized to act on its behalf.  With respect to the 
copying and disclosure of personal information under a request 
under subdivision 1, an insurer, insurance agent, or 
insurance-support organization may make arrangements with an 
insurance-support organization or a consumer reporting agency to 
copy and disclose personal information on its behalf. 
    Subd. 6.  [PRIVILEGED INFORMATION.] The rights granted 
under this section and section 10 do not extend to privileged 
information.  
    Sec. 10.  [72A.498] [CORRECTION, AMENDMENT, OR DELETION OF 
PERSONAL INFORMATION.] 
    Subdivision 1.  [PROCEDURE.] Within 30 business days from 
the date of receipt of a written request from an individual to 
correct, amend, or delete any personal information about the 
person within its possession, an insurer, insurance agent, or 
insurance-support organization shall either: 
    (1) correct, amend, or delete the portion of the personal 
information in dispute; or 
    (2) notify the individual of its refusal to make the 
correction, amendment, or deletion, the reasons for the refusal, 
and the person's right to file a statement as provided in 
subdivision 3, and the individual's right to appeal to the 
commissioner under subdivision 5. 
    Subd. 2.  [NOTICE.] If the insurer, insurance agent, or 
insurance-support organization corrects, amends, or deletes 
disputed personal information upon request of an individual or 
as ordered by the commissioner, the insurer, insurance agent, or 
insurance-support organization shall notify the person in 
writing and provide the correction, amendment, or fact of 
deletion to: 
    (1) any person specifically designated by the individual 
who may have within the preceding two years received the 
personal information; 
    (2) any insurance-support organization whose primary source 
of personal information is insurers, if the insurance-support 
organization has systematically received the personal 
information from the insurer within the preceding seven years, 
provided that the correction, amendment, or fact of deletion 
need not be provided to an insurance-support organization if the 
insurance-support organization no longer maintains personal 
information about the individual; and 
    (3) any insurance-support organization that provided the 
personal information that has been corrected, amended, or 
deleted. 
    Subd. 3.  [STATEMENT.] If the insurer, insurance agent, or 
insurance-support organization refuses to correct, amend, or 
delete disputed personal information, the individual must be 
permitted to file with the insurer, insurance agent, or 
insurance-support organization a concise statement setting forth 
what the person thinks is the correct, relevant, or fair 
information and stating the reasons why the individual disagrees 
with the insurer's, insurance agent's, or insurance-support 
organization's refusal to correct, amend, or delete disputed 
personal information. 
    Subd. 4.  [DISPUTED INFORMATION.] In the event an 
individual files a statement described in subdivision 3, the 
insurer, insurance agent, or insurance-support organization 
shall: 
    (1) file the statement with the disputed personal 
information and provide a means by which anyone reviewing the 
disputed personal information will be made aware of the 
individual's statement and have access to it; 
    (2) in any subsequent disclosure by the insurer, insurance 
agent, or insurance-support organization of the disputed 
personal information, clearly identify the matter or matters in 
dispute and provide the individual's statement along with the 
personal information being disclosed; and 
    (3) furnish the statement to the persons and in the manner 
specified in subdivision 2. 
    Subd. 5.  [APPEAL.] (a) If an insurer, insurance-support 
organization, or insurance agent refuses to correct, amend, or 
delete disputed personal information, the individual may file an 
appeal with the commissioner. 
    (b) The commissioner may, after providing the insurer, 
insurance-support organization, or insurance agent an 
opportunity for a hearing, order the insurer, insurance-support 
organization, or insurance agent to amend, correct, or delete 
disputed personal information if the commissioner finds that the 
personal information kept by the insurer, insurance-support 
organization, or insurance agent is in error.  If the 
commissioner finds that the disputed personal information 
maintained by the insurer, insurance agent, or insurance-support 
organization is correct, the insurer, insurance agent, or 
insurance-support organization may delete from the individual's 
records any statement filed with them by that individual 
relating to the disputed information under subdivision 3. 
    Sec. 11.  [72A.499] [REASONS FOR ADVERSE UNDERWRITING 
DECISIONS.] 
    Subdivision 1.  [NOTICE AND INFORMATION.] In the event of 
an adverse underwriting decision, the insurer or insurance agent 
responsible for the decision shall provide in writing to the 
applicant, policyholder, or individual proposed for coverage:  
    (1) the specific reason or reasons for the adverse 
underwriting decision, a summary of the person's rights under 
sections 9 and 10, and that upon request the person may receive 
the specific items of personal information that support those 
reasons and the specific sources of the information; or 
    (2) the specific reason or reasons for the adverse 
underwriting decision, the specific items of personal and 
privileged information that support those reasons, the names and 
addresses of the sources that supplied the specific items of 
information specified, and a summary of the rights established 
under sections 9 and 10.  
