Minnesota Session Laws - 1999, Regular Session

                            CHAPTER 236-H.F.No. 1932 
                  An act relating to insurance; regulating rental 
                  vehicle coverages; amending Minnesota Statutes 1998, 
                  sections 60K.03, subdivision 7; and 72A.125, 
                  subdivisions 1 and 2. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, section 60K.03, 
        subdivision 7, is amended to read: 
           Subd. 7.  [EXCEPTIONS.] The following are exempt from the 
        general licensing requirements prescribed by this section:  
           (1) agents of township mutuals who are exempted pursuant to 
        section 60K.04; 
           (2) fraternal benefit society representatives exempted 
        pursuant to section 60K.05; 
           (3) any regular salaried officer or employee of a licensed 
        insurer, without license or other qualification, may act on 
        behalf of that licensed insurer in the negotiation of insurance 
        for that insurer, provided that a licensed agent must 
        participate in the sale of the insurance; 
           (4) employers and their officers or employees, and the 
        trustees or employees of any trust plan, to the extent that the 
        employers, officers, employees, or trustees are engaged in the 
        administration or operation of any program of employee benefits 
        for the employees of the employers or employees of their 
        subsidiaries or affiliates involving the use of insurance issued 
        by a licensed insurance company; provided that the activities of 
        the officers, employees and trustees are incidental to clerical 
        or administrative duties and their compensation does not vary 
        with the volume of insurance or applications for insurance; 
           (5) employees of a creditor who enroll debtors for credit 
        life, credit accident and health, or credit involuntary 
        unemployment insurance; provided the employees receive no 
        commission or fee for it; 
           (6) clerical or administrative employees of an insurance 
        agent who take insurance applications or receive premiums in the 
        office of their employer, if the activities are incidental to 
        clerical or administrative duties and the employee's 
        compensation does not vary with the volume of the applications 
        or premiums; 
           (7) rental vehicle companies and their employees in 
        connection with the offer of rental vehicle personal accident 
        insurance authorized under section 72A.125; 
           (8) employees of a retailer who enroll purchasers for 
        credit insurance associated with a retail purchase; provided the 
        employees receive no commission, fee, bonus, or other form of 
        compensation for it; and 
           (9) representatives of prepaid legal service plans in 
        connection with the sale and marketing of these plans. 
           Sec. 2.  Minnesota Statutes 1998, section 72A.125, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITION.] (a) "Auto rental company" 
        means a corporation, partnership, individual, or other person 
        that is engaged primarily in the renting of motor vehicles at 
        per diem rates. 
           (b) "Rental vehicle personal accident insurance" means 
        accident only insurance providing accidental death benefits, 
        dismemberment benefits and/or reimbursement for medical expenses 
        which is issued by an insurer authorized in this state to issue 
        accident and health insurance.  These coverages are nonqualified 
        plans under chapter 62E.  
           (c) "Liability insurance" means insurance that provides 
        coverage, as applicable, to renters and other authorized drivers 
        of rental vehicles for liability arising from the operation of 
        the rental vehicle.  At the option of the auto rental company, 
        this coverage may include uninsured or underinsured motorist 
        coverage whether offered separately or in combination with other 
        liability insurance. 
           (d) "Personal effects insurance" means coverage, as 
        applicable, to renters and other rental vehicle occupants for 
        the loss of, or damage to, personal effects which occurs during 
        the rental period. 
           Sec. 3.  Minnesota Statutes 1998, section 72A.125, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SALE BY AUTO RENTAL COMPANIES.] An auto rental 
        company that offers or sells rental vehicle personal accident 
        insurance, personal effects insurance, or liability insurance in 
        this state in conjunction with the rental of a vehicle shall 
        only sell these products if the forms and rates have met the 
        relevant requirements of section 61A.02, 62A.02, or other 
        relevant sections requiring approval of forms and rates taking 
        into account the possible infrequency and severity of loss that 
        may be incurred.  An auto rental company offering insurance 
        products for sale shall conduct a training program for its 
        agents or employees, which must be submitted to the commissioner 
        for approval.  Sections 60K.01 to 60K.19 do not apply if the 
        persons engaged in the sale of these products are employees of 
        the auto rental company who do not receive commissions or other 
        remuneration for selling the product in addition to their 
        regular compensation.  Compensation may not be determined in any 
        part by the sale of insurance products.  The auto rental company 
        before engaging in the sale of the product must file with the 
        commissioner the following documents:  
           (1) an appointment of the commissioner as agent for service 
        of process; 
           (2) an agreement that the auto rental company assumes all 
        responsibility for the authorized actions of all unlicensed 
        employees who sell the insurance product on its behalf in 
        conjunction with the rental of its vehicles; 
           (3) an agreement that the auto rental company with respect 
        to itself and its employees will be subject to this chapter 
        regarding the marketing of the insurance products and the 
        conduct of those persons involved in the sale of insurance 
        products in the same manner as if it were a licensed agent. 
           An auto rental company failing to file the documents in 
        clauses (1) to (3) is guilty of an individual violation as to 
        the unlicensed sale of insurance for each sale that occurs after 
        August 1, 1987, until they make the required filings.  Each 
        individual sale after August 1, 1987, and prior to the filing 
        required by this section is subject to, in addition to any other 
        penalties allowable by law, up to a $200 per violation fine.  
        Further, the sale of the insurance product by an auto rental 
        company or any employee or agent of the company after August 1, 
        1987, without having complied with this section shall be deemed 
        to be in acceptance of the provisions of this section. 
           Insurance sold pursuant to this subdivision must be limited 
        in availability to rental vehicle customers though coverage may 
        extend to the customer, other drivers, and passengers using or 
        riding in the rented vehicles; and limited in duration to a 
        period equal to and concurrent with that of the vehicle rental.  
           Persons purchasing rental vehicle personal accident 
        insurance, personal effects insurance, or liability insurance 
        may be provided a certificate summarizing the policy provisions 
        in lieu of a copy of the policy if a copy of the policy is 
        available for inspection at the place of sale and a free copy of 
        the policy may be obtained from the auto rental company's home 
        office.  
           The commissioner may, after a hearing, revoke an auto 
        rental company's right to operate under this section if the 
        company has repeatedly violated the insurance laws of this state 
        and the revocation is in the public interest. 
           Presented to the governor May 24, 1999 
           Signed by the governor May 25, 1999, 11:34 a.m.