Minnesota Session Laws - 2002, Regular Session

                            CHAPTER 331-S.F.No. 3015 
                  An act relating to commerce; establishing a division 
                  of insurance fraud prevention within the department of 
                  commerce to investigate and prosecute insurance fraud; 
                  appropriating money; prescribing criminal penalties; 
                  amending Minnesota Statutes 2000, sections 60A.951, 
                  subdivisions 1, 2, by adding subdivisions; 60A.952, 
                  subdivisions 1, 2, by adding subdivisions; 60A.953; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapters 45; 60A; 609; repealing Minnesota Statutes 
                  2000, section 175.16, subdivision 2; 2002 H.F. No. 
                  2988, sections 30, if enacted, 34, if enacted. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [45.0135] [DIVISION OF INSURANCE FRAUD 
        PREVENTION.] 
           Subdivision 1.  [CREATION.] The division of insurance fraud 
        prevention is established in the department of commerce.  The 
        division of insurance fraud prevention shall: 
           (1) initiate inquiries and conduct investigations when the 
        division has reason to believe that insurance fraud has been or 
        is being committed; 
           (2) respond to notifications or complaints of suspected 
        insurance fraud generated by state and local police, other law 
        enforcement authorities, governmental units, including the 
        federal government, and any other person; 
           (3) review notices and reports of insurance fraud submitted 
        by authorized insurers, their employees, and agents or 
        producers, and to investigate those incidents of alleged fraud 
        that, in its judgment, require further investigation; and 
           (4) report incidents of alleged insurance fraud disclosed 
        by its investigations to appropriate law enforcement 
        authorities, including, but not limited to, the attorney 
        general, county attorneys, and to any other appropriate law 
        enforcement, administrative, regulatory, or licensing agency, 
        and to assemble evidence, prepare charges, and otherwise assist 
        any law enforcement authority having jurisdiction.  
           Subd. 2.  [POWERS.] The division of insurance fraud 
        prevention may employ investigators who are certified by the 
        board of peace officers standards and training.  The general 
        laws applicable to law enforcement officers of this state are 
        applicable to the investigators.  The powers of the division 
        include, but are not limited to, the following powers: 
           (1) to administer oaths and affirmations, subpoena 
        witnesses, compel their attendance, take evidence, and require 
        production of any books, papers, correspondence, memoranda, 
        agreements, or other documents or records that the division 
        considers relevant or material to an inquiry concerning 
        insurance fraud; 
           (2) to make arrests for criminal violations established as 
        a result of their investigations; and 
           (3) to execute arrest and search warrants for the same 
        criminal violations. 
           Subd. 3.  [EVIDENCE, DOCUMENTATION, AND RELATED MATERIALS.] 
        If the division seeks evidence, documentation, and related 
        materials pertinent to an investigation, and the matter is 
        located outside of this state, the division may designate 
        representatives, including officials of the state where the 
        matter is located, to secure the matter or inspect the matter on 
        its behalf. 
           Subd. 4.  [CONFIDENTIALITY AND IMMUNITY.] The provisions of 
        chapter 13, including, but not limited to, section 13.82, apply 
        to the classification, disclosure, and collection of data 
        relating to the division of insurance fraud prevention. 
           Subd. 5.  [ANNUAL REPORT ON ACTIVITIES AND 
        COST-EFFECTIVENESS.] The division of insurance fraud prevention 
        shall maintain records and information in order to produce an 
        annual report of its activities as may be prescribed by the 
        commissioner of commerce.  The commissioner shall report 
        annually to the house and senate standing committees with 
        jurisdiction over insurance issues as to the activities of the 
        division and the cost-effectiveness of the programs established 
        by the division. 
           Subd. 6.  [INSURANCE FRAUD PREVENTION ACCOUNT.] The 
        insurance fraud prevention account is created in the state 
        treasury.  It consists of any appropriations made by law.  Money 
        in this fund is appropriated to the commissioner of commerce for 
        the purposes specified in this section and sections 60A.951 to 
        60A.956. 
           Sec. 2.  Minnesota Statutes 2000, section 60A.951, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION.] The definitions in this 
        section apply to sections 60A.951 to 60A.955 60A.956. 
           Sec. 3.  Minnesota Statutes 2000, section 60A.951, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AUTHORIZED PERSON.] "Authorized person" means 
        the county attorney, sheriff, or chief of police responsible for 
        investigations in the county where the suspected insurance fraud 
        occurred; the superintendent of the bureau of criminal 
        apprehension; the commissioner of commerce; the division of 
        insurance fraud; the commissioner of labor and industry; the 
        attorney general; or any duly constituted criminal investigative 
        department or agency of the United States. 
           Sec. 4.  Minnesota Statutes 2000, section 60A.951, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [INSURANCE POLICY OR POLICY.] "Insurance policy" 
        or "policy" means the written instrument in which are set forth 
        the terms of any certificate of insurance, binder of coverage, 
        or contract of insurance, including a certificate, binder, or 
        contract issued by a state-assigned risk plan; benefit plan; 
        nonprofit hospital service plan; motor club service plan; or 
        surety bond, cash bond, or any other alternative to insurance 
        authorized by the Minnesota Financial Responsibility Act. 
           Sec. 5.  Minnesota Statutes 2000, section 60A.951, is 
        amended by adding a subdivision to read: 
           Subd. 4b.  [INSURANCE PROFESSIONAL.] "Insurance 
        professional" means sales agents, agencies, managing general 
        agents, brokers, producers, claims representatives, adjusters, 
        and third-party administrators. 
           Sec. 6.  Minnesota Statutes 2000, section 60A.951, is 
        amended by adding a subdivision to read: 
           Subd. 4c.  [INSURANCE TRANSACTION.] "Insurance transaction" 
        means a transaction by, between, or among: 
           (1) an insurer or a person who acts on behalf of an 
        insurer; and 
           (2) an insured, claimant, applicant for insurance, public 
        adjuster, insurance professional, practitioner who performs 
        professional services as defined by section 319B.02, subdivision 
        19, attorney, or any person who acts on behalf of any of the 
        foregoing for the purpose of obtaining insurance or reinsurance, 
        calculating insurance premiums, submitting a claim, negotiating 
        or adjusting a claim, or otherwise obtaining insurance, 
        self-insurance, or reinsurance, or obtaining the benefits or 
        annuities thereof or therefrom. 
           Sec. 7.  Minnesota Statutes 2000, section 60A.951, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [PERSON.] "Person" means a natural person, 
        company, corporation, unincorporated association, partnership, 
        professional corporation, and any other entity. 
           Sec. 8.  Minnesota Statutes 2000, section 60A.951, is 
        amended by adding a subdivision to read: 
           Subd. 5b.  [PREMIUM.] "Premium" means consideration paid or 
        payable for coverage under an insurance policy.  Premium 
        includes any payment, whether due within the insurance policy 
        term or otherwise; any deductible payment, whether advanced by 
        the insurer or insurance professional and subject to 
        reimbursement by the insured or otherwise; any self-insured 
        retention or payment, whether advanced by the insurer or 
        insurance professional and subject to reimbursement by the 
        insured or otherwise; and any collateral or security to be 
        provided to collateralize any such obligations to pay. 
           Sec. 9.  Minnesota Statutes 2000, section 60A.952, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUEST.] After receiving a written 
        request from an authorized person stating that the authorized 
        person has reason to believe that a crime or civil fraud has 
        been committed in connection with an insurance claim, insurance 
        transaction, payment, or application, an insurer must release to 
        the authorized person all relevant information in the insurer's 
        possession.  
           Sec. 10.  Minnesota Statutes 2000, section 60A.952, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOTIFICATION BY INSURER REQUIRED NOTICE TO AND 
        COOPERATION WITH THE DIVISION OF INSURANCE FRAUD PREVENTION.] If 
        an insurer has reason to believe that an insurance fraud has 
        been committed, the insurer shall, in writing, notify an 
        authorized person and provide the authorized person with all 
        relevant information in the insurer's possession.  It is 
        sufficient for the purpose of this subdivision if an insurer 
        notifies and provides relevant information to one authorized 
        person.  The insurer may also release relevant information to 
        any person authorized to receive the information under section 
        72A.502, subdivision 2.  Any insurer or insurance professional 
        that has reasonable belief that an act of insurance fraud will 
        be, is being, or has been committed, shall furnish and disclose 
        all relevant information to the division of insurance fraud 
        prevention or to any authorized person and cooperate fully with 
        any investigation conducted by the division of insurance fraud 
        prevention.  Any person that has a reasonable belief that an act 
        of insurance fraud will be, is being, or has been committed, or 
        any person who collects, reviews, or analyzes information 
        concerning insurance fraud may furnish and disclose any 
        information in its possession concerning the act to the division 
        of insurance fraud prevention, any authorized person, or to an 
        authorized representative of an insurer that requests the 
        information for the purpose of detecting, prosecuting, or 
        preventing insurance fraud.  The insurer may also release 
        relevant information to any person authorized to receive the 
        information under section 72A.502, subdivision 2.  If disclosure 
        is made to an authorized person other than the division of 
        insurance fraud prevention, a copy of the disclosure must be 
        sent to the division of insurance fraud prevention. 
           Sec. 11.  Minnesota Statutes 2000, section 60A.952, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [TOLLING OF TIME PERIODS.] If an insurer has a 
        reasonable or probable cause to believe that an insurance fraud 
        has been committed in connection with an insurance claim, and 
        has properly notified the division of insurance fraud prevention 
        of its suspicions according to subdivision 2, the notification 
        tolls any applicable time period in any unfair claims practices 
        statute or related regulations, or any action on the claim 
        against the insurer to whom the claim had been presented for bad 
        faith, until 30 days after determination by the division of 
        insurance fraud prevention and notice to the insurer that the 
        division will not recommend action on the claim. 
           Sec. 12.  Minnesota Statutes 2000, section 60A.952, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [REWARD FOR INFORMATION.] The division of 
        insurance fraud prevention, in cooperation with authorized 
        insurers and insurance professionals, may establish a voluntary 
        fund to reward persons not connected with the insurance industry 
        who provide information or furnish evidence leading to the 
        arrest and conviction of persons responsible for insurance fraud.
           Sec. 13.  Minnesota Statutes 2000, section 60A.953, is 
        amended to read: 
           60A.953 [ENFORCEMENT; REFUSAL TO COOPERATE WITH AN 
        INVESTIGATION.] 
           The intentional failure to provide relevant information as 
        required by section 60A.952, subdivision 1, or to provide 
        notification of insurance fraud as required by section 60A.952, 
        subdivision 2, is punishable as a misdemeanor.  It is unlawful 
        for any person to knowingly or intentionally interfere with the 
        enforcement of the provisions of sections 60A.951 to 60A.956 or 
        investigation of suspected or actual violations of sections 
        60A.951 to 60A.956 and is punishable as a misdemeanor. 
           Sec. 14.  [60A.956] [OTHER LAW ENFORCEMENT AUTHORITY.] 
           Nothing in sections 60A.951 to 60A.956 preempts the 
        authority of or relieves the duty of any other law enforcement 
        agencies to investigate and prosecute alleged violations of law, 
        prevents or prohibits a person from voluntarily disclosing any 
        information concerning insurance fraud to any law enforcement 
        agency other than the division of insurance fraud prevention, or 
        limits any of the powers granted elsewhere by the laws of this 
        state to the commissioner of commerce to investigate alleged 
        violations of law and to take appropriate action. 
           Sec. 15.  [609.612] [EMPLOYMENT OF RUNNERS.] 
           Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
        the following terms have the meanings given. 
           (b) "Public media" means telephone directories, 
        professional directories, newspapers and other periodicals, 
        radio and television, billboards, and mailed or electronically 
        transmitted written communications that do not involve in-person 
        contact with a specific prospective patient or client. 
           (c) "Runner," "capper," or "steerer" means a person who for 
        a pecuniary gain procures patients or clients at the direction 
        of, or in cooperation with, a health care provider when the 
        person knows or has reason to know that the provider's purpose 
        is to fraudulently perform or obtain services or benefits under 
        or relating to a contract of motor vehicle insurance.  The term 
        does not include a person who procures clients through public 
        media. 
           Subd. 2.  [ACT CONSTITUTING.] Whoever employs, uses, or 
        acts as a runner, capper, or steerer is guilty of a felony and 
        may be sentenced to imprisonment for not more than three years 
        or to a payment of a fine of not more than $6,000, or both.  
        Charges for any services rendered by a health care provider, who 
        violated this section in regard to the person for whom such 
        services were rendered, are noncompensable and unenforceable as 
        a matter of law. 
           Sec. 16.  [TRANSFER OF POWERS.] 
           The powers and duties of the department of labor and 
        industry under Minnesota Statutes, section 175.16, subdivision 
        2, are transferred to the division of insurance fraud prevention 
        of the department of commerce.  The provisions of Minnesota 
        Statutes, section 15.039, apply to this transfer of powers. 
           Sec. 17.  [REPEALER.] 
           Minnesota Statutes 2000, section 175.16, subdivision 2, is 
        repealed. 
           Sec. 18.  [REPEALER.] 
           Sections 30 and 34 of 2002 H.F. 2988, if enacted, are 
        repealed effective retroactive to their date of enactment. 
           Sec. 19.  [EFFECTIVE DATE.] 
           Sections 16 and 17 are effective July 1, 2003. 
           Presented to the governor April 9, 2002 
           Signed by the governor April 10, 2002, 3:05 p.m.