    Subd. 2.  [HEALTH REASONS.] If the specific reason for an 
adverse underwriting decision is based on health record 
information, the insurer may, in lieu of providing the specific 
reason to the individual under subdivision 1, provide the 
individual with the specific source of the adverse underwriting 
decision referring to the specific date, page, and line of the 
information received from a health professional or health care 
institution.  If the insured has been informed of the condition 
indicated by their health provider and is unable to determine 
the reason for the adverse underwriting decision, then the 
insurer must provide the specific reason to the individual.  The 
insurer must provide the specific reason for the adverse 
underwriting decision to a health professional designated by the 
individual, if requested either orally or in writing by the 
individual. 
    Subd. 3.  [EXEMPTION.] (a) This section is not applicable 
to group policies or contracts, except for group policies that 
are individually underwritten.  For group policies or contracts 
that are individually underwritten, the notice required under 
this section must be given to the individual or individuals in 
the group whose personal information resulted in the adverse 
underwriting decision. 
    (b) If a policy or contract is terminated on a class or 
statewide basis, or an insurance coverage is declined solely 
because the coverage is unavailable on a class or statewide 
basis, the insurer or agent is not required to provide the 
notice required under this section provided that the applicant 
or policyholder is provided with the specific reason for the 
termination or declination of coverage. 
    Subd. 4.  [PRIVILEGED INFORMATION.] (a) An insurer or 
insurance agent is not required to provide particular, specific 
items of privileged information under subdivision 1 if it has a 
reasonable suspicion, based upon that specific information, that 
the applicant, policyholder, or person proposed for coverage has 
engaged in criminal activity, fraud, material misrepresentation, 
or material nondisclosure.  If an insurer or insurance agent 
does not provide the specific items of information because the 
information is privileged under this subdivision, the insurer or 
insurance agent must notify the applicant, policyholder, or 
individual proposed for coverage that the specific items of 
information are privileged and of the person's right to appeal 
to the commissioner under this subdivision. 
    (b) If a person is not provided with the specific items of 
information relating to an adverse underwriting decision because 
the information is privileged under this subdivision, the person 
may request that the commissioner review the information.  The 
commissioner may then order the insurer or insurance agent to 
supply the privileged information to the commissioner.  If the 
commissioner determines that the information is not privileged 
under this subdivision, the commissioner shall order the insurer 
or insurance agent to provide the information to the applicant, 
policyholder, or person proposed for coverage. 
    Subd. 5.  [HEALTH RECORDS INFORMATION.] Specific items of 
health record information supplied by a health care institution 
or health professional, and the identity of the health 
professional or health care institution that supplied the 
information, must be disclosed in the manner required under 
section 9, subdivision 3.  
    Subd. 6.  [OTHER COMPANIES OR AGENTS ACTING ON THEIR 
BEHALF.] The obligations imposed by this section upon an insurer 
or insurance agent may be satisfied by another insurer or 
insurance agent authorized to act on its behalf. 
    Sec. 12.  [72A.50] [PREVIOUS ADVERSE UNDERWRITING 
DECISIONS.] 
    Subdivision 1.  [ADDITIONAL INFORMATION REQUIRED.] An 
insurer, insurance agent, or insurance-support organization must 
not seek information in connection with an insurance transaction 
concerning any previous adverse underwriting decision 
experienced by a person, or any previous insurance coverage 
obtained by a person through a residual market mechanism, unless 
the inquiry also requests the reasons for the previous adverse 
underwriting decision or the reasons why insurance coverage was 
previously obtained through a residual market mechanism. 
    Subd. 2.  [PROHIBITIONS.] An insurer or insurance agent may 
not base an adverse underwriting decision, in whole or in part, 
on: 
    (1) the fact of a previous adverse underwriting decision or 
the fact that a person previously obtained insurance coverage 
through a residual market mechanism, provided that an insurer or 
insurance agent may base an adverse underwriting decision on 
further information obtained from an insurer or insurance agent 
responsible for a previous adverse underwriting decision; or 
    (2) personal information received from an insurance-support 
organization whose primary source of information is insurers, 
provided that an insurer or insurance agent may base an adverse 
underwriting decision on further personal information obtained 
as the result of information received from the insurance-support 
organization. 
