Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2000, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 350-S.F.No. 3203
An act relating to commerce; conforming state statutes
to the National Association of Insurance Commissioners
model legislation providing uniform accounting
principles; regulating the registration of certain
securities; amending Minnesota Statutes 1998, sections
60A.11, subdivision 22; 60A.12, subdivision 5;
60A.121, subdivision 9, and by adding subdivisions;
60A.123; 60A.129, subdivision 3; 66A.16, subdivisions
1 and 2; 68A.01, subdivision 4, and by adding a
subdivision; and 68A.02; Minnesota Statutes 1999
Supplement, section 80A.15, subdivision 2; proposing
coding for new law in Minnesota Statutes, chapters
60A; and 68A; repealing Minnesota Statutes 1998,
sections 60A.12, subdivisions 1, 3, 4, 7, 8, and 9;
60A.125, subdivision 3; and 60A.128.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 60A.11,
subdivision 22, is amended to read:
Subd. 22. [PERSONAL PROPERTY UNDER LEASE.] Personal
property for intended lease or rental in the United States or
Canada. A company may not invest more than five percent of its
total admitted assets under this subdivision. In cases where
the asset leased would otherwise be nonadmitted, the asset or
associated lease is nonadmitted.
Sec. 2. Minnesota Statutes 1998, section 60A.12,
subdivision 5, is amended to read:
Subd. 5. [LOSS RESERVES.] (1) [FOR OTHER THAN LIABILITY
AND WORKERS' COMPENSATION.] The reserve for outstanding losses
under policies other than workers' compensation and liability
policies shall be at least equal to the aggregate estimated
amounts due or to become due on account of all the losses and
claims of which the corporation has received notice. The loss
reserve shall also include the estimated liability on any
notices received by the corporation of the occurrence of any
event which may result in a loss, and the estimated liability
for all losses which have occurred but on which no notice has
been received. For the purpose of these reserves, the
corporation shall keep a complete and itemized record showing
all losses and claims on which it has received notice, including
all notices received by it of the occurrence of any event which
may result in a loss.
When, in the judgment of the commissioner, the loss
reserves, calculated in accordance with the foregoing
provisions, statutory accounting practices as set forth in the
National Association of Insurance Commissioners' accounting
practices and procedures manual are inadequate, the commissioner
may require the corporation to maintain additional reserves.
(2) [FOR LIABILITY LOSSES.] The reserve for outstanding
losses and loss expenses incurred under liability policies
during each of the three years immediately preceding the date of
the statement shall be not less than 60 percent of the earned
liability premium for each of the three corresponding years
immediately preceding the date of the statement, less all loss
and loss expense payments made under claims incurred during each
of those years.
(3) [FOR COMPENSATION CLAIMS.] The reserve for outstanding
losses and loss expenses incurred under workers' compensation
policies shall be at least equal to the following amounts:
(a) For all compensation claims under policies written more
than three years prior to the date of the statement, the present
values, at four percent interest, of the determined and the
estimated future payments;
(b) For all compensation claims under policies written in
the three years immediately preceding the date of the statement,
the reserve shall be not less than 65 percent of the earned
compensation premiums for each of the three years, less all loss
and loss expense payments made in connection with the claims
under policies written in each of the corresponding years. For
the first year of the three-year period, the reserve shall be
not less than the present value, at four percent interest, of
the determined and the estimated unpaid compensation claims
under policies written during that year.
Sec. 3. Minnesota Statutes 1998, section 60A.121, is
amended by adding a subdivision to read:
Subd. 2a. [CONTRACTUAL TERMS.] "Contractual terms" means
the principal and interest payments of the commercial mortgage
loan as scheduled in the mortgage agreement.
Sec. 4. Minnesota Statutes 1998, section 60A.121,
subdivision 9, is amended to read:
Subd. 9. [MORTGAGE LOAN IN FORECLOSURE.] "Mortgage loan in
foreclosure" means (1) a loan in the process of foreclosure
including the time required for expiration of any equitable or
statutory redemption rights; (2) a loan to a mortgagor who is
the subject of a bankruptcy petition and who is not
making regular monthly payments according to the contractual
terms; or (3) a loan secured by a mortgage on real estate that
is subject to a senior mortgage or other lien that is being
foreclosed.
Sec. 5. Minnesota Statutes 1998, section 60A.121, is
amended by adding a subdivision to read:
Subd. 10a. [PERMANENTLY IMPAIRED.] A commercial mortgage
loan will be "permanently impaired" when, based on current
information and events, it is probable that an insurer will be
unable to collect all amounts due according to the contractual
terms.
Sec. 6. Minnesota Statutes 1998, section 60A.123, is
amended to read:
60A.123 [VALUATION PROCEDURE.]
Subdivision 1. [REQUIREMENT.] An insurer shall value its
commercial mortgage loans and real estate acquired through
foreclosure of commercial mortgage loans as provided in this
section for the purpose of establishing reserves or carrying a
valuation allowance or fair values of the investments and for
statutory accounting purposes.
Subd. 2. [PERFORMING MORTGAGE LOAN.] A performing mortgage
loan must be carried at its amortized acquisition cost.
Subd. 3. [DISTRESSED MORTGAGE LOAN.] (a) The insurer shall
make an evaluation of the appropriate carrying fair value of its
commercial mortgage loans which it classifies as distressed
mortgage loans. The carrying fair value must be based upon one
or more of the following procedures:
(1) an internal appraisal;
(2) an appraisal made by an independent appraiser;
(3) the value of guarantees or other credit enhancements
related to the loan.
(b) The insurer may will determine the carrying fair value
of its distressed mortgage loans through either an evaluation of
each specific distressed mortgage loan or by a sampling
methodology. Insurers using a sampling methodology shall
identify a sampling of its distressed mortgage loans that
represents a cross section of all of its distressed mortgage
loans. The insurer shall make an evaluation of the appropriate
carrying value for each sample loan. The carrying value of all
of the insurer's distressed mortgage loans must be the same
percentage of their amortized acquisition cost as the sample
loans. The carrying fair value must be based upon an internal
appraisal or an appraisal conducted by an independent appraiser.
(c) For distressed mortgage loans, the insurer shall either
take a charge against its surplus or establish a reserve
for measure impairment based on the fair value of the collateral
less estimated costs to obtain and sell. A valuation allowance
should be established for the difference between the
carrying adjusted fair value of the collateral and the amortized
acquisition cost of its distressed mortgage loans.
Subd. 4. [DELINQUENT MORTGAGE LOAN.] (a) The insurer shall
make an evaluation of the appropriate carrying fair value of
each delinquent mortgage loan. The carrying fair value must be
based upon one or more of the following procedures:
(1) an internal appraisal;
(2) an appraisal by an independent appraiser;
(3) the value of guarantees or other credit enhancements
related to the loan.
(b) The insurer shall either take a charge against its
surplus or establish a reserve for the difference between the
carrying fair value and the amortized acquisition cost of its
delinquent mortgage loans.
Subd. 5. [RESTRUCTURED MORTGAGE LOAN.] (a) The insurer
shall make an evaluation of the appropriate carrying fair value
of each restructured mortgage loan. The carrying fair value
must be based upon one or more of the following procedures:
(1) an internal appraisal;
(2) an appraisal by an independent appraiser;
(3) the value of guarantees or other credit enhancements
related to the loan.
(b) The insurer shall either take a charge against its
surplus or establish a reserve for measure impairment based on
the fair value of the collateral less estimated costs to obtain
and sell. The difference between the carrying adjusted fair
value of the collateral and other assets received and the
amortized acquisition cost of its restructured mortgage
loans must be recorded as a direct write-down and a new cost
basis established.
Subd. 6. [MORTGAGE LOAN IN FORECLOSURE.] (a) The insurer
shall make an evaluation of the appropriate carrying fair value
of each mortgage loan in foreclosure. The carrying fair value
must be based upon an appraisal made by an independent appraiser
and must be adjusted for additional expenses, such as insurance,
taxes, and legal fees that have been imposed to protect the
investment or to obtain clear title to the property to the
extent these amounts are expected to be recoverable from the
disposition of the property.
(b) The insurer shall take a charge against its surplus for
record as a direct write-down the difference between
the carrying fair value and the amortized acquisition cost of
its mortgage loans in the process of foreclosure.
Subd. 7. [REAL ESTATE OWNED.] (a) The insurer shall make
an evaluation of the appropriate carrying fair value of real
estate owned. The carrying fair value must be based upon an
appraisal made by an independent appraiser and must be adjusted
for additional expenses, such as insurance, taxes, and legal
fees that have been imposed to protect the investment or to
obtain clear title to the property to the extent these amounts
are expected to be recoverable from the disposition of the
property.
(b) The insurer shall take a charge against its surplus for
record as a direct write-down the difference between
the carrying fair value and the amortized acquisition cost of
real estate owned.
Sec. 7. [60A.1285] [OTHER IMPAIRMENTS.]
If distressed or delinquent mortgage loans being valued
according to section 60A.123, subdivisions 3 and 4, are
determined to be permanently impaired, a direct write-down must
be recognized as a realized loss, and a new cost basis
established.
Sec. 8. Minnesota Statutes 1998, section 60A.129,
subdivision 3, is amended to read:
Subd. 3. [ANNUAL AUDIT.] (a) Every insurance company doing
business in this state, including fraternal benefit societies,
reciprocal exchanges, service plan corporations licensed
pursuant to chapter 62C, and legal service plans licensed
pursuant to chapter 62G, unless exempted by the commissioner
pursuant to subdivision 5, paragraph (a), or by subdivision 7,
shall have an annual audit of the financial activities of the
most recently completed calendar year performed by an
independent certified public accountant, and shall file the
report of this audit with the commissioner on or before June 1
for the immediately preceding year ending December 31. The
commissioner may require an insurer to file an audited financial
report earlier than June 1 with 90 days' advance notice to the
insurer.
Extensions of the June 1 filing date may be granted by the
commissioner for 30-day periods upon a showing by the insurer
and its independent certified public accountant of the reasons
for requesting the extension and a determination by the
commissioner of good cause for the extension.
The request for extension must be submitted in writing not
less than ten days before the due date in sufficient detail to
permit the commissioner to make an informed decision with
respect to the requested extension.
(b) Foreign and alien insurers filing audited financial
reports in another state under the other state's requirements of
audited financial reports which have been found by the
commissioner to be substantially similar to these requirements
are exempt from this subdivision if a copy of the audited
financial report, accountant's letter of qualifications, and
report on significant deficiencies in internal controls, which
are filed with the other state, are filed with the commissioner
in accordance with the filing dates specified in paragraphs (a)
and (l), (Canadian insurers may submit accountants' reports as
filed with the Canadian Dominion Department of Insurance); and a
copy of any notification of adverse financial condition report
filed with the other state is filed with the commissioner within
the time specified in paragraph (k). This paragraph does not
prohibit or in any way limit the commissioner from ordering,
conducting, and performing examinations of insurers under the
authority of this chapter.
(c)(i) The annual audited financial report shall report, in
conformity with statutory accounting practices required or
permitted by the commissioner of insurance of the state of
domicile, the financial position of the insurer as of the end of
the most recent calendar year and the results of its operations,
cash flows, and changes in capital and surplus for the year
ended. The annual audited financial report shall include a
report of an independent certified public accountant; a balance
sheet reporting admitted assets, liabilities, capital, and
surplus; a statement of operations; a statement of cash flows; a
statement of changes in capital and surplus; and notes to the
financial statements.
(ii) The notes required under item (i) shall be those
required by the appropriate National Association of Insurance
Commissioners annual statement instructions and any other notes
required by generally accepted accounting principles National
Association of Insurance Commissioners Accounting Practices and
Procedures Manual and shall include reconciliation of
differences, if any, between the audited statutory financial
statements and the annual statement filed under section 60A.13,
subdivision 1, with a written description of the nature of these
differences; and shall also include a summary of ownership and
relationships of the insurer and all affiliated companies.
(iii) The financial statements included in the audited
financial report shall be prepared in a form and using language
and groupings substantially the same as the relevant sections of
the annual statement of the insurer filed with the
commissioner. The financial statement shall be comparative,
presenting the amounts as of December 31 of the current year and
the amounts as of the immediately preceding December 31. In the
first year in which an insurer is required to file an audited
financial report, the comparative data may be omitted. The
amounts may be rounded to the nearest $1,000, and all
insignificant amounts may be combined.
(d) Each insurer required by this section to file an annual
audited financial report must notify the commissioner in writing
of the name and address of the independent certified public
accountant or accounting firm retained to conduct the annual
audit within 60 days after becoming subject to the annual audit
requirement. The insurer shall obtain from the accountant a
letter which states that the accountant is aware of the
provisions that relate to accounting and financial matters in
the insurance laws and the rules of the insurance regulatory
authority of the state of domicile. The letter shall affirm
that the accountant will express an opinion on the financial
statements in terms of their conformity to the statutory
accounting practices prescribed or otherwise permitted by that
insurance regulatory authority, specifying the exceptions
believed to be appropriate. A copy of the accountant's letter
shall be filed with the commissioner.
(e) If an accountant who was the accountant for the
immediately preceding filed audited financial report is
dismissed or resigns, the insurer shall notify the commissioner
of this event within five business days. Within ten business
days of this notification, the insurer shall also furnish the
commissioner with a separate letter stating whether in the 24
months preceding this event there were any disagreements with
the former accountant on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to the satisfaction of the
former accountant, would have caused that person to make
reference to the subject matter of the disagreement in
connection with the opinion. The disagreements required to be
reported in response to this paragraph include both those
resolved to the former accountant's satisfaction and those not
resolved to the former accountant's satisfaction. Disagreements
contemplated by this section are those disagreements between
personnel of the insurer responsible for presentation of its
financial statements and personnel of the accounting firm
responsible for rendering its report. The insurer shall also in
writing request the former accountant to furnish a letter
addressed to the insurer stating whether the accountant agrees
with the statements contained in the insurer's letter and, if
not, stating the reasons for any disagreement. The insurer
shall furnish this responsive letter from the former accountant
to the commissioner together with its own.
(f) The commissioner shall not recognize any person or firm
as a qualified independent certified public accountant that is
not in good standing with the American Institute of Certified
Public Accountants and in all states in which the accountant is
licensed to practice, or for a Canadian or British company, that
is not a chartered accountant. Except as otherwise provided, an
independent certified public accountant shall be recognized as
qualified as long as the person conforms to the standards of the
person's profession, as contained in the Code of Professional
Ethics of the American Institute of Certified Public Accountants
and the rules of professional conduct of the Minnesota board of
public accountancy or similar code.
(g) No partner or other person responsible for rendering a
report for calendar year 1997 and thereafter may act in that
capacity for more than seven consecutive years. Following any
period of service, the person shall be disqualified from acting
in that or a similar capacity for the same company or its
insurance subsidiaries or affiliates for a period of two years.
An insurer may make application to the commissioner for relief
from the above rotation requirement on the basis of unusual
circumstances. The commissioner may consider the number of
partners, the expertise of the partners or the number of
insurance clients in the currently registered firm, the premium
volume of the insurer, or the number of jurisdictions in which
the insurer transacts business in determining if the relief
should be granted.
(h) The commissioner shall not recognize as a qualified
independent certified public accountant, nor accept any audited
financial report, prepared in whole or in part by any natural
person who has been convicted of fraud, bribery, a violation of
the Racketeer Influenced and Corrupt Organizations Act, United
States Code, title 18, sections 1961 to 1968, or any dishonest
conduct or practices under federal or state law, has been found
to have violated the insurance laws of this state with respect
to any previous reports submitted under this section, or has
demonstrated a pattern or practice of failing to detect or
disclose material information in previous reports filed under
the provisions of this section.
(i) The commissioner, after notice and hearing under
chapter 14, may find that the accountant is not qualified for
purposes of expressing an opinion on the financial statements in
the annual audited financial report. The commissioner may
require the insurer to replace the accountant with another whose
relationship with the insurer is qualified within the meaning of
this section.
(j) Financial statements furnished under paragraph (a),
shall be examined by an independent certified public
accountant. The examination of the insurer's financial
statements shall be conducted in accordance with generally
accepted auditing standards and consideration should be given to
other procedures illustrated in the Financial Condition
Examiners Handbook, issued by the National Association of
Insurance Commissioners, as the independent certified public
accountant considers necessary.
(k) The insurer required to furnish the annual audited
financial report shall require the independent certified public
accountant to provide written notice within five business days
to the board of directors of the insurer or its audit committee
of any determination by that independent certified public
accountant that the insurer has materially misstated its
financial condition as reported to the commissioner as of the
balance sheet date currently under examination or that the
insurer does not meet the minimum capital and surplus
requirement of section 60A.07 as of that date. An insurer
required to file an annual audited financial report who received
a notification of adverse financial condition from the
accountant shall file a copy of the notification with the
commissioner within five business days of the receipt of the
notification. The insurer shall provide the independent
certified public accountant making the notification with
evidence of the report being furnished to the commissioner. If
the independent certified public accountant fails to receive the
evidence within the required five-day period, the independent
certified public accountant shall furnish to the commissioner a
copy of the notification to the board of directors or its audit
committee within the next five business days. No independent
certified public accountant shall be liable in any manner to any
person for any statement made in connection with this paragraph
if the statement is made in good faith in compliance with this
paragraph. If the accountant becomes aware of facts which might
have affected the audited financial report after the date it was
filed under this section, the accountant shall take the action
prescribed by Professional Standards issued by the American
Institute of Certified Public Accountants.
(l) In addition to the annual audited financial statements,
each insurer shall furnish the commissioner with a written
report prepared by the accountant describing significant
deficiencies in the insurer's internal control structure noted
by the accountant during the audit. The accountant shall follow
the professional standards issued by the American Institute of
Certified Public Accountants, which require an accountant to
communicate significant deficiencies, known as reportable
conditions, noted during a financial statement audit, to the
appropriate parties within an entity. No report shall be issued
if the accountant does not identify significant deficiencies.
Any such report by the accountant describing significant
deficiencies in the insurer's internal control structure, shall
be filed annually by the insurer with the commissioner within 60
days after the filing of the annual audited financial
statements. This report on internal control shall be in the
form prescribed by generally accepted auditing standards. The
insurer shall provide the commissioner with a description of
remedial actions taken or proposed to correct significant
deficiencies, if those actions are not described in the
accountant's report.
