1.1                          A bill for an act
  1.2             relating to insurance; property-casualty; prohibiting 
  1.3             agent termination due to low premium volume of 
  1.4             business; amending Minnesota Statutes 1994, section 
  1.5             60A.172. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 60A.172, is 
  1.8   amended to read: 
  1.9      60A.172 [INSURANCE AGENCY CONTRACTS; CANCELLATION.] 
  1.10     Subdivision 1.  [CANCELLATION BASED UPON LOSS RATIO.] (a) 
  1.11  An insurer may not cancel a written agreement with an agent or 
  1.12  reduce or restrict an agent's underwriting authority with 
  1.13  respect to property or casualty insurance, based solely on the 
  1.14  loss ratio experience on that agent's book of business, if:  the 
  1.15  insurer required the agent to submit the application for 
  1.16  underwriting approval, all material information on the 
  1.17  application was fully completed, and the agent has not omitted 
  1.18  or altered any information provided by the applicant. 
  1.19     (b) For purposes of this ~~section~~ subdivision, "loss ratio 
  1.20  experience" means the ratio of claims paid divided by the 
  1.21  premiums paid. 
  1.22     (c) This ~~section~~ subdivision applies only to agents who 
  1.23  write 80 percent or more of their gross annual insurance 
  1.24  business for one company or any or all of its subsidiaries, and 
  1.25  are not in the direct employ of the company. 
  2.1      Subd. 2.  [CANCELLATION BASED UPON PREMIUM VOLUME.] An 
  2.2   insurer may not cancel a written agreement with an agent or 
  2.3   reduce or restrict an agent's underwriting authority with 
  2.4   respect to property and casualty insurance, based solely upon 
  2.5   the premium volume of business generated by that agent for that 
  2.6   insurer.  This subdivision does not apply to agents in the 
  2.7   direct employ of the insurer. 
  2.8      Sec. 2.  [EFFECTIVE DATE.] 
  2.9      Section 1 is effective the day following final enactment 
  2.10  and applies to cancellations, reductions, or restrictions begun 
  2.11  on or after that date.