Office of the Revisor of Statutes
Minnesota Session Laws - 1989, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1989
CHAPTER 330-H.F.No. 1155
An act relating to insurance; life and health;
regulating policy and contract provisions, coverages,
certain cost-containment mechanisms, cancellations and
nonrenewals, trade and marketing practices, and
remedies in these and other lines; making technical
changes; amending Minnesota Statutes 1988, sections
45.025, subdivision 8; 45.027, subdivision 7; 45.028,
subdivision 1; 61A.011, subdivision 1; 61A.09, by
adding a subdivision; 61A.092, subdivision 3; 61B.03,
subdivision 6; 62A.01; 62A.041; 62A.08; 62A.09;
62A.15, subdivisions 3a and 4; 62A.152, subdivisions 2
and 3; 62A.17, subdivision 2; 62A.46, by adding a
subdivision; 62A.48, subdivision 1; 62B.01; 62B.04,
subdivision 1; 62D.12, by adding a subdivision;
62E.06, subdivision 1; 65B.525, subdivision 1; 72A.20,
subdivision 15, and by adding subdivisions; and
149.11; proposing coding for new law in Minnesota
Statutes, chapters 62A; 65A; and 72A; repealing
Minnesota Statutes 1988, sections 60A.23, subdivision
7; and 72A.13, subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1988, section 45.025,
subdivision 8, is amended to read:
Subd. 8. [CIVIL REMEDY.] A person violating this section
is liable to a purchaser of the investment product. The
purchaser may sue either in equity for rescission upon tender of
the investment product or at law for damages if the purchaser no
longer owns the investment product. In an action for
rescission, the purchaser is entitled to recover the
consideration paid for the investment product, together with
interest at the legal rate, costs, and reasonable attorney fees,
less the amount of any income received on the investment
product. In an action at law, damages are the consideration
paid for the investment product together with interest at the
legal rate to the date of disposition, costs, and reasonable
attorney fees, less the value of the investment product at the
date of disposition. Subject to the exceptions in subdivision
3, if the advertisement advertises an investment product whose
interest rate varies according to the earnings or income of the
issuer and if the advertisement projects the accumulated
earnings for a period longer than one year, the issuer and agent
are jointly and severally liable to the purchaser for the
difference in the principal and interest received by the
purchaser and the principal and interest as projected in the
advertisement.
Sec. 2. Minnesota Statutes 1988, section 45.027,
subdivision 7, is amended to read:
Subd. 7. [ACTIONS AGAINST LICENSEES.] In addition to any
other actions authorized by this section, the commissioner may,
by order, deny, suspend, or revoke the authority or license of a
person subject to chapters 45 to 83, 155A, 309, or 332, or
censure that person if the commissioner finds that:
(1) the order is in the public interest; or and
(2) the person has violated chapters 45 to 83, 155A, 309,
or 332.
Sec. 3. Minnesota Statutes 1988, section 45.028,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENT.] (a) When a person, including
any nonresident of this state, engages in conduct prohibited or
made actionable by chapters 45 to 83, 155A, 309, and 332, or any
rule or order under those chapters, and the person has not filed
a consent to service of process under chapters 45 to 83, 155A,
309, and 332, that conduct is equivalent to an appointment of
the commissioner as the person's attorney to receive service of
process in any noncriminal suit, action, or proceeding against
the person which is based on that conduct and is brought under
chapters 45 to 83, 155A, 309, and 332, or any rule or order
under those chapters.
(b) Subdivision 2 also applies in all other cases under
chapters 45 to 83, 155A, 309, and 332, or any rule or order
under those chapters, in which a person, including a nonresident
of this state, has filed a consent to service of process. This
paragraph supersedes any inconsistent provision of law.
Sec. 4. Minnesota Statutes 1988, section 61A.011,
subdivision 1, is amended to read:
Subdivision 1. Notwithstanding any other provision of law
when any insurer, including a fraternal benefit society,
admitted to transact life insurance in this state pays the
proceeds of or payments under any policy of life insurance,
individual or group, such insurer shall pay interest at a rate
not less than the then current rate of interest on death
proceeds left on deposit with the insurer, computed from the
insured's death until the date of payment, on any such proceeds
or payments payable to a beneficiary residing in this state, or
to a beneficiary under a policy issued in this state or to a
beneficiary under a policy insuring a person resident in this
state at the time of death. If the insurer has no established
current rate of interest for death proceeds left on deposit with
the insurer, then the rate of interest to be paid under this
subdivision shall be the rate of interest charged by the insurer
to policy holders for loans under the insurer's policies.
Sec. 5. Minnesota Statutes 1988, section 61A.09, is
amended by adding a subdivision to read:
Subd. 3. Group life insurance policies may be issued to
cover groups of not less than ten debtors of a creditor written
under a master policy issued to a creditor to insure its debtors
in connection with real estate mortgage loans, in an amount not
to exceed the actual or scheduled amount of their indebtedness.
Each application for group mortgage insurance offered prior to
or at the time of loan closing shall contain a clear and
conspicuous notice that the insurance is optional and is not a
condition for obtaining the loan. Each person insured under a
group insurance policy issued under this subdivision shall be
furnished a certificate of insurance which conforms to the
requirements of section 62B.06, subdivision 2, and which
includes a conversion privilege permitting an insured debtor to
convert, without evidence of insurability, to an individual
policy of decreasing term insurance within 30 days of the date
the insured debtor's group coverage is terminated for any reason
other than the nonpayment of premiums. The initial amount of
coverage under the individual policy shall be an amount equal to
the amount of coverage terminated under the group policy and
shall decrease over a term that corresponds with the scheduled
term of the insured debtor's mortgage loan. The premium for the
individual policy shall be the same premium the insured debtor
was paying under the group policy.
Sec. 6. Minnesota Statutes 1988, section 61A.092,
subdivision 3, is amended to read:
Subd. 3. [NOTICE OF OPTIONS.] Upon termination of or
layoff from employment of a covered employee, the employer shall
inform the employee of:
(1) the employee's right to elect to continue the coverage;
(2) the amount the employee must pay monthly to the
employer to retain the coverage;
(3) the manner in which and the office of the employer to
which the payment to the employer must be made; and
(4) the time by which the payments to the employer must be
made to retain coverage.
The employee has 60 days within which to elect coverage.
The 60-day period shall begin to run on the date coverage would
otherwise terminate or on the date upon which notice of the
right to coverage is received, whichever is later.
Notice must be in writing and sent by first class certified
mail to the employee's last known address which the employee has
provided to the employer.
A notice in substantially the following form is
sufficient: "As a terminated or laid off employee, the law
authorizes you to maintain your group insurance benefits for a
period of up to 18 months. To do so, you must notify your
former employer within 60 days of your receipt of this notice
that you intend to retain this coverage and must make a monthly
payment of $............ at ............. by the .............
of each month."
Sec. 7. Minnesota Statutes 1988, section 61B.03,
subdivision 6, is amended to read:
Subd. 6. [COVERED POLICY.] "Covered policy" means any
policy or contract owned by a Minnesota resident to which
sections 61B.01 to 61B.16 apply, as provided in section 61B.02.
Sec. 8. Minnesota Statutes 1988, section 62A.01, is
amended to read:
62A.01 [POLICY OF ACCIDENT AND SICKNESS INSURANCE DEFINED.]
Subdivision 1. [DEFINITION.] The term "policy of accident
and sickness insurance" as used herein includes any policy
covering the kind of insurance described in section 60A.06,
subdivision 1, clause (5)(a).
Subd. 2. [EQUAL PROTECTION.] A certificate of insurance or
similar evidence of coverage issued to a Minnesota resident
shall provide coverage for all benefits required to be covered
in group policies in Minnesota by chapters 62A and 62E.
This subdivision supersedes any inconsistent provision of
chapters 62A and 62E.
A policy of accident and sickness insurance that is issued
or delivered in this state and that covers a person residing in
another state may provide coverage or contain provisions that
are less favorable to that person than required by chapters 62A
and 62E. Less favorable coverages or provisions must meet the
requirements that the state in which the person resides would
have required had the policy been issued or delivered in that
state.
Subd. 3. [EXCLUSIONS.] Subdivision 2 does not apply to
certificates issued in regard to a master policy issued outside
the state of Minnesota if all of the following are true:
(1) the policyholder or certificate holder exists primarily
for purposes other than to obtain insurance;
(2) the policyholder or certificate holder is not a
Minnesota corporation and does not have its principal office in
Minnesota;
(3) the policy or certificate covers fewer than 25
employees who are residents of Minnesota and the Minnesota
employees represent less than 25 percent of all covered
employees; and
(4) on request of the commissioner, the issuer files with
the commissioner a copy of the policy and a copy of each form of
certificate.
This subdivision applies to employers who are not
corporations if they are policyholders or certificate holders
providing coverage to employees through the certificate or
policy.
Subd. 4. [APPLICATION OF OTHER LAWS.] Section 60A.08,
subdivision 4, shall not be construed as requiring a certificate
of insurance or similar evidence of insurance that meets the
conditions of subdivision 3 to comply with chapter 62A or 62E.
Sec. 9. Minnesota Statutes 1988, section 62A.041, is
amended to read:
62A.041 [MATERNITY BENEFITS.]
Subdivision 1. [DISCRIMINATION PROHIBITED AGAINST
UNMARRIED WOMEN.] Each group policy of accident and health
insurance and each group health maintenance contract shall
provide the same coverage for maternity benefits to unmarried
women and minor female dependents that it provides to married
women including the wives of employees choosing dependent family
coverage. If an unmarried insured or an unmarried enrollee is a
parent of a dependent child, each group policy and each group
contract shall provide the same coverage for that child as that
provided for the child of a married employee choosing dependent
family coverage if the insured or the enrollee elects dependent
family coverage.
Each individual policy of accident and health insurance and
each individual health maintenance contract shall provide the
same coverage for maternity benefits to unmarried women and
minor female dependents as that provided for married women. If
an unmarried insured or an unmarried enrollee is a parent of a
dependent child, each individual policy and each individual
contract shall also provide the same coverage for that child as
that provided for the child of a married insured or a married
enrollee choosing dependent family coverage if the insured or
the enrollee elects dependent family coverage.
Subd. 2. [LIMITATION ON COVERAGE PROHIBITED.] Each group
policy of accident and health insurance, except for policies
which only provide coverage for specified diseases, or each
group subscriber contract of accident and health insurance or
health maintenance contract, issued or renewed after August 1,
1987, shall include maternity benefits in the same manner as any
other illness covered under the policy or contract.
Subd. 3. [ABORTION.] For the purposes of this section, the
term "maternity benefits" shall not include elective, induced
abortion whether performed in a hospital, other abortion
facility, or the office of a physician.
This section applies to policies and contracts issued,
delivered, or renewed after August 1, 1985, that cover Minnesota
residents.
Sec. 10. [62A.049] [LIMITATION ON PREAUTHORIZATIONS.]
No policy of accident and sickness insurance or group
subscriber contract regulated under chapter 62C issued or
renewed in this state may contain a provision that makes an
insured person ineligible to receive full benefits because of
the insured's failure to obtain preauthorization, if that
failure occurs because of the need for emergency confinement or
emergency treatment. The insured or an authorized
representative of the insured shall notify the insurer as soon
after the beginning of emergency confinement or emergency
treatment as reasonably possible. However, to the extent that
the insurer suffers actual prejudice caused by the failure to
obtain preauthorization, the insured may be denied all or part
of the insured's benefits. This provision does not apply to
admissions for treatment of chemical dependency and nervous and
mental disorders.
Sec. 11. Minnesota Statutes 1988, section 62A.08, is
amended to read:
62A.08 [COVERAGE OF POLICY, CONTINUANCE IN FORCE.]
If any such policy contains a provision establishing, as an
age limit or otherwise, a date after which the coverage provided
by the policy will not be effective, and if such date falls
within a period for which premium is accepted by the insurer or
if the insurer accepts a premium after such date, the coverage
provided by the policy will continue in force subject to any
right of cancellation until the end of the period for which
premium has been accepted. In the event the age of the insured
has been misstated and if, according to the correct age of the
insured, the coverage provided by the policy would not have
become effective, or would have ceased prior to the acceptance
of such premium or premiums, then the liability of the insurer
shall be limited to the refund, upon request, of all premiums
paid for the period not covered by the policy. the policy would
not have been issued, the insurer may, within 90 days of
discovering the misstatement, limit its liability to a refund of
all premiums paid. In all other instances the insurer may
either adjust the premium to reflect the actual age of the
insured or adjust the benefits to reflect the actual age and the
premium.
Sec. 12. Minnesota Statutes 1988, section 62A.09, is
amended to read:
62A.09 [LIMITATION.]
Nothing in sections 62A.01 to, 62A.02, 62A.03, 62A.04,
62A.05, 62A.06, 62A.07, and 62A.08 shall apply to or affect:
(1) any policy of workers' compensation insurance or any
policy of casualty or fire and allied lines insurance with or
without supplementary coverage therein; or
(2) any policy or contract of reinsurance; or
(3) any blanket or group policy of insurance, except when
specifically referred to; or
(4) life insurance, endowment or annuity contracts, or
contracts supplemental thereto which contain only such
provisions relating to accident and sickness insurance as (a)
provide additional benefits in case of death or dismemberment or
loss of sight by accident, or as (b) operate to safeguard such
contracts against lapse or to give a special surrender value or
special benefit or an annuity in the event that the insured or
annuitant shall become totally and permanently disabled, as
defined by the contract or supplemental contract.
Sec. 13. Minnesota Statutes 1988, section 62A.15,
subdivision 3a, is amended to read:
Subd. 3a. [NURSING SERVICES.] All benefits provided by a
policy or contract referred to in subdivision 1, relating to
expenses incurred for medical treatment or services of a duly
licensed physician must include services provided by a
registered nurse who is licensed pursuant to section 148.171 and
who is certified by the profession to engage in advanced nursing
practice. "Advanced nursing practice" means the performance of
health services by professional nurses who have gained
additional knowledge and skills through an organized program of
study and clinical experience preparing nurses for advanced
practice roles as nurse anesthetists, nurse midwives, nurse
practitioners, or clinical specialists in psychiatric or mental
health nursing. The program of study must be beyond the
education required for registered nurse licensure and must meet
criteria established by the professional nursing organization
having authority to certify the registered nurse in advanced
nursing practice, and appear on a list established and
maintained by the board of nursing through rulemaking. For the
purposes of this subdivision, the board of nursing shall, by
rule, adopt a list of professional nursing organizations which
have the authority to certify nurses in advanced nursing
practice.
This subdivision is intended to provide payment of benefits
for treatment and services by a licensed registered nurse
certified in advanced nursing practice as defined in this
subdivision and is not intended to add to the benefits provided
for in these policies or contracts.
Sec. 14. Minnesota Statutes 1988, section 62A.15,
subdivision 4, is amended to read:
Subd. 4. [DENIAL OF BENEFITS.] (a) No carrier referred to
in subdivision 1 may, in the payment of claims to employees in
this state, deny benefits payable for services covered by the
policy or contract if the services are lawfully performed by a
licensed chiropractor, licensed optometrist, or a registered
nurse meeting the requirements of subdivision 3a.
(b) When carriers referred to in subdivision 1 make claim
determinations concerning the appropriateness, quality, or
utilization of chiropractic health care for Minnesotans, any of
these determinations that are made by health care professionals
must be made by, or under the direction of, or subject to the
review of licensed doctors of chiropractic licensed under the
provisions of sections 148.01 to 148.104.
Sec. 15. Minnesota Statutes 1988, section 62A.152,
subdivision 2, is amended to read:
Subd. 2. [MINIMUM BENEFITS.] (a) All group policies and
all group subscriber contracts providing benefits for mental or
nervous disorder treatments in a hospital shall also provide
coverage on the same basis as coverage for other benefits for at
least 80 percent of the cost of the usual and customary charges
of the first ten hours of treatment incurred over a 12-month
benefit period, for mental or nervous disorder consultation,
diagnosis and treatment services delivered while the insured
person is not a bed patient in a hospital, and at least 75
percent of the cost of the usual and customary charges for any
additional hours of treatment during the same 12-month benefit
period for serious or persistent mental or nervous disorders, if
the services are furnished by (1) a licensed or accredited
hospital, (2) a community mental health center or mental health
clinic approved or licensed by the commissioner of human
services or other authorized state agency, or (3) a licensed
psychologist licensed under the provisions of sections 148.88 to
148.98, (4) a licensed consulting psychologist licensed under
the provisions of sections 148.88 to 148.98, or (5) a
psychiatrist licensed under chapter 147. Prior authorization
from an accident and health insurance company, or a nonprofit
health service corporation, shall be required for an extension
of coverage beyond ten hours of treatment. This prior
authorization must be based upon the severity of the disorder,
the patient's risk of deterioration without ongoing treatment
and maintenance, degree of functional impairment, and a concise
treatment plan. Authorization for extended treatment may be
limited to a maximum of 30 visit hours during any 12-month
benefit period.