    Sec. 13.  [72A.501] [DISCLOSURE AUTHORIZATION.] 
    Subdivision 1.  [REQUIREMENT; CONTENT.] An authorization 
used by an insurer, insurance-support organization, or insurance 
agent to disclose or collect personal information must be in 
writing and must meet the following requirements: 
    (1) is written in plain language; 
    (2) is dated; 
    (3) specifies the types of persons authorized to disclose 
information about the person; 
    (4) specifies the nature of the information authorized to 
be disclosed; 
    (5) names the insurer or insurance agent and identifies by 
generic reference representatives of the insurer to whom the 
person is authorizing information to be disclosed; 
    (6) specifies the purposes for which the information is 
collected; and 
    (7) specifies the length of time the authorization remains 
valid. 
    Subd. 2.  [APPLICATION.] (a) If the authorization is signed 
to collect information in connection with an application for a 
property and casualty insurance policy, a policy reinstatement, 
or a request for a change in benefits, the authorization must 
not remain valid for longer than one year from the date the 
authorization is signed or the date the insurer grants or denies 
coverage, reinstatement, or change in benefits, whichever is 
sooner. 
    (b) If the authorization is signed to collect information 
in connection with an application for a life, disability, and 
health insurance policy or contract, reinstatement, or request 
for change in benefits, the authorization may not remain valid 
for longer than 26 months from the date the authorization is 
signed. 
    Subd. 3.  [CLAIMS.] If the authorization is signed to 
collect information in connection with a claim for benefits 
under an insurance policy, the authorization must not remain 
valid for longer than: 
    (1) the term of coverage of the policy, if the claim is for 
a health insurance benefit; or 
    (2) the duration of the claim, if the claim is for a claim 
other than for a health insurance benefit. 
    Subd. 4.  [AUTHORIZATION; NONINSURERS.] If an authorization 
is submitted to an insurer, insurance-support organization, or 
insurance agent by a person other than an insurer, 
insurance-support organization, or insurance agent, the 
authorization must be dated, signed by the person, and obtained 
one year or less before the date a disclosure is sought.  
    Sec. 14.  [72A.502] [DISCLOSURE OF INFORMATION; LIMITATIONS 
AND CONDITIONS.] 
    Subdivision 1.  [REQUIREMENT.] An insurer, insurance agent, 
or insurance-support organization must not disclose any personal 
or privileged information about a person collected or received 
in connection with an insurance transaction without the written 
authorization of that person except as authorized by this 
section.  An insurer, insurance agent, or insurance-support 
organization must not collect personal information about a 
policyholder or an applicant not relating to a claim from 
sources other than public records without a written 
authorization from the person. 
    Subd. 2.  [PREVENTION OF FRAUD.] Personal or privileged 
information may be disclosed without a written authorization to 
another person if the information is limited to that which is 
reasonably necessary to detect or prevent criminal activity, 
fraud, material misrepresentation, or material nondisclosure in 
connection with an insurance transaction, and that person agrees 
not to disclose the information further without the individual 
written authorization unless the further disclosure is otherwise 
permitted by this section if made by an insurer, insurance 
agent, or insurance-support organization.  
    Subd. 3.  [HEALTH CARE INSTITUTIONS AND 
PROFESSIONALS.] Personal or privileged information may be 
disclosed without a written authorization to a health care 
institution or health professional for the purpose of verifying 
insurance coverage benefits, informing a person of a health 
problem of which the person must not be aware, or conducting an 
operations or services audit, if the information is only 
disclosed that is reasonably necessary to accomplish the 
purposes under this subdivision. 
    Subd. 4.  [REGULATORY AUTHORITY.] Personal or privileged 
information may be disclosed without a written authorization to 
an insurance regulatory authority. 
    Subd. 5.  [OTHER GOVERNMENTAL AUTHORITIES.] Personal or 
privileged information may be disclosed without a written 
authorization to a law enforcement or other governmental 
authority if: 
    (1) the disclosure is to protect the interests of the 
insurer, agent, or insurance-support organization in preventing 
or prosecuting the perpetration of fraud upon it; or 
    (2) the insurer, agent, or insurance-support organization 
reasonably believes that illegal activities have been conducted 
by the individual. 
    Subd. 6.  [OTHER LAWS OR ORDER.] Personal or privileged 
information may be disclosed without a written authorization if 
permitted or required by another law or in response to a 
facially valid administrative or judicial order, including a 
search warrant or subpoena. 
