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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 330-H.F.No. 2988 
                  An act relating to insurance; regulating certain 
                  licenses, fees, rates, practices, and coverages; 
                  providing for health care administrative 
                  simplification; making certain technical changes; 
                  amending Minnesota Statutes 2000, sections 60A.351; 
                  60D.20, subdivision 2; 61A.092, subdivision 6; 62A.02, 
                  subdivision 2; 62A.021, subdivision 1; 62A.25, 
                  subdivision 2; 62A.31, subdivision 1h; 62A.65, 
                  subdivision 5; 62E.11, subdivision 6; 62E.14, 
                  subdivisions 4, 5, 6; 62H.01; 62H.04; 62J.51, 
                  subdivision 19; 62J.535, subdivision 2, by adding 
                  subdivisions; 62J.581; 62L.03, subdivisions 1, 5; 
                  62L.08, by adding a subdivision; 62Q.68, subdivision 
                  1; 72A.08, subdivision 1; 79A.04, subdivision 9; 
                  Minnesota Statutes 2001 Supplement, sections 60A.14, 
                  subdivision 1; 60K.56, subdivisions 6, 8, 9; 62M.03, 
                  subdivision 2; Laws 2001, chapter 117, article 1, 
                  section 29; proposing coding for new law in Minnesota 
                  Statutes, chapter 62Q; repealing Minnesota Statutes 
                  2000, section 62J.535, subdivision 1. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2001 Supplement, 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 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; 
           (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; 
           (6) for each appointment of an agent filed with the 
        commissioner, $10; 
           (7) for filing forms and rates, $75 per filing, to which 
        may be paid on a quarterly basis in response to an invoice.  
        Billing and payment may be made electronically; 
           (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. 2.  Minnesota Statutes 2000, section 60A.351, is 
        amended to read: 
           60A.351 [RENEWAL OF INSURANCE POLICY WITH ALTERED RATES.] 
           If an insurance company licensed to do business in this 
        state offers or purports to offer to renew any commercial 
        liability and/or property insurance policy at less favorable 
        terms as to the dollar amount of coverage or deductibles, higher 
        rates, and/or higher rating plan, the new terms, the new rates 
        and/or rating plan may take effect on the renewal date of the 
        policy if the insurer has sent to the policyholder notice of the 
        new terms, new rates and/or rating plan at least 60 days prior 
        to the expiration date.  If the insurer has not so notified the 
        policyholder, the policyholder may elect to cancel the renewal 
        policy within the 60-day period after receipt of the notice.  
        Earned premium for the period of coverage, if any, shall be 
        calculated pro rata upon the prior rate.  This subdivision does 
        not apply to ocean marine insurance, accident and health 
        insurance, and reinsurance. 
           This section does not apply if the change relates to guide 
        "a" rates or excess rates also known as "consent to rates" or if 
        there has been any change in the risk insured. 
           Sec. 3.  Minnesota Statutes 2000, section 60D.20, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DIVIDENDS AND OTHER DISTRIBUTIONS.] (a) Subject 
        to the limitations and requirements of this subdivision, the 
        board of directors of any domestic insurer within an insurance 
        holding company system may authorize and cause the insurer to 
        declare and pay any dividend or distribution to its shareholders 
        as the directors deem prudent from the earned surplus of the 
        insurer.  An insurer's earned surplus, also known as unassigned 
        funds, shall be determined in accordance with the accounting 
        procedures and practices governing preparation of its annual 
        statement.  Dividends which are paid from sources other than an 
        insurer's earned surplus as of the end of the immediately 
        preceding quarter for which the insurer has filed a quarterly or 
        annual statement as appropriate, or are extraordinary dividends 
        or distributions may be paid only as provided in paragraphs (d), 
        (e), and (f). 
           (b) The insurer shall notify the commissioner within five 
        business days following declaration of a dividend declared 
        pursuant to paragraph (a) and at least ten days prior to its 
        payment.  The commissioner shall promptly consider the 
        notification filed pursuant to this paragraph, taking into 
        consideration the factors described in subdivision 4. 
           (c) The commissioner shall review at least annually the 
        dividends paid by an insurer pursuant to paragraph (a) for the 
        purpose of determining if the dividends are reasonable based 
        upon (1) the adequacy of the level of surplus as regards 
        policyholders remaining after the dividend payments, and (2) the 
        quality of the insurer's earnings and extent to which the 
        reported earnings include extraordinary items, such as surplus 
        relief reinsurance transactions and reserve destrengthening. 
           (d) No domestic insurer shall pay any extraordinary 
        dividend or make any other extraordinary distribution to its 
        shareholders until:  (1) 30 days after the commissioner has 
        received notice of the declaration of it and has not within the 
        period disapproved the payment; or (2) the commissioner has 
        approved the payment within the 30-day period. 
           (e) For purposes of this section, an extraordinary dividend 
        or distribution includes any dividend or distribution of cash or 
        other property, whose fair market value together with that of 
        other dividends or distributions made within the preceding 12 
        months exceeds the greater of (1) ten percent of the insurer's 
        surplus as regards policyholders on December 31 of the preceding 
        year; or (2) the net gain from operations of the insurer, if the 
        insurer is a life insurer, or the net income, if the insurer is 
        not a life insurer, not including realized capital gains, for 
        the 12-month period ending on December 31 of the preceding year, 
        but does not include pro rata distributions of any class of the 
        insurer's own securities.  
           (f) Notwithstanding any other provision of law, an insurer 
        may declare an extraordinary dividend or distribution that is 
        conditional upon the commissioner's approval, and the 
        declaration shall confer no rights upon shareholders until:  (1) 
        the commissioner has approved the payment of such a dividend or 
        distribution; or (2) the commissioner has not disapproved the 
        payment within the 30-day period referred to above. 
           (g) For purposes of state law, dividends paid to an 
        insurer's parent company from an insurer, which is a member of 
        an insurance holding company system, are not considered income 
        to the parent company. 
           Sec. 4.  Minnesota Statutes 2001 Supplement, section 
        60K.56, subdivision 6, is amended to read: 
           Subd. 6.  [MINIMUM EDUCATION REQUIREMENT.] Each person 
        subject to this section shall complete a minimum of 30 credit 
        hours of courses accredited by the commissioner during each 
        24-month licensing period.  Any person whose initial licensing 
        period extends more than six months shall complete 15 hours of 
        courses accredited by the commissioner during the initial 
        license period.  Any person teaching or lecturing at an 
        accredited course qualifies for 1-1/2 three times the number of 
        credit hours that would be granted to a person completing the 
        accredited course.  No more than 15 one-half of the credit hours 
        per licensing period required under this section may be credited 
        to a person for courses attending any combination of courses 
        either sponsored by, offered by, or affiliated with an insurance 
        company or its agents; or offered using new delivery technology, 
        including computer, interactive technology, and the Internet.  
        Courses sponsored by, offered by, or affiliated with an 
        insurance company or agent may restrict its students to agents 
        of the company or agency. 
           Sec. 5.  Minnesota Statutes 2001 Supplement, section 
        60K.56, subdivision 8, is amended to read: 
           Subd. 8.  [REPORTING.] (a) After completing the minimum 
        education requirement, each person subject to this section shall 
        file or cause to be filed a compliance report in accordance with 
        the procedures adopted by the commissioner.  The compliance 
        report A producer must not claim credit for continuing education 
        not actually completed at the date of filing the report. 
           (b) An institution offering an accredited course shall 
        comply with the procedure for reporting compliance adopted by 
        the commissioner.  
           (c) If a person subject to this section completes a 
        nonaccredited course, that person may submit a written report to 
        the advisory committee an application of the commissioner for 
        approval of the course accompanied by a fee of not more than $10 
        payable to the state of Minnesota for deposit in the general 
        fund.  This report must be accompanied by proof satisfactory to 
        the commissioner that the person has completed the minimum 
        education requirement for the annual period during which the 
        nonaccredited course was completed.  Upon the recommendation of 
        the advisory committee a determination that the course satisfies 
        the criteria for course accreditation, the commissioner may 
        approve the nonaccredited course and shall so inform the 
        person.  If the nonaccredited course is approved by the 
        commissioner, it may be used to satisfy the minimum education 
        requirement for the person's next annual compliance period.  
           Sec. 6.  Minnesota Statutes 2001 Supplement, section 
        60K.56, subdivision 9, is amended to read: 
           Subd. 9.  [ENFORCEMENT.] If a person subject to this 
        section fails to complete the minimum education or reporting 
        requirement or to pay the prescribed fees for any licensing 
        period, no license may be renewed or continued in force for that 
        person for any class of insurance beginning June November 1 of 
        the year due and that person may not act as an insurance 
        producer until the person has demonstrated to the satisfaction 
        of the commissioner that all requirements of this section have 
        been complied with or that a waiver or extension has been 
        obtained.  
           Sec. 7.  Minnesota Statutes 2000, section 61A.092, 
        subdivision 6, is amended 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:  (1) a 
        certificate of insurance or similar evidence of coverage that 
        meets the conditions of section 61A.093, subdivision 2; or (2) a 
        group life insurance policy that contains a provision permitting 
        the certificate holder, upon termination or layoff from 
        employment, to retain the coverage provided under the group 
        policy by paying premiums directly to the insurer, provided that 
        the employer shall give the employee notice of the employee's 
        and each related certificate holder's right to continue the 
        insurance by paying premiums directly to the insurer.  The 
        insurer may reserve the right to increase premium rates after 
        the first 18 months of continued coverage provided for under 
        clause (2).  A related certificate holder is an insured spouse 
        or dependent child of the employee.  Upon termination of this 
        group policy or at the option of the insured who has continued 
        coverage under clause (2), each covered employee, spouse, and 
        dependent child is entitled to have issued to them a life 
        conversion policy as prescribed in section 61A.09, subdivision 
        1, paragraph (h). 
           Sec. 8.  Minnesota Statutes 2000, section 62A.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPROVAL.] (a) The health plan form shall not be 
        issued, nor shall any application, rider, endorsement, or rate 
        be used in connection with it, until the expiration of 60 days 
        after it has been filed unless the commissioner approves it 
        before that time.  
           (b) Notwithstanding paragraph (a), a rate filed with 
        respect to a policy of accident and sickness insurance as 
        defined in section 62A.01 by an insurer licensed under chapter 
        60A, may be used on or after the date of filing with the 
        commissioner.  Rates that are not approved or disapproved within 
        the 60-day time period are deemed approved. 
           Sec. 9.  Minnesota Statutes 2000, section 62A.021, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LOSS RATIO STANDARDS.] (a) Notwithstanding 
        section 62A.02, subdivision 3, relating to loss ratios, health 
        care policies or certificates shall not be delivered or issued 
        for delivery to an individual or to a small employer as defined 
        in section 62L.02, unless the policies or certificates can be 
        expected, as estimated for the entire period for which rates are 
        computed to provide coverage, to return to Minnesota 
        policyholders and certificate holders in the form of aggregate 
        benefits not including anticipated refunds or credits, provided 
        under the policies or certificates, (1) at least 75 percent of 
        the aggregate amount of premiums earned in the case of policies 
        issued in the small employer market, as defined in section 
        62L.02, subdivision 27, calculated on an aggregate basis; and 
        (2) at least 65 percent of the aggregate amount of premiums 
        earned in the case of each policy form or certificate form 
        issued in the individual market; calculated on the basis of 
        incurred claims experience or incurred health care expenses 
        where coverage is provided by a health maintenance organization 
        on a service rather than reimbursement basis and earned premiums 
        for the period and according to accepted actuarial principles 
        and practices.  Assessments by the reinsurance association 
        created in chapter 62L and all types of taxes, surcharges, or 
        assessments created by Laws 1992, chapter 549, or created on or 
        after April 23, 1992, are included in the calculation of 
        incurred claims experience or incurred health care expenses.  
        The applicable percentage for policies and certificates issued 
        in the small employer market, as defined in section 62L.02, 
        increases by one percentage point on July 1 of each year, 
        beginning on July 1, 1994, until an 82 percent loss ratio is 
        reached on July 1, 2000.  The applicable percentage for policy 
        forms and certificate forms issued in the individual market 
        increases by one percentage point on July 1 of each year, 
        beginning on July 1, 1994, until a 72 percent loss ratio is 
        reached on July 1, 2000.  A health carrier that enters a market 
        after July 1, 1993, does not start at the beginning of the 
        phase-in schedule and must instead comply with the loss ratio 
        requirements applicable to other health carriers in that market 
        for each time period.  Premiums earned and claims incurred in 
        markets other than the small employer and individual markets are 
        not relevant for purposes of this section. 
           (b) All filings of rates and rating schedules shall 
        demonstrate that actual expected claims in relation to premiums 
        comply with the requirements of this section when combined with 
        actual experience to date.  Filings of rate revisions shall also 
        demonstrate that the anticipated loss ratio over the entire 
        future period for which the revised rates are computed to 
        provide coverage can be expected to meet the appropriate loss 
        ratio standards, and aggregate loss ratio from inception of the 
        policy form or certificate form shall equal or exceed the 
        appropriate loss ratio standards. 
           (c) A health carrier that issues health care policies and 
        certificates to individuals or to small employers, as defined in 
        section 62L.02, in this state shall file annually its rates, 
        rating schedule, and supporting documentation including ratios 
        of incurred losses to earned premiums by policy form or 
        certificate form duration for approval by the commissioner 
        according to the filing requirements and procedures prescribed 
        by the commissioner.  The supporting documentation shall also 
        demonstrate in accordance with actuarial standards of practice 
        using reasonable assumptions that the appropriate loss ratio 
        standards can be expected to be met over the entire period for 
        which rates are computed.  The demonstration shall exclude 
        active life reserves.  If the data submitted does not confirm 
        that the health carrier has satisfied the loss ratio 
        requirements of this section, the commissioner shall notify the 
        health carrier in writing of the deficiency.  The health carrier 
        shall have 30 days from the date of the commissioner's notice to 
        file amended rates that comply with this section.  If the health 
        carrier fails to file amended rates within the prescribed time, 
        the commissioner shall order that the health carrier's filed 
        rates for the nonconforming policy form or certificate form be 
        reduced to an amount that would have resulted in a loss ratio 
        that complied with this section had it been in effect for the 
        reporting period of the supplement.  The health carrier's 
        failure to file amended rates within the specified time or the 
        issuance of the commissioner's order amending the rates does not 
        preclude the health carrier from filing an amendment of its 
        rates at a later time.  The commissioner shall annually make the 
        submitted data available to the public at a cost not to exceed 
        the cost of copying.  The data must be compiled in a form useful 
        for consumers who wish to compare premium charges and loss 
        ratios. 
           (d) Each sale of a policy or certificate that does not 
        comply with the loss ratio requirements of this section is an 
        unfair or deceptive act or practice in the business of insurance 
        and is subject to the penalties in sections 72A.17 to 72A.32. 
           (e)(1) For purposes of this section, health care policies 
        issued as a result of solicitations of individuals through the 
        mail or mass media advertising, including both print and 
        broadcast advertising, shall be treated as individual policies. 
           (2) For purposes of this section, (i) "health care policy" 
        or "health care certificate" is a health plan as defined in 
        section 62A.011; and (ii) "health carrier" has the meaning given 
        in section 62A.011 and includes all health carriers delivering 
        or issuing for delivery health care policies or certificates in 
        this state or offering these policies or certificates to 
        residents of this state.  
           (f) The loss ratio phase-in as described in paragraph (a) 
        does not apply to individual policies and small employer 
        policies issued by a health plan company that is assessed less 
        than three percent of the total annual amount assessed by the 
        Minnesota comprehensive health association.  These policies must 
        meet a 68 percent loss ratio for individual policies, a 71 
        percent loss ratio for small employer policies with fewer than 
        ten employees, and a 75 percent loss ratio for all other small 
        employer policies.  
           (g) Notwithstanding paragraphs (a) and (f), the loss ratio 
        shall be 60 percent for a policy or certificate of accident and 
        sickness insurance as defined in section 62A.01, offered by an 
        insurance company licensed under chapter 60A that is assessed 
        less than ten percent of the total annual amount assessed by the 
        Minnesota Comprehensive Health Association.  For purposes of the 
        percentage calculation of the association's assessments, an 
        insurance company's assessments include those of its affiliates. 
           (h) The commissioners of commerce and health shall each 
        annually issue a public report listing, by health plan company, 
        the actual loss ratios experienced in the individual and small 
        employer markets in this state by the health plan companies that 
        the commissioners respectively regulate.  The commissioners 
        shall coordinate release of these reports so as to release them 
        as a joint report or as separate reports issued the same day.  
        The report or reports shall be released no later than June 1 for 
        loss ratios experienced for the preceding calendar year.  Health 
        plan companies shall provide to the commissioners any 
        information requested by the commissioners for purposes of this 
        paragraph. 
           Sec. 10.  Minnesota Statutes 2000, section 62A.25, 
        subdivision 2, is amended to read: 
           Subd. 2. (a) Every policy, plan, certificate or contract to 
        which this section applies shall provide benefits for 
        reconstructive surgery when such service is incidental to or 
        follows surgery resulting from injury, sickness or other 
        diseases of the involved part or when such service is performed 
        on a covered dependent child because of congenital disease or 
        anomaly which has resulted in a functional defect as determined 
        by the attending physician.  
           (b) The coverage limitations on reconstructive surgery in 
        paragraph (a) do not apply to reconstructive breast surgery 
        following mastectomies.  In these cases, coverage for 
        reconstructive surgery must be provided if the mastectomy is 
        medically necessary as determined by the attending physician. 
           (c) Reconstructive surgery benefits include all stages of 
        reconstruction of the breast on which the mastectomy has been 
        performed, surgery and reconstruction of the other breast to 
        produce a symmetrical appearance, and prosthesis and physical 
        complications at all stages of a mastectomy, including 
        lymphedemas, in a manner determined in consultation with the 
        attending physician and patient.  Coverage may be subject to 
        annual deductible, copayment, and coinsurance provisions as may 
        be deemed appropriate and as are consistent with those 
        established for other benefits under the plan or coverage. 
        Coverage may not: 
           (1) deny to a patient eligibility, or continued 
        eligibility, to enroll or to renew coverage under the terms of 
        the plan, solely for the purpose of avoiding the requirements of 
        this section; and 
           (2) penalize or otherwise reduce or limit the reimbursement 
        of an attending provider, or provide monetary or other 
        incentives to an attending provider to induce the provider to 
        provide care to an individual participant or beneficiary in a 
        manner inconsistent with this section. 
        Written notice of the availability of the coverage must be 
        delivered to the participant upon enrollment and annually 
        thereafter. 
           Sec. 11.  Minnesota Statutes 2000, section 62A.31, 
        subdivision 1h, is amended to read: 
           Subd. 1h.  [LIMITATIONS ON DENIALS, CONDITIONS, AND PRICING 
        OF COVERAGE.] No health carrier issuing Medicare-related 
        coverage in this state may impose preexisting condition 
        limitations or otherwise deny or condition the issuance or 
        effectiveness of any such coverage available for sale in this 
        state, nor may it discriminate in the pricing of such coverage, 
        because of the health status, claims experience, receipt of 
        health care, medical condition, or age of an applicant where an 
        application for such coverage is submitted prior to or during 
        the six-month period beginning with the first day of the month 
        in which an individual first enrolled for benefits under 
        Medicare Part B.  This subdivision applies to each 
        Medicare-related coverage offered by a health carrier regardless 
        of whether the individual has attained the age of 65 years.  If 
        an individual who is enrolled in Medicare Part B due to 
        disability status is involuntarily disenrolled due to loss of 
        disability status, the individual is eligible for another 
        six-month enrollment period provided under this subdivision 
        beginning the first day of the month in which the individual 
        later becomes eligible for and enrolls again in Medicare Part 
        B.  An individual who is or was previously enrolled in Medicare 
        Part B due to disability status is eligible for another 
        six-month enrollment period under this subdivision beginning the 
        first day of the month in which the individual has attained the 
        age of 65 years and either maintains enrollment in, or enrolls 
        again in, Medicare Part B.  If an individual enrolled in 
        Medicare Part B voluntarily disenrolls from Medicare Part B 
        because the individual becomes reemployed and is enrolled under 
        an employee welfare benefit plan, the individual is eligible for 
        another six-month enrollment period, as provided in this 
        subdivision, beginning the first day of the month in which the 
        individual later becomes eligible for and enrolls again in 
        Medicare Part B. 
           Sec. 12.  Minnesota Statutes 2000, section 62A.65, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
        individual health plan may be offered, sold, issued, or with 
        respect to children age 18 or under renewed, to a Minnesota 
        resident that contains a preexisting condition limitation, 
        preexisting condition exclusion, or exclusionary rider, unless 
        the limitation or exclusion is permitted under this subdivision 
        and under chapter 62L, provided that, except for children age 18 
        or under, underwriting restrictions may be retained on 
        individual contracts that are issued without evidence of 
        insurability as a replacement for prior individual coverage that 
        was sold before May 17, 1993.  The individual may be subjected 
        to an 18-month preexisting condition limitation, unless the 
        individual has maintained continuous coverage as defined in 
        section 62L.02.  The individual must not be subjected to an 
        exclusionary rider.  An individual who has maintained continuous 
        coverage may be subjected to a one-time preexisting condition 
        limitation of up to 12 months, with credit for time covered 
        under qualifying coverage as defined in section 62L.02, at the 
        time that the individual first is covered under an individual 
        health plan by any health carrier.  Credit must be given for all 
        qualifying coverage with respect to all preexisting conditions, 
        regardless of whether the conditions were preexisting with 
        respect to any previous qualifying coverage.  The individual 
        must not be subjected to an exclusionary rider.  Thereafter, the 
        individual must not be subject to any preexisting condition 
        limitation, preexisting condition exclusion, or exclusionary 
        rider under an individual health plan by any health carrier, 
        except an unexpired portion of a limitation under prior 
        coverage, so long as the individual maintains continuous 
        coverage as defined in section 62L.02. 
           (b) A health carrier must offer an individual health plan 
        to any individual previously covered under a group health plan 
        issued by that health carrier, regardless of the size of the 
        group, so long as the individual maintained continuous coverage 
        as defined in section 62L.02.  If the individual has available 
        any continuation coverage provided under sections 62A.146; 
        62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
        62D.101; or 62D.105, or continuation coverage provided under 
        federal law, the health carrier need not offer coverage under 
        this paragraph until the individual has exhausted the 
        continuation coverage.  The offer must not be subject to 
        underwriting, except as permitted under this paragraph.  A 
        health plan issued under this paragraph must be a qualified plan 
        as defined in section 62E.02 and must not contain any 
        preexisting condition limitation, preexisting condition 
        exclusion, or exclusionary rider, except for any unexpired 
        limitation or exclusion under the previous coverage.  The 
        individual health plan must cover pregnancy on the same basis as 
        any other covered illness under the individual health plan.  The 
        initial premium rate for the individual health plan must comply 
        with subdivision 3.  The premium rate upon renewal must comply 
        with subdivision 2.  In no event shall the premium rate exceed 
        90 100 percent of the premium charged for comparable individual 
        coverage by the Minnesota comprehensive health association, and 
        the premium rate must be less than that amount if necessary to 
        otherwise comply with this section.  An individual health plan 
        offered under this paragraph to a person satisfies the health 
        carrier's obligation to offer conversion coverage under section 
        62E.16, with respect to that person.  Coverage issued under this 
        paragraph must provide that it cannot be canceled or nonrenewed 
        as a result of the health carrier's subsequent decision to leave 
        the individual, small employer, or other group market.  Section 
        72A.20, subdivision 28, applies to this paragraph. 
           Sec. 13.  Minnesota Statutes 2000, section 62E.11, 
        subdivision 6, is amended to read: 
           Subd. 6.  [MEMBER ASSESSMENTS.] The association shall make 
        an annual determination of each contributing member's liability, 
        if any, and may make an annual fiscal year end assessment if 
        necessary.  The association may also, subject to the approval of 
        the commissioner, provide for interim assessments against the 
        contributing members whose aggregate assessments comprised a 
        minimum of 90 percent of the most recent prior annual 
        assessment, in the event that the association deems that 
        methodology to be the most administratively efficient and cost 
        effective means of assessment, and as may be necessary to assure 
        the financial capability of the association in meeting the 
        incurred or estimated claims expenses of the state plan and 
        operating and administrative expenses of the association until 
        the association's next annual fiscal year end assessment.  
        Payment of an assessment shall be due within 30 days of receipt 
        by a contributing member of a written notice of a fiscal year 
        end or interim assessment.  Failure by a contributing member to 
        tender to the association the assessment within 30 days shall be 
        grounds for termination of the contributing member's 
        membership.  A contributing member which ceases to do accident 
        and health insurance business within the state shall remain 
        liable for assessments through the calendar year during which 
        accident and health insurance business ceased.  The association 
        may decline to levy an assessment against a contributing member 
        if the assessment, as determined herein, would not exceed ten 
        dollars. 
           Sec. 14.  Minnesota Statutes 2000, section 62E.14, 
        subdivision 4, is amended to read: 
           Subd. 4.  [WAIVER OF PREEXISTING CONDITIONS FOR MEDICARE 
        SUPPLEMENT PLAN ENROLLEES.] Notwithstanding the above, any 
        Minnesota resident holder of a policy or certificate of Medicare 
        supplement coverages pursuant to sections 62A.315 and 62A.316, 
        or Medicare supplement plans previously approved by the 
        commissioner, may enroll in the comprehensive health insurance 
        plan as described in section 62E.07, with a waiver of the 
        preexisting condition as described in subdivision 3, without 
        interruption in coverage, provided, the policy or certificate 
        has been terminated by the insurer for reasons other than 
        nonpayment of premium and, provided further, that the option to 
        enroll in the plan is exercised within 30 90 days of termination 
        of the existing contract. 
           Coverage in the state plan for purposes of this section 
        shall be effective on the date of termination upon completion of 
        the proper application and payment of the required premium.  The 
        application must include evidence of termination of the existing 
        policy or certificate. 
           Sec. 15.  Minnesota Statutes 2000, section 62E.14, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TERMINATED EMPLOYEES.] An employee who is 
        voluntarily or involuntarily terminated or laid off from 
        employment and unable to exercise the option to continue 
        coverage under section 62A.17 may enroll, within 60 90 days of 
        termination or layoff, with a waiver of the preexisting 
        condition limitation set forth in subdivision 3 and a waiver of 
        the evidence of rejection set forth in subdivision 1, paragraph 
        (c). 
           Sec. 16.  Minnesota Statutes 2000, section 62E.14, 
        subdivision 6, is amended to read: 
           Subd. 6.  [TERMINATION OF INDIVIDUAL POLICY OR CONTRACT.] A 
        Minnesota resident who holds an individual health maintenance 
        contract, individual nonprofit health service corporation 
        contract, or an individual insurance policy previously approved 
        by the commissioners of health or commerce, may enroll in the 
        comprehensive health insurance plan with a waiver of the 
        preexisting condition as described in subdivision 3, without 
        interruption in coverage, provided (1) no replacement coverage 
        that meets the requirements of section 62D.121 was offered by 
        the contributing member, and (2) the policy or contract has been 
        terminated for reasons other than (a) nonpayment of premium; (b) 
        failure to make copayments required by the health care plan; (c) 
        moving out of the area served; or (d) a materially false 
        statement or misrepresentation by the enrollee in the 
        application for membership; and, provided further, that the 
        option to enroll in the plan is exercised within 30 90 days of 
        termination of the existing policy or contract. 
           Coverage allowed under this section is effective when the 
        contract or policy is terminated and the enrollee has completed 
        the proper application and paid the required premium or fee. 
           Expenses incurred from the preexisting conditions of 
        individuals enrolled in the state plan under this subdivision 
        must be paid by the contributing member canceling coverage as 
        set forth in section 62E.11, subdivision 10. 
           The application must include evidence of termination of the 
        existing policy or certificate as required in subdivision 1. 
           Sec. 17.  Minnesota Statutes 2000, section 62H.01, is 
        amended to read: 
           62H.01 [AUTHORITY TO JOINTLY SELF-INSURE.] 
           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, 
        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.  If an 
        employer chooses to jointly self-insure in accordance with this 
        chapter, the employer must participate in the joint plan for at 
        least three consecutive years.  If an employer terminates 
        participation in the joint plan before the conclusion of this 
        three-year period, a financial penalty may be assessed under the 
        joint plan, not to exceed the amount contributed by the employer 
        to the plan's reserves as determined under Minnesota Rules, part 
        2765.1200.  Joint plans must have a minimum of 100 1,000 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.  The commissioner of commerce may, on 
        behalf of the state, enter into an agreement with the United 
        States Secretary of Labor for delegation to the state of some or 
        all of the secretary's enforcement authority with respect to 
        multiple employer welfare arrangements, as described in United 
        States Code, title 29, section 1136(c). 
           Sec. 18.  Minnesota Statutes 2000, section 62H.04, is 
        amended to read: 
           62H.04 [COMPLIANCE WITH OTHER LAWS.] 
           (a) A joint self-insurance plan is subject to the 
        requirements of chapters 62A, 62E, and 62L, and 62Q, and 
        sections 72A.17 to 72A.32 unless otherwise specifically exempt.  
        A joint self-insurance plan must not offer less than a number 
        two qualified plan or its actuarial equivalent.  A joint 
        self-insurance plan must pay assessments made by the Minnesota 
        Comprehensive Health Association, as required under section 
        62E.11. 
           (b) A joint self-insurance plan is exempt from providing 
        the mandated health benefits described in chapters 62A, 62E, 
        62L, and 62Q if it otherwise provides the benefits required 
        under the Employee Retirement Income Security Act of 1974, 
        United States Code, title 29, sections 1001, et seq., for all 
        employers and not just for the employers with 50 or more 
        employees who are covered by that federal law.  
           (c) A joint self-insurance plan is exempt from section 
        62L.03, subdivision 1, if the plan offers an annual open 
        enrollment period of no less than 15 days during which all 
        employers that qualify for membership may enter the plan without 
        preexisting condition limitations or exclusions except those 
        permitted under chapter 62L.  
           (d) A joint self-insurance plan is exempt from sections 
        62A.16, 62A.17, 62A.20, and 62A.21 if the joint self-insurance 
        plan complies with the continuation requirements under the 
        Employee Retirement Income Security Act of 1974, United States 
        Code, title 29, sections 1001, et seq., for all employers and 
        not just for the employers with 20 or more employees who are 
        covered by that federal law. 
           (e) A joint self-insurance plan must provide to all 
        employers the maternity coverage required by federal law for 
        employers with 15 or more employees. 
           Sec. 19.  Minnesota Statutes 2000, section 62J.51, 
        subdivision 19, is amended to read: 
           Subd. 19.  [UNIFORM DENTAL BILLING FORM.] "Uniform dental 
        billing form" means the 1990 most current version uniform dental 
        claim form developed by the American Dental Association. 
           Sec. 20.  Minnesota Statutes 2000, section 62J.535, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [ELECTRONIC CLAIM TRANSACTIONS.] Group 
        purchasers, including government programs, not defined as 
        covered entities under United States Code, title 42, sections 
        1320d to 1320d-8, as amended from time to time, and the 
        regulations promulgated under those sections, that voluntarily 
        agree with providers to accept electronic claim transactions, 
        must accept them in the ANSI X12N 837 standard electronic format 
        as established by federal law.  Nothing in this section requires 
        acceptance of electronic claim transactions by entities not 
        covered under United States Code, title 42, sections 1320d to 
        1320d-8, as amended from time to time, and the regulations 
        promulgated under those sections.  Notwithstanding the above, 
        nothing in this section or other state law prohibits group 
        purchasers not defined as covered entities under United States 
        Code, title 42, sections 1320d to 1320d-8, as amended from time 
        to time, and the regulations promulgated under those sections, 
        from requiring, as authorized by Minnesota law or rule, 
        additional information associated with a claim submitted by a 
        provider. 
           Sec. 21.  Minnesota Statutes 2000, section 62J.535, is 
        amended by adding a subdivision to read: 
           Subd. 1b.  [PAPER CLAIM TRANSACTIONS.] All group purchasers 
        that accept paper claim transactions must accept, and health 
        care providers submitting paper claim transactions must submit, 
        these transactions with use of the applicable medical and 
        nonmedical data code sets specified in the federal electronic 
        claim transaction standards adopted under United States Code, 
        title 42, sections 1320d to 1320d-8, as amended from time to 
        time, and the regulations promulgated under those sections.  The 
        paper claim transaction must also be conducted using the uniform 
        billing forms as specified in section 62J.52 and the identifiers 
        specified in section 62J.54, on and after the compliance date 
        required by law.  Notwithstanding the above, nothing in this 
        section or other state law prohibits group purchasers not 
        defined as covered entities under United States Code, title 42, 
        sections 1320d to 1320d-8, as amended from time to time, and the 
        regulations promulgated under those sections, from requiring, as 
        authorized by Minnesota law or rule, additional information 
        associated with a claim submitted by a provider. 
           Sec. 22.  Minnesota Statutes 2000, section 62J.535, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COMPLIANCE.] (a) Subdivision 1a is effective 
        concurrent with the date of required compliance for covered 
        entities established under United States Code, title 42, 
        sections 1320d to 1320d-8, as amended from time to time, for 
        uniform electronic billing standards, all health care providers 
        must conform to the uniform billing standards developed under 
        subdivision 1. 
           (b) Notwithstanding paragraph (a), the requirements for the 
        uniform remittance advice report shall be effective 12 months 
        after the date of the required compliance of the standards for 
        the electronic remittance advice transaction are effective under 
        United States Code, title 42, sections 1320d to 1320d-8, as 
        amended from time to time. 
           Sec. 23.  Minnesota Statutes 2000, section 62J.581, is 
        amended to read: 
           62J.581 [STANDARDS FOR MINNESOTA UNIFORM HEALTH CARE 
        REIMBURSEMENT DOCUMENTS.] 
           Subdivision 1.  [MINNESOTA UNIFORM REMITTANCE ADVICE 
        REPORT.] (a) All group purchasers and payers shall provide a 
        uniform remittance advice report to health care providers when a 
        claim is adjudicated.  The uniform remittance advice report 
        shall comply with the standards prescribed in this section.  
           (b) Notwithstanding paragraph (a), this section does not 
        apply to group purchasers not included as covered entities under 
        United States Code, title 42, sections 1320d to 1320d-8, as 
        amended from time to time, and the regulations promulgated under 
        those sections. 
           Subd. 2.  [MINNESOTA UNIFORM EXPLANATION OF BENEFITS 
        DOCUMENT.] (a) All group purchasers and payers shall provide a 
        uniform explanation of benefits document to health care patients 
        when a claim is adjudicated an explanation of benefits document 
        is provided as otherwise required or permitted by law.  The 
        uniform explanation of benefits document shall comply with the 
        standards prescribed in this section.  
           (b) Notwithstanding paragraph (a), this section does not 
        apply to group purchasers not included as covered entities under 
        United States Code, title 42, sections 1320d to 1320d-8, as 
        amended from time to time, and the regulations promulgated under 
        those sections. 
           Subd. 3.  [SCOPE.] For purposes of sections 62J.50 to 
        62J.61, the uniform remittance advice report and the uniform 
        explanation of benefits document format specified in subdivision 
        4 shall apply to all health care services delivered by a health 
        care provider or health care provider organization in Minnesota, 
        regardless of the location of the payer.  Health care services 
        not paid on an individual claims basis, such as capitated 
        payments, are not included in this section.  A health plan 
        company is excluded from the requirements in subdivisions 1 and 
        2 if they comply with section 62A.01, subdivisions 2 and 3. 
           Subd. 4.  [SPECIFICATIONS.] The uniform remittance advice 
        report and the uniform explanation of benefits document shall be 
        provided by use of a paper document conforming to the 
        specifications in this section or by use of the ANSI X12N 835 
        standard electronic format as established under United States 
        Code, title 42, sections 1320d to 1320d-8, and as amended from 
        time to time for the remittance advice.  The commissioner, after 
        consulting with the administrative uniformity committee, shall 
        specify the data elements and definitions for the uniform 
        remittance advice report and the uniform explanation of benefits 
        document.  The commissioner and the administrative uniformity 
        committee must consult with the Minnesota Dental Association and 
        Delta Dental Plan of Minnesota before requiring under this 
        section the use of a paper document for the uniform explanation 
        of benefits document or the uniform remittance advice report for 
        dental care services.  
           Subd. 5.  [EFFECTIVE DATE.] The requirements in 
        subdivisions 1 and 2 are effective 12 months after the date of 
        required compliance with the standards for the electronic 
        remittance advice transaction under United States Code, title 
        42, sections 1320d to 1320d-8, and as amended from time to 
        time October 16, 2004.  The requirements in subdivisions 1 and 2 
        apply regardless of when the health care service was provided to 
        the patient. 
           Sec. 24.  Minnesota Statutes 2000, section 62L.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [GUARANTEED ISSUE AND REISSUE.] (a) Every 
        health carrier shall, as a condition of authority to transact 
        business in this state in the small employer market, 
        affirmatively market, offer, sell, issue, and renew any of its 
        health benefit plans, on a guaranteed issue basis, to any small 
        employer, including a small employer covered by paragraph (b), 
        that meets the participation and contribution requirements of 
        subdivision 3, as provided in this chapter.  
           (b) A small employer that has its workforce reduced to one 
        employee may continue coverage as a small employer for 12 months 
        from the date the group is reduced to one employee.  
           (c) Notwithstanding paragraph (a), a health carrier may, at 
        the time of coverage renewal, modify the health coverage for a 
        product offered in the small employer market if the modification 
        is consistent with state law, approved by the commissioner, and 
        effective on a uniform basis for all small employers purchasing 
        that product other than through a qualified association in 
        compliance with section 62L.045, subdivision 2. 
           Paragraph (a) does not apply to a health benefit plan 
        designed for a small employer to comply with a collective 
        bargaining agreement, provided that the health benefit plan 
        otherwise complies with this chapter and is not offered to other 
        small employers, except for other small employers that need it 
        for the same reason.  This paragraph applies only with respect 
        to collective bargaining agreements entered into prior to August 
        21, 1996, and only with respect to plan years beginning before 
        the later of July 1, 1997, or the date upon which the last of 
        the collective bargaining agreements relating to the plan 
        terminates determined without regard to any extension agreed to 
        after August 21, 1996. 
           (c) (d) Every health carrier participating in the small 
        employer market shall make available both of the plans described 
        in section 62L.05 to small employers and shall fully comply with 
        the underwriting and the rate restrictions specified in this 
        chapter for all health benefit plans issued to small employers.  
           (d) (e) A health carrier may cease to transact business in 
        the small employer market as provided under section 62L.09. 
           Sec. 25.  Minnesota Statutes 2000, section 62L.03, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CANCELLATIONS AND FAILURES TO RENEW.] (a) No 
        health carrier shall cancel, decline to issue, or fail to renew 
        a health benefit plan as a result of the claim experience or 
        health status of the persons covered or to be covered by the 
        health benefit plan.  For purposes of this subdivision, a 
        failure to renew does not include a uniform modification of 
        coverage at time of renewal, as described in subdivision 1. 
           (b) A health carrier may cancel or fail to renew a health 
        benefit plan: 
           (1) for nonpayment of the required premium; 
           (2) for fraud or misrepresentation by the small employer 
        with respect to eligibility for coverage or any other material 
        fact; 
           (3) if the employer fails to comply with the minimum 
        contribution percentage required under subdivision 3; or 
           (4) for any other reasons or grounds expressly permitted by 
        the respective licensing laws and regulations governing a health 
        carrier, including, but not limited to, service area 
        restrictions imposed on health maintenance organizations under 
        section 62D.03, subdivision 4, paragraph (m), to the extent that 
        these grounds are not expressly inconsistent with this chapter. 
           (c) A health carrier may fail to renew a health benefit 
        plan: 
           (1) if eligible employee participation during the preceding 
        calendar year declines to less than 75 percent, subject to the 
        waiver of coverage provision in subdivision 3; 
           (2) if the health carrier ceases to do business in the 
        small employer market under section 62L.09; or 
           (3) if a failure to renew is based upon the health 
        carrier's decision to discontinue the health benefit plan form 
        previously issued to the small employer, but only if the health 
        carrier permits each small employer covered under the prior form 
        to switch to its choice of any other health benefit plan offered 
        by the health carrier, without any underwriting restrictions 
        that would not have been permitted for renewal purposes. 
           (d) A health carrier need not renew a health benefit plan, 
        and shall not renew a small employer plan, if an employer ceases 
        to qualify as a small employer as defined in section 62L.02, 
        except as provided in subdivision 1, paragraph (b).  If a health 
        benefit plan, other than a small employer plan, provides terms 
        of renewal that do not exclude an employer that is no longer a 
        small employer, the health benefit plan may be renewed according 
        to its own terms.  If a health carrier issues or renews a health 
        plan to an employer that is no longer a small employer, without 
        interruption of coverage, the health plan is subject to section 
        60A.082.  
           (e) A health carrier may cancel or fail to renew the 
        coverage of an individual employee or dependent under a health 
        benefit plan for fraud or misrepresentation by the eligible 
        employee or dependent with respect to eligibility for coverage 
        or any other material fact. 
           Sec. 26.  Minnesota Statutes 2000, section 62L.08, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [RENEWAL PREMIUM INCREASES LIMITED.] (a) 
        Beginning January 1, 2003, the percentage increase in the 
        premium rate charged to a small employer for a new rating period 
        must not exceed the sum of the following: 
           (1) the percentage change in the index rate measured from 
        the first day of the prior rating period to the first day of the 
        new rating period; 
           (2) an adjustment, not to exceed 15 percent annually and 
        adjusted pro rata for rating periods of less than one year, due 
        to the claims experience, health status, or duration of coverage 
        of the employees or dependents of the employer; and 
           (3) any adjustment due to change in coverage or in the case 
        characteristics of the employer. 
           (b) This subdivision does not apply if the employer, 
        employee, or any applicant provides the health carrier with 
        false, incomplete, or misleading information. 
           Sec. 27.  Minnesota Statutes 2001 Supplement, section 
        62M.03, subdivision 2, is amended to read: 
           Subd. 2.  [NONLICENSED UTILIZATION REVIEW ORGANIZATION.] An 
        organization that meets the definition of a utilization review 
        organization under section 62M.02, subdivision 21, that is not 
        licensed in this state that performs utilization review services 
        for Minnesota residents must register with the commissioner of 
        commerce and must certify compliance with sections 62M.01 to 
        62M.16. 
           Initial registration must occur no later than January 1, 
        1993.  The registration is effective for two years and may be 
        renewed for another two years by written request.  Applications 
        for initial and renewal registrations must be made on forms 
        prescribed by the commissioner.  Each utilization review 
        organization registered under this chapter shall notify the 
        commissioner of commerce within 30 days of any change in the 
        name, address, or ownership of the organization.  The 
        organization shall pay to the commissioner of commerce a fee of 
        $1,000 for the initial registration application and $1,000 for 
        each two-year renewal. 
           Sec. 28.  Minnesota Statutes 2000, section 62Q.68, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION.] For purposes of sections 
        62Q.68 to 62Q.72, the terms defined in this section have the 
        meanings given them.  For purposes of sections 62Q.69 and 
        62Q.70, the term "health plan company" does not include an 
        insurance company licensed under chapter 60A to offer, sell, or 
        issue a policy of accident and sickness insurance as defined in 
        section 62A.01 or a nonprofit health service plan corporation 
        regulated under chapter 62C that only provides dental coverage 
        or vision coverage.  For purposes of sections 62Q.69 through 
        62Q.73, the term "health plan company" does not include the 
        comprehensive health association created under chapter 62E. 
           Sec. 29.  [62Q.731] [EXTERNAL REVIEW OF ADVERSE 
        DETERMINATION FROM COMPREHENSIVE HEALTH ASSOCIATION.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the terms defined in this subdivision have the meanings 
        given. 
           (b) "Enrollee" means an eligible person as defined in 
        section 62E.02, subdivision 13, and who meets the eligibility 
        criteria established in section 62E.14. 
           (c) "Board" means the board of directors of the 
        comprehensive health association, as described in section 
        62E.10, subdivision 2. 
           Subd. 2.  [APPEAL TO EXTERNAL REVIEW ENTITY.] If an 
        enrollee receives an adverse determination as a result of the 
        comprehensive health association's internal appeal process, by 
        which an established enrollee appeal committee renders an 
        adverse determination, the enrollee then has the option of: 
           (1) appealing the adverse determination to the external 
        review entity under section 62Q.73, which shall constitute a 
        final determination subject to the conditions specified in 
        section 62Q.73; or 
           (2) appealing to the commissioner of commerce from an 
        adverse determination as provided by the operating rules of the 
        comprehensive health association, in which case the commissioner 
        has the option of making a determination regarding the appeal, 
        or submitting the appeal to the external review entity retained 
        under section 62Q.73. 
           Sec. 30.  Minnesota Statutes 2000, section 72A.08, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REBATE DEFINED AND PROHIBITED.] No 
        insurance company or association, however constituted or 
        entitled, including any affiliate of the insurance company or 
        association, doing business in this state, nor any officer, 
        agent, subagent, solicitor, employee, intermediary, or 
        representative thereof, shall make or permit any advantage or 
        distinction in favor of any insured individual, firm, 
        corporation, or association with respect to the amount of 
        premium named in, or to be paid on, any policy of insurance, or 
        shall offer to pay or allow directly or indirectly or by means 
        of any device or artifice, including by means of participation 
        in any arrangement with an affiliate, as inducements to 
        insurance, any rebate or premium payable on the policy, or any 
        special favor or advantage in the dividends or other profit to 
        accrue thereon, or any valuable consideration or inducement not 
        specified in the policy contract of insurance, including a 
        reduced interest rate, reduced loan-related or financing-related 
        fee, or other consideration or inducement in connection with a 
        loan or other financing arrangement provided or to be provided 
        by an affiliate, or give, sell, or purchase, offer to give, sell 
        or purchase, as inducement to insure or in connection therewith, 
        any stocks, bonds, or other securities of any insurance company 
        or other corporation, association, partnership, or individual, 
        or any dividends or profits accrued or to accrue thereon, or 
        anything of value, not specified in the policy.  For purposes of 
        this section, "affiliate" has the meaning given in section 
        60D.15, subdivision 2.  No person or entity may offer, sell, 
        issue, or renew insurance if the person or entity knows that an 
        affiliate of the person or entity is violating this subdivision 
        in connection with the offer, sale, issuance, or renewal of the 
        insurance. 
           Sec. 31.  Minnesota Statutes 2000, section 79A.04, 
        subdivision 9, is amended to read: 
           Subd. 9.  [INSOLVENCY, BANKRUPTCY, OR DEFAULT; UTILIZATION 
        OF SECURITY DEPOSIT.] The commissioner of labor and industry 
        shall notify the commissioner and the security fund if the 
        commissioner of labor and industry has knowledge that any 
        private self-insurer has failed to pay workers' compensation 
        benefits as required by chapter 176.  If the commissioner 
        determines that a private self-insurer is the subject of a 
        voluntary or involuntary petition under the United States 
        Bankruptcy Code, title 11, or the commissioner determines that a 
        court of competent jurisdiction has declared the private 
        self-insurer to be bankrupt or insolvent, and the private 
        self-insurer has failed to pay workers' compensation as required 
        by chapter 176 or, if the commissioner issues a certificate of 
        default against a private self-insurer for failure to pay 
        workers' compensation as required by chapter 176, or failure to 
        pay an assessment to the self-insurers' security fund when due, 
        then the security deposit shall be utilized to administer and 
        pay the private self-insurers' workers' compensation or 
        assessment obligations or any other current or future 
        obligations of the self-insurers' security fund.  The security 
        deposit shall be used to administer and pay the private 
        self-insurers' workers' compensation or assessment obligations 
        or any other current or future obligations of the self-insurers' 
        security fund if any of the following occurs: 
           (1) the private self-insurer has failed to pay workers' 
        compensation as required by chapter 176 and either: 
           (a) the commissioner determines that a private self-insurer 
        is the subject of a voluntary or involuntary petition under the 
        United States Bankruptcy Code, title 11; or 
           (b) the commissioner determines that a court of competent 
        jurisdiction has declared the private self-insurer to be 
        bankrupt or insolvent; or 
           (2) the commissioner issues a certificate of default 
        against a private self-insurer for failure to pay workers' 
        compensation as required by chapter 176; or 
           (3) the commissioner issues a certificate of default 
        against a private self-insurer for failure to pay an assessment 
        to the self-insurer's security fund when due. 
           Sec. 32.  Laws 2001, chapter 117, article 1, section 29, is 
        amended to read: 
           Sec. 29.  [EFFECTIVE DATE; APPLICATION.] 
           Sections 1 to 28 are effective July 1, 2002, and apply to 
        persons who sell, solicit, or negotiate insurance in this state 
        for any class or classes of insurance on or after that date.  
        However, a person required to be licensed under Minnesota 
        Statutes, chapter 60K, who holds a valid license under Minnesota 
        Statutes 2000, sections 60K.01 to 60K.20, on July 1, 2002, may 
        continue to sell, solicit, or negotiate insurance in this state 
        under the authority of that license.  Upon the expiration of 
        that license, the person shall not sell, solicit, or negotiate 
        insurance in this state for any class or classes of insurance 
        unless the person is licensed in that line of authority under 
        Minnesota Statutes, chapter 60K. 
           Sec. 33.  [REVISOR INSTRUCTION.] 
           The revisor of statutes is instructed to amend the headnote 
        of Minnesota Statutes, section 62J.535, to read "Uniform Billing 
        Requirements for Claim Transactions." 
           Sec. 34.  [EXPIRATION.] 
           Section 30 expires June 1, 2003. 
           Sec. 35.  [REPEALER.] 
           Minnesota Statutes 2000, section 62J.535, subdivision 1, is 
        repealed. 
           Sec. 36.  [EFFECTIVE DATE.] 
           Sections 7 and 30 are effective the day following final 
        enactment.  Section 3 is effective for dividends paid after 
        December 31, 2000. 
           Presented to the governor April 4, 2002 
           Signed by the governor April 8, 2002, 4:20 p.m.