1.1                          A bill for an act 
  1.2             relating to insurance; providing a remedy to an 
  1.3             insured when an insurer refuses in bad faith to pay or 
  1.4             to settle a claim; awarding attorney fees and costs to 
  1.5             an insured who prevails in a first-party coverage 
  1.6             action against an insurer; proposing coding for new 
  1.7             law in Minnesota Statutes, chapter 72A. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [72A.136] [INSURER BAD FAITH; REMEDY.] 
  1.10     Subdivision 1.  [CAUSE OF ACTION.] An insured under any 
  1.11  insurance policy may bring an action against the insurer issuing 
  1.12  the policy alleging that the insurer unreasonably and in bad 
  1.13  faith refused to pay or to settle a claim made pursuant to the 
  1.14  provisions of the policy, or otherwise unreasonably and in bad 
  1.15  faith refused to timely perform its obligations under the 
  1.16  policy.  Bad faith shall include, but is not limited to, failing 
  1.17  to conduct a reasonably thorough investigation before denying a 
  1.18  claim and failing to pay or to settle a claim within a 
  1.19  reasonable time period. 
  1.20     Subd. 2.  [DAMAGES.] In an action under this section, an 
  1.21  insured may recover compensatory damages in excess of the policy 
  1.22  limits and also may recover punitive damages pursuant to section 
  1.23  549.20.  An insured who prevails in an action under this section 
  1.24  shall recover reasonable attorney fees and costs. 
  1.25     Subd. 3.  [NONPREEMPTION.] The remedy specified in this 
  1.26  section does not preempt any other remedy or cause of action 
  2.1   provided for pursuant to statute or pursuant to the common law 
  2.2   of this state. 
  2.3      Subd. 4.  [LIMITATION PERIOD.] An action under this section 
  2.4   shall be commenced within three years of the bad faith act, 
  2.5   notwithstanding any policy provision to the contrary. 
  2.6      Sec. 2.  [72A.137] [ATTORNEY FEES AND COSTS; INSURED 
  2.7   PREVAILING IN FIRST PARTY COVERAGE ACTION.] 
  2.8      In an action where an insured prevails against an insurer 
  2.9   who has not paid a claim on any type of first party coverage, 
  2.10  the court shall award the insured reasonable attorney fees and 
  2.11  costs of the action. 
  2.12     Sec. 3.  [EFFECTIVE DATE; APPLICABILITY.] 
  2.13     Sections 1 and 2 are effective the day following final 
  2.14  enactment and shall apply to all actions against insurers which 
  2.15  have been commenced and are pending in any state or federal 
  2.16  court on that date, to all actions commenced after that date, 
  2.17  and to all acts occurring on or after that date.