1.1 	A bill for an act
1.2 	relating to commerce; regulating the compensation of
1.3 	licensees; requiring disclosures; amending Minnesota
1.4 	Statutes 2004, section 72A.20, by adding a
1.5 	subdivision; proposing coding for new law in Minnesota
1.6 	Statutes, chapter 60K.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. [60K.481] DISCLOSURE OF COMPENSATION BY
1.9 	INSURANCE PRODUCERS.
1.10 	Any person receiving compensation for the sale or renewal
1.11 	of an insurance product shall, before selling the product,
1.12 	disclose in writing to the prospective purchaser any
1.13 	compensation, service fees, brokerage, or any other payments or
1.14 	allowances or anything of value whether paid directly or
1.15 	indirectly to the producer or an affiliate of the producer as a
1.16 	direct result of the sale.  The disclosure may be expressed in
1.17 	dollars or as a percentage of the premium.  The disclosure
1.18 	required in this section applies to the principal insurance
1.19 	transaction.  The disclosure is not required of subsidiary
1.20 	transactions such as changes to coverage.

1.21 	Sec. 2. [60K.482] DISCLOSURE OF INSURANCE PRODUCER AGENCY
1.22 	RELATIONSHIP.
1.23 	An insurance producer must inform its customers, before
1.24 	offering to sell or renew an insurance product, that under
1.25 	Minnesota law the insurance producer is an agent of the
1.26 	insurance company and not the agent of the insured.

2.1 	Sec. 3. Minnesota Statutes 2004, section 72A.20, is
2.2 	amended by adding a subdivision to read:
2.3 		Subd. 38.Compensation disclosure. It is an unfair trade
2.4 	practice for any insurance producer to accept compensation or
2.5 	any other item of value that inures to the benefit of the
2.6 	producer based on an expenditure made by the insured unless the
2.7 	producer has disclosed the source and nature of compensation
2.8 	pursuant to the requirements of chapter 60K.