SF 2491

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; regulating claim denials under aviation liability coverage;
amending Minnesota Statutes 2006, section 60A.081, subdivision 1; Minnesota
Statutes 2007 Supplement, section 360.59, subdivision 10.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 60A.081, subdivision 1, is amended to
read:

Subdivision 1.

Compliance exclusions prohibited; exception.

new text begin (a) new text end No policy of
insurance issued or delivered in this state covering any loss, damage, expense, or liability
arising out of the ownership, maintenance, or use of an aircraft, shall exclude or deny
coverage because the aircraft is operated in violation of federal or civil air regulations,
state law or rules, or local ordinances. This section does not prohibit the use of specific
exclusions or conditions in the policy which relate to:

(1) Certification of an aircraft in a stated category by the federal aviation
administration deleted text begin . deleted text end new text begin ;
new text end

(2) Certification of a pilot in a stated category by the federal aviation administration deleted text begin . deleted text end new text begin ;
new text end

(3) Establishing requirements for pilot experience deleted text begin . deleted text end new text begin ; or
new text end

(4) Establishing limitations on the use of the aircraft.

new text begin (b) An insured's action or failure to act is not a basis for denial of a claim, unless
the insured's action or failure to act had a direct causal connection to the loss upon which
the claim is based. For purposes of this paragraph, "denial of a claim" includes refusal
to pay a claim due to a retroactive termination of the policy on the basis of the insured's
action or failure to act.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, and applies to
policies issued, renewed, or continued as defined in Minnesota Statutes, section 60A.02,
subdivision 2a, on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2007 Supplement, section 360.59, subdivision 10, is
amended to read:

Subd. 10.

Certificate of insurance.

(a) Every owner of aircraft in this state
when applying for registration, reregistration, or transfer of ownership shall supply any
information the commissioner reasonably requires to determine that the aircraft during
the period of its contemplated operation is covered by an insurance policy with limits of
not less than $100,000 per passenger seat liability both for passenger bodily injury or
death and for property damage; not less than $100,000 for bodily injury or death to each
nonpassenger in any one accident; and not less than $300,000 per occurrence for bodily
injury or death to nonpassengers in any one accident. new text begin The insurance must comply with
section 60A.081, unless that section is inapplicable under section 60A.081, subdivision 3.
new text end

The information supplied to the commissioner must include but is not limited to the name
and address of the owner, the period of contemplated use or operation, if any, and, if
insurance coverage is then presently required, the name of the insurer, the insurance policy
number, the term of the coverage, policy limits, and any other data the commissioner
requires. No certificate of registration shall be issued pursuant to subdivision 3 in the
absence of the information required by this subdivision.

(b) In the event of cancellation of aircraft insurance by the insurer, the insurer shall
notify the Department of Transportation at least ten days prior to the date on which the
insurance coverage is to be terminated. Unless proof of a new policy of insurance is
filed with the department meeting the requirements of this subdivision during the period
of the aircraft's contemplated use or operation, the registration certificate for the aircraft
shall be revoked forthwith.

(c) Nothing in this subdivision shall be construed to require an owner of aircraft to
maintain passenger seat liability coverage on aircraft for which an experimental certificate
has been issued by the administrator of the Federal Aviation Administration pursuant to
Code of Federal Regulations, title 14, sections 21.191 to 21.195 and 91.42, whereunder
persons operating the aircraft are prohibited from carrying passengers in the aircraft.
Whenever the aircraft becomes certificated to carry passengers, passenger seat liability
coverage shall be required as provided in this subdivision.

(d) The requirements of this subdivision shall not apply to any aircraft built by the
original manufacturer prior to December 31, 1939 and owned and operated solely as a
collector's item, if the owner files an affidavit with the commissioner. The affidavit shall
state the owner's name and address, the name and address of the person from whom the
aircraft was purchased, the make, year, and model number of the aircraft, the federal
aircraft registration number, the manufacturer's identification number, and that the aircraft
is owned and operated solely as a collector's item and not for general transportation
purposes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, and applies to
policies issued, renewed, or continued as defined in Minnesota Statutes, section 60A.02,
subdivision 2a, on or after that date.
new text end