(b) For purposes of this section, covered treatment for a
minor includes treatment for the family if family therapy is
recommended by a provider listed in paragraph (a), item (1),
(2), or (3). For purposes of determining benefits under this
section, "hours of treatment" means treatment rendered on an
individual or single-family basis. If treatment is rendered on
a group basis, the hours of covered group treatment must be
provided at a ratio of no less than two group treatment sessions
to one individual treatment hour.
Sec. 16. Minnesota Statutes 1988, section 62A.152,
subdivision 3, is amended to read:
Subd. 3. [PROVIDER DISCRIMINATION PROHIBITED.] All group
policies and group subscriber contracts that provide benefits
for mental or nervous disorder treatments in a hospital must
provide direct reimbursement for those services if performed by
a licensed psychologist or a licensed consulting psychologist to
the extent that the services and treatment are within the scope
of licensed psychologist or licensed consulting psychologist
licensure. The order of the physician requesting the services
of the licensed psychologist or licensed consulting psychologist
may be required to be submitted with the claim for payment.
This subdivision is intended to provide payment of benefits
for mental or nervous disorder treatments performed by a
licensed psychologist or a licensed consulting psychologist in a
hospital and is not intended to change or add benefits for those
services provided in policies or contracts to which this
subdivision applies.
Sec. 17. Minnesota Statutes 1988, section 62A.17,
subdivision 2, is amended to read:
Subd. 2. [RESPONSIBILITY OF EMPLOYEE.] Every covered
employee electing to continue coverage shall pay the former
employer, on a monthly basis, the cost of the continued
coverage. If the policy, contract, or health care plan is
administered by a trust, every covered employee electing to
continue coverage shall pay the trust the cost of continued
coverage according to the eligibility rules established by the
trust. In no event shall the amount of premium charged exceed
102 percent of the cost to the plan for such period of coverage
for similarly situated employees with respect to whom neither
termination nor layoff has occurred, without regard to whether
such cost is paid by the employer or employee. The employee
shall be eligible to continue the coverage until the employee
becomes covered under another group health plan, or for a period
of 18 months after the termination of or lay off from
employment, whichever is shorter. If the employee becomes
covered under another group policy, contract, or health plan and
the new group policy, contract, or health plan contains any
preexisting condition limitations, the employee may, subject to
the 18-month maximum continuation limit, continue coverage with
the former employer until the preexisting condition limitations
have been satisfied. The new policy, contract, or health plan
is primary except as to the preexisting condition. In the case
of a newborn child who is a dependent of the employee, the new
policy, contract, or health plan is primary upon the date of
birth of the child, regardless of which policy, contract, or
health plan coverage is deemed primary for the mother of the
child.
Sec. 18. Minnesota Statutes 1988, section 62A.46, is
amended by adding a subdivision to read:
Subd. 12. [HOMEBOUND OR HOUSE CONFINED.] "Homebound or
house confined" means that a person is physically unable to
leave the home without another person's aid because the person
has lost the capacity of independent transportation or is
disoriented.
Sec. 19. Minnesota Statutes 1988, section 62A.48,
subdivision 1, is amended to read:
Subdivision 1. [POLICY REQUIREMENTS.] No individual or
group policy, certificate, subscriber contract, or other
evidence of coverage of nursing home care or other long-term
care services shall be offered, issued, delivered, or renewed in
this state, whether or not the policy is issued in this state,
unless the policy is offered, issued, delivered, or renewed by a
qualified insurer and the policy satisfies the requirements of
sections 62A.46 to 62A.56. A long-term care policy must cover
medically prescribed long-term care in nursing facilities and at
least the medically prescribed long-term home care services in
section 62A.46, subdivision 4, clauses (1) to (5), provided by a
home health agency. Coverage under a long-term care policy AA
must include: a maximum lifetime benefit limit of at least
$100,000 for services, and nursing facility and home care
coverages must not be subject to separate lifetime maximums, and
a requirement of prior hospitalization for up to one day may be
imposed only for long-term care in a nursing facility. Coverage
under a long-term care policy A must include: a maximum
lifetime benefit limit of at least $50,000 for services, and
nursing facility and home care coverages must not be subject to
separate lifetime maximums, and a requirement of prior
hospitalization for up to three days may be imposed for
long-term care in a nursing facility or home care services. If
long-term care policies require the policyholder to be admitted
to a nursing facility or begin home care services within a
specified period after discharge from a hospital, that period
may be no less than 30 days. Prior hospitalization may not be
required under a long-term care policy.
Coverage under either policy designation must cover
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. Coverage under either policy designation may
include a waiting period of up to 90 days before benefits are
paid, but there must be no more than one waiting period per
benefit period. No policy may exclude coverage for mental or
nervous disorders which have a demonstrable organic cause, such
as Alzheimer's and related dementias. No policy may require the
insured to meet a prior hospitalization test more than once
during a single benefit period be homebound or house confined to
receive home care services. The policy must include a provision
that the plan will not be canceled or renewal refused except on
the grounds of nonpayment of the premium, provided that the
insurer may change the premium rate on a class basis on any
policy anniversary date. A provision that the policyholder may
elect to have the premium paid in full at age 65 by payment of a
higher premium up to age 65 may be offered. A provision that
the premium would be waived during any period in which benefits
are being paid to the insured during confinement in a nursing
facility must be included. A nongroup policyholder may return a
policy within 30 days of its delivery and have the premium
refunded in full, less any benefits paid under the policy, if
the policyholder is not satisfied for any reason.
Sec. 20. [62A.60] [RETROACTIVE DENIAL OF EXPENSES.]
