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


                         Laws of Minnesota 1992 

                        CHAPTER 379-S.F.No. 1689 
           An act relating to insurance; property and casualty; 
          regulating certain terminations and modifications or 
          changes to certain agent agreements; modifying the 
          definition of loss ratio experience; modifying 
          membership in the board of review; amending Minnesota 
          Statutes 1990, sections 60A.172; and 60A.177, 
          subdivision 3. 
    Section 1.  Minnesota Statutes 1990, section 60A.172, is 
amended to read: 
    (a) An insurer may not cancel a written agreement with an 
agent or reduce or restrict an agent's underwriting authority 
with respect to property or casualty insurance, based solely on 
the loss ratio experience on that agent's book of business, if:  
the insurer required the agent to submit the application for 
underwriting approval, all material information on the 
application was fully completed, and the agent has not omitted 
or altered any information provided by the applicant. 
    (b) For purposes of this section, "loss ratio experience" 
means the ratio of premiums claims paid divided by the claims 
premiums paid during the previous two-year period. 
    (c) This section applies only to agents who write 80 
percent or more of their gross annual insurance business for one 
company or any or all of its subsidiaries, and are not in the 
direct employ of the company. 
     Sec. 2.  Minnesota Statutes 1990, section 60A.177, 
subdivision 3, is amended to read: 
    Subd. 3.  [BOARD OF REVIEW.] A three-member board of review 
shall be selected from a list of ten agents and ten insurer 
representatives compiled by the commissioner.  One member shall 
be selected by the agent, and one by the insurer, and one by the 
commissioner.  The third member shall be mutually agreed upon by 
both parties.  If the parties do not agree upon a third member, 
the commissioner shall request the American Arbitration 
Association to provide the commissioner with three names of 
potential members.  If the American Arbitration Association 
declines to provide the names, the commissioner of the bureau of 
mediation services shall provide the names.  The agent member 
and the insurer member shall each strike one person from the 
list.  The remaining person shall be selected as the third 
member of the review board.  The insurer and the agent shall 
each pay one-half of the fee charged by the third member.  The 
board member selected by the agent may not be a relative of the 
agent.  The board members selected by the agent and insurer may 
not be presently or formerly associated with an insurer 
represented by the agent.  An insurer is immune from civil 
liability to the agent for disclosures made at the hearing.  
This immunity does not extend to disclosures made in bad faith 
or with knowledge of their falseness. 
     Sec. 3.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective the day following final 
    Presented to the governor March 30, 1992 
    Signed by the governor April 1, 1992, 4:50 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes