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. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 1990, section 60A.172, is amended to read: 60A.172 [INSURANCE AGENCY CONTRACTS; CANCELLATION.] (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
premiumsclaims paid divided by the claimspremiums 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 enactment. 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