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Minnesota Legislature

Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1990 

                        CHAPTER 415-H.F.No. 1985 
           An act relating to insurance; regulating cease and 
          desist orders and communications with the department 
          of commerce; providing for a waiver of the 30-day 
          waiting period for purchasing insurance from certain 
          associations; amending Minnesota Statutes 1988, 
          sections 45.027, subdivision 5; 60A.17, by adding a 
          subdivision; and 62A.31, subdivision 1a. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:  
    Section 1.  Minnesota Statutes 1988, section 45.027, 
subdivision 5, is amended to read:  
    Subd. 5.  [LEGAL ACTIONS; INJUNCTIONS; CEASE AND DESIST 
ORDERS.] Whenever it appears to the commissioner that any person 
has engaged or is about to engage in any act or practice 
constituting a violation of chapters 45 to 83, 309, and 332, or 
any rule or order adopted under those chapters, the commissioner 
has the following powers:  (1) the commissioner may bring an 
action in the name of the state in the district court of the 
appropriate county to enjoin the acts or practices and to 
enforce compliance with chapters 45 to 83, 309, and 332, or any 
rule or order adopted or issued under those chapters, or the 
commissioner may refer the matter to the attorney general or the 
county attorney of the appropriate county.  Upon a proper 
showing, a permanent or temporary injunction, restraining order, 
or other appropriate relief must be granted; (2) the 
commissioner may issue and cause to be served upon the person an 
order requiring the person to cease and desist from violations 
of chapters 45 to 83, 309, and 332, or any rule or order adopted 
or issued under those chapters.  The order must be calculated to 
give reasonable notice of the rights of the person to request a 
hearing and must state the reasons for the entry of the order.  
A hearing must be held not later than seven days after the 
request for the hearing is received by the commissioner, unless 
the person requesting the hearing and the department of commerce 
agree the hearing be scheduled after the seven-day period.  
After which the hearing and within 20 days after receiving the 
administrative law judge's report, the commissioner shall issue 
a further order vacating the cease and desist order or making it 
permanent as the facts require.  If no hearing is requested 
within 30 days of service of the order, the order will become 
final and will remain in effect until it is modified or vacated 
by the commissioner.  Unless otherwise provided, all hearings 
must be conducted in accordance with chapter 14.  If the person 
to whom a cease and desist order is issued fails to appear at 
the hearing after being duly notified, the person is in default, 
and the proceeding may be determined against that person upon 
consideration of the cease and desist order, the allegations of 
which may be considered to be true.  The commissioner may adopt 
rules of procedure concerning all proceedings conducted under 
this subdivision.  
    Sec. 2.  Minnesota Statutes 1988, section 60A.17, is 
amended by adding a subdivision to read:  
    Subd. 8a.  [COMMUNICATIONS WITH DEPARTMENT.] An applicant 
or licensee shall respond to requests for information, 
documents, or other requests from the department within the time 
specified in the request or, if no time is specified, within 30 
days of the mailing of the request by the department.  
Applicants and licensees shall appear before the commissioner or 
the commissioner's representative when requested to do so and 
shall bring all documents or materials which the commissioner or 
the commissioner's representative has requested. 
     Sec. 3.  Minnesota Statutes 1988, section 62A.31, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [APPLICATION TO CERTAIN POLICIES.] The 
requirements of sections 62A.31 to 62A.44 shall not apply to 
disability income protection insurance policies, long-term care 
policies issued pursuant to sections 62A.46 to 62A.56, or group 
policies of accident and health insurance which do not purport 
to supplement Medicare issued to any of the following groups:  
    (a) A policy issued to an employer or employers or to the 
trustee of a fund established by an employer where only 
employees or retirees, and dependents of employees or retirees, 
are eligible for coverage.  
    (b) A policy issued to a labor union or similar employee 
organization.  
    (c) A policy issued to an association, a trust or the 
trustee of a fund established, created or maintained for the 
benefit of members of one or more associations.  The association 
or associations shall have at the outset a minimum of 100 
persons; shall have been organized and maintained in good faith 
for purposes other than that of obtaining insurance; shall have 
a constitution and bylaws which provide that (1) the association 
or associations hold regular meetings not less frequently than 
annually to further purposes of the members, (2) except for 
credit unions, the association or associations collect dues or 
solicit contributions from members, (3) the members have voting 
privileges and representation on the governing board and 
committees, and (4) the members are not, within the first 30 
days of membership, directly solicited, offered, or sold a 
long-term care policy or Medicare supplement policy if the 
policy is available as an association benefit.  This clause does 
not prohibit direct solicitations, offers, or sales made 
exclusively by mail. 
    An association may apply to the commissioner for a waiver 
of the 30-day waiting period as to that association.  The 
commissioner may grant the waiver upon a finding of all of the 
following:  (1) that the association is in full compliance with 
this section; (2) that sanctions have not been imposed against 
the association as a result of significant disciplinary action 
by the department of commerce; and (3) that at least 90 percent 
of the association's income comes from dues, contributions, or 
sources other than income from the sale of insurance. 
    Sec. 4.  [EFFECTIVE DATE.] 
    Section 3 is effective the day following final enactment. 
    Presented to the governor April 5, 1990 
    Signed by the governor April 6, 1990, 11:34 a.m.