Minnesota Session Laws - 1995, Regular Session

                             CHAPTER 75-S.F.No. 474 
                  An act relating to insurance; Medicare-related 
                  coverage; regulating policy reinstatement; amending 
                  Minnesota Statutes 1994, sections 62A.04, subdivision 
                  2; and 62D.12, by adding a subdivision. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1994, section 62A.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REQUIRED PROVISIONS.] Except as provided in 
        subdivision 4 each such policy delivered or issued for delivery 
        to any person in this state shall contain the provisions 
        specified in this subdivision in the words in which the same 
        appear in this section.  The insurer may, at its option, 
        substitute for one or more of such provisions corresponding 
        provisions of different wording approved by the commissioner 
        which are in each instance not less favorable in any respect to 
        the insured or the beneficiary.  Such provisions shall be 
        preceded individually by the caption appearing in this 
        subdivision or, at the option of the insurer, by such 
        appropriate individual or group captions or subcaptions as the 
        commissioner may approve. 
           (1) A provision as follows: 
           ENTIRE CONTRACT; CHANGES:  This policy, including the 
        endorsements and the attached papers, if any, constitutes the 
        entire contract of insurance.  No change in this policy shall be 
        valid until approved by an executive officer of the insurer and 
        unless such approval be endorsed hereon or attached hereto.  No 
        agent has authority to change this policy or to waive any of its 
        provisions. 
           (2) A provision as follows: 
           TIME LIMIT ON CERTAIN DEFENSES:  (a) After two years from 
        the date of issue of this policy no misstatements, except 
        fraudulent misstatements, made by the applicant in the 
        application for such policy shall be used to void the policy or 
        to deny a claim for loss incurred or disability (as defined in 
        the policy) commencing after the expiration of such two year 
        period. 
           The foregoing policy provision shall not be so construed as 
        to affect any legal requirement for avoidance of a policy or 
        denial of a claim during such initial two year period, nor to 
        limit the application of clauses (1), (2), (3), (4) and (5), in 
        the event of misstatement with respect to age or occupation or 
        other insurance.  A policy which the insured has the right to 
        continue in force subject to its terms by the timely payment of 
        premium (1) until at least age 50 or, (2) in the case of a 
        policy issued after age 44, for at least five years from its 
        date of issue, may contain in lieu of the foregoing the 
        following provisions (from which the clause in parentheses may 
        be omitted at the insurer's option) under the caption 
        "INCONTESTABLE": 
           After this policy has been in force for a period of two 
        years during the lifetime of the insured (excluding any period 
        during which the insured is disabled), it shall become 
        incontestable as to the statements contained in the application. 
           (b) No claim for loss incurred or disability (as defined in 
        the policy) commencing after two years from the date of issue of 
        this policy shall be reduced or denied on the ground that a 
        disease or physical condition not excluded from coverage by name 
        or specific description effective on the date of loss had 
        existed prior to the effective date of coverage of this policy. 
           (3) A provision as follows: 
           GRACE PERIOD:  A grace period of ..... (insert a number not 
        less than "7" for weekly premium policies, "10" for monthly 
        premium policies and "31" for all other policies) days will be 
        granted for the payment of each premium falling due after the 
        first premium, during which grace period the policy shall 
        continue in force. 
           A policy which contains a cancellation provision may add, 
        at the end of the above provision, 
           subject to the right of the insurer to cancel in accordance 
        with the cancellation provision hereof. 
           A policy in which the insurer reserves the right to refuse 
        any renewal shall have, at the beginning of the above provision, 
           Unless not less than five days prior to the premium due 
        date the insurer has delivered to the insured or has mailed to 
        the insured's last address as shown by the records of the 
        insurer written notice of its intention not to renew this policy 
        beyond the period for which the premium has been accepted. 
           (4) A provision as follows: 
           REINSTATEMENT:  If any renewal premium be not paid within 
        the time granted the insured for payment, a subsequent 
        acceptance of premium by the insurer or by any agent duly 
        authorized by the insurer to accept such premium, without 
        requiring in connection therewith an application for 
        reinstatement, shall reinstate the policy.  If the insurer or 
        such agent requires an application for reinstatement and issues 
        a conditional receipt for the premium tendered, the policy will 
        be reinstated upon approval of such application by the insurer 
        or, lacking such approval, upon the forty-fifth day following 
        the date of such conditional receipt unless the insurer has 
        previously notified the insured in writing of its disapproval of 
        such application.  For health plans described in section 
        62A.011, subdivision 3, clause (10), an insurer must accept 
        payment of a renewal premium and reinstate the policy, if the 
        insured applies for reinstatement no later than 60 days after 
        the due date for the premium payment, unless: 
           (1) the insured has in the interim left the state or the 
        insurer's service area; or 
           (2) the insured has applied for reinstatement on two or 
        more prior occasions. 
           The reinstated policy shall cover only loss resulting from 
        such accidental injury as may be sustained after the date of 
        reinstatement and loss due to such sickness as may begin more 
        than ten days after such date.  In all other respects the 
        insured and insurer shall have the same rights thereunder as 
        they had under the policy immediately before the due date of the 
        defaulted premium, subject to any provisions endorsed hereon or 
        attached hereto in connection with the reinstatement.  Any 
        premium accepted in connection with a reinstatement shall be 
        applied to a period for which premium has not been previously 
        paid, but not to any period more than 60 days prior to the date 
        of reinstatement.  The last sentence of the above provision may 
        be omitted from any policy which the insured has the right to 
        continue in force subject to its terms by the timely payment of 
        premiums (1) until at least age 50, or, (2) in the case of a 
        policy issued after age 44, for at least five years from its 
        date of issue. 
           (5) A provision as follows: 
           NOTICE OF CLAIM:  Written notice of claim must be given to 
        the insurer within 20 days after the occurrence or commencement 
        of any loss covered by the policy, or as soon thereafter as is 
        reasonably possible.  Notice given by or on behalf of the 
        insured or the beneficiary to the insurer at ..... (insert the 
        location of such office as the insurer may designate for the 
        purpose), or to any authorized agent of the insurer, with 
        information sufficient to identify the insured, shall be deemed 
        notice to the insurer. 
           In a policy providing a loss-of-time benefit which may be 
        payable for at least two years, an insurer may at its option 
        insert the following between the first and second sentences of 
        the above provision: 
           Subject to the qualifications set forth below, if the 
        insured suffers loss of time on account of disability for which 
        indemnity may be payable for at least two years, the insured 
        shall, at least once in every six months after having given 
        notice of claim, give to the insurer notice of continuance of 
        said disability, except in the event of legal incapacity.  The 
        period of six months following any filing of proof by the 
        insured or any payment by the insurer on account of such claim 
        or any denial or liability in whole or in part by the insurer 
        shall be excluded in applying this provision.  Delay in the 
        giving of such notice shall not impair the insured's right to 
        any indemnity which would otherwise have accrued during the 
        period of six months preceding the date on which such notice is 
        actually given. 
           (6) A provision as follows: 
           CLAIM FORMS:  The insurer, upon receipt of a notice of 
        claim, will furnish to the claimant such forms as are usually 
        furnished by it for filing proofs of loss.  If such forms are 
        not furnished within 15 days after the giving of such notice the 
        claimant shall be deemed to have complied with the requirements 
        of this policy as to proof of loss upon submitting, within the 
        time fixed in the policy for filing proofs of loss, written 
        proof covering the occurrence, the character and the extent of 
        the loss for which claim is made. 
           (7) A provision as follows: 
           PROOFS OF LOSS:  Written proof of loss must be furnished to 
        the insurer at its said office in case of claim for loss for 
        which this policy provides any periodic payment contingent upon 
        continuing loss within 90 days after the termination of the 
        period for which the insurer is liable and in case of claim for 
        any other loss within 90 days after the date of such loss.  
        Failure to furnish such proof within the time required shall not 
        invalidate nor reduce any claim if it was not reasonably 
        possible to give proof within such time, provided such proof is 
        furnished as soon as reasonably possible and in no event, except 
        in the absence of legal capacity, later than one year from the 
        time proof is otherwise required. 
           (8) A provision as follows: 
           TIME OF PAYMENT OF CLAIMS:  Indemnities payable under this 
        policy for any loss other than loss for which this policy 
        provides periodic payment will be paid immediately upon receipt 
        of due written proof of such loss.  Subject to due written proof 
        of loss, all accrued indemnities for loss for which this policy 
        provides periodic payment will be paid ..... (insert period for 
        payment which must not be less frequently than monthly) and any 
        balance remaining unpaid upon the termination of liability will 
        be paid immediately upon receipt of due written proof. 
           (9) A provision as follows: 
           PAYMENT OF CLAIMS:  Indemnity for loss of life will be 
        payable in accordance with the beneficiary designation and the 
        provisions respecting such payment which may be prescribed 
        herein and effective at the time of payment.  If no such 
        designation or provision is then effective, such indemnity shall 
        be payable to the estate of the insured. Any other accrued 
        indemnities unpaid at the insured's death may, at the option of 
        the insurer, be paid either to such beneficiary or to such 
        estate.  All other indemnities will be payable to the insured. 
           The following provisions, or either of them, may be 
        included with the foregoing provision at the option of the 
        insurer: 
           If any indemnity of this policy shall be payable to the 
        estate of the insured, or to an insured or beneficiary who is a 
        minor or otherwise not competent to give a valid release, the 
        insurer may pay such indemnity, up to an amount not exceeding 
        $..... (insert an amount which shall not exceed $1,000), to any 
        relative by blood or connection by marriage of the insured or 
        beneficiary who is deemed by the insurer to be equitably 
        entitled thereto.  Any payment made by the insurer in good faith 
        pursuant to this provision shall fully discharge the insurer to 
        the extent of such payment. 
           Subject to any written direction of the insured in the 
        application or otherwise all or a portion of any indemnities 
        provided by this policy on account of hospital, nursing, 
        medical, or surgical services may, at the insurer's option and 
        unless the insured requests otherwise in writing not later than 
        the time of filing proofs of such loss, be paid directly to the 
        hospital or person rendering such services; but it is not 
        required that the service be rendered by a particular hospital 
        or person. 
           (10) A provision as follows: 
           PHYSICAL EXAMINATIONS AND AUTOPSY:  The insurer at its own 
        expense shall have the right and opportunity to examine the 
        person of the insured when and as often as it may reasonably 
        require during the pendency of a claim hereunder and to make an 
        autopsy in case of death where it is not forbidden by law. 
           (11) A provision as follows: 
           LEGAL ACTIONS:  No action at law or in equity shall be 
        brought to recover on this policy prior to the expiration of 60 
        days after written proof of loss has been furnished in 
        accordance with the requirements of this policy.  No such action 
        shall be brought after the expiration of three years after the 
        time written proof of loss is required to be furnished. 
           (12) A provision as follows: 
           CHANGE OF BENEFICIARY:  Unless the insured makes an 
        irrevocable designation of beneficiary, the right to change of 
        beneficiary is reserved to the insured and the consent of the 
        beneficiary or beneficiaries shall not be requisite to surrender 
        or assignment of this policy or to any change of beneficiary or 
        beneficiaries, or to any other changes in this policy.  The 
        first clause of this provision, relating to the irrevocable 
        designation of beneficiary, may be omitted at the insurer's 
        option. 
           Sec. 2.  Minnesota Statutes 1994, section 62D.12, is 
        amended by adding a subdivision to read: 
           Subd. 18.  No health maintenance organization shall fail to 
        comply with the special reinstatement privilege provided under 
        section 62A.04, subdivision 2, clause (4), for the 
        Medicare-related coverage referred to in that clause. 
           Presented to the governor April 20, 1995 
           Signed by the governor April 21, 1995, 1:48 p.m.