Office of the Revisor of Statutes
Minnesota Session Laws - 1992, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1992
CHAPTER 564-H.F.No. 1681
An act relating to commerce; regulating data
collection, enforcement powers, premium finance
agreements, temporary capital stock of mutual life
companies, surplus lines insurance, conversion
privileges, coverages, rehabilitations and
liquidations, the comprehensive health insurance plan,
and claims practices; requiring insurers to notify all
covered persons of cancellations of group coverage;
regulating continuation privileges and automobile
premium surcharges; regulating unfair or deceptive
practices; regulating insurance agent licensing and
education; carrying out the intent of the legislature
to make uniform the statutory service of process
provisions under the jurisdiction of the department of
commerce; regulating annual reports on credit
insurance; making various technical changes; amending
Minnesota Statutes 1990, sections 45.012; 45.027, by
adding subdivisions; 45.028, subdivision 1; 46.03;
48.185, subdivision 7; 59A.08, subdivisions 1 and 4;
59A.11, subdivision 4; 59A.12, subdivision 1; 60A.02,
subdivision 7, and by adding a subdivision; 60A.03,
subdivision 2; 60A.07, subdivisions 1 and 10; 60A.12,
subdivision 4; 60A.1701, subdivisions 3 and 7; 60A.19,
subdivision 4; 60A.201, subdivision 4; 60A.203;
60A.206, subdivision 3; 60A.21, subdivision 2; 60A.23,
subdivision 8; 60B.03, by adding a subdivision;
60B.15; 60B.17, subdivision 1; 61A.011, by adding a
subdivision; 62A.10, subdivision 1; 62A.146; 62A.17,
subdivision 2; 62A.21, subdivisions 2a and 2b; 62A.30,
subdivision 1; 62A.41, subdivision 4; 62A.54; 62B.07,
by adding a subdivision; 62C.142, subdivision 2a;
62C.17, subdivision 5; 62D.101, subdivision 2a;
62D.22, subdivision 8; 62E.02, subdivision 23; 62E.10,
subdivision 1; 62E.11, subdivision 9; 62E.14, by
adding a subdivision; 62E.15, subdivision 4, and by
adding subdivisions; 62E.16; 62H.01; 64B.33; 64B.35,
subdivision 2; 65A.29, subdivision 11; 65B.133,
subdivision 4; 71A.02, subdivision 3; 72A.07; 72A.125,
subdivision 2; 72A.20, subdivisions 23, and by adding
a subdivision; 72A.201, subdivision 3; 72A.22,
subdivision 5; 72A.37, subdivision 2; 72A.43,
subdivision 2; 72B.02, by adding a subdivision;
72B.03, subdivision 2; 72B.04, subdivision 6; 80A.27,
subdivisions 7 and 8; 80C.20; 82.31, subdivision 3;
82A.22, subdivisions 1 and 2; 83.39, subdivisions 1
and 2; 270B.07, subdivision 1; 332.15, subdivision 4;
and 543.08; Minnesota Statutes 1991 Supplement,
sections 45.027, subdivisions 1, 2, 5, 6, and 7;
60A.13, subdivision 3a; 60D.15, subdivision 4; 60D.17,
subdivision 4; 62E.10, subdivision 9; 62E.12; 72A.201,
subdivision 8; 82B.15, subdivision 3; 332.55; and
345.485; Laws 1991, chapter 233, section 111;
proposing coding for new law in Minnesota Statutes,
chapters 45; 60A; 62A; and 62I; proposing coding for
new law as Minnesota Statutes, chapter 60K; repealing
Minnesota Statutes 1990, sections 60A.05; 60A.051;
60A.17, subdivisions 1, 1a, 1b, 1c, 2c, 2d, 3, 5, 5b,
6, 6b, 6c, 6d, 7a, 8, 8a, 9a, 10, 11, 12, 13, 14, 15,
16, 17, 18, 19, 20, and 21; 65B.70; and 72A.13,
subdivision 3; Minnesota Statutes 1991 Supplement,
section 60A.17, subdivision 1d.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
Section 1. Minnesota Statutes 1990, section 45.012, is
amended to read:
45.012 [COMMISSIONER.]
(a) The department of commerce is under the supervision and
control of the commissioner of commerce. The commissioner is
appointed by the governor in the manner provided by section
15.06.
(b) Data that is received by the commissioner or the
commissioner's designee by virtue of membership or participation
in an association, group, or organization that is not otherwise
subject to chapter 13 is confidential or protected nonpublic
data but may be shared with the department employees as the
commissioner considers appropriate. The commissioner may
release the data to any person, agency, or the public if the
commissioner determines that the access will aid the law
enforcement process, promote public health or safety, or dispel
widespread rumor or unrest.
Sec. 2. Minnesota Statutes 1991 Supplement, section
45.027, subdivision 1, is amended to read:
Subdivision 1. [GENERAL POWERS.] In connection with the
administration of chapters 45 to 83, 309, and 332, and sections
326.83 to 326.98, the commissioner of commerce may:
(1) make public or private investigations within or without
this state as the commissioner considers necessary to determine
whether any person has violated or is about to violate chapters
45 to 83, 309, and 332, sections 326.83 to 326.98, or any
rule adopted or order issued under those chapters, or to aid in
the enforcement of chapters 45 to 83, 309, and 332, sections
326.83 to 326.98, or in the prescribing of rules or forms under
those chapters;
(2) require or permit any person to file a statement in
writing, under oath or otherwise as the commissioner determines,
as to all the facts and circumstances concerning the matter
being investigated;
(3) hold hearings, upon reasonable notice, in respect to
any matter arising out of the administration of chapters 45 to
83, 309, and 332, and sections 326.83 to 326.98;
(4) conduct investigations and hold hearings for the
purpose of compiling information with a view to recommending
changes in chapters 45 to 83, 309, and 332, and sections 326.83
to 326.98, to the legislature;
(5) examine the books, accounts, records, and files of
every licensee under chapters 45 to 83, 309, and 332, and
sections 326.83 to 326.98, and of every person who is engaged in
any activity regulated under chapters 45 to 83, 309, and 332,
and sections 326.83 to 326.98; the commissioner or a designated
representative shall have free access during normal business
hours to the offices and places of business of the person, and
to all books, accounts, papers, records, files, safes, and
vaults maintained in the place of business;
(6) publish information which is contained in any order
issued by the commissioner; and
(7) require any person subject to chapters 45 to 83, 309,
and 332, and sections 326.83 to 326.98, to report all sales or
transactions that are regulated under chapters 45 to 83, 309,
and 332, and sections 326.83 to 326.98. The reports must be
made within ten days after the commissioner has ordered the
report. The report is accessible only to the respondent and
other governmental agencies unless otherwise ordered by a court
of competent jurisdiction.
Sec. 3. Minnesota Statutes 1990, section 45.027, is
amended by adding a subdivision to read:
Subd. 1a. [RESPONSE TO DEPARTMENT REQUESTS.] An applicant,
registrant, certificate holder, licensee, or other person
subject to the jurisdiction of the commissioner shall comply
with 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, registrants, certificate
holders, licensees, or other persons subject to the jurisdiction
of the commissioner shall appear before the commissioner or the
commissioner's representative when requested to do so and shall
bring all documents or materials that the commissioner or the
commissioner's representative has requested.
Sec. 4. Minnesota Statutes 1991 Supplement, section
45.027, subdivision 2, is amended to read:
Subd. 2. [POWER TO COMPEL PRODUCTION OF EVIDENCE.] For the
purpose of any investigation, hearing, or proceeding, or inquiry
under chapters 45 to 83, 309, and 332, and sections 326.83 to
326.98, the commissioner or a designated representative may
administer oaths and affirmations, subpoena witnesses, compel
their attendance, take evidence, and require the production of
books, papers, correspondence, memoranda, agreements, or other
documents or records that the commissioner considers relevant or
material to the inquiry.
Sec. 5. Minnesota Statutes 1991 Supplement, 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,
sections 326.83 to 326.98, or any rule or order adopted or order
issued 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, sections 326.83 to 326.98, 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, sections 326.83 to 326.98,
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 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. 6. Minnesota Statutes 1991 Supplement, section
45.027, subdivision 6, is amended to read:
Subd. 6. [VIOLATIONS AND PENALTIES.] The commissioner may
impose a civil penalty not to exceed $2,000 per violation upon a
person who violates chapters 45 to 83, 309, and 332, and
sections 326.83 to 326.98, or any rule adopted or order issued
under those chapters unless a different penalty is specified.
Sec. 7. Minnesota Statutes 1991 Supplement, 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
sections 326.83 to 326.98, or censure that person if the
commissioner finds that:
(1) the order is in the public interest; and
(2) the person has violated chapters 45 to 83, 155A, 309,
or 332, or sections 326.83 to 326.98 or any rule adopted or
order issued under those chapters.
Except for information classified as confidential under
sections 60A.03, subdivision 9; 60A.031; 60A.93; and 60D.22, the
commissioner may make any data otherwise classified as private
or confidential pursuant to this section accessible to an
appropriate person or agency if the commissioner determines that
the access will aid the law enforcement process, promote public
health or safety, or dispel widespread rumor or unrest. If the
commissioner determines that private or confidential information
should be disclosed, the commissioner shall notify the attorney
general as to the information to be disclosed, the purpose of
the disclosure, and the need for the disclosure. The attorney
general shall review the commissioner's determination. If the
attorney general believes that the commissioner's determination
does not satisfy the purpose and intent of this provision, the
attorney general shall advise the commissioner in writing that
the information may not be disclosed. If the attorney general
believes the commissioner's determination satisfies the purpose
and intent of this provision, the attorney general shall advise
the commissioner in writing, accordingly.
After disclosing information pursuant to this provision,
the commissioner shall advise the chairs of the senate and house
of representatives judiciary committees of the disclosure and
the basis for it.
Sec. 8. Minnesota Statutes 1990, section 45.027, is
amended by adding a subdivision to read:
Subd. 10. [REHABILITATION OF CRIMINAL OFFENDERS.] Chapter
364 does not apply to an applicant for a license or to a
licensee where the underlying conduct on which the conviction is
based would be grounds for denial, censure, suspension, or
revocation of the license.
Sec. 9. Minnesota Statutes 1990, section 59A.08,
subdivision 1, is amended to read:
Subdivision 1. A premium finance agreement shall:
(a) Be dated and signed by or on behalf of the insured, and
the printed portion thereof shall be in at least eight point
type;
(b) Contain the name and place of business of the insurance
agent or insurance broker negotiating the related insurance
contract, the name and residence or the place of business of the
insured as specified, the name and place of business of the
premium finance company to which installments or other payments
are to be made, the name of the insurer issuing the related
insurance contract, a description of the insurance contracts
including the term and type of policy, the premiums for which
are advanced or are to be advanced under the agreement and the
amount of the premiums therefor; and
(c) Set forth the following items where applicable:
(1) The total amount of the premiums,
(2) The amount of the down payment,
(3) The balance of premiums due, the amount financed (the
difference between items (1) and (2)),
(4) The amount of the finance charge,
(5) The amount of the flat service fee,
(6) The total of payments (sum of items (3), (4) and (5)).
Sec. 10. Minnesota Statutes 1990, section 59A.08,
subdivision 4, is amended to read:
Subd. 4. The premium finance company or the insurance
agent shall deliver to the insured, or mail to the insured at
the address shown in the agreement, a completed copy of that
agreement. Within 15 days of receiving the policy number of the
policy being financed, the premium finance company shall mail to
the insurer a notice of financed premium, which contains the
term, amount of premium, and type of policy being financed.
Sec. 11. Minnesota Statutes 1990, section 59A.11,
subdivision 4, is amended to read:
Subd. 4. Where statutory, regulatory or contractual
restrictions provide that the insurance contract may not be
canceled unless notice is given to a governmental agency,
mortgagee, or other third party, the insurer shall give the
prescribed notice on behalf of itself or the insured to the
governmental agency, mortgagee or other third party within a
reasonable time ten days after the day it receives the notice of
cancellation from the premium finance company. When the above
restrictions require the continuation of insurance beyond the
effective date of cancellation specified by the premium finance
company, the insurance shall be limited to the coverage to which
the restrictions relate and to the persons they are designed to
protect.
Sec. 12. Minnesota Statutes 1990, section 59A.12,
subdivision 1, is amended to read:
Subdivision 1. Whenever a financed insurance contract is
canceled, within 30 days of the effective date of cancellation,
if the premium finance company has notified the insurer that the
premiums are financed, the insurer shall return whatever gross
unearned premiums, computed pro rata, are due under the
insurance contract to the premium finance company for the
account of the insured or insureds. This action by the insurer
satisfies the insurer's obligations under the insurance contract
which relate to the return of the unearned premiums.
Sec. 13. Minnesota Statutes 1990, section 60A.02, is
amended by adding a subdivision to read:
Subd. 1a. [ASSOCIATION OR ASSOCIATIONS.] (a) "Association"
or "associations" means an organized body of people who have
some interest in common and that has at the onset a minimum of
100 persons; is organized and maintained in good faith for
purposes other than that of obtaining insurance; and has 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, which provide the members with control of the
association including the purchase and administration of
insurance products offered to members; and (4) the members are
not, within the first 30 days of membership, directly solicited,
offered, or sold an insurance policy if the policy is available
as an association benefit.
(b) An association may apply to the commissioner for a
waiver of the 30-day waiting period to that association. The
commissioner may grant the waiver upon a finding of all of the
following: (1) the association is in full compliance with this
subdivision; (2) sanctions have not been imposed against the
association as a result of significant disciplinary action by
the commissioner; and (3) at least 80 percent of the
association's income comes from dues, contributions, or sources
other than income from the sale of insurance.
Sec. 14. Minnesota Statutes 1990, section 60A.03,
subdivision 2, is amended to read:
Subd. 2. [POWERS OF COMMISSIONER.] (1) [ENFORCEMENT.] The
commissioner shall have and exercise the power to enforce all
the laws of this state relating to insurance, and shall enforce
all the provisions of the laws of this state relating to
insurance.
(2) [DEPARTMENT OF COMMERCE.] The commissioner shall have
and possess all the rights and powers and perform all the duties
heretofore vested by law in the commissioner of commerce, except
that applications for registrations of securities and brokers'
licenses under sections 80A.01 to 80A.31, and all matters
pertaining to such registrations and licenses, application for
the organization and establishment of new financial institutions
under sections 46.041, 46.043, and 46.044, applications by
insuring companies for licenses to carry on business within the
state, and all matters pertaining to such licenses, and
applications for the consolidation of insuring companies
transacting business within the state, shall be determined by
the commissioner in the manner provided by the laws defining the
powers and duties of the commissioner of commerce, and the state
securities commission, respectively, or, in the absence of any
law prescribing the procedure, by such any reasonable procedure
as the commission, as defined in chapter 45, may
prescribe commissioner prescribes.
Sec. 15. Minnesota Statutes 1990, section 60A.07,
subdivision 1, is amended to read:
Subdivision 1. [INCORPORATION.] Except when the manner of
organization is specifically otherwise provided in sections
dealing with these insurers, domestic insurance corporations
shall be organized under and governed by chapter 300. The
articles or certificate of incorporation must meet the
requirements of section 300.025, except other than:
(1) the requirement that a majority of board members shall
always be residents of this state; and
(2) the requirements of section 300.025, clause (7).
Sec. 16. Minnesota Statutes 1990, section 60A.07,
subdivision 10, is amended to read:
Subd. 10. [SPECIAL PROVISIONS AS TO LIFE COMPANIES.] (1)
[PREREQUISITES OF LIFE COMPANIES.] No mutual life company shall
be qualified to issue any policy until applications for at least
$200,000 of insurance, upon lives of at least 200 separate
residents, have been actually and in good faith made, accepted,
and entered upon its books and at least one full annual premium
thereunder, based upon the authorized table of mortality,
received in cash or in absolutely payable and collectible
notes. A duplicate receipt for each premium, conditioned for
the return thereof unless the policy be issued within one year
thereafter, shall be issued, and one copy delivered to the
applicant and the other filed with the commissioner, together
with the certificate of a solvent authorized bank in the state,
of the deposit therein of such cash and notes, aggregating the
amount aforesaid, specifying the maker, payee, date, maturity,
and amount of each. Such cash and notes shall be held by it not
longer than one year, and at or before the expiration thereof to
be by it paid or delivered, upon the written order of the
commissioner, to such company or applicants, respectively.
(2) [FOREIGN COMPANIES MAY BECOME DOMESTIC.] Any company
organized under the laws of any other state or country, which
might have been originally incorporated under the laws of this
state, and which has been admitted to do business therein for
either or both the purpose of life or accident insurance, upon
complying with all the requirements of law relative to the
execution, filing, recording and publishing of original
certificates and payment of incorporation fees by like domestic
corporations, therein designating its principal place of
business at a place in this state, may become a domestic
corporation, and be entitled to like certificates of its
corporate existence and license to transact business in this
state, and be subject in all respects to the authority and
jurisdiction thereof.
(3) [TEMPORARY CAPITAL STOCK OF MUTUAL LIFE COMPANIES.] A
new mutual life insurance company which has complied with the
provisions of clause (1) or an existing mutual life insurance
company may establish, a temporary capital of, such amount not
less than $100,000, as may be approved by the commissioner.
Such temporary capital shall be invested by the company in the
same manner as is provided for the investment of its other
funds. Out of the net surplus of the company the holders of the
temporary capital stock may receive a dividend of not more than
eight percent per annum, which may be cumulative. This capital
stock shall not be a liability of the company except that it but
shall be retired as soon as, but not before, the surplus of the
company remaining after its retirement shall be not less than
the temporary capital so established within a reasonable time
and according to terms approved by the commissioner. At the
time for the retirement of this capital stock, the holders shall
be entitled to receive from the company the par value thereof
and any dividends thereon due and unpaid, and thereupon the
stock shall be surrendered and canceled, and the right to vote
thereon shall cease. In the event of the liquidation of the
company, the holders of temporary capital stock shall have the
same preference in the assets of the company as shareholders
have in a stock insurance company.
Temporary capital stock may be issued with or without
voting rights. If issued with voting rights, the holders shall,
at all meetings, be entitled to one vote for each $10 of
temporary capital stock held.
Sec. 17. Minnesota Statutes 1990, section 60A.12,
subdivision 4, is amended to read:
Subd. 4. [UNEARNED PREMIUMS RESERVE.] (1) [FOR COMPANIES
OTHER THAN LIFE OR TITLE.] To determine the policy liability of
any company other than life or title insurance, and the amount
the company shall hold as reserve, the commissioner shall take
50 percent of the aggregate premiums, on policies running one
year or less from date of policy, and a pro rata rate amount on
policies running more than one year from date of policy, except
upon inland and marine risks, which the commissioner shall
compute by charging 50 percent of the amount of premium written
in its policies upon yearly risks and upon risks covering more
than one passage not terminated, and the full amount of premiums
written in policies upon all other inland and marine risks not
terminated. In case of any fire and marine company with less
than $200,000 capital admitted to transact in this state fire
business only, the full amount of premiums written in its marine
and inland navigation and transportation policies shall be
charged as liability.