    Subd. 7.  [ACTUARIAL AND RESEARCH STUDIES.] Personal or 
privileged information may be disclosed without a written 
authorization to conduct actuarial or research studies if: 
    (1) no individual may be identified in the actuarial or 
research report; 
    (2) materials allowing an individual to be identified are 
returned or destroyed as soon as they are no longer needed; and 
    (3) the actuarial or research organization agrees not to 
disclose the information unless the disclosure would otherwise 
be permitted by this section if made by an insurance company, 
agent, or insurance-support organization. 
    Subd. 8.  [AFFILIATE COMPANIES.] Personal or privileged 
information may be disclosed without a written authorization to 
an affiliate whose only use of the information will be in 
connection with an audit of the insurer or agent or the 
marketing of an insurance product or service, provided the 
affiliate agrees to not disclose the information for any other 
purpose or to unaffiliated persons. 
    Subd. 9.  [GROUP POLICYHOLDER.] Personal or privileged 
information may be disclosed with written authorization to a 
group policyholder only to report claims experience or conduct 
an audit of the insurer's or agent's operations or services, if 
the information disclosed is reasonably necessary for the group 
policyholder to conduct the review or audit. 
    Subd. 10.  [GOVERNMENTAL LICENSING BOARD.] Personal or 
privileged information may be disclosed without a written 
authorization to a governmental professional licensing or 
regulatory board to review the service or conduct of a health 
care institution or health professional that the insurer has 
reason to believe has violated its licensing act or engaged in 
the unlawful practice of a licensed professional.  
    Subd. 11.  [PROFESSIONAL PEER REVIEW.] Subject to the terms 
of a contract between an insurer and a health professional or 
health care institution, personal or privileged information may 
be disclosed without a written authorization to a professional 
peer review organization to review the service or conduct of a 
health care institution or health professional.  
    Subd. 12.  [NOTICE.] Whenever an insurer, insurance agent, 
or insurance-support organization discloses personal or 
privileged information about a person that requires the written 
authorization of that person under this section, the insurer, 
insurance agent, or insurance-support organization shall notify 
that person in writing within ten days of the date the 
information was disclosed.  The notification must specify the 
identity of the person to whom information was disclosed and the 
nature and substance of the information that was disclosed.  A 
notice is not required to be given under this subdivision if an 
insurer is disclosing personal information for underwriting 
purposes to another insurer, or to an insurance-support 
organization if the person had signed an authorization 
authorizing the disclosure. 
    Sec. 15.  [72A.503] [PRIVATE REMEDIES.] 
     Subdivision 1.  [LIABILITY.] Any insurer, insurance agent, 
or insurance-support organization that violates sections 2 to 17 
is liable to the aggrieved person for that violation to the same 
extent as civil remedies are otherwise allowed in section 13.08, 
subdivision 1, for violations of chapter 13, by a political 
subdivision, responsible authority, statewide system, or 
statewide agency. 
    Subd. 2.  [EQUITABLE RELIEF.] Upon application by an 
aggrieved person, a court of competent jurisdiction may grant 
equitable and declaratory relief as necessary to enforce the 
requirements of sections 2 to 17.  
    Sec. 16.  [72A.504] [OBTAINING INFORMATION UNDER IMPROPER 
MEANS.] 
    Any person who knowingly and willfully obtains information 
about a person in violation of section 5 is subject to a fine 
not to exceed $3,000 or imprisonment not to exceed one year, or 
both. 
    Sec. 17.  [72A.505] [IMMUNITY.] 
    No cause of action in the nature of defamation, invasion of 
privacy, or negligence may arise against an insurer, insurance 
agent, or insurance-support organization for disclosing personal 
or privileged information required to be disclosed under 
sections 1 to 16, provided no immunity exists for disclosing 
false information with malice or willful intent to injure any 
person. 
    Sec. 18.  [EFFECTIVE DATE.] 
    Sections 1 to 5 and 7 to 17 are effective August 1, 1989, 
and the rights granted under those sections are effective on 
that date, regardless of the date of the collection or receipt 
of the information which is subject to those sections.  Section 
6 is effective January 1, 1990.  Insurers may use, until July 1, 
1990, notices that are in substantial compliance with this 
section that have not been approved by the commissioner of 
commerce. 
    Presented to the governor May 30, 1989 
    Signed by the governor June 1, 1989, 11:28 p.m.