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    Subdivision 1. Policy to contain entire contract. A statement in full of the conditions of
insurance shall be incorporated in or attached to every policy, and neither the application of the
insured nor the bylaws of the company shall be considered as a warranty or a part of the contract,
except in so far as they are so incorporated or attached.
    Subd. 2. Corporate name; origin and financial statements. Every company, domestic or
foreign, shall conduct its business, display all signs and advertisements, and issue all policies,
circulars, and other documents and publications in this state, in its own corporate name, and
every foreign company shall state conspicuously upon a sign at each agency the state or country
of its organization. When a company publishes its assets, it shall in the same connection, and
with equal conspicuousness, publish its liabilities, computed on the basis allowed for its annual
statements; and any publication purporting to show its capital shall state only the amount thereof
which has been actually paid in cash.
    Subd. 3. Renewal; new policy. Any insurance policy terminating by its provisions at a
specified expiration date or limited as to term by any statute and not otherwise renewable may be
renewed or extended at the option of the insurer, at the premium rate then required therefor, for a
specific additional period or periods by a certificate, and without requiring the issuance of a new
policy. The insurer must also post the current policy form on its Web site, or must inform the
policyholder annually in writing that a copy of the current policy form is available on request.
    Subd. 4. Contracts; application of Minnesota law; prohibitions. All contracts of insurance
on property, lives, or interests in this state, shall be deemed to be made in this state.
It shall be unlawful for any person, firm, or corporation to solicit or make, or aid in soliciting
or making, any contract of insurance not authorized by the laws of this state.
    Subd. 5. Signatures required. All insurance policies shall be signed by the secretary or an
assistant secretary, and by the president or vice-president, or in their absence, by two directors of
the insurer. The signatures may be facsimile signatures.
    Subd. 6. Bankruptcy, insolvency, or dissolution clause. Every bond or policy of insurance
issued in this state insuring against either actual loss suffered by the insured, and imposed by law
for damages on account of personal injury, death, or injury to property caused by accident, or
legal liability imposed upon the insured by reason of such injuries or death, shall, notwithstanding
anything in the policy to the contrary, be deemed to contain the following condition:
The bankruptcy, insolvency, or dissolution of the insured shall not relieve the insurer of
any of its obligations under this policy, and in case an execution against the insured on a final
judgment is returned unsatisfied, then such judgment creditor shall have a right of action on this
policy against the company to the same extent that the insured would have, had the insured
paid the final judgment.
    Subd. 7. Unsatisfied judgment. When a judgment has been rendered by any court in this
state against any company holding the commissioner's certificate, and an execution issued thereon
has been returned unsatisfied, in whole or in part, and a certified transcript of the docket entry and
the court administrator's certificate of those facts is filed with the commissioner, the commissioner
shall forthwith revoke its certificate and give one week's published notice thereof. No new
certificate shall issue until such judgment has been fully satisfied and proof thereof filed with the
commissioner, and the expenses and fees incurred are paid. During this revocation neither the
company, nor any of its officers or agents, shall issue any new policy, take any risk, or transact
any business, except such as is absolutely necessary in closing up its affairs in this state.
    Subd. 8. Policies on which premiums are determined by audits. Any insurance company
licensed to do business in this state which issues policies of insurance in this state upon which the
premium is determined by means of an audit shall within 60 days from the date of the expiration
of any insurance policy so issued request from the insured a statement of the facts and figures
necessary to determine the premium thereon. The insured shall furnish such statement of facts and
figures within 60 days of the date of the request. Upon failure of the insured to comply within
the time specified, then the provisions of this subdivision shall not apply as to such insured.
Within 12 months from the date of the expiration of the policy, or within such longer time as the
commissioner of commerce may for cause shown direct, the insurer unless it elects to accept the
insured's statement shall make a final audit. Failure to make such final audit within the time herein
provided shall constitute a waiver of the insurer's right to make such audit and an election to
accept the statement furnished by the insured as a basis for determining the premium on such
policy. In the event an audit discloses that the insured submitted to the insurer a fraudulent
statement of facts and figures, then the insured shall be liable for three times the normal premium.
This subdivision shall not apply to policies issued covering workers' compensation.
    Subd. 9. Misrepresentation by applicant. No oral or written misrepresentation made by the
assured, or in the assured's behalf, in the negotiation of insurance, shall be deemed material, or
defeat or avoid the policy, or prevent its attaching, unless made with intent to deceive and defraud,
or unless the matter misrepresented increases the risk of loss.
This subdivision shall not apply to life insurance or accident and health insurance.
    Subd. 10. Legal expense insurance. No contract of insurance written pursuant to the
authority to transact the kind of business enumerated in section 60A.06, subdivision 1, clause (15)
shall include any provision interfering with the attorney-client relationship.
    Subd. 11. Directors' and officers' liability policies. No misrepresentation or omission made
in an application or negotiation for any policy providing directors and officers liability coverage
for directors or officers of a corporation shall defeat or avoid coverage or prevent the policy from
attaching for a director or officer unless the director or officer has signed the application and has
actual knowledge of the facts misrepresented or omitted. The application shall be attached to and
incorporated into the contract. This subdivision applies with respect to all policies governed by
this chapter or issued or renewed in this state.
    Subd. 12. Rented vehicles. All commercial automobile liability policies must provide
coverage for rented vehicles as required in chapter 65B.
This coverage can be excess over any and all specific motor vehicle coverage that is
    Subd. 13. Reduction of limits by costs of defense prohibited. (a) No insurer shall issue or
renew a policy of liability insurance in this state that reduces the limits of liability stated in the
policy by the costs of legal defense.
(b) This subdivision does not apply to:
(1) professional liability insurance with annual aggregate limits of liability of at least
$100,000, including directors' and officers' and errors and omissions liability insurance;
(2) environmental impairment liability insurance;
(3) insurance policies issued to large commercial risks; or
(4) coverages that the commissioner determines to be appropriate which will be published in
the manner prescribed for surplus lines insurance in section 60A.201, subdivision 4.
(c) For purposes of this subdivision, "large commercial risks" means an insured whose gross
annual revenues in the fiscal year preceding issuance of the policy were at least $10,000,000.
    Subd. 14. Agreement to rescind policy or release bad faith claim. (a) If the insurer has
knowledge of any claims against the insured that would remain unsatisfied due to the financial
condition of the insured, the insurer and the insured may not agree to:
(1) rescind the policy; or
(2) directly or indirectly transfer to, or release to, the insurer the insured's claim or potential
claim against the insurer based upon the insurer's refusal to settle a claim against the insured.
(b) Before entering into an agreement described in paragraph (a), an insurer must make a
good faith effort to ascertain: (1) the existence and identity of all claims against the policy;
and (2) the financial condition of the insured.
(c) The insured must provide reasonable financial information upon request of the insurer.
(d) An agreement made in violation of this section is void and unenforceable.
History: 1967 c 395 art 1 s 8; 1973 c 634 s 5; 1975 c 359 s 23; 1977 c 195 s 1; 1979 c 115
s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1985 c 251 s 1; 1986 c 444; 1Sp1986 c 3
art 1 s 82; 1988 c 611 s 1; 1989 c 260 s 2,3; 1991 c 131 s 1; 1996 c 446 art 1 s 1; 2001 c 215
s 2; 2005 c 74 s 1; 2006 c 202 s 2