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CHAPTER 72A. REGULATION OF TRADE PRACTICES

Table of Sections
SectionHeadnote
72A.001APPLICATION OF LAWS 2005, CHAPTER 56, TERMINOLOGY CHANGES.

SCOPE

72A.01SCOPE.

PROHIBITIONS AND PENALTIES IN GENERAL

72A.02VIOLATIONS AS TO POLICIES OF INSURANCE.
72A.03AGENT OF INSURER; PROCURING PREMIUMS BY FRAUD.
72A.04FALSE STATEMENTS IN APPLICATION.
72A.05FAILURE TO MAKE REPORT OR COMPLY WITH LAW.
72A.06Repealed, 1977 c 316 s 3
72A.061MANDATORY FILINGS; FAILURE TO COMPLY; PENALTIES.
72A.062Repealed, 1982 c 622 s 5
72A.07VIOLATIONS OF LAWS RELATING TO AGENTS, PENALTIES.
72A.08LAWS AGAINST REBATE.
72A.09VIOLATIONS WHERE OFFENSE IS NOT SPECIFICALLY DESIGNATED.
72A.10FAILURE TO APPEAR OR OBSTRUCTING COMMISSIONER.
72A.11COMPLAINANT ENTITLED TO ONE-HALF OF FINE IN CERTAIN CASES.
72A.12LIFE INSURANCE.
72A.125RENTAL VEHICLE PERSONAL ACCIDENT INSURANCE; SPECIAL REQUIREMENTS.
72A.13ACCIDENT AND HEALTH INSURANCE, VIOLATIONS OF CERTAIN SECTIONS.
72A.135FAILURE TO FOLLOW DIVIDEND AND PRICING POLICY; PENALTIES.
72A.139USE OF GENETIC TESTS.
72A.14Renumbered 65B.13
72A.141Renumbered 65B.14
72A.142Renumbered 65B.15
72A.143Renumbered 65B.16
72A.144Renumbered 65B.17
72A.145Renumbered 65B.18
72A.146Renumbered 65B.19
72A.147Renumbered 65B.20
72A.148Renumbered 65B.21
72A.149Renumbered 65B.22
72A.1491Renumbered 65B.23
72A.1492Renumbered 65B.24
72A.1493Renumbered 65B.25
72A.1494Renumbered 65B.26
72A.1495Renumbered 65B.27
72A.15PENALTY FOR VIOLATION OF LAW PROVIDING FOR INSURANCE IN UNLICENSED COMPANIES.
72A.16MUTUAL COMPANIES.

REGULATION OF TRADE PRACTICES

72A.17PURPOSE OF SECTIONS 72A.17 TO 72A.32.
72A.18DEFINITIONS.
72A.19UNFAIR METHODS AND UNFAIR OR DECEPTIVE ACTS AND PRACTICES.
72A.20METHODS, ACTS, AND PRACTICES WHICH ARE DEFINED AS UNFAIR OR DECEPTIVE.
72A.201REGULATION OF CLAIMS PRACTICES.
72A.202Repealed, 2002 c 283 s 3
72A.205Repealed, 1996 c 446 art 1 s 72; 1998 c 339 s 72
72A.206Repealed, 1992 c 540 art 2 s 22
72A.207GRADED DEATH BENEFITS.
72A.21POWER OF COMMISSIONER.
72A.22HEARING; WITNESSES; PRODUCTION OF BOOKS.
72A.23Repealed, 1987 c 336 s 47
72A.24Repealed, 1987 c 336 s 47
72A.25UNFAIR COMPETITION.
72A.26INTERVENTION.
72A.27APPEAL.
72A.28Repealed, 1987 c 336 s 47
72A.285CLAIM FOR INSURANCE BENEFITS; RELEASE OF SUMMARY INFORMATION.
72A.29CONCURRENT REMEDIES.
72A.30EVIDENTIAL PRIVILEGE DENIED; IMMUNITY; WAIVER.
72A.31CERTAIN ACTS DEEMED UNFAIR METHOD OF COMPETITION.
72A.32VIOLATIONS, PROCEDURE.
72A.321Repealed, 1981 c 129 s 2
72A.325INSURANCE FOR FUNERAL OR BURIAL EXPENSE; FREEDOM OF CHOICE.
72A.327HEALTH CLAIMS; RIGHTS OF APPEAL.

UNAUTHORIZED INSURERS FALSE

ADVERTISING PROCESS

72A.33PURPOSE OF ACT, CONSTRUCTION.
72A.34DEFINITIONS.
72A.35NOTICE TO DOMICILIARY SUPERVISORY OFFICIAL.
72A.36ACTION BY COMMISSIONER.
72A.37SERVICE UPON UNAUTHORIZED INSURER.
72A.38CONSTITUTIONALITY.
72A.39CITATION.

REGULATION OF UNAUTHORIZED INSURERS

72A.40PURPOSE.
72A.41TRANSACTING BUSINESS WITHOUT CERTIFICATE OF AUTHORITY.
72A.42ENFORCEMENT AUTHORITY.
72A.43SERVICE OF PROCESS UPON UNAUTHORIZED COMPANY BY COMMISSIONER.
72A.44PENALTY.
72A.45Repealed, 1994 c 485 s 66

MINNESOTA INSURANCE FAIR

INFORMATION REPORTING

72A.49SHORT TITLE.
72A.491DEFINITIONS.
72A.492SCOPE.
72A.493OBTAINING INFORMATION BY IMPROPER MEANS.
72A.494NOTICE.
72A.495MARKETING AND RESEARCH SURVEYS.
72A.496INVESTIGATIVE CONSUMER REPORTS.
72A.497ACCESS TO PERSONAL INFORMATION.
72A.498CORRECTION, AMENDMENT, OR DELETION OF PERSONAL INFORMATION.
72A.499REASONS FOR ADVERSE UNDERWRITING DECISIONS.
72A.50PREVIOUS ADVERSE UNDERWRITING DECISIONS.
72A.501DISCLOSURE AUTHORIZATION.
72A.502DISCLOSURE OF INFORMATION; LIMITATIONS AND CONDITIONS.
72A.503PRIVATE REMEDIES.
72A.504OBTAINING INFORMATION UNDER IMPROPER MEANS.
72A.505IMMUNITY.

CANCELLATION OF POLICIES

72A.51RIGHT TO CANCEL.
72A.52NOTICE REQUIREMENTS.
72A.53VENDING MACHINE SALES.
72A.001 APPLICATION OF LAWS 2005, CHAPTER 56, TERMINOLOGY CHANGES.
State agencies shall use the terminology changes specified in Laws 2005, chapter 56, section
1, when printed material and signage are replaced and new printed material and signage are
obtained. State agencies do not have to replace existing printed material and signage to comply
with Laws 2005, chapter 56, sections 1 and 2. Language changes made according to Laws 2005,
chapter 56, sections 1 and 2, shall not expand or exclude eligibility to services.
History: 2005 c 56 s 3

SCOPE

72A.01 SCOPE.
This chapter includes certain prohibitions and penalties. Other prohibitions and penalties
may be found in other articles of Laws 1967, chapter 395, and other state laws.
History: 1967 c 395 art 12 s 1

PROHIBITIONS AND PENALTIES IN GENERAL

72A.02 VIOLATIONS AS TO POLICIES OF INSURANCE.
Every company, and every officer and agent of any company, making, issuing, delivering, or
tendering any policy of insurance of any kind, or directing any of the same to be done, in willful
violation of any of the provisions of law, for a first offense, shall be guilty of a misdemeanor,
and for each subsequent offense, of a gross misdemeanor; and, in addition to all other penalties
prescribed by law, every company issuing any such policy shall be disqualified from doing any
insurance business in this state until the payment of all fines imposed and for one year thereafter.
History: 1967 c 395 art 12 s 2
72A.03 AGENT OF INSURER; PROCURING PREMIUMS BY FRAUD.
Every insurance agent who acts for another in negotiating a contract of insurance by an
insurance company shall be held to be the company's agent for the purpose of collecting or
securing the premiums therefor, whatever conditions or stipulations may be contained in the
contract or policy. Any such agent who by fraudulent representations procures payment, or an
obligation for the payment, of an insurance premium shall be guilty, for the first offense, of a
misdemeanor, and for each subsequent offense, of a gross misdemeanor.
History: 1967 c 395 art 12 s 3; 1986 c 444
72A.04 FALSE STATEMENTS IN APPLICATION.
Every solicitor, agent, examining physician, or other person who knowingly or willfully
makes a false or fraudulent statement in, or relative to, any application for insurance or
membership for any purpose shall be guilty of a gross misdemeanor.
History: 1967 c 395 art 12 s 4
72A.05 FAILURE TO MAKE REPORT OR COMPLY WITH LAW.
Every officer and agent of any insurance company required to make any report or perform
any act who shall neglect or refuse to comply with such requirement, and every agent, solicitor, or
collector of the corporation in this state who fails or neglects to procure from the commissioner a
certificate of authority to do such business, or who fails or refuses to comply with, or violates, any
provision of the insurance law, shall be guilty, for the first offense, of a misdemeanor, and for each
subsequent offense, of a gross misdemeanor.
History: 1967 c 395 art 12 s 5
72A.06 [Repealed, 1977 c 316 s 3]
72A.061 MANDATORY FILINGS; FAILURE TO COMPLY; PENALTIES.
    Subdivision 1. Annual statements. Any insurance company licensed to do business in this
state, including fraternals, reciprocals and township mutuals, which neglects to file its annual
statement in the form prescribed and within the time specified by law shall be subject to a penalty
of $100 for each day in default. If, at the end of 45 days, the default has not been corrected, the
company shall be given ten days in which to show cause to the commissioner why its license
should not be suspended. If the company has not made the requisite showing within the ten-day
period, the license and authority of the company may, at the discretion of the commissioner, be
suspended during the time the company is in default.
Any insurance company, including fraternals, reciprocals, and township mutuals, willfully
making a false annual or other required statement shall pay a penalty to the state not to exceed
$5,000. Either or both of the monetary penalties imposed by this subdivision may be recovered in
a civil action brought by and in the name of the state.
    Subd. 2. Articles of incorporation; bylaws. Any insurance company licensed to do business
in this state, including fraternals and township mutuals, which neglects to file amended bylaws
or related amendments within 30 days after date of approval shall be subject to a penalty of
$25 for each day in default.
Any insurance company licensed to do business in this state, including fraternals and
township mutuals, which neglects to file amended articles of incorporation or related amendments
within 30 days after date of approval shall be subject to a penalty of $25 for each day in default,
provided that foreign insurers shall be allowed 60 days in which to file.
If after 90 days the filings required under this subdivision are still in default, the company
shall be given ten days in which to show cause why its license should not be suspended.
    Subd. 3. Other filings. Any insurance company licensed to do business in this state,
including fraternals, reciprocals, and township mutuals, which neglects to comply with any other
mandatory filing in the form prescribed and within the time specified by law or as specified
on the document shall be subject to a penalty of $25 for each day in default. If after 90 days a
default has not been corrected, the company shall be given ten days in which to show cause why
its license should not be suspended.
    Subd. 4. Suspension, discretionary powers. Any company which writes new business in
this state, including fraternals, reciprocals and township mutuals, while its license is suspended
and after it has been notified by the commissioner by a notice mailed to the home office of the
company that its license has been suspended shall pay to the state the sum of $25 for each contract
of insurance entered into by it after being notified of its license suspension. The notification
shall be mailed by registered letter and deemed to have been received by the company at its
home office in the usual course of the mails.
    Subd. 5. Extensions. The commissioner may grant an extension of any filing deadline or
requirement specified by this section, on receiving, not less than ten days before the date of
default, satisfactory evidence of imminent hardship to the company.
    Subd. 6. Penalties; deposit to general fund. All penalties recovered pursuant to this section
shall be paid into the general fund.
History: 1977 c 316 s 1; 1984 c 592 s 71; 1986 c 444; 1991 c 325 art 10 s 10
72A.062 [Repealed, 1982 c 622 s 5]
72A.07 VIOLATIONS OF LAWS RELATING TO AGENTS, PENALTIES.
Any person, firm, or corporation violating, or failing to comply with, any of the provisions
of sections 60K.30 to 60K.56 and any person who acts in any manner in the negotiation or
transaction of unlawful insurance with an insurance company not licensed to do business in the
state, or who, as principal or agent, violates any provision of law relating to the negotiation
or effecting of contracts of insurance, shall be guilty of a misdemeanor. Upon the filing of a
complaint by the commissioner of commerce in a court of competent jurisdiction against any
person violating any provisions of this section, the county attorney of the county in which the
violation occurred shall prosecute the person. Upon the conviction of any agent of any violation
of the provisions of sections 60K.30 to 60K.56, the commissioner shall suspend the authority of
the agent to transact any insurance business within the state for a period of not less than three
months. Any insurer employing an agent and failing to procure an appointment, as required by
sections 60K.30 to 60K.56, or allowing the agent to transact business for it within the state before
an appointment has been procured, shall pay the commissioner, for the use of the state, a penalty
of $25 for each offense. Each sale of an insurance policy by an agent who is not appointed by
an insurance company shall constitute a separate offense, but no insurer shall be required to pay
more than $300 in penalties as a result of the activities of a single unappointed agent. In the event
of failure to pay a penalty within ten days' after notice from the commissioner, the authority of
the insurer to do business in this state shall be revoked by the commissioner until the penalty is
paid. No insurer whose authority is revoked shall be readmitted until it shall have complied with
all the terms and conditions imposed for admission in the first instance. Any action taken by the
commissioner under this section shall be subject to review by the district court of the county in
which the office of the commissioner is located.
History: 1967 c 395 art 12 s 7; 1977 c 243 s 4; 1983 c 289 s 114 subd 1; 1984 c 592 s 72;
1984 c 655 art 1 s 92; 1992 c 564 art 3 s 25; 2001 c 117 art 2 s 15
72A.08 LAWS AGAINST REBATE.
    Subdivision 1. Rebate defined and prohibited. No insurance company or association,
however constituted or entitled, including any affiliate of the insurance company or association,
doing business in this state, nor any officer, agent, subagent, solicitor, employee, intermediary, or
representative thereof, shall make or permit any advantage or distinction in favor of any insured
individual, firm, corporation, or association with respect to the amount of premium named in, or
to be paid on, any policy of insurance, or shall offer to pay or allow directly or indirectly or by
means of any device or artifice, as inducements to insurance, any rebate or premium payable on
the policy, or any special favor or advantage in the dividends or other profit to accrue thereon, or
any valuable consideration or inducement not specified in the policy contract of insurance, or
give, sell, or purchase, offer to give, sell or purchase, as inducement to insure or in connection
therewith, any stocks, bonds, or other securities of any insurance company or other corporation,
association, partnership, or individual, or any dividends or profits accrued or to accrue thereon,
or anything of value, not specified in the policy. For purposes of this section, "affiliate" has the
meaning given in section 60D.15, subdivision 2.
    Subd. 2. Insured prohibited from receiving rebates. No person shall receive or accept
from any such company or association, including any affiliate of the insurance company or
association, or from any of its officers, agents, subagents, solicitors, employees, intermediaries, or
representatives, or any other person any such rebate of premium payable on the policy, or any
special favor or advantage in the dividends or other financial profits accrued, or to accrue, thereon,
or any valuable consideration or inducement not specified in the policy of insurance. No person
shall be excused from testifying, or from producing any books, papers, contracts, agreements, or
documents, at the trial of any other person, copartnership, association, or company charged with
violation of any provision of this section on the ground that the testimony or evidence may tend
to incriminate; but no person shall be prosecuted for any act concerning which the person shall
be compelled to so testify or produce evidence, documentary or otherwise, except for perjury
committed in so testifying.
    Subd. 3. Penalty for rebate. Any company, association, or individual violating any
provisions of this section, whether the violation be in the giving or accepting of anything herein
prohibited, shall be punished by a fine of not less than $60 nor more than $200. In the case of a
violation by an affiliate or by an individual on behalf of an affiliate, this subdivision applies to the
insurance company or association.
    Subd. 4. Exceptions. The provisions of this section shall not apply to any policy procured
by officers, agents, subagents, employees, intermediaries, or representatives wholly and solely
upon property of which they are, respectively, the owner at the time of procuring the policy,
where the officers, agents, subagents, employees, intermediaries, or representatives are, and
have been for more than six months prior to the issuing of the policy, regularly employed by, or
connected with, the company or association issuing the policy; and any life insurance company
doing business in this state may issue industrial policies of life or endowment insurance, with
or without annuities, with special rates of premiums less than the usual rates of premiums for
these policies, to members of labor organizations, credit unions, lodges, beneficial societies, or
similar organizations, or employees of one employer, who, through their secretary or employer,
may take out insurance in an aggregate of not less than 50 members and pay their premiums
through the secretary or employer.
History: 1967 c 395 art 12 s 8; 1986 c 444; 1998 c 375 s 1-3; 2002 c 330 s 30,34; 2002
c 331 s 18; 2002 c 342 s 11; 2002 c 357 s 2
72A.09 VIOLATIONS WHERE OFFENSE IS NOT SPECIFICALLY DESIGNATED.
Whoever violates any provision of the insurance law where the nature of the offense is not
specifically designated herein shall be guilty, for the first offense, of a misdemeanor, and for each
subsequent offense, of a gross misdemeanor.
History: 1967 c 395 art 12 s 9
72A.10 FAILURE TO APPEAR OR OBSTRUCTING COMMISSIONER.
Whoever without justifiable cause neglects, upon due summons, to appear and testify before
the commissioner, or obstructs the commissioner, or deputy or assistant commissioner, in an
examination of an insurance company, shall be guilty, for the first offense, of a misdemeanor, and
for each subsequent offense, of a gross misdemeanor.
History: 1967 c 395 art 12 s 10; 1986 c 444
72A.11 COMPLAINANT ENTITLED TO ONE-HALF OF FINE IN CERTAIN CASES.
The person, other than the commissioner, or deputy or assistant commissioner, upon whose
complaint a conviction is had for violation of the law prohibiting insurance in or by foreign
companies not authorized to do business in this state, shall be entitled to one-half the fine
recovered upon sentence therefor.
History: 1967 c 395 art 12 s 11
72A.12 LIFE INSURANCE.
    Subdivision 1. Issue of prohibited life policies. Every officer or agent of a life insurance
company who shall issue any policy in violation of any order or other prohibition by the
commissioner made pursuant to law, shall be guilty, for the first offense, of a misdemeanor, and
for each subsequent offense, of a gross misdemeanor.
    Subd. 2. Misrepresentation by insurer or agent. No life insurance company doing business
in this state, and no officer, director or agent thereof, shall issue or circulate, or cause or permit to
be issued or circulated, any estimate, illustration, circular or statement of any sort misrepresenting
the terms of any policy issued by it or the benefits or advantages promised thereby, or the
dividends or shares of surplus to be received thereon, or shall use any name or title of any policy
or class of policies misrepresenting the true nature thereof.
Any person violating the provisions of this subdivision shall be guilty of a misdemeanor,
and the license of any company which shall authorize or permit a violation of this subdivision
shall be revoked.
    Subd. 3. Discrimination in accepting risks. No life insurance company or agent, all
other conditions being equal, shall make any discrimination in the acceptance of risks, in rates,
premiums, dividends, or benefits of any kind, or by way of rebates, between persons of the same
class, or on account of race; and upon request of any person whose application has been rejected,
the company shall furnish the rejected applicant, in writing, the reasons therefor, including a
certificate of the examining physician that such rejection was not for any racial cause. Every
company violating either of the foregoing provisions shall forfeit not less than $500, nor more
than $1,000, and every officer, agent, or solicitor violating the same shall be guilty of a gross
misdemeanor; and the commissioner shall revoke the license of such company and its agents, and
grant no new license within one year thereafter.
    Subd. 4. Discrimination; rebates. No life insurance company doing business in this state
shall make or permit any distinction or discrimination in favor of individuals between insurants
of the same class and equal expectation of life in the amount or payment of premiums or rates
charged for policies of life or endowment insurance, or in the dividends or other benefits payable
thereon, or in any other of the terms and conditions of the contracts it makes; nor shall any
such company or agent thereof make any contract of insurance or agreement as to such contract
other than as plainly expressed in the policy issued thereon; nor shall any such company or any
officer, agent, solicitor, or representative thereof pay, allow or give, or offer to pay, allow or give,
directly or indirectly, as inducement to insurance, any rebate of premium payable on the policy, or
any special favor or advantage in the dividends or other benefits to accrue thereon or any paid
employment or contract for services of any kind, or any valuable consideration or inducement
whatever not specified in the policy contract of insurance.
Any violation of the provisions of this subdivision shall be a misdemeanor and punishable as
such.
    Subd. 5. Political contributions prohibited. No insurance company or association,
including fraternal benefit societies, doing business in this state, shall, directly or indirectly,
pay or use, or offer, consent or agree to pay or use, any money or property for or in aid of any
political party, committee or organization, or for or in aid of any corporation, joint stock or other
association organized or maintained for political purposes, or for or in aid of any candidate
for political office, or for nomination for the office, or for any other political purpose, or for
reimbursement or indemnification of any person for money or property used for political
purposes. Any officer, director, stockholder, attorney or agent of any corporation or association
which violates any of the provisions of this section, who participates in, aids, abets, or advises
or consents to any violation, and any person who solicits or knowingly receives any money
or property in violation of this section, is guilty of a gross misdemeanor. Any officer aiding
or abetting in any contribution made in violation of this section is liable to the company or
association for the amount contributed. No person shall be excused from attending and testifying,
or producing any books, papers or other documents before any court, upon any investigation,
proceeding or trial, for a violation of any of the provisions of this section, upon the ground, or
for the reason, that the testimony or evidence, documentary or otherwise, required may tend to
incriminate or degrade the person. No person shall be prosecuted or subjected to any penalty or
forfeiture for or on account of any transaction, matter or thing concerning which the person may
testify or produce evidence, documentary or otherwise, and no testimony given or produced shall
be used against that person upon any criminal investigation or proceeding.
History: 1967 c 395 art 12 s 12; 1983 c 359 s 1; 1986 c 444; 1992 c 564 art 1 s 54
72A.125 RENTAL VEHICLE PERSONAL ACCIDENT INSURANCE; SPECIAL
REQUIREMENTS.
    Subdivision 1. Definition. (a) "Auto rental company" means a corporation, partnership,
individual, or other person that is engaged primarily in the renting of motor vehicles at per diem
rates.
(b) "Rental vehicle personal accident insurance" means accident only insurance providing
accidental death benefits, dismemberment benefits and/or reimbursement for medical expenses
which is issued by an insurer authorized in this state to issue accident and health insurance. These
coverages are nonqualified plans under chapter 62E.
(c) "Liability insurance" means insurance that provides coverage, as applicable, to renters
and other authorized drivers of rental vehicles for liability arising from the operation of the
rental vehicle. At the option of the auto rental company, this coverage may include uninsured or
underinsured motorist coverage whether offered separately or in combination with other liability
insurance.
(d) "Personal effects insurance" means coverage, as applicable, to renters and other rental
vehicle occupants for the loss of, or damage to, personal effects which occurs during the rental
period.
    Subd. 2. Sale by auto rental companies. An auto rental company that offers or sells rental
vehicle personal accident insurance, personal effects insurance, or liability insurance in this state
in conjunction with the rental of a vehicle shall only sell these products if the forms and rates have
met the relevant requirements of section 61A.02, 62A.02, or other relevant sections requiring
approval of forms and rates taking into account the possible infrequency and severity of loss that
may be incurred. An auto rental company offering insurance products for sale shall conduct a
training program for its agents or employees, which must be submitted to the commissioner for
approval. Sections 60K.30 to 60K.56 do not apply if the persons engaged in the sale of these
products are employees of the auto rental company who do not receive commissions or other
remuneration for selling the product in addition to their regular compensation. Compensation may
not be determined in any part by the sale of insurance products. The auto rental company before
engaging in the sale of the product must file with the commissioner the following documents:
(1) an appointment of the commissioner as agent for service of process;
(2) an agreement that the auto rental company assumes all responsibility for the authorized
actions of all unlicensed employees who sell the insurance product on its behalf in conjunction
with the rental of its vehicles;
(3) an agreement that the auto rental company with respect to itself and its employees will be
subject to this chapter regarding the marketing of the insurance products and the conduct of those
persons involved in the sale of insurance products in the same manner as if it were a licensed agent.
An auto rental company failing to file the documents in clauses (1) to (3) is guilty of an
individual violation as to the unlicensed sale of insurance for each sale that occurs after August 1,
1987, until they make the required filings. Each individual sale after August 1, 1987, and prior
to the filing required by this section is subject to, in addition to any other penalties allowable
by law, up to a $200 per violation fine. Further, the sale of the insurance product by an auto
rental company or any employee or agent of the company after August 1, 1987, without having
complied with this section shall be deemed to be in acceptance of the provisions of this section.
Insurance sold pursuant to this subdivision must be limited in availability to rental vehicle
customers though coverage may extend to the customer, other drivers, and passengers using or
riding in the rented vehicles; and limited in duration to a period equal to and concurrent with
that of the vehicle rental.
Persons purchasing rental vehicle personal accident insurance, personal effects insurance, or
liability insurance may be provided a certificate summarizing the policy provisions in lieu of a
copy of the policy if a copy of the policy is available for inspection at the place of sale and a free
copy of the policy may be obtained from the auto rental company's home office.
The commissioner may, after a hearing, revoke an auto rental company's right to operate
under this section if the company has violated the insurance laws of this state and the revocation
is in the public interest.
    Subd. 3. Collision damage waiver. A "collision damage waiver" is a discharge of the
responsibility of the renter or leasee to return the motor vehicle in the same condition as when
it was first rented. The waiver is a full and complete discharge of the responsibility to return
the vehicle in the same condition as when it was first rented. The waiver may not contain any
exclusions except those approved by the commissioner.
History: 1987 c 329 s 21; 1987 c 337 s 115; 1988 c 611 s 3; 1992 c 564 art 3 s 26,29; 1999 c
177 s 69; 1999 c 236 s 2,3; 2001 c 117 art 2 s 16
72A.13 ACCIDENT AND HEALTH INSURANCE, VIOLATIONS OF CERTAIN
SECTIONS.
    Subdivision 1. Penalties. Any company, corporation, association, society, or other insurer, or
any officer or agent thereof, which or who solicits, issues or delivers to any person in this state
any policy in violation of the provisions of sections 60A.06, subdivision 3 or 62A.01 to 62A.10,
may be punished by a fine of not more than $200 for each offense, and the commissioner may
revoke the license of any company, corporation, association, society, or other insurer of another
state or country, or of the agent thereof, which or who willfully violates any provision of sections
60A.06, subdivision 3 or 62A.01 to 62A.10.
    Subd. 2.[Repealed, 1989 c 330 s 37]
    Subd. 3.[Repealed, 1992 c 564 art 1 s 55]
History: 1967 c 395 art 12 s 13; 1980 c 436 s 1; 1982 c 424 s 130; 1986 c 455 s 57; 1987
c 329 s 21
72A.135 FAILURE TO FOLLOW DIVIDEND AND PRICING POLICY; PENALTIES.
An insurer failing to file and adhere to the plan required by section 61A.03, subdivision 2,
paragraph (h), is subject to a civil penalty of not more than $5,000 for each violation.
History: 1983 c 292 s 3
72A.139 USE OF GENETIC TESTS.
    Subdivision 1. Name and citation. This section shall be known and may be cited as the
"Genetic Discrimination Act."
    Subd. 2. Definitions. (a) As used in this section, "commissioner" means the commissioner of
commerce for health plan companies and other insurers regulated by that commissioner and the
commissioner of health for health plan companies regulated by that commissioner.
(b) As used in this section, a "genetic test" means a presymptomatic test of a person's genes,
gene products, or chromosomes for the purpose of determining the presence or absence of a
gene or genes that exhibit abnormalities, defects, or deficiencies, including carrier status, that
are known to be the cause of a disease or disorder, or are determined to be associated with a
statistically increased risk of development of a disease or disorder. "Genetic test" does not include
a cholesterol test or other test not conducted for the purpose of determining the presence or
absence of a person's gene or genes.
(c) As used in this section, "health plan" has the meaning given in section 62Q.01,
subdivision 3
.
(d) As used in this section, "health plan company" has the meaning given in section 62Q.01,
subdivision 4
.
(e) As used in this section, "individual" means an applicant for coverage or a person already
covered by the health plan company or other insurer.
    Subd. 3. Prohibited acts; health plan companies. A health plan company, in determining
eligibility for coverage, establishing premiums, limiting coverage, renewing coverage, or any
other underwriting decision, shall not, in connection with the offer, sale, or renewal of a health
plan:
(1) require or request an individual or a blood relative of the individual to take a genetic test;
(2) make any inquiry to determine whether an individual or a blood relative of the individual
has taken or refused a genetic test, or what the results of any such test were;
(3) take into consideration the fact that a genetic test was taken or refused by an individual or
blood relative of the individual; or
(4) take into consideration the results of a genetic test taken by an individual or a blood
relative of the individual.
    Subd. 4. Application. Subdivisions 5, 6, and 7 apply only to a life insurance company or
fraternal benefit society requiring a genetic test for the purpose of determining insurability under
a policy of life insurance.
    Subd. 5. Informed consent. If an individual agrees to take a genetic test, the life insurance
company or fraternal benefit society shall obtain the individual's written informed consent for the
test. Written informed consent must include, at a minimum, a description of the specific test to be
performed; its purpose, potential uses, and limitations; the meaning of its results; and the right to
confidential treatment of the results. The written informed consent must inform the individual that
the individual should consider consulting with a genetic counselor prior to taking the test and
must state whether the insurer will pay for any such consultation. An informed consent disclosure
form must be approved by the commissioner prior to its use.
    Subd. 6. Notification. The life insurance company or fraternal benefit society shall notify
an individual of a genetic test result by notifying the individual or the individual's designated
physician. If the individual tested has not given written consent authorizing a physician to receive
the test results, the individual must be urged, at the time that the individual is informed of the
genetic test result described in this subdivision, to contact a genetic counselor or other health
care professional.
    Subd. 7. Payment for test. A life insurance company or fraternal benefit society shall not
require an individual to submit to a genetic test unless the cost of the test is paid by the life
insurance company or fraternal benefit society.
    Subd. 8. Enforcement. A violation of this section is subject to the investigative and
enforcement authority of the commissioner, who shall enforce this section.
History: 1995 c 251 s 1
72A.14 [Renumbered 65B.13]
72A.141 [Renumbered 65B.14]
72A.142 [Renumbered 65B.15]
72A.143 [Renumbered 65B.16]
72A.144 [Renumbered 65B.17]
72A.145 [Renumbered 65B.18]
72A.146 [Renumbered 65B.19]
72A.147 [Renumbered 65B.20]
72A.148 [Renumbered 65B.21]
72A.149 [Renumbered 65B.22]
72A.1491 [Renumbered 65B.23]
72A.1492 [Renumbered 65B.24]
72A.1493 [Renumbered 65B.25]
72A.1494 [Renumbered 65B.26]
72A.1495 [Renumbered 65B.27]
72A.15 PENALTY FOR VIOLATION OF LAW PROVIDING FOR INSURANCE IN
UNLICENSED COMPANIES.
Every person licensed to procure insurance in an unlicensed foreign company who fails to
file the affidavit and statement required in such case or who willfully makes a false affidavit or
statement shall forfeit the license and be guilty, for the first offense, of a misdemeanor, and for
each subsequent offense, of a gross misdemeanor.
History: 1967 c 395 art 12 s 15; 1986 c 444
72A.16 MUTUAL COMPANIES.
    Subdivision 1. Unlawful procurement or use of proxy. Every officer or agent of a domestic
mutual insurance company who shall solicit, receive, procure to be obtained, or use, a proxy vote
in violation of any provision of law shall be guilty of a gross misdemeanor.
    Subd. 2. Guaranty against assessment. Every director, officer, or agent of an insurance
company who officially or privately gives a guaranty to a policyholder thereof against an
assessment for which the policyholder would otherwise be liable shall be guilty of a misdemeanor.
History: 1967 c 395 art 12 s 16; 1986 c 444

REGULATION OF TRADE PRACTICES

72A.17 PURPOSE OF SECTIONS 72A.17 TO 72A.32.
The purpose of sections 72A.17 to 72A.32 is to regulate trade practices in the business of
insurance in accordance with the intent of Congress as expressed in the Act of Congress of March
9, 1945 (Public Law 15, 79th Congress), by defining, or providing for the determination of, all
such practices in this state which constitute unfair methods of competition or unfair or deceptive
acts or practices and by prohibiting the trade practices so defined or determined.
History: 1967 c 395 art 12 s 17
72A.18 DEFINITIONS.
    Subdivision 1. General. Unless the context clearly indicates otherwise, the following terms,
when used in sections 72A.17 to 72A.32, shall have the meanings respectively ascribed to them
in this section.
    Subd. 2. Person. "Person" means any individual, corporation, association, partnership,
reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society, or any other legal
entity, engaged in the business of insurance, including an agent, a solicitor, or an adjuster and for
the purposes of sections 72A.31 and 72A.32 "person" shall in addition mean any person, firm or
corporation even though not engaged in the business of insurance.
History: 1967 c 395 art 12 s 18
72A.19 UNFAIR METHODS AND UNFAIR OR DECEPTIVE ACTS AND PRACTICES.
    Subdivision 1. Prohibition. No person shall engage in this state in any trade practice which
is defined in sections 72A.17 to 72A.32 as or determined pursuant to sections 72A.17 to 72A.32
to be an unfair method of competition or an unfair or deceptive act or practice in the business of
insurance.
    Subd. 2. Rulemaking. The commissioner may, in accordance with chapter 14, promulgate
reasonable rules as the commissioner deems necessary to enforce and administer the provisions
of this chapter.
History: 1967 c 395 art 12 s 19; 1980 c 436 s 2; 1982 c 424 s 130; 1985 c 248 s 70; 1986
c 444
72A.20 METHODS, ACTS, AND PRACTICES WHICH ARE DEFINED AS UNFAIR
OR DECEPTIVE.
    Subdivision 1. Misrepresentations and false advertising of policy contracts. Making,
issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration,
circular, or statement misrepresenting the terms of any policy issued or to be issued or the benefits
or advantages promised thereby or the dividends or share of the surplus to be received thereon,
or making any false or misleading statement as to the dividends or share of surplus previously
paid on similar policies, or making any misleading representation or any misrepresentation as
to the financial condition of any insurer, or as to the legal reserve system upon which any life
insurer operates, or using any name or title of any policy or class of policies misrepresenting the
true nature thereof, or making any misrepresentation to any policyholder insured in any company
for the purpose of inducing or tending to induce such policyholder to lapse, forfeit, or surrender
insurance, shall constitute an unfair method of competition and an unfair and deceptive act or
practice in the business of insurance.
    Subd. 2. False information and advertising generally. Making, publishing, disseminating,
circulating, or placing before the public, or causing, directly or indirectly, to be made, published,
disseminated, circulated, or placed before the public, in a newspaper, magazine, or other
publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station,
or in any other way, an advertisement, announcement, or statement, containing any assertion,
representation, or statement with respect to the business of insurance, or with respect to any person
in the conduct of the person's insurance business, which is untrue, deceptive, or misleading, shall
constitute an unfair method of competition and an unfair and deceptive act or practice.
    Subd. 3. Defamation. Making, publishing, disseminating, or circulating, directly or
indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating
of any oral or written statement or any pamphlet, circular, article, or literature which is false,
or maliciously critical of or derogatory to the financial condition of an insurer, and which is
calculated to injure any person engaged in the business of insurance, shall constitute an unfair
method of competition and an unfair and deceptive act or practice.
    Subd. 4. Boycott, coercion, and intimidation. Entering into any agreement to commit, or
by any concerted action committing, any act of boycott, coercion, or intimidation, resulting in or
tending to result in unreasonable restraint of, or monopoly in, the business of insurance, shall
constitute an unfair method of competition and an unfair and deceptive act or practice.
    Subd. 4a.[Renumbered 72A.201, subd 4a]
    Subd. 5. False financial statements. Filing with any supervisory or other public official,
or making, publishing, disseminating, circulating, or delivering to any person, or placing before
the public, or causing, directly or indirectly, to be made, published, disseminated, circulated,
delivered to any person, or placed before the public, any false statement of financial condition of
an insurer with intent to deceive, shall constitute an unfair method of competition and an unfair
and deceptive act or practice in the insurance business.
    Subd. 6. False entries. Making any false entry in any book, report, or statement of any
insurer with intent to deceive any agent or examiner lawfully appointed to examine into its
condition or into any of its affairs, or any public official to whom such insurer is required by law
to report, or who has authority by law to examine into its condition or into any of its affairs, or,
with like intent, willfully omitting to make a true entry of any material fact pertaining to the
business of such insurer in any book, report, or statement of such insurer, shall constitute an unfair
method of competition and an unfair and deceptive act or practice.
    Subd. 7. Stock operations and advisory board contracts. Issuing or delivering, or
permitting agents, officers, or employees to issue or deliver, agency company stock or other
capital stock, or benefit certificates or shares in any common-law corporation, or securities or
any special or advisory board contracts or other contracts of any kind promising returns and
profits as an inducement to insurance, shall constitute an unfair method of competition and an
unfair and deceptive act or practice.
    Subd. 8. Discrimination. (a) Making or permitting any unfair discrimination between
individuals of the same class and equal expectation of life in the rates charged for any contract of
life insurance or of annuity or in the dividends or other benefits payable thereon, or in any other of
the terms and conditions of such contract or in making or permitting the rejection of an individual's
application for life insurance coverage, as well as the determination of the rate class for such
individual, on the basis of a disability, shall constitute an unfair method of competition and an
unfair and deceptive act or practice, unless the claims experience and actuarial projections and
other data establish significant and substantial differences in class rates because of the disability.
(b) Refusing to insure or refusing to continue to insure the life of a member of a reserve
component of the armed forces of the United States, or the National Guard due to that person's
status as a member, or duty assignment while a member of any of these military organizations,
constitutes an unfair method of competition and an unfair and deceptive act or practice unless the
individual has received an order for active duty.
(c) Refusing to reinstate coverage for the insured or any covered dependents under
an individual or group life or health insurance policy or contract of a member of a reserve
component of the armed forces of the United States or the National Guard whose coverage or
dependent coverage was terminated, canceled, or nonrenewed while that person was on active
duty constitutes an unfair method of competition and an unfair and deceptive act or practice. For
purposes of paragraphs (a) to (c), "health insurance policy or contract" means any policy, contract,
or certificate providing benefits regulated under chapter 62A, 62C, 62D, or 64B.
For purposes of reinstatement of an individual policy, the person shall apply for reinstatement
within 90 days after removal from active duty.
The reinstated coverage must not contain any new preexisting condition or other exclusion
or limitation, except a condition determined by the Veterans Administration to be a disability
incurred or aggravated in the line of duty. The remainder of a preexisting condition limitation that
was not satisfied before the coverage was terminated may be applied once the person returns and
coverage is reinstated. Reinstatement is effective upon the payment of any required premiums.
(d) Refusing to offer, sell, or renew coverage; limiting coverage; or charging a rate different
from that normally charged for the same coverage under a life insurance policy or health plan
because the applicant who is also the proposed insured has been or is a victim of domestic abuse
is an unfair method of competition and an unfair and deceptive act or practice.
Nothing in this paragraph prevents an insurer from underwriting a risk on the basis of the
physical or mental history of an individual if the insurer does not take into consideration whether
the individual's condition was caused by an act of domestic abuse.
For purposes of this paragraph, "domestic abuse" has the meaning given in section 518B.01,
subdivision 2
; and "health plan" has the meaning given in section 62Q.01, subdivision 3, and
includes the coverages referred to in section 62A.011, subdivision 3, clauses (1), (7), (9), and (10).
    Subd. 9. Discrimination between individuals of the same class. Making or permitting any
unfair discrimination between individuals of the same class and of essentially the same hazard
in the amount of premium, policy fees, or rates charged for any policy or contract of accident
or health insurance or in the benefits payable thereunder, or in any of the terms or conditions of
such contract, or in any other manner whatever, or in making or permitting the rejection of an
individual's application for accident or health insurance coverage, as well as the determination of
the rate class for such individual, on the basis of a disability, shall constitute an unfair method
of competition and an unfair and deceptive act or practice, unless the claims experience and
actuarial projections and other data establish significant and substantial differences in class rates
because of the disability.
    Subd. 10. Rebates. Except as otherwise expressly provided by law, knowingly permitting
or offering to make or making any contract of life insurance, annuity, or accident and health
insurance, or agreement as to such contract, other than as plainly expressed in the contract issued
thereon, or paying or allowing or giving, or offering to pay, allow, or give, directly or indirectly,
as inducement to such insurance or annuity, any rebate of premiums payable on the contract,
or any special favor or advantage in the dividends or other benefits thereon, or any valuable
consideration or inducement whatever not specified in the contract; or giving or selling or
purchasing, or offering to give, sell, or purchase, as inducement to such insurance or annuity, or in
connection therewith, any stocks, bonds, or other securities of any insurance company or other
corporation, association, or partnership, or any dividends or profits accrued thereon, or anything
of value whatsoever not specified in the contract, shall constitute an unfair method of competition
and an unfair and deceptive act or practice.
    Subd. 11. Application to certain sections. Violating any provision of the following sections
of this chapter not set forth in this section shall constitute an unfair method of competition and
an unfair and deceptive act or practice: sections 72A.12, subdivisions 2, 3, and 4, 72A.16,
subdivision 2
, 72A.03 and 72A.04, 72A.08, subdivision 1, as modified by sections 72A.08,
subdivision 4
, 72A.201, sections 72A.49 to 72A.505, and 65B.13.
    Subd. 12. Unfair service. Causing or permitting with such frequency to indicate a general
business practice any unfair, deceptive, or fraudulent act concerning any claim or complaint of an
insured or claimant including, but not limited to, the following practices:
(1) misrepresenting pertinent facts or insurance policy provisions relating to coverages at
issue;
(2) failing to acknowledge and act reasonably promptly upon communications with respect
to claims arising under insurance policies;
(3) failing to adopt and implement reasonable standards for the prompt investigation of
claims arising under insurance policies;
(4) refusing to pay claims without conducting a reasonable investigation based upon all
available information;
(5) failing to affirm or deny coverage of claims within a reasonable time after proof of
loss statements have been completed;
(6) not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims
in which liability has become reasonably clear;
(7) compelling insureds to institute litigation to recover amounts due under an insurance
policy by offering substantially less than the amounts ultimately recovered in actions brought
by the insureds;
(8) attempting to settle a claim for less than the amount to which reasonable persons
would have believed they were entitled by reference to written or printed advertising material
accompanying or made part of an application;
(9) attempting to settle claims on the basis of an application which was altered without notice
to, or knowledge or consent of, the insured;
(10) making claims payments to insureds or beneficiaries not accompanied by a statement
setting forth the coverage under which the payments are being made;
(11) making known to insureds or claimants a policy of appealing from arbitration awards
in favor of insureds or claimants for the purpose of compelling them to accept settlements or
compromises less than the amount awarded in arbitration;
(12) delaying the investigation or payment of claims by requiring an insured, claimant, or
the physician of either to submit a preliminary claim report and then requiring the subsequent
submission of formal proof of loss forms, both of which submissions contain substantially the
same information;
(13) failing to promptly settle claims, where liability has become reasonably clear, under one
portion of the insurance policy coverage in order to influence settlements under other portions
of the insurance policy coverage;
(14) failing to promptly provide a reasonable explanation of the basis in the insurance policy
in relation to the facts or applicable law for denial of a claim or for the offer of a compromise
settlement;
(15) requiring an insured to provide information or documentation that is or would be
dated more than five years prior to or five years after the date of a fire loss, except for proof of
ownership of the damaged property.
    Subd. 12a.[Renumbered 72A.201]
    Subd. 13. Refusal to renew. Refusing to renew, declining to offer or write, or charging
differential rates for an equivalent amount of homeowner's insurance coverage, as defined by
section 65A.27, for property located in a town or statutory or home rule charter city, in which the
insurer offers to sell or writes homeowner's insurance, solely because:
(a) of the geographic area in which the property is located;
(b) of the age of the primary structure sought to be insured;
(c) the insured or prospective insured was denied coverage of the property by another insurer,
whether by cancellation, nonrenewal or declination to offer coverage, for a reason other than those
specified in section 65A.01, subdivision 3a, clauses (a) to (e);
(d) the property of the insured or prospective insured has been insured under the Minnesota
FAIR Plan Act, shall constitute an unfair method of competition and an unfair and deceptive act
or practice; or
(e) the insured has inquired about coverage for a hypothetical claim or has made an inquiry
to the insured's agent regarding a potential claim.
This subdivision prohibits an insurer from filing or charging different rates for different zip
code areas within the same town or statutory or home rule charter city.
This subdivision shall not prohibit the insurer from applying underwriting or rating standards
which the insurer applies generally in all other locations in the state and which are not specifically
prohibited by clauses (a) to (e). Such underwriting or rating standards shall specifically include but
not be limited to standards based upon the proximity of the insured property to an extraordinary
hazard or based upon the quality or availability of fire protection services or based upon the
density or concentration of the insurer's risks. Clause (b) shall not prohibit the use of rating
standards based upon the age of the insured structure's plumbing, electrical, heating or cooling
system or other part of the structure, the age of which affects the risk of loss. Any insurer's
failure to comply with section 65A.29, subdivisions 2 to 4, either (1) by failing to give an insured
or applicant the required notice or statement or (2) by failing to state specifically a bona fide
underwriting or other reason for the refusal to write shall create a presumption that the insurer has
violated this subdivision.
    Subd. 14. Application form refusal. An insurance agent refusing to supply a requested
application form for homeowner's insurance with any insurer whom the agent represents or
refusing to transmit forthwith any completed application form to the insurer, shall constitute an
unfair method of competition and an unfair and deceptive act or practice.
    Subd. 15. Practices not held to be discrimination or rebates. Nothing in subdivision 8,
9, or 10, or in section 72A.12, subdivisions 3 and 4, shall be construed as including within the
definition of discrimination or rebates any of the following practices:
(1) in the case of any contract of life insurance or annuity, paying bonuses to policyholders
or otherwise abating their premiums in whole or in part out of surplus accumulated from
nonparticipating insurance, provided that any bonuses or abatement of premiums shall be fair and
equitable to policyholders and for the best interests of the company and its policyholders;
(2) in the case of life insurance policies issued on the industrial debit plan, making allowance,
to policyholders who have continuously for a specified period made premium payments directly
to an office of the insurer, in an amount which fairly represents the saving in collection expense;
(3) readjustment of the rate of premium for a group insurance policy based on the loss or
expense experienced thereunder, at the end of the first or any subsequent policy year of insurance
thereunder, which may be made retroactive only for such policy year;
(4) in the case of an individual or group health insurance policy, the payment of differing
amounts of reimbursement to insureds who elect to receive health care goods or services from
providers designated by the insurer, provided that each insurer shall on or before August 1 of
each year file with the commissioner summary data regarding the financial reimbursement offered
to providers so designated.
Any insurer which proposes to offer an arrangement authorized under this clause shall
disclose prior to its initial offering and on or before August 1 of each year thereafter as a
supplement to its annual statement submitted to the commissioner pursuant to section 60A.13,
subdivision 1
, the following information:
(a) the name which the arrangement intends to use and its business address;
(b) the name, address, and nature of any separate organization which administers the
arrangement on the behalf of the insurers; and
(c) the names and addresses of all providers designated by the insurer under this clause and
the terms of the agreements with designated health care providers.
The commissioner shall maintain a record of arrangements proposed under this clause,
including a record of any complaints submitted relative to the arrangements.
If the commissioner requests copies of contracts with a provider under this clause and the
provider requests a determination, all information contained in the contracts that the commissioner
determines may place the provider or health care plan at a competitive disadvantage is nonpublic
data.
    Subd. 16. Discrimination based on sex or marital status. Refusing to insure, refusing to
continue to insure, refusing to offer or submit an application for coverage, or limiting the amount
of coverage available to an individual because of the sex or marital status of the individual;
however, nothing in this subsection prohibits an insurer from taking marital status into account for
the purpose of defining persons eligible for dependents' benefits.
    Subd. 17. Return of premiums. (a) Refusing, upon surrender of an individual policy of life
insurance in the case of the insured's death, or in the case of a surrender prior to death, of an
individual insurance policy not covered by the standard nonforfeiture laws under section 61A.24,
to refund to the owner all unearned premiums paid on the policy covering the insured as of the
time of the insured's death or surrender if the unearned premium is for a period of more than one
month. The return of unearned premium must be delivered to the insured within 30 days following
receipt by the insurer of the insured's request for cancellation.
(b) Refusing, upon termination or cancellation of a policy of automobile insurance under
section 65B.14, subdivision 2, or a policy of homeowner's insurance under section 65A.27,
subdivision 4
, or a policy of accident and sickness insurance under section 62A.01, or a policy
of comprehensive health insurance under chapter 62E, to refund to the insured all unearned
premiums paid on the policy covering the insured as of the time of the termination or cancellation
if the unearned premium is for a period of more than one month. The return of unearned premium
must be delivered to the insured within 30 days following receipt by the insurer of the insured's
request for cancellation.
(c) This subdivision does not apply to policies of insurance providing coverage only for
motorcycles or other seasonally rated or limited use vehicles where the rate is reduced to reflect
seasonal or limited use.
(d) For purposes of this section, a premium is unearned during the period of time the insurer
has not been exposed to any risk of loss. Except for premiums for motorcycle coverage or other
seasonally rated or limited use vehicles where the rate is reduced to reflect seasonal or limited use,
the unearned premium is determined by multiplying the premium by the fraction that results from
dividing the period of time from the date of termination to the date the next scheduled premium
is due by the period of time for which the premium was paid.
(e) The owner may cancel a policy referred to in this section at any time during the policy
period. This provision supersedes any inconsistent provision of law or any inconsistent policy
provision.
    Subd. 18. Improper business practices. (a) Improperly withholding, misappropriating, or
converting any money belonging to a policyholder, beneficiary, or other person when received in
the course of the insurance business; or (b) engaging in fraudulent, coercive, or dishonest practices
in connection with the insurance business, shall constitute an unfair method of competition
and an unfair and deceptive act or practice.
    Subd. 19. Support for underwriting standards. No life or health insurance company doing
business in this state shall engage in any selection or underwriting process unless the insurance
company establishes beforehand substantial data, actuarial projections, or claims experience
which support the underwriting standards used by the insurance company. The data, projections,
or claims experience used to support the selection or underwriting process is not limited to only
that of the company. The experience, projections, or data of other companies or a rate service
organization may be used as well.
    Subd. 20. Contact with government. An insurance company may not terminate or otherwise
penalize an insurance agent solely because the agent contacted any government department
or agency regarding a problem that the agent or an insured may be having with an insurance
company. For purposes of this section, "government department or agency" includes the executive,
legislative, and judicial branches of government as stated in article III of the Constitution.
    Subd. 21. Prohibited selection or underwriting practice. No insurance company doing
business in this state shall engage in any selection or underwriting practice that is arbitrary,
capricious, or unfairly discriminatory.
    Subd. 22. Limitations on health care providers. (a) No insurer providing benefits under
the Minnesota No-Fault Automobile Insurance Act or a plan authorized by sections 471.617 or
471.98 to 471.982 may limit the type of licensed health care provider who may provide treatment
for covered conditions under a policy so long as the services provided are within the scope of
licensure for the provider. The insurer may not exclude a specific method of treatment for a
covered condition if that exclusion has the effect of excluding a specific type of licensed health
care provider from treating a covered condition.
(b) This subdivision does not limit the right of an insurer to contract with individual members
of any type of licensed health care provider to the exclusion of other members of the group, nor
shall it limit the right to the insurer to exclude coverage for a type of treatment if the insurer can
show the treatment is not medically necessary or is not medically appropriate.
    Subd. 23. Discrimination in automobile insurance policies. (a) No insurer that offers an
automobile insurance policy in this state shall:
(1) use the employment status of the applicant as an underwriting standard or guideline; or
(2) deny coverage to a policyholder for the same reason.
(b) No insurer that offers an automobile insurance policy in this state shall:
(1) use the applicant's status as a residential tenant, as the term is defined in section
504B.001, subdivision 12, as an underwriting standard or guideline; or
(2) deny coverage to a policyholder for the same reason; or
(3) make any discrimination in offering or establishing rates, premiums, dividends, or
benefits of any kind, or by way of rebate, for the same reason.
(c) No insurer that offers an automobile insurance policy in this state shall:
(1) use the failure of the applicant to have an automobile policy in force during any period of
time before the application is made as an underwriting standard or guideline; or
(2) deny coverage to a policyholder for the same reason.
Paragraph (c) does not apply if the applicant was required by law to maintain automobile
insurance coverage and failed to do so.
An insurer may require reasonable proof that the applicant did not fail to maintain this
coverage. The insurer is not required to accept the mere lack of a conviction or citation for failure
to maintain this coverage as proof of failure to maintain coverage. The insurer must provide the
applicant with information identifying the documentation that is required to establish reasonable
proof that the applicant did not fail to maintain the coverage.
(d) No insurer that offers an automobile insurance policy in this state shall use an applicant's
prior claims for benefits paid under section 65B.44 as an underwriting standard or guideline if the
applicant was 50 percent or less negligent in the accident or accidents causing the claims.
(e) No insurer shall refuse to issue any standard or preferred policy of motor vehicle
insurance or make any discrimination in the acceptance of risks, in rates, premiums, dividends,
or benefits of any kind, or by way of rebate:
(1) between persons of the same class, or
(2) on account of race, or
(3) on account of physical disability if the disability is compensated for by special training,
equipment, prosthetic device, corrective lenses, or medication and if the physically disabled
person:
(i) is licensed by the Department of Public Safety to operate a motor vehicle in this state, and
(ii) operates only vehicles that are equipped with auxiliary devices and equipment necessary
for safe and effective operation by the disabled person, or
(4) on account of marital dissolution.
    Subd. 24. Cancellations and nonrenewals. No insurer shall cancel or fail to renew an
individual life or individual health policy or an individual nonprofit health service plan subscriber
contract for nonpayment of premium unless it mails or delivers to the named insured, at the
address shown on the policy or subscriber contract at least 30 days before lapse, final notice of the
cancellation or nonrenewal and the effective date of the cancellation or nonrenewal.
If the named insured is not the policy or subscriber contract owner, the notice required
by this subdivision must be sent to the insured's last known address, if any, and to the owner's
last known address.
Proof of mailing of the notice of lapse for failure to pay the premium before the expiration of
the grace period is sufficient proof that notice required in this subdivision has been given.
This subdivision does not apply to a life or health insurance policy or contract upon which
premiums are paid at a monthly interval or less and that contains any grace period required by
statute for the payment of premiums during which time the insurance continues in force.
    Subd. 25. Use of statements of a minor. No statement of a minor or information obtained by
an insurer or a representative of an insurer from a minor may be used in any manner in regard to
a claim unless the parent or guardian of the minor has granted permission for the minor to be
interviewed or the minor's statement to be taken.
    Subd. 26. Loss experience. An insurer shall without cost to the insured provide an insured
with the loss or claims experience of that insured for the current policy period and for the two
policy periods preceding the current one for which the insurer has provided coverage, within
30 days of a request for the information by the policyholder. Claims experience data must
be provided to the insured in accordance with state and federal requirements regarding the
confidentiality of medical data. The insurer shall not be responsible for providing information
without cost more often than once in a 12-month period. The insurer is not required to provide the
information if the policy covers the employee of more than one employer and the information is
not maintained separately for each employer and not all employers request the data.
An insurer, health maintenance organization, or a third-party administrator may not request
more than three years of loss or claims experience as a condition of submitting an application or
providing coverage.
This subdivision only applies to group life policies and group health policies.
    Subd. 27. Solicitations and sales of insurance products to borrowers. (a) A loan officer, a
loan representative, or other person involved in taking or processing a loan may not solicit an
insurance product, except for credit life, credit disability, credit involuntary unemployment,
mortgage life, mortgage accidental death, or mortgage disability, and except for life insurance
when offered in lieu of credit life insurance, from the completion of the initial loan application,
as defined in the federal Equal Credit Opportunity Act, United States Code, title 15, sections
1691 to 1691f, and any regulations adopted under those sections, until after the closing of the
loan transaction.
(b) This subdivision applies only to loan transactions covered by the federal Truth-in-Lending
Act, United States Code, title 15, sections 1601 to 1666j, and any regulations adopted under
those sections.
(c) This subdivision does not apply to sales of title insurance, homeowner's insurance, a
package homeowner's-automobile insurance product, automobile insurance, or a similar insurance
product, required to perfect title to, or protect, property for which a security interest will be taken
if the product is required as a condition of the loan.
(d) Nothing in this subdivision prohibits the solicitation or sale of any insurance product
by means of mass communication.
    Subd. 28. Conversion fees prohibited. An issuer providing health coverage through
conversion policies, plans, or contracts shall not impose a fee or charge, other than the premium,
for issuing these policies, plans, or contracts.
    Subd. 29. HIV tests; crime victims and emergency medical service personnel. No insurer
regulated under chapter 61A, 62B, or 62S, or providing health, medical, hospitalization, long-term
care insurance, or accident and sickness insurance regulated under chapter 62A, or nonprofit
health service plan corporation regulated under chapter 62C, health maintenance organization
regulated under chapter 62D, or fraternal benefit society regulated under chapter 64B, may:
(1) use the results of a test to determine the presence of the human immunodeficiency virus
(HIV) antibody performed on an offender under section 611A.19 or performed on a crime victim
who was exposed to or had contact with an offender's bodily fluids during commission of a crime
that was reported to law enforcement officials, in order to make an underwriting decision, cancel,
fail to renew, or take any other action with respect to a policy, plan, certificate, or contract;
(2) use the results of a test to determine the presence of a bloodborne pathogen performed
on an individual according to sections 144.7401 to 144.7415, 241.33 to 241.342, or 246.71 to
246.722 in order to make an underwriting decision, cancel, fail to renew, or take any other action
with respect to a policy, plan, certificate, or contract; or
(3) ask an applicant for coverage or a person already covered whether the person has: (i) had
a test performed for the reason set forth in clause (1) or (2); or (ii) been the victim of an assault or
any other crime which involves bodily contact with the offender.
This subdivision does not affect tests conducted for purposes other than those described in
clause (1) or (2), including any test to determine the presence of a bloodborne pathogen if such test
was performed at the insurer's direction as part of the insurer's normal underwriting requirements.
    Subd. 29a. HIV tests; vaccine research. (a) No insurer regulated under chapter 61A or
62B, or providing health, medical, hospitalization, or accident and sickness insurance regulated
under chapter 62A, or nonprofit health services corporation regulated under chapter 62C, health
maintenance organization regulated under chapter 62D, or fraternal benefit society regulated
under chapter 64B, may make an underwriting decision, cancel, fail to renew, or take any other
action with respect to a policy, plan, certificate, or contract based solely on the fact of a person's
participation in a human immunodeficiency virus (HIV) vaccine clinical trial.
(b) If a test to determine the presence of the HIV antibody is performed at the insurer's
direction, as part of the insurer's normal underwriting requirements or on any other basis, and an
applicant or covered person is a participant or former participant in a vaccine clinical trial and
tests positive for the HIV antibody in the insurer-directed test, the person shall disclose the
person's status as a participant or former participant in a vaccine clinical trial and provide the
insurance company with certification from the trial sponsor of the person's participation or former
participation in the vaccine trial. Upon that notification, an insurer shall stay any adverse decision
or refrain from making an underwriting decision to cancel, fail to renew, or take any other action
based solely on the positive test result until the insurer obtains a confidential certificate from the
sponsor of the trial verifying the person's HIV status. If the confidential certificate indicates that
the person's HIV antibodies are a result of exposure to the vaccine, that the person does not have
the HIV virus, and that the person did not test positive for the HIV virus in any test administered
by the trial sponsor prior to entering the vaccine clinical trial, the insurer shall ignore the presence
of the HIV antibody in the insurer-directed test.
(c) This subdivision does not affect any tests to determine the presence of the HIV antibody,
except as provided under paragraph (b).
(d) This subdivision does not apply to persons who are confirmed as having the HIV virus.
(e) For purposes of this subdivision, "vaccine clinical trial" means a clinical trial conducted
by a sponsor under an investigational new drug application as provided by Code of Federal
Regulations, title 21, section 312. "Sponsor" means the hospital, clinic, or health care professional
that is conducting the vaccine clinical trial.
    Subd. 30. Records retention. An insurer shall retain copies of all underwriting documents,
policy forms, and applications for three years from the effective date of the policy. An insurer
shall retain all claim files and documentation related to a claim for three years from the date the
claim was paid or denied. This subdivision does not relieve the insurer of its obligation to produce
these documents to the department after the retention period has expired in connection with an
enforcement action or administrative proceeding against the insurer from whom the documents
are requested, if the insurer has retained the documents. Records required to be retained by
this section may be retained in paper, photograph, microprocess, magnetic, mechanical, or
electronic media, or by any process which accurately reproduces or forms a durable medium for
the reproduction of a record.
    Subd. 31. Reasonable, adequate, and not predatory premiums. Premiums charged by
a health plan company, as defined in section 62Q.01, shall be reasonable, adequate, and not
predatory in relation to the benefits, considering actuarial projection of the cost of providing or
paying for the covered health services, considering the costs of administration, and in relation
to the reserves and surplus required by law.
    Subd. 32. Unfair health risk avoidance. No insurer or health plan company may design a
network of providers, policies on access to providers, or marketing strategy in such a way as to
discourage enrollment by individuals or groups whose health care needs are perceived as likely
to be more expensive than the average. This subdivision does not prohibit underwriting and
rating practices that comply with Minnesota law.
    Subd. 33. Prohibition of inappropriate incentives. No insurer or health plan company may
give any financial incentive to a health care provider based solely on the number of services
denied or referrals not authorized by the provider. This subdivision does not prohibit capitation
or other compensation methods that serve to hold health care providers financially accountable
for the cost of caring for a patient population.
    Subd. 34. Suitability of insurance for customer. In recommending or issuing life,
endowment, individual accident and sickness, long-term care, annuity, life-endowment, or
Medicare supplement insurance to a customer, an insurer, either directly or through its agent, must
have reasonable grounds for believing that the recommendation is suitable for the customer.
In the case of group insurance marketed on a direct response basis without the use of direct
agent contact, this subdivision is satisfied if the insurer has reasonable grounds to believe that the
insurance offered is generally suitable for the group to whom the offer is made.
    Subd. 35. Determination of health plan policy limits. Any health plan that includes
a specific policy limit within its insurance policy, certificate, or subscriber agreement shall
calculate the policy limit by using the amount actually paid on behalf of the insured, subscriber, or
dependents for services covered under the policy, subscriber agreement, or certificate unless the
amount paid is greater than the billed charge.
    Subd. 36. Limitations on the use of credit information. (a) No insurer or group of affiliated
insurers may reject, cancel, or nonrenew a policy of private passenger motor vehicle insurance
as defined under section 65B.01 or a policy of homeowner's insurance as defined under section
65A.27, for any person in whole or in part on the basis of credit information, including a credit
reporting product known as a "credit score" or "insurance score," without consideration and
inclusion of any other applicable underwriting factor.
(b) If credit information, credit scoring, or insurance scoring is to be used in underwriting,
the insurer must disclose to the consumer that credit information will be obtained and used as
part of the insurance underwriting process.
(c) Insurance inquiries and non-consumer-initiated inquiries must not be used as part of the
credit scoring or insurance scoring process.
(d) If a credit score, insurance score, or other credit information relating to a consumer, with
respect to the types of insurance referred to in paragraph (a), is adversely impacted or cannot be
generated because of the absence of a credit history, the insurer must exclude the use of credit as a
factor in the decision to reject, cancel, or nonrenew.
(e) Insurers must upon the request of a policyholder reevaluate the policyholder's score. Any
change in premium resulting from the reevaluation must be effective upon the renewal of the
policy. An insurer is not required to reevaluate a policyholder's score pursuant to this paragraph
more than twice in any given calendar year.
(f) Insurers must upon request of the applicant or policyholder provide reasonable
underwriting exceptions based upon prior credit histories for persons whose credit information
is unduly influenced by expenses related to a catastrophic injury or illness, temporary loss of
employment, or the death of an immediate family member. The insurer may require reasonable
documentation of these events prior to granting an exception.
(g) A credit scoring or insurance scoring methodology must not be used by an insurer if the
credit scoring or insurance scoring methodology incorporates the gender, race, nationality, or
religion of an insured or applicant.
(h) Insurers that employ a credit scoring or insurance scoring system in underwriting of
coverage described in paragraph (a) must have on file with the commissioner:
(1) the insurer's credit scoring or insurance scoring methodology; and
(2) information that supports the insurer's use of a credit score or insurance score as an
underwriting criterion.
(i) Insurers described in paragraph (g) shall file the required information with the
commissioner within 120 days of August 1, 2002, or prior to implementation of a credit scoring
or insurance scoring system by the insurer, if that date is later.
(j) Information provided by, or on behalf of, an insurer to the commissioner under this
subdivision is trade secret information under section 13.37.
    Subd. 37. Electronic transmission of required information. A health carrier, as defined in
section 62A.011, subdivision 2, is not in violation of this chapter for electronically transmitting or
electronically making available information otherwise required to be delivered in writing under
chapters 62A to 62Q and 72A to an enrollee as defined in section 62Q.01, subdivision 2a, and
with the requirements of those chapters if the following conditions are met:
(1) the health carrier informs the enrollee that electronic transmission or access is available
and, at the discretion of the health carrier, the enrollee is given one of the following options:
(i) electronic transmission or access will occur only if the enrollee affirmatively requests to
the health carrier that the required information be electronically transmitted or available and a
record of that request is retained by the health carrier; or
(ii) electronic transmission or access will automatically occur if the enrollee has not
opted out of that manner of transmission by request to the health carrier and requested that the
information be provided in writing. If the enrollee opts out of electronic transmission, a record of
that request must be retained by the health carrier;
(2) the enrollee is allowed to withdraw the request at any time;
(3) if the information transmitted electronically contains individually identifiable data, it must
be transmitted to a secured mailbox. If the information made available electronically contains
individually identifiable data, it must be made available at a password-protected secured Web site;
(4) the enrollee is provided a customer service number on the enrollee's member card that
may be called to request a written copy of the document; and
(5) the electronic transmission or electronic availability meets all other requirements of
this chapter including, but not limited to, size of the typeface and any required time frames
for distribution.
    Subd. 38. Unfair claims service; service contracts. No person shall, in connection with a
service contract regulated under chapter 59B:
(1) attempt to settle claims on the basis of an application or any other material document
which was altered without notice to, or knowledge or consent of, the service contract holder;
(2) make a material misrepresentation to the service contract holder for the purpose and
with the intent of effecting settlement of the claims, loss, or damage under the contract on less
favorable terms than those provided in, and contemplated by, the contract; or
(3) commit or perform with such frequency as to indicate a general business practice any
of the following practices:
(i) failure to properly investigate claims;
(ii) misrepresentation of pertinent facts or contract provisions relating to coverages at issue;
(iii) failure to acknowledge and act upon communications within a reasonable time with
respect to claims;
(iv) denial of claims without conducting reasonable investigations based upon available
information;
(v) failure to affirm or deny coverage of claims upon written request of the service contract
holder within a reasonable time after proof-of-loss statements have been completed; or
(vi) failure to timely provide a reasonable explanation to the service contract holder of the
basis in the contract in relation to the facts or applicable law for denial of a claim or for the
offer of a compromise settlement.
    Subd. 39. Discounted payments by health care providers; effect on use of usual and
customary payments. An insurer, including, but not limited to, a health plan company as defined
in section 62Q.01, subdivision 4; a reparation obligor as defined in section 65B.43, subdivision 9;
and a workers' compensation insurer shall not consider in determining a health care provider's
usual and customary payment, standard payment, or allowable payment used as a basis for
determining the provider's payment by the insurer, the following discounted payment situations:
(1) care provided to relatives of the provider;
(2) care for which a discount or free care is given in hardship situations; and
(3) care for which a discount is given in exchange for cash payment.
For purposes of this subdivision, "health care provider" and "provider" have the meaning
given in section 62J.03, subdivision 8.
History: 1967 c 395 art 12 s 20; 1973 c 474 s 1; 1975 c 139 s 1; 1979 c 207 s 6; 1Sp1981 c
4 art 2 s 7; 1983 c 285 s 1; 1984 c 555 s 1-3; 1984 c 592 s 73; 1Sp1985 c 10 s 71; 1986 c 444;
1987 c 113 s 1; 1987 c 337 s 116-119; 1989 c 170 s 3; 1989 c 260 s 17-20; 1989 c 316 s 1; 1989 c
330 s 27-32; 1990 c 467 s 1; 1991 c 188 s 1; 1992 c 524 s 1; 1992 c 564 art 1 s 46,54; art 4 s 14;
1992 c 569 s 6; 1993 c 343 s 26; 1994 c 475 s 1; 1994 c 485 s 54,55,65; 1994 c 625 art 3 s 20;
1995 c 186 s 17; 1995 c 234 art 8 s 21,22; 1995 c 258 s 52,53; 1996 c 278 s 1; 1996 c 433 s 1;
1996 c 446 art 1 s 61-65; 1997 c 77 s 3; 1999 c 121 s 1; 1999 c 177 s 70; 1999 c 199 art 2 s 1;
2000 c 422 s 3; 2000 c 483 s 21,22; 2001 c 28 s 1; 2002 c 357 s 1; 2004 c 268 s 11; 2004 c 288
art 7 s 4; 2005 c 56 s 1; 2005 c 132 s 22,23; 1Sp2005 c 1 art 5 s 12; 2006 c 255 s 59
72A.201 REGULATION OF CLAIMS PRACTICES.
    Subdivision 1. Administrative enforcement. The commissioner may, in accordance
with chapter 14, adopt rules to ensure the prompt, fair, and honest processing of claims and
complaints. The commissioner may, in accordance with sections 72A.22 to 72A.25, seek and
impose appropriate administrative remedies, including fines, for (1) a violation of this section
or the rules adopted pursuant to this section; or (2) a violation of section 72A.20, subdivision
12
. The commissioner need not show a general business practice in taking an administrative
action for these violations.
No individual violation constitutes an unfair, discriminatory, or unlawful practice in business,
commerce, or trade for purposes of section 8.31.
    Subd. 2. Construction. The policy of the Department of Commerce, in interpreting and
enforcing this section, will be to take into consideration all pertinent facts and circumstances in
determining the severity and appropriateness of the action to be taken in regard to any violation
of this section.
The magnitude of the harm to the claimant or insured, and any actions by the insured,
claimant, or insurer that mitigate or exacerbate the impact of the violation may be considered.
Actions of the claimant or insured which impeded the insurer in processing or settling the
claim, and actions of the insurer which increased the detriment to the claimant or insured may
also be considered in determining the appropriate administrative action to be taken.
    Subd. 3. Definitions. For the purposes of this section, the following terms have the meanings
given them.
(1) Adjuster or adjusters. "Adjuster" or "adjusters" is as defined in section 72B.02.
(2) Agent. "Agent" means insurance agents or insurance agencies licensed pursuant to
sections 60K.30 to 60K.56, and representatives of these agents or agencies.
(3) Claim. "Claim" means a request or demand made with an insurer for the payment of
funds or the provision of services under the terms of any policy, certificate, contract of insurance,
binder, or other contracts of temporary insurance. The term does not include a claim under a
health insurance policy made by a participating provider with an insurer in accordance with
the participating provider's service agreement with the insurer which has been filed with the
commissioner of commerce prior to its use.
(4) Claim settlement. "Claim settlement" means all activities of an insurer related directly
or indirectly to the determination of the extent of liabilities due or potentially due under coverages
afforded by the policy, and which result in claim payment, claim acceptance, compromise, or
other disposition.
(5) Claimant. "Claimant" means any individual, corporation, association, partnership, or
other legal entity asserting a claim against any individual, corporation, association, partnership, or
other legal entity which is insured under an insurance policy or insurance contract of an insurer.
(6) Complaint. "Complaint" means a communication primarily expressing a grievance.
(7) Insurance policy. "Insurance policy" means any evidence of coverage issued by
an insurer including all policies, contracts, certificates, riders, binders, and endorsements
which provide or describe coverage. The term includes any contract issuing coverage under a
self-insurance plan, group self-insurance plan, or joint self-insurance employee health plans.
(8) Insured. "Insured" means an individual, corporation, association, partnership, or other
legal entity asserting a right to payment under their insurance policy or insurance contract arising
out of the occurrence of the contingency or loss covered by the policy or contract. The term does
not apply to a person who acquires rights under a mortgage.
(9) Insurer. "Insurer" includes any individual, corporation, association, partnership,
reciprocal exchange, Lloyds, fraternal benefits society, self-insurer, surplus line insurer,
self-insurance administrator, and nonprofit service plans under the jurisdiction of the Department
of Commerce.
(10) Investigation. "Investigation" means a reasonable procedure adopted by an insurer to
determine whether to accept or reject a claim.
(11) Notification of claim. "Notification of claim" means any communication to an insurer
by a claimant or an insured which reasonably apprises the insurer of a claim brought under an
insurance contract or policy issued by the insurer. Notification of claim to an agent of the insurer
is notice to the insurer.
(12) Proof of loss. "Proof of loss" means the necessary documentation required from the
insured to establish entitlement to payment under a policy.
(13) Self-insurance administrator. "Self-insurance administrator" means any vendor of
risk management services or entities administering self-insurance plans, licensed pursuant to
section 60A.23, subdivision 8.
(14) Self-insured or self-insurer. "Self-insured" or "self-insurer" means any entity
authorized pursuant to section 65B.48, subdivision 3; chapter 62H; section 176.181, subdivision
2
; Laws of Minnesota 1983, chapter 290, section 171; section 471.617; or section 471.981 and
includes any entity which, for a fee, employs the services of vendors of risk management services
in the administration of a self-insurance plan as defined by section 60A.23, subdivision 8, clause
(2), subclauses (a) and (d).
    Subd. 4. Standards for claim filing and handling. The following acts by an insurer, an
adjuster, a self-insured, or a self-insurance administrator constitute unfair settlement practices:
(1) except for claims made under a health insurance policy, after receiving notification
of claim from an insured or a claimant, failing to acknowledge receipt of the notification of
the claim within ten business days, and failing to promptly provide all necessary claim forms
and instructions to process the claim, unless the claim is settled within ten business days. The
acknowledgment must include the telephone number of the company representative who can
assist the insured or the claimant in providing information and assistance that is reasonable so
that the insured or claimant can comply with the policy conditions and the insurer's reasonable
requirements. If an acknowledgment is made by means other than writing, an appropriate notation
of the acknowledgment must be made in the claim file of the insurer and dated. An appropriate
notation must include at least the following information where the acknowledgment is by
telephone or oral contact:
(i) the telephone number called, if any;
(ii) the name of the person making the telephone call or oral contact;
(iii) the name of the person who actually received the telephone call or oral contact;
(iv) the time of the telephone call or oral contact; and
(v) the date of the telephone call or oral contact;
(2) failing to reply, within ten business days of receipt, to all other communications about a
claim from an insured or a claimant that reasonably indicate a response is requested or needed;
(3)(i) unless provided otherwise by clause (ii) or (iii), other law, or in the policy, failing to
complete its investigation and inform the insured or claimant of acceptance or denial of a claim
within 30 business days after receipt of notification of claim unless the investigation cannot be
reasonably completed within that time. In the event that the investigation cannot reasonably be
completed within that time, the insurer shall notify the insured or claimant within the time period
of the reasons why the investigation is not complete and the expected date the investigation will
be complete. For claims made under a health policy the notification of claim must be in writing;
(ii) for claims submitted under a health policy, the insurer must comply with all of the
requirements of section 62Q.75;
(iii) for claims submitted under a health policy that are accepted, the insurer must notify
the insured or claimant no less than semiannually of the disposition of claims of the insured or
claimant. For purposes of this clause, acceptance of a claim means that there is no additional
financial liability for the insured or claimant, either because there is a flat co-payment amount
specified in the health plan or because there is no co-payment, deductible, or coinsurance owed;
(4) where evidence of suspected fraud is present, the requirement to disclose their reasons
for failure to complete the investigation within the time period set forth in clause (3) need not
be specific. The insurer must make this evidence available to the Department of Commerce if
requested;
(5) failing to notify an insured who has made a notification of claim of all available benefits
or coverages which the insured may be eligible to receive under the terms of a policy and of the
documentation which the insured must supply in order to ascertain eligibility;
(6) unless otherwise provided by law or in the policy, requiring an insured to give written
notice of loss or proof of loss within a specified time, and thereafter seeking to relieve the insurer
of its obligations if the time limit is not complied with, unless the failure to comply with the time
limit prejudices the insurer's rights and then only if the insurer gave prior notice to the insured
of the potential prejudice;
(7) advising an insured or a claimant not to obtain the services of an attorney or an adjuster,
or representing that payment will be delayed if an attorney or an adjuster is retained by the
insured or the claimant;
(8) failing to advise in writing an insured or claimant who has filed a notification of claim
known to be unresolved, and who has not retained an attorney, of the expiration of a statute of
limitations at least 60 days prior to that expiration. For the purposes of this clause, any claim on
which the insurer has received no communication from the insured or claimant for a period of two
years preceding the expiration of the applicable statute of limitations shall not be considered to be
known to be unresolved and notice need not be sent pursuant to this clause;
(9) demanding information which would not affect the settlement of the claim;
(10) unless expressly permitted by law or the policy, refusing to settle a claim of an insured
on the basis that the responsibility should be assumed by others;
(11) failing, within 60 business days after receipt of a properly executed proof of loss, to
advise the insured of the acceptance or denial of the claim by the insurer. No insurer shall deny a
claim on the grounds of a specific policy provision, condition, or exclusion unless reference to
the provision, condition, or exclusion is included in the denial. The denial must be given to the
insured in writing with a copy filed in the claim file;
(12) denying or reducing a claim on the basis of an application which was altered or falsified
by the agent or insurer without the knowledge of the insured;
(13) failing to notify the insured of the existence of the additional living expense coverage
when an insured under a homeowners policy sustains a loss by reason of a covered occurrence
and the damage to the dwelling is such that it is not habitable;
(14) failing to inform an insured or a claimant that the insurer will pay for an estimate of
repair if the insurer requested the estimate and the insured or claimant had previously submitted
two estimates of repair.
    Subd. 4a. Standards for preauthorization approval. If a policy of accident and sickness
insurance or a subscriber contract requires preauthorization approval for any nonemergency
services or benefits, the decision to approve or disapprove the requested services or benefits must
be processed in accordance with section 62M.07.
    Subd. 5. Standards for fair settlement offers and agreements. The following acts by an
insurer, an adjuster, a self-insured, or a self-insurance administrator constitute unfair settlement
practices:
(1) making any partial or final payment, settlement, or offer of settlement, which does not
include an explanation of what the payment, settlement, or offer of settlement is for;
(2) making an offer to an insured of partial or total settlement of one part of a claim
contingent upon agreement to settle another part of the claim;
(3) refusing to pay one or more elements of a claim by an insured for which there is no
good faith dispute;
(4) threatening cancellation, rescission, or nonrenewal of a policy as an inducement to
settlement of a claim;
(5) notwithstanding any inconsistent provision of section 65A.01, subdivision 3, failing
to issue payment for any amount finally agreed upon in settlement of all or part of any claim
within five business days from the receipt of the agreement by the insurer or from the date of the
performance by the claimant of any conditions set by such agreement, whichever is later;
(6) failing to inform the insured of the policy provision or provisions under which payment is
made;
(7) settling or attempting to settle a claim or part of a claim with an insured under actual
cash value provisions for less than the value of the property immediately preceding the loss,
including all applicable taxes and license fees. In no case may an insurer be required to pay an
amount greater than the amount of insurance;
(8) except where limited by policy provisions, settling or offering to settle a claim or part
of a claim with an insured under replacement value provisions for less than the sum necessary
to replace the damaged item with one of like kind and quality, including all applicable taxes,
license, and transfer fees;
(9) reducing or attempting to reduce for depreciation any settlement or any offer of settlement
for items not adversely affected by age, use, or obsolescence;
(10) reducing or attempting to reduce for betterment any settlement or any offer of settlement
unless the resale value of the item has increased over the preloss value by the repair of the damage.
    Subd. 6. Standards for automobile insurance claims handling, settlement offers, and
agreements. In addition to the acts specified in subdivisions 4, 5, 7, 8, and 9, the following
acts by an insurer, adjuster, or a self-insured or self-insurance administrator constitute unfair
settlement practices:
(1) if an automobile insurance policy provides for the adjustment and settlement of an
automobile total loss on the basis of actual cash value or replacement with like kind and quality
and the insured is not an automobile dealer, failing to offer one of the following methods of
settlement:
(a) comparable and available replacement automobile, with all applicable taxes, license fees,
at least pro rata for the unexpired term of the replaced automobile's license, and other fees incident
to the transfer or evidence of ownership of the automobile paid, at no cost to the insured other
than the deductible amount as provided in the policy;
(b) a cash settlement based upon the actual cost of purchase of a comparable automobile,
including all applicable taxes, license fees, at least pro rata for the unexpired term of the replaced
automobile's license, and other fees incident to transfer of evidence of ownership, less the
deductible amount as provided in the policy. The costs must be determined by:
(i) the cost of a comparable automobile, adjusted for mileage, condition, and options, in the
local market area of the insured, if such an automobile is available in that area; or
(ii) one of two or more quotations obtained from two or more qualified sources located within
the local market area when a comparable automobile is not available in the local market area. The
insured shall be provided the information contained in all quotations prior to settlement; or
(iii) any settlement or offer of settlement which deviates from the procedure above must
be documented and justified in detail. The basis for the settlement or offer of settlement must
be explained to the insured;
(2) if an automobile insurance policy provides for the adjustment and settlement of an
automobile partial loss on the basis of repair or replacement with like kind and quality and the
insured is not an automobile dealer, failing to offer one of the following methods of settlement:
(a) to assume all costs, including reasonable towing costs, for the satisfactory repair of the
motor vehicle. Satisfactory repair includes repair of both obvious and hidden damage as caused
by the claim incident. This assumption of cost may be reduced by applicable policy provision; or
(b) to offer a cash settlement sufficient to pay for satisfactory repair of the vehicle.
Satisfactory repair includes repair of obvious and hidden damage caused by the claim incident,
and includes reasonable towing costs;
(3) regardless of whether the loss was total or partial, in the event that a damaged vehicle of
an insured cannot be safely driven, failing to exercise the right to inspect automobile damage
prior to repair within five business days following receipt of notification of claim. In other cases
the inspection must be made in 15 days;
(4) regardless of whether the loss was total or partial, requiring unreasonable travel of a
claimant or insured to inspect a replacement automobile, to obtain a repair estimate, to allow an
insurer to inspect a repair estimate, to allow an insurer to inspect repairs made pursuant to policy
requirements, or to have the automobile repaired;
(5) regardless of whether the loss was total or partial, if loss of use coverage exists under the
insurance policy, failing to notify an insured at the time of the insurer's acknowledgment of claim,
or sooner if inquiry is made, of the fact of the coverage, including the policy terms and conditions
affecting the coverage and the manner in which the insured can apply for this coverage;
(6) regardless of whether the loss was total or partial, failing to include the insured's
deductible in the insurer's demands under its subrogation rights. Subrogation recovery must be
shared at least on a proportionate basis with the insured, unless the deductible amount has been
otherwise recovered by the insured, except that when an insurer is recovering directly from an
uninsured third party by means of installments, the insured must receive the full deductible share
as soon as that amount is collected and before any part of the total recovery is applied to any other
use. No deduction for expenses may be made from the deductible recovery unless an attorney is
retained to collect the recovery, in which case deduction may be made only for a pro rata share
of the cost of retaining the attorney. An insured is not bound by any settlement of its insurer's
subrogation claim with respect to the deductible amount, unless the insured receives, as a result of
the subrogation settlement, the full amount of the deductible. Recovery by the insurer and receipt
by the insured of less than all of the insured's deductible amount does not affect the insured's
rights to recover any unreimbursed portion of the deductible from parties liable for the loss;
(7) requiring as a condition of payment of a claim that repairs to any damaged vehicle must
be made by a particular contractor or repair shop or that parts, other than window glass, must
be replaced with parts other than original equipment parts or engaging in any act or practice of
intimidation, coercion, threat, incentive, or inducement for or against an insured to use a particular
contractor or repair shop. Consumer benefits included within preferred vendor programs must
not be considered an incentive or inducement. At the time a claim is reported, the insurer must
provide the following advisory to the insured or claimant:
"You have the legal right to choose a repair shop to fix your vehicle. Your policy will cover
the reasonable costs of repairing your vehicle to its pre-accident condition no matter where you
have repairs made. Have you selected a repair shop or would you like a referral?"
After an insured has indicated that the insured has selected a repair shop, the insurer must
cease all efforts to influence the insured's or claimant's choice of repair shop;
(8) where liability is reasonably clear, failing to inform the claimant in an automobile
property damage liability claim that the claimant may have a claim for loss of use of the vehicle;
(9) failing to make a good faith assignment of comparative negligence percentages in
ascertaining the issue of liability;
(10) failing to pay any interest required by statute on overdue payment for an automobile
personal injury protection claim;
(11) if an automobile insurance policy contains either or both of the time limitation
provisions as permitted by section 65B.55, subdivisions 1 and 2, failing to notify the insured in
writing of those limitations at least 60 days prior to the expiration of that time limitation;
(12) if an insurer chooses to have an insured examined as permitted by section 65B.56,
subdivision 1
, failing to notify the insured of all of the insured's rights and obligations under
that statute, including the right to request, in writing, and to receive a copy of the report of the
examination;
(13) failing to provide, to an insured who has submitted a claim for benefits described in
section 65B.44, a complete copy of the insurer's claim file on the insured, excluding internal
company memoranda, all materials that relate to any insurance fraud investigation, materials that
constitute attorney work-product or that qualify for the attorney-client privilege, and medical
reviews that are subject to section 145.64, within ten business days of receiving a written request
from the insured. The insurer may charge the insured a reasonable copying fee. This clause
supersedes any inconsistent provisions of sections 72A.49 to 72A.505;
(14) if an automobile policy provides for the adjustment or settlement of an automobile loss
due to damaged window glass, failing to provide payment to the insured's chosen vendor based on
a competitive price that is fair and reasonable within the local industry at large.
Where facts establish that a different rate in a specific geographic area actually served by the
vendor is required by that market, that geographic area must be considered. This clause does not
prohibit an insurer from recommending a vendor to the insured or from agreeing with a vendor to
perform work at an agreed-upon price, provided, however, that before recommending a vendor,
the insurer shall offer its insured the opportunity to choose the vendor. If the insurer recommends
a vendor, the insurer must also provide the following advisory:
"Minnesota law gives you the right to go to any glass vendor you choose, and prohibits
me from pressuring you to choose a particular vendor.";
(15) requiring that the repair or replacement of motor vehicle glass and related products and
services be made in a particular place or shop or by a particular entity, or by otherwise limiting the
ability of the insured to select the place, shop, or entity to repair or replace the motor vehicle glass
and related products and services; or
(16) engaging in any act or practice of intimidation, coercion, threat, incentive, or inducement
for or against an insured to use a particular company or location to provide the motor vehicle
glass repair or replacement services or products. For purposes of this section, a warranty shall
not be considered an inducement or incentive.
    Subd. 7. Standards for releases. The following acts by an insurer, adjuster, or self-insured
or self-insurance administrator constitute unfair settlement practices:
(1) requesting or requiring an insured or a claimant to sign a release that extends beyond the
subject matter that gave rise to the claim payment;
(2) issuing a check or draft in payment of a claim that contains any language or provision
that implies or states that acceptance of the check or draft constitutes a final settlement or release
of any or all future obligations arising out of the loss.
    Subd. 8. Standards for claim denial. The following acts by an insurer, adjuster, or
self-insured, or self-insurance administrator constitute unfair settlement practices:
(1) denying a claim or any element of a claim on the grounds of a specific policy provision,
condition, or exclusion, without informing the insured of the policy provision, condition, or
exclusion on which the denial is based;
(2) denying a claim without having made a reasonable investigation of the claim;
(3) denying a liability claim because the insured has requested that the claim be denied;
(4) denying a liability claim because the insured has failed or refused to report the claim,
unless an independent evaluation of available information indicates there is no liability;
(5) denying a claim without including the following information:
(i) the basis for the denial;
(ii) the name, address, and telephone number of the insurer's claim service office or the
claim representative of the insurer to whom the insured or claimant may take any questions or
complaints about the denial;
(iii) the claim number and the policy number of the insured; and
(iv) if the denied claim is a fire claim, the insured's right to file with the Department of
Commerce a complaint regarding the denial, and the address and telephone number of the
Department of Commerce;
(6) denying a claim because the insured or claimant failed to exhibit the damaged property
unless:
(i) the insurer, within a reasonable time period, made a written demand upon the insured or
claimant to exhibit the property; and
(ii) the demand was reasonable under the circumstances in which it was made;
(7) denying a claim by an insured or claimant based on the evaluation of a chemical
dependency claim reviewer selected by the insurer unless the reviewer meets the qualifications
specified under subdivision 8a. An insurer that selects chemical dependency reviewers to conduct
claim evaluations must annually file with the commissioner of commerce a report containing the
specific evaluation standards and criteria used in these evaluations. The report must be filed at the
same time its annual statement is submitted under section 60A.13. The report must also include
the number of evaluations performed on behalf of the insurer during the reporting period, the types
of evaluations performed, the results, the number of appeals of denials based on these evaluations,
the results of these appeals, and the number of complaints filed in a court of competent jurisdiction.
    Subd. 8a. Chemical dependency claim reviewer qualifications. (a) The personnel file of a
chemical dependency claim reviewer must include documentation of the individual's competency
in the following areas:
(1) knowledge of chemical abuse and dependency;
(2) chemical use assessment, including client interviewing and screening;
(3) case management, including treatment planning, general knowledge of social services,
and appropriate referrals, and record keeping, reporting requirements, and confidentiality rules
and regulations that apply to chemical dependency clients; and
(4) individual and group counseling, including crisis intervention.
(b) The insurer may accept one of the following as adequate documentation that a chemical
dependency claim reviewer is competent in the areas required under paragraph (a):
(1) the individual has at least a baccalaureate degree with a major or concentration in
social work, nursing, sociology, human services, or psychology, is a licensed registered nurse,
or is a licensed physician; has successfully completed 30 hours of classroom instruction in each
of the areas identified in paragraph (a), clauses (1) and (2); and has successfully completed
480 hours of supervised experience as a chemical dependency counselor, either as a student
or as an employee; or
(2) the individual has documented the successful completion of the following:
(i) 60 hours of classroom training in the subject area identified in paragraph (a), clause (1);
(ii) 30 hours of classroom training in the subject area identified in paragraph (a), clause (2);
(iii) 160 hours of classroom training in the subject areas identified in paragraph (a), clauses
(3) and (4); and
(iv) completion of 480 hours of supervised experience as a chemical dependency counselor,
either as a student or as an employee; or
(3) the individual is certified by the Institute for Chemical Dependency Professionals of
Minnesota, Inc., as a chemical dependency counselor or as a chemical dependency counselor
reciprocal, through the evaluation process established by the Certification Reciprocity Consortium
Alcohol and Other Drug Abuse, Inc., and published in the Case Presentation Method Trainer's
Manual, copyright 1986;
(4) the individual successfully completed three years of supervised work experience as a
chemical dependency counselor before January 1, 1988; or
(5) the individual is a licensed physician, who has 480 hours of experience in a licensed
chemical dependency program.
After January 1, 1993, chemical dependency counselors must document that they meet the
requirements of clause (1), (2), or (3) in order to comply with this paragraph.
    Subd. 9. Standards for communications with department. In addition to the acts specified
elsewhere in this section and section 72A.20, the following acts by an insurer, adjuster, or a
self-insured or self-insurance administrator constitute unfair settlement practices:
(1) failure to respond, within 15 working days after receipt of an inquiry from the
commissioner, about a claim, to the commissioner;
(2) failure, upon request by the commissioner, to make specific claim files available to the
commissioner;
(3) failure to include in the claim file all written communications and transactions emanating
from, or received by, the insurer, as well as all notes and work papers relating to the claim.
All written communications and notes referring to verbal communications must be dated by
the insurer;
(4) failure to submit to the commissioner, when requested, any summary of complaint
data reasonably required;
(5) failure to compile and maintain a file on all complaints. If the complaint deals with a
loss, the file must contain adequate information so as to permit easy retrieval of the entire file.
If the complaint alleges that the company, or agent of the company, or any agent producing
business written by the company is engaged in any unfair, false, misleading, dishonest, fraudulent,
untrustworthy, coercive, or financially irresponsible practice, or has violated any insurance law or
rule, the file must indicate what investigation or action was taken by the company. The complaint
file must be maintained for at least four years after the date of the complaint.
For purposes of clause (1) the term insurer includes an agent of the insurer. The insurer must
have been sent a copy of any communication to an agent to be held in violation of this provision.
    Subd. 10. Scope. This section does not apply to workers' compensation insurance. Nothing
in this section abrogates any policy provisions.
    Subd. 11. Disclosure mandatory. An insurer must disclose the coverage and limits of an
insurance policy within 30 days after the information is requested in writing by a claimant.
    Subd. 12. Prejudgment interest. If a judgment is entered against an insured, the principal
amount of which is within the applicable policy limits, the insurer is responsible for their insured's
share of the costs, disbursements, and prejudgment interest, as determined under section 549.09,
included in the judgment even if the total amount of the judgment is in excess of the applicable
policy limits.
    Subd. 13. Improper claim of discount. (a) No insurer or community integrated service
network shall intentionally provide a health care provider with an explanation of benefits or
similar document claiming a right to a discounted fee, price, or other charge, when the insurer
or community integrated service network does not have an agreement with the provider for the
discount with respect to the patient involved.
(b) The insurer or community integrated service network may, notwithstanding paragraph
(a), claim the right to a discount based upon a discount agreement between the health care
provider and another entity, but only if:
(1) that agreement expressly permitted the entity to assign its right to receive the discount;
(2) an assignment to the insurer or community integrated service network of the right
to receive the discount complies with any relevant requirements for assignments contained in
the discount agreement; and
(3) the insurer or community integrated service network has complied with any relevant
requirements contained in the assignment.
(c) When an explanation of benefits or similar document claims a discount permitted under
paragraph (b), it shall prominently state that the discount claimed is based upon an assignment
and shall state the name of the entity from whom the assignment was received. This paragraph
does not apply if the entity that issues the explanation of benefits or similar document has a
provider agreement with the provider.
(d) No insurer or community integrated service network that has entered into an agreement
with a health care provider that involves discounted fees, prices, or other charges shall disclose
the discounts to another entity, with the knowledge or expectation that the disclosure will result in
claims for discounts prohibited under paragraphs (a) and (b).
History: 1984 c 555 s 3; 1987 c 64 s 1; 1989 c 193 s 1; 1989 c 260 s 21-23; 1991 c 115
s 1,2; 1991 c 131 s 2; 1991 c 207 s 7; 1992 c 413 s 1; 1992 c 524 s 2; 1992 c 564 art 1 s 47;
art 3 s 27; 1994 c 485 s 56,65; 1995 c 234 art 7 s 27; 1997 c 77 s 4; 1997 c 225 art 2 s 62;
1999 c 239 s 41; 2000 c 342 s 1; 2001 c 117 art 2 s 17; 2002 c 283 s 1; 2005 c 77 s 5; 2005 c
140 s 1; 2006 c 255 s 60
72A.202 [Repealed, 2002 c 283 s 3]
72A.206 [Repealed, 1992 c 540 art 2 s 22]
72A.207 GRADED DEATH BENEFITS.
For the purpose of this section, a graded death benefit is a provision within a life insurance
policy in which the death benefit, in the early years of the policy, is less than the face amount of
the policy, but which increases with the passage of time.
No policy of life insurance paying a graded death benefit may be issued in this state unless
the graded death benefit is equal to at least four times the first year premium. This section does
not prohibit the return of premiums or premiums plus interest in connection with the voluntary
or judicially ordered rescission of the policy, or according to the terms of the exclusions from
coverage for suicide, aviation, or war risk.
History: 1996 c 446 art 1 s 66
72A.21 POWER OF COMMISSIONER.
The commissioner shall have power to examine and investigate into the affairs of every
person engaged in the business of insurance in this state in order to determine whether that
person has been or is engaged in any unfair method of competition or in any unfair or deceptive
act or practice prohibited by section 72A.19.
History: 1967 c 395 art 12 s 21
72A.22 HEARING; WITNESSES; PRODUCTION OF BOOKS.
    Subdivision 1. Statement of charges and notice of hearing. Whenever the commissioner
has reason to believe that any person has been engaged or is engaging in this state in any unfair
method of competition or any unfair or deceptive act or practice, defined in section 72A.20, and
that a proceeding in respect thereto would be to the interest of the public, the commissioner shall
issue and serve upon that person a statement of the charges in that respect and a notice of a
hearing thereon to be held at a time and place fixed in the notice, which shall not be less than
20 days after the date of the service thereof.
    Subd. 2. Appearance; intervention. At the time and place fixed for such hearing said person
shall have an opportunity to be heard and to show cause why an order should not be made by the
commissioner requiring the person to cease and desist from the acts, methods, or practices so
complained of. Upon good cause shown, the commissioner shall permit any person to intervene,
appear and be heard at such hearing by counsel or in person.
    Subd. 3. Formal rules of pleading or evidence not required. Nothing contained in sections
72A.17 to 72A.32 shall require the observance at any such hearing of formal rules of pleading or
evidence.
    Subd. 4. Hearing. The commissioner, upon such a hearing, may administer oaths, examine
and cross-examine witnesses, receive oral and documentary evidence, and shall have the power
to subpoena witnesses, compel their attendance, and require the production of books, papers,
records, correspondence, or other documents which the commissioner deems relevant to the
inquiry. The commissioner, upon such a hearing, may, and upon the request of any party shall,
cause to be made a stenographic record of all the evidence and all the proceedings had at the
hearing. If no stenographic record is made and if a judicial review is sought, the commissioner
shall prepare a statement of the evidence and proceeding for use on review. In case of a refusal of
any person to comply with any subpoena issued hereunder or to testify with respect to any matter
concerning which the person may be lawfully interrogated, the District Court of Ramsey County
or of the county where the hearing is being held, on application of the commissioner, may issue an
order requiring that person to comply with the subpoena and to testify; and any failure to obey
any such order of the court may be punished by the court as a contempt thereof.
    Subd. 5. Service. Statements of charges, notices, orders, and other processes of the
commissioner under sections 72A.17 to 72A.32 may be served by anyone duly authorized by the
commissioner, either in the manner provided by law for service of process in civil actions or in
compliance with section 45.028, subdivision 2.
History: 1967 c 395 art 12 s 22; 1986 c 444; 1992 c 564 art 2 s 7
72A.23 [Repealed, 1987 c 336 s 47]
72A.24 [Repealed, 1987 c 336 s 47]
72A.25 UNFAIR COMPETITION.
    Subdivision 1. Statement of charges; service; hearing. Whenever the commissioner has
reason to believe that any person engaged in the business of insurance is engaged in this state in
any method of competition or in any act or practice in the conduct of that business which is not
defined in section 72A.20, that said method of competition is unfair or that said act or practice
is unfair or deceptive and that a proceeding in respect thereto would be to the interest of the
public, the commissioner may issue and serve upon that person a statement of the charges in
that respect and a notice of a hearing thereon to be held at a time and place fixed in the notice,
which shall not be less than 20 days after the date of the service thereof. Each such hearing
shall be conducted in the same manner as the hearings provided for in section 72A.22, and the
provisions of that section as to service are made applicable to proceedings under this section.
Upon good cause shown, the commissioner shall permit any person to intervene, appear and be
heard at such hearing by counsel or in person. The commissioner shall, after the hearing, make a
written report which shall include findings as to the facts and shall serve a copy thereof upon the
person served with the statement of charges.
    Subd. 2. Application for injunction. If the report charges a violation of sections 72A.17 to
72A.32 and if the method of competition, act, or practice charged has not been discontinued, the
commissioner may, through the attorney general, at any time after 20 days after the service of the
report, cause a petition to be filed in the District Court of Ramsey County, to enjoin and restrain
that person from engaging in the method, act, or practice charged. A transcript of the proceedings
before the commissioner, including all evidence taken and the report and findings, shall be filed
with the petition. Upon the filing of the petition and transcript the court shall have jurisdiction
of the proceedings and shall have power to make and enter appropriate orders in connection
therewith and to issue such writs as are ancillary to its jurisdiction or necessary in its judgment
to prevent injury to the public pendente lite.
    Subd. 3. Order enjoining and restraining. If the court finds that the method of competition
complained of is unfair or that the act or practice complained of is unfair and deceptive, and that
the proceeding by the commissioner with respect thereto is to the interests of the public, it shall
issue its order enjoining and restraining the continuance of that method of competition, act, or
practice. The findings of the commissioner shall be given the same effect as those of a referee
appointed pursuant to rule 53 of the Rules of Civil Procedure.
    Subd. 4. Rehearing. If either party shall apply to the court before the entry of its order for
leave to adduce additional evidence, and shall show to the satisfaction of the court that said
additional evidence is material and that there were reasonable grounds for the failure to adduce it
in the proceeding before the commissioner, the court may order said additional evidence to be
taken before the commissioner and to be adduced upon the hearing in such manner and upon such
terms and conditions as to the court may seem proper. The commissioner may modify the findings
of fact, or make new findings, by reason of the additional evidence so taken, and shall file those
modified or new findings with the return of the additional evidence. Any such additional evidence
and modified or new findings shall be considered by the court in making and entering its final
order, together with the matters submitted in the original transcript.
History: 1967 c 395 art 12 s 25; 1976 c 239 s 18; 1984 c 555 s 5; 1986 c 444
72A.26 INTERVENTION.
If the report of the commissioner does not charge a violation of sections 72A.17 to 72A.32,
any intervenor in the proceedings may, within 20 days after the service of the report, cause a
petition to be filed in the District Court of Ramsey County for a review of that report. Notice of
the filing of the intervenor's petition shall be given to the commissioner and to the person upon
whom the statement of charges was originally served. The commissioner shall, within 20 days
after the service of the notice of filing the petition, file a transcript of the proceedings, including
all evidence taken and the report and findings, and the person upon whom the statement of
charges was originally served shall have 20 days after the service of notice of filing the petition
in which to file an answer. The proceedings before the court shall conform to those provided
for by section 72A.25. Upon such a review the court shall have authority to issue appropriate
orders and writs in connection therewith, including, if the court finds it is to the interest of the
public, orders enjoining and restraining the continuance of any method of competition, act, or
practice which it finds, notwithstanding the report of the commissioner, constitutes a violation of
sections 72A.17 to 72A.32.
History: 1967 c 395 art 12 s 26; 1986 c 444
72A.27 APPEAL.
Any decree or order of a district court made and entered under section 72A.25 is subject to
review by appeal as in other civil cases. The appeal must be taken within the time prescribed by
law for taking appeals from orders of the district courts.
History: 1967 c 395 art 12 s 27; 1983 c 247 s 37; 1987 c 336 s 8
72A.28 [Repealed, 1987 c 336 s 47]
72A.285 CLAIM FOR INSURANCE BENEFITS; RELEASE OF SUMMARY
INFORMATION.
Notwithstanding section 145.64, when a review organization, as defined in section 145.61,
has conducted a review of health services given or proposed to be given to an insured or claimant
in connection with or in anticipation of a claim for insurance benefits, a complete summary of the
review findings must be furnished by the insurer to the provider who requested the review or to
the insured or claimant, upon that person's request.
The summary must list the qualifications of the reviewer, including any license, certification,
or specialty designation. The summary must also describe the relationship between the insured's
or claimant's diagnosis and the review criteria used as a basis for the claim decision, including the
specific rationale for the reviewer's decision.
Nothing in this section requires the disclosure of the identity of the person conducting
the review.
History: 1991 c 264 s 3
72A.29 CONCURRENT REMEDIES.
    Subdivision 1. Liability under other laws. No order of the commissioner, or order or decree
of any district court, under sections 72A.17 to 72A.32 shall in any way relieve or absolve any
person affected by such order or decree from any liability under any other laws of this state.
    Subd. 2. Concurrent powers. The powers vested in the commissioner by sections 72A.17
to 72A.32 shall be additional to any other powers to enforce any penalties, fines, or forfeitures
authorized by law with respect to the methods, acts, and practices hereby declared to be unfair or
deceptive.
History: 1967 c 395 art 12 s 29
72A.30 EVIDENTIAL PRIVILEGE DENIED; IMMUNITY; WAIVER.
A person who asks to be excused from attending and testifying or from producing any
books, papers, records, correspondence, or other documents at any hearing on the ground that
the testimony or evidence required may tend to incriminate or subject the person to a penalty or
forfeiture, who is nevertheless directed to give the testimony or produce the evidence, shall
comply with the direction. However, the person shall not subsequently be prosecuted or subjected
to any penalty or forfeiture because of any transaction, matter, or thing about which the person
testified or produced evidence, and no testimony given or evidence produced shall be received
against that person upon any criminal action, investigation, or proceeding. No person testifying is
exempt from prosecution or punishment for perjury committed while testifying, and the testimony
or evidence given or produced shall be admissible against that person upon any criminal action,
investigation, or proceeding concerning the perjury. The person is not exempt from the refusal,
revocation, or suspension of any license, permission, or authority conferred, or to be conferred,
pursuant to the insurance law of this state.
An individual may execute, acknowledge, and file in the office of the commissioner a
statement expressly waiving immunity or privilege in respect to any transaction, matter, or thing
specified in the statement, and the testimony of that person or any evidence in relation to it may
be received or produced before any judge, court, tribunal, grand jury, or otherwise. When it is
received or produced, that individual is not entitled to any immunity or privilege on account of
any testimony given or evidence produced by that individual.
History: 1967 c 395 art 12 s 30; 1983 c 359 s 2; 1986 c 444
72A.31 CERTAIN ACTS DEEMED UNFAIR METHOD OF COMPETITION.
    Subdivision 1. Real and personal property financing; prohibited acts by businesses. No
person, firm or corporation engaged in the business of financing the purchase of real or personal
property or of lending money on the security of real or personal property or who acts as agent
or broker for one who purchases real property and borrows money on the security thereof, and
no trustee, director, officer, agent or other employee of any such person, firm, or corporation
shall directly or indirectly:
(1) require, as a condition precedent to such purchase or financing the purchase of such
property or to loaning money upon the security of a mortgage thereon, or as a condition
prerequisite for the renewal or extension of any such loan or mortgage or for the performance
of any other act in connection therewith, that the person, firm or corporation making such
purchase or for whom such purchase is to be financed or to whom the money is to be loaned or for
whom such extension, renewal or other act is to be granted or performed negotiate any policy of
insurance or renewal thereof covering such property through a particular agent, or insurer, or
(2) refuse to accept any policy of insurance covering such property because it was not
negotiated through or with any particular agent, or insurer, or
(3) refuse to accept any policy of insurance covering the property issued by an insurer that is
a member insurer as defined by section 60C.03, subdivision 6, or
(4) require any policy of insurance covering the property to exceed the replacement cost
of the buildings on the mortgaged premises.
This section shall not prevent the disapproval of the insurer or a policy of insurance by
any such person, firm, corporation, trustee, director, officer, agent or employee where there
are reasonable grounds for believing that the insurer is insolvent or that such insurance is
unsatisfactory as to placement with an unauthorized insurer, adequacy of the coverage, adequacy
of the insurer to assume the risk to be insured, the assessment features to which the policy is
subject, or other grounds which are based on the nature of the coverage and which are not
arbitrary, unreasonable or discriminatory, nor shall this section prevent a mortgage lender or
mortgage servicer from requiring that a policy of insurance or renewal thereof be in conformance
with standards of the Federal National Mortgage Association or the Federal Home Loan Mortgage
Corporation, nor shall this section forbid the securing of insurance or a renewal thereof at the
request of the borrower or because of the borrower's failure to furnish the necessary insurance or
renewal thereof. For purposes of this section, "insurer" includes a township mutual fire insurance
company operating under sections 67A.01 to 67A.26 and a farmers mutual fire insurance company
operating under sections 67A.27 to 67A.39.
Upon notice of any such disapproval of or refusal to accept an insurer or a policy of
insurance, the commissioner may order the approval of the insurer or the acceptance of the
tendered policy of insurance, or both, if the commissioner determines such disapproval or refusal
to accept is not in accordance with the foregoing requirements. Failure to comply with such an
order of the commissioner of commerce shall be deemed a violation of this section.
    Subd. 2. Public agency construction insurance or bond; prohibited acts. It shall be
unlawful in connection with any contract or subcontract calling for any construction work for
a public agency to require, directly or indirectly, that any insurance or bond be purchased or
renewed through a particular agent or insurer.
History: 1967 c 395 art 12 s 31; 1969 c 229 s 1; 1969 c 433 s 1; 1983 c 289 s 114 subd 1;
1984 c 655 art 1 s 92; 1986 c 444; 1987 c 337 s 120
72A.32 VIOLATIONS, PROCEDURE.
Any violation of section 72A.31 shall constitute an unfair method of competition and the
person, firm or corporation practicing the same shall be proceeded against under the provisions of
sections 72A.21 to 72A.25, inclusive.
History: 1967 c 395 art 12 s 32
72A.321 [Repealed, 1981 c 129 s 2]
72A.325 INSURANCE FOR FUNERAL OR BURIAL EXPENSE; FREEDOM OF
CHOICE.
No insurance company, agent, or other person engaged in the business of providing insurance
or other benefits for the payment of any funeral or burial expense, shall designate, endorse, or
otherwise promote any particular mortician, funeral director, funeral establishment, cemetery,
or any other party offering funeral or burial services or supplies, as the beneficiary or recipient
of the benefits, so as to deprive the persons with legal authority to control the disposition of the
remains of the deceased policyholder under section 149A.80, subdivision 2, of the right to select
the funeral or burial services and supplies of their choice. No owner, director, or employee of a
funeral establishment, or entity having a direct equity interest in a funeral establishment, shall
receive any fee, commission, or other reimbursement on any insurance sale facilitated through
the funeral establishment, except the sale of a preneed funeral insurance contract with a face
amount not to exceed $20,000.
For purposes of this section, "preneed funeral insurance contract" means an agreement by or
for an individual before that individual's death relating to the purchase or provision of specific
funeral or cemetery merchandise or services.
Nothing in this section constitutes a waiver or exception to the requirements of chapter 60K.
History: 1981 c 129 s 1; 1987 c 233 s 1; 1999 c 100 s 1
72A.327 HEALTH CLAIMS; RIGHTS OF APPEAL.
(a) An insured whose claim for medical benefits under chapter 65B is denied because the
treatment or services for which the claim is made is claimed to be experimental, investigative, not
medically necessary, or otherwise not generally accepted by licensed health care providers and for
which the insured has financial responsibility in excess of applicable co-payments and deductibles
may appeal the denial to the commissioner.
(b) This section does not apply to claims for health benefits which have been arbitrated
under section 65B.525, subdivision 1.
(c) A three-member panel shall review the denial of the claim and report to the commissioner.
The commissioner shall establish a list of qualified individuals who are eligible to serve on
the panel. In establishing the list, the commissioner shall consult with representatives of the
contributing members as defined in section 65B.01, subdivision 2, and professional societies.
Each panel must include: one person with medical expertise as identified by the contributing
members; one person with medical expertise as identified by the professional societies; and one
public member. The commissioner, upon initiation of an arbitration, shall select from each list
three potential arbitrators and shall notify the issuer and the claimant of the selection. Each party
shall strike one of the potential arbitrators and an arbitrator shall be selected by the commissioner
from the remaining names of potential arbitrators if more than one potential arbitrator is left.
In the event of multiparty arbitration, the commissioner may increase the number of potential
arbitrators and divide the strikes so as to afford an equal number of strikes to each adverse interest.
If the selected arbitrator is unable or unwilling to serve for any reason, the commissioner may
appoint an arbitrator, which will be subject to challenge only for cause. The party that denied the
coverage has the burden of proving that the services or treatment are experimental, investigative,
not medically necessary, or not generally accepted by licensed health care professionals. In
determining whether the burden has been met, the panel may consider expert testimony, medical
literature, and any other relevant sources. If the party fails to sustain its burden, the commissioner
may order the immediate payment of the claim. All proceedings of the panel and any documents
received or developed by the review process are nonpublic.
(d) A person aggrieved by an order under this section may appeal the order. The appeal shall
be pursuant to section 65B.525 where appropriate, or to the district court for a trial de novo, in all
other cases. In nonemergency situations, if the insurer has an internal grievance or appeal process,
the insured must exhaust that process before the external appeal. In no event shall the internal
grievance process exceed the time limits described in section 72A.201, subdivision 4a.
(e) If prior authorization is required before services or treatment can be rendered, an appeal
of the denial of prior authorization may be made as provided in this section.
(f) The commissioner shall adopt procedural rules for the conduct of appeals.
(g) The permanent rulemaking authority granted in this section is effective June 2, 1989,
regardless of the actual effective date of January 1, 1990.
History: 1989 c 330 s 34

UNAUTHORIZED INSURERS FALSE

ADVERTISING PROCESS

72A.33 PURPOSE OF ACT, CONSTRUCTION.
The purpose of sections 72A.33 to 72A.39 is to subject to the jurisdiction of the commissioner
of commerce of this state and to the jurisdiction of the courts of this state insurers not authorized to
transact business in this state which place in or send into this state any false advertising designed
to induce residents of this state to purchase insurance from insurers not authorized to transact
business in this state. The legislature declares it is in the interest of the citizens of this state who
purchase insurance from insurers which solicit insurance business in this state in the manner
set forth in the preceding sentence that such insurers be subject to the provisions of sections
72A.33 to 72A.39. In furtherance of such state interest, the legislature herein provides a method
of substituted service of process upon such insurers and declares that in so doing, it exercises its
power to protect its residents and also exercises powers and privileges available to the state by
virtue of Public Law 15, 79th Congress of the United States, chapter 20, 1st Session, section 340,
which declares that the business of insurance and every person engaged therein shall be subject
to the laws of the several states; the authority provided herein to be in addition to any existing
powers of this state. The provisions of sections 72A.33 to 72A.39 shall be liberally construed.
History: 1967 c 395 art 12 s 33; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92
72A.34 DEFINITIONS.
    Subdivision 1. Scope. When used in sections 72A.33 to 72A.39 the terms defined in this
section shall have the meanings given them in this section.
    Subd. 2. Unfair Trade Practice Act. "Unfair Trade Practice Act" shall mean the act relating
to regulation of trade practices as defined in sections 72A.17 to 72A.32.
    Subd. 3. Residents. "Residents" shall mean and include persons, partnerships or
corporations, domestic, alien, or foreign.
History: 1967 c 395 art 12 s 34
72A.35 NOTICE TO DOMICILIARY SUPERVISORY OFFICIAL.
No unauthorized foreign or alien insurer of the kind described in section 72A.33 shall make,
issue, circulate or cause to be made, issued or circulated, to residents of this state any estimate,
illustration, circular, pamphlet, or letter, or cause to be made in any newspaper, magazine or
other publication or over any radio or television station, any announcement or statement to such
residents misrepresenting its financial condition or the terms of any contracts issued or to be
issued or the benefits or advantages promised thereby, or the dividends or share of the surplus to
be received thereon in violation of the Unfair Trade Practice Act, and whenever the commissioner
shall have reason to believe that any such insurer is engaging in such unlawful advertising, it shall
be the commissioner's duty to give notice of such fact by certified mail to such insurer and to
the insurance supervisory official of the domiciliary state of such insurer. For the purpose of this
section, the domiciliary state of an alien insurer shall be deemed to be the state of entry or the
state of the principal office in the United States.
History: 1967 c 395 art 12 s 35; 1978 c 674 s 60; 1986 c 444
72A.36 ACTION BY COMMISSIONER.
If after 30 days following the giving of the notice mentioned in section 72A.35 such insurer
has failed to cease making, issuing, or circulating such false representations or causing the same
to be made, issued or circulated in this state, and if the commissioner has reason to believe that a
proceeding in respect to such matters would be to the interest of the public, and that such insurer
is issuing or delivering contracts of insurance to residents of this state or collecting premiums on
such contracts or doing any of the acts enumerated in section 72A.37, the commissioner shall take
action against such insurer under the unfair trade practice act.
History: 1967 c 395 art 12 s 36; 1986 c 444
72A.37 SERVICE UPON UNAUTHORIZED INSURER.
    Subdivision 1. Acts constituting appointment of commissioner as attorney. Any of the
following acts in this state, effected by mail or otherwise, by any such unauthorized foreign or
alien insurer: (1) The issuance or delivery of contracts of insurance to residents of this state; (2)
the solicitation of applications for such contracts; (3) the collection of premiums, membership
fees, assessments or other considerations for such contracts; or (4) any other transaction of
insurance business; is equivalent to and shall constitute an appointment by such insurer of the
commissioner of commerce and a successor or successors in office, to be its true and lawful
attorney, upon whom may be served all statements of charges, notices and lawful process in any
proceeding instituted in respect to the misrepresentations set forth in section 72A.35 under the
provisions of the Unfair Trade Practice Act, or in any action, suit or proceeding for the recovery
of any penalty therein provided, and any such act shall be signification of its agreement that such
service of statement of charges, notices or process is of the same legal force and validity as
personal service of such statement of charges, notices or process in this state, upon such insurer.
    Subd. 2. Method of service. Service of a statement of charges and notices under said unfair
trade practice act shall be made by any deputy or employee of the Department of Commerce upon
the commissioner or some person in apparent charge of the office, in compliance with section
45.028. Service of process issued by any court in any action, suit or proceeding to collect any
penalty under said act provided, shall be made in compliance with section 45.028, subdivision 2.
    Subd. 3. Service on agents and certain others. Service of statement of charges, notices
and process in any such proceeding, action or suit shall in addition to the manner provided in
subdivision 2 be valid if served upon any person within this state who on behalf of such insurer is
(1) soliciting insurance, or
(2) making, issuing or delivering any contract of insurance, or
(3) collecting or receiving in this state any premium for insurance;
and a copy of such statement of charges, notices or process is sent within ten days thereafter
by certified mail by or on behalf of the commissioner to the defendant at the last known principal
place of business of the defendant, and the defendant's receipt, or the receipt issued by the post
office with which the letter is certified, showing the name of the sender of the letter, the name
and address of the person to whom the letter is addressed, and the affidavit of the person mailing
the same showing a compliance herewith, are filed with the commissioner in the case of any
statement of charges or notices, or with the court administrator of the court in which such action is
pending in the case of any process, on or before the date the defendant is required to appear or
within such further time as the court may allow.
    Subd. 4. Cease or desist order. No cease or desist order under this section shall be entered
until the expiration of 30 days from the date of the filing of the affidavit of compliance.
    Subd. 5. Other methods of service. Service of process and notice under the provisions of
sections 72A.33 to 72A.39 shall be in addition to all other methods of service provided by law,
and nothing in sections 72A.33 to 72A.39 shall limit or prohibit the right to serve any statement
of charges, notices or process upon any insurer in any other manner now or hereafter permitted
by law.
History: 1967 c 395 art 12 s 37; 1978 c 674 s 60; 1983 c 289 s 114 subd 1; 1984 c 655 art 1
s 92; 1986 c 444; 1Sp1986 c 3 art 1 s 82; 1992 c 564 art 2 s 8
72A.38 CONSTITUTIONALITY.
If any provision of sections 72A.33 to 72A.39 or the application thereof to any person or
circumstances is held invalid, such invalidity shall not affect other provisions or application of
sections 72A.33 to 72A.39 which can be given effect without the invalid provision or application,
and to this end the provisions of sections 72A.33 to 72A.39 are declared to be severable.
History: 1967 c 395 art 12 s 38
72A.39 CITATION.
Sections 72A.33 to 72A.39 may be cited as the Unauthorized Insurers False Advertising
Process Act.
History: 1967 c 395 art 12 s 39

REGULATION OF UNAUTHORIZED INSURERS

72A.40 PURPOSE.
The legislature declares that it is a subject of concern that many residents of this state hold
policies of insurance issued or delivered in this state by insurers not authorized to do insurance
business in this state. The legislature further declares that it desires to protect residents of this
state against acts by insurers not authorized to do an insurance business in this state, to maintain
fair and honest insurance markets, to protect the premium tax revenues of this state, to protect
authorized insurers who are subject to strict regulation from unfair competition by unauthorized
insurers, and to protect against the evasion of the insurance regulatory laws of this state. In
furtherance of the state interest, the legislature herein provides a method for substituted service
of process upon unauthorized insurers. The legislature declares that in so doing it exercises its
power to protect residents of this state and to define what constitutes doing an insurance business
in this state, and also exercises powers and privileges available to this state by virtue of Public
Law 79-15, Statutes at Large, volume 59, page 33, as amended, which declares that the business
of insurance and every person engaged therein shall be subject to the laws of the several states.
History: 1967 c 590 s 1
72A.41 TRANSACTING BUSINESS WITHOUT CERTIFICATE OF AUTHORITY.
    Subdivision 1. Prohibition; exception. It is unlawful for any company to enter into a
contract of insurance as an insurer or to transact insurance business in this state, as set forth
in subdivision 2, without a certificate of authority from the commissioner; provided that this
subdivision does not apply to:
(a) contracts of insurance procured by agents under the authority of sections 60A.195 to
60A.209;
(b) contracts of reinsurance and contracts of ocean or wet marine and transportation
insurance;
(c) transactions in this state involving a policy lawfully solicited, written and delivered
outside of this state covering only subjects of insurance not resident, located, or expressly to be
performed in this state at the time of issuance and which transactions are subsequent to the
issuance of the policy;
(d) transactions in this state involving a policy of insurance or annuity issued prior to July 1,
1967;
(e) contract of insurance procured under the authority of section 60A.19, subdivision 8; or
(f) transactions in this state involving contracts of insurance covering property or risks not
located in this state.
    Subd. 2. Acts constituting. Any of the following acts in this state, effected by mail or
otherwise by an unauthorized insurer, shall be included among those deemed to constitute
transacting insurance business in this state: (a) the issuance or delivery of a contract of insurance
or annuity to a resident of this state; (b) the solicitation of an application for such a contract;
(c) the collection of a premium, membership fee, assessment or other consideration for such a
contract; or (d) the transaction of any matter subsequent to the execution of such a contract
and arising out of it.
    Subd. 3. Failure to obtain certificate. The failure of a company to obtain a certificate
of authority shall not impair the validity of any act or contract of such company and shall not
prevent such company from defending any action in any court of this state, but no company
transacting insurance business in this state without a certificate of authority shall be permitted
to maintain an action in any court of this state to enforce any right, claim or demand arising
out of the transaction of such business until such company shall have obtained a certificate of
authority. Nor shall an action be maintained in any court of this state by any successor or assignee
of such company on any such right, claim or demand originally held by such company until a
certificate of authority shall have been obtained by such company or by a company which has
acquired all or substantially all of its assets.
History: 1967 c 590 s 2; 1969 c 6 s 17; 1980 c 436 s 3; 1987 c 384 art 2 s 15; 1994 c 485 s 57
72A.42 ENFORCEMENT AUTHORITY.
    Subdivision 1. Injunctions. Whenever the commissioner believes, from evidence
satisfactory to the commissioner, that any company is violating or about to violate the provisions
of section 72A.41, the commissioner may, through the attorney general of this state, cause a
complaint to be filed in the District Court of Ramsey County to enjoin and restrain such company
from continuing such violation or engaging therein or doing any act in furtherance thereof. The
court shall have jurisdiction of the proceeding and shall have the power to make and enter an
order or judgment awarding such preliminary or final injunctive relief as in its judgment is proper.
    Subd. 2. Enforcement proceedings. The attorney general may proceed in the courts of this
state or any reciprocal state to enforce an order or decision in any court proceeding or in any
administrative proceeding before the commissioner of commerce.
(a) Definition--In this section:
(1) "Reciprocal state" means any state or territory of the United States the laws of which
contain procedures substantially similar to those specified in this section for the enforcement of
foreign decrees issued by courts located in other states or territories of the United States, against
any insurer incorporated or authorized to do business in said state or territory.
(2) "Foreign decree" means any decree or order in equity or in law, including without being
limited thereto, final money judgments for penalties and fines of a court located in a "reciprocal
state," including a court of the United States located therein, against any insurer incorporated or
authorized to do business in this state.
(3) "Qualified party" means a state regulatory agency acting in its capacity to enforce the
insurance laws of its state.
(b) List of reciprocal states: The commissioner of commerce of this state shall determine
which states and territories qualify as reciprocal states and shall maintain at all times an up-to-date
list of such states.
(c) Filing and status of foreign decrees: a copy of any foreign decree authenticated in
accordance with the statutes of this state may be filed in the Office of the Court Administrator of
District Court of Ramsey County of this state. The court administrator, upon verifying with the
commissioner of commerce that the decree or order qualifies as a "foreign decree" shall treat the
foreign decree in the same manner as a decree of District Court of Ramsey County of this state. A
foreign decree so filed has the same effect and shall be deemed as a decree of District Court of
Ramsey County of this state, and is subject to the same procedures, defenses and proceedings for
reopening, vacating, or staying as a decree of District Court of Ramsey County of this state and
may be enforced or satisfied in like manner.
(d) Notice of filing:
(1) At the time of the filing of the foreign decree, the attorney general shall make and
file with the court administrator an affidavit setting forth the name and last known post office
address of the defendant.
(2) Promptly upon the filing of the foreign decree and the affidavit, the court administrator
shall mail notice of the filing of the foreign decree to the defendant at the address given and to the
commissioner of commerce of this state and shall make a note of the mailing in the docket. In
addition, the attorney general may mail a notice of the filing of the foreign decree to the defendant
and to the commissioner of commerce of this state and may file proof of mailing with the court
administrator. Lack of mailing notice of filing by the court administrator shall not affect the
enforcement proceedings if proof of mailing by the attorney general has been filed.
(3) No execution or other process for enforcement of a foreign decree filed hereunder shall
issue until 30 days after the date the decree is filed.
(e) Stay:
(1) If the defendant shows the District Court of Ramsey County that an appeal from the
foreign decree is pending or will be taken, or that a stay of execution has been granted, the court
may stay enforcement of the foreign decree until the appeal is concluded, the time for appeal
expires, or the stay of execution expires or is vacated, upon proof that the defendant has furnished
the security for the satisfaction of the decree required by the state in which it was rendered.
(2) If the defendant shows the District Court of Ramsey County any ground upon which
enforcement of a decree of District Court of Ramsey County of this state would be stayed, the
court may stay enforcement of the foreign decree for an appropriate period, upon requiring the
same security for satisfaction of the decree which is required in this state.
(f) Fees: Any person filing a foreign decree shall pay to the court administrator as a fee for
docketing, transcription or other enforcement proceedings, the amount provided for decrees of the
District Court of Ramsey County.
History: 1967 c 590 s 3; 1969 c 459 s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92;
1986 c 444; 1Sp1986 c 3 art 1 s 82
72A.43 SERVICE OF PROCESS UPON UNAUTHORIZED COMPANY BY
COMMISSIONER.
    Subdivision 1. Appointment of agent. Any act of entering into a contract of insurance or
annuity as an insurer or transacting insurance business in this state as set forth in subdivision 2 of
section 72A.41, by an unauthorized company is equivalent to and shall constitute an appointment
by such company of the commissioner of commerce and a successor or successors in office to
be its true and lawful attorney upon whom may be served all lawful process in any action or
proceeding against it, arising out of a violation of section 72A.41, and any of such acts shall be a
signification of its agreement that any such process against it which is so served shall be of the
same legal force and validity as personal service of process in this state upon such company.
    Subd. 2. How made. Service of such process shall be made in compliance with section
45.028, subdivision 2.
    Subd. 3. Postponement of service. The court in any action or proceeding in which service is
made in the manner provided in subdivision 2 may, in its discretion, order such postponement
as may be necessary to afford such company reasonable opportunity to defend such action
or proceeding.
Nothing in this section is to be construed to prevent an unauthorized company from filing a
motion to quash a writ or to set aside service thereof made in the manner provided in subdivision
2 on the ground that such unauthorized company has not done any of the acts referred to in
subdivision 1.
    Subd. 4. Judgment by default. No judgment by default shall be entered in any such action or
proceeding until the expiration of 30 days from the date of the filing of the affidavit of compliance.
    Subd. 5. Affect on other law. Nothing contained in this section shall limit or affect the right
to serve any process, notice or demand required or permitted by law to be served upon any
company in any other manner now or hereafter permitted by law.
History: 1967 c 590 s 4; 1978 c 674 s 60; 1984 c 618 s 3,4; 1986 c 444; 1Sp1986 c 3 art 1
s 82; 1992 c 564 art 2 s 9
72A.44 PENALTY.
Any company that violates subdivision 1 of section 72A.41, shall be required to pay a penalty
of not less than $100 nor more than $1,000 for each offense, to be recovered on behalf of the state.
History: 1967 c 590 s 5
72A.45 [Repealed, 1994 c 485 s 66]

MINNESOTA INSURANCE FAIR

INFORMATION REPORTING

72A.49 SHORT TITLE.
Sections 72A.49 to 72A.505 may be cited as the "Minnesota Insurance Fair Information
Reporting Act."
History: 1989 c 316 s 2
72A.491 DEFINITIONS.
    Subdivision 1. Application. For the purposes of sections 72A.49 to 72A.505, the following
terms have the meanings given them.
    Subd. 2. Adverse underwriting decision. "Adverse underwriting decision" means any of
the following actions with respect to insurance transactions involving insurance coverage that is
individually underwritten:
(1) denial, in whole or in part, of coverage that was requested in writing to the insurer;
(2) termination or reduction of insurance coverage or policy;
(3) failure of an insurance agent to apply for coverage with a specific insurer that the agent
represents and that is specifically requested by an applicant;
(4) placement by an insurer or insurance agent of a risk with a residual market mechanism,
an unauthorized insurer, or an insurer that specializes in substandard risks;
(5) charging a higher rate on the basis of information that differs from that which the
applicant or policyholder furnished for property or casualty coverage;
(6) an offer to insure at higher than standard rates for life, health, or disability coverage; or
(7) the rescission of a policy.
    Subd. 3. Affiliate or affiliated. "Affiliate" or "affiliated" means a person who directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with another person.
    Subd. 4. Applicant. "Applicant" means any person who seeks to contract for insurance
coverage from an insurer.
    Subd. 5. Consumer report. "Consumer report" means any written, oral, or other
communication of information bearing on a person's credit worthiness, credit standing, credit
capacity, character, general reputation, personal characteristics, or mode of living that is used or
expected to be used in connection with an insurance transaction.
    Subd. 6. Consumer reporting agency. "Consumer reporting agency" means any person who:
(1) regularly engages, in whole or in part, in the practice of assembling or preparing
consumer reports for a monetary fee;
(2) obtains information primarily from sources other than insurers; and
(3) furnishes consumer reports to other persons.
    Subd. 7. Control; controlled by; under common control with. "Control," "controlled by,"
or "under common control with" means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person, whether through the ownership
of voting securities, by contract other than a commercial contract for goods or nonmanagement
services, or otherwise, unless the power is the result of an official position with or corporate
office held by the person.
    Subd. 8. Health care institution. "Health care institution" means any facility or institution
that is licensed to provide health care services to natural persons.
    Subd. 9. Health professional. "Health professional" means any person licensed or certified
to provide health care services to natural persons.
    Subd. 10. Health record information. "Health record information" means personal
information that:
(1) relates to an individual's physical or mental condition, health history, or health treatment;
and
(2) is obtained from a health professional or health care institution, from the individual, or
from the individual's spouse, parent, legal guardian, or other person.
    Subd. 11. Individual. "Individual" means any natural person who:
(1) in the case of property or casualty insurance is a past, present, or proposed named insured
or certificate holder;
(2) in the case of life, health, or disability insurance is a past, present, or proposed principal
insured or certificate holder;
(3) is a past, present, or proposed policy owner;
(4) is a past or present applicant;
(5) is a past or present claimant; or
(6) derived, derives, or is proposed to derive insurance coverage under an insurance policy or
certificate subject to this act.
    Subd. 12. Insurance-support organization. (a) "Insurance-support organization" means
any person who regularly engages, in whole or in part, in the practice of assembling or collecting
information about persons for the primary purpose of providing the information to an insurer or
insurance agent for insurance transactions, including:
(1) the furnishing of consumer reports or investigative consumer reports to an insurer or
insurance agent for use in connection with an insurance transaction; and
(2) the collection of personal information from insurers, insurance agents, or other
insurance-support organizations to detect or prevent fraud, material misrepresentation, or material
nondisclosure in connection with insurance underwriting or insurance claim activity.
(b) Insurance-support organizations do not include insurance agents, government institutions,
insurers, health care institutions, or health professionals.
    Subd. 13. Insurance transaction. "Insurance transaction" means any transaction that
involves:
(1) the determination of an individual's eligibility for an insurance coverage, benefit, or
payment; or
(2) the servicing of an insurance application, policy, contract, or certificate.
    Subd. 14. Insurer. "Insurer" means any insurance company, risk retention group as
defined under section 60E.02, service plan corporation as defined under section 62C.02, health
maintenance organization as defined under section 62D.02, fraternal benefit society regulated
under chapter 64B, township mutual company regulated under chapter 67A, joint self-insurance
plan or multiple employer trust regulated under chapter 60F, 62H, or section 471.617, subdivision
2
, and persons administering a self-insurance plan as defined under section 60A.23, subdivision 8,
paragraph (2), clauses (a) and (d).
    Subd. 15. Insurer that specializes in substandard risks. "Insurer that specializes in
substandard risks" means an insurer whose rates and market orientation are directed at risks
other than preferred or standard risks.
    Subd. 16. Investigative consumer report. "Investigative consumer report" means all or
part of a consumer report in which information about a person's character, general reputation,
personal characteristics, or mode of living is obtained through personal interviews with the
person's neighbors, friends, associates, acquaintances, or others who may have knowledge
concerning these items of information.
    Subd. 17. Personal information. "Personal information" means any individually identifiable
information gathered in connection with an insurance transaction from which judgments can be
made about an individual's character, habits, avocations, finances, occupation, general reputation,
credit, health, or any other personal characteristics. The term includes the individual's name and
address and health record information, but does not include privileged information. Personal
information does not include health record information maintained by a health maintenance
organization as defined under section 62D.02, subdivision 4, in its capacity as a health provider.
    Subd. 18. Policyholder. "Policyholder" means any individual who is a present named
insured, a present policyowner, or a present group certificate holder.
    Subd. 19. Privileged information. (a) "Privileged information" means any individually
identifiable information that:
(1) relates to a claim for insurance benefits or a civil or criminal proceeding; or
(2) is collected in connection with or in reasonable anticipation of a claim for insurance
benefits or civil or criminal proceeding.
(b) Information otherwise meeting the definition of privileged information under paragraph
(a) must be considered personal information if it is disclosed in violation of section 72A.502.
    Subd. 20. Residual market mechanism. "Residual market mechanism" means an
association, organization, or other entity created under the laws of this state to provide insurance
coverage to any person who is unable to obtain coverage through ordinary methods in the
normal insurance markets.
    Subd. 21. Termination of insurance coverage or termination of an insurance policy.
"Termination of insurance coverage" or "termination of an insurance policy" means either a
cancellation or nonrenewal of an insurance policy, in whole or in part, for any reason other than
the failure to pay a premium as required by the policy.
    Subd. 22. Unauthorized insurer. "Unauthorized insurer" means an insurance company
that has not been granted a certificate of authority by the commissioner to transact the business
of insurance in this state.
History: 1989 c 316 s 3; 2000 c 468 s 20
72A.492 SCOPE.
    Subdivision 1. Covered policies. The obligations imposed by sections 72A.49 to 72A.505
apply to insurers, insurance agents, and insurance-support organizations that:
(1) collect, receive, or maintain information in connection with insurance transactions that
pertains to persons who are residents of this state; or
(2) engage in insurance transactions with applicants, individuals, or policyholders who
are residents of this state.
    Subd. 2. Covered persons. The rights granted by sections 72A.49 to 72A.505 extend to:
(1) a person who is a resident of this state and is the subject of information collected,
received, or maintained in connection with an insurance transaction; and
(2) a person who is a resident of this state and engages in or seeks to engage in an insurance
transaction.
    Subd. 3. Exceptions. (a) Sections 72A.49 to 72A.505 do not apply to information collected
from the public records of a governmental authority and maintained by an insurance company or
its representatives to insure the title to real property located in this state.
(b) Nothing in sections 72A.49 to 72A.505 gives a patient access to the health records
pertaining to the patient maintained by the patient's health provider, or gives the patient the right
to alter or amend those health records, unless otherwise provided by law.
(c) Sections 72A.49 to 72A.505 do not apply to any insurance transactions involving
property and casualty insurance primarily for business or professional needs.
History: 1989 c 316 s 4
72A.493 OBTAINING INFORMATION BY IMPROPER MEANS.
An insurer, insurance agent, or insurance-support organization must not obtain information
or authorize another person to obtain information in connection with an insurance transaction by:
(1) pretending to be someone else;
(2) pretending to represent a person;
(3) misrepresenting the true purpose of the interview; or
(4) refusing to provide identification upon request.
History: 1986 c 444; 1989 c 316 s 5
72A.494 NOTICE.
    Subdivision 1. Required. Each insurer or insurance agent shall provide a notice relating to
information practices to each applicant or policyholder in the manner and at the time required
by this section.
    Subd. 2. Exemption. A notice is not required to be provided under this section for:
(1) a group policy or contract that is not individually underwritten; or
(2) a renewal, reinstatement, or a change in benefits for a policy or contract if no personal
information is to be collected other than from the applicant or policyholder, or from public records.
    Subd. 3. Timing. (a) In the case of an application for insurance coverage, the notice must
be provided to the applicant or policyholder no later than the time application is made for the
coverage, renewal, reinstatement, or change in benefits.
(b) If personal information is to be collected only from the applicant or from public records,
the notice may be provided at the time of delivery of the policy or the certificate.
    Subd. 4. Content of notice. The notice required by this section must be in writing and state:
(1) whether personal information may be collected from persons other than the individual or
individuals proposed for coverage;
(2) the types of personal information that may be collected and the types of sources and
investigative techniques that may be used to collect the information;
(3) the types of disclosures of personal information that may be made under section 72A.501
and the circumstances under which the disclosures may be made without prior authorization;
except that only those circumstances which occur with such frequency as to indicate a general
business practice must be described;
(4) a description of the rights established under sections 72A.497 and 72A.498 and the
manner in which those rights may be exercised; and
(5) that information obtained from a report prepared by an insurance-support organization
may be retained by the insurance-support organization and disclosed to other persons.
    Subd. 5. Abbreviated notice. In lieu of the notice required under subdivision 4, the insurer
or insurance agent may provide an abbreviated notice informing the applicant or policyholder that:
(1) personal information may be collected from persons other than the person or persons
proposed for coverage;
(2) the information collected by the insurer or insurance agent may in certain circumstances
be disclosed to third parties without authorization;
(3) the person has a right to see their personal records and correct personal information
collected; and
(4) the person will be furnished the detailed notice required under subdivision 4 upon request.
    Subd. 6. Other companies or agencies acting on its behalf. The obligations imposed by
this section upon an insurer or insurance agent may be satisfied by another insurer or insurance
agent authorized to act on its behalf.
History: 1989 c 316 s 6
72A.495 MARKETING AND RESEARCH SURVEYS.
An insurer or insurance agent shall clearly specify any questions designed to obtain
information solely for marketing or research purposes from an individual in connection with an
insurance transaction, and state that responses to the questions are not required to obtain coverage.
History: 1989 c 316 s 7
72A.496 INVESTIGATIVE CONSUMER REPORTS.
    Subdivision 1. Notice. An insurer, insurance agent, or insurance-support organization must
not prepare or request an investigative consumer report about an individual in connection with
an insurance transaction involving an application for insurance, a policy renewal, a policy
reinstatement, or a change in insurance benefits, unless the insurer or insurance agent informs
the person:
(1) that the individual may request to be interviewed in connection with the preparation of
the investigative consumer report; and
(2) that, upon a request pursuant to section 72A.497, the individual is entitled to receive
a copy of the investigative consumer report.
    Subd. 2. Reports prepared by insurers. If an investigative consumer report is to be
prepared by an insurer or insurance agent, the insurer or insurance agent shall institute reasonable
procedures to conduct a personal interview requested by an individual.
    Subd. 3. Reports prepared by insurance-support organizations. If an investigative
consumer report is to be prepared by an insurance-support organization, the insurer or insurance
agent desiring the report shall inform the insurance-support organization whether a personal
interview has been requested by the individual. The insurance-support organization shall institute
reasonable procedures for conducting an interview, if requested.
History: 1989 c 316 s 8
72A.497 ACCESS TO PERSONAL INFORMATION.
    Subdivision 1. Request. (a) If an individual, after proper identification, submits a written
request to an insurer, insurance agent, or insurance-support organization for access to personal
information about the individual, the insurer, insurance agent, or insurance-support organization
shall within 30 business days from the date the request is received:
(1) inform the individual of the nature and substance of the personal information that they
possess in writing, by telephone, or by other oral communication, whichever the insurer, insurance
agent, or insurance-support organization elects;
(2) permit the individual to see and copy, in person, the personal information pertaining
to that person;
(3) permit the individual to obtain by mail a copy of all of the personal information or a
reasonably described portion thereof, whichever the individual requests;
(4) disclose to the individual the identity of those persons to whom the insurer, insurance
agent, or insurance-support organization has disclosed the personal information within two years
before the request; and
(5) provide the individual with a summary of the procedures by which the person may request
correction, amendment, or deletion of personal information, as provided under section 72A.498.
(b) If the personal information is in coded form, an accurate translation in plain language
must be provided in writing.
(c) If credit information is requested that federal law prohibits an insurer to disclose, the
insurer must disclose that the individual has the right to receive the credit information from the
credit reporting agency. The insurer must disclose the name, address, and telephone number of the
credit reporting agency that supplied the insurer with the credit information.
    Subd. 2. Source. Any personal information collected must specifically identify the source of
the information.
    Subd. 3. Health records. (a) Health record information requested under subdivision 1 that
has been supplied by a health care institution or a health professional must provide the identity
of the health professional or health care institution that supplied the information. The health
record information must be provided either directly to the individual or to a health professional
designated by the person who is licensed to provide health care with respect to the condition to
which the information relates, whichever the individual elects. If the information is provided to a
designated health professional, the insurer, insurance agent, or insurance-support organization
shall notify the person, at the time of the disclosure, that the information has been provided
to the health professional.
(b) If a health professional or a health care institution has provided health information
to an insurer, insurance-support organization, or insurance agent that the health professional
or health care institution has determined and indicates in writing that the release of the health
record information is detrimental to the physical or mental health of the person, or is likely
to cause the individual to inflict self-harm or to harm another, the insurer, insurance agent, or
insurance-support organization may provide that information directly to the individual only with
the approval of the health professional with treatment responsibility for the condition to which
the information relates. If approval is not obtained, the information must be provided to the
health professional designated by the individual.
(c) Nothing in this section may reduce or affect a patient's rights under section 144.335.
    Subd. 4. Fee. An insurer, insurance agent, or insurance-support organization may charge a
reasonable fee, not to exceed the actual costs, to copy information provided under this section.
If an individual is requesting information as a result of an adverse underwriting decision, the
insurer, insurance agent, or insurance-support organization must provide the information free
of any charge.
    Subd. 5. Other companies or agents acting on its behalf. The obligations imposed by
this section upon an insurer or insurance agent may be satisfied by another insurer or insurance
agent authorized to act on its behalf. With respect to the copying and disclosure of personal
information under a request under subdivision 1, an insurer, insurance agent, or insurance-support
organization may make arrangements with an insurance-support organization or a consumer
reporting agency to copy and disclose personal information on its behalf.
    Subd. 6. Privileged information. The rights granted under this section and section 72A.498
do not extend to privileged information.
History: 1989 c 316 s 9
72A.498 CORRECTION, AMENDMENT, OR DELETION OF PERSONAL
INFORMATION.
    Subdivision 1. Procedure. Within 30 business days from the date of receipt of a written
request from an individual to correct, amend, or delete any personal information about the person
within its possession, an insurer, insurance agent, or insurance-support organization shall either:
(1) correct, amend, or delete the portion of the personal information in dispute; or
(2) notify the individual of its refusal to make the correction, amendment, or deletion, the
reasons for the refusal, and the person's right to file a statement as provided in subdivision 3, and
the individual's right to appeal to the commissioner under subdivision 5.
    Subd. 2. Notice. If the insurer, insurance agent, or insurance-support organization corrects,
amends, or deletes disputed personal information upon request of an individual or as ordered by
the commissioner, the insurer, insurance agent, or insurance-support organization shall notify the
person in writing and provide the correction, amendment, or fact of deletion to:
(1) any person specifically designated by the individual who may have within the preceding
two years received the personal information;
(2) any insurance-support organization whose primary source of personal information
is insurers, if the insurance-support organization has systematically received the personal
information from the insurer within the preceding seven years, provided that the correction,
amendment, or fact of deletion need not be provided to an insurance-support organization if the
insurance-support organization no longer maintains personal information about the individual; and
(3) any insurance-support organization that provided the personal information that has
been corrected, amended, or deleted.
    Subd. 3. Statement. If the insurer, insurance agent, or insurance-support organization refuses
to correct, amend, or delete disputed personal information, the individual must be permitted to
file with the insurer, insurance agent, or insurance-support organization a concise statement
setting forth what the person thinks is the correct, relevant, or fair information and stating the
reasons why the individual disagrees with the insurer's, insurance agent's, or insurance-support
organization's refusal to correct, amend, or delete disputed personal information.
    Subd. 4. Disputed information. In the event an individual files a statement described in
subdivision 3, the insurer, insurance agent, or insurance-support organization shall:
(1) file the statement with the disputed personal information and provide a means by which
anyone reviewing the disputed personal information will be made aware of the individual's
statement and have access to it;
(2) in any subsequent disclosure by the insurer, insurance agent, or insurance-support
organization of the disputed personal information, clearly identify the matter or matters in dispute
and provide the individual's statement along with the personal information being disclosed; and
(3) furnish the statement to the persons and in the manner specified in subdivision 2.
    Subd. 5. Appeal. (a) If an insurer, insurance-support organization, or insurance agent refuses
to correct, amend, or delete disputed personal information, the individual may file an appeal
with the commissioner.
(b) The commissioner may, after providing the insurer, insurance-support organization, or
insurance agent an opportunity for a hearing, order the insurer, insurance-support organization, or
insurance agent to amend, correct, or delete disputed personal information if the commissioner
finds that the personal information kept by the insurer, insurance-support organization, or
insurance agent is in error. If the commissioner finds that the disputed personal information
maintained by the insurer, insurance agent, or insurance-support organization is correct, the
insurer, insurance agent, or insurance-support organization may delete from the individual's
records any statement filed with them by that individual relating to the disputed information
under subdivision 3.
History: 1989 c 316 s 10
72A.499 REASONS FOR ADVERSE UNDERWRITING DECISIONS.
    Subdivision 1. Notice and information. (a) In the event of an adverse underwriting decision,
the insurer or insurance agent responsible for the decision shall provide in writing to the applicant,
policyholder, or individual proposed for coverage:
(1) the specific reason or reasons for the adverse underwriting decision, a summary of the
person's rights under sections 72A.497 and 72A.498, and that upon request the person may
receive the specific items of personal information that support those reasons and the specific
sources of the information; or
(2) the specific reason or reasons for the adverse underwriting decision, the specific items
of personal and privileged information that support those reasons, the names and addresses of
the sources that supplied the specific items of information specified, and a summary of the rights
established under sections 72A.497 and 72A.498.
(b) In addition to the requirements of paragraph (a), if the adverse underwriting decision
is either solely or partially based upon a report of creditworthiness, credit standing, or credit
capacity that an insurer receives from a consumer reporting agency, the insurer or insurance agent
responsible for the decision shall provide in writing to the applicant, policyholder, or individual
proposed for coverage the primary reason or reasons for the credit score or other credit based
information used by the insurer in the insurer's adverse underwriting decision.
    Subd. 2. Health reasons. If the specific reason for an adverse underwriting decision is
based on health record information, the insurer may, in lieu of providing the specific reason
to the individual under subdivision 1, provide the individual with the specific source of the
adverse underwriting decision referring to the specific date, page, and line of the information
received from a health professional or health care institution. If the insured has been informed
of the condition indicated by their health provider and is unable to determine the reason for the
adverse underwriting decision, then the insurer must provide the specific reason to the individual.
The insurer must provide the specific reason for the adverse underwriting decision to a health
professional designated by the individual, if requested either orally or in writing by the individual.
    Subd. 3. Exemption. (a) This section is not applicable to group policies or contracts, except
for group policies that are individually underwritten. For group policies or contracts that are
individually underwritten, the notice required under this section must be given to the individual or
individuals in the group whose personal information resulted in the adverse underwriting decision.
(b) If a policy or contract is terminated on a class or statewide basis, or an insurance coverage
is declined solely because the coverage is unavailable on a class or statewide basis, the insurer or
agent is not required to provide the notice required under this section provided that the applicant
or policyholder is provided with the specific reason for the termination or declination of coverage.
    Subd. 4. Privileged information. (a) An insurer or insurance agent is not required to provide
particular, specific items of privileged information under subdivision 1 if it has a reasonable
suspicion, based upon that specific information, that the applicant, policyholder, or person
proposed for coverage has engaged in criminal activity, fraud, material misrepresentation, or
material nondisclosure. If an insurer or insurance agent does not provide the specific items of
information because the information is privileged under this subdivision, the insurer or insurance
agent must notify the applicant, policyholder, or individual proposed for coverage that the specific
items of information are privileged and of the person's right to appeal to the commissioner under
this subdivision.
(b) If a person is not provided with the specific items of information relating to an adverse
underwriting decision because the information is privileged under this subdivision, the person
may request that the commissioner review the information. The commissioner may then order
the insurer or insurance agent to supply the privileged information to the commissioner. If
the commissioner determines that the information is not privileged under this subdivision,
the commissioner shall order the insurer or insurance agent to provide the information to the
applicant, policyholder, or person proposed for coverage.
    Subd. 5. Health records information. Specific items of health record information supplied
by a health care institution or health professional, and the identity of the health professional or
health care institution that supplied the information, must be disclosed in the manner required
under section 72A.497, subdivision 3.
    Subd. 6. Other companies or agents acting on its behalf. The obligations imposed by
this section upon an insurer or insurance agent may be satisfied by another insurer or insurance
agent authorized to act on its behalf.
History: 1989 c 316 s 11; 2000 c 483 s 23
72A.50 PREVIOUS ADVERSE UNDERWRITING DECISIONS.
    Subdivision 1. Additional information required. An insurer, insurance agent, or
insurance-support organization must not seek information in connection with an insurance
transaction concerning any previous adverse underwriting decision experienced by a person, or
any previous insurance coverage obtained by a person through a residual market mechanism,
unless the inquiry also requests the reasons for the previous adverse underwriting decision or the
reasons why insurance coverage was previously obtained through a residual market mechanism.
    Subd. 2. Prohibitions. An insurer or insurance agent may not base an adverse underwriting
decision, in whole or in part, on:
(1) the fact of a previous adverse underwriting decision or the fact that a person previously
obtained insurance coverage through a residual market mechanism, provided that an insurer or
insurance agent may base an adverse underwriting decision on further information obtained from
an insurer or insurance agent responsible for a previous adverse underwriting decision; or
(2) personal information received from an insurance-support organization whose primary
source of information is insurers, provided that an insurer or insurance agent may base an adverse
underwriting decision on further personal information obtained as the result of information
received from the insurance-support organization.
History: 1989 c 316 s 12
72A.501 DISCLOSURE AUTHORIZATION.
    Subdivision 1. Requirement; content. An authorization used by an insurer,
insurance-support organization, or insurance agent to disclose or collect personal or privileged
information must be in writing and must meet the following requirements:
(1) is written in plain language;
(2) is dated;
(3) specifies the types of persons authorized to disclose information about the person;
(4) specifies the nature of the information authorized to be disclosed;
(5) names the insurer or insurance agent and identifies by generic reference representatives
of the insurer to whom the person is authorizing information to be disclosed;
(6) specifies the purposes for which the information is collected; and
(7) specifies the length of time the authorization remains valid.
If the insurer, insurance-support organization, or insurance agent determines to disclose or collect
a kind of information not specified in a previous authorization, a new authorization specifying
that kind of information must be obtained.
    Subd. 2. Application. (a) If the authorization is signed to collect information in connection
with an application for a property and casualty insurance policy, a policy reinstatement, or a
request for a change in benefits, the authorization is valid as long as the individual is continually
insured with the insurer. At each renewal of the policy, the insurer must notify the insured in
writing of the contents of the authorization and that the authorization remains in effect unless
revoked.
(b) If the authorization is signed to collect information in connection with an application for
a life, disability, and health insurance policy or contract, reinstatement, or request for change in
benefits, the authorization is valid as long as the individual is continually insured with the insurer.
At each renewal of the policy, the insurer must notify the insured in writing of the contents of the
authorization and that the authorization remains in effect unless revoked.
(c) This section and section 72A.502, subdivisions 1 and 12, do not apply to the collection
and use of a numeric product referred to as an insurance score or credit score that is used by a
licensed insurance agent or insurer exclusively for the purpose of underwriting or rating an
insurance policy, if the agent or insurer informs the policyholder or prospective policyholder
requesting the insurance coverage that an insurance score or credit score will be obtained for the
purpose of underwriting or rating the policy.
    Subd. 3. Claims. If the authorization is signed to collect information in connection with a
claim for benefits under an insurance policy, the authorization must not remain valid for longer
than:
(1) the term of coverage of the policy, if the claim is for a health insurance benefit; or
(2) the duration of the claim, if the claim is for a claim other than for a health insurance
benefit.
    Subd. 4. Authorization; noninsurers. If an authorization is submitted to an insurer,
insurance-support organization, or insurance agent by a person other than an insurer,
insurance-support organization, or insurance agent, the authorization must be dated, signed by the
person, and obtained one year or less before the date a disclosure is sought.
History: 1989 c 316 s 13; 1990 c 467 s 2; 2003 c 74 s 10; 2005 c 74 s 11,12
72A.502 DISCLOSURE OF INFORMATION; LIMITATIONS AND CONDITIONS.
    Subdivision 1. Requirement. An insurer, insurance agent, or insurance-support organization
must not disclose any personal or privileged information about a person collected or received in
connection with an insurance transaction without the written authorization of that person except
as authorized by this section. An insurer, insurance agent, or insurance-support organization must
not collect personal information about a policyholder or an applicant not relating to a claim from
sources other than public records without a written authorization from the person.
    Subd. 2. Prevention of fraud. Personal or privileged information may be disclosed without
a written authorization to another person if the information is limited to that which is reasonably
necessary to detect or prevent criminal activity, fraud, material misrepresentation, or material
nondisclosure in connection with an insurance transaction, and that person agrees not to disclose
the information further without the individual written authorization unless the further disclosure is
otherwise permitted by this section if made by an insurer, insurance agent, or insurance-support
organization.
    Subd. 3. Health care institutions and professionals. Personal or privileged information
may be disclosed without a written authorization to a health care institution or health professional
for the purpose of verifying insurance coverage benefits, informing a person of a health problem
of which the person must not be aware, or conducting an operations or services audit, if the
information is only disclosed that is reasonably necessary to accomplish the purposes under
this subdivision.
    Subd. 4. Regulatory authority. Personal or privileged information may be disclosed without
a written authorization to an insurance regulatory authority.
    Subd. 5. Other governmental authorities. Personal or privileged information may be
disclosed without a written authorization to a law enforcement or other governmental authority if:
(1) the disclosure is to protect the interests of the insurer, agent, or insurance-support
organization in preventing or prosecuting the perpetration of fraud upon it; or
(2) the insurer, agent, or insurance-support organization reasonably believes that illegal
activities have been conducted by the individual.
    Subd. 6. Other laws or order. Personal or privileged information may be disclosed without
a written authorization if permitted or required by another law or in response to a facially valid
administrative or judicial order, including a search warrant or subpoena.
    Subd. 7. Actuarial and research studies. Personal or privileged information may be
disclosed without a written authorization to conduct actuarial or research studies if:
(1) no individual may be identified in the actuarial or research report;
(2) materials allowing an individual to be identified are returned or destroyed as soon as they
are no longer needed; and
(3) the actuarial or research organization agrees not to disclose the information unless the
disclosure would otherwise be permitted by this section if made by an insurance company, agent,
or insurance-support organization.
    Subd. 8. Affiliate companies. Personal or privileged information may be disclosed without a
written authorization to an affiliate whose only use of the information will be in connection with
an audit of the insurer or agent or the marketing of an insurance product or service, provided the
affiliate agrees to not disclose the information for any other purpose or to unaffiliated persons.
    Subd. 9. Group policyholder. Personal or privileged information may be disclosed without
written authorization to a group policyholder only to report claims experience or conduct an
audit of the insurer's or agent's operations or services, if the information disclosed is reasonably
necessary for the group policyholder to conduct the review or audit.
    Subd. 10. Governmental licensing board. Personal or privileged information may be
disclosed without a written authorization to a governmental professional licensing or regulatory
board to review the service or conduct of a health care institution or health professional that the
insurer has reason to believe has violated its licensing act or engaged in the unlawful practice
of a licensed professional.
    Subd. 11. Professional peer review. Subject to the terms of a contract between an insurer
and a health professional or health care institution, personal or privileged information may be
disclosed without a written authorization to a professional peer review organization to review the
service or conduct of a health care institution or health professional.
    Subd. 11a. Merger or sale. Personal or privileged information may be disclosed to a party or
representative of a party to a proposed or consummated sale, transfer, merger, or consolidation
of all or part of the business of the insurer, agent, or insurance-support organization, without a
written authorization provided:
(1) prior to the consummation of the sale, transfer, merger, or consolidation, only such
information is disclosed as is reasonably necessary to enable the recipient to make business
decisions about the merger, transfer, purchase, or consolidation; and
(2) the recipient agrees not to disclose the information unless the disclosure would otherwise
be permitted by this section if made by an insurer, agent, or insurance-support organization.
    Subd. 12. Notice. Whenever an insurer, insurance agent, or insurance-support organization
discloses personal or privileged information about a person that requires the written authorization
of that person under this section, the insurer, insurance agent, or insurance-support organization
shall notify that person in writing within ten days of the date the information was disclosed.
The notification must specify the identity of the person to whom information was disclosed
and the nature and substance of the information that was disclosed. A notice is not required to
be given under this subdivision if an insurer is disclosing personal information for underwriting
purposes to another insurer, or to an insurance-support organization if the person had signed
an authorization authorizing the disclosure.
History: 1989 c 316 s 14; 1990 c 467 s 3,4
72A.503 PRIVATE REMEDIES.
    Subdivision 1. Liability. Any insurer, insurance agent, or insurance-support organization that
violates sections 72A.49 to 72A.505 is liable to the aggrieved person for that violation to the same
extent as civil remedies are otherwise allowed in section 13.08, subdivision 1, for violations of
chapter 13, by a political subdivision, responsible authority, statewide system, or statewide agency.
    Subd. 2. Equitable relief. Upon application by an aggrieved person, a court of competent
jurisdiction may grant equitable and declaratory relief as necessary to enforce the requirements of
sections 72A.49 to 72A.505.
History: 1989 c 316 s 15
72A.504 OBTAINING INFORMATION UNDER IMPROPER MEANS.
Any person who knowingly and willfully obtains information about a person in violation
of section 72A.493 is subject to a fine not to exceed $3,000 or imprisonment not to exceed one
year, or both.
History: 1989 c 316 s 16
72A.505 IMMUNITY.
No cause of action in the nature of defamation, invasion of privacy, or negligence may arise
against an insurer, insurance agent, or insurance-support organization for disclosing personal
or privileged information required to be disclosed under sections 72A.20, subdivision 11, and
72A.49 to 72A.504, provided no immunity exists for disclosing false information with malice or
willful intent to injure any person.
History: 1989 c 316 s 17

CANCELLATION OF POLICIES

72A.51 RIGHT TO CANCEL.
    Subdivision 1. Date of purchase defined. For the purposes of this section and section 72A.52
"date of purchase" means the date on which the purchaser receives a copy of the policy or contract.
    Subd. 2. Return of policy or contract; notice. Any individual person may cancel an
individual policy of insurance against loss or damage by reason of the sickness of the assured or
the assured's dependents, a nonprofit health service plan contract providing benefits for hospital,
surgical and medical care, a health maintenance organization subscriber contract, or a policy of
insurance authorized by section 60A.06, subdivision 1, clause (4), by returning the policy or
contract and by giving written notice of cancellation any time before midnight of the tenth day
following the date of purchase. Notice of cancellation may be given personally, by mail, or by
telegram. The policy or contract may be returned personally or by mail. If by mail, the notice
or return of the policy or contract is effective upon being postmarked, properly addressed and
postage prepaid.
    Subd. 3. Refund of consideration. With the exception of a variable annuity contract issued
pursuant to sections 61A.13 to 61A.21, a person's cancellation of an insurance policy or contract
under this section and section 72A.52 is without liability and the person is entitled to a refund of
the entire consideration paid for the policy or contract within ten days after notice of cancellation
and the returned policy or contract are received by the insurer or its agent. Cancellation under
this section and section 72A.52 of a variable annuity contract issued pursuant to sections 61A.13
to 61A.21 shall entitle a person to an amount equal to the sum of (a) the difference between the
premiums paid including any contract fees or other charges and the amounts allocated to any
separate accounts under the contract and (b) the cash value of the contract, or, if the contract does
not have a cash value, the reserve for the contract, on the date the returned contract is received
by the insurer or its agent. Cancellation of an insurance policy or contract under this section or
section 72A.52 makes the policy or contract void from its inception.
    Subd. 4. Waiver or surrender prohibited. A person may not waive or surrender a right to
cancel an insurance policy or contract under this section and section 72A.52.
History: 1977 c 178 s 1; 1980 c 354 s 1; 1986 c 444
72A.52 NOTICE REQUIREMENTS.
    Subdivision 1. Contents. In addition to all other legal requirements a policy or contract of
insurance described in section 72A.51 shall show the name and address of the insurer and the
seller of the policy or contract and shall state, clearly and conspicuously in boldface type of
a minimum size of ten points, a notice in the following form or its equivalent: "RIGHT TO
CANCEL. You may cancel this policy by delivering or mailing a written notice or sending a
telegram to (insert name and mailing address of the insurer or the seller of the policy or contract)
and by returning the policy or contract before midnight of the tenth day after the date you receive
the policy. Notice given by mail and return of the policy or contract by mail are effective on being
postmarked, properly addressed and postage prepaid. The insurer must return all payments made
for this policy within ten days after it receives notice of cancellation and the returned policy."
For variable annuity contracts issued pursuant to sections 61A.13 to 61A.21, this notice shall be
suitably modified so as to notify the purchaser that the purchaser is entitled to a refund of the
amount calculated in accordance with the provisions of section 72A.51, subdivision 3.
    Subd. 2. Noncompliance; cancellation. If a policy or contract of insurance covered by this
section is sold without compliance with subdivision 1, the policy or contract may be canceled by
the purchaser at any time within one year after the date of purchase by returning the policy or
contract and by giving written notice of cancellation to the insurer or its agent. If a purchaser
cancels a policy or contract under this subdivision, the insurer must return the entire consideration
paid for the policy or contract within ten days after receiving notice of cancellation and the
returned policy or contract, except that if the contract is a variable annuity contract issued pursuant
to sections 61A.13 to 61A.21, the insurer shall refund to the purchaser an amount calculated in
accordance with the provisions of section 72A.51, subdivision 3.
History: 1977 c 178 s 2; 1980 c 354 s 2; 1986 c 444
72A.53 VENDING MACHINE SALES.
Sections 72A.51 and 72A.52 shall not apply to insurance sold pursuant to section 60A.18.
History: 1977 c 178 s 3

Official Publication of the State of Minnesota
Revisor of Statutes