(2) [SPECIAL PROVISIONS FOR MUTUAL FIRE COMPANIES WITH A
CONTINGENT LIABILITY.] In case of a mutual fire insurance
company with a policyholders' contingent liability fixed by its
bylaws and in its policies as provided by law, to determine the
amount of this reinsurance reserve, the commissioner shall take
25 percent of the aggregate premiums running one year or less
from date of policy, and 50 percent of the pro rata amount on
policies running more than one year from date of policy.
(3) [CASUALTY COMPANIES WRITING LIABILITY OR WORKERS'
COMPENSATION.] In case of a casualty insurance company writing
insurance against loss or damage resulting from accident to or
injuries suffered by an employee or other person and for which
the insured is liable, and under insurance against loss from
liability on account of the death of or injury to an employee
not caused by the negligence of an employer, the commissioner
shall charge as a liability, in addition to the capital stock
and all other outstanding indebtedness of the corporation:
The premium reserve on policies in force, equal to 50
percent of the gross premiums charged for covering the risks;
provided, that the commissioner may charge a premium reserve
equal to the unearned portions of the gross premiums charged,
computed on each respective risk from the date of the issuance
of the policy. Notwithstanding any other provision of this
subdivision, an unearned premium reserve shall be required based
only on the timing and the amount of the recorded written
premium.
(4) [PROVISION FOR ANNUAL PAYMENT TERM POLICIES.] A policy
for a term of years on which the premium is payable annually
shall be considered a policy for one year.
Sec. 18. Minnesota Statutes 1991 Supplement, section
60A.13, subdivision 3a, is amended to read:
Subd. 3a. [ANNUAL AUDIT.] Every insurance company doing
business in this state, including fraternal beneficiary
associations benefit societies, reciprocal exchanges, service
plan corporations licensed pursuant to chapter 62C, and legal
service plans licensed pursuant to chapter 62G, unless exempted
by the commissioner pursuant to subdivision 4a or by subdivision
7 shall have an annual audit of the financial activities of the
most recently completed fiscal year performed by an independent
certified public accountant as prescribed by the commissioner,
and shall file the report of this audit with the commissioner
not more that six months following the close of the company's
fiscal year. Any insurer required by this subdivision to file
an annual audit which does not currently have its financial
statement audited shall file its first audit with the
commissioner not later than June 30, 1983. All other insurers
shall file their annual audits beginning June 30, 1982.
Sec. 19. Minnesota Statutes 1990, section 60A.1701,
subdivision 3, is amended to read:
Subd. 3. [EXEMPTIONS.] This section does not apply to:
(a) persons soliciting or selling solely on behalf of
companies organized and operating according to chapter 67A; or
(b) persons holding life and health, or property and
casualty licenses who, by February 28 of each year at the time
of license renewal, certify to the commissioner in writing that
they will sell only credit life, credit health, and credit
property insurance, during that year and do in fact so limit
their sale of insurance.
Sec. 20. Minnesota Statutes 1990, section 60A.1701,
subdivision 7, is amended to read:
Subd. 7. [CRITERIA FOR COURSE ACCREDITATION.] (a) The
commissioner may accredit a course only to the extent it is
designed to impart substantive and procedural knowledge of the
insurance field. The burden of demonstrating that the course
satisfies this requirement is on the individual or organization
seeking accreditation. The commissioner shall approve any
educational program approved by Minnesota Continuing Legal
Education relating to the insurance field.
(b) The commissioner shall approve or disapprove
professional designation examinations that are recommended for
approval by the advisory task force. In order for an agent to
receive full continuing education credit for a professional
designation examination, the agent must pass the examination.
An agent may not receive credit for classroom instruction
preparing for the professional designation examination and also
receive continuing education credit for passing the professional
designation examination.
(c) The commissioner may not accredit a course:
(1) that is designed to prepare students for a license
examination;
(2) in mechanical office or business skills, including
typing, speedreading, use of calculators, or other machines or
equipment;
(3) in sales promotion, including meetings held in
conjunction with the general business of the licensed agent;
(4) in motivation, the art of selling, psychology, or time
management;
(5) unless the student attends classroom instruction
conducted by an instructor approved by the department of
commerce; or
(6) (5) which can be completed by the student at home or
outside the classroom without the supervision of an instructor
approved by the department of commerce, except that home-study
courses may be accredited by the commissioner if the student is
a nonresident agent residing in a state which is not contiguous
to Minnesota.
Sec. 21. Minnesota Statutes 1990, section 60A.201,
subdivision 4, is amended to read:
Subd. 4. [LISTS OF UNAVAILABLE LINES OF INSURANCE;
MAINTENANCE.] The commissioner shall maintain on a current basis
a list of those lines of insurance for which coverages are
believed by the commissioner to be generally unavailable from
licensed insurers. The commissioner shall republish a list and
make it available to all licensees the list every six months at
least annually. Any person may request in writing that the
commissioner add or remove coverage from the current list at the
next publication of the list. The commissioner's determinations
of coverages to be added to or removed from the list shall not
be subject to the administrative procedure act but prior to
making determinations the commissioner shall provide opportunity
for comment from interested parties.
Sec. 22. Minnesota Statutes 1990, section 60A.203, is
amended to read:
60A.203 [LICENSEES TO FILE EVIDENCE OF TRANSACTIONS FILING
REQUIREMENTS.]
Each surplus lines licensee shall keep a separate account
of each transaction entered into pursuant to sections 60A.195 to
60A.209. Evidence of these transactions shall be filed with the
commissioner documented in the form, and manner, and time
designated by the commissioner or if designated by the
commissioner, with an association and retained by the licensee
for a minimum of five years. The forms must be readily
available for review and audit by the commissioner.
Sec. 23. Minnesota Statutes 1990, section 60A.206,
subdivision 3, is amended to read:
Subd. 3. [STANDARDS TO BE MET BY INSURERS.] (a) The
commissioner shall recognize the insurer as an eligible surplus
lines insurer when satisfied that the insurer is in a stable,
unimpaired financial condition and that the insurer is qualified
to provide coverage in compliance with sections 60A.195 to
60A.209. If filed with full supporting documentation before
July 1 of any year, applications submitted under subdivision 2
shall be acted upon by the commissioner before December 31 of
the year of submission.
(b) The commissioner shall not authorize an insurer as an
eligible surplus lines insurer unless the insurer continuously
maintains capital and surplus of at least $3,000,000 and
transaction of business by the insurer is not hazardous,
financially or otherwise, to its policyholders, its creditors,
or the public. Each alien surplus lines insurer shall have
current financial data filed with the National Association of
Insurance Commissioners Nonadmitted Insurers Information Office.
(c) Eligible surplus lines insurers domiciled within the
United States shall file an annual statement and an annual
financial audit, under the terms and conditions of section
60A.13, subdivisions 1, 3a, and 6, and are subject to the
penalties of section 72A.061 in regard to those requirements.
The commissioner also has the powers provided in section 60A.13,
subdivision 2, in regard to eligible surplus lines insurers.
(d) Eligible surplus lines insurers domiciled outside the
United States shall file an annual statement on the standard
nonadmitted insurers information office financial reporting
format as prescribed by the National Association of Insurance
Commissioners and an annual financial audit performed by an
independent accounting firm.
Sec. 24. Minnesota Statutes 1990, section 60B.03, is
amended by adding a subdivision to read:
Subd. 20. [AFFILIATE OR AFFILIATED.] An "affiliate" of, or
a person "affiliated" with, a specific person is a person that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with,
the person specified.
Sec. 25. Minnesota Statutes 1990, section 60B.15, is
amended to read:
60B.15 [GROUNDS FOR REHABILITATION.]
The commissioner may apply by verified petition to the
district court for Ramsey county or for the county in which the
principal office of the insurer is located for an order
directing the commissioner to rehabilitate a domestic insurer or
an alien insurer domiciled in this state on any one or more of
the following grounds:
(1) Any ground on which the commissioner may apply for an
order of liquidation under section 60B.20, whenever the
commissioner believes that the insurer may be successfully
rehabilitated without substantial increase in the risk of loss
to creditors of the insurer, its policyholders or to the public;
(2) That the commissioner has reasonable cause to believe
that there has been theft from the insurer, wrongful
sequestration or diversion of the insurer's assets, forgery or
fraud affecting the insurer or other illegal conduct in, by or
with respect to the insurer, which endanger assets in an amount
threatening insolvency of the insurer;
(3) That substantial and unexplained discrepancies exist
between the insurer's records and the most recent annual report
or other official company reports;
(4) That the insurer, after written demand by the
commissioner, has failed to remove any person who in fact has
executive authority in the insurer, whether an officer, manager,
general agent, employee, or other person, if the person has been
found by the commissioner after notice and hearing to be
dishonest or untrustworthy in a way affecting the insurer's
business such as is the basis for action under section 60A.051;
(5) That control of the insurer, whether by stock ownership
or otherwise, and whether direct or indirect, is in one or more
persons found by the commissioner after notice and hearing to be
dishonest or untrustworthy such as is the basis for action under
section 60A.051;
(6) That the insurer, after written demand by the
commissioner, has failed within a reasonable period of time to
terminate the employment and status and all influences on
management of any person who in fact has executive authority in
the insurer, whether an officer, manager, general agent,
employee or other person if the person has refused to submit to
lawful examination under oath by the commissioner concerning the
affairs of the insurer, whether in this state or elsewhere;
(7) That after lawful written demand by the commissioner
the insurer has failed to submit promptly any of its own
property, books, accounts, documents, or other records, or those
of any subsidiary or related company within the control of the
insurer, or those of any person having executive authority in
the insurer so far as they pertain to the insurer, to reasonable
inspection or examination by the commissioner or an authorized
representative. If the insurer is unable to submit the
property, books, accounts, documents, or other records of a
person having executive authority in the insurer, it shall be
excused from doing so if it promptly and effectively terminates
the relationship of the person to the insurer;
(8) That without first obtaining the written consent of the
commissioner, or if required by law, the written consent of the
attorney general, the insurer has transferred, or attempted to
transfer, substantially its entire property or business, or has
entered into any transaction the effect of which is to merge,
consolidate, or reinsure substantially its entire property or
business of any other person;
(9) That the insurer or its property has been or is the
subject of an application for the appointment of a receiver,
trustee, custodian, conservator or sequestrator or similar
fiduciary of the insurer or its property otherwise than as
authorized under sections 60B.01 to 60B.61, and that such
appointment has been made or is imminent, and that such
appointment might divest the courts of this state of
jurisdiction or prejudice orderly delinquency proceedings under
sections 60B.01 to 60B.61;
(10) That within the previous year the insurer has
willfully violated its charter or articles of incorporation or
its bylaws or any applicable insurance law or regulation of any
state, or of the federal government, or any valid order of the
commissioner under section 60B.11 in any manner or as to any
matter which threatens substantial injury to the insurer, its
creditors, it policyholders or the public, or having become
aware within the previous year of an unintentional or willful
violation has failed to take all reasonable steps to remedy the
situation resulting from the violation and to prevent the same
violations in the future;
(11) That the directors of the insurer are deadlocked in
the management of the insurer's affairs and that the members or
shareholders are unable to break the deadlock and that
irreparable injury to the insurer, its creditors, its
policyholders, or the public is threatened by reason thereof;
(12) That the insurer has failed to pay for 60 days after
due date any obligation to this state or any political
subdivision thereof or any judgment entered in this state,
except that such nonpayment shall not be a ground until 60 days
after any good faith effort by the insurer to contest the
obligation or judgment has been terminated, whether it is before
the commissioner or in the courts;
(13) That the insurer has failed to file its annual report
or other report within the time allowed by law, and after
written demand by the commissioner has failed to give an
adequate explanation immediately;
(14) That two-thirds of the board of directors, or the
holders of a majority of the shares entitled to vote, or a
majority of members or policyholders of an insurer subject to
control by its members or policyholders, consent to
rehabilitation under sections 60B.01 to 60B.61;
(15) That the insurer is engaging in a systematic practice
of reaching settlements with and obtaining releases from
policyholders or third party claimants and then unreasonably
delaying payment of or failing to pay the agreed upon
settlements;
(16) That the insurer is in such condition that the further
transaction of business would be hazardous, financially or
otherwise, to its policyholders, its creditors, or the public;
(17) That within the previous 12 months the insurer has
systematically attempted to compromise with its creditors on the
ground that it is financially unable to pay its claims in full;
(18) In the context of a health maintenance organization,
"insurer" when used in clauses (1) to (17) means "health
maintenance organization." In addition to the grounds in
clauses (1) to (17), any one of the following constitutes
grounds for rehabilitation of a health maintenance organization:
(a) the health maintenance organization is unable or is
expected to be unable to meet its debts as they become due;
(b) grounds exist under section 62D.042, subdivision 7;
(c) the health maintenance organization's liabilities
exceed the current value of its assets, exclusive of intangibles
and, where the guaranteeing organization's financial condition
no longer meets the requirements of sections 62D.041 and
62D.042, exclusive of any deposits, letters of credit, or
guarantees provided by any guaranteeing organization under
chapter 62D;
(d) in addition to grounds under clause (16), within the
last year the health maintenance organization has failed, and
the commissioner of health expects such failure to continue in
the future, to make comprehensive medical care adequately
available and accessible to its enrollees and the health
maintenance organization has not successfully implemented a plan
of corrective action pursuant to section 62D.121, subdivision 7;
and
(e) in addition to grounds under clause (16), within the
last year the directors or officers of the health maintenance
organization willfully violated the requirements of section
317A.251, or having become aware within the previous year of an
unintentional or willful violation of section 317A.251, have
failed to take all reasonable steps to remedy the situation
resulting from the violation and to prevent the same violation
in the future;
(19) An affiliate of the insurer has been placed in
conservatorship, rehabilitation, liquidation, or other court
supervision such that the insurer's financial condition may be
jeopardized.
Sec. 26. Minnesota Statutes 1990, section 60B.17,
subdivision 1, is amended to read:
Subdivision 1. [SPECIAL DEPUTY COMMISSIONER.] The
commissioner as rehabilitator shall make every reasonable effort
to employ an active or retired senior executive from a
successful insurer to serve as employ a special deputy
commissioner to rehabilitate the insurer. The special deputy
shall have all of the powers of the rehabilitator granted under
this section. To obtain a suitable special deputy, the
commissioner may consult with and obtain the assistance and
advice of executives of insurers doing business in this state.
Subject to court approval, the commissioner shall make such
arrangements for compensation as are necessary to obtain a
special deputy of proven ability. The special deputy shall
serve at the pleasure of the commissioner.
Sec. 27. Minnesota Statutes 1991 Supplement, section
60D.15, subdivision 4, is amended to read:
Subd. 4. [CONTROL.] The term "control," including the
terms "controlling," "controlled by," and "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, or court appointment of, the person. Control is presumed to
exist if any person, directly or indirectly, owns, controls,
holds with the power to vote, or holds proxies representing, ten
percent or more of the voting securities of any other person.
This presumption may be rebutted by a showing made in the manner
provided by section 60D.19, subdivision 11, that control does
not exist in fact. The commissioner may determine, after
furnishing all persons in interest notice and opportunity to be
heard and making specific findings of fact to support such
determination, that control exists in fact, notwithstanding the
absence of a presumption to that effect.
Sec. 28. Minnesota Statutes 1991 Supplement, section
60D.17, subdivision 4, is amended to read:
Subd. 4. [APPROVAL BY COMMISSIONER; HEARINGS.] (a) The
commissioner shall approve any merger or other acquisition of
control referred to in subdivision 1 unless, after a public
hearing, the commissioner finds that:
(1) After the change of control, the domestic insurer
referred to in subdivision 1 would not be able to satisfy the
requirements for the issuance of a license to write the line or
lines of insurance for which it is presently licensed, unless
the domestic insurer is in rehabilitation or other court-ordered
supervision and the acquiring party commits to a plan that would
enable the domestic insurer to satisfy the requirements for the
issuance of a license within a reasonable amount of time;
(2) The effect of the merger or other acquisition of
control would be substantially to lessen competition in
insurance in this state or tend to create a monopoly therein in
applying the competitive standard in this subdivision:
(i) the informational requirements of section 60D.18,
subdivision 3, paragraph (b), and the standards of section
60D.18, subdivision 4, paragraph (c), shall apply;
(ii) the merger or other acquisition shall not be
disapproved if the commissioner finds that any of the situations
meeting the criteria provided by section 60D.18, subdivision 4,
paragraph (c), exist; and
(iii) the commissioner may condition the approval of the
merger or other acquisition on the removal of the basis of
disapproval within a specified period of time;
(3) The financial condition of any acquiring party is such
as might jeopardize the financial stability of the insurer, or
prejudice the interest of its policyholders;
(4) The plans or proposals that the acquiring party has to
liquidate the insurer, sell its assets, or consolidate or merge
it with any person, or to make any other material change in its
business or corporate structure or management, are unfair and
unreasonable to policyholders of the insurer and not in the
public interest;
(5) The competence, experience, and integrity of those
persons who would control the operation of the insurer are such
that it would not be in the interest of policyholders of the
insurer and of the public to permit the merger or other
acquisition of control; or
(6) The acquisition is likely to be hazardous or
prejudicial to the insurance buying public.
(b) The public hearing referred to in paragraph (a) must be
held 30 days after the statement required by subdivision 1 is
filed, and at least 20 days notice of it shall be given by the
commissioner to the person filing the statement. Not less than
seven days notice of the public hearing shall be given by the
person filing the statement to the insurer and to other persons
designated by the commissioner. The commissioner shall make a
determination within 30 days after the conclusion of the
hearing. At the hearing, the person filing the statement, the
insurer, any person to whom notice of hearing was sent, and any
other person whose interest may be affected by it may present
evidence, examine and cross-examine witnesses, and offer oral
and written arguments and may conduct discovery proceedings in
the same manner as is presently allowed in the district courts
of this state. All discovery proceedings must be concluded not
later than three days before the start of the public hearing.
(c) The commissioner may retain at the acquiring person's
expense any attorneys, actuaries, accountants, and other experts
not otherwise a part of the commissioner's staff as may be
reasonably necessary to assist the commissioner in reviewing the
proposed acquisition of control.
Sec. 29. Minnesota Statutes 1990, section 61A.011, is
amended by adding a subdivision to read:
Subd. 8. [ACCIDENTAL DEATH BENEFITS.] Payments of
accidental death benefits under an individual or group policy,
whether payable in connection with a separate policy issued
solely to provide that type of coverage or otherwise, are
subject to this section. If the applicable rate of interest
cannot be determined as provided in this section, the rate of
interest for purposes of subdivision 1 is the rate provided in
section 549.09, subdivision 1, paragraph (c).
Sec. 30. Minnesota Statutes 1990, section 62A.10,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS.] Group accident and health
insurance is hereby declared to be that form of accident and
health insurance covering not less than two employees nor less
than ten members, and which may include the employee's or
member's dependents, consisting of husband, wife, children, and
actual dependents residing in the household, written under a
master policy issued to any governmental corporation, unit,
agency, or department thereof, or to any corporation,
copartnership, individual, employer, or to any association
having a constitution or bylaws and formed in good faith for
purposes other than that of obtaining insurance under the
provisions of this chapter as defined by section 60A.02,
subdivision 1a, where officers, members, employees, or classes
or divisions thereof, may be insured for their individual
benefit.
Any insurer authorized to write accident and health
insurance in this state shall have power to issue group accident
and health policies.
Sec. 31. Minnesota Statutes 1990, section 62A.21,
subdivision 2b, is amended to read:
Subd. 2b. [CONVERSION PRIVILEGE.] Every policy described
in subdivision 1 shall contain a provision allowing a former
spouse and dependent children of an insured, without providing
evidence of insurability, to obtain from the insurer at the
expiration of any continuation of coverage required under
subdivision 2a or sections 62A.146 and 62A.20, conversion
coverage providing at least the minimum benefits of a qualified
plan as prescribed by section 62E.06 and the option of a number
three qualified plan, a number two qualified plan, a number one
qualified plan as provided by section 62E.06, subdivisions 1 to
3, provided application is made to the insurer within 30 days
following notice of the expiration of the continued coverage and
upon payment of the appropriate premium. A policy providing
reduced benefits at a reduced premium rate may be accepted by
the former spouse and dependent children in lieu of the optional
coverage otherwise required by this subdivision. The individual
policy shall be renewable at the option of the former spouse
covered person as long as the former spouse covered person is
not covered under another qualified plan as defined in section
62E.02, subdivision 4. Any revisions in the table of rate for
the individual policy shall apply to the former spouse's covered
person's original age at entry and shall apply equally to all
similar policies issued by the insurer.
A policy providing reduced benefits at a reduced premium
rate may be accepted by the covered person in lieu of the
optional coverage otherwise required by this subdivision.
Sec. 32. Minnesota Statutes 1990, section 62A.30,
subdivision 1, is amended to read:
Subdivision 1. [SCOPE OF COVERAGE.] This section applies
to all policies of accident and health insurance, health
maintenance contracts regulated under chapter 62D, health
benefit certificates offered through a fraternal beneficiary
association regulated under chapter 64B, and group subscriber
contracts offered by nonprofit health service plan corporations
regulated under chapter 62C, but does not apply to policies
designed primarily to provide coverage payable on a per diem,
fixed indemnity or nonexpense incurred basis, or policies that
provide only accident coverage.
Sec. 33. Minnesota Statutes 1990, section 62A.54, is
amended to read:
62A.54 [PROHIBITED PRACTICES.]
Unless otherwise provided for in Laws 1986, chapter 397,
sections 2 to 8 62A.46 to 62A.56, the solicitation or sale of
long-term care policies is subject to the requirements and
penalties applicable to the sale of Medicare supplement
insurance policies as set forth in sections 62A.31 to 62A.44.
It is misconduct for any agent or company to make any
misstatements concerning eligibility or coverage under the
medical assistance program, or about how long-term care costs
will or will not be financed if a person does not have long-term
care insurance. Any agent or company providing information on
the medical assistance program shall also provide information
about how to contact the county human services department or the
state department of human services.
Sec. 34. Minnesota Statutes 1990, section 62E.02,
subdivision 23, is amended to read:
Subd. 23. "Contributing member" means those companies
operating pursuant to regulated under chapter 62A and offering,
selling, issuing, or renewing policies or contracts of accident
and health insurance or, health maintenance organizations and
regulated under chapter 62D, nonprofit health service plan
corporations incorporated regulated under chapter 62C or,
fraternal benefit society operating societies regulated under
chapter 64B, and joint self-insurance plans regulated under
chapter 62H. For the purposes of determining liability of
contributing members pursuant to section 62E.11 payments
received from or on behalf of Minnesota residents for coverage
by a health maintenance organization shall be considered to be
accident and health insurance premiums.
Sec. 35. Minnesota Statutes 1990, section 62E.10,
subdivision 1, is amended to read:
Subdivision 1. [CREATION; TAX EXEMPTION.] There is
established a comprehensive health association to promote the
public health and welfare of the state of Minnesota with
membership consisting of all insurers, self-insurers,
fraternals, joint self-insurance plans regulated under chapter
62H, and health maintenance organizations licensed or authorized
to do business in this state. The comprehensive health
association shall be exempt from taxation under the laws of this
state and all property owned by the association shall be exempt
from taxation.
Sec. 36. Minnesota Statutes 1990, section 62E.11,
subdivision 9, is amended to read:
Subd. 9. Each contributing member that terminates
individual health coverage regulated under chapter 62A, 62C,
62D, or 64B for reasons other than (a) nonpayment of premium; (b)
failure to make copayments; (c) enrollee moving out of the area
served; or (d) a materially false statement or misrepresentation
by the enrollee in the application for membership; and does not
provide or arrange for replacement coverage that meets the
requirements of section 62D.121; shall pay a special assessment
to the state plan based upon the number of terminated
individuals who join the comprehensive health insurance plan as
authorized under section 62E.14, subdivisions 1, paragraph (d),
and 6. Such a contributing member shall pay the association an
amount equal to the average cost of an enrollee in the state
plan in the year in which the member terminated enrollees
multiplied by the total number of terminated enrollees who
enroll in the state plan.
The average cost of an enrollee in the state comprehensive
health insurance plan shall be determined by dividing the state
plan's total annual losses by the total number of enrollees from
that year. This cost will be assessed to the contributing
member who has terminated health coverage before the association
makes the annual determination of each contributing member's
liability as required under this section.
In the event that the contributing member is terminating
health coverage because of a loss of health care providers, the
commissioner may review whether or not the special assessment
established under this subdivision will have an adverse impact
on the contributing member or its enrollees or insureds,
including but not limited to causing the contributing member to
fall below statutory net worth requirements. If the
commissioner determines that the special assessment would have
an adverse impact on the contributing member or its enrollees or
insureds, the commissioner may adjust the amount of the special
assessment, or establish alternative payment arrangements to the
state plan. For health maintenance organizations regulated
under chapter 62D, the commissioner of health shall make the
determination regarding any adjustment in the special assessment
and shall transmit that determination to the commissioner of
commerce.
Sec. 37. Minnesota Statutes 1990, section 62E.14, is
amended by adding a subdivision to read:
Subd. 7. [TERMINATIONS OF CONVERSION POLICIES.] (a) A
Minnesota resident who is covered by a conversion policy or
contract of health coverage may enroll in the comprehensive
health plan with a waiver of the preexisting condition
limitation in subdivision 3 and a waiver of the evidence of
rejection in subdivision 1, paragraph (c), at any time for any
reason during the term of coverage.
(b) A Minnesota resident who was covered by a conversion
policy or contract of health coverage may enroll in the
comprehensive health plan with a waiver of the preexisting
condition limitation in subdivision 3 and a waiver of the
evidence of rejection in subdivision 1, paragraph (c), if that
person applies for coverage within 90 days after termination of
the conversion policy or contract coverage regardless of: (1)
the reasons for the termination; or (2) the party terminating
coverage.
(c) Coverage under this subdivision is effective upon
termination of prior coverage if the enrollee has submitted a
completed application and paid the required premium or fee.
Sec. 38. Minnesota Statutes 1990, section 62E.15,
subdivision 4, is amended to read:
Subd. 4. Every insurer and health maintenance organization
which rejects or applies underwriting restrictions to an
applicant for accident and a plan of health insurance coverage
shall: (1) provide the applicant with a written notice of
rejection or the underwriting restrictions applied to the
applicant in a manner consistent with the requirements in
section 72A.499; (2) notify the applicant of the existence of
the state plan, the requirements for being accepted in it, and
the procedure for applying to it; and (3) provide the applicant
with written materials explaining the state plan in greater
detail. This written material shall be provided by the
association to every insurer at no charge.
Sec. 39. Minnesota Statutes 1990, section 62E.15, is
amended by adding a subdivision to read:
Subd. 5. [INITIAL NOTIFICATION.] Every insurer and health
maintenance organization before issuing a conversion policy or
contract of health insurance shall:
(1) notify the applicant of the existence of the state
plan, the requirements for being accepted in it, the procedure
for applying to it, and the plan rates; and
(2) provide the applicant with written materials explaining
the state plan in greater detail. This written material shall
be provided by the association to every insurer and health
maintenance organization at no charge.
Sec. 40. Minnesota Statutes 1990, section 62E.15, is
amended by adding a subdivision to read:
Subd. 6. [ANNUAL NOTIFICATION.] Every insurer and health
maintenance organization which provides health coverage to an
insured through a conversion plan shall annually:
(1) notify the insured of the existence of the state plan,
the requirements for being accepted in it, the procedure for
applying to it, and the plan rates; and
(2) provide the applicant with written materials explaining
the state plan in greater detail. This written material shall
be provided by the association to every insurer and health
maintenance organization at no charge.
Sec. 41. Minnesota Statutes 1990, section 62E.15, is
amended by adding a subdivision to read:
Subd. 7. [CONVERSION RATES.] For Medicare supplement
conversion policies issued prior to the effective date of this
section, the requirements of subdivisions 5 and 6 apply only
when the conversion rates offered to the applicant by the
insurer or health maintenance organization exceed the
association rates.
Sec. 42. Minnesota Statutes 1990, section 62E.16, is
amended to read:
62E.16 [POLICY CONVERSION PRIVILEGES RIGHTS.]
Every program of self-insurance, policy of group accident
and health insurance or contract of coverage by a health
maintenance organization written or renewed in this state, shall
include, in addition to the provisions required by section
62A.17, the right to convert to an individual coverage qualified
plan without the addition of underwriting restrictions if the
individual insured leaves the group regardless of the reason for
leaving the group or if an employer member of a group ceases to
remit payment so as to terminate coverage for its employees, or
upon cancellation or termination of the coverage for the group
except where uninterrupted and continuous group coverage is
otherwise provided to the group. If the health maintenance
organization has canceled coverage for the group because of a
loss of providers in a service area, the health maintenance
organization shall arrange for other health maintenance or
indemnity conversion options that shall be offered to enrollees
without the addition of underwriting restrictions. The required
conversion contract must treat pregnancy the same as any other
covered illness under the conversion contract. The person may
exercise this right to conversion within 30 days of leaving the
group or within 30 days following receipt of due notice of
cancellation or termination of coverage of the group or of the
employer member of the group and upon payment of premiums from
the date of termination or cancellation. Due notice of
cancellation or termination of coverage for a group or of the
employer member of the group shall be provided to each employee
having coverage in the group by the insurer, self-insurer or
health maintenance organization canceling or terminating the
coverage except where reasonable evidence indicates that
uninterrupted and continuous group coverage is otherwise
provided to the group. Every employer having a policy of group
accident and health insurance, group subscriber or contract of
coverage by a health maintenance organization shall, upon
request, provide the insurer or health maintenance organization
a list of the names and addresses of covered employees. Plans
of health coverage shall also include a provision which, upon
the death of the individual in whose name the contract was
issued, permits every other individual then covered under the
contract to elect, within the period specified in the contract,
to continue coverage under the same or a different contract
without the addition of underwriting restrictions until the
individual would have ceased to have been entitled to coverage
had the individual in whose name the contract was issued lived.
An individual conversion contract issued by a health maintenance
organization shall not be deemed to be an individual enrollment
contract for the purposes of section 62D.10.
Sec. 43. Minnesota Statutes 1990, section 62H.01, is
amended to read:
62H.01 [JOINT SELF-INSURANCE EMPLOYEE HEALTH PLAN.]
Any three two or more employers, excluding the state and
its political subdivisions as described in section 471.617,
subdivision 1, who are authorized to transact business in
Minnesota may jointly self-insure employee health, dental, or
short-term disability benefits. Joint plans must have a minimum
of 250 100 covered employees and meet all conditions and terms
of sections 62H.01 to 62H.08. Joint plans covering employers
not resident in Minnesota must meet the requirements of sections
62H.01 to 62H.08 as if the portion of the plan covering
Minnesota resident employees was treated as a separate plan. A
plan may cover employees resident in other states only if the
plan complies with the applicable laws of that state.
A multiple employer welfare arrangement as defined in
United States Code, title 29, section 1002(40)(a), is subject to
this chapter to the extent authorized by the Employee Retirement
Income Security Act of 1974, United States Code, title 29,
sections 1001 et seq.
Sec. 44. [62I.121] [BENEFITS FOR EMPLOYEES.]
At the option of the board, employees may participate in
the state retirement plan and the state deferred compensation
plan for employees in the unclassified service, and an insurance
plan administered by the commissioner of employee relations
under chapter 43A.
Sec. 45. Minnesota Statutes 1990, section 65B.133,
subdivision 4, is amended to read:
Subd. 4. [NOTIFICATION OF CHANGE.] No insurer may change
its surcharge plan unless a surcharge disclosure statement is
mailed or delivered to the named insured before the change is
made. A surcharge disclosure statement disclosing a change
applicable on the renewal of a policy, may be mailed with an
offer to renew the policy. No Surcharges cannot be applied to
accidents or traffic violations that occurred prior to a change
in a surcharge plan may be applied retroactively except to the
extent provided under the prior plan.
Sec. 46. Minnesota Statutes 1990, section 72A.20,
subdivision 23, is amended to read:
Subd. 23. [DISCRIMINATION IN AUTOMOBILE INSURANCE
POLICIES.] (a) No insurer that offers an automobile insurance
policy in this state shall:
(1) use the employment status of the applicant as an
underwriting standard or guideline; or
(2) deny coverage to a policyholder for the same reason.
(b) No insurer that offers an automobile insurance policy
in this state shall:
(1) use the applicant's status as a tenant, as the term is
defined in section 566.18, subdivision 2, as an underwriting
standard or guideline; or
(2) deny coverage to a policyholder for the same reason; or
(3) make any discrimination in offering or establishing
rates, premiums, dividends, or benefits of any kind, or by way
of rebate, for the same reason.
(c) No insurer that offers an automobile insurance policy
in this state shall:
(1) use the failure of the applicant to have an automobile
policy in force during any period of time before the application
is made as an underwriting standard or guideline; or
(2) deny coverage to a policyholder for the same reason.
This provision does not apply if the applicant was required
by law to maintain automobile insurance coverage and failed to
do so.
An insurer may require reasonable proof that the applicant
did not fail to maintain this coverage. The insurer is not
required to accept the mere lack of a conviction or citation for
failure to maintain this coverage as proof of failure to
maintain coverage.
Sec. 47. Minnesota Statutes 1991 Supplement, section
72A.201, subdivision 8, is amended to read:
Subd. 8. [STANDARDS FOR CLAIM DENIAL.] The following acts
by an insurer, adjuster, or self-insured, or self-insurance
administrator constitute unfair settlement practices:
(1) denying a claim or any element of a claim on the
grounds of a specific policy provision, condition, or exclusion,
without informing the insured of the policy provision,
condition, or exclusion on which the denial is based;
(2) denying a claim without having made a reasonable
investigation of the claim;
(3) denying a liability claim because the insured has
requested that the claim be denied;
(4) denying a liability claim because the insured has
failed or refused to report the claim, unless an independent
evaluation of available information indicates there is no
liability;
(5) denying a claim without including the following
information:
(i) the basis for the denial;
(ii) the name, address, and telephone number of the
insurer's claim service office or the claim representative of
the insurer to whom the insured or claimant may take any
questions or complaints about the denial; and
(iii) the claim number and the policy number of the
insured;
(6) denying a claim because the insured or claimant failed
to exhibit the damaged property unless:
(i) the insurer, within a reasonable time period, made a
written demand upon the insured or claimant to exhibit the
property; and
(ii) the demand was reasonable under the circumstances in
which it was made;
(7) denying a claim by an insured or claimant based on the
evaluation of a chemical dependency claim reviewer selected by
the insurer unless the reviewer meets the qualifications
specified under subdivision 8a. An insurer that selects
chemical dependency reviewers to conduct claim evaluations must
annually file with the commissioner of commerce a report
containing the specific evaluation standards and criteria used
in these evaluations. The report must be filed at the same time
its annual statement is submitted under section 60A.13. The
report must also include the number of evaluations performed on
behalf of the insurer during the reporting period, the types of
evaluations performed, the results, the number of appeals of
denials based on these evaluations, the results of these
appeals, and the number of complaints filed in a court of
competent jurisdiction.
Sec. 48. Minnesota Statutes 1990, section 72B.02, is
amended by adding a subdivision to read:
Subd. 14. [CROP HAIL ADJUSTER.] "Crop hail adjuster" means
a person who for money, commission, or other thing of value acts
as an adjuster in regard to insurance policies against crop
damage by hail.
Sec. 49. Minnesota Statutes 1990, section 72B.03,
subdivision 2, is amended to read:
Subd. 2. [CLASSES OF LICENSES.] (a) There shall be three
four classes of licenses, as follows:
(a) (1) independent adjuster's license.;
(b) (2) public adjuster's license.;
(c) (3) public adjuster solicitor's license; and
(4) crop hail adjuster's license.
(b) The independent adjuster and public adjuster licenses
shall be issued in at least three fields each, as follows:
(a) (1) fire and allied lines, inland marine lines and
including all perils under homeowners policies.;
(b) (2) all lines written as casualty insurance under
section 60A.06, and including workers' compensation.; and
(c) (3) a combination of the fields described in
(a) clauses (1) and (b), above (2). Separate licenses shall be
required for each field, but the same person may obtain licenses
in more than one field. No person shall be licensed as both a
public and independent adjuster. The license shall state the
class for which the person is licensed and, where applicable,
the field in which the person is licensed, and shall state the
licensee's name and residence address, the date of issuance and
the date of expiration of the license and any other information
prescribed by the commissioner which is consistent with the
purpose of the license.
Sec. 50. Minnesota Statutes 1990, section 72B.04,
subdivision 6, is amended to read:
Subd. 6. [EXCEPTIONS.] A person who on January 1, 1972,
meets all of the qualifications specified in subdivision 2 with
regard to the class of license applied for and, if experience is
one of the requisites, has gained the experience within the
three years next preceding January 1, 1972, shall be eligible
for the issuance of a license without taking an examination.
A person who has held a license of any given class or in
any field or fields within three years prior to the application
shall be entitled to a renewal of the license in the same class
or in the same fields without taking an examination.