(m) The accountant shall furnish the insurer in connection
with, and for inclusion in, the filing of the annual audited
financial report, a letter stating that the accountant is
independent with respect to the insurer and conforms to the
standards of the accountant's profession as contained in the
Code of Professional Ethics of the American Institute of
Certified Public Accountants and the rules of professional
conduct of the Minnesota board of accountancy or similar code;
the background and experience in general, and the experience in
audits of insurers of the staff assigned to the engagement and
whether each is an independent certified public accountant; that
the accountant understands that the annual audited financial
report and the opinion thereon will be filed in compliance with
this statute and that the commissioner will be relying on this
information in the monitoring and regulation of the financial
position of insurers; that the accountant consents to the
requirements of paragraph (n) and that the accountant consents
and agrees to make available for review by the commissioner, or
the commissioner's designee or appointed agent, the workpapers,
as defined in paragraph (n); a representation that the
accountant is properly licensed by the appropriate state
licensing authority and is a member in good standing in the
American Institute of Certified Public Accountants; and, a
representation that the accountant complies with paragraph (f).
Nothing in this section shall be construed as prohibiting the
accountant from utilizing staff the accountant deems appropriate
where use is consistent with the standards prescribed by
generally accepted auditing standards.
(n) Workpapers are the records kept by the independent
certified public accountant of the procedures followed, tests
performed, information obtained, and conclusions reached
pertinent to the independent certified public accountant's
examination of the financial statements of an insurer.
Workpapers may include audit planning documents, work programs,
analyses, memoranda, letters of confirmation and representation,
management letters, abstracts of company documents, and
schedules or commentaries prepared or obtained by the
independent certified public accountant in the course of the
examination of the financial statements of an insurer and that
support the accountant's opinion. Every insurer required to
file an audited financial report shall require the accountant,
through the insurer, to make available for review by the
examiners the workpapers prepared in the conduct of the
examination and any communications related to the audit between
the accountant and the insurer. The workpapers shall be made
available at the offices of the insurer, at the offices of the
commissioner, or at any other reasonable place designated by the
commissioner. The insurer shall require that the accountant
retain the audit workpapers and communications until the
commissioner has filed a report on examination covering the
period of the audit but no longer than seven years after the
period reported upon. In the conduct of the periodic review by
the examiners, it shall be agreed that photocopies of pertinent
audit workpapers may be made and retained by the commissioner.
These copies shall be part of the commissioner's workpapers and
shall be given the same confidentiality as other examination
workpapers generated by the commissioner.
(o)(i) In the case of Canadian and British insurers, the
annual audited financial report means the annual statement of
total business on the form filed by these companies with their
domiciliary supervision authority and duly audited by an
independent chartered accountant.
(ii) For these insurers, the letter required in paragraph
(d), shall state that the accountant is aware of the
requirements relating to the annual audited statement filed with
the commissioner under paragraph (a), and shall affirm that the
opinion expressed is in conformity with those requirements.
(p) The audit report of the independent certified public
accountant that performs the audit of an insurer's annual
statement as required under paragraph (a), shall contain a
statement as to whether anything, in connection with the audit,
came to the accountant's attention that caused the accountant to
believe that the insurer failed to adopt and consistently apply
the valuation procedures as required by sections 60A.122 and
60A.123.
Sec. 9. Minnesota Statutes 1998, section 66A.16,
subdivision 1, is amended to read:
Subdivision 1. [MUTUAL FIRE INSURANCE COMPANIES.] A mutual
fire insurance company may be formed with, or an existing fire
insurance company may establish, a guaranty fund divided into
certificates of $10 each, or multiples thereof, and this
guaranty fund shall be invested in the same manner as is
provided for the investment of capital stock of insurance
companies. The certificate holders of the guaranty fund shall
be entitled to an annual dividend of not more than ten percent
on their respective certificates, if the net profits or unused
premiums left after all losses, expenses, or liabilities then
incurred, with reserves for reinsurance, are provided for shall
be sufficient to pay the same; and, if the dividends in any one
year are less than ten percent, the difference may be made up in
any subsequent year or years from the net profits. Approval of
the commissioner must be obtained before accrual for or payment
of the dividend, or any repayment of principal.
The guaranty fund shall be applied to the payment of losses
and expenses when necessary and, if the guaranty fund be
impaired, the directors may make good the whole or any part of
the impairment from future profits of the company, but no
dividend shall be paid on guaranty fund certificates while the
guaranty fund is impaired.
The holder of the guaranty fund certificate shall not be
liable for any more than the amount of the certificate which has
not been paid in and this amount shall be plainly and legibly
stated on the face of the certificate.
Each certificate holder of record shall be entitled to one
vote in person or by proxy in any meeting of the members of the
company for each $10 investment in guaranty fund certificates.
The guaranty fund may be reduced or retired by vote of the
policyholders of the company and the assent of the commissioner,
if the net assets of the company above its reinsurance reserve
and all other claims and obligations and the amount of its
guaranty fund certificates and interest thereon for two years
last preceding and including the date of its last annual
statement shall not be less than 50 percent of the premiums in
force.
Due notice of this proposed action on the part of the
company shall be mailed to each policyholder of the company not
less than 30 days before the meeting when the action may be
taken.
In mutual fire insurance companies with a guaranty fund,
the certificate holders shall be entitled to choose and elect
from among their own number or from among the policyholders at
least one-half of the total number of directors.
If any mutual fire insurance company with a guaranty fund
ceases to do business, it shall not divide among its certificate
holders any part of its assets or guaranty fund until all its
debts and obligations have been paid or canceled.
Foreign mutual fire insurance companies having a guaranty
fund shall not be required to make their certificate of guaranty
fund conform to the provisions of this section, but when the
certificates do not conform therewith the amount thereof shall
be charged as a liability.
Sec. 10. Minnesota Statutes 1998, section 66A.16,
subdivision 2, is amended to read:
Subd. 2. [MUTUAL CASUALTY COMPANIES.] Any mutual insurance
company which establishes and maintains, over and above its
liabilities and the reserves required by law of a like stock
insurance company, a guaranty fund available for the payment of
losses and expenses at least equal to the capital stock required
of a like stock insurance company may issue policies of
insurance without contingent liability, and when the articles of
incorporation of any mutual insurance company having this
guaranty fund provide, the company may transact any and all of
the kinds of business as set forth in section 60A.06,
subdivision 1, clauses (1) to (15) subject to the restrictions
and limitations imposed by law on a like stock insurance
company, and any domestic mutual company having a guaranty fund
equal to the amount of capital stock required of a like stock
insurance company may insure the same kinds of property and
conduct and carry on its business, subject only to the
restrictions and limitations applicable to like domestic stock
insurance companies.
Subdivision 1 shall not apply to this guaranty fund except
that the guaranty fund of the company shall be invested in the
same manner as is provided by law for the investment of its
other funds. Every such company shall in its annual statement
show as separate items the amount of the guaranty fund and the
remaining divisible surplus, and the aggregate of these items
shall be shown as surplus to policyholders.
A guaranty fund may be created, in whole or in part, in
either or both of the following ways:
(1) Where an existing mutual company has a surplus, the
members of the company may at any regular or special meeting set
aside from and out of its surplus such sum as shall be fixed by
resolution to be transferred to and thereafter constitute, in
whole or in part, the guaranty fund of the company; or
(2) By the issuance of guaranty fund certificates, as
specified in this subdivision, the same to be issued upon the
conditions and subject to the rights and obligations specified
in this subdivision.
Any such company establishing a guaranty fund, as provided
in this subdivision, may, subject to the restrictions and
limitations imposed by law as to a like stock insurance company,
amend its articles to provide for the doing by it of one or more
of the kinds of insurance business specified in section 60A.06,
subdivision 1, clauses (1) to (15).
The policy liability of any such mutual company issuing
policies without a contingent liability shall, as to these
policies, be computed upon the same basis as is applicable to
like policies issued by stock insurance companies. Where any
such company shall issue five-year term policies, wherein the
premiums shall be payable in annual or biennial installments and
no premium note is taken by the company as payment of the full
term premium, the company then shall be required to maintain a
reserve fund on only the portion of premiums actually collected
from time to time under these term policies and no company so
creating a guaranty fund shall issue policies without a
contingent liability after the guaranty fund shall be impaired
or reduced below the capital required of a like stock insurance
company doing the same kind or kinds of insurance. Any company
having a guaranty fund may insure, without a contingent
liability, any kind or class of property which a like stock
company may insure.
Any director, officer, or member of any mutual insurance
company, or any other person, may advance to the company any sum
of money necessary for the purposes of its business or to enable
it to comply with any of the requirements of the law, including
the creation, in whole or in part, of a guaranty fund to enable
it to do one or more of the kinds of business specified in this
subdivision, and for the creation by a company issuing policies
with a contingent liability of a guaranty fund, in such amount
as the board of directors shall determine, for the protection of
policyholders of the company, and the moneys, together with the
interest thereon as may have been agreed upon, not exceeding ten
percent per annum, shall be repaid only out of the surplus
remaining after providing for all reserves, if any, and other
liability, and which shall not otherwise be a liability or claim
against the company or any of its assets. No commission or
promotion expenses shall be paid in connection with the advance
of any money to the company, and the amount of the advance
remaining unpaid shall be reported in each annual statement.
The company shall issue to each person advancing money for
the creation of a guaranty fund a certificate or certificates
specifying the amount advanced. These certificates may be
assigned by the holder and the transfer recorded upon the books
of the company. The holders of the guaranty fund certificates
shall be entitled to annual interest thereon at the rate agreed
upon, if the net profits of the company, after all losses,
expenses, liabilities, and legal reserves, if any, have been
paid or provided for, are sufficient to pay the same. If the
net profits of the company in any year are insufficient to pay
the full amount of interest agreed upon, the difference may be
paid in any subsequent year from the net profits of the
subsequent years, if approval of the commissioner is obtained
before accrual for or payment of the interest.
The guaranty fund shall be applied to the payment of losses
and expenses when necessary and, if the guaranty fund be
impaired, the directors may make good the whole or any part of
the impairment from future net profits of the company or by the
issue and sale of additional guaranty fund certificates, but no
interest shall be paid on the guaranty fund certificates while
the guaranty fund is impaired. No certificate shall be issued
except for money actually paid to the company, which amount
shall be plainly and legibly stated therein. The company shall
issue certificates only in sums of $10, or multiples thereof; it
shall keep a record of the name and address of the person to
whom issued and of all assignments thereof. Upon surrender of a
certificate duly assigned in writing, the company shall cancel
the same and issue a new certificate to the assignee.
Each certificate holder of record shall be entitled to one
vote in person or by proxy at any meeting of the members of the
company, for each $10 investment in the guaranty fund
certificates.
The guaranty fund may be reduced or retired by vote of the
board of directors of the company and the assent of the
commissioner, if the net assets of the company, above its legal
reserves, if any, and all other claims and obligations are
sufficient therefor. The certificate holders shall be entitled
to choose and elect from among their own members or from among
the policyholders at least one-half of the total number of
directors.
In case the members of any company by resolution adopted at
any regular meeting or special meeting called for that purpose
shall determine to wind up and liquidate the business of any
such company, the assets thereof shall be applied (1) to the
payment of the expense of the liquidation; (2) to the payment of
any accrued liability, including losses, if any; (3) to the
payment of any unearned premiums on policies in force at the
time of the liquidation; (4) to the payment of guaranty fund
certificates, if any, together with accrued interest thereon, if
any; and (5) the residue shall be distributed according to the
provisions of chapter 60B.
Sec. 11. Minnesota Statutes 1998, section 68A.01,
subdivision 4, is amended to read:
Subd. 4. [INVESTMENT OF OTHER FUNDS.] After the investment
of such portion of its capital stock as hereinbefore provided
and the deposit of the securities in its guaranty fund as
aforesaid the remainder of its capital stock and funds may be
invested in such securities, records, abstract plants, and
equipment as the board of directors or the board of trustees of
the company shall determine to be suitable for the transaction
of its business, unless otherwise limited by this chapter.
Sec. 12. Minnesota Statutes 1998, section 68A.01, is
amended by adding a subdivision to read:
Subd. 6. [ADMITTED ASSET STANDARDS.] An investment in a
title plant or plants in an amount equal to the actual cost must
be allowed as an admitted asset for title insurers. The
aggregate amount of the investment must not exceed the lesser of
20 percent of admitted assets or 40 percent of surplus to
policyholders, both as required to be shown on the statutory
balance sheet of the insurer for its most recently filed
statement with the commissioner. If the amount of the
investment exceeds the limits in this subdivision, the excess
amount must be recorded as a nonadmitted asset.
Sec. 13. Minnesota Statutes 1998, section 68A.02, is
amended to read:
68A.02 [UNEARNED PREMIUM RESERVE.]
Upon issuance of each contract of title insurance issued on
or after January 1, 1964, through January 1, 2001, by a domestic
real estate title insurance company, there shall be reserved
initially a sum equal to ten percent of the original premium
charged therefor. At the end of each calendar year following
the year in which the contract of title insurance is issued,
there shall be a reduction in the sum so reserved in the amount
of one-twentieth of such sum. On any contract of title
insurance issued prior to January 1, 1964, by a domestic real
estate title insurance company, a reserve shall be set up on
January 1, 1964, and thereafter maintained in such sum as would
have been required if the foregoing requirements with respect to
title insurance reserves had existed at and after the date of
the contract of title insurance. Such sums herein required to
be reserved shall at all times and for all purposes be
considered and constitute unearned portions of the original
premiums on such contracts of title insurance, shall be charged
as a reserve liability of the real estate title insurance
company in determining its financial condition, and, for the
purpose of applying the provisions of section 60A.23,
subdivision 4, shall be deemed to constitute the whole amount of
the premiums on the unexpired risks of such real estate title
insurance company.
Sec. 14. [68A.03] [RESERVES.]
Subdivision 1. [REQUIREMENTS.] After January 1, 2001, the
financial condition of an insurer doing business under chapter
68A must be determined by applying the general provisions of the
insurance code requiring the establishment of reserves
sufficient to cover all known and unknown liabilities including
allocated and unallocated loss adjustment expense, except that a
title insurer shall also establish and maintain the reserves
required by this section.
Subd. 2. [CLAIM RESERVES.] A title insurer shall establish
and maintain a known claim reserve in an amount estimated to be
sufficient to cover all unpaid losses, claims, and allocated
loss adjustment expenses arising under title insurance policies,
guaranteed certificates of title, guaranteed searches, and
guaranteed abstracts of title and all unpaid losses, claims, and
allocated loss adjustment expenses for which the title insurer
may be liable, and for which the insurer has received notice by
or on behalf of the insured, holder of a guarantee, or escrow or
security depositor.
Subd. 3. [PREMIUM RESERVE.] (a) A title insurer shall
establish and maintain a statutory premium reserve consisting of:
(1) the amount of statutory premium reserve required by the
laws of the domiciliary state of the insurer if the insurer is a
foreign or non-U.S. title insurer; or
(2) if the insurer is a domestic title insurer of this
state, a statutory or unearned premium reserve consisting of:
(i) the amount of the statutory or unearned premium or
reinsurance reserve legally held on January 1, 2001, which
balance must be released according to the law in effect at the
time the sums were added to the reserve; and
(ii) additions to the reserve after January 1, 2001, must
be made out of total charges for title insurance policies and
guarantees written, equal to the sum of the following items, as
set forth in the title insurer's most recent annual statement
filed with the commissioner:
(A) for each title insurance policy on a single risk
written or assumed after January 1, 2001, a minimum rate of
$0.36 per $1,000 of net retained liability for policies under
$500,000 and $0.16 per $1,000 of net retained liability for
policies of $500,000 or greater; and
(B) a minimum of eight percent of escrow, settlement, and
closing fees collected in contemplation of the issuance of title
insurance policies or guarantees.
(b) The aggregate of the amounts set aside in this reserve
in any calendar year pursuant to paragraph (a), clause (2), item
(ii), must be released from the reserve and restored to net
profits over a period of 20 years at an amortization rate not to
exceed the following formula: 35 percent of the aggregate sum on
July 1 of the year next succeeding the year of addition; 15
percent of the aggregate sum on July 1 of each of the succeeding
two years; ten percent of the aggregate sum on July 1 of the
next succeeding year; three percent of the aggregate sum on July
1 of each of the next three succeeding years; two percent of the
aggregate sum on July 1 of each of the next three succeeding
years; and one percent of the aggregate sum on July 1 of each of
the next succeeding ten years.
(c) The insurer shall calculate an adjusted statutory or
unearned premium reserve as of the year of first application of
paragraph (a), clause (2), item (ii). The adjusted reserve must
be calculated as if paragraph (a), clause (2), item (ii), had
been in effect for all years beginning 20 years before the year
of first application of paragraph (a), clause (2), item (ii).
For purposes of this calculation, the balance of the reserve as
of that date is considered to be zero. If the adjusted reserve
so calculated exceeds the aggregate amount set aside for
statutory or unearned premiums in the insurer's most recent
annual statement filed with the commissioner, the insurer shall,
out of total charges for policies of title insurance, increase
its statutory or unearned premium reserve by an amount equal to
one-sixth of that excess in each of the succeeding six years,
beginning with the calendar year that includes the year of first
application of paragraph (a), clause (2), item (ii), until the
entire excess has been added.
(d) The aggregate of the amounts set aside in this reserve
in any calendar year as adjustments to the insurer's statutory
or unearned premium reserve pursuant to paragraph (c) must be
released from the reserve and restored to net profits, or equity
if the additions required by paragraph (c) reduced equity
directly, over a period not exceeding ten years pursuant to the
following table:
Year of addition Release
Year 1* Equally over ten years
Year 2 Equally over nine years
Year 3 Equally over eight years
Year 4 Equally over seven years
Year 5 Equally over six years
Year 6 Equally over five years
* The calendar year following the year of first application
of paragraphs (a), clause (2), item (ii), (b), and (c).
(e) A supplemental reserve must be established consisting
of any other reserves necessary, when taken in combination with
the reserves required by sections 68A.02 and 68A.03, to cover
the company's liabilities with respect to all losses, claims,
and loss adjusted expenses.
(f) Each title insurer subject to the provisions of this
chapter shall file with its annual statement, required under
section 60A.13, subdivision 1, a certification by a member in
good standing of the American Academy of Actuaries. The
actuarial certification required of a title insurer must conform
to the National Association of Insurance Commissioners' annual
statement instructions for title insurers.
Sec. 15. Minnesota Statutes 1999 Supplement, section
80A.15, subdivision 2, is amended to read:
Subd. 2. The following transactions are exempted from
sections 80A.08 and 80A.16:
(a) Any sales, whether or not effected through a
broker-dealer, provided that:
(1) no person shall make more than ten sales of securities
of the same issuer pursuant to this exemption, exclusive of
sales according to clause (2), during any period of 12
consecutive months; provided further, that in the case of sales
by an issuer, except sales of securities registered under the
Securities Act of 1933 or exempted by section 3(b) of that act,
(i) the seller reasonably believes that all buyers are
purchasing for investment, and (ii) the securities are not
advertised for sale to the general public in newspapers or other
publications of general circulation or otherwise, or by radio,
television, electronic means or similar communications media, or
through a program of general solicitation by means of mail or
telephone; and
(2) no issuer shall make more than 25 sales of its
securities according to this exemption, exclusive of sales
pursuant to clause (1), during any period of 12 consecutive
months; provided further, that the issuer meets the conditions
in clause (1) and, in addition meets the following additional
conditions: (i) files with the commissioner, ten days before a
sale according to this clause, a statement of issuer on a form
prescribed by the commissioner; and (ii) no commission or other
remuneration is paid or given directly or indirectly for
soliciting any prospective buyers in this state in connection
with a sale according to this clause except reasonable and
customary commissions paid by the issuer to a broker-dealer
licensed under this chapter.
(b) Any nonissuer distribution of an outstanding security
if (1) either Moody's, Fitch's, or Standard & Poor's Securities
Manuals, or other recognized manuals approved by the
commissioner contains the names of the issuer's officers and
directors, a balance sheet of the issuer as of a date not more
than 18 months prior to the date of the sale, and a profit and
loss statement for the fiscal year preceding the date of the
balance sheet, and (2) the issuer or its predecessor has been in
active, continuous business operation for the five-year period
next preceding the date of sale, and (3) if the security has a
fixed maturity or fixed interest or dividend provision, the
issuer has not, within the three preceding fiscal years,
defaulted in payment of principal, interest, or dividends on the
securities.
(c) The execution of any orders by a licensed broker-dealer
for the purchase or sale of any security, pursuant to an
unsolicited offer to purchase or sell; provided that the
broker-dealer acts as agent for the purchaser or seller, and has
no direct material interest in the sale or distribution of the
security, receives no commission, profit, or other compensation
from any source other than the purchaser and seller and delivers
to the purchaser and seller written confirmation of the
transaction which clearly itemizes the commission, or other
compensation.
(d) Any nonissuer sale of notes or bonds secured by a
mortgage lien if the entire mortgage, together with all notes or
bonds secured thereby, is sold to a single purchaser at a single
sale.
(e) Any judicial sale, exchange, or issuance of securities
made pursuant to an order of a court of competent jurisdiction.
(f) The sale, by a pledge holder, of a security pledged in
good faith as collateral for a bona fide debt.
(g) Any offer or sale to a bank, savings institution, trust
company, insurance company, investment company as defined in the
Investment Company Act of 1940, or other financial institution
or institutional buyer, or to a broker-dealer, whether the
purchaser is acting for itself or in some fiduciary capacity.
(h) An offer or sale of securities by an issuer made in
reliance on the exemptions provided by Rule 505 or 506 of
Regulation D promulgated by the Securities and Exchange
Commission, Code of Federal Regulations, title 17, sections
230.501 to 230.508, subject to the conditions and definitions
provided by Rules 501 to 503 of Regulation D, if the offer and
sale also satisfies the conditions and limitations in clauses
(1) to (10).
(1) The exemption under this paragraph is not available for
the securities of an issuer if any of the persons described in
Rule 252(c) to (f) of Regulation A promulgated by the Securities
and Exchange Commission, Code of Federal Regulations, title 17,
sections 230.251 to 230.263:
(i) has filed a registration statement that is the subject
of a currently effective order entered against the issuer, its
officers, directors, general partners, controlling persons, or
affiliates, according to any state's law within five years
before the filing of the notice required under clause (5),
denying effectiveness to, or suspending or revoking the
effectiveness of, the registration statement;
(ii) has been convicted, within five years before the
filing of the notice required under clause (5), of a felony or
misdemeanor in connection with the offer, sale, or purchase of a
security or franchise, or a felony involving fraud or deceit,
including but not limited to forgery, embezzlement, obtaining
money under false pretenses, larceny, or conspiracy to defraud;
(iii) is subject to an effective administrative order or
judgment entered by a state securities administrator within five
years before the filing of the notice required under clause (5),
that prohibits, denies, or revokes the use of an exemption from
securities registration, that prohibits the transaction of
business by the person as a broker-dealer or agent, or that is
based on fraud, deceit, an untrue statement of a material fact,
or an omission to state a material fact; or
(iv) is subject to an order, judgment, or decree of a court
entered within five years before the filing of the notice
required under clause (5), temporarily, preliminarily, or
permanently restraining or enjoining the person from engaging in
or continuing any conduct or practice in connection with the
offer, sale, or purchase of a security, or the making of a false
filing with a state.
A disqualification under paragraph (h) involving a
broker-dealer or agent is waived if the broker-dealer or agent
is or continues to be licensed in the state in which the
administrative order or judgment was entered against the person
or if the broker-dealer or agent is or continues to be licensed
in this state as a broker-dealer or agent after notifying the
commissioner of the act or event causing disqualification.
The commissioner may waive a disqualification under
paragraph (h) upon a showing of good cause that it is not
necessary under the circumstances that use of the exemption be
denied.
A disqualification under paragraph (h) may be waived if the
state securities administrator or agency of the state that
created the basis for disqualification has determined, upon a
showing of good cause, that it is not necessary under the
circumstances that an exemption from registration of securities
under the state's laws be denied.
It is a defense to a violation of paragraph (h) based upon
a disqualification if the issuer sustains the burden of proof to
establish that the issuer did not know, and in the exercise of
reasonable care could not have known, that a disqualification
under paragraph (h) existed.
(2) This exemption must not be available to an issuer with
respect to a transaction that, although in technical compliance
with this exemption, is part of a plan or scheme to evade
registration or the conditions or limitations explicitly stated
in paragraph (h).
(3) No commission, finder's fee, or other remuneration
shall be paid or given, directly or indirectly, for soliciting a
prospective purchaser, unless the recipient is appropriately
licensed, or exempt from licensure, in this state as a
broker-dealer.
(4) Nothing in this exemption is intended to or should be
in any way construed as relieving issuers or persons acting on
behalf of issuers from providing disclosure to prospective
investors adequate to satisfy the antifraud provisions of the
securities law of Minnesota.
(5) The issuer shall file with the commissioner a notice on
form D as adopted by the Securities and Exchange Commission
according to Regulation D, Code of Federal Regulations, title
17, section 230.502. The notice must be filed not later than 15
days after the first sale in this state of securities in an
offering under this exemption. Every notice on form D must be
manually signed by a person duly authorized by the issuer and
must be accompanied by a consent to service of process on a form
prescribed by the commissioner.
(6) A failure to comply with a term, condition, or
requirement of paragraph (h) will not result in loss of the
exemption for an offer or sale to a particular individual or
entity if the person relying on the exemption shows that: (i)
the failure to comply did not pertain to a term, condition, or
requirement directly intended to protect that particular
individual or entity, and the failure to comply was
insignificant with respect to the offering as a whole; and (ii)
a good faith and reasonable attempt was made to comply with all
applicable terms, conditions, and requirements of paragraph (h),
except that, where an exemption is established only through
reliance upon this provision, the failure to comply shall
nonetheless constitute a violation of section 80A.08 and be
actionable by the commissioner.
(7) The issuer, upon request by the commissioner, shall,
within ten days of the request, furnish to the commissioner a
copy of any and all information, documents, or materials
furnished to investors or offerees in connection with the offer
and sale according to paragraph (h).
(8) Neither compliance nor attempted compliance with the
exemption provided by paragraph (h), nor the absence of an
objection or order by the commissioner with respect to an offer
or sale of securities undertaken according to this exemption,
shall be considered to be a waiver of a condition of the
exemption or considered to be a confirmation by the commissioner
of the availability of this exemption.
(9) The commissioner may, by rule or order, increase the
number of purchasers or waive any other condition of this
exemption.
(10) The determination whether offers and sales made in
reliance on the exemption set forth in paragraph (h) shall be
integrated with offers and sales according to other paragraphs
of this subdivision shall be made according to the integration
standard set forth in Rule 502 of Regulation D promulgated by
the Securities and Exchange Commission, Code of Federal
Regulations, title 17, section 230.502. If not subject to
integration according to that rule, offers and sales according
to paragraph (h) shall not otherwise be integrated with offers
and sales according to other exemptions set forth in this
subdivision.
(i) Any offer (but not a sale) of a security for which a
registration statement has been filed under sections 80A.01 to
80A.31, if no stop order or refusal order is in effect and no
public proceeding or examination looking toward an order is
pending; and any offer of a security if the sale of the security
is or would be exempt under this section. The commissioner may
by rule exempt offers (but not sales) of securities for which a
registration statement has been filed as the commissioner deems
appropriate, consistent with the purposes of sections 80A.01 to
80A.31.
(j) The offer and sale by a cooperative organized under
chapter 308A or under the laws of another state, of its
securities when the securities are offered and sold only to its
members, or when the purchase of the securities is necessary or
incidental to establishing membership in the cooperative, or
when such securities are issued as patronage dividends. This
paragraph applies to a cooperative organized under the laws of
another state only if the cooperative has filed with the
commissioner a consent to service of process under section
80A.27, subdivision 7, and has, not less than ten days prior to
the issuance or delivery, furnished the commissioner with a
written general description of the transaction and any other
information that the commissioner requires by rule or otherwise.
This exemption only applies when the issuing cooperative is
seeking to raise up to $1,000,000.
(l) The issuance and delivery of any securities of one
corporation to another corporation or its security holders in
connection with a merger, exchange of shares, or transfer of
assets whereby the approval of stockholders of the other
corporation is required to be obtained, provided, that the
commissioner has been furnished with a general description of
the transaction and with other information as the commissioner
by rule prescribes not less than ten days prior to the issuance
and delivery.
(m) Any transaction between the issuer or other person on
whose behalf the offering is made and an underwriter or among
underwriters.
(n) The distribution by a corporation of its or other
securities to its own security holders as a stock dividend or as
a dividend from earnings or surplus or as a liquidating
distribution; or upon conversion of an outstanding convertible
security; or pursuant to a stock split or reverse stock split.
(o) Any offer or sale of securities by an affiliate of the
issuer thereof if: (1) a registration statement is in effect
with respect to securities of the same class of the issuer and
(2) the offer or sale has been exempted from registration by
rule or order of the commissioner.
(p) Any transaction pursuant to an offer to existing
security holders of the issuer, including persons who at the
time of the transaction are holders of convertible securities,
nontransferable warrants, or transferable warrants exercisable
within not more than 90 days of their issuance, if: (1) no
commission or other remuneration (other than a standby
commission) is paid or given directly or indirectly for
soliciting any security holder in this state; and (2) the
commissioner has been furnished with a general description of
the transaction and with other information as the commissioner
may by rule prescribe no less than ten days prior to the
transaction.
(q) Any nonissuer sales of any security, including a
revenue obligation, issued by the state of Minnesota or any of
its political or governmental subdivisions, municipalities,
governmental agencies, or instrumentalities.
(r) Any transaction as to which the commissioner by rule or
order finds that registration is not necessary in the public
interest and for the protection of investors.
(s) An offer or sale of a security issued in connection
with an employee's stock purchase, savings, option, profit
sharing, pension, or similar employee benefit plan, if the
following conditions are met:
(1) the issuer, its parent corporation or any of its
majority-owned subsidiaries offers or sells the security
according to a written benefit plan or written contract relating
to the compensation of the purchaser; and
(2) the class of securities offered according to the plan
or contract, or if an option or right to purchase a security,
the class of securities to be issued upon the exercise of the
option or right, is registered under section 12 of the
Securities Exchange Act of 1934, or is a class of securities
with respect to which the issuer files reports according to
section 15(d) of the Securities Exchange Act of 1934; or
(3) the issuer fully complies with the provisions of Rule
701 as adopted by the Securities and Exchange Commission, Code
of Federal Regulations, title 12, section 230.701.
The issuer shall file not less than ten days before the
transaction, a general description of the transaction and any
other information that the commissioner requires by rule or
otherwise or, if applicable, a Securities and Exchange Form S-8.
Annually, within 90 days after the end of the issuer's fiscal
year, the issuer shall file a notice as provided with the
commissioner.
(t) Any sale of a security of an issuer that is a pooled
income fund, a charitable remainder trust, or a charitable lead
trust that has a qualified charity as the only charitable
beneficiary.
(u) Any sale by a qualified charity of a security that is a
charitable gift annuity if the issuer has a net worth, otherwise
defined as unrestricted fund balance, of not less than $300,000
and either: (1) has been in continuous operation for not less
than three years; or (2) is a successor or affiliate of a
qualified charity that has been in continuous operation for not
less than three years.
Sec. 16. [REPEALER.]
Minnesota Statutes 1998, sections 60A.12, subdivisions 1,
3, 4, 7, 8, and 9; 60A.125, subdivision 3; and 60A.128, are
repealed.
Sec. 17. [EFFECTIVE DATE.]
Section 15 is effective retroactively from July 1, 1999.
Presented to the governor April 6, 2000
Signed by the governor April 10, 2000, 2:47 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes