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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 132-H.F.No. 1809 
                  An act relating to insurance; regulating agency 
                  terminations, coverages, fees, forms, disclosures, 
                  reports, information security, and premiums; amending 
                  Minnesota Statutes 2004, sections 60A.14, subdivision 
                  1; 60A.171, subdivision 11; 60A.23, subdivision 8; 
                  60A.966; 60A.969; 62A.136; 62A.31, subdivision 1h; 
                  62A.315; 62A.316; 62E.12; 62E.13, subdivision 2; 
                  62Q.471; 62Q.65; 65A.29, subdivision 11; 65B.48, 
                  subdivision 3; 72A.20, subdivisions 13, 36; 79.211, by 
                  adding a subdivision; 79.40; 79.56, subdivisions 1, 3; 
                  79.62, subdivision 3; 79A.03, subdivision 9; 79A.04, 
                  subdivisions 2, 10; 79A.06, subdivision 5; 79A.12, 
                  subdivision 2; 79A.22, subdivision 11, by adding a 
                  subdivision; 176.191, subdivision 3; Laws 1985, 
                  chapter 85, section 1; proposing coding for new law in 
                  Minnesota Statutes, chapters 60A; 62L; 65A; 65B; 
                  repealing Minnesota Statutes 2004, sections 61A.072, 
                  subdivision 2; 62E.03. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2004, 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 $90 per filing, 
        which or $75 per filing when submitted via electronic filing 
        system.  Filing fees 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; 
           (9) $250 filing fee for a large risk alternative rating 
        option plan that meets the $250,000 threshold requirement. 
           The commissioner shall adopt rules to define filings that 
        are subject to a fee. 
           Sec. 2.  Minnesota Statutes 2004, section 60A.171, 
        subdivision 11, is amended to read: 
           Subd. 11.  Upon termination of an agency, a company is 
        prohibited from soliciting business in the notice of nonrenewal 
        required by section 60A.37.  If termination of an agency 
        contract is the ground for nonrenewal of a policy of homeowner's 
        insurance, as defined in section 65A.27, subdivision 4, the 
        company must provide notice to the policyholder that the policy 
        is not being renewed due to the termination of the company's 
        contract with the agency.  If the agency is unable to replace 
        the homeowner's insurance policy with a suitable policy from 
        another insurer, the agent must notify the policyholder of the 
        policyholder's right to renew with the company terminating the 
        agency contract.  The company must renew the policy if the 
        insured or the insured's agent makes a written request for the 
        renewal before the renewal date. 
           Sec. 3.  Minnesota Statutes 2004, section 60A.23, 
        subdivision 8, is amended to read: 
           Subd. 8.  [SELF-INSURANCE OR INSURANCE PLAN ADMINISTRATORS 
        WHO ARE VENDORS OF RISK MANAGEMENT SERVICES.] (1)  [SCOPE.] This 
        subdivision applies to any vendor of risk management services 
        and to any entity which administers, for compensation, a 
        self-insurance or insurance plan.  This subdivision does not 
        apply (a) to an insurance company authorized to transact 
        insurance in this state, as defined by section 60A.06, 
        subdivision 1, clauses (4) and (5); (b) to a service plan 
        corporation, as defined by section 62C.02, subdivision 6; (c) to 
        a health maintenance organization, as defined by section 62D.02, 
        subdivision 4; (d) to an employer directly operating a 
        self-insurance plan for its employees' benefits; (e) to an 
        entity which administers a program of health benefits 
        established pursuant to a collective bargaining agreement 
        between an employer, or group or association of employers, and a 
        union or unions; or (f) to an entity which administers a 
        self-insurance or insurance plan if a licensed Minnesota insurer 
        is providing insurance to the plan and if the licensed insurer 
        has appointed the entity administering the plan as one of its 
        licensed agents within this state. 
           (2)  [DEFINITIONS.] For purposes of this subdivision the 
        following terms have the meanings given them. 
           (a) "Administering a self-insurance or insurance plan" 
        means (i) processing, reviewing or paying claims, (ii) 
        establishing or operating funds and accounts, or (iii) otherwise 
        providing necessary administrative services in connection with 
        the operation of a self-insurance or insurance plan. 
           (b) "Employer" means an employer, as defined by section 
        62E.02, subdivision 2. 
           (c) "Entity" means any association, corporation, 
        partnership, sole proprietorship, trust, or other business 
        entity engaged in or transacting business in this state. 
           (d) "Self-insurance or insurance plan" means a plan 
        providing life, medical or hospital care, accident, sickness or 
        disability insurance for the benefit of employees or members of 
        an association, or a plan providing liability coverage for any 
        other risk or hazard, which is or is not directly insured or 
        provided by a licensed insurer, service plan corporation, or 
        health maintenance organization. 
           (e) "Vendor of risk management services" means an entity 
        providing for compensation actuarial, financial management, 
        accounting, legal or other services for the purpose of designing 
        and establishing a self-insurance or insurance plan for an 
        employer. 
           (3)  [LICENSE.] No vendor of risk management services or 
        entity administering a self-insurance or insurance plan may 
        transact this business in this state unless it is licensed to do 
        so by the commissioner.  An applicant for a license shall state 
        in writing the type of activities it seeks authorization to 
        engage in and the type of services it seeks authorization to 
        provide.  The license may be granted only when the commissioner 
        is satisfied that the entity possesses the necessary 
        organization, background, expertise, and financial integrity to 
        supply the services sought to be offered.  The commissioner may 
        issue a license subject to restrictions or limitations upon the 
        authorization, including the type of services which may be 
        supplied or the activities which may be engaged in.  The license 
        fee is $1,000 $1,500 for the initial application and 
        $1,000 $1,500 for each two-year three-year renewal.  All 
        licenses are for a period of two three years. 
           (4)  [REGULATORY RESTRICTIONS; POWERS OF THE COMMISSIONER.] 
        To assure that self-insurance or insurance plans are financially 
        solvent, are administered in a fair and equitable fashion, and 
        are processing claims and paying benefits in a prompt, fair, and 
        honest manner, vendors of risk management services and entities 
        administering insurance or self-insurance plans are subject to 
        the supervision and examination by the commissioner.  Vendors of 
        risk management services, entities administering insurance or 
        self-insurance plans, and insurance or self-insurance plans 
        established or operated by them are subject to the trade 
        practice requirements of sections 72A.19 to 72A.30.  In lieu of 
        an unlimited guarantee from a parent corporation for a vendor of 
        risk management services or an entity administering insurance or 
        self-insurance plans, the commissioner may accept a surety bond 
        in a form satisfactory to the commissioner in an amount equal to 
        120 percent of the total amount of claims handled by the 
        applicant in the prior year.  If at any time the total amount of 
        claims handled during a year exceeds the amount upon which the 
        bond was calculated, the administrator shall immediately notify 
        the commissioner.  The commissioner may require that the bond be 
        increased accordingly. 
           No contract entered into after July 1, 2001, between a 
        licensed vendor of risk management services and a group 
        authorized to self-insure for workers' compensation liabilities 
        under section 79A.03, subdivision 6, may take effect until it 
        has been filed with the commissioner, and either (1) the 
        commissioner has approved it or (2) 60 days have elapsed and the 
        commissioner has not disapproved it as misleading or violative 
        of public policy. 
           (5)  [RULEMAKING AUTHORITY.] To carry out the purposes of 
        this subdivision, the commissioner may adopt rules pursuant to 
        sections 14.001 to 14.69.  These rules may: 
           (a) establish reporting requirements for administrators of 
        insurance or self-insurance plans; 
           (b) establish standards and guidelines to assure the 
        adequacy of financing, reinsuring, and administration of 
        insurance or self-insurance plans; 
           (c) establish bonding requirements or other provisions 
        assuring the financial integrity of entities administering 
        insurance or self-insurance plans; or 
           (d) establish other reasonable requirements to further the 
        purposes of this subdivision. 
           Sec. 4.  Minnesota Statutes 2004, section 60A.966, is 
        amended to read: 
           60A.966 [APPROVAL OF VIATICAL SETTLEMENTS CONTRACT FORMS.] 
           A viatical settlement provider or broker may not use a 
        viatical settlement contract form in this state unless it has 
        been filed with and approved by the commissioner.  A viatical 
        settlement contract form filed with the commissioner is 
        considered to have been approved if it has not been disapproved 
        within 60 days of the filing.  The commissioner shall disapprove 
        a viatical settlement contract form if, in the commissioner's 
        opinion, the contract or contract provisions are unreasonable, 
        contrary to the interests of the public, or otherwise misleading 
        or unfair to the policy owner.  
           Sec. 5.  Minnesota Statutes 2004, section 60A.969, is 
        amended to read: 
           60A.969 [DISCLOSURE.] 
           A viatical settlement provider or a broker shall disclose 
        the following information to the viator no later than the 
        date the viatical settlement contract is signed by all 
        parties an application is given to the viator: 
           (1) possible alternatives to viatical settlement contracts 
        for persons with catastrophic or life threatening illnesses, 
        including accelerated benefits offered by the issuer of the life 
        insurance policy; 
           (2) the fact that some or all of the proceeds of the 
        viatical settlement may be taxable and that assistance should be 
        sought from a personal tax advisor; 
           (3) the fact that the viatical settlement may be subject to 
        the claims of creditors; 
           (4) the fact that receipt of a viatical settlement may 
        adversely affect the recipients' eligibility for Medicaid or 
        other government benefits or entitlements and that advice should 
        be obtained from the appropriate agencies; 
           (5) the policy owner's right to rescind a viatical 
        settlement contract within 30 days of the date it is executed by 
        all parties or 15 days of the receipt of the viatical settlement 
        proceeds by the viator, whichever is less, as provided in 
        section 60A.970, subdivision 3; and 
           (6) the date by which the funds will be available to the 
        viator and the source of the funds. 
           Sec. 6.  [60A.98] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For purposes of sections 60A.98 
        and 60A.981, the terms defined in this section have the meanings 
        given them. 
           Subd. 2.  [CUSTOMER.] "Customer" means a consumer who has a 
        continuing relationship with a licensee under which the licensee 
        provides one or more insurance products or services to the 
        consumer that are to be used primarily for personal, family, or 
        household purposes. 
           Subd. 3.  [CUSTOMER INFORMATION.] "Customer information" 
        means nonpublic personal information about a customer, whether 
        in paper, electronic, or other form, that is maintained by or on 
        behalf of the licensee. 
           Subd. 4.  [CUSTOMER INFORMATION SYSTEMS.] "Customer 
        information systems" means the electronic or physical methods 
        used to access, collect, store, use, transmit, protect, or 
        dispose of customer information. 
           Subd. 5.  [LICENSEE.] "Licensee" means all licensed 
        insurers, producers, and other persons licensed or required to 
        be licensed, authorized or required to be authorized, or 
        registered or required to be registered pursuant to the 
        insurance laws of this state, except that "licensee" does not 
        include a purchasing group or an ineligible insurer in regard to 
        the surplus line insurance conducted pursuant to sections 
        60A.195 to 60A.209.  "Licensee" does not include producers until 
        January 1, 2007.  
           Subd. 6.  [NONPUBLIC FINANCIAL INFORMATION.] "Nonpublic 
        financial information" means: 
           (1) personally identifiable financial information; and 
           (2) any list, description, or other grouping of consumers, 
        and publicly available information pertaining to them, that is 
        derived using any personally identifiable financial information 
        that is not publicly available. 
           Subd. 7.  [NONPUBLIC PERSONAL HEALTH 
        INFORMATION.] "Nonpublic personal health information" means 
        health information: 
           (1) that identifies an individual who is the subject of the 
        information; or 
           (2) with respect to which there is a reasonable basis to 
        believe that the information could be used to identify an 
        individual. 
           Subd. 8.  [NONPUBLIC PERSONAL INFORMATION.] "Nonpublic 
        personal information" means nonpublic financial information and 
        nonpublic personal health information.  
           Subd. 9.  [PERSONALLY IDENTIFIABLE FINANCIAL 
        INFORMATION.] "Personally identifiable financial information" 
        means any information: 
           (1) a consumer provides to a licensee to obtain an 
        insurance product or service from the licensee; 
           (2) about a consumer resulting from a transaction involving 
        an insurance product or service between a licensee and a 
        consumer; or 
           (3) the licensee otherwise obtains about a consumer in 
        connection with providing an insurance product or service to 
        that consumer. 
           Subd. 10.  [SERVICE PROVIDER.] "Service provider" means a 
        person that maintains, processes, or otherwise is permitted 
        access to customer information through its provision of services 
        directly to the licensee. 
           Sec. 7.  [60A.981] [INFORMATION SECURITY PROGRAM.] 
           Subdivision 1.  [GENERAL REQUIREMENTS.] Each licensee shall 
        implement a comprehensive written information security program 
        that includes administrative, technical, and physical safeguards 
        for the protection of customer information.  The administrative, 
        technical, and physical safeguards included in the information 
        security program must be appropriate to the size and complexity 
        of the licensee and the nature and scope of its activities. 
           Subd. 2.  [OBJECTIVES.] A licensee's information security 
        program must be designed to: 
           (1) ensure the security and confidentiality of customer 
        information; 
           (2) protect against any anticipated threats or hazards to 
        the security or integrity of the information; and 
           (3) protect against unauthorized access to or use of the 
        information that could result in substantial harm or 
        inconvenience to any customer. 
           Subd. 3.  [EXAMPLES OF METHODS OF DEVELOPMENT AND 
        IMPLEMENTATION.] The following actions and procedures are 
        examples of methods of implementation of the requirements of 
        subdivisions 1 and 2.  These examples are nonexclusive 
        illustrations of actions and procedures that licensees may 
        follow to implement subdivisions 1 and 2: 
           (1) the licensee: 
           (i) identifies reasonably foreseeable internal or external 
        threats that could result in unauthorized disclosure, misuse, 
        alteration, or destruction of customer information or customer 
        information systems; 
           (ii) assesses the likelihood and potential damage of these 
        threats, taking into consideration the sensitivity of customer 
        information; and 
           (iii) assesses the sufficiency of policies, procedures, 
        customer information systems, and other safeguards in place to 
        control risks; 
           (2) the licensee: 
           (i) designs its information security program to control the 
        identified risks, commensurate with the sensitivity of the 
        information, as well as the complexity and scope of the 
        licensee's activities; 
           (ii) trains staff, as appropriate, to implement the 
        licensee's information security program; and 
           (iii) regularly tests or otherwise regularly monitors the 
        key controls, systems, and procedures of the information 
        security program.  The frequency and nature of these tests or 
        other monitoring practices are determined by the licensee's risk 
        assessment; 
           (3) the licensee: 
           (i) exercises appropriate due diligence in selecting its 
        service providers; and 
           (ii) requires its service providers to implement 
        appropriate measures designed to meet the objectives of this 
        regulation, and, where indicated by the licensee's risk 
        assessment, takes appropriate steps to confirm that its service 
        providers have satisfied these obligations; and 
           (4) the licensee monitors, evaluates, and adjusts, as 
        appropriate, the information security program in light of any 
        relevant changes in technology, the sensitivity of its customer 
        information, internal or external threats to information, and 
        the licensee's own changing business arrangements, such as 
        mergers and acquisitions, alliances and joint ventures, 
        outsourcing arrangements, and changes to customer information 
        systems. 
           Sec. 8.  [60A.982] [UNFAIR TRADE PRACTICES.] 
           A violation of sections 60A.98 and 60A.981 is considered to 
        be a violation of sections 72A.17 to 72A.32. 
           Sec. 9.  Minnesota Statutes 2004, section 62A.136, is 
        amended to read: 
           62A.136 [DENTAL AND VISION PLAN COVERAGE.] 
           The following provisions do not apply to health plans as 
        defined in section 62A.011, subdivision 3, clause (6), providing 
        dental or vision coverage only:  sections 62A.041; 62A.0411; 
        62A.047; 62A.149; 62A.151; 62A.152; 62A.154; 62A.155; 62A.17, 
        subdivision 6; 62A.21, subdivision 2b; 62A.26; 62A.28; 62A.285; 
        62A.30; 62A.304; 62A.3093; and 62E.16. 
           Sec. 10.  Minnesota Statutes 2004, 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. 11.  Minnesota Statutes 2004, section 62A.315, is 
        amended to read: 
           62A.315 [EXTENDED BASIC MEDICARE SUPPLEMENT PLAN; 
        COVERAGE.] 
           The extended basic Medicare supplement plan must have a 
        level of coverage so that it will be certified as a qualified 
        plan pursuant to section 62E.07, and will provide: 
           (1) coverage for all of the Medicare Part A inpatient 
        hospital deductible and coinsurance amounts, and 100 percent of 
        all Medicare Part A eligible expenses for hospitalization not 
        covered by Medicare; 
           (2) coverage for the daily co-payment amount of Medicare 
        Part A eligible expenses for the calendar year incurred for 
        skilled nursing facility care; 
           (3) coverage for the coinsurance amount or in the case of 
        hospital outpatient department services paid under a prospective 
        payment system, the co-payment amount, of Medicare eligible 
        expenses under Medicare Part B regardless of hospital 
        confinement, and the Medicare Part B deductible amount; 
           (4) 80 percent of the usual and customary hospital and 
        medical expenses and supplies described in section 62E.06, 
        subdivision 1, not to exceed any charge limitation established 
        by the Medicare program or state law, the usual and customary 
        hospital and medical expenses and supplies, described in section 
        62E.06, subdivision 1, while in a foreign country, and 
        prescription drug expenses, not covered by Medicare; 
           (5) coverage for the reasonable cost of the first three 
        pints of blood, or equivalent quantities of packed red blood 
        cells as defined under federal regulations under Medicare parts 
        A and B, unless replaced in accordance with federal regulations; 
           (6) 100 percent of the cost of immunizations not otherwise 
        covered under Part D of the Medicare program and routine 
        screening procedures for cancer, including mammograms and pap 
        smears; 
           (7) preventive medical care benefit:  coverage for the 
        following preventive health services not covered by Medicare: 
           (i) an annual clinical preventive medical history and 
        physical examination that may include tests and services from 
        clause (ii) and patient education to address preventive health 
        care measures; 
           (ii) any one or a combination of the following preventive 
        screening tests or preventive services, the selection and 
        frequency of which is considered determined to be medically 
        appropriate: by the attending physician. 
           (A) fecal occult blood test and/or digital rectal 
        examination; 
           (B) dipstick urinalysis for hematuria, bacteriuria, and 
        proteinuria; 
           (C) pure tone (air only) hearing screening test 
        administered or ordered by a physician; 
           (D) serum cholesterol screening every five years; 
           (E) thyroid function test; 
           (F) diabetes screening; 
           (iii) any other tests or preventive measures determined 
        appropriate by the attending physician.  
           Reimbursement shall be for the actual charges up to 100 
        percent of the Medicare-approved amount for each service as if 
        Medicare were to cover the service as identified in American 
        Medical Association current procedural terminology (AMA CPT) 
        codes to a maximum of $120 annually under this benefit.  This 
        benefit shall not include payment for any procedure covered by 
        Medicare; 
           (8) at-home recovery benefit:  coverage for services to 
        provide short-term at-home assistance with activities of daily 
        living for those recovering from an illness, injury, or surgery: 
           (i) for purposes of this benefit, the following definitions 
        shall apply: 
           (A) "activities of daily living" include, but are not 
        limited to, bathing, dressing, personal hygiene, transferring, 
        eating, ambulating, assistance with drugs that are normally 
        self-administered, and changing bandages or other dressings; 
           (B) "care provider" means a duly qualified or licensed home 
        health aide/homemaker, personal care aide, or nurse provided 
        through a licensed home health care agency or referred by a 
        licensed referral agency or licensed nurses registry; 
           (C) "home" means a place used by the insured as a place of 
        residence, provided that the place would qualify as a residence 
        for home health care services covered by Medicare.  A hospital 
        or skilled nursing facility shall not be considered the 
        insured's place of residence; 
           (D) "at-home recovery visit" means the period of a visit 
        required to provide at-home recovery care, without limit on the 
        duration of the visit, except each consecutive four hours in a 
        24-hour period of services provided by a care provider is one 
        visit; 
           (ii) coverage requirements and limitations: 
           (A) at-home recovery services provided must be primarily 
        services that assist in activities of daily living; 
           (B) the insured's attending physician must certify that the 
        specific type and frequency of at-home recovery services are 
        necessary because of a condition for which a home care plan of 
        treatment was approved by Medicare; 
           (C) coverage is limited to: 
           (I) no more than the number and type of at-home recovery 
        visits certified as medically necessary by the insured's 
        attending physician.  The total number of at-home recovery 
        visits shall not exceed the number of Medicare-approved home 
        health care visits under a Medicare-approved home care plan of 
        treatment; 
           (II) the actual charges for each visit up to a maximum 
        reimbursement of $100 per visit; 
           (III) $4,000 per calendar year; 
           (IV) seven visits in any one week; 
           (V) care furnished on a visiting basis in the insured's 
        home; 
           (VI) services provided by a care provider as defined in 
        this section; 
           (VII) at-home recovery visits while the insured is covered 
        under the policy or certificate and not otherwise excluded; 
           (VIII) at-home recovery visits received during the period 
        the insured is receiving Medicare-approved home care services or 
        no more than eight weeks after the service date of the last 
        Medicare-approved home health care visit; 
           (iii) coverage is excluded for: 
           (A) home care visits paid for by Medicare or other 
        government programs; and 
           (B) care provided by unpaid volunteers or providers who are 
        not care providers. 
           Sec. 12.  Minnesota Statutes 2004, section 62A.316, is 
        amended to read: 
           62A.316 [BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.] 
           (a) The basic Medicare supplement plan must have a level of 
        coverage that will provide: 
           (1) coverage for all of the Medicare part A inpatient 
        hospital coinsurance amounts, and 100 percent of all Medicare 
        part A eligible expenses for hospitalization not covered by 
        Medicare, after satisfying the Medicare part A deductible; 
           (2) coverage for the daily co-payment amount of Medicare 
        part A eligible expenses for the calendar year incurred for 
        skilled nursing facility care; 
           (3) coverage for the coinsurance amount, or in the case of 
        outpatient department services paid under a prospective payment 
        system, the co-payment amount, of Medicare eligible expenses 
        under Medicare part B regardless of hospital confinement, 
        subject to the Medicare part B deductible amount; 
           (4) 80 percent of the hospital and medical expenses and 
        supplies incurred during travel outside the United States as a 
        result of a medical emergency; 
           (5) coverage for the reasonable cost of the first three 
        pints of blood, or equivalent quantities of packed red blood 
        cells as defined under federal regulations under Medicare parts 
        A and B, unless replaced in accordance with federal regulations; 
           (6) 100 percent of the cost of immunizations not otherwise 
        covered under part D of the Medicare program and routine 
        screening procedures for cancer screening including mammograms 
        and pap smears; and 
           (7) 80 percent of coverage for all physician prescribed 
        medically appropriate and necessary equipment and supplies used 
        in the management and treatment of diabetes not otherwise 
        covered under Part D of the Medicare program.  Coverage must 
        include persons with gestational, type I, or type II diabetes. 
           (b) Only the following optional benefit riders may be added 
        to this plan: 
           (1) coverage for all of the Medicare part A inpatient 
        hospital deductible amount; 
           (2) a minimum of 80 percent of eligible medical expenses 
        and supplies not covered by Medicare part B, not to exceed any 
        charge limitation established by the Medicare program or state 
        law; 
           (3) coverage for all of the Medicare part B annual 
        deductible; 
           (4) coverage for at least 50 percent, or the equivalent of 
        50 percent, of usual and customary prescription drug expenses; 
           (5) coverage for the following preventive health services 
        medical care benefit coverage for the following preventative 
        health services not covered by Medicare: 
           (i) an annual clinical preventive medical history and 
        physical examination that may include tests and services from 
        clause (ii) and patient education to address preventive health 
        care measures; 
           (ii) any one or a combination of the following preventive 
        screening tests or preventive services, the selection and 
        frequency of which is considered determined to be medically 
        appropriate: by the attending physician. 
           (A) fecal occult blood test and/or digital rectal 
        examination; 
           (B) dipstick urinalysis for hematuria, bacteriuria, and 
        proteinuria; 
           (C) pure tone (air only) hearing screening test, 
        administered or ordered by a physician; 
           (D) serum cholesterol screening every five years; 
           (E) thyroid function test; 
           (F) diabetes screening; 
           (iii) any other tests or preventive measures determined 
        appropriate by the attending physician. 
           Reimbursement shall be for the actual charges up to 100 
        percent of the Medicare-approved amount for each service, as if 
        Medicare were to cover the service as identified in American 
        Medical Association current procedural terminology (AMA CPT) 
        codes, to a maximum of $120 annually under this benefit.  This 
        benefit shall not include payment for a procedure covered by 
        Medicare; 
           (6) coverage for services to provide short-term at-home 
        assistance with activities of daily living for those recovering 
        from an illness, injury, or surgery: 
           (i) For purposes of this benefit, the following definitions 
        apply: 
           (A) "activities of daily living" include, but are not 
        limited to, bathing, dressing, personal hygiene, transferring, 
        eating, ambulating, assistance with drugs that are normally 
        self-administered, and changing bandages or other dressings; 
           (B) "care provider" means a duly qualified or licensed home 
        health aide/homemaker, personal care aid, or nurse provided 
        through a licensed home health care agency or referred by a 
        licensed referral agency or licensed nurses registry; 
           (C) "home" means a place used by the insured as a place of 
        residence, provided that the place would qualify as a residence 
        for home health care services covered by Medicare.  A hospital 
        or skilled nursing facility shall not be considered the 
        insured's place of residence; 
           (D) "at-home recovery visit" means the period of a visit 
        required to provide at-home recovery care, without limit on the 
        duration of the visit, except each consecutive four hours in a 
        24-hour period of services provided by a care provider is one 
        visit; 
           (ii) Coverage requirements and limitations: 
           (A) at-home recovery services provided must be primarily 
        services that assist in activities of daily living; 
           (B) the insured's attending physician must certify that the 
        specific type and frequency of at-home recovery services are 
        necessary because of a condition for which a home care plan of 
        treatment was approved by Medicare; 
           (C) coverage is limited to: 
           (I) no more than the number and type of at-home recovery 
        visits certified as necessary by the insured's attending 
        physician.  The total number of at-home recovery visits shall 
        not exceed the number of Medicare-approved home care visits 
        under a Medicare-approved home care plan of treatment; 
           (II) the actual charges for each visit up to a maximum 
        reimbursement of $40 per visit; 
           (III) $1,600 per calendar year; 
           (IV) seven visits in any one week; 
           (V) care furnished on a visiting basis in the insured's 
        home; 
           (VI) services provided by a care provider as defined in 
        this section; 
           (VII) at-home recovery visits while the insured is covered 
        under the policy or certificate and not otherwise excluded; 
           (VIII) at-home recovery visits received during the period 
        the insured is receiving Medicare-approved home care services or 
        no more than eight weeks after the service date of the last 
        Medicare-approved home health care visit; 
           (iii) Coverage is excluded for: 
           (A) home care visits paid for by Medicare or other 
        government programs; and 
           (B) care provided by family members, unpaid volunteers, or 
        providers who are not care providers; 
           (7) coverage for at least 50 percent, or the equivalent of 
        50 percent, of usual and customary prescription drug expenses to 
        a maximum of $1,200 paid by the issuer annually under this 
        benefit.  An issuer of Medicare supplement insurance policies 
        that elects to offer this benefit rider shall also make 
        available coverage that contains the rider specified in clause 
        (4). 
           Sec. 13.  Minnesota Statutes 2004, section 62E.12, is 
        amended to read: 
           62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE 
        PLAN.] 
           (a) The association through its comprehensive health 
        insurance plan shall offer policies which provide the benefits 
        of a number one qualified plan and a number two qualified plan, 
        except that the maximum lifetime benefit on these plans shall be 
        $2,800,000; and an extended basic Medicare supplement plan and a 
        basic Medicare supplement plan as described in sections 62A.31 
        to 62A.44.  The association may also offer a plan that is 
        identical to a number one and number two qualified plan except 
        that it has a $2,000 annual deductible and a $2,800,000 maximum 
        lifetime benefit.  The association, subject to the approval of 
        the commissioner, may also offer plans that are identical to the 
        number one or number two qualified plan, except that they have 
        annual deductibles of $5,000 and $10,000, respectively; have 
        limitations on total annual out-of-pocket expenses equal to 
        those annual deductibles and therefore cover 100 percent of the 
        allowable cost of covered services in excess of those annual 
        deductibles; and have a $2,800,000 maximum lifetime 
        benefit.  The association, subject to approval of the 
        commissioner, may also offer plans that meet all other 
        requirements of state law except those that are inconsistent 
        with high deductible health plans as defined in sections 220 and 
        223 of the Internal Revenue Code and supporting regulations.  As 
        of January 1, 2006, the association shall no longer be required 
        to offer an extended basic Medicare supplement plan.  
           (b) The requirement that a policy issued by the association 
        must be a qualified plan is satisfied if the association 
        contracts with a preferred provider network and the level of 
        benefits for services provided within the network satisfies the 
        requirements of a qualified plan.  If the association uses a 
        preferred provider network, payments to nonparticipating 
        providers must meet the minimum requirements of section 72A.20, 
        subdivision 15.  
           (c) The association shall offer health maintenance 
        organization contracts in those areas of the state where a 
        health maintenance organization has agreed to make the coverage 
        available and has been selected as a writing carrier.  
           (d) Notwithstanding the provisions of section 62E.06 and 
        unless those charges are billed by a provider that is part of 
        the association's preferred provider network, the state plan 
        shall exclude coverage of services of a private duty nurse other 
        than on an inpatient basis and any charges for treatment in a 
        hospital located outside of the state of Minnesota in which the 
        covered person is receiving treatment for a mental or nervous 
        disorder, unless similar treatment for the mental or nervous 
        disorder is medically necessary, unavailable in Minnesota and 
        provided upon referral by a licensed Minnesota medical 
        practitioner. 
           Sec. 14.  Minnesota Statutes 2004, section 62E.13, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SELECTION OF WRITING CARRIER.] The association 
        may select policies and contracts, or parts thereof, submitted 
        by a member or members of the association, or by the association 
        or others, to develop specifications for bids from any entity 
        which wishes to be selected as a writing carrier to administer 
        the state plan.  The selection of the writing carrier shall be 
        based upon criteria established by the board of directors of the 
        association and approved by the commissioner.  The criteria 
        shall outline specific qualifications that an entity must 
        satisfy in order to be selected and, at a minimum, shall include 
        the entity's proven ability to handle large group accident and 
        health insurance cases, efficient claim paying capacity, and the 
        estimate of total charges for administering the plan.  The 
        association may select separate writing carriers for the two 
        types of qualified plans and the $2,000, $5,000, and $10,000 
        deductible plans, the qualified Medicare supplement plan plans, 
        and the health maintenance organization contract. 
           Sec. 15.  [62L.056] [SMALL EMPLOYER FLEXIBLE BENEFITS 
        PLANS.] 
           (a) Notwithstanding any provision of this chapter, chapter 
        363A, or any other law to the contrary, a health carrier may 
        offer, sell, issue, and renew a health benefit plan that is a 
        flexible benefits plan under this section to a small employer if 
        the following requirements are satisfied: 
           (1) the health benefit plan must be offered in compliance 
        with this chapter, except as otherwise permitted in this 
        section; 
           (2) the health benefit plan to be offered must be designed 
        to enable employers and covered persons to better manage costs 
        and coverage options through the use of co-pays, deductibles, 
        and other cost-sharing arrangements; 
           (3) the health benefit plan must be issued and administered 
        in compliance with sections 62E.141; 62L.03, subdivision 6; and 
        62L.12, subdivisions 3 and 4, relating to prohibitions against 
        enrolling in the Minnesota Comprehensive Health Association 
        persons eligible for employer group coverage; 
           (4) the health benefit plan may modify or exclude any or 
        all coverages of benefits that would otherwise be required by 
        law, except for maternity benefits and other benefits required 
        under federal law; 
           (5) each health benefit plan must be approved by the 
        commissioner of commerce, but the commissioner may not 
        disapprove a plan on the grounds of a modification or exclusion 
        permitted under clause (4); and 
           (6) prior to sale of the health benefit plan, the small 
        employer must be given a written list of the coverages otherwise 
        required by law that are modified or excluded in the health 
        benefit plan.  The list must include a description of each 
        coverage in the list and indicate whether the coverage is 
        modified or excluded.  If a coverage is modified, the list must 
        describe the modification.  The list may, but need not, also 
        list any or all coverages otherwise required by law that are 
        included in the health benefit plan and indicate that they are 
        included.  The insurer must require that a copy of this written 
        list be provided, prior to the effective date of the health 
        benefit plan, to each employee who is eligible for health 
        coverage under the employer's plan.  
           (b) The definitions in section 62L.02 apply to this section 
        as modified by this section. 
           (c) An employer may provide a health benefit plan permitted 
        under this section to its employees, the employees' dependents, 
        and other persons eligible for coverage under the employer's 
        plan, notwithstanding chapter 363A or any other law to the 
        contrary. 
           Sec. 16.  Minnesota Statutes 2004, section 62Q.471, is 
        amended to read: 
           62Q.471 [EXCLUSION FOR SUICIDE ATTEMPTS PROHIBITED.] 
           (a) No health plan may exclude or reduce coverage for 
        health care for an enrollee who is otherwise covered under the 
        health plan on the basis that the need for the health care arose 
        out of a suicide or suicide attempt by the enrollee. 
           (b) For purposes of this section, "health plan" has the 
        meaning given in section 62Q.01, subdivision 3, but includes the 
        coverages described in section 62A.011, clauses (4), (6), 
        and (7) and through (10). 
           Sec. 17.  Minnesota Statutes 2004, section 62Q.65, is 
        amended to read: 
           62Q.65 [ACCESS TO PROVIDER DISCOUNTS.] 
           Subdivision 1.  [REQUIREMENT.] A high deductible health 
        plan must, when used in connection with a medical savings 
        account or health savings account, provide the enrollee access 
        to any discounted provider fees for services covered by the high 
        deductible health plan, regardless of whether the enrollee has 
        satisfied the deductible for the high deductible health plan. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given: 
           (1) "high deductible health plan" has the meaning given 
        under the Internal Revenue Code of 1986, section 220(c)(2), with 
        respect to a medical savings account; and the meaning given 
        under Internal Revenue Code of 1986, section 223(c)(2), with 
        respect to a health savings account; 
           (2) "medical savings account" has the meaning given under 
        the Internal Revenue Code of 1986, section 220(d)(1); and 
           (3) "discounted provider fees" means fees contained in a 
        provider agreement entered into by the issuer of the high 
        deductible health plan, or an affiliate of the issuer, for use 
        in connection with the high deductible health plan; and 
           (4) "health savings account" has the meaning given under 
        the Internal Revenue Code of 1986, section 223(d). 
           Sec. 18.  Minnesota Statutes 2004, section 65A.29, 
        subdivision 11, is amended to read: 
           Subd. 11.  [NONRENEWAL.] Every insurer shall establish a 
        plan that sets out the minimum number and amount of claims 
        during an experience period that may result in a 
        nonrenewal.  For purposes of the plan, the insurer may not 
        consider as a claim the insured's inquiry about a hypothetical 
        claim, or the insured's inquiry to the insured's agent regarding 
        a potential claim. 
           No homeowner's insurance policy may be nonrenewed based on 
        the insured's loss experience unless the insurer has sent a 
        written notice that any future losses may result in nonrenewal 
        due to loss experience. 
           Any nonrenewal of a homeowner's insurance policy must, at a 
        minimum, comply with the requirements of subdivision 8 and the 
        rules adopted by the commissioner. 
           Sec. 19.  [65A.297] [ACTIVE DUTY MEMBER OF ARMED SERVICES 
        RESERVE OR NATIONAL GUARD; USE IN UNDERWRITING PROHIBITED.] 
           No insurer, including the Minnesota FAIR plan, shall refuse 
        to renew, decline to offer or write, reduce the limits of, 
        cancel, or charge differential rates for equivalent coverage for 
        any coverage in a homeowner's policy because the dwelling is 
        vacant or occupied by a caretaker if the insured's absence is 
        caused solely by the insured being called to active duty as a 
        member of the armed services reserve or the National Guard. 
           Sec. 20.  [65B.286] [SNOWMOBILE AUXILIARY LIGHTING SYSTEM 
        DISCOUNT.] 
           Subdivision 1.  [DEFINITION.] For the purposes of this 
        section, the term "auxiliary hazard warning lighting system" 
        means a system installed by the manufacturer of a snowmobile as 
        original equipment or installed in a snowmobile by the 
        manufacturer or an authorized dealer of that manufacturer as an 
        aftermarket system that does the following when activated: 
           (1) a yellow light emitting diode (L.E.D.) light on the 
        front of the snowmobile that flashes at least once per second 
        and is visible at least one-half mile in front of the 
        snowmobile; and 
           (2) a red light emitting diode (L.E.D.) light on the rear 
        of the snowmobile that flashes at least once per second and is 
        visible at least one-half mile from behind the snowmobile. 
           Subd. 2.  [REQUIRED REDUCTION.] An insurer must provide an 
        appropriate premium reduction of at least five percent on a 
        policy insuring the snowmobile, or on that portion of a policy 
        insuring a snowmobile that is issued, delivered, or renewed in 
        this state, to the insured whose snowmobile is equipped with an 
        authorized auxiliary hazard warning lighting system.  The 
        premium reduction required by this subdivision applies to every 
        snowmobile of the insured that is equipped with an auxiliary 
        hazard warning lighting system. 
           Sec. 21.  Minnesota Statutes 2004, section 65B.48, 
        subdivision 3, is amended to read: 
           Subd. 3.  Self-insurance, subject to approval of the 
        commissioner, is effected by filing with the commissioner in 
        satisfactory form: 
           (1) a continuing undertaking by the owner or other 
        appropriate person to pay tort liabilities or basic economic 
        loss benefits, or both, and to perform all other obligations 
        imposed by sections 65B.41 to 65B.71; 
           (2) evidence that appropriate provision exists for prompt 
        administration of all claims, benefits, and obligations provided 
        by sections 65B.41 to 65B.71; 
           (3) evidence that reliable financial arrangements, 
        deposits, or commitments exist providing assurance, 
        substantially equivalent to that afforded by a policy of 
        insurance complying with sections 65B.41 to 65B.71, for payment 
        of tort liabilities, basic economic loss benefits, and all other 
        obligations imposed by sections 65B.41 to 65B.71; and 
           (4) a nonrefundable initial application fee 
        of $1,500 $2,500 and an annual a renewal fee of $400 $1,200 
        for political subdivisions and $500 $1,500 for nonpolitical 
        entities every three years.  
           Sec. 22.  Minnesota Statutes 2004, section 72A.20, 
        subdivision 13, is amended to read: 
           Subd. 13.  [REFUSAL TO RENEW.] Refusing to renew, declining 
        to offer or write, or charging differential rates for an 
        equivalent amount of homeowner's insurance coverage, as defined 
        by section 65A.27, for property located in a town or statutory 
        or home rule charter city, in which the insurer offers to sell 
        or writes homeowner's insurance, solely because:  
           (a) of the geographic area in which the property is 
        located; 
           (b) of the age of the primary structure sought to be 
        insured; 
           (c) the insured or prospective insured was denied coverage 
        of the property by another insurer, whether by cancellation, 
        nonrenewal or declination to offer coverage, for a reason other 
        than those specified in section 65A.01, subdivision 3a, clauses 
        (a) to (e); or 
           (d) the property of the insured or prospective insured has 
        been insured under the Minnesota FAIR Plan Act, shall constitute 
        an unfair method of competition and an unfair and deceptive act 
        or practice; or 
           (e) the insured has inquired about coverage for a 
        hypothetical claim or has made an inquiry to the insured's agent 
        regarding a potential claim.  
           This subdivision prohibits an insurer from filing or 
        charging different rates for different zip code areas within the 
        same town or statutory or home rule charter city. 
           This subdivision shall not prohibit the insurer from 
        applying underwriting or rating standards which the insurer 
        applies generally in all other locations in the state and which 
        are not specifically prohibited by clauses (a) to (d) (e).  Such 
        underwriting or rating standards shall specifically include but 
        not be limited to standards based upon the proximity of the 
        insured property to an extraordinary hazard or based upon the 
        quality or availability of fire protection services or based 
        upon the density or concentration of the insurer's risks.  
        Clause (b) shall not prohibit the use of rating standards based 
        upon the age of the insured structure's plumbing, electrical, 
        heating or cooling system or other part of the structure, the 
        age of which affects the risk of loss.  Any insurer's failure to 
        comply with section 65A.29, subdivisions 2 to 4, either (1) by 
        failing to give an insured or applicant the required notice or 
        statement or (2) by failing to state specifically a bona fide 
        underwriting or other reason for the refusal to write shall 
        create a presumption that the insurer has violated this 
        subdivision.  
           Sec. 23.  Minnesota Statutes 2004, section 72A.20, 
        subdivision 36, is amended to read: 
           Subd. 36.  [LIMITATIONS ON THE USE OF CREDIT INFORMATION.] 
        (a) No insurer or group of affiliated insurers may reject, 
        cancel, or nonrenew a policy of private passenger motor vehicle 
        insurance as defined under section 65B.01 or a policy of 
        homeowner's insurance as defined under section 65A.27, for any 
        person in whole or in part on the basis of credit information, 
        including a credit reporting product known as a "credit score" 
        or "insurance score," without consideration and inclusion of any 
        other applicable underwriting factor. 
           (b) If credit information, credit scoring, or insurance 
        scoring is to be used in underwriting, the insurer must disclose 
        to the consumer that credit information will be obtained and 
        used as part of the insurance underwriting process. 
           (c) Insurance inquiries and non-consumer-initiated 
        inquiries must not be used as part of the credit scoring or 
        insurance scoring process. 
           (d) If a credit score, insurance score, or other credit 
        information relating to a consumer, with respect to the types of 
        insurance referred to in paragraph (a), is adversely impacted or 
        cannot be generated because of the absence of a credit history, 
        the insurer must exclude the use of credit as a factor in the 
        decision to reject, cancel, or nonrenew. 
           (e) Insurers must upon the request of a policyholder 
        reevaluate the policyholder's score.  Any change in premium 
        resulting from the reevaluation must be effective upon the 
        renewal of the policy.  An insurer is not required to reevaluate 
        a policyholder's score pursuant to this paragraph more than 
        twice in any given calendar year. 
           (f) Insurers must upon request of the applicant or 
        policyholder provide reasonable underwriting exceptions based 
        upon prior credit histories for persons whose credit information 
        is unduly influenced by expenses related to a catastrophic 
        injury or illness, temporary loss of employment, or the death of 
        an immediate family member.  The insurer may require reasonable 
        documentation of these events prior to granting an exception. 
           (f) (g) A credit scoring or insurance scoring methodology 
        must not be used by an insurer if the credit scoring or 
        insurance scoring methodology incorporates the gender, race, 
        nationality, or religion of an insured or applicant. 
           (g) (h) Insurers that employ a credit scoring or insurance 
        scoring system in underwriting of coverage described in 
        paragraph (a) must have on file with the commissioner: 
           (1) the insurer's credit scoring or insurance scoring 
        methodology; and 
           (2) information that supports the insurer's use of a credit 
        score or insurance score as an underwriting criterion. 
           (h) (i) Insurers described in paragraph (g) shall file the 
        required information with the commissioner within 120 days of 
        August 1, 2002, or prior to implementation of a credit scoring 
        or insurance scoring system by the insurer, if that date is 
        later. 
           (i) (j) Information provided by, or on behalf of, an 
        insurer to the commissioner under this subdivision is trade 
        secret information under section 13.37. 
           Sec. 24.  Minnesota Statutes 2004, section 79.211, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [EXPERIENCE MODIFICATION FACTOR REVISION FOR 
        CERTAIN CLOSED CLAIMS.] An insurer or an employer insured under 
        a workers' compensation policy subject to an experience rating 
        plan may request in writing of the data service organization 
        computing the policy's experience modification factor that the 
        most recent factor be revised if each of the following criteria 
        is met: 
           (1) a workers' compensation claim under that policy is 
        closed between the normal valuation date for that claim and the 
        next time that valuation is used in computing the experience 
        modification factor on the policy; 
           (2) the data service organization receives a revised unit 
        statistical report containing data on the closed claim in a form 
        consistent with its filed unit statistical plan; and 
           (3) inclusion of the closed claim in the experience 
        modification factor calculation would impact that factor by five 
        percentage points or more. 
           Sec. 25.  Minnesota Statutes 2004, section 79.40, is 
        amended to read: 
           79.40 [PREMIUM INCLUSION IN RATEMAKING.] 
           Premiums charged members by the reinsurance association 
        shall be recognized in the ratemaking procedures for insurance 
        rates in the same manner as assessments for the special 
        compensation fund.  
           Sec. 26.  Minnesota Statutes 2004, section 79.56, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PREFILING OF RATES.] (a) Each insurer 
        shall file with the commissioner a complete copy of its rates 
        and rating plan, and all changes and amendments thereto, and 
        such supporting data and information that the commissioner may 
        by rule require, at least 60 days prior to its effective date.  
        The commissioner shall advise an insurer within 30 days of the 
        filing if its submission is not accompanied with such supporting 
        data and information that the commissioner by rule may require.  
        The commissioner may extend the filing review period and 
        effective date for an additional 30 days if an insurer, after 
        having been advised of what supporting data and information is 
        necessary to complete its filing, does not provide such 
        information within 15 days of having been so notified.  If any 
        rate or rating plan filing or amendment thereto is not 
        disapproved by the commissioner within the filing review period, 
        the insurer may implement it.  For the period August 1, 1995, to 
        December 31, 1995, the filing shall be made at least 90 days 
        prior to the effective date and the department shall advise an 
        insurer within 60 days of such filing if the filing is 
        insufficient under this section. 
           (b) A rating plan or rates are not subject to the 
        requirements of paragraph (a), where the insurer files a 
        certification verifying that it will use the mutually agreed 
        upon rating plan or rates only to write a specific employer that 
        generates $250,000 in annual written workers' compensation 
        premiums before the application of any large deductible rating 
        plan.  The certification must be refiled upon each renewal of 
        the employer's policy.  The $250,000 threshold includes premiums 
        generated in any state.  The designation and certification must 
        be submitted in substantially the following form: 
        Name and address of insurer:................................. 
        Name and address of insured employer:........................ 
        Policy period:............................................... 
        I certify that the employer named above generates $250,000 or 
        more in annual countrywide written workers' compensation 
        premiums, and that the calculation of this threshold is based on 
        the rates and rating plans that have been approved by the 
        appropriate state regulatory authority.  The filing of this 
        certification authorizes the use of this rate or rating plan 
        only for the named employer. 
        Name of responsible officer:................................. 
        Title:....................................................... 
        Signature:................................................... 
           Sec. 27.  Minnesota Statutes 2004, section 79.56, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PENALTIES.] (a) Any insurer using a rate or a 
        rating plan which has not been filed or certified under 
        subdivision 1 shall be subject to a fine of up to $100 for each 
        day the failure to file continues.  The commissioner may, after 
        a hearing on the record, find that the failure is willful.  A 
        willful failure to meet filing requirements shall be punishable 
        by a fine of up to $500 for each day during which a willful 
        failure continues.  These penalties shall be in addition to any 
        other penalties provided by law.  
           (b) Notwithstanding this subdivision, an employer that 
        generates $250,000 in annual written workers' compensation 
        premium under the rates and rating plan of an insurer before the 
        application of any large deductible rating plans, may be written 
        by that insurer using rates or rating plans that are not subject 
        to disapproval but which have been filed.  For the purposes of 
        this paragraph, written workers' compensation premiums generated 
        from states other than Minnesota are included in calculating the 
        $250,000 threshold for large risk alternative rating option 
        plans.  
           Sec. 28.  Minnesota Statutes 2004, section 79.62, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ISSUANCE.] The commissioner, upon finding that 
        the applicant organization is qualified to provide the services 
        required and proposed, or has contracted with a licensed data 
        service organization to purchase these services which are 
        required by this chapter but are not provided directly by the 
        applicant, and that all requirements of law are met, shall issue 
        a license.  Each license is subject to annual renewal effective 
        June 30.  Each new or renewal license application must be 
        accompanied by a fee of $50 $1,000.  
           Sec. 29.  Minnesota Statutes 2004, section 79A.03, 
        subdivision 9, is amended to read: 
           Subd. 9.  [FILING REPORTS.] (a) Incurred losses, paid and 
        unpaid, specifying indemnity and medical losses by 
        classification, payroll by classification, and current estimated 
        outstanding liability for workers' compensation shall be 
        reported to the commissioner by each self-insurer on a calendar 
        year basis, in a manner and on forms available from the 
        commissioner.  Payroll information must be filed by April 1 of 
        the following year.  
           (b) Each self-insurer shall, under oath, attest to the 
        accuracy of each report submitted pursuant to paragraph (a).  
        Upon sufficient cause, the commissioner shall require the 
        self-insurer to submit a certified audit of payroll and claim 
        records conducted by an independent auditor approved by the 
        commissioner, based on generally accepted accounting principles 
        and generally accepted auditing standards, and supported by an 
        actuarial review and opinion of the future contingent 
        liabilities.  The basis for sufficient cause shall include the 
        following factors:  where the losses reported appear 
        significantly different from similar types of businesses; where 
        major changes in the reports exist from year to year, which are 
        not solely attributable to economic factors; or where the 
        commissioner has reason to believe that the losses and payroll 
        in the report do not accurately reflect the losses and payroll 
        of that employer.  If any discrepancy is found, the commissioner 
        shall require changes in the self-insurer's or workers' 
        compensation service company record-keeping practices. 
           (c) An annual status report due August 1 by each 
        self-insurer shall be filed in a manner and on forms prescribed 
        by the commissioner.  
           (d) Each individual self-insurer shall, within four months 
        after the end of its fiscal year, annually file with the 
        commissioner its latest 10K report required by the Securities 
        and Exchange Commission.  If an individual self-insurer does not 
        prepare a 10K report, it shall file an annual certified 
        financial statement, together with such other financial 
        information as the commissioner may require to substantiate data 
        in the financial statement.  
           (e) Each member of the group shall, within seven six months 
        after the end of each fiscal year for that group, file submit to 
        a certified public accountant designated by the group, the most 
        recent annual financial statement, reviewed by a certified 
        public accountant in accordance with the Statements on Standards 
        for Accounting and Review Services, Volume 2, the American 
        Institute of Certified Public Accountants Professional 
        Standards, or audited in accordance with generally accepted 
        auditing standards, together with such other financial 
        information the commissioner may require.  In addition, the 
        group shall file with the commissioner, within seven months 
        after the end of each fiscal year for that group, combining 
        financial statements of the group members, compiled by a 
        certified public accountant in accordance with the Statements on 
        Standards for Accounting and Review Services, Volume 2, the 
        American Institute of Certified Public Accountants Professional 
        Standards.  The combining financial statements shall include, 
        but not be limited to, a balance sheet, income statement, 
        statement of changes in net worth, and statement of cash flow.  
        Each combining financial statement shall include a column for 
        each individual group member along with a total column.  Each 
        combined statement shall have a statement from the certified 
        public accountant confirming that each member has submitted the 
        required financial statement as defined in this section.  The 
        certified public accountant shall notify the commissioner if any 
        statement is qualified or otherwise conditional.  The 
        commissioner may require additional financial information from 
        any group member.  
           Where a group has 50 or more members, the group shall file, 
        in lieu of the combining financial statements, a combined 
        financial statement showing only the total column for the entire 
        group's balance sheet, income statement, statement of changes in 
        net worth, and statement of cash flow.  Additionally, the group 
        shall disclose, for each member, the total assets, net worth, 
        revenue, and income for the most recent fiscal year.  The 
        combining and combined financial statements may omit all 
        footnote disclosures. 
           (f) In addition to the financial statements required by 
        paragraphs (d) and (e), interim financial statements or 10Q 
        reports required by the Securities and Exchange Commission may 
        be required by the commissioner upon an indication that there 
        has been deterioration in the self-insurer's financial 
        condition, including a worsening of current ratio, lessening of 
        net worth, net loss of income, the downgrading of the company's 
        bond rating, or any other significant change that may adversely 
        affect the self-insurer's ability to pay expected losses.  Any 
        self-insurer that files an 8K report with the Securities and 
        Exchange Commission shall also file a copy of the report with 
        the commissioner within 30 days of the filing with the 
        Securities and Exchange Commission. 
           Sec. 30.  Minnesota Statutes 2004, section 79A.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MINIMUM DEPOSIT.] The minimum deposit is 110 
        percent of the private self-insurer's estimated future 
        liability.  The deposit may be used to secure payment of all 
        administrative and legal costs, and unpaid assessments required 
        by section 79A.12, subdivision 2, relating to or arising from 
        its or other employers' self-insuring.  As used in this section, 
        "private self-insurer" includes both current and former members 
        of the self-insurers' security fund; and "private self-insurers' 
        estimated future liability" means the private self-insurers' 
        total of estimated future liability as determined by an 
        Associate or Fellow of the Casualty Actuarial Society every year 
        for group member private self-insurers and, for a nongroup 
        member private self-insurer's authority to self-insure, every 
        year for the first five years.  After the first five years, the 
        nongroup member's total shall be as determined by an Associate 
        or Fellow of the Casualty Actuarial Society at least every two 
        years, and each such actuarial study shall include a projection 
        of future losses during the period until the next scheduled 
        actuarial study, less payments anticipated to be made during 
        that time.  
           All data and information furnished by a private 
        self-insurer to an Associate or Fellow of the Casualty Actuarial 
        Society for purposes of determining private self-insurers' 
        estimated future liability must be certified by an officer of 
        the private self-insurer to be true and correct with respect to 
        payroll and paid losses, and must be certified, upon information 
        and belief, to be true and correct with respect to reserves.  
        The certification must be made by sworn affidavit.  In addition 
        to any other remedies provided by law, the certification of 
        false data or information pursuant to this subdivision may 
        result in a fine imposed by the commissioner of commerce on the 
        private self-insurer up to the amount of $5,000, and termination 
        of the private self-insurers' authority to self-insure.  The 
        determination of private self-insurers' estimated future 
        liability by an Associate or Fellow of the Casualty Actuarial 
        Society shall be conducted in accordance with standards and 
        principles for establishing loss and loss adjustment expense 
        reserves by the Actuarial Standards Board, an affiliate of the 
        American Academy of Actuaries.  The commissioner may reject an 
        actuarial report that does not meet the standards and principles 
        of the Actuarial Standards Board, and may further disqualify the 
        actuary who prepared the report from submitting any future 
        actuarial reports pursuant to this chapter.  Within 30 days 
        after the actuary has been served by the commissioner with a 
        notice of disqualification, an actuary who is aggrieved by the 
        disqualification may request a hearing to be conducted in 
        accordance with chapter 14.  Based on a review of the actuarial 
        report, the commissioner of commerce may require an increase in 
        the minimum security deposit in an amount the commissioner 
        considers sufficient. 
           Estimated future liability is determined by first taking 
        the total amount of the self-insured's future liability of 
        workers' compensation claims and then deducting the total amount 
        which is estimated to be returned to the self-insurer from any 
        specific excess insurance coverage, aggregate excess insurance 
        coverage, and any supplementary benefits or second injury 
        benefits which are estimated to be reimbursed by the special 
        compensation fund.  However, in the determination of estimated 
        future liability, the actuary for the self-insurer shall not 
        take a credit for any excess insurance or reinsurance which is 
        provided by a captive insurance company which is wholly owned by 
        the self-insurer.  Supplementary benefits or second injury 
        benefits will not be reimbursed by the special compensation fund 
        unless the special compensation fund assessment pursuant to 
        section 176.129 is paid and the reports required thereunder are 
        filed with the special compensation fund.  In the case of surety 
        bonds, bonds shall secure administrative and legal costs in 
        addition to the liability for payment of compensation reflected 
        on the face of the bond.  In no event shall the security be less 
        than the last retention limit selected by the self-insurer with 
        the Workers' Compensation Reinsurance Association, provided that 
        the commissioner may allow former members to post less than the 
        Workers' Compensation Reinsurance Association retention level if 
        that amount is adequate to secure payment of the self-insurers' 
        estimated future liability, as defined in this subdivision, 
        including payment of claims, administrative and legal costs, and 
        unpaid assessments required by section 79A.12, subdivision 2.  
        The posting or depositing of security pursuant to this section 
        shall release all previously posted or deposited security from 
        any obligations under the posting or depositing and any surety 
        bond so released shall be returned to the surety.  Any other 
        security shall be returned to the depositor or the person 
        posting the bond. 
           As a condition for the granting or renewing of a 
        certificate to self-insure, the commissioner may require a 
        private self-insurer to furnish any additional security the 
        commissioner considers sufficient to insure payment of all 
        claims under chapter 176. 
           Sec. 31.  Minnesota Statutes 2004, section 79A.04, 
        subdivision 10, is amended to read: 
           Subd. 10.  [NOTICE; OBLIGATION OF FUND.] In the event of 
        bankruptcy, insolvency, or certificate of default, the 
        commissioner shall immediately notify by certified mail the 
        commissioner of finance, the surety, the issuer of an 
        irrevocable letter of credit, and any custodian of the security 
        required in this chapter.  At the time of notification, the 
        commissioner shall also call the security and transfer and 
        assign it to the self-insurers' security fund.  The commissioner 
        shall also immediately notify by certified mail the 
        self-insurers' security fund, and order the security fund to 
        assume the insolvent self-insurers' obligations for which it is 
        liable under chapter 176.  The security fund shall commence 
        payment of these obligations within 14 days of receipt of this 
        notification and order.  Payments shall be made to claimants 
        whose entitlement to benefits can be ascertained by the security 
        fund, with or without proceedings before the Department of Labor 
        and Industry, the Office of Administrative Hearings, the 
        Workers' Compensation Court of Appeals, or the Minnesota Supreme 
        Court.  Upon the assumption of obligations by the security fund 
        pursuant to the commissioner's notification and order, the 
        security fund has the right to immediate possession of any 
        posted or deposited security and the custodian, surety, or 
        issuer of any irrevocable letter of credit or the commissioner, 
        if in possession of it, shall turn over the security, proceeds 
        of the surety bond, or letter of credit to the security fund 
        together with the interest that has accrued since the date of 
        the self-insured employer's insolvency.  The security fund has 
        the right to the immediate possession of all relevant workers' 
        compensation claim files and data of the self-insurer, and the 
        possessor of the files and data must turn the files and data, or 
        complete copies of them, over to the security fund within five 
        days of the notification provided under this subdivision.  If 
        the possessor of the files and data fails to timely turn over 
        the files and data to the security fund, it is liable to the 
        security fund for a penalty of $500 per day for each day after 
        the five-day period has expired.  The security fund is entitled 
        to recover its reasonable attorney fees and costs in any action 
        brought to obtain possession of the workers' compensation claim 
        files and data of the self-insurer, and for any action to 
        recover the penalties provided by this subdivision.  The 
        self-insurers' security fund may administer payment of benefits 
        or it may retain a third-party administrator to do so.  
           Sec. 32.  Minnesota Statutes 2004, section 79A.06, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PRIVATE EMPLOYERS WHO HAVE CEASED TO BE 
        SELF-INSURED.] (a) Private employers who have ceased to be 
        private self-insurers shall discharge their continuing 
        obligations to secure the payment of compensation which is 
        accrued during the period of self-insurance, for purposes of 
        Laws 1988, chapter 674, sections 1 to 21, by compliance with all 
        of the following obligations of current certificate holders: 
           (1) Filing reports with the commissioner to carry out the 
        requirements of this chapter; 
           (2) Depositing and maintaining a security deposit for 
        accrued liability for the payment of any compensation which may 
        become due, pursuant to chapter 176.  However, if a private 
        employer who has ceased to be a private self-insurer purchases 
        an insurance policy from an insurer authorized to transact 
        workers' compensation insurance in this state which provides 
        coverage of all claims for compensation arising out of injuries 
        occurring during the entire period the employer was 
        self-insured, whether or not reported during that period, the 
        policy will: 
           (i) discharge the obligation of the employer to maintain a 
        security deposit for the payment of the claims covered under the 
        policy; 
           (ii) discharge any obligation which the self-insurers' 
        security fund has or may have for payment of all claims for 
        compensation arising out of injuries occurring during the period 
        the employer was self-insured, whether or not reported during 
        that period; and 
           (iii) discharge the obligations of the employer to pay any 
        future assessments to the self-insurers' security fund.  
           A private employer who has ceased to be a private 
        self-insurer may instead buy an insurance policy described 
        above, except that it covers only a portion of the period of 
        time during which the private employer was self-insured; 
        purchase of such a policy discharges any obligation that the 
        self-insurers' security fund has or may have for payment of all 
        claims for compensation arising out of injuries occurring during 
        the period for which the policy provides coverage, whether or 
        not reported during that period.  
           A policy described in this clause may not be issued by an 
        insurer unless it has previously been approved as to form and 
        substance by the commissioner; and 
           (3) Paying within 30 days all assessments of which notice 
        is sent by the security fund, for a period of seven years from 
        the last day its certificate of self-insurance was in effect.  
        Thereafter, the private employer who has ceased to be a private 
        self-insurer may either:  (i) continue to pay within 30 days all 
        assessments of which notice is sent by the security fund until 
        it has no incurred liabilities for the payment of compensation 
        arising out of injuries during the period of self-insurance; or 
        (ii) pay the security fund a cash payment equal to four percent 
        of the net present value of all remaining incurred liabilities 
        for the payment of compensation under sections 176.101 and 
        176.111 as certified by a member of the casualty actuarial 
        society.  Assessments shall be based on the benefits paid by the 
        employer during the calendar year immediately preceding the 
        calendar year in which the employer's right to self-insure is 
        terminated or withdrawn. 
           (b) With respect to a self-insurer who terminates its 
        self-insurance authority after April 1, 1998, that member shall 
        obtain and file with the commissioner an actuarial opinion of 
        its outstanding liabilities as determined by an associate or 
        fellow of the Casualty Actuarial Society within 120 days of the 
        date of its termination.  If the actuarial opinion is not timely 
        filed, the self-insurers' security fund may, at its discretion, 
        engage the services of an actuary for this purpose.  The expense 
        of this actuarial opinion must be assessed against and be the 
        obligation of the self-insurer.  The commissioner may issue a 
        certificate of default against the self-insurer for failure to 
        pay this assessment to the self-insurers' security fund as 
        provided by section 79A.04, subdivision 9.  The opinion must 
        separate liability for indemnity benefits from liability from 
        medical benefits, and must discount each up to four percent per 
        annum to net present value.  Within 30 days after notification 
        of approval of the actuarial opinion by the commissioner, the 
        member shall pay to the security fund an amount equal to 120 
        percent of that discounted outstanding indemnity liability, 
        multiplied by the greater of the average annualized assessment 
        rate since inception of the security fund or the annual rate at 
        the time of the most recent assessment before termination.  If 
        the payment is not made within 30 days of the notification, 
        interest on it at the rate prescribed by section 549.09 must be 
        paid by the former member to the security fund until the 
        principal amount is paid in full. 
           (c) A former member who terminated its self-insurance 
        authority before April 1, 1998, who has paid assessments to the 
        self-insurers' security fund for seven years, and whose 
        annualized assessment is $500 or less, may buy out of its 
        outstanding liabilities to the self-insurers' security fund by 
        an amount calculated as follows:  1.35 multiplied by the 
        indemnity case reserves at the time of the calculation, 
        multiplied by the then current self-insurers' security fund 
        annualized assessment rate. 
           (d) A former member who terminated its self-insurance 
        authority before April 1, 1998, and who is paying assessments 
        within the first seven years after ceasing to be self-insured 
        under paragraph (a), clause (3), may elect to buy out its 
        outstanding liabilities to the self-insurers' security fund by 
        obtaining and filing with the commissioner an actuarial opinion 
        of its outstanding liabilities as determined by an associate or 
        fellow of the Casualty Actuarial Society.  The opinion must 
        separate liability for indemnity benefits from liability for 
        medical benefits, and must discount each up to four percent per 
        annum to net present value.  Within 30 days after notification 
        of approval of the actuarial opinion by the commissioner, the 
        member shall pay to the security fund an amount equal to 120 
        percent of that discounted outstanding indemnity liability, 
        multiplied by the greater of the average annualized assessment 
        rate since inception of the security fund or the annual rate at 
        the time of the most recent assessment. 
           (e) A former member who has paid the security fund 
        according to paragraphs (b) to (d) and subsequently receives 
        authority from the commissioner to again self-insure shall be 
        assessed under section 79A.12, subdivision 2, only on indemnity 
        benefits paid on injuries that occurred after the former member 
        received authority to self-insure again; provided that the 
        member furnishes verified data regarding those benefits to the 
        security fund. 
           (f) In addition to proceedings to establish liabilities and 
        penalties otherwise provided, a failure to comply may be the 
        subject of a proceeding before the commissioner.  An appeal from 
        the commissioner's determination may be taken pursuant to the 
        contested case procedures of chapter 14 within 30 days of the 
        commissioner's written determination. 
           Any current or past member of the self-insurers' security 
        fund is subject to service of process on any claim arising out 
        of chapter 176 or this chapter in the manner provided by section 
        5.25, or as otherwise provided by law.  The issuance of a 
        certificate to self-insure to the private self-insured employer 
        shall be deemed to be the agreement that any process which is 
        served in accordance with this section shall be of the same 
        legal force and effect as if served personally within this state.
           Sec. 33.  Minnesota Statutes 2004, section 79A.12, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ASSESSMENT.] The security fund may assess each 
        of its members a pro rata share of the funding necessary to 
        carry out its obligation and the purposes of this chapter.  
        Total annual assessments in any calendar year shall not exceed 
        ten percent of the workers' compensation benefits paid under 
        sections 176.101 and 176.111 during the previous paid indemnity 
        losses, as defined in section 176.129, made by the self-insured 
        employer during the preceding calendar year.  The annual 
        assessment calculation shall not include supplementary benefits 
        paid which will be reimbursed by the special compensation fund.  
        Funds obtained by assessments pursuant to this subdivision may 
        only be used for the purposes of this chapter.  The trustees 
        shall certify to the commissioner the collection and receipt of 
        all money from assessments, noting any delinquencies.  The 
        trustees shall take any action deemed appropriate to collect any 
        delinquent assessments. 
           Sec. 34.  Minnesota Statutes 2004, section 79A.22, 
        subdivision 11, is amended to read: 
           Subd. 11.  [DISBURSEMENT OF FUND SURPLUS.] (a) One 
        hundred Except as otherwise provided in paragraphs (b) and (c), 
        100 percent of any surplus money for a fund year in excess of 
        125 percent of the amount necessary to fulfill all obligations 
        under the Workers' Compensation Act, chapter 176, for that fund 
        year may be declared refundable to a member eligible members at 
        any time.  The date shall be no earlier than 18 months following 
        the end of such fund year.  The first disbursement of fund 
        surplus may not be made prior to the written approval of the 
        commissioner.  There can be no more than one refund made in any 
        12-month period. 
           (b) Except as otherwise provided in paragraph (c), for 
        groups that have been in existence for five years or more, 100 
        percent of any surplus money for a fund year in excess of 110 
        percent of the amount necessary to fulfill all obligations under 
        the Workers' Compensation Act, chapter 176, for that fund year 
        may be declared refundable to eligible members at any time. 
           (c) Excess surplus distributions under paragraphs (a) and 
        (b) may not be greater than the combined surplus of the group at 
        the time of the distribution. 
           (d) When all the claims of any one fund year have been 
        fully paid, as certified by an actuary, all surplus money from 
        that fund year may be declared refundable. 
           (b) (e) The commercial self-insurance group shall give ten 
        days' prior notice to the commissioner of any refund.  Said The 
        notice shall must be accompanied by a statement from the 
        commercial self-insurer group's certified public accountant 
        certifying that the proposed refund is in compliance 
        with paragraph (a) this subdivision. 
           Sec. 35.  Minnesota Statutes 2004, section 79A.22, is 
        amended by adding a subdivision to read: 
           Subd. 14.  [ALL STATES COVERAGE.] Policies issued by 
        commercial self-insurance groups pursuant to this chapter may 
        also provide workers' compensation coverage required under the 
        laws of states other than Minnesota, commonly known as "all 
        states coverage."  The coverage must be provided to members of 
        the group which are temporarily performing work in another state.
           Sec. 36.  Minnesota Statutes 2004, section 176.191, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INSURER PAYMENT.] If a dispute exists as to 
        whether an employee's injury is compensable under this chapter 
        and the employee is otherwise covered by an insurer or entity 
        pursuant to chapters 62A, 62C and, 62D, 62E, 62R, and 62T, that 
        insurer or entity shall pay any medical costs incurred by the 
        employee for the injury up to the limits of the applicable 
        coverage and shall make any disability payments otherwise 
        payable by that insurer or entity in the absence of or in 
        addition to workers' compensation liability.  If the injury is 
        subsequently determined to be compensable pursuant to this 
        chapter, the workers' compensation insurer shall be ordered to 
        reimburse the insurer or entity that made the payments for all 
        payments made under this subdivision by the insurer or entity, 
        including interest at a rate of 12 percent a year.  If a payment 
        pursuant to this subdivision exceeds the reasonable value as 
        permitted by sections 176.135 and 176.136, the provider shall 
        reimburse the workers' compensation insurer for all the excess 
        as provided by rules promulgated by the commissioner. 
           Sec. 37.  Laws 1985, chapter 85, section 1, is amended to 
        read: 
           Section 1.  [CERTAIN COUNTIES; JOINT AGREEMENTS FOR 
        INSURANCE COVERAGE.] 
           (a) The counties of Aitkin, Itasca, Koochiching and St. 
        Louis, and political subdivisions located in those counties, 
        except the city of Duluth, when two or more of them are acting 
        jointly under Minnesota Statutes, section 471.61, subdivision 1, 
        or section 471.59 for purposes of section 471.61, may act 
        jointly for the same purposes with any nonprofit organization 
        organized under the laws of Minnesota and which is exempt from 
        taxation pursuant to section 501(c)(3) of the Internal Revenue 
        Code 1954, as amended through December 31, 1984. 
           (b) Notwithstanding Minnesota Statutes, sections 62L.03; 
        62L.04; 62L.045; or any other provision of Minnesota Statutes, 
        chapter 62L, an arrangement described in paragraph (a) may 
        provide the same health coverage under the same plan and premium 
        rates to its member employers that have 50 or fewer employees 
        that the arrangement provides to its member employers that have 
        more than 50 employees.  The insurer offering the plan need not 
        offer this same plan to small employers that are not member 
        employers in the arrangement described in paragraph (a). 
           (c) Paragraph (b) is a pilot project that expires at the 
        end of its third full plan year after its date of enactment.  
        After the second full plan year, the entity operating an 
        arrangement described in paragraph (a) shall provide a written 
        report to the commissioner of commerce summarizing the 
        advantages and disadvantages of the pilot project and 
        recommending whether to make it permanent. 
           Sec. 38.  [REPEALER.] 
           Minnesota Statutes 2004, sections 61A.072, subdivision 2; 
        and 62E.03 are repealed. 
           Sec. 39.  [EFFECTIVE DATES.] 
           (a) Sections 9, 13, 14, 15, 18, 22, 23, 25, and 31 to 36 
        are effective the day following final enactment.  Section 19 is 
        effective the day following final enactment and applies to any 
        action taken by an insurer on or after that date.  Sections 1, 
        3, 21, and 26 to 28 are effective July 1, 2005.  The remaining 
        sections are effective August 1, 2005. 
           (b) Pursuant to Minnesota Statutes, section 645.023, 
        subdivision 1, clause (a), local approval of section 37 is not 
        required.  Section 37 is effective the day following final 
        enactment. 
           Presented to the governor May 31, 2005 
           Signed by the governor June 3, 2005, 8:15 a.m.