1999 Minnesota Statutes

     65A.36 Underwriting. 

    Subdivision 1.  Agents are not permitted to bind coverage.  
 The facility shall issue a policy if the risk meets preliminary 
 underwriting requirements.  The facility may request an 
 inspection report to obtain further underwriting information.  
 If the inspection reveals that the applicant is not eligible for 
 the coverage applied for, the facility shall inform the 
 applicant within 59 days of the inception of the policy that the 
 policy will be rescinded under section 65A.01, subdivision 3, 
 paragraph (b), or canceled under section 65A.38.  If the 
 applicant is eligible for other coverage provided by the 
 facility, the facility will replace the rescinded or canceled 
 policy with a policy providing coverage for which the applicant 
 is eligible. 

    Before the 60th day after the inception of the policy, the 
 facility shall advise the applicant that: 

    (a) The risk is acceptable with or without a condition 
 charge.  If a condition charge applies, the facility will tell 
 the insured what improvements are necessary in order to remove 
 the charge; 

    (b) The risk is not acceptable unless improvements noted by 
 the facility are made by the applicant and confirmed by the 
 facility; or 

    (c) The risk is not acceptable for the reasons stated by 
 the facility.  

    Subd. 2.  If the risk is accepted, an invoice will be 
 delivered to the applicant requiring payment of the premium 
 amount.  After receipt of the invoiced premium, the facility 
 shall issue an insurance policy to the applicant within five 
 business days.  

    Subd. 3.  In the event a risk is declined because it fails 
 to meet reasonable underwriting standards, the applicant shall 
 be so notified.  Reasonable underwriting standards shall 
 include, but not be limited to, the following: 

    (a) Physical condition of the property, such as its 
 construction, heating, wiring, evidence of previous fires, or 
 general deterioration; 

    (b) Its present use or housekeeping such as vacancy, 
 overcrowding, storage of rubbish, or flammable materials; 

    (c) Other specific characteristics of ownership, condition, 
 occupancy, or maintenance which are violative of public policy 
 and result in increased exposure to loss.  

    Neighborhood or area location or any environmental hazard 
 beyond the control of the property owner shall not be deemed to 
 be acceptable criteria for declining a risk.  

    Subd. 4.  In the event that a risk is declined on the basis 
 that it does not meet reasonable underwriting standards, or the 
 coverage will be written on condition that the property be 
 improved, the facility shall, within five business days, send 
 copies of the inspection report to the applicant and the 
 commissioner, and shall advise the applicant of the right to and 
 the procedure for an appeal to the governing board and to the 
 commissioner.  

    Subd. 5.  The facility must within five business days of 
 the receipt of a completed application advise the applicant that 
 the risk has been declined, the risk has been accepted, or that 
 the risk meets preliminary underwriting standards and a policy 
 has been issued. 

    HIST: 1969 c 483 s 6; 1986 c 444; 1993 c 248 s 9; 1999 c 120 s 
 7,8