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

                            CHAPTER 117-S.F.No. 1826 
                  An act relating to insurance; providing qualifications 
                  and procedures for the licensing of insurance 
                  producers; prescribing a criminal penalty; making 
                  conforming changes; amending Minnesota Statutes 2000, 
                  sections 13.7191, subdivision 6; 43A.317, subdivision 
                  12; 60A.02, subdivision 7; 60A.14; 60A.171, 
                  subdivision 1; 60A.198, subdivision 3; 62A.41, 
                  subdivision 4; 62C.17, subdivision 5; 62D.22, 
                  subdivision 8; 62H.10, subdivision 4; 62L.12, 
                  subdivision 3; 62S.30; 64B.33; 65B.09, subdivision 1; 
                  72A.07; 72A.125, subdivision 2; 72A.201, subdivision 
                  3; 270B.07, subdivision 1; proposing coding for new 
                  law in Minnesota Statutes, chapter 60K; repealing 
                  Minnesota Statutes 2000, sections 60K.01; 60K.02; 
                  60K.03; 60K.04; 60K.05; 60K.06; 60K.07; 60K.081; 
                  60K.09; 60K.10; 60K.11; 60K.12; 60K.13; 60K.14; 
                  60K.15; 60K.16; 60K.17; 60K.18; 60K.19; 60K.20. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                              INSURANCE PRODUCERS 
           Section 1.  [60K.30] [PURPOSE AND SCOPE.] 
           (a) Sections 60K.30 to 60K.56 govern the qualifications and 
        procedures for the licensing of insurance producers.  
           (b) Except as to the underlying requirement that a surplus 
        lines agent or broker obtain an insurance producer license, this 
        chapter does not apply to surplus lines agents or brokers 
        licensed under sections 60A.195 to 60A.209, except as provided 
        in sections 60K.39 and 60K.53, subdivision 2. 
           Sec. 2.  [60K.31] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For purposes of sections 60K.31 to 
        60K.57, the terms in subdivisions 2 to 18 have the meanings 
        given them.  The definitions in section 60A.02 are applicable to 
        terms not defined in this section, unless the language or 
        context clearly indicates that a different meaning is intended.  
           Subd. 2.  [BUSINESS ENTITY.] "Business entity" means a 
        corporation, association, partnership, limited liability 
        company, limited liability partnership, or other legal entity. 
           Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of commerce. 
           Subd. 4.  [HOME STATE.] "Home state" means the District of 
        Columbia and any state or territory of the United States in 
        which an insurance producer maintains the producer's principal 
        place of residence or principal place of business and is 
        licensed to act as an insurance producer. 
           Subd. 5.  [INSURANCE.] "Insurance" means any of the lines 
        of authority in section 60A.06. 
           Subd. 6.  [INSURANCE PRODUCER.] "Insurance producer" means 
        a person required to be licensed under the laws of this state to 
        sell, solicit, or negotiate insurance. 
           Subd. 7.  [LICENSE.] "License" means a document issued by 
        the commissioner authorizing a person to act as an insurance 
        producer for the lines of authority specified in the document.  
        The license itself does not create any authority, actual, 
        apparent, or inherent, in the holder to represent or commit an 
        insurance carrier.  
           Subd. 8.  [LIMITED LINE CREDIT INSURANCE.] "Limited line 
        credit insurance" includes credit life, credit disability, 
        credit property, credit unemployment, involuntary unemployment, 
        mortgage life, mortgage guaranty, mortgage disability, 
        guaranteed automobile protection insurance, and any other form 
        of insurance offered in connection with an extension of credit 
        that is limited to partially or wholly extinguishing that credit 
        obligation that the commissioner determines should be designated 
        a form of limited line credit insurance. 
           Subd. 9.  [LIMITED LINE CREDIT INSURANCE 
        PRODUCER.] "Limited line credit insurance producer" means a 
        person who sells, solicits, or negotiates one or more forms of 
        limited line credit insurance coverage to individuals through a 
        master, corporate, group, or individual policy. 
           Subd. 10.  [LIMITED LINES INSURANCE.] "Limited lines 
        insurance" means those lines of insurance defined in section 
        60K.38, subdivision 1, paragraph (c), or any other line of 
        insurance that the commissioner considers necessary to recognize 
        for the purposes of complying with section 60K.39, subdivision 5.
           Subd. 11.  [LIMITED LINES PRODUCER.] "Limited lines 
        producer" means a person authorized by the commissioner to sell, 
        solicit, or negotiate limited lines insurance. 
           Subd. 12.  [NEGOTIATE.] "Negotiate" means the act of 
        conferring directly with or offering advice directly to a 
        purchaser or prospective purchaser of a particular contract of 
        insurance concerning any of the substantive benefits, terms, or 
        conditions of the contract if the person engaged in that act 
        either sells insurance or obtains insurance from insurers for 
        purchasers. 
           Subd. 13.  [PERSON.] "Person" means an individual or a 
        business entity. 
           Subd. 14.  [SELL.] "Sell" means to exchange a contract of 
        insurance by any means, for money or its equivalent, on behalf 
        of an insurance company. 
           Subd. 15.  [SOLICIT.] "Solicit" means attempting to sell 
        insurance or asking or urging a person to apply for a particular 
        kind of insurance from a particular company. 
           Subd. 16.  [TERMINATE.] "Terminate" means the cancellation 
        of the relationship between an insurance producer and the 
        insurer or the termination of a producer's authority to transact 
        insurance. 
           Subd. 17.  [UNIFORM BUSINESS ENTITY APPLICATION.] "Uniform 
        Business Entity Application" means the current version of the 
        Uniform Business Entity Application for resident and nonresident 
        business entities of the National Association of Insurance 
        Commissioners. 
           Subd. 18.  [UNIFORM APPLICATION.] "Uniform Application" 
        means the current version of the Uniform Application for 
        resident and nonresident producer licensing of the National 
        Association of Insurance Commissioners. 
           Sec. 3.  [60K.32] [LICENSE REQUIRED.] 
           A person shall not sell, solicit, or negotiate insurance in 
        this state for any class or classes of insurance unless the 
        person is licensed for that line of authority under sections 
        60K.31 to 60K.57.  The license itself does not create any 
        authority, actual, apparent, or inherent, in the holder to 
        represent or commit an insurance carrier. 
           Sec. 4.  [60K.33] [CRIMINAL PENALTY.] 
           A person who acts or assumes to act as an insurance 
        producer without a license issued under this chapter is guilty 
        of a gross misdemeanor. 
           Sec. 5.  [60K.34] [EXCEPTIONS TO LICENSING.] 
           Subdivision 1.  [LICENSE NOT REQUIRED.] Nothing in sections 
        60K.31 to 60K.57 requires an insurer to obtain an insurance 
        producer license.  In this section, the term "insurer" does not 
        include an insurer's officers, directors, employees, 
        subsidiaries, or affiliates.  
           Subd. 2.  [SPECIFIC EXCEPTIONS.] A license as an insurance 
        producer is not required of the following:  
           (1) a fraternal benefit society representative exempted 
        pursuant to section 60K.35; 
           (2) an officer, director, or employee of an insurer or of 
        an insurance producer if the officer, director, or employee does 
        not receive any commission on policies written or sold to insure 
        risks residing, located, or to be performed in this state and: 
           (i) the officer, director, or employee's activities are 
        executive, administrative, managerial, clerical, or a 
        combination of these, and are only indirectly related to the 
        sale, solicitation, or negotiation of insurance; 
           (ii) the officer, director, or employee's function relates 
        to underwriting, loss control, inspection, or the processing, 
        adjusting, investigating, or settling of a claim on a contract 
        of insurance; or 
           (iii) the officer, director, or employee is acting in the 
        capacity of a special agent or agency supervisor assisting 
        insurance producers where the person's activities are limited to 
        providing technical advice and assistance to licensed insurance 
        producers and do not include the sale, solicitation, or 
        negotiation of insurance; 
           (3) a person who secures and furnishes information for the 
        purpose of group life insurance, group property and casualty 
        insurance, group annuities, group or blanket accident and health 
        insurance; or for the purpose of enrolling individuals under 
        plans; issuing certificates under plans or otherwise assisting 
        in administering plans; or performs administrative services 
        related to mass marketed property and casualty insurance; where 
        no commission is paid to the person for the service; 
           (4) an employer or association or its officers, directors, 
        employees, or the trustees of an employee trust plan, to the 
        extent that the employers, officers, employees, director, or 
        trustees are engaged in the administration or operation of a 
        program of employee benefits for the employer's or association's 
        own employees or the employees of its subsidiaries or 
        affiliates, which program involves the use of insurance issued 
        by an insurer, as long as the employers, associations, officers, 
        directors, employees, or trustees are not in any manner 
        compensated, directly or indirectly, by the company issuing the 
        contracts; 
           (5) employees of insurers or organizations employed by 
        insurers who are engaging in the inspection, rating or 
        classification of risks, or in the supervision of the training 
        of insurance producers and who are not individually engaged in 
        the sale, solicitation, or negotiation of insurance; 
           (6) a person whose activities in this state are limited to 
        advertising without the intent to solicit insurance in this 
        state through communications in printed publications or other 
        forms of electronic mass media whose distribution is not limited 
        to residents of the state, if the person does not sell, solicit, 
        or negotiate insurance that would insure risks residing, 
        located, or to be performed in this state; 
           (7) a person who is not a resident of this state who sells, 
        solicits, or negotiates a contract of insurance for commercial 
        property and casualty risks to an insured with risks located in 
        more than one state insured under that contract, if the person 
        is otherwise licensed as an insurance producer to sell, solicit, 
        or negotiate that insurance in the state where the insured 
        maintains its principal place of business and the contract of 
        insurance insures risks located in that state; 
           (8) a salaried full-time employee who counsels or advises 
        the employee's employer relative to the insurance interests of 
        the employer or of the subsidiaries or business affiliates of 
        the employer if the employee does not sell or solicit insurance 
        or receive a commission; or 
           (9) rental vehicle companies and their employees in 
        connection with the offer of rental vehicle personal accident 
        insurance under section 72A.125. 
           Sec. 6.  [60K.35] [FRATERNAL BENEFIT SOCIETY 
        REPRESENTATIVES.] 
           Representatives of fraternal benefit societies who solicit 
        and negotiate insurance contracts are considered to be insurance 
        producers and are subject to the licensing requirements of this 
        chapter, provided that no insurance producer's license is 
        required of: 
           (1) any officer, employee, or secretary of a fraternal 
        benefit society or of any subordinate lodge or branch who 
        devotes substantially all of that person's time to activities 
        other than the solicitation or negotiation of insurance 
        contracts and who receives no commission or other compensation 
        directly dependent upon the number or amount of contracts 
        solicited or negotiated; or 
           (2) any agent or representative of a fraternal benefit 
        society who devotes, or intends to devote, less than 50 percent 
        of that person's time to the solicitation and procurement of 
        insurance contracts for that society.  Any person who in the 
        preceding calendar year has solicited and procured life 
        insurance in excess of $50,000 face amount, or, in the case of 
        any other kinds of insurance that the society may write, on the 
        persons of more than 25 individuals, and who has received or 
        will receive a commission or other compensation in the total 
        amount of $1,000 or more, is presumed to be devoting, or 
        intending to devote, 50 percent of that person's time to the 
        solicitation or procurement of insurance contracts for that 
        society.  
           Sec. 7.  [60K.36] [EXAMINATIONS.] 
           Subdivision 1.  [REQUIREMENT.] A resident individual 
        applying for an insurance producer license shall pass a written 
        examination unless exempt under subdivision 2 or section 
        60K.40.  The examination must test the knowledge of the 
        individual concerning the lines of authority for which the 
        application is made, the duties and responsibilities of an 
        insurance producer, and the insurance laws and rules of this 
        state.  Examinations required by this section must be approved 
        by the commissioner. 
           Subd. 2.  [EXAMINATION NOT REQUIRED.] A resident individual 
        applying for a limited lines credit insurance, title insurance, 
        travel baggage insurance, or bail bonds license is not required 
        to take a written examination. 
           Subd. 3.  [ADMINISTRATION.] The commissioner may make 
        arrangements, including contracting with an outside testing 
        service, for administering examinations. 
           Subd. 4.  [COURSE OF STUDY.] The examination must be given 
        only after the applicant has completed a program of classroom 
        studies in a school, which must not include a school sponsored 
        by, offered by, or affiliated with an insurance company or its 
        producers; except that this limitation does not preclude a bona 
        fide professional association of insurance producers, not acting 
        on behalf of an insurer, from offering courses.  The course of 
        study must consist of 30 hours of classroom study devoted to the 
        basic fundamentals of insurance for those seeking a Minnesota 
        license for the first time and 7.5 hours devoted to the line in 
        which the producer seeks to be licensed.  The program of studies 
        or study course must have been approved by the commissioner in 
        order to qualify under this subdivision.  If the applicant has 
        been previously licensed for the particular line of insurance in 
        the state of Minnesota, the requirement of a program of studies 
        or a study course must be waived.  A certification of compliance 
        by the organization offering the course must accompany the 
        applicant's license application.  This program of studies in a 
        school or a study course does not apply to limited lines farm 
        property liability applicants or to variable life and variable 
        annuity applicants. 
           Subd. 5.  [FAILURE TO APPEAR OR PASS.] An individual who 
        fails to appear for the examination as scheduled or fails to 
        pass the examination shall reapply for an examination and remit 
        all required fees and forms before being rescheduled for another 
        examination. 
           Subd. 6.  [RESULTS; VALIDITY.] Examination results are 
        valid for three years from the date of the examination. 
           Sec. 8.  [60K.37] [APPLICATION FOR LICENSE.] 
           Subdivision 1.  [RESIDENT INSURANCE PRODUCER.] A person is 
        a resident of this state if that person resides in this state or 
        the principal place of business of that person is maintained in 
        this state.  Application for a license claiming residency in 
        this state constitutes an election of residency in this state.  
        A license issued upon an application claiming residency in this 
        state is void if the licensee, while holding a resident license 
        in this state, obtains a resident license in, or claims to be a 
        resident of, any other state or jurisdiction or if the licensee 
        ceases to be a resident of this state.  However, if the 
        applicant is a resident of a community or trade area, the border 
        of which is contiguous with the state line of this state, the 
        applicant may qualify for a resident license in this state and 
        at the same time hold a resident license from the contiguous 
        state.  
           Subd. 2.  [INDIVIDUALS.] A person applying for a resident 
        insurance producer license shall make application to the 
        commissioner on the Uniform Application and declare under 
        penalty of refusal, suspension, or revocation of the license 
        that the statements made in the application are true, correct, 
        and complete to the best of the individual's knowledge and 
        belief.  Before approving the application, the commissioner 
        shall find that the individual: 
           (1) is at least 18 years of age; 
           (2) has not committed any act that is a ground for denial, 
        suspension, or revocation set forth in section 60K.43; 
           (3) has completed, where required by the commissioner, a 
        prelicensing course of study for the lines of authority for 
        which the person has applied; 
           (4) has paid the fees set forth in section 60K.55; and 
           (5) has successfully passed the examinations for the lines 
        of authority for which the person has applied. 
           Subd. 3.  [BUSINESSES.] (a) A business entity acting as an 
        insurance producer is required to obtain an insurance producer 
        license.  Application must be made using the Uniform Business 
        Entity Application.  Before approving the application, the 
        commissioner shall find that: 
           (1) the business entity has paid the fees set forth in 
        section 60K.55; and 
           (2) the business entity has designated an individual 
        licensed producer responsible for the business entity's 
        compliance with the insurance laws and rules of this state. 
           (b) A business entity insurance producer license does not 
        grant authority to any individual officer, director, partner, 
        member, or employee to act as an insurance producer. 
           Subd. 4.  [SERVICE OF PROCESS.] Application for a license 
        under this chapter constitutes appointment of the commissioner 
        as the person's agent for service of process under section 
        45.028. 
           Subd. 5.  [ADDITIONAL DOCUMENTATION.] The commissioner may 
        require any documents reasonably necessary to verify the 
        information contained in an application. 
           Subd. 6.  [LIMITED LINE CREDIT INSURANCE INSTRUCTION.] An 
        insurer that sells, solicits, or negotiates any form of limited 
        line credit insurance shall provide to each individual whose 
        duties will include selling, soliciting, or negotiating limited 
        line credit insurance a program of instruction that may be 
        approved by the commissioner. 
           Subd. 7.  [VARIABLE LIFE AND VARIABLE ANNUITY.] A resident 
        individual applying for a variable life and variable annuity 
        license shall demonstrate that the applicant holds a current 
        license as a life insurance producer. 
           Sec. 9.  [60K.38] [LICENSE.] 
           Subdivision 1.  [ISSUANCE.] (a) Unless denied a license 
        under section 60K.43, a person who has met the requirements of 
        sections 60K.36 and 60K.37 must be issued an insurance producer 
        license.  An insurance producer may receive qualification for a 
        license in one or more of the lines of authority in paragraphs 
        (b) and (c). 
           (b) An individual insurance producer may receive 
        qualification for a license in one or more of the following 
        major lines: 
           (1) life insurance:  coverage on human lives including 
        benefits of endowment and annuities, and may include benefits in 
        the event of death or dismemberment by accident and benefits for 
        disability income; 
           (2) accident and health or sickness insurance:  coverage 
        for sickness, bodily injury, or accidental death, and may 
        include benefits for disability income; 
           (3) property insurance:  coverage for the direct or 
        consequential loss or damage to property of every kind; 
           (4) casualty insurance:  coverage against legal liability, 
        including that for death, injury, or disability, or damage to 
        real or personal property; 
           (5) variable life and variable annuity products insurance:  
        coverage provided under variable life insurance contracts and 
        variable annuities; and 
           (6) personal lines:  property and casualty insurance 
        coverage sold to individuals and families for primarily 
        noncommercial purposes. 
           (c) An individual insurance producer may receive 
        qualification for a license in one or more of the following 
        limited lines: 
           (1) limited line credit insurance; 
           (2) farm property and liability insurance; 
           (3) title insurance; 
           (4) travel baggage insurance; 
           (5) bail bonds; and 
           (6) any other line of insurance permitted under state laws 
        or rules. 
           Subd. 2.  [PERIOD OF EFFECTIVENESS.] An insurance producer 
        license remains in effect unless revoked or suspended as long as 
        the fee set forth in section 60K.55 is paid, continuing 
        education requirements for resident individual producers are 
        met, and all additional documentation required by the 
        commissioner is provided by the renewal date. 
           Subd. 3.  [LAPSED LICENSE.] An individual insurance 
        producer who allows the license to lapse may, within 12 months 
        from the due date of the renewal fee, reinstate the license 
        without the necessity of passing a written examination.  
        However, a penalty in the amount of twice the unpaid renewal fee 
        must be paid by the individual for any renewal fee received 
        after the due date. 
           Subd. 4.  [WAIVERS.] A licensed insurance producer who is 
        unable to comply with license renewal procedures due to military 
        service or some other extenuating circumstance, such as a 
        long-term medical disability, may request a waiver of those 
        procedures.  The producer may also request a waiver of any 
        examination requirement or any other fine or sanction imposed 
        for failure to comply with renewal procedures. 
           Subd. 5.  [CONTENTS.] The license must contain the 
        licensee's name, address, producer license number, and the date 
        of issuance, the lines of authority, the expiration date, and 
        any other information the commissioner considers necessary. 
           Subd. 6.  [NAME OR ADDRESS CHANGES.] Licensees shall inform 
        the commissioner, by any means acceptable to the commissioner, 
        of a change of name or address within ten days of the change.  
           Subd. 7.  [ADMINISTRATIVE ASSISTANCE TO THE 
        COMMISSIONER.] In order to assist in the performance of the 
        commissioner's duties, the commissioner may contract with 
        nongovernmental entities, including the National Association of 
        Insurance Commissioners (NAIC) or any affiliates or subsidiaries 
        that the NAIC oversees, to perform any ministerial functions, 
        including the collection of fees, related to producer licensing 
        that the commissioner and the nongovernmental entity consider 
        appropriate. 
           Sec. 10.  [60K.39] [NONRESIDENT LICENSING.] 
           Subdivision 1.  [ISSUANCE.] Unless denied a license under 
        section 62K.41, a nonresident person shall receive a nonresident 
        producer license if: 
           (1) the person is currently licensed as a resident and in 
        good standing in the person's home state; 
           (2) the person has submitted the proper request for 
        licensure and has paid the fees required by section 60K.55; 
           (3) the person has submitted or transmitted to the 
        commissioner the application for licensure that the person 
        submitted to the person's home state, or in lieu of the same, a 
        completed Uniform Application; and 
           (4) the person's home state awards nonresident producer 
        licenses to residents of this state on the same basis. 
           Subd. 2.  [VERIFICATION OF LICENSING STATUS.] The 
        commissioner may verify the producer's licensing status through 
        the producer database maintained by the National Association of 
        Insurance Commissioners, its affiliates, or subsidiaries. 
           Subd. 3.  [CHANGE OF ADDRESS.] A nonresident producer who 
        moves from one state to another state or a resident producer who 
        moves from this state to another state shall file a change of 
        address and provide certification from the new resident state 
        within ten days of the change of legal residence.  No fee or 
        license application is required. 
           Subd. 4.  [TERMINATION; RESIDENT LICENSE.] A nonresident 
        producer license terminates automatically when the person's 
        resident license is terminated for any reason. 
           Subd. 5.  [SURPLUS LINES PRODUCERS.] (a) Notwithstanding 
        any other provision of sections 60K.31 to 60K.57, a person 
        licensed as a surplus lines producer in the person's home state 
        shall receive a nonresident surplus lines producer license under 
        subdivision 1.  Except as to subdivision 1, nothing in this 
        section otherwise amends or supersedes any provision of sections 
        60A.195 to 60A.209. 
           (b) No surplus lines agent or broker licensed under 
        sections 60A.195 to 60A.209 may do business in this state unless 
        the agent or broker has complied with the requirements set forth 
        in section 60A.198, subdivision 3, paragraphs (b) to (d). 
           Subd. 6.  [LIMITED LINES PRODUCER.] Notwithstanding any 
        other provision of sections 60K.31 to 60K.57, a person licensed 
        as a limited line credit insurance or other type of limited 
        lines producer in the person's home state shall receive a 
        nonresident limited lines producer license, under subdivision 1, 
        granting the same scope of authority as granted under the 
        license issued by the producer's home state.  For the purposes 
        of this subdivision, limited line insurance is any authority 
        granted by the home state that restricts the authority of the 
        license to less than the total authority prescribed in the 
        associated major lines pursuant to section 60K.38, subdivision 
        1, clauses (1) to (6). 
           Sec. 11.  [60K.40] [INDIVIDUALS LICENSED IN ANOTHER STATE; 
        EXEMPTION FROM EXAMINATION.] 
           Subdivision 1.  [AVAILABILITY.] An individual who applies 
        for an insurance producer license in this state who was 
        previously licensed for the same lines of authority in another 
        state is not required to complete any prelicensing education or 
        examination.  This exemption is only available if the person is 
        currently licensed in that state or if the application is 
        received within 90 days of the cancellation of the applicant's 
        previous license and if the prior state issues a certification 
        that, at the time of cancellation, the applicant was in good 
        standing in that state or the state's Producer Database records, 
        maintained by the National Association of Insurance 
        Commissioners, its affiliates or subsidiaries, indicate that the 
        producer is or was licensed in good standing for the line of 
        authority requested. 
           Subd. 2.  [REQUIRED APPLICATION.] If a person licensed as 
        an insurance producer in another state who moves to this state 
        makes application within 90 days of establishing legal residence 
        to become a resident licensee under section 60K.37, no 
        prelicensing education or examination is required of that person 
        to obtain any line of authority previously held in the prior 
        state. 
           Sec. 12.  [60K.41] [ASSUMED NAMES.] 
           An insurance producer doing business under any name other 
        than the producer's legal name shall provide the commissioner 
        with documentation that the assumed name has been properly filed 
        with the secretary of state before using the assumed name. 
           Sec. 13.  [60K.42] [TEMPORARY LICENSING.] 
           Subdivision 1.  [COMMISSIONER'S AUTHORITY TO GRANT.] The 
        commissioner may issue a temporary insurance producer license 
        for a period not to exceed 180 days without requiring an 
        examination if the commissioner considers the temporary license 
        necessary for the servicing of an insurance business in the 
        following cases: 
           (1) to the surviving spouse or court-appointed personal 
        representative of a licensed insurance producer who dies or 
        becomes mentally or physically disabled to allow adequate time 
        for the sale of the insurance business owned by the producer or 
        for the recovery or return of the producer to the business or to 
        provide for the training and licensing of new personnel to 
        operate the producer's business; 
           (2) to a member or employee of a business entity licensed 
        as an insurance producer, upon the death or disability of an 
        individual designated in the business entity application or the 
        license; 
           (3) to the designee of a licensed insurance producer 
        entering active service in the armed forces of the United States 
        of America; or 
           (4) in any other circumstance where the commissioner 
        considers that the public interest will best be served by the 
        issuance of this license. 
           Subd. 2.  [LIMITATIONS.] The commissioner may by order 
        limit the authority of any temporary licensee in any way 
        considered necessary to protect insureds and the public.  The 
        commissioner may require the temporary licensee to have a 
        suitable sponsor who is a licensed producer or insurer and who 
        assumes responsibility for all acts of the temporary licensee 
        and may impose other similar requirements designed to protect 
        insureds and the public.  The commissioner may by order revoke a 
        temporary license if the interests of insureds or the public are 
        endangered.  A temporary license may not continue after the 
        owner or the personal representative disposes of the business. 
           Sec. 14.  [60K.43] [LICENSE DENIAL, NONRENEWAL, OR 
        REVOCATION.] 
           Subdivision 1.  [CAUSES.] The commissioner may, by order, 
        restrict, censure, suspend, revoke, or refuse to issue or renew 
        an insurance producer's license or may levy a civil penalty 
        under section 45.027 or any combination of actions, for any one 
        or more of the following causes: 
           (1) providing incorrect, misleading, incomplete, or 
        materially untrue information in the licensing application 
           (2) violating any insurance laws, including chapter 45 or 
        chapters 60A to 72A, or violating any regulation, subpoena, or 
        order of the commissioner or of another state's insurance 
        commissioner; 
           (3) obtaining or attempting to obtain a license through 
        misrepresentation or fraud; 
           (4) improperly withholding, misappropriating, or converting 
        any money or properties received in the course of doing 
        insurance business; 
           (5) misrepresenting the terms of an actual or proposed 
        insurance contract or application for insurance; 
           (6) having pled guilty, with or without explicitly 
        admitting guilt, pled nolo contendere, or been convicted of a 
        felony, gross misdemeanor, or misdemeanor involving moral 
        turpitude, including, but not limited to, assault or similar 
        conduct; 
           (7) having admitted or been found to have committed any 
        insurance unfair trade practice or fraud; 
           (8) using fraudulent, coercive, or dishonest practices, or 
        demonstrating incompetence, untrustworthiness, or financial 
        irresponsibility whether or not involving the business of 
        insurance in this state or elsewhere; 
           (9) having an insurance producer license, or its 
        equivalent, denied, suspended, or revoked, or having been the 
        subject of a fine or any other discipline in any other state, 
        province, district, or territory; 
           (10) forging another's name to an application for insurance 
        or to any document, whether or not related to an insurance 
        transaction; 
           (11) improperly using notes or any other reference material 
        to complete an examination for an insurance license; 
           (12) knowingly accepting insurance business from an 
        individual who is not licensed; 
           (13) failing to comply with an administrative or court 
        order imposing a child support obligation; 
           (14) failing to pay state income tax or comply with any 
        administrative or court order directing payment of state income 
        tax; 
           (15) being permanently or temporarily enjoined by any court 
        of competent jurisdiction from engaging in or continuing any 
        conduct or practice involving any aspect of the insurance 
        business; 
           (16) making any communication to a potential buyer that 
        gives the impression that the producer is acting on behalf of a 
        government agency; or 
           (17) while performing residential mortgage activity 
        regulated under chapter 58, violating any notification, 
        disclosure, or recordkeeping requirement, or any standard of 
        conduct imposed by chapter 58. 
           Subd. 2.  [HEARING RIGHTS.] (a) If the commissioner 
        determines that the producer is in violation of this section, 
        the commissioner may issue an order requiring a licensee to show 
        cause why any or all of the following should not occur: 
           (1) the revocation or suspension of the license; 
           (2) the censuring of the licensee; or 
           (3) the imposition of a civil penalty.  
           The order must be calculated to give reasonable notice of 
        the time and place for hearing on the matter and must state the 
        reasons for the entry of the order.  The commissioner may, by 
        order, summarily suspend a license pending final determination 
        of any order to show cause.  If a license is suspended pending 
        final determination of an order to show cause, a hearing on the 
        merits must be held within 30 days of the issuance of the order 
        of suspension.  All hearings must be conducted in accordance 
        with the provisions of chapter 14.  After the hearing, the 
        commissioner shall enter an order disposing of the matter as the 
        facts require.  If the licensee fails to appear at a hearing 
        after having been duly notified of it, the licensee shall be 
        considered in default, and the proceeding may be determined 
        against the licensee upon consideration of the order to show 
        cause, the allegations of which may be considered to be true.  
           (b) In the event that the action by the commissioner is to 
        nonrenew or to deny an application for a license, the 
        commissioner shall notify the applicant or licensee and advise, 
        in writing, the applicant or licensee of the reason for the 
        denial or nonrenewal of the applicant's or licensee's license.  
        The applicant or licensee may make written demand upon the 
        commissioner within 30 days for a hearing to determine the 
        reasonableness of the commissioner's action.  The hearing must 
        be held within 30 days and must be held pursuant to the 
        contested case provisions of chapter 14.  If no hearing is 
        requested within 30 days of service of the notice of nonrenewal 
        or denial, the nonrenewal or denial becomes final. 
           Subd. 3.  [ACTIONS AGAINST BUSINESS ENTITY.] The license of 
        a business entity may be suspended, revoked, or refused if the 
        commissioner finds, after hearing, that an individual licensee's 
        violation was known or should have been known by one or more of 
        the partners, officers, or managers acting on behalf of the 
        partnership or corporation and the violation was not reported to 
        the commissioner in a timely manner. 
           Subd. 4.  [FINE.] In addition to or in lieu of any 
        applicable denial, suspension, or revocation of a license, a 
        person may, after hearing, be subject to a civil fine according 
        to section 45.027, subdivision 6. 
           Subd. 5.  [OTHER AUTHORITY OF THE COMMISSIONER.] If a 
        license lapses, is surrendered, withdrawn, terminated, or 
        otherwise becomes ineffective, the commissioner may institute a 
        proceeding under this subdivision within two years after the 
        license was last effective and enter a revocation or suspension 
        order as of the last date on which the license was in effect, or 
        impose a civil penalty as provided for in section 45.027, 
        subdivision 6.  
           Subd. 6.  [CONDITIONS FOR RELICENSURE.] A revocation of a 
        license prohibits the licensee from making a new application for 
        a license for at least two years from the effective date of the 
        revocation.  Further, the commissioner shall, as a condition of 
        reapplication, require the applicant to obtain a performance 
        bond issued by an insurer authorized to transact business in 
        this state in the amount of $20,000 or a greater amount the 
        commissioner considers appropriate for the protection of 
        citizens of this state in the event the commissioner grants the 
        application.  The bond must be filed with the commissioner, with 
        the state of Minnesota as obligee, conditioned for the prompt 
        payment to any aggrieved person entitled to payment of any 
        amounts received by the licensee or to protect any aggrieved 
        person from loss resulting from fraudulent, deceptive, 
        dishonest, or other prohibited practices arising out of any 
        transaction when the licensee was licensed or performed acts for 
        which a license is required under this chapter.  The bond 
        remains operative for as long as that licensee is licensed.  The 
        bond required by this subdivision must provide coverage for all 
        matters arising during the period of licensure.  
           Sec. 15.  [60K.44] [TAX CLEARANCE CERTIFICATE.] 
           Subdivision 1.  [REQUIREMENT FOR ISSUANCE OR RENEWAL OF 
        LICENSE.] In addition to the provisions of section 60K.43, the 
        commissioner may not issue or renew a license if the 
        commissioner of revenue notifies the commissioner and the 
        licensee or applicant for a license that the licensee or 
        applicant owes the state delinquent taxes in the amount of $500 
        or more.  The commissioner may issue or renew the license only 
        if:  
           (1) the commissioner of revenue issues a tax clearance 
        certificate; and 
           (2) the commissioner of revenue or the licensee or 
        applicant forwards a copy of the clearance certificate to the 
        commissioner.  
        The commissioner of revenue may issue a clearance certificate 
        only if the licensee or applicant does not owe the state any 
        uncontested delinquent taxes. 
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given them: 
           (1) "taxes" are all taxes payable to the commissioner of 
        revenue, including penalties and interest due on those taxes; 
        and 
           (2) "delinquent taxes" do not include a tax liability if (i)
        an administrative or court action that contests the amount or 
        validity of the liability has been filed or served, (ii) the 
        appeal period to contest the tax liability has not expired, or 
        (iii) the licensee or applicant has entered into a payment 
        agreement to pay the liability and is current with the payments. 
           Subd. 3.  [CONTESTED CASE HEARING.] In lieu of the notice 
        and hearing requirements of section 60K.43, when a licensee or 
        applicant is required to obtain a clearance certificate under 
        this section, a contested case hearing must be held if the 
        licensee or applicant requests a hearing in writing to the 
        commissioner of revenue within 30 days of the date of the notice 
        provided in subdivision 1.  The hearing must be held within 45 
        days of the date the commissioner of revenue refers the case to 
        the office of administrative hearings.  Notwithstanding any law 
        to the contrary, the licensee or applicant must be served with 
        20 days' notice in writing specifying the time and place of the 
        hearing and the allegations against the licensee or applicant.  
        The notice may be served personally or by mail. 
           Subd. 4.  [IDENTIFICATION REQUIRED.] The commissioner shall 
        require all licensees or applicants to provide their social 
        security number and Minnesota business identification number on 
        all license applications.  Upon request of the commissioner of 
        revenue, the commissioner must provide to the commissioner of 
        revenue a list of all licensees and applicants, including the 
        name and address, social security number, and business 
        identification number.  The commissioner of revenue may request 
        a list of the licensees and applicants no more than once each 
        calendar year.  
           Sec. 16.  [60K.45] [SURRENDER OF LICENSE.] 
           The commissioner shall promptly notify the licensee and all 
        appointing insurers, where applicable, of any suspension, 
        revocation, or termination of the licensee's producer license by 
        the commissioner.  Upon receipt of the notice of suspension or 
        revocation of a license, the licensee shall immediately deliver 
        it to the commissioner. 
           Sec. 17.  [60K.46] [REQUIRED ACTS.] 
           Subdivision 1.  [PERSONAL SOLICITATION OF INSURANCE 
        SALES.] (a) For the purpose of this section, "personal 
        solicitation" means any contact by a producer, or any person 
        acting on behalf of a producer, made for the purpose of selling 
        or attempting to sell insurance, when either the producer or the 
        person acting for the producer contacts the buyer in person, by 
        telephone, or by electronic means, except:  
           (1) an attempted sale in which the buyer personally knows 
        the identity of the producer, the name of the general agency, if 
        any, which the producer represents, and the fact that the 
        producer is an insurance producer; 
           (2) an attempted sale in which the prospective purchaser of 
        insurance initiated the contact; or 
           (3) a personal contact which takes place at the producer's 
        place of business. 
           (b) Before a personal solicitation, the producer or person 
        acting for a producer shall, at the time of initial personal 
        contact with the potential buyer, clearly and expressly disclose 
        in writing: 
           (1) the name of the person making the contact; 
           (2) the name of the producer, general agency, or insurer 
        that the person represents; and 
           (3) the fact that the producer, agency, or insurer is in 
        the business of selling insurance.  
           If the initial personal contact is made by telephone, the 
        disclosures required by this subdivision need not be made in 
        writing.  
           Subd. 2.  [FEES FOR SERVICES.] No person shall charge a fee 
        for any services rendered in connection with the solicitation, 
        negotiation, or servicing of any insurance contract unless: 
           (1) before rendering the services, a written statement is 
        provided disclosing: 
           (i) the services for which fees are charged; 
           (ii) the amount of the fees; 
           (iii) that the fees are charged in addition to premiums; 
        and 
           (iv) that premiums include a commission; and 
           (2) all fees charged are reasonable in relation to the 
        services rendered.  
           Subd. 3.  [COMMISSIONS OR COMPENSATION.] A duly licensed 
        producer may pay commissions or assign or direct that 
        commissions be paid to a partnership of which the producer is a 
        member, employee, or agent, or to a corporation of which the 
        producer is an officer, employee, or agent. 
           Subd. 4.  [SUITABILITY OF INSURANCE.] In recommending the 
        purchase of any life, endowment, individual accident and 
        sickness, long-term care, annuity, life-endowment, or Medicare 
        supplement insurance to a customer, a producer must have 
        reasonable grounds for believing that the recommendation is 
        suitable for the customer and must make reasonable inquiries to 
        determine suitability.  The suitability of a recommended 
        purchase of insurance will be determined by reference to the 
        totality of the particular customer's circumstances, including, 
        but not limited to, the customer's income, the customer's need 
        for insurance, and the values, benefits, and costs of the 
        customer's existing insurance program, if any, when compared to 
        the values, benefits, and costs of the recommended policy or 
        policies.  This subdivision does not apply to limited lines 
        insurance under section 60K.38, subdivision 1, paragraph (c). 
           Subd. 5.  [PREMIUMS.] All premiums or other money received 
        by a producer from an insured or applicant for insurance must be 
        promptly deposited directly in a business checking, savings, or 
        other similar account maintained by the producer or agency, 
        unless the money is forwarded directly to the designated insurer.
           Subd. 6.  [PRIVACY OF INSURED.] Except as otherwise 
        provided by law, no insurance producer may disclose or cause to 
        be disclosed to any other person the identity of a person 
        insured through the producer without the consent of the insured. 
           Subd. 7.  [ALTERING EXISTING POLICIES; WRITTEN BINDERS 
        REQUIRED.] An insurance producer having express authority to 
        bind coverage, who orally agrees on behalf of an insurer to 
        provide insurance coverage, or to alter an existing insurance 
        agreement, shall execute and deliver a written memorandum or 
        binder containing the terms of the oral agreement to the insured 
        within three business days from the time the oral agreement is 
        entered. 
           Sec. 18.  [60K.47] [LIABILITY FOR PLACING INSURANCE IN 
        UNAUTHORIZED COMPANY.] 
           Any person, whether or not licensed as an insurance 
        producer, who participates in any manner in the sale of any 
        insurance policy or certificate, or any other contract providing 
        benefits, for or on behalf of any company that is required to 
        be, but that is not authorized to engage in the business of 
        insurance in this state, other than pursuant to sections 60A.195 
        to 60A.209, is personally liable for all premiums, whether 
        earned or unearned, paid by the insured, and the premiums may be 
        recovered by the insured.  In addition, that person is 
        personally liable for any loss the insured has sustained or may 
        sustain if the loss is one resulting from a risk or hazard 
        covered in the issued policy, certificate, or contract, or which 
        would have been covered if the policy, certificate, or contract 
        had been issued to the purchaser of the insurance. 
           Sec. 19.  [60K.48] [COMMISSIONS.] 
           Subdivision 1.  [PAYMENT PROHIBITED.] An insurance company 
        or insurance producer shall not pay a commission, service fee, 
        brokerage, or other valuable consideration to a person for 
        selling, soliciting, or negotiating insurance in this state if 
        that person is required to be licensed under sections 60K.31 to 
        60K.57 and is not so licensed.  
           Subd. 2.  [ACCEPTANCE PROHIBITED.] A person shall not 
        accept a commission, service fee, brokerage, or other valuable 
        consideration for selling, soliciting, or negotiating insurance 
        in this state if that person is required to be licensed under 
        sections 60K.31 to 60K.57 and is not so licensed. 
           Subd. 3.  [EXCEPTIONS.] (a) Renewal or other deferred 
        commissions may be paid to a person for selling, soliciting, or 
        negotiating insurance in this state if the person was required 
        to be licensed under sections 60K.31 to 60K.57 at the time of 
        the sale, solicitation, or negotiation and was so licensed at 
        that time. 
           (b) An insurer or insurance producer may pay or assign 
        commissions, service fees, brokerages, or other valuable 
        consideration to an insurance agency or to persons who do not 
        sell, solicit, or negotiate insurance in this state, unless the 
        payment would constitute an illegal rebate or otherwise violate 
        section 72A.20, subdivision 10.  A duly licensed producer may 
        pay commissions or assign or direct that commissions be paid to 
        a partnership of which the producer is a member, employee, or 
        agent, or to a corporation of which the agent is an officer, 
        employee, or agent. 
           Sec. 20.  [60K.49] [APPOINTMENTS.] 
           Subdivision 1.  [AGENT OF INSURER.] A person performing 
        acts requiring a producer license under this chapter is at all 
        times the agent of the insurer and not the insured. 
           Subd. 2.  [REQUIREMENTS.] Except as described in 
        subdivision 3, a licensed insurance producer shall not engage in 
        the business of insurance with an insurer unless the producer 
        either: 
           (1) has been appointed by that insurer; or 
           (2) has the permission of the insurer to transact business 
        on its behalf and obtains an appointment from the insurer within 
        15 days after the first application is submitted to the insurer. 
           Subd. 3.  [EXCEPTION.] A licensed insurance producer may, 
        in response to the needs of a customer, procure insurance in a 
        class of insurance for which the producer is licensed from an 
        insurer by which the producer is not appointed, if the 
        transaction is consummated through an appointed agent of the 
        insurer. 
           Subd. 4.  [PROCEDURE.] To appoint a producer as its agent, 
        the appointing insurer shall file, in a format approved by the 
        commissioner, a notice of appointment within 15 days from the 
        date the agency contract is executed or the first insurance 
        application is submitted.  An insurer may also elect to appoint 
        a producer to all or some insurers within the insurer's holding 
        company system or group by the filing of a single appointment 
        request.  No insurer shall appoint a producer until the producer 
        obtains a license under this chapter.  
           Subd. 5.  [ELIGIBILITY.] Upon receipt of the notice of 
        appointment, the commissioner shall verify within a reasonable 
        time not to exceed 30 days that the insurance producer is 
        eligible for appointment.  If the insurance producer is 
        determined to be ineligible for appointment, the commissioner 
        shall notify the insurer within five days of its determination. 
           Subd. 6.  [FEES.] An insurer shall pay an appointment fee, 
        in the amount and method of payment set forth in section 60A.14, 
        subdivision 1, for each insurance producer appointed by the 
        insurer.  
           Subd. 7.  [PERIOD OF EFFECTIVENESS.] Appointments shall 
        remain in force until voluntarily terminated by the insurer or 
        the producer, or until the license of the producer has been 
        terminated for any reason.  An insurer may terminate the 
        appointment at any time by notifying the commissioner and the 
        producer under section 60K.51.  If the insurer does not specify 
        an effective date, the termination is effective on the date the 
        notice is received by the commissioner.  Within 30 days after 
        the insurer gives notice to the commissioner, the insurer shall 
        furnish the producer with a current statement of the producer's 
        commission account.  
           Sec. 21.  [60K.50] [LIMITATION ON APPOINTMENTS.] 
           No insurer or representative of an insurer shall knowingly 
        appoint a producer who is known to the insurer or representative 
        to have engaged in any of the activities in section 60K.43 or to 
        be otherwise unqualified or unfit.  Upon discovery by the 
        insurer or a representative of the insurer that an appointed 
        producer has engaged in any of the activities in section 60K.43 
        or is otherwise unqualified or unfit, the insurer shall 
        immediately terminate the appointment and notify the 
        commissioner as set forth in section 60K.51.  No insurer shall 
        employ a producer whose license has been revoked. 
           Sec. 22.  [60K.51] [NOTIFICATION TO COMMISSIONER OF 
        TERMINATION.] 
           Subdivision 1.  [TERMINATION FOR CAUSE.] An insurer or 
        authorized representative of the insurer that terminates the 
        appointment, employment, contract, or other insurance business 
        relationship with a producer shall notify the commissioner 
        within 30 days following the effective date of the termination, 
        using a format acceptable to the commissioner, if the reason for 
        termination is one of the reasons set forth in section 60K.43 or 
        the insurer has knowledge that the producer was found by a 
        court, government body, or self-regulatory organization 
        authorized by law to have engaged in any of the activities in 
        section 60K.43.  Upon the written request of the commissioner, 
        the insurer shall provide additional information, documents, 
        records, or other data pertaining to the termination or activity 
        of the producer. 
           Subd. 2.  [TERMINATION WITHOUT CAUSE.] An insurer or 
        authorized representative of the insurer that terminates the 
        appointment, employment, or contract with a producer for any 
        reason not set forth in section 60K.43 shall notify the 
        commissioner within 30 days following the effective date of the 
        termination, using a format acceptable to the commissioner.  
        Upon written request of the commissioner, the insurer shall 
        provide additional information, documents, records, or other 
        data pertaining to the termination. 
           Subd. 3.  [ONGOING NOTIFICATION REQUIREMENT.] The insurer 
        or the authorized representative of the insurer shall promptly 
        notify the commissioner in a format acceptable to the 
        commissioner if, upon further review or investigation, the 
        insurer discovers additional information that would have been 
        reportable to the commissioner under subdivision 1 had the 
        insurer then known of its existence. 
           Subd. 4.  [COPY OF NOTIFICATION TO BE PROVIDED TO 
        PRODUCER.] (a) Within 15 days after making the notification 
        required by subdivisions 1 to 3, the insurer shall mail a copy 
        of the notification to the producer at the producer's last known 
        address.  If the producer is terminated for cause for any of the 
        reasons listed in section 60K.43, the insurer shall provide a 
        copy of the notification to the producer at the producer's last 
        known address by certified mail, return receipt requested, 
        postage prepaid, or by overnight delivery using a nationally 
        recognized carrier. 
           (b) Within 30 days after the producer has received the 
        original or additional notification, the producer may file 
        written comments concerning the substance of the notification 
        with the commissioner.  The producer shall, by the same means, 
        simultaneously send a copy of the comments to the reporting 
        insurer.  The comments become a part of the commissioner's file 
        and must accompany every copy of a report distributed or 
        disclosed for any reason about the producer as permitted under 
        subdivision 6. 
           Subd. 5.  [IMMUNITIES.] (a) In the absence of actual 
        malice, an insurer, the authorized representative of the 
        insurer, a producer, the commissioner, or an organization of 
        which the commissioner is a member and that compiles the 
        information and makes it available to other insurance 
        commissioners or regulatory or law enforcement agencies is not 
        subject to civil liability, and no civil cause of action arises 
        against these entities or their respective agents or employees, 
        as a result of any statement or information required by or 
        provided pursuant to this section or any information relating to 
        any statement that may be requested in writing by the 
        commissioner, from an insurer or producer.  The immunity granted 
        in this subdivision extends to a statement by a terminating 
        insurer or producer to an insurer or producer limited solely and 
        exclusively to whether a termination for cause under subdivision 
        1 was reported to the commissioner, provided that the propriety 
        of any termination for cause under subdivision 1 is certified in 
        writing by an officer or authorized representative of the 
        insurer or producer terminating the relationship. 
           (b) In any action brought against a person that may have 
        immunity under paragraph (a) for making any statement required 
        by this section or providing any information relating to any 
        statement that may be requested by the commissioner, the party 
        bringing the action shall plead specifically in any allegation 
        that paragraph (a) does not apply because the person making the 
        statement or providing the information did so with actual malice.
           (c) Paragraph (a) or (b) does not abrogate or modify any 
        existing statutory or common law privileges or immunities. 
           Subd. 6.  [CLASSIFICATION OF INVESTIGATIVE DATA.] Any 
        documents, materials, or other information in the control or 
        possession of the department of commerce that is furnished by an 
        insurer, producer, or an employee or agent of an insurer or 
        producer acting on behalf of the insurer or producer, or 
        obtained by the commissioner in an investigation pursuant to 
        this section is classified as confidential or private data 
        pursuant to section 13.41, subdivision 2. 
           Sec. 23.  [60K.52] [USE AND SHARING OF LICENSING AND 
        INVESTIGATIVE DATA.] 
           Subdivision 1.  [COMMISSIONER'S AUTHORITY.] In order to 
        assist in the performance of the commissioner's duties under 
        sections 60K.31 to 60K.57, the commissioner: 
           (1) may share licensing data or any active or inactive 
        investigative data with other state, federal, and international 
        regulatory agencies, with the National Association of Insurance 
        Commissioners, its affiliates or subsidiaries, and with state, 
        federal, and international law enforcement authorities if the 
        recipient agrees to maintain the data in a manner consistent 
        with its data classification; 
           (2) may receive documents, materials, or information, 
        including otherwise confidential and privileged documents, 
        materials, or information, from the National Association of 
        Insurance Commissioners, its affiliates or subsidiaries, and 
        from regulatory and law enforcement officials of other foreign 
        or domestic jurisdictions, and shall maintain as confidential or 
        privileged any document, material, or information received with 
        notice or the understanding that it is confidential or 
        privileged under the laws of the jurisdiction that is the source 
        of the document, material, or information; and 
           (3) may enter into agreements governing sharing and use of 
        information consistent with this subdivision. 
           No waiver of any applicable privilege or claim of 
        confidentiality in the documents, materials, or information 
        occurs as a result of disclosure to the commissioner under this 
        section or as a result of sharing as authorized in this 
        subdivision. 
           Nothing in sections 60K.31 to 60K.57 prohibits the 
        commissioner from releasing information concerning final, 
        adjudicated actions, including for-cause terminations, to a 
        database or other clearinghouse service maintained by the 
        National Association of Insurance Commissioners, its affiliates, 
        or subsidiaries of the National Association of Insurance 
        Commissioners. 
           Subd. 2.  [PENALTIES FOR FAILING TO REPORT.] An insurer, 
        the authorized representative of the insurer, or a producer that 
        fails to report as required under this section or that is found 
        to have reported with actual malice by a court of competent 
        jurisdiction may, after notice and hearing, have its license or 
        certificate of authority suspended or revoked and may be fined 
        in accordance with section 45.027. 
           Sec. 24.  [60K.53] [RECIPROCITY.] 
           Subdivision 1.  [NONRESIDENT LICENSE WAIVER.] The 
        commissioner shall waive any requirements for a nonresident 
        license applicant with a valid license from the applicant's home 
        state, except the requirements imposed by section 60K.39, if the 
        applicant's home state awards nonresident licenses to residents 
        of this state on the same basis. 
           Subd. 2.  [CONTINUING EDUCATION REQUIREMENTS.] A 
        nonresident producer's satisfaction of that person's home 
        state's continuing education requirements for licensed insurance 
        producers constitutes satisfaction of this state's continuing 
        education requirements if the nonresident producer's home state 
        recognizes the satisfaction of its continuing education 
        requirements imposed upon producers from this state on the same 
        basis. 
           Sec. 25.  [60K.54] [REPORTING OF ACTIONS.] 
           Subdivision 1.  [ADMINISTRATIVE ACTIONS.] A producer shall 
        report to the commissioner any administrative action taken 
        against the producer in another jurisdiction or by another 
        governmental agency in this state within 30 days of the final 
        disposition of the matter.  This report must include a copy of 
        the order, consent to order, or other relevant legal documents. 
           Subd. 2.  [CRIMINAL PROSECUTIONS.] Within 30 days of the 
        initial pretrial hearing date, a producer shall report to the 
        commissioner any criminal prosecution of the producer taken in 
        any jurisdiction.  The report must include a copy of the initial 
        complaint filed, the order resulting from the hearing, and any 
        other relevant legal documents.  In addition, a producer shall 
        report to the commissioner within ten days any conviction, 
        guilty plea, or plea of nolo contendere to any felony or gross 
        misdemeanor.  
           Sec. 26.  [60K.55] [FEES.] 
           Subdivision 1.  [RENEWAL FEES.] Each producer licensed 
        under this chapter shall pay a renewal fee as prescribed by 
        subdivision 2. 
           Subd. 2.  [LICENSING FEES.] (a) In addition to fees 
        provided for examinations, each insurance producer licensed 
        under this chapter shall pay to the commissioner a fee of: 
           (1) $40 for an initial life, accident and health, property, 
        or casualty license issued to an individual insurance producer, 
        and a fee of $40 for each renewal; 
           (2) $75 for an initial variable life and variable annuity 
        license issued to an individual insurance producer, and a fee of 
        $50 for each renewal; 
           (3) $80 for an initial personal lines license issued to an 
        individual insurance producer, and a fee of $80 for each 
        renewal; 
           (4) $80 for an initial limited lines license issued to an 
        individual insurance producer, and a fee of $80 for each 
        renewal; 
           (5) $200 for an initial license issued to a business 
        entity, and a fee of $150 for each renewal; and 
           (6) $500 for an initial surplus lines license, and a fee of 
        $500 for each renewal. 
           (b) Initial licenses issued under this chapter are valid 
        for a period not to exceed 24 months and expire on October 31 of 
        the renewal year assigned by the commissioner.  Each renewal 
        insurance producer license is valid for a period of 24 months.  
        Licensees who submit renewal applications postmarked or 
        delivered on or before October 15 of the renewal year may 
        continue to transact business whether or not the renewal license 
        has been received by November 1.  Licensees who submit 
        applications postmarked or delivered after October 15 of the 
        renewal year must not transact business after the expiration 
        date of the license until the renewal license has been received. 
           (c) All fees are nonreturnable, except that an overpayment 
        of any fee may be refunded upon proper application.  
           Sec. 27.  [60K.56] [CONTINUING INSURANCE EDUCATION.] 
           Subdivision 1.  [DEFINITION.] For the purposes of this 
        section, "course" means a course, program of instruction, or 
        seminar of continuing insurance education.  A "professional 
        designation examination" means a written, proctored, and graded 
        examination the passage of which leads to a bona fide insurance 
        or financial planning professional designation used by insurance 
        producers.  
           Subd. 2.  [APPLICABILITY.] This section applies to all 
        natural persons licensed by this state to sell lines of 
        insurance for which licensing examinations are required.  
           Subd. 3.  [EXEMPTIONS.] This section does not apply to 
        persons soliciting or selling solely on behalf of companies 
        organized and operating according to chapter 67A. 
           Subd. 4.  [POWERS OF THE COMMISSIONER.] (a) The 
        commissioner shall make the final determination as to 
        accreditation and assignment of credit hours for courses.  
           (b) The commissioner shall adopt procedures for reporting 
        compliance with the minimum education requirement.  
           (c) The commissioner shall adopt rules according to chapter 
        14 to carry out the purposes of this section.  
           Subd. 5.  [CRITERIA FOR COURSE ACCREDITATION.] (a) The 
        commissioner may accredit a course only to the extent it is 
        designed to impart substantive and procedural knowledge of the 
        insurance field.  The burden of demonstrating that the course 
        satisfies this requirement is on the individual or organization 
        seeking accreditation.  The commissioner shall approve any 
        educational program approved by Minnesota Continuing Legal 
        Education relating to the insurance field.  The commissioner is 
        authorized to establish a procedure for renewal of course 
        accreditation. 
           (b) The commissioner shall approve or disapprove 
        professional designation examinations that are recommended for 
        approval by the advisory task force.  In order for an insurance 
        producer to receive full continuing education credit for a 
        professional designation examination, the producer must pass the 
        examination.  A producer may not receive credit for classroom 
        instruction preparing for the professional designation 
        examination and also receive continuing education credit for 
        passing the professional designation examination. 
           (c) The commissioner may not accredit a course:  
           (1) that is designed to prepare students for a license 
        examination; 
           (2) in mechanical office or business skills, including 
        typing, speedreading, use of calculators, or other machines or 
        equipment; 
           (3) in sales promotion, including meetings held in 
        conjunction with the general business of the licensed agent; or 
           (4) in motivation, the art of selling, psychology, or time 
        management. 
           Subd. 6.  [MINIMUM EDUCATION REQUIREMENT.] Each person 
        subject to this section shall complete a minimum of 30 credit 
        hours of courses accredited by the commissioner during each 
        24-month licensing period.  Any person whose initial licensing 
        period extends more than six months shall complete 15 hours of 
        courses accredited by the commissioner during the initial 
        license period.  Any person teaching or lecturing at an 
        accredited course qualifies for 1-1/2 times the number of credit 
        hours that would be granted to a person completing the 
        accredited course.  No more than 15 credit hours per licensing 
        period may be credited to a person for courses sponsored by, 
        offered by, or affiliated with an insurance company or its 
        agents.  Courses sponsored by, offered by, or affiliated with an 
        insurance company or agent may restrict its students to agents 
        of the company or agency. 
           Subd. 7.  [WAIVER OF REQUIREMENTS.] (a) The commissioner 
        may grant a waiver or an extension of time up to 90 days to 
        complete the minimum education requirement to an individual upon 
        a showing of good cause.  It is the licensed person's 
        responsibility to request a waiver or extension on a form 
        prescribed by the commissioner.  As of the day the licensed 
        person properly files a request for a waiver or extension, the 
        license remains in effect until the commissioner notifies the 
        licensed person of the commissioner's decision.  The 
        commissioner may approve a waiver or extension subject to any 
        reasonable conditions.  The person's license remains in effect 
        during the compliance period determined by the commissioner.  If 
        the licensed person fails to comply with any reasonable 
        conditions imposed by the commissioner, the commissioner shall 
        terminate the license.  If the request for a waiver or extension 
        is denied by the commissioner, the licensed person shall have 30 
        days within which to satisfy the minimum education requirement 
        involved in the request for a waiver or extension.  If the 
        minimum education requirement is not satisfied within the 
        compliance period, the commissioner shall terminate the person's 
        license.  
           (b) Upon application on a form prescribed by the 
        commissioner, the commissioner may grant a waiver of the minimum 
        education requirement to a licensee who is no longer actively 
        engaged in the solicitation and sale of insurance.  A licensed 
        person seeking a waiver from the requirements of this section 
        may be required to submit information to the commissioner that 
        substantiates the person's retirement or inactive status.  A 
        licensed person receiving a waiver from the commissioner may 
        maintain and renew a license but may not solicit or sell new 
        insurance business while this waiver is in effect.  A licensee 
        may, for a fee, continue to service an insurance policy for 
        which the licensee is the producer of record, if the policy is 
        in force at the time the waiver is granted.  An insurer may not 
        terminate a service contract or refuse to pay compensation 
        because the waiver does not allow the licensee to solicit or 
        sell new insurance.  
           For the purposes of receiving renewal commissions and other 
        benefits or compensation from insurers, an agent receiving a 
        waiver under this paragraph is considered to be the holder of a 
        valid insurance producer license in this state.  
           Subd. 8.  [REPORTING.] (a) After completing the minimum 
        education requirement, each person subject to this section shall 
        file or cause to be filed a compliance report in accordance with 
        the procedures adopted by the commissioner.  The compliance 
        report must not claim credit for continuing education not 
        actually completed at the date of filing the report. 
           (b) An institution offering an accredited course shall 
        comply with the procedure for reporting compliance adopted by 
        the commissioner.  
           (c) If a person subject to this section completes a 
        nonaccredited course, that person may submit a written report to 
        the advisory committee accompanied by a fee of not more than $10 
        payable to the state of Minnesota for deposit in the general 
        fund.  This report must be accompanied by proof satisfactory to 
        the commissioner that the person has completed the minimum 
        education requirement for the annual period during which the 
        nonaccredited course was completed.  Upon the recommendation of 
        the advisory committee that the course satisfies the criteria 
        for course accreditation, the commissioner may approve the 
        nonaccredited course and shall so inform the person.  If the 
        nonaccredited course is approved by the commissioner, it may be 
        used to satisfy the minimum education requirement for the 
        person's next annual compliance period.  
           Subd. 9.  [ENFORCEMENT.] If a person subject to this 
        section fails to complete the minimum education or reporting 
        requirement or to pay the prescribed fees for any licensing 
        period, no license may be renewed or continued in force for that 
        person for any class of insurance beginning June 1 of the year 
        due and that person may not act as an insurance producer until 
        the person has demonstrated to the satisfaction of the 
        commissioner that all requirements of this section have been 
        complied with or that a waiver or extension has been obtained.  
           Sec. 28.  [REPEALER.] 
           Minnesota Statutes 2000, sections 60K.01; 60K.02; 60K.03; 
        60K.04; 60K.05; 60K.06; 60K.07; 60K.081; 60K.09; 60K.10; 60K.11; 
        60K.12; 60K.13; 60K.14; 60K.15; 60K.16; 60K.17; 60K.18; 60K.19; 
        and 60K.20, are repealed. 
           Sec. 29.  [EFFECTIVE DATE.] 
           Sections 1 to 28 are effective July 1, 2002. 

                                   ARTICLE 2 
                  CORRECTIVE, CONFORMING, AND OTHER PROVISIONS 
           Section 1.  Minnesota Statutes 2000, section 13.7191, 
        subdivision 6, is amended to read: 
           Subd. 6.  [INSURANCE AGENT PRODUCER LICENSING; 
        TERMINATION.] Access to data on insurance agent producer 
        terminations held by the commissioner of commerce is governed by 
        section 60K.10 60K.51. 
           Sec. 2.  Minnesota Statutes 2000, section 43A.317, 
        subdivision 12, is amended to read: 
           Subd. 12.  [STATUS OF AGENTS.] Notwithstanding sections 
        60K.03, subdivision 5, 60K.49 and 72A.07, the program may use, 
        and pay referral fees, commissions, or other compensation to, 
        agents licensed as life and health agents insurance producers 
        under chapter 60K or licensed under section 62C.17, regardless 
        of whether the agents are appointed to represent the particular 
        health carriers or community integrated service networks that 
        provide the coverage available through the program.  When acting 
        under this subdivision, an agent is not an agent of the health 
        carrier or community integrated service network, with respect to 
        that transaction. 
           Sec. 3.  Minnesota Statutes 2000, section 60A.02, 
        subdivision 7, is amended to read: 
           Subd. 7.  [INSURANCE AGENT OR INSURANCE AGENCY.] An 
        "insurance agent" or "insurance agency" is a person an insurance 
        producer licensed under sections 60K.30 to 60K.56 acting under 
        express authority from, and an appointment pursuant to section 
        60K.02 by, an insurer and on its behalf to solicit insurance, or 
        to appoint other agents insurance producers to solicit 
        insurance, or to write and countersign policies of insurance, or 
        to collect premiums therefor within this state, or to exercise 
        any or all these powers when so authorized by the insurer.  The 
        term "person" includes a natural person, a partnership, a 
        corporation, or other entity, including an insurance agency.  
           Sec. 4.  Minnesota Statutes 2000, section 60A.14, is 
        amended to read: 
           60A.14 [FEES.] 
           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, a domestic insurer shall remit $5 and all other 
        insurers shall remit $3 $10; 
           (7) for filing forms and rates, $75 per filing; 
           (8) for annual renewal of surplus lines insurer license, 
        $300. 
           The commissioner shall adopt rules to define filings that 
        are subject to a fee. 
           Subd. 2.  [RETALIATORY PROVISIONS.] When, by the laws of 
        any other state or nation, any fines, penalties, licenses, or 
        fees additional to, or in excess of, those imposed by this 
        section upon foreign insurance companies and their agents, are 
        imposed upon insurance companies of this state or their agents 
        doing business in such state, the same fines, penalties, 
        licenses, and fees shall be imposed upon all insurance companies 
        of that state and their agents doing business in this state, so 
        long as such laws of such other state remain in force.  This 
        subdivision does not apply to agent appointment fees required 
        under subdivision 1, clause (6). 
           Sec. 5.  Minnesota Statutes 2000, section 60A.171, 
        subdivision 1, is amended to read: 
           Subdivision 1.  (a) After an agency contractual 
        relationship has been in effect for a period of three years, an 
        insurance company writing fire or casualty loss insurance in 
        this state may not terminate the agency contractual relationship 
        with any appointed agent unless the company has attempted to 
        rehabilitate the agent as provided in subdivision 4.  The 
        insurer shall provide written notice of intent to rehabilitate. 
           (b) If the agent and company are not able to reach a 
        mutually acceptable plan of rehabilitation, the company may 
        terminate the agency contractual relationship after providing 
        written notice of termination to the agent at least 90 days in 
        advance. 
           (c) The notice of termination must include the reasons for 
        termination and a copy of the notice of intent to rehabilitate. 
           (d) An insurance company may not terminate an agency 
        contract based upon any of the following: 
           (1) an adverse loss experience for a single year; 
           (2) the geographic location of the agent's auto and 
        homeowners insurance business; or 
           (3) the performance of obligations required of an insurer 
        under Minnesota Statutes. 
           (e) For purposes of this section, "fire or casualty loss 
        insurance" means any line of insurance which an insurance agent 
        with a personal lines, property, or casualty license under 
        sections 60K.30 to 60K.56 may write in this state. 
           Sec. 6.  Minnesota Statutes 2000, section 60A.198, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PROCEDURE FOR OBTAINING LICENSE.] A person 
        licensed as an agent in this state pursuant to other law may 
        obtain a surplus lines license by doing the following:  
           (a) filing an application in the form and with the 
        information the commissioner may reasonably require to determine 
        the ability of the applicant to act in accordance with sections 
        60A.195 to 60A.209; 
           (b) maintaining an agent's license in this state; 
           (c) agreeing to file with the commissioner of revenue all 
        returns required by chapter 297I and paying to the commissioner 
        of revenue all amounts required under chapter 297I; and 
           (d) paying a fee as prescribed by section 60K.06, 
        subdivision 2, paragraph (a), clause (4) 60K.55. 
           Sec. 7.  Minnesota Statutes 2000, section 62A.41, 
        subdivision 4, is amended to read: 
           Subd. 4.  [UNLICENSED SALES.] Notwithstanding section 
        60K.02, subdivision 1 60K.32, a person who acts or assumes to 
        act as an insurance agent producer without a valid license for 
        the purpose of selling or attempting to sell Medicare supplement 
        insurance, and the person who aids or abets the actor, is guilty 
        of a felony and is subject to a civil penalty of not more than 
        $5,000 per violation. 
           Sec. 8.  Minnesota Statutes 2000, section 62C.17, 
        subdivision 5, is amended to read: 
           Subd. 5.  A person shall not be qualified for a license if 
        upon examination or reexamination it is determined that the 
        person is incompetent to act as an agent or solicitor a 
        producer, if the person has acted in any manner which would 
        disqualify a person to hold a license as an insurance agent or 
        solicitor producer under sections 60K.01 to 60K.18 60K.30 to 
        60K.56, or if the person fails to produce documents subpoenaed 
        by the commissioner, or fails to appear at a hearing to which 
        the person is a party or has been subpoenaed, if the production 
        of documents or appearance is lawfully required.  
           Sec. 9.  Minnesota Statutes 2000, section 62D.22, 
        subdivision 8, is amended to read: 
           Subd. 8.  [INSURANCE AGENTS.] All agents, solicitors, and 
        brokers engaged in soliciting or dealing with enrollees or 
        prospective enrollees of a health maintenance organization, 
        whether employees or under contract to the health maintenance 
        organization, shall be subject to the provisions of sections 
        60K.01 to 60K.18 60K.30 to 60K.56, concerning the licensure 
        of health insurance agents, solicitors, and brokers, producers 
        and lawful rules thereunder.  Medical doctors and others who 
        merely explain the operation of health maintenance organizations 
        shall be exempt from the provisions of sections 60K.01 to 60K.18 
        60K.30 to 60K.56.  Section 60K.03 60K.37, subdivision 2 1, 
        shall not apply except as to provide for an examination of an 
        applicant in the applicant's knowledge concerning the operations 
        and benefits of health maintenance organizations and related 
        insurance matters. 
           Sec. 10.  Minnesota Statutes 2000, section 62H.10, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BROKER.] "Broker" means an agent engaged in 
        brokerage business pursuant to section 60K.081 60K.49. 
           Sec. 11.  Minnesota Statutes 2000, section 62L.12, 
        subdivision 3, is amended to read: 
           Subd. 3.  [AGENT'S LICENSURE.] An agent licensed under 
        chapter 60K or section 62C.17 who knowingly and willfully breaks 
        apart a small group for the purpose of selling individual health 
        plans to eligible employees and dependents of a small employer 
        that meets the participation and contribution requirements of 
        section 62L.03, subdivision 3, is guilty of an unfair trade 
        practice and subject to disciplinary action, including the 
        revocation or suspension of license, under section 60K.11 60K.43 
        or 62C.17.  The action must be by order and subject to the 
        notice, hearing, and appeal procedures specified in 
        section 60K.11 60K.43.  The action of the commissioner is 
        subject to judicial review as provided under chapter 14. 
           Sec. 12.  Minnesota Statutes 2000, section 62S.30, is 
        amended to read: 
           62S.30 [APPROPRIATENESS OF RECOMMENDED PURCHASE.] 
           In recommending the purchase or replacement of a long-term 
        care insurance policy or certificate, an agent shall comply with 
        section 60K.14 60K.46, subdivision 4. 
           Sec. 13.  Minnesota Statutes 2000, section 64B.33, is 
        amended to read: 
           64B.33 [LICENSING OF AGENTS.] 
           Agents of societies shall be licensed in accordance with 
        the provisions of chapters 60A and 60K regulating the licensing, 
        revocation, suspension, or termination of license of resident 
        and nonresident agents, except as otherwise provided in section 
        60K.05 60K.35. 
           Sec. 14.  Minnesota Statutes 2000, section 65B.09, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AGENTS' RESPONSIBILITY.] Every person 
        licensed under sections 60K.02 and 60K.03 60K.30 to 60K.56 who 
        is authorized to solicit, negotiate or effect automobile 
        insurance on behalf of any member shall: 
           (1) offer to place coverage through the facility for any 
        qualified applicant who is ineligible or unacceptable for 
        coverage in the insurer or insurers for whom the agent is 
        authorized to solicit, negotiate or effect automobile 
        insurance.  Provided, that the failure of an agent to make such 
        an offer to a qualified applicant shall not subject the agent to 
        any liability to the applicant; 
           (2) forward to the facility all applications and any 
        deposit premiums which are required by the plan of operation, 
        rules and procedures of the facility, if the qualified applicant 
        accepts the offer to have coverage placed through the facility; 
           (3) be entitled to receive compensation for placing 
        insurance through the facility at the uniform rates of 
        compensation as provided in the plan of operation, and all 
        members shall pay such compensation. 
           Sec. 15.  Minnesota Statutes 2000, section 72A.07, is 
        amended to read: 
           72A.07 [VIOLATIONS OF LAWS RELATING TO AGENTS, PENALTIES.] 
           Any person, firm, or corporation violating, or failing to 
        comply with, any of the provisions of sections 60K.01 to 60K.18 
        60K.30 to 60K.56 and any person who acts in any manner in the 
        negotiation or transaction of unlawful insurance with an 
        insurance company not licensed to do business in the state, or 
        who, as principal or agent, violates any provision of law 
        relating to the negotiation or effecting of contracts of 
        insurance, shall be guilty of a misdemeanor.  Upon the filing of 
        a complaint by the commissioner of commerce in a court of 
        competent jurisdiction against any person violating any 
        provisions of this section, the county attorney of the county in 
        which the violation occurred shall prosecute the person.  Upon 
        the conviction of any agent of any violation of the provisions 
        of sections 60K.01 to 60K.18 60K.30 to 60K.56, the commissioner 
        shall suspend the authority of the agent to transact any 
        insurance business within the state for a period of not less 
        than three months.  Any insurer employing an agent and failing 
        to procure an appointment, as required by sections 60K.01 to 
        60K.18 60K.30 to 60K.56, or allowing the agent to transact 
        business for it within the state before an appointment has been 
        procured, shall pay the commissioner, for the use of the state, 
        a penalty of $25 for each offense.  Each sale of an insurance 
        policy by an agent who is not appointed by an insurance company 
        shall constitute a separate offense, but no insurer shall be 
        required to pay more than $300 in penalties as a result of the 
        activities of a single unappointed agent.  In the event of 
        failure to pay a penalty within ten days' after notice from the 
        commissioner, the authority of the insurer to do business in 
        this state shall be revoked by the commissioner until the 
        penalty is paid.  No insurer whose authority is revoked shall be 
        readmitted until it shall have complied with all the terms and 
        conditions imposed for admission in the first instance.  Any 
        action taken by the commissioner under this section shall be 
        subject to review by the district court of the county in which 
        the office of the commissioner is located. 
           Sec. 16.  Minnesota Statutes 2000, section 72A.125, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SALE BY AUTO RENTAL COMPANIES.] An auto rental 
        company that offers or sells rental vehicle personal accident 
        insurance, personal effects insurance, or liability insurance in 
        this state in conjunction with the rental of a vehicle shall 
        only sell these products if the forms and rates have met the 
        relevant requirements of section 61A.02, 62A.02, or other 
        relevant sections requiring approval of forms and rates taking 
        into account the possible infrequency and severity of loss that 
        may be incurred.  An auto rental company offering insurance 
        products for sale shall conduct a training program for its 
        agents or employees, which must be submitted to the commissioner 
        for approval.  Sections 60K.01 to 60K.19 60K.30 to 60K.56 do not 
        apply if the persons engaged in the sale of these products are 
        employees of the auto rental company who do not receive 
        commissions or other remuneration for selling the product in 
        addition to their regular compensation.  Compensation may not be 
        determined in any part by the sale of insurance products.  The 
        auto rental company before engaging in the sale of the product 
        must file with the commissioner the following documents:  
           (1) an appointment of the commissioner as agent for service 
        of process; 
           (2) an agreement that the auto rental company assumes all 
        responsibility for the authorized actions of all unlicensed 
        employees who sell the insurance product on its behalf in 
        conjunction with the rental of its vehicles; 
           (3) an agreement that the auto rental company with respect 
        to itself and its employees will be subject to this chapter 
        regarding the marketing of the insurance products and the 
        conduct of those persons involved in the sale of insurance 
        products in the same manner as if it were a licensed agent. 
           An auto rental company failing to file the documents in 
        clauses (1) to (3) is guilty of an individual violation as to 
        the unlicensed sale of insurance for each sale that occurs after 
        August 1, 1987, until they make the required filings.  Each 
        individual sale after August 1, 1987, and prior to the filing 
        required by this section is subject to, in addition to any other 
        penalties allowable by law, up to a $200 per violation fine.  
        Further, the sale of the insurance product by an auto rental 
        company or any employee or agent of the company after August 1, 
        1987, without having complied with this section shall be deemed 
        to be in acceptance of the provisions of this section. 
           Insurance sold pursuant to this subdivision must be limited 
        in availability to rental vehicle customers though coverage may 
        extend to the customer, other drivers, and passengers using or 
        riding in the rented vehicles; and limited in duration to a 
        period equal to and concurrent with that of the vehicle rental.  
           Persons purchasing rental vehicle personal accident 
        insurance, personal effects insurance, or liability insurance 
        may be provided a certificate summarizing the policy provisions 
        in lieu of a copy of the policy if a copy of the policy is 
        available for inspection at the place of sale and a free copy of 
        the policy may be obtained from the auto rental company's home 
        office.  
           The commissioner may, after a hearing, revoke an auto 
        rental company's right to operate under this section if the 
        company has violated the insurance laws of this state and the 
        revocation is in the public interest. 
           Sec. 17.  Minnesota Statutes 2000, section 72A.201, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DEFINITIONS.] For the purposes of this section, 
        the following terms have the meanings given them.  
           (1) [ADJUSTER OR ADJUSTERS.] "Adjuster" or "adjusters" is 
        as defined in section 72B.02.  
           (2) [AGENT.] "Agent" means insurance agents or insurance 
        agencies licensed pursuant to sections 60K.01 to 60K.18 60K.30 
        to 60K.56, and representatives of these agents or agencies.  
           (3) [CLAIM.] "Claim" means a request or demand made with an 
        insurer for the payment of funds or the provision of services 
        under the terms of any policy, certificate, contract of 
        insurance, binder, or other contracts of temporary insurance. 
        The term does not include a claim under a health insurance 
        policy made by a participating provider with an insurer in 
        accordance with the participating provider's service agreement 
        with the insurer which has been filed with the commissioner of 
        commerce prior to its use.  
           (4) [CLAIM SETTLEMENT.] "Claim settlement" means all 
        activities of an insurer related directly or indirectly to the 
        determination of the extent of liabilities due or potentially 
        due under coverages afforded by the policy, and which result in 
        claim payment, claim acceptance, compromise, or other 
        disposition.  
           (5) [CLAIMANT.] "Claimant" means any individual, 
        corporation, association, partnership, or other legal entity 
        asserting a claim against any individual, corporation, 
        association, partnership, or other legal entity which is insured 
        under an insurance policy or insurance contract of an insurer.  
           (6) [COMPLAINT.] "Complaint" means a communication 
        primarily expressing a grievance.  
           (7) [INSURANCE POLICY.] "Insurance policy" means any 
        evidence of coverage issued by an insurer including all 
        policies, contracts, certificates, riders, binders, and 
        endorsements which provide or describe coverage.  The term 
        includes any contract issuing coverage under a self-insurance 
        plan, group self-insurance plan, or joint self-insurance 
        employee health plans.  
           (8) [INSURED.] "Insured" means an individual, corporation, 
        association, partnership, or other legal entity asserting a 
        right to payment under their insurance policy or insurance 
        contract arising out of the occurrence of the contingency or 
        loss covered by the policy or contract.  The term does not apply 
        to a person who acquires rights under a mortgage. 
           (9) [INSURER.] "Insurer" includes any individual, 
        corporation, association, partnership, reciprocal exchange, 
        Lloyds, fraternal benefits society, self-insurer, surplus line 
        insurer, self-insurance administrator, and nonprofit service 
        plans under the jurisdiction of the department of commerce.  
           (10) [INVESTIGATION.] "Investigation" means a reasonable 
        procedure adopted by an insurer to determine whether to accept 
        or reject a claim.  
           (11) [NOTIFICATION OF CLAIM.] "Notification of claim" means 
        any communication to an insurer by a claimant or an insured 
        which reasonably apprises the insurer of a claim brought under 
        an insurance contract or policy issued by the insurer. 
        Notification of claim to an agent of the insurer is notice to 
        the insurer.  
           (12) [PROOF OF LOSS.] "Proof of loss" means the necessary 
        documentation required from the insured to establish entitlement 
        to payment under a policy.  
           (13) [SELF-INSURANCE ADMINISTRATOR.] "Self-insurance 
        administrator" means any vendor of risk management services or 
        entities administering self-insurance plans, licensed pursuant 
        to section 60A.23, subdivision 8.  
           (14) [SELF-INSURED OR SELF-INSURER.] "Self-insured" or 
        "self-insurer" means any entity authorized pursuant to section 
        65B.48, subdivision 3; chapter 62H; section 176.181, subdivision 
        2; Laws of Minnesota 1983, chapter 290, section 171; section 
        471.617; or section 471.981 and includes any entity which, for a 
        fee, employs the services of vendors of risk management services 
        in the administration of a self-insurance plan as defined by 
        section 60A.23, subdivision 8, clause (2), subclauses (a) and 
        (d). 
           Sec. 18.  Minnesota Statutes 2000, section 270B.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DISCLOSURE TO LICENSING AUTHORITIES.] The 
        commissioner may disclose return information with respect to 
        returns filed under Minnesota tax laws to licensing authorities 
        of the state or political subdivisions of the state to the 
        extent necessary to enforce the license clearance programs under 
        sections 60K.12 60K.44, 82.27, 147.091, 148.10, 150A.08, and 
        270.72. 
           Sec. 19.  [EFFECTIVE DATE.] 
           Sections 1 to 18 are effective July 1, 2002. 
           Presented to the governor May 14, 2001 
           Signed by the governor May 17, 2001, 10:24 a.m.

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