A person applying for a license as a crop hail adjuster
shall not be required to comply with the requirements of
subdivision 5.
The commissioner may issue a license under sections 72B.01
to 72B.14 without an examination, if the applicant presents
sufficient and satisfactory evidence of having passed a similar
examination in another state and if the commissioner, with the
advice of the advisory board, has determined that the standards
of such other state are equivalent to those in Minnesota for the
class of license applied for. Any applicant who presents
sufficient and satisfactory evidence of having successfully
completed all six parts of the insurance institute of America
program in adjusting shall be entitled to an adjuster's license
without taking the examination prescribed in subdivision 5.
Sec. 51. Laws 1991, chapter 233, section 111, is amended
to read:
Sec. 111. [EFFECTIVE DATE.]
(a) Sections 33 and 110, paragraph (a), are effective the
day following final enactment.
(b) Sections 63; 64; 65; 66; 67; 68; 69; 70; 71; 72; 73;
74; 75; 76; 77; 78; 79; 80; 81; 82; 83; and 110, paragraph (b),
are effective August 1, 1991.
(c) Sections 43 and Section 44 are is effective July
for the licensing year beginning June 1, 1992.
Sec. 52. [REQUIRED PROPERTY AND CASUALTY COVERAGES
INCLUDING BONDS; STUDY.]
The commissioner of commerce shall conduct a study of all
property and casualty insurance coverages including bonds
required by state law and report to the legislature by February
1, 1993. The report shall include, but is not limited to, the
following:
(1) identification of all required insurance coverages and
bonds;
(2) the purpose of the requirement, for example, if it is
to protect third parties, to protect government, or to protect
the purchaser;
(3) the availability of the insurance and bonds from
admitted insurers;
(4) the likely effect, including cost implications, of
requiring that only admitted carriers may offer the coverage;
and
(5) other information the commissioner considers
appropriate.
The commissioner may request an extension of the date of
submission of the report from the chairs of the senate commerce
committee and the house financial institutions and insurance
committee.
Sec. 53. [APPLICATION.]
Section 13 does not apply to policies in force on the
effective date of that section and does not preclude renewals of
those policies.
Section 20 applies to reports required to be filed in 1993
and subsequent years.
Sec. 54. [REVISOR INSTRUCTION.]
The revisor of statutes shall change the terms "fraternal
beneficiary association," "association," or similar terms to
"fraternal benefit society," "society," or similar terms
wherever they appear in Minnesota Statutes and Minnesota Rules
in connection with those entities regulated under Minnesota
Statutes, chapter 64B.
Sec. 55. [REPEALER.]
Minnesota Statutes 1990, sections 65B.70; and 72A.13,
subdivision 3, are repealed.
Sec. 56. [EFFECTIVE DATE.]
Section 44 is effective retroactive to the effective date
of Laws 1989, chapter 260, section 25. The prohibition against
solicitation of members within the first 30 days of membership
in section 13 is effective August 1, 1993.
ARTICLE 2
Section 1. Minnesota Statutes 1990, 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.
(c) Subdivision 2 applies in all cases in which service of
process is allowed to be made on the commissioner of commerce.
Sec. 2. Minnesota Statutes 1990, section 48.185,
subdivision 7, is amended to read:
Subd. 7. Any bank or savings bank extending credit in
compliance with the provisions of this section, which is injured
competitively by violations of this section by another bank or
savings bank, may institute a civil action in the district court
of this state against that bank or savings bank for an
injunction prohibiting any violation of this section. The
court, upon proper proof that the defendant has engaged in any
practice in violation of this section, may enjoin the future
commission of that practice. Proof of monetary damage or loss
of profits shall not be required. Costs and attorneys' fees may
be allowed to the plaintiff, unless the court directs
otherwise. The relief provided in this subdivision is in
addition to remedies otherwise available against the same
conduct under the common law or statutes of this state.
Service of process shall be as in any other civil suit,
except that if a defendant in the action is a foreign
corporation or a national banking association with its principal
place of business in another state, service of process may also
be made by personal service outside the state, or in the manner
provided by section 303.13, subdivision 1, clause (3), or in
such manner as the court may direct, or in accordance with
section 45.028, subdivision 2. Process is valid if it satisfies
the requirements of due process of law, whether or not defendant
is doing business in Minnesota regularly or habitually.
Sec. 3. Minnesota Statutes 1990, section 60A.19,
subdivision 4, is amended to read:
Subd. 4. [FEES.] The commissioner shall be entitled to
charge and receive a fee prescribed by section 60A.14,
subdivision 1, paragraph (c), clause (4), for each notice, proof
of loss, summons, or other process served under the provisions
of this subdivision and subdivision 3, to be paid by the persons
serving the same. The service of process is authorized by this
section shall be made by delivering to and leaving with the
commissioner two copies thereof for each company being served in
compliance with section 45.028, subdivision 2.
Sec. 4. Minnesota Statutes 1990, section 60A.21,
subdivision 2, is amended to read:
Subd. 2. [SERVICE OF PROCESS UPON UNAUTHORIZED INSURER.]
(1) Any of the following acts in this state effected by mail or
otherwise by an unauthorized foreign or alien insurer: (a) the
issuance or delivery of contracts of insurance to residents of
this state or to corporations authorized to do business therein;
(b) the solicitation of applications for such contracts; (c) the
collection of premiums, membership fees, assessments, or other
considerations for such contracts; or (d) any other transaction
of insurance business, is equivalent to and shall constitute an
appointment by such insurer of the commissioner of commerce and
the commissioner's successor or successors in office to be its
true and lawful attorney upon whom may be served all lawful
process in any action, suit, or proceeding instituted by or on
behalf of an insured or beneficiary arising out of any such
contract of insurance and any such act shall be signification of
its agreement that such service of process is of the same legal
force and validity as personal service of process in this state
upon such insurer.
(2) Such service of process shall be made by delivering to
and leaving with the commissioner of commerce or some person in
apparent charge of that office two copies thereof in compliance
with section 45.028, subdivision 2 and the payment to that
person of a filing fee as prescribed by section 60A.14,
subdivision 1, paragraph (c), clause (4). The commissioner of
commerce shall forthwith mail by certified mail one of the
copies of such process to the defendant at its last known
principal place of business and shall keep a record of all
process so served upon the commissioner. Such service of
process is sufficient provided notice of such service and a copy
of the process are sent within ten days thereafter by certified
mail by plaintiff or plaintiff's attorney to the defendant at
its last known principal place of business and the defendant's
receipt, or receipt issued by the post office with which the
letter is certified showing the name of the sender of the letter
and the name and address of the person to whom the letter is
addressed, and the affidavit of the plaintiff or plaintiff's
attorney showing a compliance herewith are filed with the court
administrator of the court in which such action is pending on or
before the date the defendant is required to appear or within
such further time as the court may allow.
(3) Service of process in any such action, suit, or
proceeding shall in addition to the manner provided in clause
(2) of this subdivision be valid if served upon any person
within this state who, in this state on behalf of such insurer,
is: (a) soliciting insurance, or (b) making, issuing, or
delivering any contract of insurance, or (c) collecting or
receiving any premium, membership fee, assessment, or other
consideration for insurance; and if a copy of such process is
sent within ten days thereafter by certified mail by the
plaintiff or plaintiff's attorney to the defendant at the last
known principal place of business of the defendant and the
defendant's receipt, or the receipt issued by the post office
with which the letter is certified showing the name of the
sender of the letter and the name and address of the person to
whom the letter is addressed, and the affidavit of the plaintiff
or plaintiff's attorney showing a compliance herewith are filed
with the administrator of the court in which such action is
pending on or before the date the defendant is required to
appear or within such further time as the court may allow.
(4) No plaintiff or complainant shall be entitled to a
judgment by default under this subdivision until the expiration
of 30 days from the date of the filing of the affidavit of
compliance.
(5) Nothing in this subdivision contained shall limit or
abridge the right to serve any process, notice, or demand upon
any insurer in any other manner now or hereafter permitted by
law.
(6) The provisions of this section shall not apply to
surplus line insurance lawfully effectuated under Minnesota law,
or to reinsurance, nor to any action or proceeding against an
unauthorized insurer arising out of:
(a) Wet marine and transportation insurance;
(b) Insurance on or with respect to subjects located,
resident, or to be performed wholly outside this state, or on or
with respect to vehicles or aircraft owned and principally
garaged outside this state;
(c) Insurance on property or operations of railroads
engaged in interstate commerce; or
(d) Insurance on aircraft or cargo of such aircraft, or
against liability, other than employer's liability, arising out
of the ownership, maintenance, or use of such aircraft, where
the policy or contract contains a provision designating the
commissioner as its attorney for the acceptance of service of
lawful process in any action or proceeding instituted by or on
behalf of an insured or beneficiary arising out of any such
policy, or where the insurer enters a general appearance in any
such action.
Sec. 5. Minnesota Statutes 1990, section 64B.35,
subdivision 2, is amended to read:
Subd. 2. [SERVICE.] Service under this section shall only
be made upon the commissioner, or if absent, upon the person in
charge of the commissioner's office. It shall be made in
duplicate and shall constitute sufficient service upon the
society. When legal process against a society is served upon
the commissioner, the commissioner shall immediately forward one
of the duplicate copies by registered mail, prepaid, directed to
the secretary or corresponding officer in compliance with
section 45.028, subdivision 2. No service shall require a
society to file its answer, pleading, or defense in less than 30
days from the date of mailing the copy of the service to a
society. Legal process shall not be served upon a society
except in the manner herein provided. At the time of serving
any process upon the commissioner, the plaintiff or complainant
in the action shall pay to the commissioner a fee as prescribed
in section 60A.14.
Sec. 6. Minnesota Statutes 1990, section 71A.02,
subdivision 3, is amended to read:
Subd. 3. [COMMISSIONER AS AGENT FOR SERVICE.] Concurrently
with the filing of the declaration provided for by the terms of
subdivision 2, the attorney shall execute and file with the
commissioner an instrument in writing for the subscribers,
conditioned that upon the issuance of the certificate of
authority provided for in subdivision 1, service of process in
compliance with section 45.028, subdivision 2, may be had upon
the commissioner in all suits in this state arising out of these
policies, contracts, or agreements, which service shall be valid
and binding upon all subscribers exchanging at any time
reciprocal or interinsurance contracts through such
attorney. Three copies of the process shall be served and the
commissioner shall file one copy, forward one copy to the
attorney, and return one copy with an admission of service.
Sec. 7. Minnesota Statutes 1990, section 72A.22,
subdivision 5, is amended to read:
Subd. 5. [SERVICE.] Statements of charges, notices,
orders, and other processes of the commissioner under sections
72A.17 to 72A.32 may be served by anyone duly authorized by the
commissioner, either in the manner provided by law for service
of process in civil actions or by registering and mailing a copy
thereof to the person affected by the statement, notice, order,
or other process at the person's residence or principal office
or place of business. A verified return by the person serving
the statement, notice, order, or other process, setting forth
the manner of such service, or the return postcard receipt for a
copy of the statement, notice, order, or other process,
registered and mailed as aforesaid, shall be proof of the
service of the same in compliance with section 45.028,
subdivision 2.
Sec. 8. Minnesota Statutes 1990, section 72A.37,
subdivision 2, is amended to read:
Subd. 2. [METHOD OF SERVICE.] Service of a statement of
charges and notices under said unfair trade practice act shall
be made by any deputy or employee of the department of
commerce delivering to and leaving with upon the commissioner or
some person in apparent charge of the office, two copies thereof
in compliance with section 45.028. Service of process issued by
any court in any action, suit or proceeding to collect any
penalty under said act provided, shall be made by delivering and
leaving with the commissioner, or some person in apparent charge
of the office, two copies thereof. The commissioner shall
forthwith cause to be mailed by certified mail one of the copies
of such statement of charges, notices or process to the
defendant at its last known principal place of business, and
shall keep a record of all statements of charges, notices and
process so served. Such service of statement of charges,
notices or process shall be sufficient provided they shall have
been so mailed and the defendant's receipt or receipt issued by
the post office with which the letter is certified, showing the
name of the sender of the letter and the name and address of the
person to whom the letter is addressed, and the affidavit of the
person mailing such letter showing a compliance herewith are
filed with the commissioner in the case of any statement of
charges or notices, or with the court administrator of the court
in which such action is pending in the case of any process, on
or before the date the defendant is required to appear or within
such further time as may be allowed in compliance with section
45.028, subdivision 2.
Sec. 9. Minnesota Statutes 1990, section 72A.43,
subdivision 2, is amended to read:
Subd. 2. Service of such process shall be made by
delivering and leaving with the commissioner two copies thereof
and the payment to the commissioner of a $15 filing fee. The
commissioner shall forthwith mail by certified mail one of the
copies of such process to such company at its last known
registered office, and shall keep a record of all process so
served. The company's receipt, or receipt issued by the post
office with which the letter is certified, and an affidavit of
compliance herewith by or on behalf of the commissioner, shall
be filed with the court administrator of the court in which such
action or proceeding is pending on or before the return date of
such process or within such further time as the court may
allow in compliance with section 45.028, subdivision 2.
Sec. 10. Minnesota Statutes 1990, section 80A.27,
subdivision 7, is amended to read:
Subd. 7. Every applicant for registration under sections
80A.01 to 80A.31 and every issuer who proposes to offer a
security in this state through any person acting on an agency
basis in the common law sense shall file with the commissioner,
in such form as the commissioner by rule prescribes, an
irrevocable consent appointing the commissioner or a successor
in office to be the attorney to receive service of any lawful
process in any noncriminal suit, action, or proceeding against
that person or a successor, executor, or administrator which
arises under sections 80A.01 to 80A.31 or any rule or order
hereunder after the consent has been filed, with the same force
and validity as if served personally on the person filing the
consent. The consent need not be filed by a person who has
filed a consent in connection with a previous registration or
license which is then in effect. Service may be made by leaving
a copy of the process in the office of the commissioner, but it
is not effective unless (a) the plaintiff, who may be
commissioner in a suit, action, or proceeding instituted by the
commissioner, forthwith sends notice of the service and a copy
of the process by certified mail to the defendant or respondent
at the last address on file with the commissioner, and (b) the
plaintiff's affidavit of compliance with this subsection is
filed in the case on or before the return day of the process, if
any, or within such further time as the court allows in
compliance with section 45.028, subdivision 2.
Sec. 11. Minnesota Statutes 1990, section 80A.27,
subdivision 8, is amended to read:
Subd. 8. When any person, including any nonresident of
this state, engages in conduct prohibited or made actionable by
sections 80A.01 to 80A.31 or any rule or order hereunder, and
has not filed a consent to service of process under subdivision
7 and personal jurisdiction cannot otherwise be obtained in this
state, that conduct shall be considered equivalent to an
appointment of the commissioner or a successor in office to be
the attorney to receive service of any lawful process in any
noncriminal suit, action, or proceeding against that person or a
successor executor or administrator which grows out of that
conduct and which is brought under sections 80A.01 to 80A.31 or
any rule or order hereunder, with the same force and validity as
if served personally. Service may under this section shall be
made by leaving a copy of the process in the office of the
commissioner, and it is not effective unless (a) the plaintiff,
who may be the commissioner in a suit, action, or proceeding
instituted by the commissioner, forthwith sends notice of the
service and a copy of the process by certified mail to the
defendant or respondent at the last known address or takes other
steps which are reasonably calculated to give actual notice, and
(b) the plaintiff's affidavit of compliance with this subsection
is filed in the case on or before the return day of the process,
if any, or within such further time as the court allows in
compliance with section 45.028, subdivision 2.
Sec. 12. Minnesota Statutes 1990, section 80C.20, is
amended to read:
80C.20 [SERVICE OF PROCESS.]
Every applicant for registration under sections 80C.01 to
80C.22 and every franchisor on whose behalf an application for
registration is filed, except applicants and franchisors which
are Minnesota corporations, shall file with the commissioner, in
such form as the commissioner may prescribe, an irrevocable
consent appointing the commissioner and successors in office to
be the applicant's or franchisor's attorney to receive service
of any lawful process in any civil action against the applicant
or franchisor or a successor, executor or administrator, which
arises under sections 80C.01 to 80C.22 or any rule or order
thereunder after the consent has been filed, with the same force
and validity as if served personally on the applicant or
franchisor or a successor, executor or administrator. Service
may under this section shall be made by leaving a copy of the
process in the office of the commissioner, but it is not
effective unless the plaintiff, who may be the commissioner in
an action instituted by the commissioner, forthwith sends notice
of the service and a copy of the process by certified mail to
the defendant or respondent at the last address on file with the
commissioner, and the plaintiff's affidavit of compliance with
this subsection is filed with the court at the time of the
filing of the complaint in compliance with section 45.028,
subdivision 2.
When any person, including any nonresident of this state
and any foreign corporation, engages in conduct prohibited or
made actionable by sections 80C.01 to 80C.22, whether or not the
person has filed a consent to service of process, and personal
jurisdiction over the person cannot otherwise be obtained in
this state, that conduct shall be considered equivalent to
appointment of the commissioner and successors in office to be
the person's agent to receive service of any lawful process in
any suit against the person or a successor, executor or
administrator which grows out of that conduct and which is
brought under sections 80C.01 to 80C.22, with the same force and
validity as if served personally. Service may under this
section shall be made by leaving a copy of the process in the
office of the commissioner but it is not effective unless the
plaintiff, who may be the commissioner in an action instituted
by the commissioner, forthwith sends notice of the service and a
copy of the process by certified mail to the defendant or
respondent at the last known address on file with the
commissioner and the plaintiff's affidavit of compliance with
this section is filed with the court at the time of the filing
of the complaint in compliance with section 45.028, subdivision
2.
Sec. 13. Minnesota Statutes 1990, section 82.31,
subdivision 3, is amended to read:
Subd. 3. Service of process under this section may shall
be made by filing a copy of the process with the commissioner or
a representative, but is not effective unless:
(a) The plaintiff, who may be the commissioner in an action
or proceeding instituted by the commissioner, sends notice of
the service and a copy of the process by certified mail to the
defendant or respondent at the address as shown by the records
at the office of the commissioner in the case of service made on
the commissioner as attorney pursuant to appointment in
compliance with subdivision 1, and at the defendant's or
respondent's last known address in the case of service on the
commissioner as attorney pursuant to appointment by virtue of
subdivision 2; and
(b) The plaintiff's affidavit of compliance with this
subdivision is filed in the action or proceeding on or before
the return day of the process, if any, or within such further
time as the court or administrative law judge allows in
compliance with section 45.028, subdivision 2.
Sec. 14. Minnesota Statutes 1990, section 82A.22,
subdivision 1, is amended to read:
Subdivision 1. [CONSENT TO SERVICE.] Every membership
camping operator or broker, on whose behalf an application for
registration or exemption is filed, shall file with the
commissioner, in such form as the commissioner may prescribe, an
irrevocable consent appointing the commissioner and the
commissioner's successors in office to be the membership camping
operator's or broker's attorney to receive service of any lawful
process in any noncriminal suit, action, or proceeding against
the membership camping operator or broker or a successor,
executor, or administrator which arises under this chapter or
any rule or order thereunder after the consent has been filed,
with the same force and validity as if served personally on the
membership camping operator or the operator's successor,
executor, or administrator. Service may under this section
shall be made by leaving a copy of the process in the office of
the commissioner, but it is not effective unless:
(1) the plaintiff, who may be the commissioner in a suit,
action, or proceeding instituted by the commissioner, sends
notice of the service and a copy of the process by certified
mail to the defendant or respondent at that person's last
address on file with the commissioner; and
(2) the plaintiff's affidavit of compliance with this
section is filed in the case on or before the return day of the
process, if any, or within such further time as the court allows
in compliance with section 45.028, subdivision 2.
Sec. 15. Minnesota Statutes 1990, section 82A.22,
subdivision 2, is amended to read:
Subd. 2. [APPOINTMENT OF COMMISSIONER.] When any person,
including any nonresident of this state, engages in conduct
prohibited or made actionable by this chapter, or any rule or
order thereunder, and the person has not filed a consent to
service of process under subdivision 1 and personal jurisdiction
over this person cannot otherwise be obtained in this state,
that conduct shall be considered equivalent to the person's
appointment of the commissioner or the commissioner's successor
to be the person's attorney to receive service of any lawful
process in any noncriminal suit, action, or proceeding against
the person which grows out of that conduct and which is brought
under this chapter or any rule or order thereunder, with the
same force and validity as if served on the person personally.
Service may under this section shall be made by leaving a copy
of the process in the office of the commissioner, and it is not
effective unless:
(1) the plaintiff, who may be the commissioner in a suit,
action, or proceeding instituted by the commissioner, forthwith
sends notice of the service and a copy of the process by
certified mail to the defendant or respondent at that person's
last known address or takes other steps which are reasonably
calculated to give actual notice; and
(2) the plaintiff's affidavit of compliance with this
subdivision is filed in the case on or before the return day of
the process, if any, or within such further time as the court
allows in compliance with section 45.028, subdivision 2.
Sec. 16. Minnesota Statutes 1991 Supplement, section
82B.15, subdivision 3, is amended to read:
Subd. 3. [PROCEDURE.] Service of process under this
section may shall be made under the provisions of in compliance
with section 45.028, subdivision 2.
Sec. 17. Minnesota Statutes 1990, section 83.39,
subdivision 1, is amended to read:
Subdivision 1. [PROCEDURE.] Every applicant for
registration under sections 83.20 to 83.42, 83.43 and 83.44
shall file with the commissioner, in a format as by rule may be
prescribed, an irrevocable consent appointing the commissioner
or commissioner's successor to be the applicant's attorney to
receive service of any lawful process in any noncriminal suit,
action, or proceeding against the applicant or a successor,
executor, or administrator which arises under sections 83.20 to
83.42, 83.43 and 83.44 or any rule or order thereunder after the
consent has been filed, with the same force and validity as if
served personally on the person filing the consent. Service may
under this section shall be made by leaving a copy of the
process in the office of the commissioner, but it is not
effective unless (a) the plaintiff, who may be commissioner in a
suit, action, or proceeding instituted by the commissioner,
forthwith sends notice of the service and a copy of the process
by registered mail to the defendant or respondent at that
person's last address on file with the commissioner, and (b) the
plaintiff's affidavit of compliance with this subdivision is
filed in the case on or before the return day of the process, if
any, or within such further time as the court allows in
compliance with section 45.028, subdivision 2.
The rulemaking authority in this subdivision does not
include emergency rulemaking authority pursuant to chapter 14.
Sec. 18. Minnesota Statutes 1990, section 83.39,
subdivision 2, is amended to read:
Subd. 2. [SERVICE ON COMMISSIONER.] When any person,
including any nonresident of this state, engages in conduct
prohibited or made actionable by sections 83.20 to 83.42, 83.43
and 83.44, or any rule or order thereunder, and the person has
not filed a consent to service of process under subdivision 1
and personal jurisdiction over this person cannot otherwise be
obtained in this state, that conduct shall be considered
equivalent to the person's appointment of the commissioner or
the commissioner's successor to be the person's attorney to
receive service of any lawful process in any noncriminal suit,
action, or proceeding against the commissioner or the
commissioner's successor, executor, or administrator which grows
out of that conduct and which is brought under sections 83.20 to
83.42, 83.43 and 83.44 or any rule or order thereunder, with the
same force and validity as if served on the person personally.
Service may under this section shall be made by leaving a copy
of the process in the office of the commissioner, and it is not
effective unless (a) the plaintiff, who may be the commissioner
in a suit, action, or proceeding instituted by the commissioner,
forthwith sends notice of the service and a copy of the process
by registered mail to the defendant or respondent at that
person's last known address or takes other steps which are
reasonably calculated to give actual notice, and (b) the
plaintiff's affidavit of compliance with this subdivision is
filed in the case on or before the return day of the process, if
any, or within such further time as the court allows in
compliance with section 45.028, subdivision 2.
Sec. 19. Minnesota Statutes 1990, section 543.08, is
amended to read:
543.08 [SUMMONS, SERVICE UPON CERTAIN CORPORATIONS.]
If a private domestic corporation has no officer at the
registered office of the corporation within the state upon whom
service can be made, of which fact the return of the sheriff of
the county in which that office is located, or the affidavit of
a private person not a party, that none can be found in that
county shall be conclusive evidence, service of the summons upon
it may be made by depositing two copies, together with a fee of
$35 with the secretary of state, which shall be deemed personal
service upon the corporation. One of the copies shall be filed
by the secretary, and the other forthwith mailed by the
secretary to the corporation by certified mail, if the place of
its main office is known to the secretary or is disclosed by the
files in the office.
If the defendant is a foreign insurance corporation, the
summons may be served by two copies delivered to the
commissioner of commerce, who shall file one in the
commissioner's office and forthwith mail the other postage
prepaid to the defendant at its home office in compliance with
section 45.028, subdivision 2.
ARTICLE 3
INSURANCE AGENTS
Section 1. Minnesota Statutes 1990, section 60A.02,
subdivision 7, is amended to read:
Subd. 7. [INSURANCE AGENT OR INSURANCE AGENCY.] An
"insurance agent" or "insurance agency" is a person acting under
express authority from, and an appointment pursuant to section
60A.17 60K.02 by, an insurer and on its behalf to solicit
insurance, or to appoint other agents to solicit insurance, or
to write and countersign policies of insurance, or to collect
premiums therefor within this state, or to exercise any or all
these powers when so authorized by the insurer. The term
"person" includes a natural person, a partnership, a
corporation, or other entity, including an insurance agency.
Sec. 2. [60A.052] [DENIAL, REVOCATION, SUSPENSION OF
CERTIFICATE OF AUTHORITY.]
Subdivision 1. [GROUNDS.] The commissioner may by order
take any or all of the following actions: (1) deny, suspend, or
revoke a certificate of authority; (2) censure the insurance
company; or (3) impose a civil penalty as provided for in
section 45.027, subdivision 6. In order to take this action the
commissioner must find that the order is in the public interest,
and the insurance company:
(1) has a board of directors or principal management that
is incompetent, untrustworthy, or so lacking in insurance
company managerial experience as to make its operation hazardous
to policyholders, its stockholders, or to the insurance buying
public;
(2) is controlled directly or indirectly through ownership,
management, reinsurance transactions, or other business
relations by any person or persons whose business operations are
or have been marked by manipulation of any assets, reinsurance,
or accounts as to create a hazard to the company's
policyholders, stockholders, or the insurance buying public;
(3) is in an unsound or unsafe condition;
(4) has the actual liabilities that exceed the actual funds
of the company;
(5) has filed an application for a license which is
incomplete in any material respect or contains any statement
which, in light of the circumstances under which it was made,
contained any misrepresentation or was false, misleading, or
fraudulent;
(6) has pled guilty, with or without explicitly admitting
guilt, pled nolo contendere, or been convicted of a felony,
gross misdemeanor, or misdemeanor involving moral turpitude, or
similar conduct;
(7) is permanently or temporarily enjoined by any court of
competent jurisdiction from engaging in or continuing any
conduct or practice involving any aspect of the insurance
business;
(8) has violated or failed to comply with any order of the
insurance regulator of any other state or jurisdiction;
(9) has had a certificate of authority denied, suspended,
or revoked, has been censured or reprimanded, has been the
subject of any other discipline imposed by, or has paid or has
been required to pay a monetary penalty or fine to, another
state;
(10) agents, officers, or directors refuse to submit to
examination or perform any related legal obligation; or
(11) has violated or failed to comply with, any of the
provisions of the insurance laws including chapter 45 or
chapters 60A to 72A or any rule or order under those chapters.
Subd. 2. [SUMMARY SUSPENSION OR REVOCATION OF AUTHORITY OR
CENSURE.] If the commissioner determines that one of the
conditions listed in subdivision 1 exists, the commissioner may
issue an order requiring the insurance company to show cause why
any or all of the following should not occur: (1) revocation or
suspension of any or all certificates of authority granted to
the foreign or domestic insurance company or its agent; (2)
censuring of the insurance company; or (3) the imposition of a
civil penalty. The order shall be calculated to give reasonable
notice of the time and place for hearing thereon, and shall
state the reasons for the entry of the order. The commissioner
may by order summarily suspend or revoke a certificate pending
final determination of any order to show cause. If a
certificate is suspended or revoked pending final determination
of an order to show cause, a hearing on the merits shall be held
within 30 days of the issuance of the summary order. All
hearings shall be conducted in accordance with chapter 14.
After the hearing, the commissioner shall enter an order
disposing of the matter as the facts require. If the insurance
company fails to appear at a hearing after having been duly
notified of it, the company shall be considered in default, and
the proceeding may be determined against the company upon
consideration of the order to show cause, the allegations of
which may be considered to be true.
Subd. 3. [APPLICANTS.] Whenever it appears to the
commissioner that an application for a certificate of authority
should be denied pursuant to subdivision 1, the commissioner
shall promptly give a written notice to the applicant of the
denial. The notice must state the grounds for the denial and
give reasonable notice of the rights of the applicant to request
a hearing. A hearing must be held not later than 30 days after
the request for hearing is received by the commissioner unless
the applicant and the department of commerce agree that the
hearing may be held at a later date. If no hearing is requested
within 30 days of service of the notice, the denial will become
final. All hearings shall be conducted in accordance with
chapter 14. After the hearing, the commissioner shall enter an
order disposing of the matter as the facts require. If the
applicant fails to appear at a hearing after having been duly
notified of it, the applicant shall be considered in default,
and the proceeding may be determined against the applicant upon
consideration of the notice denying the application, the
allegations of which may be considered to be true.
Subd. 4. [ACTIONS AGAINST LAPSED CERTIFICATE OF
AUTHORITY.] If a certificate of authority lapses, is
surrendered, withdrawn, terminated, or otherwise becomes
ineffective, the commissioner may institute a proceeding under
this subdivision within two years after the certificate of
authority was last effective and enter a revocation or
suspension order as of the last date on which the certificate of
authority was in effect, or impose a civil penalty as provided
for in section 45.027, subdivision 6.
Sec. 3. [60K.01] [DEFINITIONS.]
Unless the language or context clearly indicates that a
different meaning is intended, the definitions in section 60A.01
are applicable to this chapter.
Sec. 4. [60K.02] [INSURANCE AGENTS; SOLICITORS LICENSE.]
Subdivision 1. [REQUIREMENT.] No person shall act or
assume to act as an insurance agent in the solicitation or
procurement of applications for insurance, nor in the sale of
insurance or policies of insurance, nor in any manner aid as an
insurance agent in the negotiation of insurance by or with an
insurer, including resident agents or reciprocal or
interinsurance exchanges and fraternal benefit societies, until
that person obtains from the commissioner a license for that
purpose. The license must specifically set forth the name of
the person authorized to act as an agent and the class or
classes of insurance for which that person is authorized to
solicit or countersign policies. An insurance agent may qualify
for a license in the following classes: (1) life and health;
and (2) property and casualty.
No insurer shall appoint or reappoint a natural person,
partnership, or corporation to act as an insurance agent on its
behalf until that natural person, partnership, or corporation
obtains a license as an insurance agent.
Subd. 2. [PARTNERSHIPS AND CORPORATIONS.] A license issued
to a partnership or corporation must be solely in the name of
the entity to which it is issued; provided that each partner,
director, officer, stockholder, or employee of the licensed
entity who is personally engaged in the solicitation or
negotiation of a policy of insurance on behalf of the licensed
entity shall be personally licensed as an insurance agent.
Upon request by the commissioner, each partnership and
corporation licensed as an insurance agent shall provide the
commissioner with a list of the names of each partner, director,
officer, stockholder, and employee who is required to hold a
valid insurance agent's license.
Subd. 3. [TRANSITION.] (a) Any agent who is qualified for
life or accident and health as of June 1, 1981, is qualified for
a life and health license under Laws 1981, chapter 307, and is
appointed by an insurer which has submitted a written
requisition for a license for that agent as of June 1, 1981.
(b) Any agent who is qualified for one or more lines of
insurance, excluding life or accident and health and farm
property liability as of June 1, 1981, is qualified for a
property and casualty license under Laws 1981, chapter 307, and
is appointed by any insurer which has submitted a written
requisition for a license for that agent as of June 1, 1981.
Subd. 4. [CRIMINAL PENALTIES.] A person who acts or
assumes to act as an insurance agent without a valid license
issued by the commissioner is guilty of a gross misdemeanor.
Sec. 5. [60K.03] [LICENSE APPLICATION.]
Subdivision 1. [PROCEDURE.] An application for a license
to act as an insurance agent shall be made to the commissioner
by the person who seeks to be licensed. The application for
license shall be accompanied by a written appointment from an
admitted insurer authorizing the applicant to act as its agent
under one or both classes of license. The insurer must also
submit its check payable to the state treasurer for the amount
of the appointment fee prescribed by section 60A.14, subdivision
1, paragraph (c), clause (9), at the time the agent becomes
licensed. The application and appointment must be on forms
prescribed by the commissioner.
If the applicant is a natural person, no license shall be
issued until that natural person has become qualified.
If the applicant is a partnership or corporation, no
license shall be issued until at least one natural person who is
a partner, director, officer, stockholder, or employee shall be
licensed as an insurance agent.
Subd. 2. [RESIDENT AGENT.] The commissioner shall issue a
resident insurance agent's license to a qualified resident of
this state as follows:
(a) A person may qualify as a resident of this state if
that person resides in this state or the principal place of
business of that person is maintained in this state.
Application for a license claiming residency in this state for
licensing purposes constitutes an election of residency in this
state. A license issued upon an application claiming residency
in this state is void if the licensee, while holding a resident
license in this state, also holds, or makes application for, a
resident license in, or thereafter claims to be a resident of,
any other state or jurisdiction or if the licensee ceases to be
a resident of this state; provided, however, if the applicant is
a resident of a community or trade area, the border of which is
contiguous with the state line of this state, the applicant may
qualify for a resident license in this state and at the same
time hold a resident license from the contiguous state.
(b) The commissioner shall subject each applicant who is a
natural person to a written examination as to the applicant's
competence to act as an insurance agent. The examination must
be held at a reasonable time and place designated by the
commissioner.
(c) The examination shall be approved for use by the
commissioner and shall test the applicant's knowledge of the
lines of insurance, policies, and transactions to be handled
under the class of license applied for, of the duties and
responsibilities of the licensee, and pertinent insurance laws
of this state.
(d) The examination shall be given only after the applicant
has completed a program of classroom studies in a school, which
shall not include a school sponsored by, offered by, or
affiliated with an insurance company or its agents; except that
this limitation does not preclude a bona fide professional
association of agents, not acting on behalf of an insurer, from
offering courses. The course of study shall consist of 30 hours
of classroom study devoted to the basic fundamentals of
insurance for those seeking a Minnesota license for the first
time, 15 hours devoted to specific life and health topics for
those seeking a life and health license, and 15 hours devoted to
specific property and casualty topics for those seeking a
property and casualty license. The program of studies or study
course shall have been approved by the commissioner in order to
qualify under this clause. If the applicant has been previously
licensed for the particular line of insurance in the state of
Minnesota, the requirement of a program of studies or a study
course shall be waived. A certification of compliance by the
organization offering the course shall accompany the applicant's
license application. This program of studies in a school or a
study course shall not apply to farm property perils and farm
liability applicants, or to agents writing such other lines of
insurance as the commissioner may exempt from examination by
order.
(e) The applicant must pass the examination with a grade
determined by the commissioner to indicate satisfactory
knowledge and understanding of the class or classes of insurance
for which the applicant seeks qualification. The commissioner
shall inform the applicant as to whether or not the applicant
has passed.
(f) An applicant who has failed to pass an examination may
take subsequent examinations. Examination fees for subsequent
examinations shall not be waived.
(g) Any applicant for a license covering the same class or
classes of insurance for which the applicant was licensed under
a similar license in this state, other than a temporary license,
within the three years preceding the date of the application
shall be exempt from the requirement of a written examination,
unless the previous license was revoked or suspended by the
commissioner. An applicant whose license is not renewed under
section 60K.12 is exempt from the requirement of a written
examination.
Subd. 3. [NONRESIDENT AGENT.] The commissioner shall issue
a nonresident insurance agent's license to a qualified person
who is a resident of another state or country as follows:
(a) A person may qualify for a license under this section
as a nonresident only if that person holds a license in another
state, province of Canada, or other foreign country which, in
the opinion of the commissioner, qualifies that person for the
same activity as that for which a license is sought.
(b) The commissioner shall not issue a license to a
nonresident applicant until that person files with the
commissioner a designation of the commissioner and the
commissioner's successors in office as the applicant's true and
lawful attorney upon whom may be served all lawful process in an
action, suit, or proceeding instituted by or on behalf of an
interested person arising out of the applicant's insurance
business in this state. This designation constitutes an
agreement that this service of process is of the same legal
force and validity as personal service of process in this state
upon that applicant.
Service of process upon a licensee in an action or
proceeding begun in a court of competent jurisdiction of this
state may be made in compliance with section 45.028, subdivision
2.
(c) A nonresident license terminates automatically when the
resident license for that class of license in the state,
province, or foreign country in which the licensee is a resident
is terminated for any reason.
Subd. 4. [TERM.] All licenses issued pursuant to this
section remain in force until voluntarily terminated by the
licensee, not renewed as prescribed in section 60K.06, or until
suspended or revoked by the commissioner. A voluntary
termination occurs when the license is surrendered to the
commissioner with the request that it be terminated or when the
licensee dies, or when the licensee is dissolved or its
existence is terminated. In the case of a nonresident license,
a voluntary termination also occurs upon the happening of the
event described in subdivision 3, paragraph (c).
Every licensed agent shall notify the commissioner within
30 days of a change of name, address, or information contained
in the application.
Subd. 5. [SUBSEQUENT APPOINTMENTS.] A person who holds a
valid agent's license from this state may solicit applications
for insurance on behalf of an admitted insurer with which the
licensee does not have a valid appointment on file with the
commissioner; provided that the licensee has permission from the
insurer to solicit insurance on its behalf and, provided
further, that the insurer upon receipt of the application for
insurance submits a written notice of appointment to the
commissioner accompanied by its check payable to the state
treasurer in the amount of the appointment fee prescribed by
section 60A.14, subdivision 1, paragraph (c), clause (9). The
notice of appointment must be on a form prescribed by the
commissioner.
Subd. 6. [AMENDMENT OF LICENSE.] An application to the
commissioner to amend a license to reflect a change of name, or
to include an additional class of license, or for any other
reason, shall be on forms provided by the commissioner and shall
be accompanied by the applicant's surrendered license and a
check payable to the state treasurer for the amount of fee
specified in section 60A.14, subdivision 1, paragraph (c).
An applicant who surrenders an insurance license pursuant
to this subdivision retains licensed status until an amended
license is received.
Subd. 7. [EXCEPTIONS.] The following are exempt from the
general licensing requirements prescribed by this section:
(1) agents of township mutuals who are exempted pursuant to
section 60K.04;
(2) fraternal benefit society representatives exempted
pursuant to section 60K.05;
(3) any regular salaried officer or employee of a licensed
insurer, without license or other qualification, may act on
behalf of that licensed insurer in the negotiation of insurance
for that insurer, provided that a licensed agent must
participate in the sale of the insurance;
(4) employers and their officers or employees, and the
trustees or employees of any trust plan, to the extent that the
employers, officers, employees, or trustees are engaged in the
administration or operation of any program of employee benefits
for the employees of the employers or employees of their
subsidiaries or affiliates involving the use of insurance issued
by a licensed insurance company; provided that the activities of
the officers, employees and trustees are incidental to clerical
or administrative duties and their compensation does not vary
with the volume of insurance or applications for insurance;
(5) employees of a creditor who enroll debtors for life or
accident and health insurance; provided the employees receive no
commission or fee for it;
(6) clerical or administrative employees of an insurance
agent who take insurance applications or receive premiums in the
office of their employer, if the activities are incidental to
clerical or administrative duties and the employee's
compensation does not vary with the volume of the applications
or premiums; and
(7) rental vehicle companies and their employees in
connection with the offer of rental vehicle personal accident
insurance under section 72A.125.
Sec. 6. [60K.04] [TOWNSHIP MUTUAL AGENTS.]
No agent for a township mutual shall be required to take an
examination to become eligible for an agent's license in farm
property perils and farm liability if it is certified by one or
more township mutual companies that the agent has been acting in
the capacity of an agent at least since January 1, 1971, and no
new examination shall be required for eligibility for a license
in farm property perils and farm liability for a licensed agent
in farm windstorm and hail insurance who was licensed prior to
January 1, 1971.
Sec. 7. [60K.05] [FRATERNAL BENEFIT SOCIETY
REPRESENTATIVES.]
Representatives of fraternal benefit societies who solicit
and negotiate insurance contracts shall be deemed to be
insurance agents and subject to the licensing requirements as
set forth in section 60K.03 subdivision 1; provided, that no
insurance agent's license shall be required of:
(1) any officer, employee, or secretary of a fraternal
benefit society or of any subordinate lodge or branch who
devotes substantially all of that person's time to activities
other than the solicitation or negotiation of insurance
contracts and who receives no commission or other compensation
directly dependent upon the number or amount of contracts
solicited or negotiated; or
(2) any agent or representative of a fraternal benefit
society who devotes, or intends to devote, less than 50 percent
of that person's time to the solicitation and procurement of
insurance contracts for that society. Any person who in the
preceding calendar year has solicited and procured life
insurance in excess of $50,000 face amount, or, in the case of
any other kinds of insurance which the society may write, on the
persons of more than 25 individuals, and who has received or
will receive a commission or other compensation in the total
amount of $1,000 or more, shall be presumed to be devoting, or
intending to devote, 50 percent of that person's time to the
solicitation or procurement of insurance contracts for that
society.
Sec. 8. [60K.06] [RENEWAL FEE.]
(a) Each agent licensed pursuant to section 60K.03 shall
annually pay in accordance with the procedure adopted by the
commissioner a renewal fee as prescribed by section 60A.14,
subdivision 1, paragraph (c), clause (10).
(b) Every agent, corporation, and partnership license
expires on October 31 of the year for which period a license is
issued.
(c) Persons whose applications have been properly and
timely filed who have not received notice of denial of renewal
are approved for renewal and may continue to transact business
whether or not the renewed license has been received on or
before November 1. Applications for renewal of a license are
timely filed if received by the commissioner on or before
October 15 of the year due, on forms duly executed and
accompanied by appropriate fees. An application mailed is
considered timely filed if addressed to the commissioner, with
proper postage, and postmarked by October 15.
(d) The commissioner may issue licenses for agents,
corporations, or partnerships for a three-year period. If
three-year licenses are issued, the fee is three times the
annual license fee.
Sec. 9. [60K.07] [TEMPORARY LICENSES.]
Subdivision 1. [EXAMINATION.] The commissioner may grant a
temporary insurance agent's license to a person who has
successfully completed the examination, if any, required by the
commissioner. The temporary license may be granted as of the
date upon which the applicant receives written notice from the
commissioner that the person has passed any required
examination. A temporary license will permit the applicant to
act as an insurance agent for the original appointing insurer
for the class of business specified therein until the earlier of
(1) receipt by the applicant of the resident license, or (2) the
expiration of 90 days from the date on which the temporary
license was granted.
Subd. 2. [PERMISSIVE TEMPORARY LICENSE.] The commissioner
may issue a temporary license to a person to act as an insurance
agent for a period not to exceed 90 days, which may be extended
as determined by the commissioner, without requiring an
examination if the commissioner considers a temporary license
necessary for the servicing of an insurance business in the
following cases:
(1) to an agent licensed as a resident agent in another
state where the commissioner determines that the foreign license
is substantially the equivalent of that being applied for from
the state of Minnesota and where the agent has been transferred
into this state with the intention of becoming a resident,
working as an insurance agent, and obtaining a resident license
from the state of Minnesota;
(2) to the surviving spouse or next of kin, or to the
administrator or executor, or to an employee of a deceased
licensed insurance agent, or to the spouse, next of kin, an
employee, or legal guardian of a disabled licensed insurance
agent;
(3) to the designee of a licensed insurance agent entering
upon active service in the armed forces of the United States; or
(4) in any other circumstance where the commissioner
considers that the public interest will best be served by the
issuance of a temporary license.
Sec. 10. [60K.08] [BROKERAGE BUSINESS.]
Every insurance agent duly licensed to transact business in
this state shall have the right to procure the insurance of
risks, or parts of risks, in the class or classes of insurance
for which the agent is licensed in other insurers duly
authorized to transact business in this state, but the insurance
shall only be consummated through a duly appointed resident
agent of the insurer taking the risk. If the law of another
state requires a nonresident agent who is a resident agent of
Minnesota to pay a portion of the premium to or share
commissions with a licensed resident agent of that state, then
the licensed resident agent of Minnesota when consummating and
countersigning for a licensed nonresident agent of that state
shall receive five percent of the total premium or 25 percent of
the commission, whichever is less.
Sec. 11. [60K.09] [UNFIT PERSON NOT TO BE EMPLOYED BY
INSURER.]
No insurer, its officers, agents, or managers shall
knowingly make application to the commissioner for appointment
of a person as its agent where that person is known to the
insurer, its officers, agents, or managers making the
application, to be unfit or disqualified to be licensed as an
insurance agent, and immediately upon the discovery by the
insurer, its officers, agents, or managers having supervision of
the agent, of the unfitness or disqualification, the insurer, or
the officers agents, or managers shall forthwith inform the
commissioner in writing of their decision to terminate their
appointment of this agent; nor shall any insurer retain in its
employ any agent known by it to be disqualified or unfit to be
licensed as an insurance agent.
Sec. 12. [60K.10] [TERM OF APPOINTMENTS.]
All appointments of agents by insurers pursuant to this
section shall remain in force until terminated voluntarily by
the appointing insurer or the license of the agent has for any
reason been terminated during the appointment. The original
appointing insurer, as well as any subsequent appointing
insurer, may terminate the appointment of an agent at any time
by giving written notice thereof to the commissioner and by
sending a copy thereof to the last known address of the agent.
The effective date of the termination shall be the date of
receipt of the notice by the commissioner unless another date is
specified by the insurer in the notice. Within 30 days after
the insurer gives notice of termination to the commissioner, the
insurer shall furnish the agent with a current statement of the
agent's commission account.
Accompanying the notice of a termination given to the
commissioner by the insurer shall be a statement of the specific
reasons constituting the cause of termination. Any document,
record, or statement relating to the agent which is disclosed or
furnished to the commissioner contemporaneously with, or
subsequent to, the notice of termination shall be deemed
confidential by the commissioner and a privileged
communication. The document, record, or statement furnished to
the commissioner shall not be admissible in whole or in part for
any purpose in any action or proceeding against (1) the insurer
or any of its officers, employees, or representatives submitting
or providing the document, record, or statement, or (2) any
person, firm, or corporation furnishing in good faith to the
insurer the information upon which the reasons for termination
are based.
Sec. 13. [60K.11] [DENIAL, REVOCATION, SUSPENSION, AND
CENSURE OF LICENSES.]
Subdivision 1. [GROUNDS.] The commissioner may by order
take any or all of the following actions:
(1) deny, suspend, or revoke an insurance agent or agency
license;
(2) censure the licensee; or
(3) impose a civil penalty as provided for in section
45.027, subdivision 6.
In order to take this action the commissioner must find
that the order is in the public interest and that the applicant,
licensee, or in the case of an insurance agency, partner,
director, shareholder, officer, or agent of that insurance
agency:
(i) does not intend to or is not in good faith carrying on
the business of an insurance agent;
(ii) has filed an application for a license which is
incomplete in any material respect or contains any statement
which, in light of the circumstances under which it is made,
contains any misrepresentation, or is false, misleading, or
fraudulent;
(iii) has engaged in an act or practice, whether or not
such act or practice involves the business of insurance, which
demonstrates that the applicant or licensee is untrustworthy,
financially irresponsible, or otherwise incompetent or
unqualified to act as an insurance agent or agency;
(iv) has pled guilty, with or without explicitly admitting
guilt, pled nolo contendere, or been convicted of a felony,
gross misdemeanor, or misdemeanor involving moral turpitude,
including, but not limited to, assault or similar conduct;
(v) has violated or failed to comply with any of the
provisions of the insurance laws including chapter 45 or
chapters 60A to 72A or any rule or order under those chapters;
(vi) is permanently or temporarily enjoined by any court of
competent jurisdiction from engaging in or continuing any
conduct or practice involving any aspect of the insurance
business;
(vii) has violated or failed to comply with any order of
the insurance regulator of any other state or jurisdiction;
(viii) has had an insurance agent or agency license denied,
suspended, or revoked, has been censured or reprimanded, has
been the subject of any other discipline imposed by, or has paid
or has been required to pay a monetary penalty or fine to,
another state or jurisdiction;
(ix) has misrepresented the terms of any actual or proposed
insurance contract;
(x) has engaged in any fraudulent, coercive, deceptive, or
dishonest act or practice whether or not such act or practice
involves the business of insurance;
(xi) has improperly withheld, misappropriated, or converted
to the licensee's or applicant's own use any money belonging to
a policyholder, insurer, beneficiary, or other person; or
(xii) has forged another's name to any document whether or
not the document relates to an application for insurance or a
policy of insurance.
Subd. 2. [LICENSEES.] If the commissioner determines that
one of the conditions listed in subdivision 1 exists, the
commissioner may issue an order requiring a licensee to show
cause why any or all of the following should not occur: (1) the
license revocation or suspension; (2) censuring of the licensee;
or (3) the imposition of a civil penalty. The order shall be
calculated to give reasonable notice of the time and place for
hearing on the matter, and shall state the reasons for the entry
of the order. The commissioner may by order summarily suspend a
license pending final determination of any order to show cause.
If a license is suspended pending final determination of an
order to show cause, a hearing on the merits shall be held
within 30 days of the issuance of the order of suspension. All
hearings shall be conducted in accordance with the provisions of
chapter 14. After the hearing, the commissioner shall enter an
order disposing of the matter as the facts require. If the
licensee fails to appear at a hearing after having been duly
notified of it, the licensee shall be considered in default, and
the proceeding may be determined against the licensee upon
consideration of the order to show cause, the allegations of
which may be considered to be true.
Subd. 3. [APPLICANTS.] Whenever it appears to the
commissioner that a license application should be denied
pursuant to subdivision 1, the commissioner shall promptly give
a written notice to the applicant of the denial. The notice
must state the grounds for the denial and give reasonable notice
of the rights of the applicant to request a hearing. A hearing
must be held not later than 30 days after the request for the
hearing is received by the commissioner unless the applicant and
the department of commerce agree that the hearing may be held at
a later date. If no hearing is requested within 30 days of
service of the notice, the denial will become final. All
hearings shall be conducted in accordance with the provisions of
chapter 14. After the hearing, the commissioner shall enter an
order making such disposition as the facts require. If the
applicant fails to appear at a hearing after having been duly
notified of it, the person shall be considered in default, and
the proceeding may be determined against the applicant upon
consideration of the notice denying application, the allegations
of which may be considered to be true. All fees accompanying
the application and appointment are considered earned and are
not refundable.
Subd. 4. [ACTIONS AGAINST LAPSED LICENSE.] If a license
lapses, is surrendered, withdrawn, terminated, or otherwise
becomes ineffective, the commissioner may institute a proceeding
under this subdivision within two years after the license was
last effective and enter a revocation or suspension order as of
the last date on which the license was in effect, or impose a
civil penalty as provided for in section 45.027, subdivision 6.
Subd. 5. [NOTIFICATION OF ACTION TAKEN BY OTHER STATE.] An
insurance agent shall notify the commissioner within 30 days of
any fine imposed on that agent by another state or of a
suspension or revocation of license by the commissioner of
commerce of this state or the commissioner of insurance of any
other state.
Subd. 6. [CONDITIONS FOR RELICENSURE.] A revocation of a
license shall prohibit the licensee from making a new
application for a license for at least two years from the
effective date of the revocation. Further, the commissioner
shall, as a condition of reapplication, require the applicant to
obtain a performance bond issued by an insurer authorized to
transact business in this state in the amount of $20,000 or a
greater amount the commissioner considers appropriate for the
protection of citizens of this state in the event the
commissioner grants the application. The bond shall be filed
with the commissioner, with the state of Minnesota as obligee,
conditioned for the prompt payment to any aggrieved person
entitled to payment of any amounts received by the licensee or
to protect any aggrieved person from loss resulting from
fraudulent, deceptive, dishonest, or other prohibited practices
arising out of any transaction when the licensee was licensed or
performed acts for which a license is required under this
chapter. The bond shall remain operative for as long as that
licensee is licensed. The bond required by this subdivision
must provide coverage for all matters arising during the period
of licensure.
Sec. 14. [60K.12] [TAX CLEARANCE CERTIFICATE.]
Subdivision 1. [REQUIREMENT FOR ISSUANCE OR RENEWAL OF
LICENSE.] In addition to the provisions of section 60K.11, the
commissioner may not issue or renew a license if the
commissioner of revenue notifies the commissioner and the
licensee or applicant for a license that the licensee or
applicant owes the state delinquent taxes in the amount of $500
or more. The commissioner may issue or renew the license only
if: (1) the commissioner of revenue issues a tax clearance
certificate; and (2) the commissioner of revenue or the licensee
or applicant forwards a copy of the clearance certificate to the
commissioner. The commissioner of revenue may issue a clearance
certificate only if the licensee or applicant does not owe the
state any uncontested delinquent taxes.
Subd. 2. [DEFINITIONS.] For purposes of this section, the
following terms have the meanings given them:
(1) "taxes" are all taxes payable to the commissioner of
revenue, including penalties and interest due on those taxes;
and
(2) "delinquent taxes" do not include a tax liability if
(i) an administrative or court action that contests the amount
or validity of the liability has been filed or served, (ii) the
appeal period to contest the tax liability has not expired, or
(iii) the licensee or applicant has entered into a payment
agreement to pay the liability and is current with the payments.
Subd. 3. [CONTESTED CASE HEARING.] In lieu of the notice
and hearing requirements of section 60K.11, when a licensee or
applicant is required to obtain a clearance certificate under
this section, a contested case hearing must be held if the
licensee or applicant requests a hearing in writing to the
commissioner of revenue within 30 days of the date of the notice
provided in subdivision 1. The hearing must be held within 45
days of the date the commissioner of revenue refers the case to
the office of administrative hearings. Notwithstanding any law
to the contrary, the licensee or applicant must be served with
20 days' notice in writing specifying the time and place of the
hearing and the allegations against the licensee or applicant.
The notice may be served personally or by mail.
Subd. 4. [IDENTIFICATION REQUIRED.] The commissioner shall
require all licensees or applicants to provide their social
security number and Minnesota business identification number on
all license applications. Upon request of the commissioner of
revenue, the commissioner must provide to the commissioner of
revenue a list of all licensees and applicants, including the
name and address, social security number, and business
identification number. The commissioner of revenue may request
a list of the licensees and applicants no more than once each
calendar year.
Sec. 15. [60K.13] [SURRENDER, LOSS, OR DESTRUCTION OF
LICENSE.]
Subdivision 1. [NOTIFICATION.] The commissioner shall
promptly notify the licensee and all appointing insurers, where
applicable, of any suspension, revocation, or termination of the
licensee's agent's license by the commissioner. Upon receipt of
the notice of suspension or revocation of a license, the
licensee shall immediately deliver it to the commissioner.
Subd. 2. [RETURN OF LICENSE.] An agent whose resident or
nonresident license is terminated, as provided in section
60K.11, shall deliver the terminated license to the commissioner
by personal delivery or by mail within 30 days after the date of
termination.
Subd. 3. [DUPLICATE LICENSE.] The commissioner may issue a
duplicate license for any lost, stolen, or destroyed license
issued pursuant to this section upon an affidavit of the
licensee concerning the facts of the loss, theft, or
destruction, and the payment of a fee of $3 by money order or
cashier's check payable to the state treasurer.
Sec. 16. [60K.14] [PROHIBITED ACTS.]
Subdivision 1. [PERSONAL SOLICITATION OF INSURANCE SALES.]
(a) [DEFINITIONS.] For the purposes of this section, the
following terms have the meanings given them:
(1) "agent" means a person, copartnership, or corporation
required to be licensed pursuant to section 60K.02; and
(2) "personal solicitation" means any contact by an agent,
or any person acting on behalf of an agent, made for the purpose
of selling or attempting to sell insurance, when either the
agent or a person acting for the agent contacts the buyer by
telephone or in person, except: (i) an attempted sale in which
the buyer personally knows the identity of the agent, the name
of the general agency, if any, which the agent represents, and
the fact that the agent is an insurance agent; (ii) an attempted
sale in which the prospective purchaser of insurance initiated
the contact; or (iii) a personal contact which takes place at
the agent's place of business.
(b) [DISCLOSURE REQUIREMENT.] Before a personal
solicitation, the agent or person acting for an agent shall, at
the time of initial personal contact or communication with the
potential buyer, clearly and expressly disclose:
(1) the name of the person making the contact or
communication;
(2) the name of the agent, general agency, or insurer that
person represents; and
(3) the fact that the agent, agency, or insurer is in the
business of selling insurance.
(c) [FALSE REPRESENTATION OF GOVERNMENT AFFILIATION.] No
agent or person acting for an agent shall make any communication
to a potential buyer that indicates or gives the impression that
the agent is acting on behalf of a government agency.
Subd. 2. [FEES FOR SERVICES.] No person shall charge a fee
for any services rendered in connection with the solicitation,
negotiation, or servicing of any insurance contract unless:
(1) before rendering the services, a written statement is
provided disclosing:
(i) the services for which fees are charged;
(ii) the amount of the fees;
(iii) that the fees are charged in addition to premiums;
and
(iv) that premiums include a commission; and
(2) all fees charged are reasonable in relation to the
services rendered.
Subd. 3. [COMMISSIONS OR COMPENSATION.] No commission or
other compensation shall be paid or allowed by any person, firm,
or corporation to any other person, firm, or corporation acting,
or assuming to act, as an insurance agent without a license
therefor. A duly licensed agent may pay commissions or assign
or direct that commissions be paid to a partnership of which the
agent is a member, employee, or agent, or to a corporation of
which the agent is an officer, employee, or agent. This
subdivision does not prevent the payment or receipt of renewal
or other deferred commissions to or by any person solely because
the person has ceased to hold a license to act as an insurance
agent.
Subd. 4. [SUITABILITY OF INSURANCE.] In recommending the
purchase of any life, endowment, long-term care, annuity,
life-endowment, or Medicare supplement insurance to a customer,
an agent must have reasonable grounds for believing that the
recommendation is suitable for the customer and must make
reasonable inquiries to determine suitability. The suitability
of a recommended purchase of insurance will be determined by
reference to the totality of the particular customer's
circumstances, including, but not limited to, the customer's
income, the customer's need for insurance, and the values,
benefits, and costs of the customer's existing insurance
program, if any, when compared to the values, benefits, and
costs of the recommended policy or policies.
Subd. 5. [PREMIUMS.] All premiums or other money received
by an agent from an insured or applicant for insurance must be
forthwith deposited directly in a business checking, savings, or
other similar account maintained by the agent or agency, unless
the money is forwarded directly to the designated insurer.
Subd. 6. [PRIVACY OF CLIENT.] Except as otherwise provided
by law, no insurance agent may disclose nor cause to be
disclosed to any other person the identity of a person insured
through the agent without the consent of the insured.
Sec. 17. [60K.15] [INSURER'S AGENT.]
Any person who solicits insurance is the agent of the
insurer and not the agent of the insured.
Sec. 18. [60K.16] [LIABILITY FOR PLACING INSURANCE IN
UNAUTHORIZED COMPANY.]
Any person, regardless of whether that person is required
to be licensed as an insurance agent, who participates in any
manner in the sale of any insurance policy or certificate, or
any other contract providing benefits, for or on behalf of any
company which is required to be, but which is not authorized to
engage in the business of insurance in this state, other than
pursuant to sections 60A.195 to 60A.209, shall be personally
liable for all premiums, whether earned or unearned, paid by the
insured, and the premiums may be recovered by the insured. In
addition, that person shall be personally liable for any loss
the insured has sustained or may sustain if the loss is one
resulting from a risk or hazard covered in the issued policy,
certificate, or contract or which would have been covered if the
policy, certificate, or contract had been issued to the
purchaser of the insurance.
Sec. 19. [60K.17] [AGENTS; VARIABLE CONTRACTS.]
Subdivision 1. [LICENSE REQUIRED.] No person shall sell or
offer for sale a contract on a variable basis unless prior to
making any solicitation or sale the person has obtained from the
commissioner a license therefor. The license shall only be
granted, upon the written requisition of an insurer, to a
qualified person who holds a current license authorizing the
person to solicit and sell life insurance and annuity contracts
in this state. To become qualified, a person shall complete a
written application on a form prescribed by the commissioner and
shall take and pass an examination prescribed by the
commissioner.
Subd. 2. [EXCEPTIONS.] (a) Any regularly salaried officer
or employee of a licensed insurer may, without license or other
qualification, act on behalf of that licensed insurer in the
negotiation of a contract on a variable basis, provided that a
licensed agent must participate in the sale of any contract.
(b) Any person who holds a valid license to solicit and
sell life insurance and annuity contracts may solicit and sell
contracts on a variable basis without acquiring a license under
this subdivision if the contract is based on an account which is
excluded from the definition of investment company under the
Investment Company Act of 1940, United States Code, title 15,
section 80a-3(11).
Subd. 3. [RULES.] The commissioner may by rule waive or
modify any of the requirements in this section or prescribe
additional requirements considered necessary for the proper sale
and solicitation of contracts on a variable basis.
Sec. 20. [60K.18] [ALTERING EXISTING POLICIES; WRITTEN
BINDERS REQUIRED.]
An insurance agent having express authority to bind
coverage, who orally agrees on behalf of an insurer to provide
insurance coverage, or to alter an existing insurance agreement,
shall execute and deliver a written memorandum or binder
containing the terms of the oral agreement to the insured within
three business days from the time the oral agreement is entered.
Sec. 21. Minnesota Statutes 1990, section 62A.41,
subdivision 4, is amended to read:
Subd. 4. [UNLICENSED SALES.] Notwithstanding section
60A.17 60K.02, subdivision 1, paragraph (d), a person who acts
or assumes to act as an insurance agent without a valid license
for the purpose of selling or attempting to sell Medicare
supplement insurance, and the person who aids or abets the
actor, is guilty of a felony and is subject to a civil penalty
of not more than $5,000 per violation.
Sec. 22. Minnesota Statutes 1990, section 62C.17,
subdivision 5, is amended to read:
Subd. 5. A person shall not be qualified for a license if
upon examination or reexamination it is determined that the
person is incompetent to act as an agent or solicitor, if the
person has acted in any manner which would disqualify a person
to hold a license as an insurance agent or solicitor under
section 60A.17, subdivision 6 sections 60K.01 to 60K.18, or if
the person fails to produce documents subpoenaed by the
commissioner, or fails to appear at a hearing to which the
person is a party or has been subpoenaed, if the production of
documents or appearance is lawfully required.
Sec. 23. Minnesota Statutes 1990, section 62D.22,
subdivision 8, is amended to read:
Subd. 8. All agents, solicitors, and brokers engaged in
soliciting or dealing with enrollees or prospective enrollees of
a health maintenance organization, whether employees or under
contract to the health maintenance organization, shall be
subject to the provisions of section 60A.17 sections 60K.01 to
60K.18, concerning the licensure of health insurance agents,
solicitors, and brokers, and lawful rules thereunder. Medical
doctors and others who merely explain the operation of health
maintenance organizations shall be exempt from the provisions of
section 60A.17 sections 60K.01 to 60K.18. Section 60A.17
60K.03, subdivision 1a 2, paragraph (b) shall not apply except
as to provide for an examination of an applicant in the
applicant's knowledge concerning the operations and benefits of
health maintenance organizations and related insurance matters.
Sec. 24. Minnesota Statutes 1990, section 64B.33, is
amended to read:
64B.33 [LICENSING OF AGENTS.]
Agents of societies shall be licensed in accordance with
the provisions of chapter chapters 60A and 60K regulating the
licensing, revocation, suspension, or termination of license of
resident and nonresident agents, except as otherwise provided in
section 60A.17, subdivision 1c 60K.05.
Sec. 25. Minnesota Statutes 1990, section 72A.07, is
amended to read:
72A.07 [VIOLATIONS OF LAWS RELATING TO AGENTS, PENALTIES.]
Any person, firm, or corporation violating, or failing to
comply with, any of the provisions of section 60A.17 sections
60K.01 to 60K.18 and any person who acts in any manner in the
negotiation or transaction of unlawful insurance with an
insurance company not licensed to do business in the state, or
who, as principal or agent, violates any provision of law
relating to the negotiation or effecting of contracts of
insurance, shall be guilty of a misdemeanor. Upon the filing of
a complaint by the commissioner of commerce in a court of
competent jurisdiction against any person violating any
provisions of this section, the county attorney of the county in
which the violation occurred shall prosecute the person. Upon
the conviction of any agent of any violation of the provisions
of section 60A.17 sections 60K.01 to 60K.18, the commissioner
shall suspend the authority of the agent to transact any
insurance business within the state for a period of not less
than three months. Any insurer employing an agent and failing
to procure an appointment, as required by section 60A.17
sections 60K.01 to 60K.18, or allowing the agent to transact
business for it within the state before an appointment has been
procured, shall pay the commissioner, for the use of the state,
a penalty of $25 for each offense. Each sale of an insurance
policy by an agent who is not appointed by an insurance company
shall constitute a separate offense, but no insurer shall be
required to pay more than $300 in penalties as a result of the
activities of a single unappointed agent. In the event of
failure to pay a penalty within ten days after notice from the
commissioner, the authority of the insurer to do business in
this state shall be revoked by the commissioner until the
penalty is paid. No insurer whose authority is revoked shall be
readmitted until it shall have complied with all the terms and
conditions imposed for admission in the first instance. Any
action taken by the commissioner under this section shall be
subject to review by the district court of the county in which
the office of the commissioner is located.
Sec. 26. Minnesota Statutes 1990, section 72A.125,
subdivision 2, is amended to read:
Subd. 2. [SALE BY AUTO RENTAL COMPANIES.] An auto rental
company that offers or sells rental vehicle personal accident
insurance in this state in conjunction with the rental of a
vehicle shall only sell these products if the forms and rates
have met the relevant requirements of section 62A.02, taking
into account the possible infrequency and severity of loss that
may be incurred. Sections 60A.17 and 60A.1701 and 60K.01 to
60K.18 do not apply if the persons engaged in the sale of these
products are employees of the auto rental company who do not
receive commissions or other remuneration for selling the
product in addition to their regular compensation. Compensation
may not be determined in any part by the sale of insurance
products. The auto rental company before engaging in the sale
of the product must file with the commissioner the following
documents:
(1) an appointment of the commissioner as agent for service
of process;
(2) an agreement that the auto rental company assumes all
responsibility for the authorized actions of all unlicensed
employees who sell the insurance product on its behalf in
conjunction with the rental of its vehicles;
(3) an agreement that the auto rental company with respect
to itself and its employees will be subject to this chapter
regarding the marketing of the insurance products and the
conduct of those persons involved in the sale of insurance
products in the same manner as if it were a licensed agent.
An auto rental company failing to file the documents in
clauses (1) to (3) is guilty of an individual violation as to
the unlicensed sale of insurance for each sale that occurs after
August 1, 1987, until they make the required filings. Each
individual sale after August 1, 1987, and prior to the filing
required by this section is subject to, in addition to any other
penalties allowable by law, up to a $200 per violation fine.
Further, the sale of the insurance product by an auto rental
company or any employee or agent of the company after August 1,
1987, without having complied with this section shall be deemed
to be in acceptance of the provisions of this section.
Insurance sold pursuant to this subdivision must be limited
in availability to rental vehicle customers though coverage may
extend to the customer, other drivers, and passengers using or
riding in the rented vehicles; and limited in duration to a
period equal to and concurrent with that of the vehicle rental.
Persons purchasing rental vehicle personal accident
insurance may be provided a certificate summarizing the policy
provisions in lieu of a copy of the policy if a copy of the
policy is available for inspection at the place of sale and a
free copy of the policy may be obtained from the auto rental
company's home office.
The commissioner may, after a hearing, revoke an auto
rental company's right to operate under this section if the
company has repeatedly violated the insurance laws of this state
and the revocation is in the public interest.
Sec. 27. Minnesota Statutes 1990, section 72A.201,
subdivision 3, is amended to read:
Subd. 3. [DEFINITIONS.] For the purposes of this section,
the following terms have the meanings given them.
(1) Adjuster or adjusters. "Adjuster" or "adjusters" is as
defined in section 72B.02.
(2) Agent. "Agent" means insurance agents or insurance
agencies licensed pursuant to section 60A.17 sections 60K.01 to
60K.18, and representatives of these agents or agencies.
(3) Claim. "Claim" means a request or demand made with an
insurer for the payment of funds or the provision of services
under the terms of any policy, certificate, contract of
insurance, binder, or other contracts of temporary insurance.
The term does not include a claim under a health insurance
policy made by a participating provider with an insurer in
accordance with the participating provider's service agreement
with the insurer which has been filed with the commissioner of
commerce prior to its use.
(4) Claim settlement. "Claim settlement" means all
activities of an insurer related directly or indirectly to the
determination of the extent of liabilities due or potentially
due under coverages afforded by the policy, and which result in
claim payment, claim acceptance, compromise, or other
disposition.
(5) Claimant. "Claimant" means any individual,
corporation, association, partnership, or other legal entity
asserting a claim against any individual, corporation,
association, partnership, or other legal entity which is insured
under an insurance policy or insurance contract of an insurer.
(6) Complaint. "Complaint" means a communication primarily
expressing a grievance.
(7) Insurance policy. "Insurance policy" means any
evidence of coverage issued by an insurer including all
policies, contracts, certificates, riders, binders, and
endorsements which provide or describe coverage. The term
includes any contract issuing coverage under a self-insurance
plan, group self-insurance plan, or joint self-insurance
employee health plans.
(8) Insured. "Insured" means an individual, corporation,
association, partnership, or other legal entity asserting a
right to payment under their insurance policy or insurance
contract arising out of the occurrence of the contingency or
loss covered by the policy or contract. The term does not apply
to a person who acquires rights under a mortgage.
(9) Insurer. "Insurer" includes any individual,
corporation, association, partnership, reciprocal exchange,
Lloyds, fraternal benefits society, self-insurer, surplus line
insurer, self-insurance administrator, and nonprofit service
plans under the jurisdiction of the department of commerce.
(10) Investigation. "Investigation" means a reasonable
procedure adopted by an insurer to determine whether to accept
or reject a claim.
(11) Notification of claim. "Notification of claim" means
any communication to an insurer by a claimant or an insured
which reasonably apprises the insurer of a claim brought under
an insurance contract or policy issued by the insurer.
Notification of claim to an agent of the insurer is notice to
the insurer.
(12) Proof of loss. "Proof of loss" means the necessary
documentation required from the insured to establish entitlement
to payment under a policy.
(13) Self-insurance administrator. "Self-insurance
administrator" means any vendor of risk management services or
entities administering self-insurance plans, licensed pursuant
to section 60A.23, subdivision 8.
(14) Self-insured or self-insurer. "Self-insured" or
"self-insurer" means any entity authorized pursuant to section
65B.48, subdivision 3; chapter 62H; section 176.181, subdivision
2; Laws of Minnesota 1983, chapter 290, section 171; section
471.617; or section 471.981 and includes any entity which, for a
fee, employs the services of vendors of risk management services
in the administration of a self-insurance plan as defined by
section 60A.23, subdivision 8, clause (2), subclauses (a) and
(d).
Sec. 28. Minnesota Statutes 1990, section 270B.07,
subdivision 1, is amended to read:
Subdivision 1. [DISCLOSURE TO LICENSING AUTHORITIES.] The
commissioner may disclose return information with respect to
returns filed under Minnesota tax laws to licensing authorities
of the state or political subdivisions of the state to the
extent necessary to enforce the license clearance programs under
sections 60A.17 60K.12, 82.27, 147.091, 148.10, 150A.08, and
270.72.
Sec. 29. [REVISOR INSTRUCTION.]
(a) The revisor shall recodify Minnesota Statutes, section
60A.1701, as Minnesota Statutes, section 60K.19, and shall make
the necessary cross-reference changes in Minnesota Statutes and
Minnesota Rules.
(b) If a provision of Minnesota Statutes, chapter 60A,
repealed by this article is also amended in the 1992 regular
legislative session by other law, the revisor shall recodify the
amendment to be part of the recodification, notwithstanding
Minnesota Statutes, section 645.30.
Sec. 30. [REPEALER.]
Minnesota Statutes 1990, sections 60A.05; 60A.051; 60A.17,
subdivisions 1, 1a, 1b, 1c, 2c, 2d, 3, 5, 5b, 6, 6b, 6c, 6d, 7a,
8, 8a, 9a, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, and 21;
and Minnesota Statutes 1991 Supplement, section 60A.17,
subdivision 1d, are repealed.
Sec. 31. [EFFECTIVE DATE.]
Section 8 is effective for the licensing year beginning
June 1, 1992.
ARTICLE 4
MISCELLANEOUS
Section 1. [45.0291]
Bonds issued under chapters 45 to 83, 309, 332, and
sections 326.83 to 326.98, are not state bonds or contracts for
purposes of sections 8.05 and 16B.06, subdivision 2.
Sec. 2. Minnesota Statutes 1990, section 46.03, is amended
to read:
46.03 [SEAL OF DEPARTMENT OF COMMERCE.]
The commissioner of commerce, in chapters 46 to 59, called
the commissioner, shall devise a seal for official use, which
shall continue to be the seal of the department of
commerce. The seal must be capable of being legibly reproduced
under photographic methods. A description of the seal; with an
impression thereof, and a copy of it, shall be filed in the
office of the secretary of state.
Sec. 3. [60A.085] [CANCELLATION OF GROUP COVERAGE;
NOTIFICATION TO COVERED PERSONS.]
(a) No cancellation of any group life, group accidental
death and dismemberment, group disability income, or group
medical expense policy, plan, or contract is effective unless
the insurer has made a good faith effort to notify all covered
persons of the cancellation at least 30 days before the
effective cancellation date. For purposes of this section, an
insurer has made a good faith effort to notify all covered
persons if the insurer has notified all the persons included on
the list required by paragraph (b) at the home address given and
only if the list has been updated within the last 12 months.
(b) At the time of the application for coverage subject to
paragraph (a), the insurer shall obtain an accurate list of the
names and home addresses of all persons to be covered. The
insurer shall obtain an update of the list at least once during
each subsequent 12-month period while the policy, plan, or
contract is in force.
Sec. 4. Minnesota Statutes 1990, section 60A.23,
subdivision 8, is amended to read:
Subd. 8. [SELF-INSURANCE OR INSURANCE PLAN ADMINISTRATORS
WHO ARE VENDORS OF RISK MANAGEMENT SERVICES.] (1) [SCOPE.] This
subdivision applies to any vendor of risk management services
and to any entity which administers, for compensation, a
self-insurance or insurance plan. This subdivision does not
apply (a) to an insurance company authorized to transact
insurance in this state, as defined by section 60A.06,
subdivision 1, clauses (4) and (5); (b) to a service plan
corporation, as defined by section 62C.02, subdivision 6; (c) to
a health maintenance organization, as defined by section 62D.02,
subdivision 4; (d) to an employer directly operating a
self-insurance plan for its employees' benefits; or (e) to an
entity which administers a program of health benefits
established pursuant to a collective bargaining agreement
between an employer, or group or association of employers, and a
union or unions.
(2) [DEFINITIONS.] For purposes of this subdivision the
following terms have the meanings given them.
(a) "Administering a self-insurance or insurance plan"
means (i) processing, reviewing or paying claims, (ii)
establishing or operating funds and accounts, or (iii) otherwise
providing necessary administrative services in connection with
the operation of a self-insurance or insurance plan.
(b) "Employer" means an employer, as defined by section
62E.02, subdivision 2.
(c) "Entity" means any association, corporation,
partnership, sole proprietorship, trust, or other business
entity engaged in or transacting business in this state.
(d) "Self-insurance or insurance plan" means a plan
providing life, medical or hospital care, accident, sickness or
disability insurance, as an employee fringe benefit, or a plan
providing liability coverage for any other risk or hazard, which
is or is not directly insured or provided by a licensed insurer,
service plan corporation, or health maintenance organization.
(e) "Vendor of risk management services" means an entity
providing for compensation actuarial, financial management,
accounting, legal or other services for the purpose of designing
and establishing a self-insurance or insurance plan for an
employer.
(3) [LICENSE.] No vendor of risk management services or
entity administering a self-insurance or insurance plan may
transact this business in this state unless it is licensed to do
so by the commissioner. An applicant for a license shall state
in writing the type of activities it seeks authorization to
engage in and the type of services it seeks authorization to
provide. The license may be granted only when the commissioner
is satisfied that the entity possesses the necessary
organization, background, expertise, and financial integrity to
supply the services sought to be offered. The commissioner may
issue a license subject to restrictions or limitations upon the
authorization, including the type of services which may be
supplied or the activities which may be engaged in. The license
fee is $100. All licenses are for a period of two years.
(4) [REGULATORY RESTRICTIONS; POWERS OF THE COMMISSIONER.]
To assure that self-insurance or insurance plans are financially
solvent, are administered in a fair and equitable fashion, and
are processing claims and paying benefits in a prompt, fair, and
honest manner, vendors of risk management services and entities
administering insurance or self-insurance plans are subject to
the supervision and examination by the commissioner. Vendors of
risk management services, entities administering insurance or
self-insurance plans, and insurance or self-insurance plans
established or operated by them are subject to the trade
practice requirements of sections 72A.19 to 72A.30. In lieu of
an unlimited guarantee from a parent corporation for a vendor of
risk management services or an entity administering insurance or
self-insurance plans, the commissioner may accept a fidelity
bond in a form satisfactory to the commissioner in an amount
equal to 120 percent of the total amount of claims handled by
the applicant in the prior year. If at any time the total
amount of claims handled during a year exceeds the amount upon
which the bond was calculated, the administrator shall
immediately notify the commissioner. The commissioner may
require that the bond be increased accordingly.
(5) [RULEMAKING AUTHORITY.] To carry out the purposes of
this subdivision, the commissioner may adopt rules, including
emergency rules, pursuant to sections 14.001 to 14.69. These
rules may:
(a) establish reporting requirements for administrators of
insurance or self-insurance plans;
(b) establish standards and guidelines to assure the
adequacy of financing, reinsuring, and administration of
insurance or self-insurance plans;
(c) establish bonding requirements or other provisions
assuring the financial integrity of entities administering
insurance or self-insurance plans; or
(d) establish other reasonable requirements to further the
purposes of this subdivision.
Sec. 5. Minnesota Statutes 1990, section 62A.146, is
amended to read:
62A.146 [CONTINUATION OF BENEFITS TO SURVIVORS.]
No policy, contract, or plan of accident and health
protection issued by an insurer, nonprofit health service plan
corporation, or health maintenance organization, providing
coverage of hospital or medical expense on either an expense
incurred basis or other than an expense incurred basis which in
addition to coverage of the insured, subscriber, or enrollee,
also provides coverage to dependents, shall, except upon the
written consent of the survivor or survivors of the deceased
insured, subscriber, or enrollee, terminate, suspend, or
otherwise restrict the participation in or the receipt of
benefits otherwise payable under the policy, contract, or plan
to the survivor or survivors until the earlier of the following
dates:
(a) the date the surviving spouse becomes covered under
another group health plan; or
(b) the date coverage would have terminated under the
policy, contract, or plan had the insured, subscriber, or
enrollee lived.
The survivor or survivors, in order to have the coverage
and benefits extended, may be required to pay the entire cost of
the protection on a monthly basis. The policy, contract, or
plan must require the group policyholder or contract holder to,
upon request, provide the insured, subscriber, or enrollee with
written verification from the insurer of the cost of this
coverage promptly at the time of eligibility for this coverage
and at any time during the continuation period. In no event
shall the amount of premium or fee contributions charged exceed
102 percent of the cost to the plan for such period of coverage
for other similarly situated spouses and dependent children who
are not the survivors of a deceased insured, without regard to
whether such cost is paid by the employer or employee. Failure
of the survivor to make premium or fee payments within 90 days
after notice of the requirement to pay the premiums or fees
shall be a basis for the termination of the coverage without
written consent. In event of termination by reason of the
survivor's failure to make required premium or fee
contributions, written notice of cancellation must be mailed to
the survivor's last known address at least 30 days before the
cancellation. If the coverage is provided under a group policy,
contract, or plan, any required premium or fee contributions for
the coverage shall be paid by the survivor to the group
policyholder or contract holder for remittance to the insurer,
nonprofit health service plan corporation, or health maintenance
organization.
Sec. 6. Minnesota Statutes 1990, 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. The policy, contract, or plan must require the group
policyholder or contract holder to, upon request, provide the
employee with written verification from the insurer of the cost
of this coverage promptly at the time of eligibility for this
coverage and at any time during the continuation period. 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. 7. Minnesota Statutes 1990, section 62A.21,
subdivision 2a, is amended to read:
Subd. 2a. [CONTINUATION PRIVILEGE.] Every policy described
in subdivision 1 shall contain a provision which permits
continuation of coverage under the policy for the insured's
former spouse and dependent children upon entry of a valid
decree of dissolution of marriage. The coverage shall be
continued until the earlier of the following dates:
(a) the date the insured's former spouse becomes covered
under any other group health plan; or
(b) the date coverage would otherwise terminate under the
policy.
If the coverage is provided under a group policy, any
required premium contributions for the coverage shall be paid by
the insured on a monthly basis to the group policyholder for
remittance to the insurer. The policy must require the group
policyholder to, upon request, provide the insured with written
verification from the insurer of the cost of this coverage
promptly at the time of eligibility for this coverage and at any
time during the continuation period. In no event shall the
amount of premium charged exceed 102 percent of the cost to the
plan for such period of coverage for other similarly situated
spouses and dependent children with respect to whom the marital
relationship has not dissolved, without regard to whether such
cost is paid by the employer or employee.
Sec. 8. [62A.285] [PROHIBITED UNDERWRITING; BREAST
IMPLANTS.]
Subdivision 1. [SCOPE OF COVERAGE.] This section applies
to all policies of accident and health insurance regulated under
this chapter, subscriber contracts offered by nonprofit health
service plan corporations regulated under chapter 62C, health
maintenance contracts regulated under chapter 62D, and health
benefit certificates offered through a fraternal benefit society
regulated under chapter 64B. This section does not apply to
policies, plans, certificates, or contracts payable on a fixed
indemnity or nonexpense incurred basis, or policies, plans,
certificates, or contracts that provide only accident coverage.
Subd. 2. [REQUIRED COVERAGE.] No policy, plan,
certificate, or contract referred to in subdivision 1 shall be
issued or renewed to provide coverage to a Minnesota resident if
it provides an exclusion, reduction, or other limitation as to
coverage, deductible, coinsurance, or copayment applicable
solely to conditions caused by breast implants.
Subd. 3. [REFUSAL TO ISSUE OR RENEW.] No issuer of a
policy, plan, certificate, or contract referred to in
subdivision 1 shall refuse to issue or renew at standard premium
rates a policy, plan, certificate, or contract referred to in
subdivision 1 solely because the prospective insured or enrollee
has breast implants.
Subd. 4. [EXCLUSION PERMITTED.] A policy, plan,
certificate, or contract referred to in subdivision 1 may limit
or exclude coverage for conditions caused by breast implants, if
the conditions were diagnosed prior to the date that coverage
for the person begins.
Sec. 9. Minnesota Statutes 1990, section 62C.142,
subdivision 2a, is amended to read:
Subd. 2a. [CONTINUATION PRIVILEGE.] Every subscriber
contract, other than a contract whose continuance is contingent
upon continued employment or membership, shall contain a
provision which permits continuation of coverage under the
contract for the subscriber's former spouse and children upon
entry of a valid decree of dissolution of marriage, if the
decree requires the subscriber to provide continued coverage for
those persons. The coverage may be continued until the earlier
of the following dates:
(a) the date of remarriage of either the subscriber or the
subscriber's former spouse; or
(b) the date coverage would otherwise terminate under the
subscriber contract.
The contract must require the group contract holder to,
upon request, provide the insured with written verification from
the insurer of the cost of this coverage promptly at the time of
eligibility for this coverage and at any time during the
continuation period. In no event shall the amount of premium
charged exceed 102 percent of the cost to the plan for such
period of coverage for other similarly situated spouses and
dependent children with respect to whom the marital relationship
has not dissolved, without regard to whether such cost is paid
by the employer or employee.
Sec. 10. Minnesota Statutes 1990, section 62D.101,
subdivision 2a, is amended to read:
Subd. 2a. [CONTINUATION PRIVILEGE.] Every health
maintenance contract as described in subdivision 1 shall contain
a provision which permits continuation of coverage under the
contract for the enrollee's former spouse and children upon
entry of a valid decree of dissolution of marriage. The
coverage shall be continued until the earlier of the following
dates:
(a) the date the enrollee's former spouse becomes covered
under another group plan or Medicare; or
(b) the date coverage would otherwise terminate under the
health maintenance contract.
If coverage is provided under a group policy, any required
premium contributions for the coverage shall be paid by the
enrollee on a monthly basis to the group contract holder to be
paid to the health maintenance organization. The contract must
require the group contract holder to, upon request, provide the
enrollee with written verification from the insurer of the cost
of this coverage promptly at the time of eligibility for this
coverage and at any time during the continuation period. In no
event shall the fee charged exceed 102 percent of the cost to
the plan for the period of coverage for other similarly situated
spouses and dependent children when the marital relationship has
not dissolved, regardless of whether the cost is paid by the
employer or employee.
Sec. 11. Minnesota Statutes 1991 Supplement, section
62E.10, subdivision 9, is amended to read:
Subd. 9. [EXPERIMENTAL DELIVERY METHOD.] The association
may petition the commissioner of commerce for a waiver to allow
the experimental use of alternative means of health care
delivery. The commissioner may approve the use of the
alternative means the commissioner considers appropriate. The
commissioner may waive any of the requirements of this chapter
and chapters 60A, 62A, and 62D in granting the waiver. The
commissioner may also grant to the association any additional
powers as are necessary to facilitate the specific waiver,
including the power to implement a provider payment schedule.
This subdivision is effective until August 1, 1992 1993.
Sec. 12. Minnesota Statutes 1991 Supplement, section
62E.12, is amended to read:
62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE
PLAN.]
The association through its comprehensive health insurance
plan shall offer policies which provide the benefits of a number
one qualified plan, and a number two qualified plan, except that
the maximum lifetime benefit on these plans shall be $1,000,000,
and basic and extended basic Medicare supplement plans. The
requirement that a policy issued by the association must be a
qualified plan is satisfied if the association contracts with a
preferred provider network and the level of benefits for
services provided within the network satisfies the requirements
of a qualified plan. If the association uses a preferred
provider network, payments to nonparticipating providers must
meet the minimum requirements of section 72A.20, subdivision
15. They shall offer health maintenance organization contracts
in those areas of the state where a health maintenance
organization has agreed to make the coverage available and has
been selected as a writing carrier. Notwithstanding the
provisions of section 62E.06 the state plan shall exclude
coverage of services of a private duty nurse other than on an
inpatient basis and any charges for treatment in a hospital
located outside of the state of Minnesota in which the covered
person is receiving treatment for a mental or nervous disorder,
unless similar treatment for the mental or nervous disorder is
medically necessary, unavailable in Minnesota and provided upon
referral by a licensed Minnesota medical practitioner.
Sec. 13. Minnesota Statutes 1990, section 65A.29,
subdivision 11, is amended to read:
Subd. 11. [NONRENEWAL PLAN.] Every insurer shall establish
a plan that sets out the minimum number and amount of claims
during an experience period that may result in a nonrenewal. A
clear and concise written statement of this plan must be
provided to the insured at the time claim forms and instructions
are provided to the insured or a claimant under section 72A.201,
subdivision 4 when any future losses may result in nonrenewal of
the policy.
The plan must, at a minimum, comply with the requirements
of subdivision 8 and the rules adopted by the commissioner.
Sec. 14. Minnesota Statutes 1990, section 72A.20, is
amended by adding a subdivision to read:
Subd. 28. [CONVERSION FEES PROHIBITED.] An issuer
providing health coverage through conversion policies, plans, or
contracts shall not impose a fee or charge, other than the
premium, for issuing these policies, plans, or contracts.
Sec. 15. Minnesota Statutes 1990, section 332.15,
subdivision 4, is amended to read:
Subd. 4. [BOND.] Every applicant shall submit to the
commissioner at the time of the application for a license, a
surety bond to be approved by the attorney general in which the
applicant shall be the obligor, in a sum to be determined by the
commissioner but not less than $5,000, and in which an insurance
company, which is duly authorized by the state of Minnesota to
transact the business of fidelity and surety insurance, shall be
a surety; provided, however, the commissioner may accept a
deposit in cash, or securities such as may legally be purchased
by savings banks or for trust funds of an aggregate market value
equal to the bond requirement, in lieu of the surety bond, such
cash or securities to be deposited with the state treasurer.
The commissioner may also require a fidelity bond in an
appropriate amount covering employees of any applicant. Each
branch office or additional place of business of an applicant
shall be bonded as provided herein. In determining the bond
amount necessary for the maintenance of any office be it surety,
fidelity or both the commissioner shall consider the financial
responsibility, experience, character and general fitness of the
agency and its operators and owners; the volume of business
handled or proposed to be handled; the location of the office
and the geographical area served or proposed to be served; and
such other information the commissioner may deem pertinent based
upon past performance, previous examinations, annual reports and
manner of business conducted in other states.
Sec. 16. Minnesota Statutes 1991 Supplement, section
332.55, is amended to read:
332.55 [BOND.]
A credit services organization must submit to the
commissioner at the time of registration, a surety bond of
$10,000 to be approved by the attorney general and in which an
insurance company, which is authorized by the state of Minnesota
to transact the business of fidelity and surety insurance, is a
surety. The credit services organization must be the obligor.
The bond must benefit the state of Minnesota and any person who
may have a cause of action against the obligor arising out of
the obligor's activities as a credit services organization. The
commissioner may accept a deposit in cash, or securities that
may be legally purchased by savings banks or for trust funds of
an aggregate market value equal to the bond requirement, in lieu
of the surety bond. The cash or securities must be deposited
with the state treasurer.
Sec. 17. Minnesota Statutes 1991 Supplement, section
345.485, is amended to read:
345.485 [RECOVERY OF PROPERTY IN OTHER STATES BY OTHERS.]
The commissioner may request that the attorney general of
another state or another person or entity in the other state
make a demand or bring an action to recover unclaimed property
in the name of the commissioner in the other state. The
commissioner may request that another person or entity make a
demand or bring an action to recover unclaimed property in this
state in the name of the commissioner. This state shall pay all
expenses including attorney fees incurred under this section.
The commissioner may agree to pay fees to the person or entity
making the demand or bringing the action based in whole or in
part on a percentage of the value of any property recovered.
Expenses paid under this section shall not reduce the amount to
which the claimant is entitled.
Sec. 18. [MINIMUM LOSS RATIO STUDY.]
The commissioner of commerce shall study the effect of
minimum loss ratios required under Minnesota Statutes, section
62A.135, and report to the legislature by January 31, 1993.
Sec. 19. [EFFECTIVE DATE.]
Section 8 is effective the day following final enactment.
ARTICLE 5
Section 1. Minnesota Statutes 1990, section 62B.07, is
amended by adding a subdivision to read:
Subd. 8. [ANNUAL REPORT.] Each insurer that sold insurance
regulated under this chapter in this state or to a Minnesota
resident during the preceding calendar year shall file, as a
supplement to its annual statement, a report covering that
calendar year. The report must include the following data for
coverage regulated by this chapter and sold in this state or to
a Minnesota resident, all shown separately for each rate for
each policy form or certificate form used for credit insurance
regulated under chapter 62B:
(1) claims incurred;
(2) premiums earned;
(3) expenses other than claims;
(4) the data described in clauses (1), (2), and (3), shown
separately for policies sold at each premium rate used by the
insurer;
(5) a statement as to whether the insurer applies or has
applied underwriting criteria to coverage sold under this
chapter, a description of any such criteria and the specific
policies or certificates to which the criteria are applied;
(6) information as to the compensation paid in regard to
the sale of credit insurance regulated under chapter 62B as
follows:
(i) the name and address of each person or company to whom
compensation was paid;
(ii) the total compensation paid to each person or company;
and
(iii) the total premiums written by each person or company
for which the compensation in clause (2) was paid; and
(7) any other information requested by the commissioner.
For purposes of this section, "compensation" includes
pecuniary or nonpecuniary remuneration of any kind relating to
the sale or renewal of the policy or certificate, including but
not limited to bonuses, gifts, prizes, awards, dividends,
experience refunds, retrospective commissions, finder's fees,
and increased or decreased prices for other transactions with
the insurer.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective for the annual report due after
January 1, 1993.
Presented to the governor April 17, 1992
Signed by the governor April 29, 1992, 8:13 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes