language to be deleted (2) new language
Laws of Minnesota 1992 CHAPTER 520-H.F.No. 1980 An act relating to insurance; clarifying interest on accidental death benefits; regulating the structure and functions of the Minnesota automobile insurance plan; amending Minnesota Statutes 1990, sections 61A.011, by adding a subdivision; 65B.01; 65B.02, subdivisions 1, 4, and 7; 65B.03, subdivision 1; 65B.04, subdivisions 3, 4, and by adding a subdivision; 65B.05; 65B.06; 65B.07, subdivision 4; 65B.08, subdivisions 1 and 2; 65B.09; 65B.10; and 65B.12, subdivision 1; repealing Minnesota Statutes 1990, sections 65B.04, subdivisions 1 and 2; and 65B.07, subdivision 2. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 1990, section 61A.011, is amended by adding a subdivision to read: Subd. 7. [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. 2. Minnesota Statutes 1990, section 65B.01, is amended to read: 65B.01 [PURPOSES, CONSTRUCTION AND SCOPE.] Subdivision 1. [PURPOSE.] The purposes of
Laws 1971, chapter 813sections 65B.01 to 65B.12 are to provide the guarantee that automobile insurance coverage will be available to any person who is unable to procure such insurance through ordinary methods by providing a facility for the placement of automobile insurance risks with insurers, and to preserve to the public the benefits of price competition by encouraging maximum use of the normal private insurance system. Laws 1971, chapter 813Sections 65B.01 to 65B.12 shall be liberally construed to effect the purposes stated. Subd. 2. [SCOPE AND MEMBERSHIP.] Every insurer authorized to write and writingautomobile bodily injury liability, property damageliability or physical damage insurance in this state, as a condition precedent to being licensed or to retain such license to write such insurance in this state, shall be a member of the facility and shall participate therein under the terms and provisions of Laws 1971, chapter 813. Every such insurer shall be a member of such a facility on a date specified by the commissioner of commercesections 65B.01 to 65B.12. Sec. 3. Minnesota Statutes 1990, section 65B.02, subdivision 1, is amended to read: Subdivision 1. Unless the language or context clearly indicates a different meaning is intended, the following terms shall, for the purposes of Laws 1971, chapter 813sections 65B.01 to 65B.12, have the meanings ascribed to them. Sec. 4. Minnesota Statutes 1990, section 65B.02, subdivision 4, is amended to read: Subd. 4. " ParticipatingMember" means an insurer who is required by Laws 1971, chapter 813sections 65B.01 to 65B.12, to be a member of the facility and who in the second preceding calendar year, has written automobile insurance in this state. Sec. 5. Minnesota Statutes 1990, section 65B.02, subdivision 7, is amended to read: Subd. 7. "Participation ratio" means the ratio of the participatingmember's Minnesota premiums, or other measure of business written approved by the commissioner, in relation to the comparable statewide totals for all participatingmembers. (1) For private passenger nonfleet automobile insurance coverages the participation ratio shall be based on voluntary car years written in this state for the calendar year ending December 31 of the second prior year, as reported by the statistical agent of each participatingmember as private passenger nonfleet exposures. (2) For insurance coverages on all other automobiles, including insurance for fleets, commercial vehicles, public vehicles and garages, the ratio shall be based on the total Minnesota gross, direct automobile insurance premiums written, including both policy and membership fees less return premiums and premiums on policies not taken, without including reinsurance assumed and without deducting reinsurance ceded, and less the amount of such premiums reported as received for insurance on private passenger nonfleet vehicles, for the calendar year ending December 31 of the second prior year. (3) For the purpose of determining each participatingmember's responsibility for expenses and assessments, the ratio shall be based on each participatingmember's total Minnesota car years and gross, direct premiums written, including both policy and membership fees less return premiums and premiums on policies not taken, without including reinsurance assumed and without deducting reinsurance ceded, for the calendar year ending December 31 of the second prior year, provided, however, that the preliminary determination of each participatingmember's responsibility for expenses and assessments may use the calendar year ending December 31 of the third prior year. Sec. 6. Minnesota Statutes 1990, section 65B.03, subdivision 1, is amended to read: Subdivision 1. [MEMBERSHIP.] The commissioner shall direct thatAn election must be held among every insurer subject to this chaptersections 65B.01 to 65B.12, for the election of insurer representatives on the facility governing committee. The governing committee shall be made up of nine individuals, five of whom shall be elected by participatingmembers of the facility and four who shall be public members. Public members may include licensed insurance agents. The public members shall be appointed by the commissioner. Each insurer member of the governing committee shall be a participating member.The term of office for members of the governing committee is two years. Each participatingmember serving on the governing committee shall be represented by a salaried employee of that participatingmember, and not more than one participatingmember in a group under the same management shall serve on the governing committee at the same time. Sec. 7. Minnesota Statutes 1990, section 65B.04, is amended by adding a subdivision to read: Subd. 1a. [PLAN.] The plan of operation consists of the operation procedures of the facility. Sec. 8. Minnesota Statutes 1990, section 65B.04, subdivision 3, is amended to read: Subd. 3. [AMENDMENTS.] The plan of operation may be amended by a majority vote of the governing committee, the approval of the commissioner and ratification by a majority of the participatingmembers. An order by the commissioner disapproving an amendment to the plan of operation must be issued within 30 days of receipt by the commissioner of the proposed amendment, certified by the governing committee as having been adopted by that committee by a majority vote, or the amendment shall be deemed approved by the commissioner. An order of disapproval may be reviewed as provided in subdivision 1appealed as provided in chapter 14. Sec. 9. Minnesota Statutes 1990, section 65B.04, subdivision 4, is amended to read: Subd. 4. [ADHERENCE TO PLAN.] Every insurer authorized to write and writingautomobile bodily injury liability, property damage liability or physical damage insurance in this state, as a condition to maintaining its authorization to transact the business of insurance in this state, shall adhere to the plan of operation. Sec. 10. Minnesota Statutes 1990, section 65B.05, is amended to read: 65B.05 [POWER OF FACILITY, GOVERNING COMMITTEE.] The governing committee shall have the power to direct the operation of the facility in all pursuits consistent with the purposes and terms of Laws 1971, chapter 813sections 65B.01 to 65B.12, including but not limited to the following: (1) To sue and be sued in the name of the facility and to assess each participatingmember in accord with its participation ratio to pay any judgment against the facility as an entity, provided, however, that no judgment against the facility shall create any liabilities in one or more participatingmembers disproportionate to their participation ratio or an individual representing participatingmembers on the governing committee. (2) To delegate ministerial duties, to hire a manager and to contract for goods and services from others. (3) To assess participatingmembers on the basis of participation ratios to cover anticipated costs of operation and administration of the facility. (4) To impose limitations on cancellation or nonrenewal by participatingmembers of insureds covered pursuant to placement through the facility in addition to the limitations imposed by chapter 72A and sections 65B.13 to 65B.21. Sec. 11. Minnesota Statutes 1990, section 65B.06, is amended to read: 65B.06 [DISTRIBUTION OF RISKS; COVERAGE.] Subdivision 1. With respect to private passenger, nonfleet automobiles, the facility shall provide for the equitable distribution of qualified applicants to participatingmembers in accordance with the participation ratio. Subd. 2. With respect to private passenger, nonfleet automobiles, the facility shall provide for the issuance of policies of automobile insurance by participatingmembers with coverage as follows: (1) Bodily injury liability and property damage liability coverage in the minimum amounts specified in section 65B.49, subdivision 3; (2) Uninsured motorists coverageand underinsured motorist coverages as required by section 65B.49, subdivision 4subdivisions 3a and 4a; (3) A reasonable selection of higher limits of liability coverage up to $50,000 because of bodily injury to or death of one person in any one accident and, subject to such limit for one person, up to $100,000 because of bodily injury to or death of two or more persons in any one accident, and up to $25,000 because of injury to or destruction of property of others in any one accident, or higher limits of liability coverage as recommended by the governing committee and approved by the commissioner; (4) Basic economic loss benefits, as required by section 65B.44, and other optional coverages as recommended by the governing committee and approved by the commissioner; and (5) Automobile physical damage coverage, including coverage of loss by collision, subject to optional deductiblesdeductible options. No coverage available under clause (5) shall be provided by a carrier that has been licensed to provide the coverage made available under clause (1) or (2), unless the qualified applicant has requested coverage pursuant to clause (1) or (2) as well as physical damage coverage. If a qualified applicant requests only physical damage coverage, the coverage shall be provided by an insurer not writing the coverage specified in clauses (1) and (2).Subd. 3. With respect to all automobiles not included in subdivisions 1 and 2, the facility shall provide: (1) Only the insurance coverage required by law; (2) For the equitable distribution of qualified applicants for this coverage among the participatingmembers in accord with the applicable participation ratio; and (3) For a school district or contractor transporting school children under contract with a school district, that amount of automobile liability insurance coverage, not to exceed $1,000,000, required by the school district by resolution or contract, or that portion of such $1,000,000 of coverage for which the school district or contractor applies and for which it is eligible under section 65B.10. Subd. 4. Coverage made available under this section shall be the standard automobile policy and endorsement forms, as approved by the commissioner, with such changes, additions and amendments as are adopted by the governing committee and approved by the commissioner. Sec. 12. Minnesota Statutes 1990, section 65B.07, subdivision 4, is amended to read: Subd. 4. The facility shall provide an annual financial statementsstatement on the facility's operation to the commissioner, and shall provide an annual report of operations to the commissioner and to all participatingmembers and to the commissionerso requesting. Sec. 13. Minnesota Statutes 1990, section 65B.08, subdivision 1, is amended to read: Subdivision 1. [FILING.] As agent for participatingmembers, the facility shall file with the commissioner all manuals of classification, all manuals of rules and rates, all rating plans, and any modifications of same, proposed for use for private passenger nonfleet automobile insurance placed through the facility. The classifications, rules and rates and any amendments thereto shall be subject to prior written approval by the commissioner. Rates, surcharge points, and increased limits factors filed by the facility shall not be excessive, inadequate, or unfairly discriminatory. No other entity, service or organization shall make filings for the facility or the participatingmembers to apply to insurance placed through the facility. Sec. 14. Minnesota Statutes 1990, section 65B.08, subdivision 2, is amended to read: Subd. 2. [USE OF RATES.] Every participatingmember shall be authorized to use the rates and rules approved by the commissioner for use by the facility on business placed through the facility, and shall use no other rates on private passenger nonfleetautomobiles placed through the facility. Sec. 15. Minnesota Statutes 1990, section 65B.09, is amended to read: 65B.09 [AGENTS.] Subdivision 1. [AGENTS' RESPONSIBILITY.] Every agentperson licensed under section 60A.17 who is authorized to solicit, negotiate or effect automobile insurance on behalf of any participatingmember shall: (1) Offer to place coverage through the facility for any qualified applicant who is ineligible or unacceptable for coverage in the insurer or insurers for whom the agent is authorized to solicit, negotiate or effect automobile insurance. Provided, that the failure of an agent to make such an offer to a qualified applicant shall not subject the agent to any liability to the applicant; (2) Forward to the facility all applications and any deposit premiums which are required by the plan of operation, rules and procedures of the facility, if the qualified applicant accepts the offer to have coverage placed through the facility; (3) Be entitled to receive a commissioncompensation for placing insurance through the facility at the uniform rates of commissioncompensation as provided in the plan of operation, and all participatingmembers shall be entitled topay commissions tosuch agentscompensation. Subd. 2. [AGENTS' CONTRACTS.] A participatingmember may not include the premiums and losses incurred from risks insured through the facility in determining the loss ratio of any of its agents, or otherwise use the experience from such risks as cause for altering the relationship between the participatingmember and its agent. Sec. 16. Minnesota Statutes 1990, section 65B.10, is amended to read: 65B.10 [ELIGIBILITY.] Subdivision 1. [ELIGIBILITY FOR COVERAGE.] To be eligible for coverage through the facility an otherwise qualified applicant must have been rejected, canceled or refused renewal with respect to automobile insurance by a participatingmember. Subd. 2. [TERMINATION OF ELIGIBILITY.] Eligibility for placement through the facility will terminate if an insured is offered equivalent coverage in the voluntary market at a rate lower than the facility rate. If the participatingmember that is required to provide coverage by the facility makes such an offer after giving 30 days' advance written notice to the agent of record before making the offer, the participatingmember shall have no further obligation to the agent of record. Subd. 3. [REVIEW OF INSUREDS.] At least annually, every participatingmember shall review every applicant which it insures through the facility and determine whether or not such applicant is acceptable for voluntary insurance at a rate lower than the facility rate. If such applicant is acceptable, the participatingmember shall make an offer to insure the applicant under voluntary coverage at such lower rate. Sec. 17. Minnesota Statutes 1990, section 65B.12, subdivision 1, is amended to read: Subdivision 1. Any participatingmember, applicant or person insured under a policy placed through the facility may request a formal hearing and ruling by the governing committee on any alleged violation of the plan of operation or any alleged improper act or ruling of the facility. The request for hearing must be filed within 30 days after the date of the alleged act or decision. Sec. 18. [REPEALER.] Minnesota Statutes 1990, sections 65B.04, subdivisions 1 and 2; and 65B.07, subdivision 2, are repealed. Sec. 19. [EFFECTIVE DATE.] Section 1 is effective the day following final enactment for accidental death benefits payable on deaths that occur on or after that date. Presented to the governor April 17, 1992 Signed by the governor April 27, 1992, 1:49 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes