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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 485-H.F.No. 1094 
                  An act relating to insurance; regulating fees, data 
                  collection, coverages, notice provisions, enforcement 
                  provisions, the Minnesota joint underwriting 
                  association and the liquor liability assigned risk 
                  plan; enacting the NAIC model regulation relating to 
                  reporting requirements for licensees seeking to do 
                  business with certain unauthorized multiple employer 
                  welfare arrangements; making various technical 
                  changes; amending Minnesota Statutes 1992, sections 
                  45.024, subdivision 2; 59A.12, by adding a 
                  subdivision; 60A.02, by adding a subdivision; 60A.03, 
                  subdivision 5; 60A.052, subdivision 2; 60A.082; 
                  60A.085; 60A.14, subdivision 1; 60A.19, subdivision 4; 
                  60A.206, subdivision 3; 60A.21, subdivision 2; 60A.36, 
                  by adding a subdivision; 60K.06; 60K.14, subdivision 
                  4; 61A.07; 61A.071; 61A.074, subdivision 1; 61A.08; 
                  61A.09, subdivision 1; 61A.092, by adding a 
                  subdivision; 61A.12, subdivision 1; 61A.282, 
                  subdivision 2; 62A.047; 62A.148; 62A.153; 62A.43, 
                  subdivision 4; 62E.05; 62E.19, subdivision 1; 62H.01; 
                  62I.02; 62I.03; 62I.07; 62I.13, subdivisions 1 and 2; 
                  62I.20; 65A.01, subdivision 1; 65A.29, subdivision 7; 
                  65B.49, subdivision 3; 72A.20, subdivision 29, and by 
                  adding a subdivision; 72A.201, subdivision 9; 72A.41, 
                  subdivision 1; 72B.03, subdivision 1; 72B.04, 
                  subdivision 2; 176.181, subdivision 2; and 340A.409, 
                  subdivisions 2 and 3; Minnesota Statutes 1993 
                  Supplement, section 61A.02, subdivision 2; Laws 1993, 
                  chapter 372, section 8; proposing coding for new law 
                  in Minnesota Statutes, chapters 45; 61A; 62A; and 62H; 
                  repealing Minnesota Statutes 1992, sections 72A.45; 
                  and 72B.07; Minnesota Rules, parts 2780.4800; 
                  2783.0010; 2783.0020; 2783.0030; 2783.0040; 2783.0050; 
                  2783.0060; 2783.0070; 2783.0080; 2783.0090; and 
                  2783.0100. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [45.015] [PROOF OF MAILING.] 
           In any provision of law related to the duties and 
        responsibilities entrusted to the commissioner, and unless a 
        different method is specified, when a person is required to 
        provide notice or perform a similar act, this action may be 
        accomplished by mail, and proof of mailing is sufficient to 
        prove compliance with the requirement. 
           Sec. 2.  Minnesota Statutes 1992, section 45.024, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DELEGATION.] The commissioner of commerce may 
        delegate to a deputy commissioner, assistant commissioner, or 
        director the exercise of the commissioner's statutory powers and 
        duties, including the authority to decide and issue final orders 
        in contested cases, rulemaking proceedings, and other hearings 
        held under chapter 14. 
           This delegation is in addition to, and does not in any way 
        limit, the commissioner's authority to delegate pursuant to 
        section 15.06, subdivision 6, or any other law.  
           Sec. 3.  Minnesota Statutes 1992, section 59A.12, is 
        amended by adding a subdivision to read: 
           Subd. 5.  Whenever an insurer, after having been advised 
        that an insurance policy has been financed by a premium finance 
        agreement, returns an unearned premium on such a policy, the 
        insurer shall deliver or mail to the policyholder a notice that 
        includes the following information:  the amount of premium paid, 
        the term of the policy, the date coverage began and ceased, the 
        amount of the unearned premium, the name of the party receiving 
        the funds, and a statement of the obligation of the premium 
        finance company to return within 30 days of receipt of the 
        unearned premium any amount of the unearned premium in excess of 
        the amount owed by the policyholder to the premium finance 
        company. 
           Sec. 4.  Minnesota Statutes 1992, section 60A.02, is 
        amended by adding a subdivision to read: 
           Subd. 28.  [GROUP INSURANCE.] "Group insurance" means that 
        form of insurance coverage sponsored by: 
           (1) an employer covering not less than two employees and 
        which may include the employees' dependents, consisting of 
        husband, wife, children, and actual dependents residing in the 
        household, written under a master policy issued to any employer, 
        or group of employers who have joined into an arrangement for 
        the purposes of providing the employees insurance for their 
        individual benefit.  Employees' dependents, consisting of 
        husband, wife, children, and actual dependents residing in the 
        same household, are not employees for purposes of this 
        definition except for a spouse employed on a regular full-time 
        basis by the same employer.  This clause does not apply to 
        chapter 62L; 
           (2) an association to provide insurance to its members; or 
           (3) a creditor to provide life insurance to insure its 
        debtors in connection with real estate mortgage loans, in an 
        amount not to exceed the actual or scheduled amount of their 
        indebtedness. 
           Sec. 5.  Minnesota Statutes 1992, section 60A.03, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXAMINATION FEES AND EXPENSES.] When any 
        visitation, examination, or appraisal is made by order of the 
        commissioner, the company being examined, visited, or appraised, 
        including, but not limited to, fraternals, township mutuals, 
        reciprocal exchanges, nonprofit service plan corporations, 
        health maintenance organizations, vendors of risk management 
        services licensed under section 60A.23, or self-insurance plans 
        or pools established under section 176.181 or 471.982, shall pay 
        to the department of commerce the necessary expenses of the 
        persons engaged in the examination, visit, appraisal, or desk 
        audits of annual statements and records performed by the 
        department other than on the company premises plus the per diem 
        salary fees of the employees of the department of commerce who 
        are conducting or participating in the examination, visitation, 
        appraisal, or desk audit.  The per diem salary fees may be based 
        upon the approved examination fee schedules of the National 
        Association of Insurance Commissioners or otherwise determined 
        by the commissioner.  All of these fees and expenses must be 
        paid into the department of commerce revolving fund. 
           Sec. 6.  Minnesota Statutes 1992, section 60A.052, 
        subdivision 2, is amended to read: 
           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.  The 
        insurer may waive its right to the hearing.  If the insurer is 
        under the supervision or control of the insurance department of 
        the insurer's state of domicile, that insurance department, 
        acting on behalf of the insurer, may waive the insurer's right 
        to the hearing.  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. 
           Sec. 7.  Minnesota Statutes 1992, section 60A.082, is 
        amended to read: 
           60A.082 [GROUP INSURANCE; BENEFITS CONTINUED IF INSURER 
        CHANGED.] 
           A person covered under group life, group accidental death 
        and dismemberment, group disability income or group medical 
        expense insurance, shall not be denied benefits to which the 
        person is otherwise entitled solely because of a change in the 
        insurance company writing the coverage or in the group contract 
        applicable to the person.  In the case of one or more carriers 
        replacing or remaining in place after one or more plans have 
        been discontinued, each carrier shall accept any person who was 
        covered under the discontinued plan or plans without denial of 
        benefits to which other persons in the group covered by that 
        carrier are entitled.  "Insurance company" shall include a 
        service plan corporation under chapter 62C or 62D.  
           For purposes of satisfying any preexisting condition 
        limitation, the insurance company shall credit the period of 
        time the person was covered by the prior plan, if the person has 
        maintained continuous coverage. 
           The commissioner shall promulgate rules to carry out this 
        section.  Nothing in this section shall preclude an employer, 
        union or association from reducing the level of benefits under 
        any group insurance policy or plan. 
           Sec. 8.  Minnesota Statutes 1992, section 60A.085, is 
        amended to read: 
           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. 
           (c) Paragraph (a) does not apply if the group policy, plan, 
        or contract is replaced by a substantially similar policy, plan, 
        or contract. 
           Sec. 9.  Minnesota Statutes 1992, section 60A.14, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FEES OTHER THAN EXAMINATION FEES.] In 
        addition to the fees and charges provided for examinations, the 
        following fees must be paid to the commissioner for deposit in 
        the general fund: 
           (a) by township mutual fire insurance companies: 
           (1) for filing certificate of incorporation $25 and 
        amendments thereto, $10; 
           (2) for filing annual statements, $15; 
           (3) for each annual certificate of authority, $15; 
           (4) for filing bylaws $25 and amendments thereto, $10. 
           (b) by other domestic and foreign companies including 
        fraternals and reciprocal exchanges: 
           (1) for filing certified copy of certificate of articles of 
        incorporation, $100; 
           (2) for filing annual statement, $225; 
           (3) for filing certified copy of amendment to certificate 
        or articles of incorporation, $100; 
           (4) for filing bylaws, $75 or amendments thereto, $75; 
           (5) for each company's certificate of authority, $575, 
        annually. 
           (c) the following general fees apply: 
           (1) for each certificate, including certified copy of 
        certificate of authority, renewal, valuation of life policies, 
        corporate condition or qualification, $25; 
           (2) for each copy of paper on file in the commissioner's 
        office 50 cents per page, and $2.50 for certifying the same; 
           (3) for license to procure insurance in unadmitted foreign 
        companies, $575; 
           (4) for receiving and forwarding each notice, proof of 
        loss, summons, complaint or other process served upon the 
        commissioner of commerce, as attorney for service of process 
        upon any nonresident agent or insurance company, including 
        reciprocal exchanges, $15 plus the cost of effectuating service 
        by certified mail, which amount must be paid by the party 
        serving the notice and may be taxed as other costs in the 
        action; 
           (5) for valuing the policies of life insurance companies, 
        one cent per $1,000 of insurance so valued, provided that the 
        fee shall not exceed $13,000 per year for any company.  The 
        commissioner may, in lieu of a valuation of the policies of any 
        foreign life insurance company admitted, or applying for 
        admission, to do business in this state, accept a certificate of 
        valuation from the company's own actuary or from the 
        commissioner of insurance of the state or territory in which the 
        company is domiciled; 
           (6) (5) for receiving and filing certificates of policies 
        by the company's actuary, or by the commissioner of insurance of 
        any other state or territory, $50; 
           (7) for issuing an initial license to an individual agent, 
        $30 per license, for issuing an initial agent's license to a 
        partnership or corporation, $100, and for issuing an amendment 
        (variable annuity) to a license, $50, and for renewal of 
        amendment, $25; 
           (8) (6) for each appointment of an agent filed with the 
        commissioner, a domestic insurer shall remit $5 and all other 
        insurers shall remit $3; 
           (9) for renewing an individual agent's license, $30 per 
        year per license, and for renewing a license issued to a 
        corporation or partnership, $60 per year; 
           (10) for issuing and renewing a surplus lines agent's 
        license, $250; 
           (11) for issuing duplicate licenses, $10; 
           (12) for issuing licensing histories, $20; 
           (13) (7) for filing forms and rates, $50 per filing; 
           (14) (8) for annual renewal of surplus lines insurer 
        license, $300. 
           The commissioner shall adopt rules to define filings that 
        are subject to a fee. 
           Sec. 10.  Minnesota Statutes 1992, section 60A.19, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FEES SERVICE OF PROCESS.] 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 
        authorized by this section shall be made in compliance with 
        section 45.028, subdivision 2.  
           Sec. 11.  Minnesota Statutes 1992, 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, and are subject to section 60A.03, 
        subdivision 5, 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. 12.  Minnesota Statutes 1992, 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 in compliance 
        with section 45.028, subdivision 2 and the payment of a filing 
        fee as prescribed by section 60A.14, subdivision 1, paragraph 
        (c), clause (4).  
           (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. 13.  Minnesota Statutes 1992, section 60A.36, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [RESCISSION.] (a) No insurer may rescind or void 
        a contract of liability or property insurance unless there was 
        material misrepresentation, material omission, or fraud made by 
        or with the knowledge of the insured in obtaining the contract 
        or in pursuing a claim under the policy. 
           (b) No misrepresentation or omission shall be material 
        unless knowledge by the insurer of the facts misrepresented or 
        omitted would have led to a refusal by the insurer to make such 
        a contract.  In determining the question of materiality, 
        evidence of the practice of the insurer with respect to the 
        acceptance or rejection of similar risks shall be admissible. 
           (c) For purposes of this section, a representation is a 
        statement as to past or present fact, made to an insurer or the 
        insurer's agent by the applicant as an inducement for issuing a 
        contract of commercial liability or property insurance.  A 
        misrepresentation is a false representation, and the facts 
        misrepresented are those facts which make the representation 
        false. 
           (d) This subdivision does not limit the right to cancel the 
        policy prospectively for the reasons stated in subdivision 1, 
        clause (2). 
           Sec. 14.  Minnesota Statutes 1992, section 60K.06, is 
        amended to read: 
           60K.06 [RENEWAL FEE FEES.] 
           Subdivision 1.  [RENEWAL FEES.] (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.  
           Subd. 2. [LICENSING FEES.] (a) In addition to the fees and 
        charges provided for examinations, each agent licensed pursuant 
        to section 60K.03 shall pay to the commissioner:  
           (1) for issuing an initial license to an individual agent, 
        $30 per year; 
           (2) for issuing an initial agent's license to a partnership 
        or corporation, $100 per year; 
           (3) for issuing an amendment (variable annuity) to a 
        license, $50 per year; 
           (4) for renewing an amendment, $25 per year; 
           (5) for renewing an individual agent's license, $30 per 
        year; 
           (6) for renewing a license issued to a corporation or 
        partnership, $60 per year; 
           (7) for issuing and renewing a surplus lines agent's 
        license, $250 per year; 
           (8) for issuing duplicate licenses, $10.  
           (b) Every agent, corporation, and partnership license 
        expires on October 31. 
           (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) All fees shall be retained by the commissioner and 
        shall be nonreturnable, except that an overpayment of any fee 
        shall be the subject of a refund upon proper application.  
           Sec. 15.  Minnesota Statutes 1992, section 60K.14, 
        subdivision 4, is amended to read: 
           Subd. 4.  [SUITABILITY OF INSURANCE.] In recommending the 
        purchase of any life, endowment, individual accident and 
        sickness, 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. 
           Sec. 16.  Minnesota Statutes 1993 Supplement, section 
        61A.02, subdivision 2, is amended to read: 
           Subd. 2.  [APPROVAL REQUIRED.] No policy or certificate of 
        life insurance or annuity contract, issued to an individual, 
        group, or multiple employer trust, nor any rider of any kind or 
        description which is made a part thereof shall be issued or 
        delivered in this state, or be issued by a life insurance 
        company organized under the laws of this state, until the form 
        of the same has been approved by the commissioner.  In making a 
        determination under this section, the commissioner may require 
        the insurer to provide rates and advertising materials related 
        to policies or contracts, certificates, or similar evidence of 
        coverage issued or delivered in this state.  
           This section applies to a policy, certificate of insurance, 
        or similar evidence of coverage issued to a Minnesota resident 
        or issued to provide coverage to a Minnesota resident.  This 
        section does not apply to a certificate of insurance or similar 
        evidence of coverage that meets the conditions of section 
        61A.093, subdivision 2. 
           Sec. 17.  Minnesota Statutes 1992, section 61A.07, is 
        amended to read: 
           61A.07 [PROHIBITED PROVISIONS.] 
           No policy of life insurance shall be issued or delivered in 
        this state, or be issued by a life insurance company organized 
        under the laws of this state, if it contains a provision: 
           (1) for forfeiture of the policy for failure to repay any 
        loan on the policy or to pay interest on such loan while the 
        total indebtedness on the policy is less than the loan value 
        thereof; or for forfeiture for failure to repay any such loan or 
        to pay interest thereon, unless such provision contain a 
        stipulation that no such forfeiture shall occur until at least 
        one month after notice shall have been mailed by the company to 
        the last known address of the insured and of the assignee, if 
        any, notice of whose address and contract of the assignment has 
        been filed with the company, at its home office; or 
           (2) in a life policy or annuity contract, limiting the time 
        within which any action at law or in equity may be commenced to 
        less than five years after the cause of action shall accrue; or 
           (3) by which the policy shall purport to be issued or to 
        take effect more than six months before the original application 
        for the insurance was made; or 
           (4) for any mode of settlement at maturity of less value 
        than the amount insured on the face of the policy plus any 
        dividend additions, less any indebtedness to the company on the 
        policy, and less any premium that may be deducted by the terms 
        of the policy.  
           Sec. 18.  Minnesota Statutes 1992, section 61A.071, is 
        amended to read: 
           61A.071 [APPLICATIONS.] 
           No individual life insurance policy, except mass marketed 
        life insurance as defined in section 72A.13, subdivision 2 
        except life insurance marketed on a direct response basis, shall 
        be issued or delivered in this state to a person age 65 or older 
        unless a signed and completed copy of the application for 
        insurance is left with the applicant at the time application is 
        made.  However, where an individual life policy is marketed on a 
        direct response basis, a copy of any application signed by the 
        applicant shall be delivered to the insured along with, or as 
        part of, the policy. 
           Sec. 19.  Minnesota Statutes 1992, section 61A.074, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CORPORATION OR TRUSTEE.] A corporation or 
        the trustee of a trust providing life, annuity, health, 
        disability, retirement, or similar benefits to employees of one 
        or more corporations, and acting in a fiduciary capacity with 
        respect to the employees, retired employees, or their dependents 
        or beneficiaries, has an insurable interest in the lives of 
        employees for whom the benefits are to be provided.  The written 
        consent of the insured is required if the insurance purchased 
        under this subdivision is payable to the corporation or to the 
        trustee. 
           Sec. 20.  Minnesota Statutes 1992, section 61A.08, is 
        amended to read: 
           61A.08 [EXCEPTIONS.] 
           Sections 61A.02, 61A.03, 61A.07, 61A.23, and 61A.25 shall 
        not, except as expressly provided in this chapter, apply to 
        annuities, industrial or group term policies, or to corporations 
        or associations operating on the assessment or fraternal plan, 
        and in every case where a contract provides for both insurance 
        and annuities, sections 61A.02, 61A.03 and 61A.07 shall apply 
        only to that part of the contract which provides for insurance, 
        but every contract issued prior to the operative date specified 
        in section 61A.245 containing a provision for a deferred annuity 
        on the life of the insured only, unless paid for by a single 
        premium, shall provide that, in event of the nonpayment of any 
        premium after three full years' premium shall have been paid, 
        the annuity shall automatically become converted into a paid-up 
        annuity for that proportion of the original annuity as the 
        number of completed years' premiums paid bears to the total 
        number of premiums required under the contract. 
           Sec. 21.  Minnesota Statutes 1992, section 61A.09, 
        subdivision 1, is amended to read: 
           Subdivision 1.  No group life insurance policy or group 
        annuity shall be issued for delivery in this state until the 
        form thereof and the form of any certificates issued thereunder 
        have been filed in accordance with and subject to the provisions 
        of section 61A.02.  Each person insured under such a group life 
        insurance policy (excepting policies which insure the lives of 
        debtors of a creditor or vendor to secure payment of 
        indebtedness) shall be furnished a certificate of insurance 
        issued by the insurer and containing the following: 
           (a) Name and location of the insurance company; 
           (b) A statement as to the insurance protection to which the 
        certificate holder is entitled, including any changes in such 
        protection depending on the age of the person whose life is 
        insured; 
           (c) Any and all provisions regarding the termination or 
        reduction of the certificate holder's insurance protection; 
           (d) A statement that the master group policy may be 
        examined at a reasonably accessible place; 
           (e) The maximum rate of contribution to be paid by the 
        certificate holder; 
           (f) Beneficiary and method required to change such 
        beneficiary; 
           (g) In the case of a group term insurance policy if the 
        policy provides that insurance of the certificate holder will 
        terminate, in case of a policy issued to an employer, by reason 
        of termination of the certificate holder's employment, or in 
        case of a policy issued to an organization of which the 
        certificate holder is a member, by reason of termination of 
        membership, a provision to the effect that in case of 
        termination of employment or membership, or in case of 
        termination of the group policy, the certificate holder shall be 
        entitled to have issued by the insurer, without evidence of 
        insurability, upon application made to the insurer within 31 
        days after the termination of employment or membership, and upon 
        payment of the premium applicable to the class of risk to which 
        that person belongs and to the form and amount of the policy at 
        that person's then attained age, a policy of life insurance 
        only, in any one of the forms customarily issued by the insurer 
        except term insurance, in an amount equal to the amount of the 
        life insurance protection under such group insurance policy at 
        the time of such termination; and shall contain a further 
        provision to the effect that upon the death of the certificate 
        holder during such 31-day period and before any such individual 
        policy has become effective, the amount of insurance for which 
        the certificate holder was entitled to make application shall be 
        payable as a death benefit by the insurer.  
           This section applies to a policy, certificate of insurance, 
        or similar evidence of coverage issued to a Minnesota resident 
        or issued to provide coverage to a Minnesota resident.  This 
        section does not apply to a certificate of insurance or similar 
        evidence of coverage that meets the conditions of section 
        61A.093, subdivision 2. 
           Sec. 22.  Minnesota Statutes 1992, section 61A.092, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [APPLICATION.] This section applies to a policy, 
        certificate of insurance, or similar evidence of coverage issued 
        to a Minnesota resident or issued to provide coverage to a 
        Minnesota resident.  This section does not apply to a 
        certificate of insurance or similar evidence of coverage that 
        meets the conditions of section 61A.093, subdivision 2. 
           Sec. 23.  [61A.093] [CERTIFICATE OF INSURANCE.] 
           Subdivision 1.  [COVERAGE.] A certificate of insurance or 
        similar evidence of coverage issued to a Minnesota resident 
        shall provide coverage for all benefits required to be covered 
        in group policies in Minnesota by this chapter. 
           This subdivision supersedes any inconsistent provision of 
        this chapter. 
           A policy of life insurance that is issued or delivered in 
        this state and that covers a person residing in another state 
        may provide coverage or contain provisions that are less 
        favorable to that person than required by this chapter.  Less 
        favorable coverages or provisions must meet the requirements 
        that the state in which the person resides would have required 
        had the policy been issued or delivered in that state. 
           Subd. 2.  [NONAPPLICATION.] Subdivision 1 does not apply to 
        certificates issued in regard to a master policy issued outside 
        the state of Minnesota if all of the following are true: 
           (1) the policyholder or certificate holder exists primarily 
        for purposes other than to obtain insurance; 
           (2) the policyholder or certificate holder is not a 
        Minnesota corporation and does not have its principal office in 
        Minnesota; 
           (3) the policy or certificate covers fewer than 25 persons 
        who are residents of Minnesota and the Minnesota residents 
        represent less than 25 percent of all covered persons; and 
           (4) on request of the commissioner, the issuer files with 
        the commissioner a copy of the policy and a copy of each form of 
        certificate. 
           Subd. 3.  [RELATION TO OTHER LAW.] Section 60A.08, 
        subdivision 4, shall not be construed as requiring a certificate 
        of insurance or similar evidence of insurance that meets the 
        conditions of subdivision 2 to comply with this chapter. 
           Sec. 24.  Minnesota Statutes 1992, section 61A.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PROCEEDS OF LIFE POLICY OR ANNUITY, WHO 
        ENTITLED TO.] When any insurance is effected in favor of 
        another, the beneficiary shall be entitled to its proceeds 
        against the creditors and representatives of the person 
        effecting the same.  All premiums paid for insurance in fraud of 
        creditors, with interest thereon, shall inure to their benefit 
        from the proceeds of the policy, if the company be specifically 
        notified thereof, in writing, before payment. 
           Sec. 25.  Minnesota Statutes 1992, section 61A.282, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LENDING OF SECURITIES.] A company may loan 
        securities held by it under this chapter to a broker-dealer 
        registered under the Securities and Exchange Act of 1934 or to a 
        bank which is a member of the Federal Reserve System., under the 
        following conditions: 
           (a) The market value of loaned securities outstanding at 
        any one time, excluding securities held in a separate account 
        established pursuant to section 61A.14, subdivision 1, or 
        61A.275, shall not exceed 50 40 percent of the company's capital 
        and surplus admitted assets as of the December 31 immediately 
        preceding. 
           (b) The company is limited to no more than two percent of 
        its admitted assets as of the December 31 immediately preceding 
        being subject to lending of securities with any one borrower. 
           (c) Each loan must be evidenced by a written agreement 
        which provides: 
           (a) (1) that the loan will be fully collateralized by cash 
        or obligations issued or guaranteed by the United States or an 
        agency or an instrumentality thereof, and that the collateral 
        will be adjusted each business day during the term of the loan 
        to maintain the required collateral in the event of market value 
        changes in the loaned securities or collateral; 
           (b) (2) that the loan may be terminated by the company at 
        any time, and that the borrower must return the loaned 
        securities or their equivalent within five business days after 
        termination; 
           (c) (3) that the company has the right to retain the 
        collateral or to use the collateral to purchase securities 
        equivalent to the loaned securities if the borrower defaults 
        under the terms of the agreement; and 
           (d) (4) that the borrower remains liable for any losses and 
        expenses, not covered by the collateral, which are incurred by 
        the company due to default. 
           Sec. 26.  Minnesota Statutes 1992, section 62A.047, is 
        amended to read: 
           62A.047 [CHILDREN'S HEALTH SUPERVISION SERVICES AND 
        PRENATAL CARE SERVICES.] 
           A policy of individual or group health and accident 
        insurance regulated under this chapter, or individual or group 
        subscriber contract regulated under chapter 62C, health 
        maintenance contract regulated under chapter 62D, or health 
        benefit certificate regulated under chapter 64B, issued, 
        renewed, or continued to provide coverage to a Minnesota 
        resident, must provide coverage for child health supervision 
        services and prenatal care services.  The policy, contract, or 
        certificate must specifically exempt reasonable and customary 
        charges for child health supervision services and prenatal care 
        services from a deductible, copayment, or other coinsurance or 
        dollar limitation requirement.  For individual policies, This 
        section does not prohibit the use of policy waiting periods or 
        preexisting condition limitations for these services.  Minimum 
        benefits may be limited to one visit payable to one provider for 
        all of the services provided at each visit cited in this section 
        subject to the schedule set forth in this section.  Nothing in 
        this section applies to a commercial health insurance policy 
        issued as a companion to a health maintenance organization 
        contract, a policy designed primarily to provide coverage 
        payable on a per diem, fixed indemnity, or nonexpense incurred 
        basis, or a policy that provides only accident coverage. 
           "Child health supervision services" means pediatric 
        preventive services, appropriate immunizations, developmental 
        assessments, and laboratory services appropriate to the age of a 
        child from birth to age six as defined by Standards of Child 
        Health Care issued by the American Academy of Pediatrics.  
        Reimbursement must be made for at least five child health 
        supervision visits from birth to 12 months, three child health 
        supervision visits from 12 months to 24 months, once a year from 
        24 months to 72 months. 
           "Prenatal care services" means the comprehensive package of 
        medical and psychosocial support provided throughout the 
        pregnancy, including risk assessment, serial surveillance, 
        prenatal education, and use of specialized skills and 
        technology, when needed, as defined by Standards for 
        Obstetric-Gynecologic Services issued by the American College of 
        Obstetricians and Gynecologists. 
           Sec. 27.  [62A.105] [COVERAGES; TRANSFERS TO SUBSTANTIALLY 
        SIMILAR PRODUCTS.] 
           Subdivision 1.  [SCOPE.] No individual policy of accident 
        and sickness regulated under this chapter or subscriber contract 
        regulated under chapter 62C shall be issued, renewed, or 
        continued to provide coverage to a Minnesota resident unless it 
        satisfies the requirements of subdivision 2. 
           Subd. 2.  [REQUIREMENT.] If an issuer of policies or plans 
        referred to in subdivision 1 ceases to offer a particular policy 
        or subscriber contract to the general public or otherwise stops 
        adding new insureds to the group of covered persons, the issuer 
        shall allow any covered person to transfer to another 
        substantially similar policy or contract currently being sold by 
        the issuer.  The issuer shall permit the transfer without any 
        preexisting condition limitation, waiting period, or other 
        restriction of any type other than those which applied to the 
        insured under the prior policy or contract.  This section does 
        not apply to persons who were covered under an individual policy 
        or contract prior to July 1, 1994. 
           Sec. 28.  [62A.136] [DENTAL AND VISION PLANS.] 
           The following provisions do not apply to health plans 
        providing dental or vision coverage only:  sections 62A.041, 
        62A.047, 62A.149, 62A.151, 62A.152, 62A.154, 62A.155, 62A.26, 
        62A.28, and 62A.30. 
           Sec. 29.  Minnesota Statutes 1992, section 62A.148, is 
        amended to read: 
           62A.148 [GROUP INSURANCE; PROVISION OF BENEFITS FOR 
        DISABLED EMPLOYEES.] 
           No employer or insurer of that employer shall terminate, 
        suspend or otherwise restrict the participation in or the 
        receipt of benefits otherwise payable under any program or 
        policy of group insurance to any covered employee who becomes 
        totally disabled while employed by the employer solely on 
        account of absence caused by such total disability.  This 
        includes coverage of dependents of the employee.  If the 
        employee is required to pay all or any part of the premium for 
        the extension of coverage, payment shall be made to the 
        employer, by the employee.  
           Sec. 30.  Minnesota Statutes 1992, section 62A.153, is 
        amended to read: 
           62A.153 [FREE STANDING AMBULATORY SURGICAL CENTERS 
        OUTPATIENT MEDICAL AND SURGICAL SERVICES.] 
           No policy or plan of health, medical, hospitalization, or 
        accident and sickness insurance regulated under this chapter, or 
        subscriber contract provided by a nonprofit health service plan 
        corporation regulated under chapter 62C that provides coverage 
        for services in a hospital shall be issued, renewed, continued, 
        delivered, issued for delivery or executed in this state, or 
        approved for issuance or renewal in this state by the 
        commissioner of commerce unless the policy, plan or contract 
        specifically provides coverage for a health care treatment 
        or service rendered by a free standing ambulatory surgical 
        center or facilities offering ambulatory medical service 24 
        hours a day seven days a week, which are not part of a hospital, 
        but have been reviewed and approved by the state commissioner of 
        health to provide the treatment or service, surgery on an 
        outpatient basis at a facility equipped to perform these 
        services, whether or not the facility is part of a hospital.  
        Coverage shall be on the same basis as coverage provided for the 
        same health care treatment or service rendered by in a hospital. 
           Sec. 31.  Minnesota Statutes 1992, section 62A.43, 
        subdivision 4, is amended to read: 
           Subd. 4.  [OTHER POLICIES NOT PROHIBITED.] The prohibition 
        in this section or the requirements of section 62A.31, 
        subdivision 1, against the sale of duplicate Medicare supplement 
        coverage does do not preclude the sale of insurance coverage, 
        such as travel, accident and sickness coverage, the effect or 
        purpose of which is not to supplement Medicare coverage.  
        Notwithstanding this provision, if the commissioner determines 
        that the coverage being sold is in fact Medicare supplement 
        insurance, the commissioner shall notify the insurer in writing 
        of the determination.  If the insurer does not thereafter comply 
        with sections 62A.31 to 62A.44, the commissioner may, pursuant 
        to chapter 14, revoke or suspend the insurer's authority to sell 
        accident and health insurance in this state or impose a civil 
        penalty not to exceed $10,000, or both. 
           Sec. 32.  [62A.49] [HOME CARE SERVICES COVERAGE.] 
           Subdivision 1.  [GENERALLY.] Section 62A.48 does not 
        prohibit the sale of policies, certificates, subscriber 
        contracts, or other evidences of coverage that provide home care 
        services only.  This does not, however, remove the requirement 
        that home care service benefits must be provided as part of a 
        long-term care policy pursuant to that section.  Home care 
        services only policies may be sold, provided that they meet the 
        requirements set forth in sections 62A.46 to 62A.56, except that 
        they do not have to meet those conditions that relate to 
        long-term care in nursing facilities.  Disclosures and 
        representations regarding these policies must be adjusted 
        accordingly to remove references to coverage for nursing home 
        care. 
           Subd. 2.  [PROVIDER NETWORKS AND MANAGED CARE.] Home health 
        care services issued pursuant to this section may be provided 
        through a limited provider network and may employ managed care 
        practices.  If these methods are used, they must be adequately 
        disclosed within the policy and any advertisements or 
        representations regarding coverage.  Policies may not be sold in 
        areas where there are not sufficient providers to meet the needs 
        of the policyholders located in that area. 
           Sec. 33.  [62A.615] [PREEXISTING CONDITIONS; LIMITATIONS ON 
        CANCELLATIONS, RESCISSIONS, OR RESTRICTIONS ON COVERAGE.] 
           No insurer may cancel or rescind a health insurance policy 
        for a preexisting condition of which the application or other 
        information provided by the insured reasonably gave the insurer 
        notice.  No insurer may restrict coverage for a preexisting 
        condition of which the application or other information provided 
        by the insured reasonably gave the insurer notice unless the 
        coverage is restricted at the time the policy is issued and the 
        restriction is disclosed in writing to the insured at the time 
        the policy is issued. 
           Sec. 34.  Minnesota Statutes 1992, section 62E.05, is 
        amended to read: 
           62E.05 [CERTIFICATION OF QUALIFIED PLANS.] 
           Upon application by an insurer, fraternal, or employer for 
        certification of a plan of health coverage as a qualified plan 
        or a qualified medicare supplement plan for the purposes of 
        sections 62E.01 to 62E.16, the commissioner shall make a 
        determination within 90 days as to whether the plan is 
        qualified.  All plans of health coverage, except Medicare 
        supplement policies, shall be labeled as "qualified" or 
        "nonqualified" on the front of the policy or evidence of 
        insurance.  All qualified plans shall indicate whether they are 
        number one, two, or three coverage plans. 
           Sec. 35.  Minnesota Statutes 1992, section 62E.19, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EMPLOYER LIABILITY.] An employer is liable 
        to the association for the costs of any preexisting conditions 
        of the employer's former employees or their dependents during 
        the first six months of coverage under the state comprehensive 
        health insurance plan under the following conditions: 
           (1)(i) the employer has terminated or laid off employees 
        and is required to meet the notice requirements under section 
        268.976, subdivision 3; 
           (2) (ii) the employer has failed to provide, arrange for, 
        or make available continuation health insurance coverage 
        required to be provided under federal or state law to employees 
        or their dependents; and 
           (3) (iii) the employer's former employees or their 
        dependents enroll in the state comprehensive health insurance 
        plan with a waiver of the preexisting condition limitation under 
        section 62E.14, subdivision 4a or 5; or 
           (4) (2)(i) the employer has terminated or allowed the 
        employer's plan of health insurance coverage to lapse within 90 
        days prior to the date of termination or layoff of an employee; 
        and 
           (5) (ii) the employer's former employees or their 
        dependents enroll in the state comprehensive health insurance 
        plan with a waiver of the preexisting condition limitation under 
        section 62E.14, subdivision 4a or 5. 
           The employer shall pay a special assessment to the 
        association for the costs of the preexisting conditions.  The 
        special assessment may be assessed before the association makes 
        the annual determination of each contributing member's liability 
        as required under this chapter.  The association may enforce the 
        obligation to pay the special assessment by action, as a claim 
        in an insolvency proceeding, or by any other method not 
        prohibited by law. 
           If the association makes the special assessment permitted 
        by this subdivision, the association may also make any 
        assessment of contributing members otherwise permitted by law, 
        without regard to the special assessment permitted by this 
        subdivision.  Contributing members must pay the assessment, 
        subject to refund or adjustment in the event of receipt by the 
        association of any portion of the special assessment. 
           Sec. 36.  Minnesota Statutes 1992, section 62H.01, is 
        amended to read: 
           62H.01 [JOINT SELF-INSURANCE EMPLOYEE HEALTH PLAN.] 
           Any 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, or other benefits permitted 
        under the Employee Retirement Income Security Act of 1974, 
        United States Code, title 29, sections 1001 et seq.  Joint plans 
        must have a minimum of 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. 37.  [62H.10] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For purposes of sections 62H.10 to 
        62H.17, the terms in this section have the meanings given them. 
           Subd. 2.  [AGENT.] "Agent" means an agent as defined under 
        section 60A.02, subdivision 7. 
           Subd. 3.  [ARRANGEMENT.] "Arrangement" means a fund, trust, 
        plan, program, or other mechanism by which a person provides, or 
        attempts to provide, health care benefits to individuals. 
           Subd. 4.  [BROKER.] "Broker" means an agent engaged in 
        brokerage business pursuant to section 60K.08. 
           Subd. 5.  [COLLECTIVELY BARGAINED ARRANGEMENT.] 
        "Collectively bargained arrangement" means an arrangement which 
        provides or represents that it is providing health care benefits 
        or coverage under or pursuant to one or more collective 
        bargaining agreements. 
           Subd. 6.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of commerce. 
           Subd. 7.  [EMPLOYEE LEASING ARRANGEMENT.] "Employee leasing 
        arrangement" means a labor leasing, staff leasing, employee 
        leasing, contract labor, extended employee staffing or supply, 
        or other arrangement, under contract or otherwise, whereby one 
        business or entity leases or obtains all or a significant number 
        of its workers from another business or entity. 
           Subd. 8.  [EMPLOYEE WELFARE BENEFIT PLAN.] "Employee 
        welfare benefit plan" means a plan, fund, or program established 
        or maintained by an employer or by an employee organization, or 
        by both, to the extent that the plan, fund, or program was 
        established or is maintained for the purpose of providing for 
        its participants or their beneficiaries, through the purchase of 
        insurance or otherwise, medical, surgical, or hospital care or 
        benefits, or benefits in the event of sickness, accident, 
        disability, death, or unemployment. 
           Subd. 9.  [FULLY INSURED BY A LICENSED INSURER.] "Fully 
        insured by a licensed insurer" means that, for all of the health 
        care benefits or coverage provided or offered by or through an 
        arrangement: 
           (1) a licensed insurer is directly obligated by contract to 
        provide all of the coverage to or under the arrangement; 
           (2) the licensed insurer assumes all of the risk for 
        payment of all covered services or benefits; and 
           (3) the liability of the licensed insurer for payment of 
        the covered services or benefits is directly to the individual 
        employee, member, or dependent receiving the health care 
        services. 
           Subd. 10.  [LICENSED INSURER.] "Licensed insurer" means an 
        insurer having a certificate of authority to transact insurance 
        in this state. 
           Subd. 11.  [REPORTABLE MEWA.] "Reportable MEWA" means a 
        person that provides health care benefits or coverage to the 
        employees of two or more employers.  Reportable MEWA does not 
        include: 
           (1) a licensed insurer; 
           (2) an arrangement which is fully insured by a licensed 
        insurer; 
           (3) a collectively bargained arrangement; 
           (4) an employee welfare benefit plan established or 
        maintained by a rural electric cooperative or a rural telephone 
        cooperative; 
           (5) an employee leasing arrangement; or 
           (6) a joint self-insurance employee health plan, which 
        includes but is not limited to multiple employee welfare 
        arrangements and multiple employer welfare arrangements (MEWAs), 
        having a certificate of authority to transact insurance in this 
        state pursuant to chapter 62H. 
           Subd. 12.  [RURAL ELECTRIC COOPERATIVE.] "Rural electric 
        cooperative" means: 
           (1) an organization that is exempt from tax under United 
        States Code, title 26, section 501(a), and which is engaged 
        primarily in providing electric service on a mutual or 
        cooperative basis; or 
           (2) an organization described in United States Code, title 
        26, section 501(c), paragraph (4) or (6), which is exempt from 
        tax under United States Code, title 26, section 501(a), and at 
        least 80 percent of the members of which are organizations 
        described in clause (1). 
           Subd. 13.  [RURAL TELEPHONE COOPERATIVE.] "Rural telephone 
        cooperative" means an organization described in United States 
        Code, title 26, section 501(c), paragraph (4) or (6), which is 
        exempt from tax under United States Code, title 26, section 
        501(a), and at least 80 percent of the members of which are 
        organizations engaged primarily in providing telephone service 
        to rural areas of the United States on a mutual, cooperative, or 
        other basis. 
           Subd. 14.  [THIRD PARTY ADMINISTRATOR.] "Third party 
        administrator" means a vendor of risk management services or an 
        entity administering a self-insurance or insurance plan under 
        section 60A.23. 
           Sec. 38.  [62H.11] [AGENTS AND BROKERS PROHIBITED FROM 
        ASSISTING REPORTABLE MEWAS PRIOR TO FILING.] 
           (a) No agent or broker may solicit, advertise, or market in 
        this state health benefits or coverage from, or accept an 
        application for, or place coverage for a person who resides in 
        this state with, a reportable MEWA unless the agent or broker 
        first files with the commissioner the information required under 
        section 62H.16. 
           (b) No agent or broker may solicit another agent or broker 
        to enter into an arrangement to solicit, advertise, or market 
        services, health benefits, or coverage of a reportable MEWA 
        unless the agent or broker first files with the commissioner the 
        information required under section 62H.16. 
           Sec. 39.  [62H.12] [AGENTS AND BROKERS PROHIBITED FROM 
        ASSISTING EMPLOYEE LEASING ARRANGEMENTS PRIOR TO FILING.] 
           (a) No agent or broker may solicit, advertise, or market in 
        this state the services, health benefits, or coverage of an 
        employee leasing arrangement or a person or arrangement which 
        represents itself as an employee leasing arrangement unless the 
        agent or broker first files with the commissioner the 
        information required under section 62H.16. 
           (b) No agent or broker may solicit another agent or broker 
        to enter into an arrangement to solicit, advertise, or market 
        the services, health benefits, or coverage of an employee 
        leasing arrangement unless the agent or broker first files with 
        the commissioner the information required under section 62H.16. 
           Sec. 40.  [62H.13] [AGENTS AND BROKERS PROHIBITED FROM 
        ASSISTING COLLECTIVELY BARGAINED ARRANGEMENTS PRIOR TO FILING.] 
           (a) No agent or broker may solicit, advertise, or market in 
        this state health benefits or coverage from, or accept an 
        application for, or place coverage for a person who resides in 
        this state with, a collectively bargained arrangement or an 
        arrangement that represents itself as a collectively bargained 
        arrangement unless the agent or broker first files with the 
        commissioner the information required under section 62H.16. 
           (b) No agent or broker may solicit another agent or broker 
        to enter into an arrangement to solicit, advertise, or market 
        the health benefits or coverage of a collectively bargained 
        arrangement unless the agent or broker first files with the 
        commissioner the information required under section 62H.16. 
           Sec. 41.  [62H.14] [THIRD PARTY ADMINISTRATORS AND LICENSED 
        INSURERS PROHIBITED FROM ASSISTING REPORTABLE MEWAS PRIOR TO 
        FILING.] 
           (a) No third party administrator may solicit or effect 
        coverage of, underwrite for, collect charges or premium for, or 
        adjust or settle claims of a resident of this state for, or 
        enter into any agreement to perform any of those functions for, 
        a reportable MEWA that provides coverage to residents of this 
        state unless the third party administrator first files with the 
        commissioner the information required under section 62H.16. 
           (b) No licensed insurer may solicit or effect coverage of, 
        underwrite for, collect charges or premiums for, adjust or 
        settle claims of a resident of this state for, or enter into any 
        agreement to perform any of those functions for a reportable 
        MEWA that provides coverage to residents of this state unless 
        the insurer first files with the commissioner the information 
        required under section 62H.16. 
           (c) A licensed insurer that issues or has issued any 
        insurance coverage to a reportable MEWA that covers residents of 
        this state, including, but not limited to, specific or aggregate 
        stop-loss coverage, shall file with the commissioner the 
        information required under section 62H.16 within 30 days after 
        the coverage is issued or within 30 days after the date the 
        reportable MEWA first provides coverage to a resident of this 
        state, whichever is later. 
           Sec. 42.  [62H.15] [LACK OF KNOWLEDGE NOT A DEFENSE.] 
           (a) Lack of knowledge or intent to deceive with respect to 
        the organization or status of insurance coverage of a reportable 
        MEWA, employee leasing firm, or collectively bargained 
        arrangement is not a defense to a violation of sections 62H.10 
        to 62H.17. 
           (b) A filing under sections 62H.10 to 62H.17 is solely for 
        the purpose of providing information to the commissioner.  
        Sections 62H.10 to 62H.17 and a filing under those sections do 
        not authorize or license a reportable MEWA, employee leasing 
        firm, collectively bargained arrangement, or any other 
        arrangement to engage in business in this state if otherwise 
        prohibited by law. 
           Sec. 43.  [62H.16] [INFORMATION REQUIRED TO BE FILED AND 
        KEPT CURRENT.] 
           (a) An agent, broker, third party administrator, or insurer 
        required to file under sections 62H.10 to 62H.17 shall file with 
        the commissioner all of the following information on a form 
        prescribed by the commissioner: 
           (1) a copy of the organizational documents of the 
        reportable MEWA, employee leasing firm, or collectively 
        bargained arrangement, including the articles of incorporation 
        and bylaws, partnership agreement, or trust instrument; 
           (2) a copy of each insurance or reinsurance contract that 
        purports to insure or guarantee all or any portion of benefits 
        or coverage offered by the reportable MEWA, employee leasing 
        firm, or collectively bargained arrangement to a person who 
        resides in this state; 
           (3) copies of the benefit plan description and other 
        materials intended to be distributed to potential purchasers; 
        and 
           (4) the names and addresses of all persons performing or 
        expected to perform the functions of a third party administrator 
        for the reportable MEWA, employee leasing firm, or collectively 
        bargained arrangement. 
           (b) A filing under sections 62H.10 to 62H.17 is ineffective 
        and is not in compliance with those sections if it is incomplete 
        or inaccurate in a material respect. 
           (c) A person who has made a filing under sections 62H.10 to 
        62H.17 shall amend the filing within 30 days of the date the 
        person becomes aware, or exercising due diligence should have 
        become aware, of any material change to the information required 
        to be filed.  The amended filing must accurately reflect the 
        material change to the information originally filed. 
           Sec. 44.  [62H.17] [LIABILITY FOR VIOLATION.] 
           If an arrangement that is an unauthorized insurer fails to 
        pay a claim or loss in this state within the provisions of its 
        contract, a person who violates sections 62H.10 to 62H.17 with 
        respect to the arrangement is liable to the insured for the full 
        amount of the claim or loss in the manner provided by the 
        provisions of the insurance contract. 
           Sec. 45.  Minnesota Statutes 1992, section 62I.02, is 
        amended to read: 
           62I.02 [MINNESOTA JOINT UNDERWRITING ASSOCIATION.] 
           Subdivision 1.  [CREATION.] The Minnesota joint 
        underwriting association is created to provide insurance 
        coverage to any person or entity unable to obtain insurance 
        through ordinary methods if the insurance is required by 
        statute, ordinance, or otherwise required by law, or is 
        necessary to earn a livelihood or conduct a business and serves 
        a public purpose, including, but not limited to, liquor 
        liability.  Prudent business practice or mere desire to have 
        insurance coverage is not a sufficient standard for the 
        association to offer insurance coverage to a person or entity.  
        For purposes of this subdivision, directors' and officers' 
        liability insurance is considered to be a business necessity and 
        not merely a prudent business practice.  The association shall 
        be specifically authorized to provide insurance coverage to day 
        care providers, foster parents, foster homes, developmental 
        achievement centers, group homes, and rehabilitation facilities 
        for mentally, emotionally, or physically handicapped persons, 
        and citizen participation groups established pursuant to the 
        housing and community redevelopment act of 1974, Public Law 
        Number 93-383.  Because the activities of certain persons or 
        entities present a risk that is so great, the association shall 
        not offer insurance coverage to any person or entity the board 
        of directors of the association determines is outside the 
        intended scope and purpose of the association because of the 
        gravity of the risk of offering insurance coverage.  The 
        association shall not offer environmental impairment liability 
        or product liability insurance.  The association shall not offer 
        coverage for activities that are conducted substantially outside 
        the state of Minnesota unless the insurance is required by 
        statute, ordinance, or otherwise required by law.  Every insurer 
        authorized to write property and casualty insurance and personal 
        injury liability insurance in this state shall be a member of 
        the association as a condition to obtaining and retaining a 
        license to write insurance in this state. 
           Subd. 2.  [DIRECTOR.] The association shall have a board of 
        directors composed of 11 persons chosen as follows:  five 
        persons elected by members of the association at a meeting 
        called by the commissioner; three public members, as defined in 
        section 214.02, appointed by the commissioner; and three 
        members, appointed by the commissioner representing groups to 
        whom coverage has been extended by the association.  The terms 
        of the members shall be four years.  Terms may be staggered so 
        that no more than six members are appointed or elected every two 
        years.  Members may serve until their successors are appointed 
        or elected.  If at any time no coverage is currently extended by 
        the association, then either additional public members may be 
        appointed to fill these three positions or, at the option of the 
        commissioner, representatives from groups who had previously 
        been covered by the association may serve as directors. 
           Subd. 3.  [REAUTHORIZATION.] The authorization to issue 
        insurance to day care providers, foster parents, foster homes, 
        developmental activity centers, group homes, and rehabilitation 
        facilities for mentally, emotionally, or physically handicapped 
        persons, and citizen participation groups established pursuant 
        to the housing and community redevelopment act of 1974, Public 
        Law Number 93-383, is valid for a period of two years from the 
        date it was made.  The commissioner may reauthorize the issuance 
        of insurance for these groups and other classes of business for 
        additional two-year periods pursuant to sections 62I.21 and 
        62I.22.  This subdivision is not a limitation on the number of 
        times the commissioner may reauthorize the issuance of insurance.
           Subd. 4.  [LIQUOR LIABILITY.] Policies and contracts of 
        coverage issued under this section for the purposes of providing 
        liquor liability insurance must contain the usual and customary 
        provisions of liability insurance policies, and must contain at 
        least the minimum coverage required by section 340A.409, 
        subdivision 1, or the local governing unit. 
           Subd. 5.  [ACCOUNTS.] For the purposes of administration 
        and assessment, the association shall be divided into two 
        separate accounts:  (1) the property and casualty insurance 
        account; and (2) the personal injury liability insurance account.
           Sec. 46.  Minnesota Statutes 1992, section 62I.03, is 
        amended to read: 
           62I.03 [DEFINITION.] 
           Subdivision 1.  [SCOPE.] As used in sections 62I.01 to 
        62I.22 the following terms have the meanings given them in this 
        section. 
           Subd. 2.  [ASSOCIATION.] "Association" means the Minnesota 
        joint underwriting association. 
           Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of commerce. 
           Subd. 4.  [DIRECT WRITTEN PREMIUMS.] "Direct written 
        premiums" means that amount at column (2), lines 5, 8, 9, 17, 
        21.2, 22, 23, 24, 25, 26, and 27, page 14, of the annual 
        statement filed annually with the department of commerce 
        pursuant to section 60A.13. 
           Subd. 5.  [DEFICIT.] "Deficit" means, for a particular 
        policy year, that amount by which total paid and outstanding 
        losses and loss adjustment expenses exceed premium revenue, 
        including retrospective premium revenue. 
           Subd. 6.  [NET DIRECT PREMIUMS.] For purposes of liquor 
        liability insurance, "net direct premiums" means gross direct 
        premiums written on personal injury liability insurance, 
        including the liability component of multiple peril package 
        policies as computed by the commissioner, less return premiums 
        for the unused or unabsorbed portions of premium deposits. 
           Subd. 7.  [PERSONAL INJURY LIABILITY INSURANCE.] "Personal 
        injury liability insurance" means insurance described in section 
        60A.06, subdivision 1, clause (13). 
           Sec. 47.  Minnesota Statutes 1992, section 62I.07, is 
        amended to read: 
           62I.07 [MEMBERSHIP ASSESSMENTS.] 
           Subdivision 1.  [GENERAL ASSESSMENT.] Each member of the 
        association that is authorized to write property and casualty 
        insurance in the state shall participate in its losses and 
        expenses in the proportion that the direct written premiums of 
        the member on the kinds of insurance in that account bears to 
        the total aggregate direct written premiums written in this 
        state by all members on the kinds of insurance in that account.  
        The members' participation in the association shall be 
        determined annually on the direct written premiums written 
        during the preceding calendar year as reported on the annual 
        statements and other reports filed by the member with the 
        commissioner. 
           Subd. 2.  [PERSONAL INJURY LIABILITY INSURANCE ASSESSMENT.] 
        A member of the association shall participate in its writings, 
        expenses, servicing allowance, management fees, and losses in 
        the proportion that the net direct premiums of the member, 
        excluding that portion of premiums attributable to the operation 
        of the association, written during the preceding calendar year 
        on the kinds of insurance in that account bears to the aggregate 
        net direct premiums written in this state by all members on the 
        kinds of insurance in that account.  The member's participation 
        in the association shall be determined annually on the basis of 
        net direct premiums written during the preceding calendar year, 
        as reported in the annual statements and other reports filed by 
        the member with the commissioner. 
           Sec. 48.  Minnesota Statutes 1992, section 62I.13, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GENERALLY.] To be eligible to participate 
        in the association, an applicant must apply for coverage through 
        the market assistance program, as required by section 62I.08.  
        Except as provided by subdivision 4, the market assistance 
        program has 30 days from the receipt of the application to 
        secure an offer of coverage for the applicant.  If the market 
        assistance program is able to secure an offer of coverage for 
        the applicant and if the offer of coverage would not be 
        considered a refusal for purposes of the association, then 
        coverage may not be extended by the association.  Eligibility 
        for coverage by the association is also subject to the terms and 
        conditions of subdivisions 2 and 3. 
           Sec. 49.  Minnesota Statutes 1992, section 62I.13, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MINIMUM OF QUALIFICATIONS.] Anyone who is unable 
        to obtain insurance in the private market and who so certifies 
        to the association in the application is eligible to make 
        written application to the association for coverage.  Payment of 
        the applicable premium or required portion of it must be paid 
        prior to coverage by the association.  An offer of coverage at a 
        rate in excess of the rate that would be charged by the 
        association for similar coverage and risk shall be deemed to be 
        a refusal of coverage for purposes of eligibility for 
        participation in the association.  It shall not be deemed to be 
        a written notice of refusal if the rate for coverage offered is 
        less than five percent in excess of the joint underwriting 
        association rates for similar coverage and risk or 20 percent in 
        excess of the joint underwriting association rates for liquor 
        liability coverages.  However, the offered rate must also be the 
        rate that the insurer has filed with the department of commerce 
        if the insurer is required to file its rates with the 
        department.  If the insurer is not required to file its rates 
        with the department, the offered rate must be the rate generally 
        charged by the insurer for similar coverage and risk. 
           Sec. 50.  Minnesota Statutes 1992, section 62I.20, is 
        amended to read: 
           62I.20 [MERGER OF OTHER PLANS.] 
           Upon application by the governing body of the liquor 
        liability assigned risk plan authorized by section 340A.409 or 
        the joint underwriting association authorized by chapter 62F to 
        be merged with the association, the commissioner shall, if the 
        commissioner deems it appropriate, hold a public hearing in 
        regard to the merger.  The commissioner upon motion or upon the 
        motion of any insured under plans shall hold a hearing.  Unless 
        it can be shown that the rights of the insured would be 
        adversely affected by the merger or that it would be less 
        efficient or more costly to merge the plans, the commissioner 
        shall consent to the merger.  The commissioner shall also 
        consent to the merger at any time there are less than ten 
        insureds in any plan. 
           Sec. 51.  Minnesota Statutes 1992, section 65A.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DESIGNATION AND SCOPE.] The printed form 
        of a policy of fire insurance, as set forth in subdivisions 3 
        and 3a, shall be known and designated as the "Minnesota standard 
        fire insurance policy" to be used in the state of Minnesota.  No 
        policy or contract of fire insurance shall be made, issued or 
        delivered by any insurer including reciprocals or interinsurance 
        exchanges or any agent or representative thereof, on any 
        property in this state, unless it shall provide the specified 
        coverage and conform as to all provisions, stipulations, and 
        conditions, with such form of policy, except as provided 
        in section sections 60A.08, subdivision 9; 60A.30 to 60A.35; 
        65A.06; 65A.29; 72A.20, subdivision 17; and other statutes 
        containing specific requirements that are inconsistent with the 
        form of this policy.  Any policy or contract otherwise subject 
        to the provisions of this subdivision, subdivisions 3 and 3a 
        which includes either on an unspecified basis as to coverage or 
        for a single premium, coverage against the peril of fire and 
        coverage against other perils may be issued without 
        incorporating the exact language of the Minnesota standard fire 
        insurance policy, provided:  Such policy or contract shall, with 
        respect to the peril of fire, afford the insured all the rights 
        and benefits of the Minnesota standard fire insurance policy and 
        such additional benefits as the policy provides; the provisions 
        in relation to mortgagee interests and obligations in said 
        Minnesota standard fire insurance policy shall be incorporated 
        therein without change; such policy or contract is complete as 
        to its terms of coverage; and, the commissioner is satisfied 
        that such policy or contract complies with the provisions hereof.
           Sec. 52.  Minnesota Statutes 1992, section 65A.29, 
        subdivision 7, is amended to read: 
           Subd. 7.  [RENEWAL; NOTICE REQUIREMENT.] No insurer shall 
        refuse to renew, or reduce limits of coverage, or eliminate any 
        coverage in a homeowner's insurance policy unless it mails or 
        delivers to the insured, at the address shown in the policy, at 
        least 60 days advance notice of its intention.  The notice must 
        contain the specific underwriting or other reason or reasons for 
        the indicated action.  
           Proof of mailing this notice to the insured at the address 
        shown in the policy is sufficient proof that the notice required 
        by this section has been given. 
           Sec. 53.  Minnesota Statutes 1992, section 65B.49, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RESIDUAL LIABILITY INSURANCE.] (1) Each plan of 
        reparation security shall also contain stated limits of 
        liability, exclusive of interest and costs, with respect to each 
        vehicle for which coverage is thereby granted, of not less than 
        $30,000 because of bodily injury to one person in any one 
        accident and, subject to said limit for one person, of not less 
        than $60,000 because of injury to two or more persons in any one 
        accident, and, if the accident has resulted in injury to or 
        destruction of property, of not less than $10,000 because of 
        such injury to or destruction of property of others in any one 
        accident. 
           (2) Under residual liability insurance the reparation 
        obligor shall be liable to pay, on behalf of the insured, sums 
        which the insured is legally obligated to pay as damages because 
        of bodily injury and property damage arising out of the 
        ownership, maintenance or use of a motor vehicle if the injury 
        or damage occurs within this state, the United States of 
        America, its territories or possessions, or Canada.  A 
        reparation obligor shall also be liable to pay sums which 
        another reparation obligor is entitled to recover under the 
        indemnity provisions of section 65B.53, subdivision 1. 
           (3) Every plan of reparation security shall be subject to 
        the following provisions which need not be contained therein: 
           (a) The liability of the reparation obligor with respect to 
        the residual liability coverage required by this clause shall 
        become absolute whenever injury or damage occurs; such liability 
        may not be canceled or annulled by any agreement between the 
        reparation obligor and the insured after the occurrence of the 
        injury or damage; no statement made by the insured or on the 
        insured's behalf and no violation of said policy shall defeat or 
        void said policy. 
           (b) The satisfaction by the insured of a judgment for such 
        injury or damage shall not be a condition precedent to the right 
        or duty of the reparation obligor to make payment on account of 
        such injury or damage. 
           (c) The reparation obligor shall have the right to settle 
        any claim covered by the residual liability insurance policy, 
        and if such settlement is made in good faith, the amount thereof 
        shall be deductible from the limits of liability for the 
        accident out of which such claim arose. 
           (d) Except as provided in subdivision 5a, a residual 
        liability insurance policy shall be excess of a nonowned vehicle 
        policy whether the nonowned vehicle is borrowed or rented, or 
        used for business or pleasure.  A nonowned vehicle is one not 
        used or provided on a regular basis.  
           Sec. 54.  Minnesota Statutes 1992, section 72A.20, 
        subdivision 29, is amended to read: 
           Subd. 29.  [HIV TESTS; CRIME VICTIMS.] No insurer regulated 
        under chapter 61A or 62B, or providing health, medical, 
        hospitalization, or accident and sickness insurance regulated 
        under chapter 62A, or nonprofit health services corporation 
        regulated under chapter 62C, health maintenance organization 
        regulated under chapter 62D, or fraternal benefit society 
        regulated under chapter 64B, may: 
           (1) obtain or use the performance of or the results of a 
        test to determine the presence of the human immune deficiency 
        virus (HIV) antibody performed on an offender under section 
        611A.19 or performed on a crime victim who was exposed to or had 
        contact with an offender's bodily fluids during commission of a 
        crime that was reported to law enforcement officials, in order 
        to make an underwriting decision, cancel, fail to renew, or take 
        any other action with respect to a policy, plan, certificate, or 
        contract; or 
           (2) ask an applicant for coverage or a person already 
        covered whether the person has:  (i) had a test performed for 
        the reason set forth in clause (1); or (ii) been the victim of 
        an assault or any other crime which involves bodily contact with 
        the offender. 
           A question that purports to require an answer that would 
        provide information regarding a test performed for the reason 
        set forth in clause (1) may be interpreted as excluding this 
        test.  An answer that does not mention the test is considered to 
        be a truthful answer for all purposes.  An authorization for the 
        release of medical records for insurance purposes must 
        specifically exclude any test performed for the purpose set 
        forth in clause (1) and must be read as providing this exclusion 
        regardless of whether the exclusion is expressly stated.  This 
        subdivision does not affect tests conducted for purposes other 
        than those described in clause (1), including any test to 
        determine the presence of the human deficiency virus (HIV) 
        antibody if such test was performed at the insurer's direction 
        as part of the insurer's normal underwriting requirements. 
           Sec. 55.  Minnesota Statutes 1992, section 72A.20, is 
        amended by adding a subdivision to read: 
           Subd. 30.  [RECORDS RETENTION.] An insurer shall retain 
        copies of all underwriting documents, policy forms, and 
        applications for three years from the effective date of the 
        policy.  This subdivision does not relieve the insurer of its 
        obligation to produce these documents to the department after 
        the retention period has expired in connection with an 
        enforcement action or administrative proceeding against the 
        insurer from whom the documents are requested, if the insurer 
        has retained the documents.  Records required to be retained by 
        this section may be retained in paper, photograph, microprocess, 
        magnetic, mechanical, or electronic media, or by any process 
        which accurately reproduces or forms a durable medium for the 
        reproduction of a record. 
           Sec. 56.  Minnesota Statutes 1992, section 72A.201, 
        subdivision 9, is amended to read: 
           Subd. 9.  [STANDARDS FOR COMMUNICATIONS WITH THE 
        DEPARTMENT.] In addition to the acts specified elsewhere in this 
        section and section 72A.20, the following acts by an insurer, 
        adjuster, or a self-insured or self-insurance administrator 
        constitute unfair settlement practices:  
           (1) failure to respond, within 15 working days after 
        receipt of an inquiry from the commissioner, about a claim, to 
        the commissioner; 
           (2) failure, upon request by the commissioner, to make 
        specific claim files available to the commissioner; 
           (3) failure to include in the claim file all written 
        communications and transactions emanating from, or received by, 
        the insurer, as well as all notes and work papers relating to 
        the claim.  All written communications and notes referring to 
        verbal communications must be dated by the insurer; 
           (4) failure to submit to the commissioner, when requested, 
        any summary of complaint data reasonably required; 
           (5) failure to compile and maintain a file on all 
        complaints.  If the complaint deals with a loss, the file must 
        contain adequate information so as to permit easy retrieval of 
        the entire file.  If the complaint alleges that the company, or 
        agent of the company, or any agent producing business written by 
        the company is engaged in any unfair, false, misleading, 
        dishonest, fraudulent, untrustworthy, coercive, or financially 
        irresponsible practice, or has violated any insurance law or 
        rule, the file must indicate what investigation or action was 
        taken by the company.  The complaint file must be maintained for 
        at least four years after the date of the complaint.  
           For purposes of clause (1) the term insurer includes an 
        agent of the insurer.  The insurer must have been sent a copy of 
        any communication to an agent to be held in violation of this 
        provision. 
           Sec. 57.  Minnesota Statutes 1992, section 72A.41, 
        subdivision 1, is amended to read: 
           Subdivision 1.  It is unlawful for any company to enter 
        into a contract of insurance as an insurer or to transact 
        insurance business in this state, as set forth in subdivision 2, 
        without a certificate of authority from the commissioner; 
        provided that this subdivision does not apply to:  (a) contracts 
        of insurance procured by agents under the authority of sections 
        60A.195 to 60A.209; (b) contracts of reinsurance and contracts 
        of ocean or wet marine and transportation insurance; (c) 
        transactions in this state involving a policy lawfully 
        solicited, written and delivered outside of this state covering 
        only subjects of insurance not resident, located, or expressly 
        to be performed in this state at the time of issuance and which 
        transactions are subsequent to the issuance of the policy; (d) 
        transactions in this state involving group or blanket insurance 
        and group annuities where the master policy of such groups was 
        lawfully issued and delivered in a state in which the company 
        was authorized to do an insurance business where, except for 
        group annuities, the insurer complies with section 72A.13.  The 
        commissioner may require the insurer which has issued such 
        master policy to submit any information as the commissioner 
        reasonably requires in order to determine if probable cause 
        exists to convene a hearing to determine whether the total 
        charges for the insurance to the persons insured are 
        unreasonable in relation to the benefits provided under the 
        policy; (e) transactions in this state involving a policy of 
        insurance or annuity issued prior to July 1, 1967; or (f) (e) 
        contract of insurance procured under the authority of section 
        60A.19, subdivision 8; or (g) (f) transactions in this state 
        involving contracts of insurance covering property or risks not 
        located in this state. 
           Sec. 58.  Minnesota Statutes 1992, section 72B.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIREMENT; EXCEPTIONS.] Except as 
        otherwise provided, no person shall act as an independent 
        adjuster, public adjuster, or public adjuster solicitor for 
        money, a commission, or any other thing of value, unless such 
        person shall first obtain from the commissioner a license.  No 
        license shall be required for a person: 
           (a) Undergoing a training or education program under the 
        guidance of a licensed adjuster and who is registered with the 
        commissioner for a one year temporary permit; 
           (b) (1) a person acting in a catastrophe or emergency 
        situation, and who has registered with the commissioner for that 
        purpose; 
           (c) (2) a nonresident adjuster who occasionally is in this 
        state to adjust a single loss; provided, however, that if a 
        nonresident adjusts more than six losses in this state in one 
        year the adjuster must qualify for and receive a nonresident's 
        license as provided in sections 72B.01 to 72B.14, and provided 
        the adjuster's domiciliary state affords a like privilege. 
           Sec. 59.  Minnesota Statutes 1992, section 72B.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [QUALIFICATIONS.] An applicant for licensing as 
        an adjuster under sections 72B.01 to 72B.14 shall be at least 18 
        years of age, and shall have one year's training and experience 
        in adjusting insurance claims for damage or loss from risks in 
        the field stated in the application.  The applicant shall be 
        competent and trustworthy and shall not have been engaged in any 
        practice which would be grounds for suspension or revocation of 
        a license under sections 72B.01 to 72B.14 within the three years 
        next preceding the date of the application. 
           An applicant for licensing as a public adjuster solicitor 
        under sections 72B.01 to 72B.14 shall be at least 18 years of 
        age, shall be competent and trustworthy, and shall not have been 
        engaged in any practice which would be grounds for suspension or 
        revocation of a license under sections 72B.01 to 72B.14 within 
        the three years next preceding the date of the application. 
           In the case of any applicant who has been convicted of a 
        felony within the ten years next preceding the date of the 
        application, and who in the judgment of the commissioner, meets 
        the other qualifications, the commissioner may impose the 
        additional requirement of the filing of a bond in accordance 
        with the requirements of section 72B.08, subdivision 8. 
           Sec. 60.  Minnesota Statutes 1992, section 176.181, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COMPULSORY INSURANCE; SELF-INSURERS.] (1) Every 
        employer, except the state and its municipal subdivisions, 
        liable under this chapter to pay compensation shall insure 
        payment of compensation with some insurance carrier authorized 
        to insure workers' compensation liability in this state, or 
        obtain a written order from the commissioner of commerce 
        exempting the employer from insuring liability for compensation 
        and permitting self-insurance of the liability.  The terms, 
        conditions and requirements governing self-insurance shall be 
        established by the commissioner pursuant to chapter 14.  The 
        commissioner of commerce shall also adopt, pursuant to clause 
        (2)(c), rules permitting two or more employers, whether or not 
        they are in the same industry, to enter into agreements to pool 
        their liabilities under this chapter for the purpose of 
        qualifying as group self-insurers.  With the approval of the 
        commissioner of commerce, any employer may exclude medical, 
        chiropractic and hospital benefits as required by this chapter.  
        An employer conducting distinct operations at different 
        locations may either insure or self-insure the other portion of 
        operations as a distinct and separate risk.  An employer 
        desiring to be exempted from insuring liability for compensation 
        shall make application to the commissioner of commerce, showing 
        financial ability to pay the compensation, whereupon by written 
        order the commissioner of commerce, on deeming it proper, may 
        make an exemption.  An employer may establish financial ability 
        to pay compensation by:  (1) providing financial statements of 
        the employer to the commissioner of commerce; or (2) filing a 
        surety bond or bank letter of credit with the commissioner of 
        commerce in an amount equal to the anticipated annual 
        compensation costs of the employer, but in no event less than 
        $100,000.  Upon ten days' written notice the commissioner of 
        commerce may revoke the order granting an exemption, in which 
        event the employer shall immediately insure the liability.  As a 
        condition for the granting of an exemption the commissioner of 
        commerce may require the employer to furnish security the 
        commissioner of commerce considers sufficient to insure payment 
        of all claims under this chapter, consistent with subdivision 
        2b.  If the required security is in the form of currency or 
        negotiable bonds, the commissioner of commerce shall deposit it 
        with the state treasurer.  In the event of any default upon the 
        part of a self-insurer to abide by any final order or decision 
        of the commissioner of labor and industry directing and awarding 
        payment of compensation and benefits to any employee or the 
        dependents of any deceased employee, then upon at least ten days 
        notice to the self-insurer, the commissioner of commerce may by 
        written order to the state treasurer require the treasurer to 
        sell the pledged and assigned securities or a part thereof 
        necessary to pay the full amount of any such claim or award with 
        interest thereon.  This authority to sell may be exercised from 
        time to time to satisfy any order or award of the commissioner 
        of labor and industry or any judgment obtained thereon.  When 
        securities are sold the money obtained shall be deposited in the 
        state treasury to the credit of the commissioner of commerce and 
        awards made against any such self-insurer by the commissioner of 
        commerce shall be paid to the persons entitled thereto by the 
        state treasurer upon warrants prepared by the commissioner of 
        commerce and approved by the commissioner of finance out of the 
        proceeds of the sale of securities.  Where the security is in 
        the form of a surety bond or personal guaranty the commissioner 
        of commerce, at any time, upon at least ten days notice and 
        opportunity to be heard, may require the surety to pay the 
        amount of the award, the payments to be enforced in like manner 
        as the award may be enforced. 
           (2)(a) No association, corporation, partnership, sole 
        proprietorship, trust or other business entity shall provide 
        services in the design, establishment or administration of a 
        group self-insurance plan under rules adopted pursuant to this 
        subdivision unless it is licensed, or exempt from licensure, 
        pursuant to section 60A.23, subdivision 8, to do so by the 
        commissioner of commerce.  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 shall be granted only when the 
        commissioner of commerce is satisfied that the entity possesses 
        the necessary organization, background, expertise, and financial 
        integrity to supply the services sought to be offered.  The 
        commissioner of commerce may issue a license subject to 
        restrictions or limitations, including restrictions or 
        limitations on the type of services which may be supplied or the 
        activities which may be engaged in.  The license is for a 
        two-year period. 
           (b) To assure that group self-insurance plans are 
        financially solvent, administered in a fair and capable fashion, 
        and able to process claims and pay benefits in a prompt, fair 
        and equitable manner, entities licensed to engage in such 
        business are subject to supervision and examination by the 
        commissioner of commerce. 
           (c) To carry out the purposes of this subdivision, the 
        commissioner of commerce may promulgate administrative rules, 
        including emergency rules, pursuant to sections 14.001 to 14.69. 
        These rules may: 
           (i) establish reporting requirements for administrators of 
        group self-insurance plans; 
           (ii) establish standards and guidelines consistent with 
        subdivision 2b to assure the adequacy of the financing and 
        administration of group self-insurance plans; 
           (iii) establish bonding requirements or other provisions 
        assuring the financial integrity of entities administering group 
        self-insurance plans; 
           (iv) establish standards, including but not limited to 
        minimum terms of membership in self-insurance plans, as 
        necessary to provide stability for those plans; 
           (v) establish standards or guidelines governing the 
        formation, operation, administration, and dissolution of 
        self-insurance plans; and 
           (vi) establish other reasonable requirements to further the 
        purposes of this subdivision.  The rules may not require 
        excessive cash payments to a common claims fund by group 
        self-insurers.  However, a level of funding in the common claims 
        fund must always be maintained at not less than one year's claim 
        losses paid in the most recent year. 
           Sec. 61.  Minnesota Statutes 1992, section 340A.409, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MARKET ASSISTANCE.] The commissioner of commerce 
        shall advise licensees and municipalities subject to the 
        financial responsibility requirements of subdivision 1 of those 
        persons offering insurance coverage.  The commissioner of 
        commerce shall establish a program to assist licensees in 
        obtaining insurance coverage.  The program shall include a 
        committee appointed by the commissioner of commerce that is 
        representative of insurance carriers and producers, liquor 
        vendors, and the public.  No less than one-half of the committee 
        members shall represent casualty insurers and surplus lines 
        agents or brokers.  The commissioner of commerce or the 
        commissioner's designated representative shall serve as an ex 
        officio member of the committee.  The committee shall review and 
        act upon all properly executed applications.  If the committee 
        finds that it cannot assist in securing insurance coverage, it 
        shall notify the applicant in writing with a full explanation 
        and recommendation for enhancing its ability to secure 
        insurance.  The commissioner of commerce shall, if necessary, 
        establish an assigned risk plan pursuant to subdivision 3. The 
        market assistance plan of the Minnesota joint underwriting 
        association shall assist licensees in obtaining insurance 
        coverage. 
           Sec. 62.  Minnesota Statutes 1992, section 340A.409, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ASSIGNED RISK PLAN MINNESOTA JOINT UNDERWRITING 
        ASSOCIATION.] (a) The purpose of the assigned risk plan is 
        to Minnesota joint underwriting association shall provide 
        coverage required by subdivision 1 to persons rejected under 
        this subdivision. 
           (b) An insurer who offers liquor liability insurance that 
        refuses to write the coverage required by subdivision 1 shall 
        furnish the applicant with a written notice of refusal.  The 
        rejected applicant shall file a copy of the notice of refusal 
        with the commissioner of public safety at the time of 
        application for coverage to the assigned risk plan and the 
        market assistance program.  
           A written notice of refusal must be provided to any 
        applicant who has requested only liquor liability insurance if 
        the insurer chooses to only offer liquor liability insurance in 
        combination with other types of insurance. 
           A written notice of refusal must be provided by an insurer 
        to any applicant who receives an offer of coverage from that 
        insurer that is in excess of the rate charged by the assigned 
        risk plan for similar coverage and risk.  A notice is not 
        required if the rate for the coverage offered is less than 20 
        percent in excess of the assigned risk plan rates, provided that 
        the offered rate is the rate that the insurer has filed with the 
        commissioner of commerce if the insurer is required to file its 
        rates with the commissioner.  If the insurer is not required to 
        file its rates with the commissioner, the offered rate must be 
        the rate generally charged by the insurer for similar coverage 
        and risk. 
           A notice of refusal is not required to be filed if there is 
        not an insurer offering liquor liability insurance in the state. 
           To be eligible to participate in the assigned risk plan an 
        applicant must apply for coverage through the market assistance 
        program.  Application to the market assistance program must be 
        made no later than the time of application to the assigned risk 
        plan.  If the market assistance program is unable to secure 
        coverage then coverage may be extended by the assigned risk plan.
           (c) The commissioner of commerce may enter into service 
        contracts as necessary or beneficial to accomplish the purposes 
        of the assigned risk plan including servicing of policies or 
        contracts of coverage, data management, and assessment 
        collections.  Services related to the administration of policies 
        or contracts of coverages must be performed by one or more 
        qualified insurance companies licensed pursuant to section 
        60A.06, subdivision 1, clause (13), or a qualified vendor of 
        risk management services.  A qualified insurer or vendor of risk 
        management services must possess sufficient financial, 
        professional, administrative, and personnel resources to provide 
        the services required for operation of the plan.  The cost of 
        all services contracted for are an obligation of the assigned 
        risk plan. 
           (d) The commissioner of commerce may assess all insurers 
        licensed under section 60A.06, subdivision 1, clause (13), an 
        amount sufficient to fully fund the obligations of the assigned 
        risk plan if the commissioner determines that the assets of the 
        assigned risk plan are insufficient to meet its obligations.  
        The assessment of each insurer must be in a proportion equal to 
        the proportion which the amount of insurance written as reported 
        on page 14 of the annual statement under line 5, commercial 
        multiperil, and line 17, other liability, during the preceding 
        calendar year by that insurer bears to the total written by all 
        such carriers for such lines. 
           (e) Policies and contracts of coverage issued under this 
        subdivision must contain the usual and customary provisions of 
        liability insurance policies, and must contain at least the 
        minimum coverage required by subdivision 1 or the local 
        governing unit. 
           (f) Assigned risk policies and contracts of coverage are 
        subject to premium tax pursuant to section 60A.15. 
           (g) Insureds served by the assigned risk plan must be 
        charged premiums based upon a rating plan approved by the 
        commissioner of commerce.  Assigned risk premiums must be on an 
        actuarially sound basis.  The rating plan approved by the 
        commissioner shall provide for surcharge factors based upon 
        claims reported and losses paid.  The commissioner of commerce 
        shall fix the compensation received by the agent of record. 
           (h) The rating plan may be amended by rule pursuant to 
        chapter 14 or by the following expedited procedures: 
           (1) Any person may, by written petition served upon the 
        commissioner, request that a hearing be held to amend the rating 
        plan. 
           (2) The commissioner shall forward a copy of the petition 
        to the chief administrative law judge within three business days 
        of its receipt.  The chief administrative law judge shall, 
        within three business days of receipt of the copy of the 
        petition or a request for a hearing by the commissioner, set a 
        hearing date, assign an administrative law judge to hear the 
        matter, and notify the commissioner of the hearing date and the 
        administrative law judge assigned to hear the matter.  The 
        hearing date must be set no less than 60 days nor more than 90 
        days from the date of receipt of the petition by the 
        commissioner. 
           (3) The commissioner of commerce shall publish a notice of 
        the hearing in the State Register at least 30 days before the 
        hearing date.  The notice should be similar to that used for 
        rulemaking under the administrative procedure act.  Approval by 
        the administrative law judge of the notice prior to publication 
        is not required.  
           (4) The hearing and all matters taking place after the 
        hearing are a contested case under chapter 14.  Within 45 days 
        from the commencement of the hearing and within 15 days of the 
        completion of the hearing the administrative law judge shall 
        submit a report to the commissioner of commerce.  The parties, 
        or the administrative law judge, if the parties cannot agree, 
        shall adjust all time requirements under the contested case 
        procedure to conform with the 45-day requirement. 
           (5) The commissioner shall render a decision within ten 
        business days of the receipt of the administrative law judge's 
        report. 
           (6) If all parties to the proceeding agree, any of the 
        previous requirements may be waived or modified. 
           (7) A petition for a hearing to amend the rating plan 
        received by the commissioner within 180 days of the date of the 
        commissioner's decision in a prior proceeding to amend the 
        rating plan is invalid and requires no action. 
           (i) (b) A liquor vendor shall be denied or terminated from 
        coverage through the assigned risk plan Minnesota joint 
        underwriting association if the liquor vendor disregards safety 
        standards, laws, rules, or ordinances pertaining to the offer, 
        sale, or other distribution of liquor. 
           The commissioner may by rule establish other conditions for 
        denial or termination from coverage through the assigned risk 
        plan. 
           (j) The commissioner of commerce shall adopt rules needed 
        to implement this subdivision.  The rules may include: 
           (1) appeal procedures from actions of the assigned risk 
        plan; 
           (2) formation of an advisory committee composed of 
        insurers, vendors of risk management services and licensees, to 
        advise the commissioner of commerce regarding operation of the 
        plan; and 
           (3) applicable rating plans and rating standards. 
           Sec. 63.  [LIQUOR LIABILITY ASSIGNED RISK PLAN OBLIGATIONS 
        AND LIABILITIES.] 
           The Minnesota joint underwriting association shall assume 
        the obligations of existing contracts and existing liabilities 
        of the liquor liability assigned risk plan. 
           Sec. 64.  Laws 1993, chapter 372, section 8, is amended to 
        read: 
           Sec. 8.  [EFFECTIVE DATE.] 
           Sections 1 and 2 apply to all franchise contracts or 
        franchise transfer agreements entered into or renewed on or 
        after the effective date, and apply as of July 1, 1993, to 
        franchise contracts in effect on the effective date that have no 
        expiration date. 
           Sections 4 to 7 apply to all agreements for private label 
        purchases entered into or renewed on or after July 1, 1993, and 
        to all private label purchases occurring on or after that date. 
           Sec. 65.  [REVISOR INSTRUCTIONS.] 
           (a) The revisor shall recodify Minnesota Statutes, section 
        72A.20, subdivision 4a, as section 72A.201, subdivision 4a. 
           (b) The revisor shall recodify Minnesota Statutes, section 
        60A.30 as section 60A.351 and section 60A.31 as section 60A.352 
        and correct internal references in Minnesota Statutes and 
        Minnesota Rules. 
           Sec. 66.  [REPEALER.] 
           (a) Minnesota Statutes 1992, sections 72A.45; and 72B.07, 
        are repealed. 
           (b) Minnesota Rules, parts 2780.4800; 2783.0010; 2783.0020; 
        2783.0030; 2783.0040; 2783.0050; 2783.0060; 2783.0070; 
        2783.0080; 2783.0090; and 2783.0100, are repealed.  The rates 
        set pursuant to these rules shall continue to apply until 
        changed pursuant to Minnesota Statutes, section 62I.06. 
           Sec. 67.  [EFFECTIVE DATE.] 
           Sections 61 to 63 and 66, paragraph (b), are effective the 
        day following final enactment. 
           Section 64 is effective July 1, 1993. 
           Presented to the governor April 20, 1994 
           Signed by the governor April 22, 1994, 1:45 p.m.