Minnesota Session Laws - 2005, Regular Session

                            CHAPTER 74-H.F.No. 1669 
                  An act relating to insurance; regulating certain fees, 
                  rate filings, policy renewals and alterations, 
                  insurance holding company systems, and insurance 
                  information reporting practices; amending Minnesota 
                  Statutes 2004, sections 60A.08, subdivision 3; 60A.14, 
                  subdivision 1; 60A.171, subdivisions 1, 2; 60A.351; 
                  60K.46, subdivision 7; 61A.02, subdivision 2, by 
                  adding a subdivision; 72A.501, subdivisions 1, 2; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapters 60A; 60D; repealing Minnesota Statutes 2004, 
                  section 60A.171, subdivision 4. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2004, section 60A.08, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RENEWAL; NEW POLICY.] Any insurance policy 
        terminating by its provisions at a specified expiration date or 
        limited as to term by any statute and not otherwise renewable 
        may be renewed or extended at the option of the insurer, at the 
        premium rate then required therefor, for a specific additional 
        period or periods by a certificate, and without requiring the 
        issuance of a new policy more than once in any five-year 
        period.  The insurer must also post the current policy form on 
        its Web site, or must inform the policyholder annually in 
        writing that a copy of the current policy form is available on 
        request. 
           Sec. 2.  Minnesota Statutes 2004, section 60A.14, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FEES OTHER THAN EXAMINATION FEES.] In 
        addition to the fees and charges provided for examinations, the 
        following fees must be paid to the commissioner for deposit in 
        the general fund: 
           (a) by township mutual fire insurance companies; 
           (1) for filing certificate of incorporation $25 and 
        amendments thereto, $10; 
           (2) for filing annual statements, $15; 
           (3) for each annual certificate of authority, $15; 
           (4) for filing bylaws $25 and amendments thereto, $10; 
           (b) by other domestic and foreign companies including 
        fraternals and reciprocal exchanges; 
           (1) for filing certified copy of certificate of articles of 
        incorporation, $100; 
           (2) for filing annual statement, $225; 
           (3) for filing certified copy of amendment to certificate 
        or articles of incorporation, $100; 
           (4) for filing bylaws, $75 or amendments thereto, $75; 
           (5) for each company's certificate of authority, $575, 
        annually; 
           (c) the following general fees apply: 
           (1) for each certificate, including certified copy of 
        certificate of authority, renewal, valuation of life policies, 
        corporate condition or qualification, $25; 
           (2) for each copy of paper on file in the commissioner's 
        office 50 cents per page, and $2.50 for certifying the same; 
           (3) for license to procure insurance in unadmitted foreign 
        companies, $575; 
           (4) for valuing the policies of life insurance companies, 
        one cent per $1,000 of insurance so valued, provided that the 
        fee shall not exceed $13,000 per year for any company.  The 
        commissioner may, in lieu of a valuation of the policies of any 
        foreign life insurance company admitted, or applying for 
        admission, to do business in this state, accept a certificate of 
        valuation from the company's own actuary or from the 
        commissioner of insurance of the state or territory in which the 
        company is domiciled; 
           (5) for receiving and filing certificates of policies by 
        the company's actuary, or by the commissioner of insurance of 
        any other state or territory, $50; 
           (6) for each appointment of an agent filed with the 
        commissioner, $10; 
           (7) for filing forms and, rates, and compliance 
        certifications under section 60A.315, $75 per filing, which may 
        be paid on a quarterly basis in response to an invoice.  Billing 
        and payment may be made electronically; 
           (8) for annual renewal of surplus lines insurer license, 
        $300; 
           (9) $250 filing fee for a large risk alternative rating 
        option plan that meets the $250,000 threshold requirement. 
           The commissioner shall adopt rules to define filings that 
        are subject to a fee. 
           Sec. 3.  [60A.315] [EXPEDITED FORM AND RATE FILING.] 
           Subdivision 1.  [AUTHORITY.] An insurer or rate service 
        organization otherwise required to file rates and forms may use 
        the expedited filing procedure under this section for 
        homeowner's insurance as defined in section 65A.27, subdivision 
        4, and automobile insurance as governed by chapter 65B. 
           Subd. 2.  [COMPLIANCE CERTIFICATIONS.] An insurer or rate 
        service organization shall file with the Department of Commerce 
        on a prescribed form a description of the policy, amendment, or 
        endorsement and a written certification signed by an officer of 
        the insurer or the rate service organization that the forms, 
        policies, amendments, and endorsements comply with all 
        applicable Minnesota statutes, rules, and case law, and a copy 
        of the policy, amendment, or endorsement.  If the filing will 
        impact rates, the filing must comply with section 70A.06, 
        subdivisions 1 and 1a.  Forms and rates filed under this 
        procedure are effective upon receipt by the department.  Anyone 
        using the expedited filing procedures authorized by this section 
        must provide copies of the form filings within 24 hours of 
        receiving a request from the commissioner.  Insurers may comply 
        with this requirement by providing the form filings in paper or 
        electronic format. 
           Subd. 3.  [APPLICATION OF LAW.] If an insurer uses the 
        services of a rate service organization for purposes of filing a 
        certificate of compliance under this section, the certification 
        by the rate service organization under subdivision 2 does not 
        excuse the insurer from its obligation to ensure that its filing 
        complies with all applicable Minnesota statutes, rules, and case 
        law. 
           Subd. 4.  [FEES.] In order to be effective, the filing must 
        be accompanied by payment of the filing fee applicable to the 
        policy, amendment, endorsement, or rate unless the fee is 
        remitted in accordance with an alternative procedure allowed 
        under section 60A.14. 
           Subd. 5.  [RECORD KEEPING.] The insurer or rate service 
        organization shall retain the policy, amendment, or endorsement 
        for at least five years after that policy, amendment, or 
        endorsement ceased providing coverage to any Minnesota 
        policyholder, and shall provide to the Department of Commerce 
        upon request a copy of any form in use pursuant to these filing 
        procedures. 
           Subd. 6.  [AUDITS; PENALTIES.] The commissioner is 
        authorized to conduct audits and investigations under section 
        45.027 and this chapter to determine if the insurers are 
        complying with Minnesota law in the issuance of policies 
        described under this section.  If the policy filings contain 
        provisions that are inconsistent with or violate Minnesota law, 
        the commissioner may take action against the insurer under 
        section 45.027.  The commissioner shall assess the insurer for 
        the costs of the investigation performed by the department and 
        shall deposit all such assessments into the revolving fund 
        established under section 60A.03. 
           Sec. 4.  Minnesota Statutes 2004, section 60A.171, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TERMINATION RIGHTS AND OBLIGATIONS.] (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 
        provided written notice of termination to the agent at least 90 
        60 days in advance of the effective date of the termination. 
           (c) (b) The notice of termination must include the reasons 
        for termination and a copy of the notice of intent to 
        rehabilitate. 
           (d) (c) 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) (d) 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. 5.  Minnesota Statutes 2004, section 60A.171, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AGENT REQUEST TO RENEW INSURANCE CONTRACT.] The 
        company shall at the request of the agent renew any insurance 
        contract written by the agent for the company for not more than 
        one year for fire or casualty loss insurance during a period 
        of nine 18 months after the effective date of the termination, 
        but in the event any risk does not meet current underwriting 
        standards of the company, the company may decline its renewal, 
        provided that the company shall give the agent not less than 60 
        days' notice of its intention not to renew the contract of 
        insurance.  The company shall not reduce the agent's 
        commissions, unless the company is reducing the commissions for 
        other appointed agents in the state at the same time. 
           Sec. 6.  Minnesota Statutes 2004, section 60A.351, is 
        amended to read: 
           60A.351 [RENEWAL OF INSURANCE POLICY WITH ALTERED RATES.] 
           If an insurance company licensed to do business in this 
        state offers or purports to offer to renew any commercial 
        liability and/or property insurance policy at less favorable 
        terms as to the dollar amount of coverage or deductibles, higher 
        rates, and/or higher rating plan, the new terms, the new rates 
        and/or rating plan may take effect on the renewal date of the 
        policy if the insurer has sent to the policyholder notice of the 
        new terms, new rates and/or rating plan at least 60 days prior 
        to the expiration date.  If the insurer has not so notified the 
        policyholder, the policyholder may elect to cancel the renewal 
        policy within the 60-day period after receipt of the notice.  
        Earned premium for the period of coverage, if any, shall be 
        calculated pro rata upon the prior rate.  This subdivision 
        section does not apply to ocean marine insurance, accident and 
        health insurance, and reinsurance, and coverage under the 
        federal Terrorism Risk Insurance Act. 
           This section does not apply if the change relates to guide 
        "a" rates or excess rates also known as "consent to rates" or if 
        there has been any change in the risk insured. 
           Sec. 7.  [60D.30] [ELIGIBILITY DETERMINATION.] 
           Section 302A.521, subdivision 3, applies to a corporation 
        that is a member of an insurance holding company system, except 
        if a determination for advancement is not made under section 
        302A.521, subdivision 6, clauses (1) to (4), the corporation 
        that is a member of an insurance holding company system may make 
        the determination that a person is entitled to payment or 
        reimbursement of expenses in advance of the final disposition of 
        a proceeding upon receipt of a written affirmation as provided 
        in section 302A.521, subdivision 3. 
           Sec. 8.  Minnesota Statutes 2004, section 60K.46, 
        subdivision 7, is amended to read: 
           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 forward a written 
        memorandum or binder containing the terms of the oral agreement 
        to the insured within three five business days from the time the 
        oral agreement is entered, unless the insurer forwards the 
        information.  The memorandum of coverage or binder may be 
        forwarded by mail, facsimile, or electronically.  The memorandum 
        of coverage or binder must be forwarded by mail, unless the 
        insured authorizes facsimile or electronic transmission of it.  
        A memorandum of coverage or binder must be provided by the 
        insurer to the policyholder upon request.  
           Sec. 9.  Minnesota Statutes 2004, section 61A.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPROVAL REQUIRED.] Except as otherwise 
        authorized pursuant to subdivision 2a, no policy or certificate 
        of life insurance or annuity contract, issued to an individual, 
        group, or multiple employer trust, nor any rider of any kind or 
        description which is made a part thereof shall be issued or 
        delivered in this state, or be issued by a life insurance 
        company organized under the laws of this state, until the form 
        of the same has been approved by the commissioner.  In making a 
        determination under this section, the commissioner may require 
        the insurer to provide rates and advertising materials related 
        to policies or contracts, certificates, or similar evidence of 
        coverage issued or delivered in this state.  
           Subdivisions 1 to 5 apply to a policy, certificate of 
        insurance, or similar evidence of coverage issued to a Minnesota 
        resident or issued to provide coverage to a Minnesota resident.  
        Subdivisions 1 to 5 do not apply to a certificate of insurance 
        or similar evidence of coverage that meets the conditions of 
        section 61A.093, subdivision 2. 
           Sec. 10.  Minnesota Statutes 2004, section 61A.02, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [EXPEDITED PROCEDURE FOR LIFE OR ANNUITY 
        CONTRACTS; FORM AND RATE FILING REVIEWS.] (a) An insurer may 
        file a life or annuity contract, rates, or forms and all related 
        riders of any kind or description with the commissioner for a 
        review under this subdivision.  Any review must be completed 
        within 60 days of receipt of a completed filing.  The cost of 
        any actuarial review must be paid by the insurer submitting the 
        filing under this subdivision. 
           (b) If a filing has been disapproved and is resubmitted, 
        the cover letter must note the disapproval and any changes made 
        since the earlier filing, with an explanation of why the new 
        filing should be approved.  Resubmission of disapproved forms 
        should, where possible, be made within 90 days of disapproval. 
           (c) The filer may request a hearing within ten days of 
        receiving a final disapproval.  Within 20 days of the receipt of 
        the request, the commissioner shall schedule a date for the 
        hearing, which must occur within 30 days of the scheduling.  At 
        least ten days' written notice of the hearing must be given to 
        all interested parties.  All hearings must be conducted in 
        accordance with chapter 14.  
           (d) The hearing officer may order a prehearing conference 
        for the resolution or simplification of issues, to be held no 
        less than three days before the scheduled date of a hearing. 
           (e) All actuaries used by the commissioner to review 
        filings submitted by insurers pursuant to this subdivision, 
        whether employed by the department or secured by contract, must 
        be members of the American Academy of Actuaries.  The 
        commissioner may contract with actuaries to review filings 
        submitted by insurers under this subdivision, and shall assess 
        the applicant for the costs of this review.  Payments received 
        by the commissioner under this subdivision shall be deposited in 
        the revolving fund established under section 60A.03. 
           (f) Except for the change in timing for the review of 
        completed filings found in paragraph (a) and the expedited 
        hearing procedures found in paragraph (c), nothing in this 
        subdivision shall be construed as changing the statutory and 
        regulatory standards for approval or disapproval of filings. 
           Sec. 11.  Minnesota Statutes 2004, section 72A.501, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIREMENT; CONTENT.] An authorization 
        used by an insurer, insurance-support organization, or insurance 
        agent to disclose or collect personal or privileged information 
        must be in writing and must meet the following requirements: 
           (1) is written in plain language; 
           (2) is dated; 
           (3) specifies the types of persons authorized to disclose 
        information about the person; 
           (4) specifies the nature of the information authorized to 
        be disclosed; 
           (5) names the insurer or insurance agent and identifies by 
        generic reference representatives of the insurer to whom the 
        person is authorizing information to be disclosed; 
           (6) specifies the purposes for which the information is 
        collected; and 
           (7) specifies the length of time the authorization remains 
        valid. 
        If the insurer, insurance-support organization, or insurance 
        agent determines to disclose or collect a kind of information 
        not specified in a previous authorization, a new authorization 
        specifying that kind of information must be obtained. 
           Sec. 12.  Minnesota Statutes 2004, section 72A.501, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION.] (a) If the authorization is signed 
        to collect information in connection with an application for a 
        property and casualty insurance policy, a policy reinstatement, 
        or a request for a change in benefits, the authorization must 
        not remain is valid for longer than one year from the date the 
        authorization is signed or the date the insurer grants or denies 
        coverage, reinstatement, or change in benefits, whichever is 
        sooner as long as the individual is continually insured with the 
        insurer.  At each renewal of the policy, the insurer must notify 
        the insured in writing of the contents of the authorization and 
        that the authorization remains in effect unless revoked. 
           (b) If the authorization is signed to collect information 
        in connection with an application for a life, disability, and 
        health insurance policy or contract, reinstatement, or request 
        for change in benefits, the authorization may not remain is 
        valid for longer than 26 months from the date the authorization 
        is signed as long as the individual is continually insured with 
        the insurer.  At each renewal of the policy, the insurer must 
        notify the insured in writing of the contents of the 
        authorization and that the authorization remains in effect 
        unless revoked. 
           (c) This section and section 72A.502, subdivisions 1 and 
        12, do not apply to the collection and use of a numeric product 
        referred to as an insurance score or credit score that is used 
        by a licensed insurance agent or insurer exclusively for the 
        purpose of underwriting or rating an insurance policy, if the 
        agent or insurer informs the policyholder or prospective 
        policyholder requesting the insurance coverage that an insurance 
        score or credit score will be obtained for the purpose of 
        underwriting or rating the policy. 
           Sec. 13.  [REPEALER.] 
           Minnesota Statutes 2004, section 60A.171, subdivision 4, is 
        repealed. 
           Sec. 14.  [EFFECTIVE DATE; APPLICATION.] 
           Sections 2, 3, and 10 are effective the day following final 
        enactment and apply to filings made on or after that date. 
           Presented to the governor May 20, 2005 
           Signed by the governor May 24, 2005, 1:40 p.m.