In cases where the subscriber or insured is liable for
costs beyond applicable copayments or deductibles, no insurer
may retroactively deny payment to a person who is covered when
the services are provided for health care services that are
otherwise covered, if the insurer or its representative failed
to provide prior or concurrent review or authorization for the
expenses when required to do so under the policy, plan, or
certificate. If prior or concurrent review or authorization was
provided by the insurer or its representative, the insurer may
not deny payment for the authorized service or time period
except in cases where fraud or substantive misrepresentation
occurred.
Sec. 21. Minnesota Statutes 1988, section 62B.01, is
amended to read:
62B.01 [SCOPE.]
All life insurance and accident and health insurance in
connection with loan or other credit transactions shall be
subject to the provisions of sections 62B.01 to 62B.14, except
insurance in connection with a loan or other credit transaction
of more than five years duration mortgage life, mortgage
accidental death, and mortgage disability insurance. Insurance
shall not be subject to the provisions of sections 62B.01 to
62B.14 where its issuance is an isolated transaction on the part
of the insurer not related to an agreement or a plan for
insuring debtors of the creditor. Credit life and accident and
health insurance provided at no additional cost to the borrower
shall not be subject to the provisions of sections 62B.01 to
62B.14.
Sec. 22. Minnesota Statutes 1988, section 62B.04,
subdivision 1, is amended to read:
Subdivision 1. [CREDIT LIFE INSURANCE.] (1) The initial
amount of credit life insurance shall not exceed the total
amount of principal repayable under the contract of indebtedness.
Thereafter, if the indebtedness is repayable in substantially
equal installments according to a predetermined schedule, the
amount of insurance shall not exceed the scheduled or actual
amount of indebtedness, whichever is greater.
(2) Notwithstanding clause (1), the amount of credit life
insurance written in connection with credit transactions
repayable over a specified term exceeding 63 months shall not
exceed: (i) the actual amount of unpaid indebtedness as it
exists from time to time; or (ii) where an indebtedness is
repayable in substantially equal installments according to a
predetermined schedule, the scheduled amount of unpaid
indebtedness, less any unearned interest or finance charges,
plus an amount equal to two monthly payments.
(3) Notwithstanding clause clauses (1) and (2), insurance
on educational, agricultural and horticultural credit
transaction commitments may be written on a nondecreasing or
level term plan for the amount of the loan commitment.
Sec. 23. Minnesota Statutes 1988, section 62D.12, is
amended by adding a subdivision to read:
Subd. 1a. [SWING-OUT PRODUCTS.] Notwithstanding
subdivision 1, nothing in sections 10, 20, and 27 applies to a
commercial health policy issued under this chapter as a
companion to a health maintenance contract.
Sec. 24. Minnesota Statutes 1988, section 62E.06,
subdivision 1, is amended to read:
Subdivision 1. [NUMBER THREE PLAN.] A plan of health
coverage shall be certified as a number three qualified plan if
it otherwise meets the requirements established by chapters 62A
and 62C, and the other laws of this state, whether or not the
policy is issued in Minnesota, and meets or exceeds the
following minimum standards:
(a) The minimum benefits for a covered individual shall,
subject to the other provisions of this subdivision, be equal to
at least 80 percent of the cost of covered services in excess of
an annual deductible which does not exceed $150 per person. The
coverage shall include a limitation of $3,000 per person on
total annual out-of-pocket expenses for services covered under
this subdivision. The coverage shall be subject to a maximum
lifetime benefit of not less than $500,000.
The $3,000 limitation on total annual out-of-pocket
expenses and the $500,000 maximum lifetime benefit shall not be
subject to change or substitution by use of an actuarially
equivalent benefit.
(b) Covered expenses shall be the usual and customary
charges for the following services and articles when prescribed
by a physician:
(1) hospital services;
(2) professional services for the diagnosis or treatment of
injuries, illnesses, or conditions, other than dental, which are
rendered by a physician or at the physician's direction;
(3) drugs requiring a physician's prescription;
(4) services of a nursing home for not more than 120 days
in a year if the services would qualify as reimbursable services
under Medicare;
(5) services of a home health agency if the services would
qualify as reimbursable services under Medicare;
(6) use of radium or other radioactive materials;
(7) oxygen;
(8) anesthetics;
(9) prostheses other than dental but including scalp hair
prostheses worn for hair loss suffered as a result of alopecia
areata;
(10) rental or purchase, as appropriate, of durable medical
equipment other than eyeglasses and hearing aids;
(11) diagnostic X-rays and laboratory tests;
(12) oral surgery for partially or completely unerupted
impacted teeth, a tooth root without the extraction of the
entire tooth, or the gums and tissues of the mouth when not
performed in connection with the extraction or repair of teeth;
(13) services of a physical therapist;
(14) transportation provided by licensed ambulance service
to the nearest facility qualified to treat the condition; or a
reasonable mileage rate for transportation to a kidney dialysis
center for treatment; and
(15) services of an occupational therapist.
(c) Covered expenses for the services and articles
specified in this subdivision do not include the following:
(1) any charge for care for injury or disease either (i)
arising out of an injury in the course of employment and subject
to a workers' compensation or similar law, (ii) for which
benefits are payable without regard to fault under coverage
statutorily required to be contained in any motor vehicle, or
other liability insurance policy or equivalent self-insurance,
or (iii) for which benefits are payable under another policy of
accident and health insurance, Medicare or any other
governmental program except as otherwise provided by law section
62A.04, subdivision 3, clause (4);
(2) any charge for treatment for cosmetic purposes other
than for reconstructive surgery when such service is incidental
to or follows surgery resulting from injury, sickness, or other
diseases of the involved part or when such service is performed
on a covered dependent child because of congenital disease or
anomaly which has resulted in a functional defect as determined
by the attending physician;
(3) care which is primarily for custodial or domiciliary
purposes which would not qualify as eligible services under
Medicare;
(4) any charge for confinement in a private room to the
extent it is in excess of the institution's charge for its most
common semiprivate room, unless a private room is prescribed as
medically necessary by a physician, provided, however, that if
the institution does not have semiprivate rooms, its most common
semiprivate room charge shall be considered to be 90 percent of
its lowest private room charge;
(5) that part of any charge for services or articles
rendered or prescribed by a physician, dentist, or other health
care personnel which exceeds the prevailing charge in the
locality where the service is provided; and
(6) any charge for services or articles the provision of
which is not within the scope of authorized practice of the
institution or individual rendering the services or articles.
(d) The minimum benefits for a qualified plan shall
include, in addition to those benefits specified in clauses (a)
and (e), benefits for well baby care, effective July 1, 1980,
subject to applicable deductibles, coinsurance provisions, and
maximum lifetime benefit limitations.
(e) Effective July 1, 1979, the minimum benefits of a
qualified plan shall include, in addition to those benefits
specified in clause (a), a second opinion from a physician on
all surgical procedures expected to cost a total of $500 or more
in physician, laboratory, and hospital fees, provided that the
coverage need not include the repetition of any diagnostic tests.
(f) Effective August 1, 1985, the minimum benefits of a
qualified plan must include, in addition to the benefits
specified in clauses (a), (d), and (e), coverage for special
dietary treatment for phenylketonuria when recommended by a
physician.
(g) Outpatient mental health coverage is subject to section
62A.152, subdivision 2.
Sec. 25. [65A.061] [CREDITORS LIMITED TO EXISTING
INSURANCE.]
When a creditor requires a debtor to provide insurance on
real or personal property security against reasonable risks of
loss, damage, or destruction, no insurance shall be sold or
placed by or through the creditor if the debtor provides the
creditor with a loss payable through existing policies of
insurance that the debtor owns or controls. This section does
not apply if the existing insurance is in an amount less than
the amount of indebtedness to be secured on the real or personal
property.
This section does not prevent the disapproval of the
insurer or a policy of insurance where there are reasonable
grounds for believing that the insurer is insolvent or that the
insurance is unsatisfactory as to placement with an unauthorized
insurer, adequacy of the coverage, adequacy of the insurer to
assume the risk to be insured, the assessment features to which
the policy is subject, or other grounds that are based on the
nature of the coverage and that are not arbitrary, unreasonable
or discriminatory. This section does not prevent a mortgage
lender or mortgage servicer from requiring that a policy of
insurance or renewal of the policy be in conformance with
standards of the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation, nor does this section
forbid the securing of a policy of insurance or a renewal of the
policy at the request of the borrower or because of the
borrower's failure to furnish the necessary insurance or renewal.
This section supersedes any inconsistent provision of law
to the contrary.
Sec. 26. Minnesota Statutes 1988, section 65B.525,
subdivision 1, is amended to read:
Subdivision 1. Except as otherwise provided in section
72A.327, the supreme court and the several courts of general
trial jurisdiction of this state shall by rules of court or
other constitutionally allowable device, provide for the
mandatory submission to arbitration of all cases at issue where
the claim at the commencement of arbitration is in an amount of
$5,000 or less against any insured's reparation obligor for
no-fault benefits or comprehensive or collision damage coverage.
Sec. 27. Minnesota Statutes 1988, section 72A.20, is
amended by adding a subdivision to read:
Subd. 4a. [STANDARDS FOR PREAUTHORIZATION APPROVAL.] If a
policy of accident and sickness insurance or a subscriber
contract requires preauthorization approval for any nonemergency
services or benefits, the decision to approve or disapprove the
requested services or benefits must be communicated to the
insured or the insured's health care provider within ten
business days of the preauthorization request provided that all
information reasonably necessary to make a decision on the
request has been made available to the insurer.
Sec. 28. Minnesota Statutes 1988, section 72A.20,
subdivision 15, is amended to read:
Subd. 15. [PRACTICES NOT HELD TO BE DISCRIMINATION OR
REBATES.] Nothing in subdivision 8, 9, or 10, or in section
72A.12, subdivisions 3 and 4, shall be construed as including
within the definition of discrimination or rebates any of the
following practices:
(1) in the case of any contract of life insurance or
annuity, paying bonuses to policyholders or otherwise abating
their premiums in whole or in part out of surplus accumulated
from nonparticipating insurance, provided that any bonuses or
abatement of premiums shall be fair and equitable to
policyholders and for the best interests of the company and its
policyholders;
(2) in the case of life insurance policies issued on the
industrial debit plan, making allowance, to policyholders who
have continuously for a specified period made premium payments
directly to an office of the insurer, in an amount which fairly
represents the saving in collection expense;
(3) readjustment of the rate of premium for a group
insurance policy based on the loss or expense experienced
thereunder, at the end of the first or any subsequent policy
year of insurance thereunder, which may be made retroactive only
for such policy year;
(4) in the case of an individual or group health insurance
policy, the payment of differing amounts of reimbursement to
insureds who elect to receive health care goods or services from
providers designated by the insurer, provided that each insurer
shall on or before August 1 of each year file with the
commissioner summary data regarding the financial reimbursement
offered to providers so designated.
Any insurer which proposes to offer an arrangement
authorized under this clause shall disclose prior to its initial
offering and on or before August 1 of each year thereafter as a
supplement to its annual statement submitted to the commissioner
pursuant to section 60A.13, subdivision 1, the following
information:
(a) the name which the arrangement intends to use and its
business address;
(b) the name, address, and nature of any separate
organization which administers the arrangement on the behalf of
the insurers; and
(c) the names and addresses of all providers designated by
the insurer under this clause and the terms of the agreements
with designated health care providers.
The commissioner shall maintain a record of arrangements
proposed under this clause, including a record of any complaints
submitted relative to the arrangements.
If the commissioner requests copies of contracts with a
provider under this clause and the provider requests a
determination, all information contained in the contracts that
the commissioner determines may place the provider or health
care plan at a competitive disadvantage is nonpublic data.
Sec. 29. Minnesota Statutes 1988, section 72A.20, is
amended by adding a subdivision to read:
Subd. 24. [CANCELLATIONS AND NONRENEWALS.] No insurer
shall cancel or fail to renew an individual life or individual
health policy or an individual nonprofit health service plan
subscriber contract for nonpayment of premium unless it mails or
delivers to the named insured, at the address shown on the
policy or subscriber contract at least 30 days before lapse,
final notice of the cancellation or nonrenewal and the effective
date of the cancellation or nonrenewal.
If the named insured is not the policy or subscriber
contract owner, the notice required by this subdivision must be
sent to the insured's last known address, if any, and to the
owner's last known address.
Proof of mailing of the notice of lapse for failure to pay
the premium before the expiration of the grace period is
sufficient proof that notice required in this subdivision has
been given.
This subdivision does not apply to a life or health
insurance policy or contract upon which premiums are paid at a
monthly interval or less and that contains any grace period
required by statute for the payment of premiums during which
time the insurance continues in force.
Sec. 30. Minnesota Statutes 1988, section 72A.20, is
amended by adding a subdivision to read:
Subd. 25. [USE OF STATEMENTS OF A MINOR.] No statement of
a minor or information obtained by an insurer or a
representative of an insurer from a minor may be used in any
manner in regard to a claim unless the parent or guardian of the
minor has granted permission for the minor to be interviewed or
the minor's statement to be taken.
Sec. 31. Minnesota Statutes 1988, section 72A.20, is
amended by adding a subdivision to read:
Subd. 26. [LOSS EXPERIENCE.] An insurer shall without cost
to the insured provide an insured with the loss or claims
experience of that insured for the current policy period and for
the two policy periods preceding the current one for which the
insurer has provided coverage, within 30 days of a request for
the information by the policyholder. The insurer shall not be
responsible for providing information without cost more often
than once in a 12-month period. The insurer is not required to
provide the information if the policy covers the employee of
more than one employer and the information is not maintained
separately for each employer and not all employers request the
data.
An insurer, health maintenance organization, or a
third-party administrator may not request more than three years
of loss or claims experience as a condition of submitting an
application or providing coverage.
This subdivision does not apply to individual life and
health insurance policies or personal automobile or homeowner's
insurance policies.
Sec. 32. Minnesota Statutes 1988, section 72A.20, is
amended by adding a subdivision to read:
Subd. 27. [SOLICITATIONS AND SALES OF INSURANCE PRODUCTS
TO BORROWERS.] (a) A loan officer, a loan representative, or
other person involved in taking or processing a loan may not
solicit an insurance product, except for credit life and
disability or mortgage life, mortgage accidental death, or
mortgage disability, and except for life insurance when offered
in lieu of credit life insurance, from the completion of the
initial loan application, as defined in the federal Equal Credit
Opportunity Act, United States Code, title 15, sections 1691 to
1691f, and any regulations adopted under those sections, until
after the closing of the loan transaction.
(b) This subdivision applies only to loan transactions
covered by the federal Truth-in-Lending Act, United States Code,
title 15, sections 1601 to 1666j, and any regulations adopted
under those sections.
(c) This subdivision does not apply to sales of title
insurance, homeowner's insurance, a package
homeowner's-automobile insurance product, automobile insurance,
or a similar insurance product, required to perfect title to, or
protect, property for which a security interest will be taken if
the product is required as a condition of the loan.
(d) Nothing in this subdivision prohibits the solicitation
or sale of any insurance product by means of mass communication.
Sec. 33. [72A.205] [PROHIBITED PROVISIONS AND COVERAGES.]
No policy of insurance paying a death benefit that returns
premiums or premiums plus interest, or multiples of less than
four times the premiums or premiums plus interest, in lieu of
benefits may be issued in this state. This section does not
prohibit the return of premiums or premiums plus interest in
connection with a voluntary or judicially ordered rescission of
the policy, nor in accordance with the terms of exclusions from
coverage for suicides, aviation, or war risk.
Sec. 34. [72A.327] [HEALTH CLAIMS; RIGHTS OF APPEAL.]
(a) An insured whose claim for medical benefits under
chapter 65B is denied because the treatment or services for
which the claim is made is claimed to be experimental,
investigative, not medically necessary, or otherwise not
generally accepted by licensed health care providers and for
which the insured has financial responsibility in excess of
applicable copayments and deductibles may appeal the denial to
the commissioner.
(b) This section does not apply to claims for health
benefits which have been arbitrated under section 65B.525,
subdivision 1.
(c) A three-member panel shall review the denial of the
claim and report to the commissioner. The commissioner shall
establish a list of qualified individuals who are eligible to
serve on the panel. In establishing the list, the commissioner
shall consult with representatives of the contributing members
as defined in section 65B.01, subdivision 2, and professional
societies. Each panel must include: one person with medical
expertise as identified by the contributing members; one person
with medical expertise as identified by the professional
societies; and one public member. The commissioner, upon
initiation of an arbitration, shall select from each list three
potential arbitrators and shall notify the issuer and the
claimant of the selection. Each party shall strike one of the
potential arbitrators and an arbitrator shall be selected by the
commissioner from the remaining names of potential arbitrators
if more than one potential arbitrator is left. In the event of
multiparty arbitration, the commissioner may increase the number
of potential arbitrators and divide the strikes so as to afford
an equal number of strikes to each adverse interest. If the
selected arbitrator is unable or unwilling to serve for any
reason, the commissioner may appoint an arbitrator, which will
be subject to challenge only for cause. The party that denied
the coverage has the burden of proving that the services or
treatment are experimental, investigative, not medically
necessary, or not generally accepted by licensed health care
professionals. In determining whether the burden has been met,
the panel may consider expert testimony, medical literature, and
any other relevant sources. If the party fails to sustain its
burden, the commissioner may order the immediate payment of the
claim. All proceedings of the panel and any documents received
or developed by the review process are nonpublic.
(d) A person aggrieved by an order under this section may
appeal the order. The appeal shall be pursuant to section
65B.525 where appropriate, or to the district court for a trial
de novo, in all other cases. In nonemergency situations, if the
insurer has an internal grievance or appeal process, the insured
must exhaust that process before the external appeal. In no
event shall the internal grievance process exceed the time
limits described in section 72A.201, subdivision 4a.
(e) If prior authorization is required before services or
treatment can be rendered, an appeal of the denial of prior
authorization may be made as provided in this section.
(f) The commissioner shall adopt procedural rules for the
conduct of appeals.
(g) The permanent rulemaking authority granted in this
section is effective the day following final enactment of the
section regardless of the actual effective date of the section.
Sec. 35. Minnesota Statutes 1988, section 149.11, is
amended to read:
149.11 [PREARRANGED FUNERAL PLANS; CONTRACTS; TRUST FUNDS.]
(a) When prior to the death of any person, that person or
another enters into any transaction, makes a contract, or any
series or combination of transactions or contracts with another
person, partnership, association or corporation, other than an
insurance company licensed to do business in the state of
Minnesota, by the terms of which, certain personal property
related to the funeral services or the burial, cremation, or
other disposition of human remains will be used upon the death
of the person for whom the property is to be used, or when the
professional services of a funeral director or embalmer will
then be furnished, or both, then the total of all money paid by
the terms of the transaction, contract or series or combination
of transactions or contracts shall be held in trust for the
purpose for which it has been paid until the death of the person
for whose benefit the money was paid, or refunded to the person
who made the payment or payments, upon demand. A prearranged
funeral or burial contract buyer may, at the buyer's option,
declare the funeral or burial trust to be irrevocable up to an
amount equivalent to the current allowable supplemental security
income asset exclusion used for determining eligibility for
public assistance. The contract buyer may, at the buyer's
option, also declare the interest to be irrevocable to the
extent permitted by federal laws and rules governing public
assistance. The buyer of either a revocable or an irrevocable
prearranged funeral or burial contract retains the right to
designate as trustee a different funeral establishment at any
time before the death of the person for whose benefit the money
was paid. Upon the death of that person, the next of kin or
other legal representative of that person's estate retains the
right to designate as trustee a different funeral
establishment. Accruals of interest or dividends declared upon
the sum of money held in trust are subject to the same trust.
The person, partnership, association or corporation holding the
money in trust shall inform the person on whose behalf the money
is held that all money paid plus all accrued earnings will be
held in trust until the death of that person or until a request
for a refund is made if made prior to death, except for a
prearranged funeral or burial trust declared irrevocable by the
buyer under this section. The location of the trust account
including the name and address of the institution in which the
money is being held and any identifying account numbers, and any
subsequent changes in that information must be disclosed in
writing to the person on whose behalf the money is being held,
at the time the funds are deposited into the trust account and
at the time of any subsequent changes in the information. The
personal property shall include but not be limited to a casket,
burial vault not interred in a grave, combination casket-vault
or other receptacle not described in paragraph (b) for the
internment, entombment, cremation, or other disposition of human
remains.
(b) Nothing in this section shall prevent the sale and
delivery of cemetery lots, graves, burial vaults preinterred in
a grave, cremation urns, crypt spaces, niches, or grave or lot
markers or monuments before their use is required. Nothing in
this section prevents the preconstruction sale of crypt spaces
to be permanently installed except that any seller of mausoleum
space or columbarium space, selling burial space in a mausoleum
or columbarium that is not completely constructed and usable,
must comply with section 306.90.
(c) It is the intent of the legislature that the provisions
of this section shall be construed as a limitation upon the
manner in which a person or legal entity is permitted to accept
funds in prepayment of funeral services to be performed in the
future or in prepayment of funeral or burial goods to be used in
connection with the funeral or final disposition of human
remains. It is further intended to allow members of the public
to arrange and pay for funerals, final dispositions, funeral
services, and funeral and burial goods for themselves and their
families in advance of need while at the same time providing all
possible safeguards so that the prepaid funds cannot be
dissipated, whether intentionally or not, so as to be available
for the payment of the services and goods selected.
Sec. 36. [REVISOR'S INSTRUCTION.]
The revisor of statutes shall, as part of the regular
process of statutory revision, prepare a bill for introduction
that amends Minnesota Statutes to reflect the intent of the
legislature as expressed in section 3 to make uniform the
service of process provisions in Minnesota Statutes, chapters 45
to 83, 155A, 309, and 332.
Sec. 37. [REPEALER.]
Minnesota Statutes 1988, sections 60A.23, subdivision 7;
and 72A.13, subdivision 2, are repealed.
Sec. 38. [EFFECTIVE DATE.]
Sections 1 to 3, 5, 6, 8, 9, 11 to 14, 18, 23 to 25, 28,
30, 32, 33, 36, and 37 are effective the day following final
enactment. Sections 4, 7, 10, 17, 20, 27, 29, 31, and 35 are
effective August 1, 1989. Sections 15, 16, 19, 21, and 22 are
effective for policies, plans, or contracts issued or renewed on
or after August 1, 1989.
Sections 26 and 34 are effective January 1, 1990.
Presented to the governor May 30, 1989
Signed by the governor June 1, 1989, 11:52 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes