Minnesota Session Laws - 1994, Regular Session

                            CHAPTER 574-H.F.No. 1999 
                  An act relating to insurance; requiring disclosure of 
                  information relating to insurance fraud; granting 
                  immunity for reporting suspected insurance fraud; 
                  requiring insurers to develop antifraud plans; 
                  prescribing penalties; proposing coding for new law in 
                  Minnesota Statutes, chapter 60A. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [60A.951] [DEFINITIONS.] 
           Subdivision 1.  [APPLICATION.] The definitions in this 
        section apply to sections 60A.951 to 60A.955. 
           Subd. 2.  [AUTHORIZED PERSON.] "Authorized person" means 
        the county attorney, sheriff, or chief of police responsible for 
        investigations in the county where the suspected insurance fraud 
        occurred; the superintendent of the bureau of criminal 
        apprehension; the commissioner of commerce; the attorney 
        general; or any duly constituted criminal investigative 
        department or agency of the United States. 
           Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of commerce for insurers regulated by the 
        commissioner of commerce, and means the commissioner of health 
        for insurers regulated by the commissioner of health. 
           Subd. 4.  [INSURANCE FRAUD.] "Insurance fraud" occurs when 
        a person presents or causes to be presented to any insurer, or 
        prepares with knowledge or belief that it will be so presented, 
        a written or oral statement, including a computer-generated 
        document, an electronic claim filing, or other electronic 
        transmission, that contains materially false or misleading 
        information, or a material and misleading omission, concerning: 
           (1) an application for the issuance of an insurance policy; 
           (2) the rating of an insurance policy; 
           (3) a claim for payment, reimbursement, or benefits payable 
        under an insurance policy to an insured, a beneficiary, or a 
        third party; 
           (4) premiums on an insurance policy; or 
           (5) payments made in accordance with the terms of an 
        insurance policy. 
           Subd. 5.  [INSURER.] "Insurer" means insurance company, 
        risk retention group as defined in section 60E.02, service plan 
        corporation as defined in section 62C.02, health maintenance 
        organization as defined in section 62D.02, integrated service 
        network as defined in section 62N.02, fraternal benefit society 
        regulated under chapter 64B, township mutual company regulated 
        under chapter 67A, joint self-insurance plan or multiple 
        employer trust regulated under chapter 60F, 62H, or section 
        471.617, subdivision 2, and persons administering a 
        self-insurance plan as defined in section 60A.23, subdivision 8, 
        clause (2), paragraphs (a) and (d). 
           Subd. 6.  [RELEVANT INFORMATION.] "Relevant information" 
        includes, but is not limited to: 
           (1) pertinent insurance policy information, including the 
        application for a policy; 
           (2) policy premium payment records; 
           (3) a history of previous claims made by the insured 
        including, where the insured is a corporation, limited liability 
        company, or partnership, a history of claims by a subsidiary or 
        any affiliates, and a history of claims of any other business 
        association in which individual officers or partners or their 
        family members are known to be involved; 
           (4) material relating to the investigation, including the 
        statement of any person and the proof of loss; 
           (5) billing records; and 
           (6) any other information which an authorized person 
        identifies and which appears reasonably related to the 
        investigation. 
           Sec. 2.  [60A.952] [DISCLOSURE OF INFORMATION.] 
           Subdivision 1.  [REQUEST.] After receiving a written 
        request from an authorized person stating that the authorized 
        person has reason to believe that a crime or civil fraud have 
        been committed in connection with an insurance claim, payment, 
        or application, an insurer must release to the authorized person 
        all relevant information in the insurer's possession.  
           Subd. 2.  [NOTIFICATION BY INSURER REQUIRED.] If an insurer 
        has reason to believe that an insurance fraud has been 
        committed, the insurer shall, in writing, notify an authorized 
        person and provide the authorized person with all relevant 
        information in the insurer's possession.  It is sufficient for 
        the purpose of this subdivision if an insurer notifies and 
        provides relevant information to one authorized person.  The 
        insurer may also release relevant information to any person 
        authorized to receive the information under section 72A.502, 
        subdivision 2. 
           Subd. 3.  [IMMUNITY FROM LIABILITY.] If insurers, agents 
        acting on the insurers' behalf, or authorized persons release 
        information in good faith under this section, whether orally or 
        in writing, they are immune from any liability, civil or 
        criminal, for the release or reporting of the information. 
           Sec. 3.  [60A.953] [ENFORCEMENT.] 
           The intentional failure to provide relevant information as 
        required by section 60A.952, subdivision 1, or to provide 
        notification of insurance fraud as required by section 60A.952, 
        subdivision 2, is punishable as a misdemeanor. 
           Sec. 4.  [60A.954] [INSURANCE ANTIFRAUD PLAN.] 
           Subdivision 1.  [ESTABLISHMENT.] An insurer shall 
        institute, implement, and maintain an antifraud plan.  For the 
        purpose of this section, the term insurer does not include 
        reinsurers, self-insurers, and excess insurers.  Within 30 days 
        after instituting or modifying an antifraud plan, the insurer 
        shall notify the commissioner in writing.  The notice must 
        include the name of the person responsible for administering the 
        plan.  An antifraud plan shall establish procedures to: 
           (1) prevent insurance fraud, including:  internal fraud 
        involving the insurer's officers, employees, or agents; fraud 
        resulting from misrepresentations on applications for insurance; 
        and claims fraud; 
           (2) report insurance fraud to appropriate law enforcement 
        authorities; and 
           (3) cooperate with the prosecution of insurance fraud cases.
           Subd. 2.  [REVIEW.] The commissioner may review each 
        insurer's antifraud plan to determine whether it complies with 
        the requirements of this section.  If the commissioner finds 
        that an insurer's antifraud plan does not comply with the 
        requirements of this section, the commissioner shall disapprove 
        the plan and send a notice of disapproval, along with the 
        reasons for disapproval, to the insurer.  An insurer whose 
        antifraud plan has been disapproved by the commissioner shall 
        submit a new plan to the commissioner within 60 days after the 
        plan was disapproved.  The commissioner may examine an insurer's 
        procedures to determine whether the insurer is complying with 
        its antifraud plan.  The commissioner shall withhold from public 
        inspection any part of an insurer's antifraud plan for so long 
        as the commissioner deems the withholding to be in the public 
        interest. 
           Sec. 5.  [60A.955] [FORMS TO CONTAIN FRAUD WARNING.] 
           All insurance claim forms issued by an insurer for use in 
        submitting a claim for payment or a claim for any other benefit 
        pursuant to a policy shall clearly contain a warning 
        substantially as follows:  "A person who submits an application 
        or files a claim with intent to defraud or helps commit a fraud 
        against an insurer is guilty of a crime."  An insurer may comply 
        with this section by including the warning on an addendum 
        attached to the application or claim form.  The absence of the 
        required warning does not constitute a defense in a prosecution 
        for a violation of chapter 609 or any other chapter of Minnesota 
        Statutes. 
           Sec. 6.  [EFFECTIVE DATE.] 
           Sections 4 and 5 are effective January 1, 1995. 
           Presented to the governor May 3, 1994 
           Signed by the governor May 5, 1994, 4:45 p.m.