60C.21 INSOLVENCY; NOTICE OF GUARANTY FUND PROTECTION.
Subdivision 1. Notice required.
No person, including an insurer, agent, or affiliate of an
insurer or agent shall sell, or offer for sale, a covered property and casualty insurance policy,
unless the notice, in the form specified in subdivision 2, is delivered with or as a part of the
application for that policy. A copy of the notice must be given to the applicant. If the application
is not taken from the applicant in person, the notice must be sent to the applicant within 72
hours after the application is taken. The person offering the policy or contract shall document
the fact that the notice was given at the time of application or was sent within the specified time
and shall include a copy of the notice with the policy or contract when delivered to the applicant.
This section does not apply to renewals, unless the renewal increases the dollar amount of a
coverage by more than 100 percent.
Subd. 2. Form.
The notice required under subdivision 1 must be in the following form:
"NOTICE CONCERNING POLICYHOLDER RIGHTS IN AN
INSOLVENCY UNDER THE MINNESOTA INSURANCE
GUARANTY ASSOCIATION LAW
The financial strength of your insurer is one of the most important things for you to consider
when determining from whom to purchase a property or liability insurance policy. It is your best
assurance that you will receive the protection for which you purchased the policy. If your insurer
becomes insolvent, you may have protection from the Minnesota Insurance Guaranty Association
as described below but to the extent that your policy is not protected by the Minnesota Insurance
Guaranty Association or if it exceeds the guaranty association's limits, you will only have the
assets, if any, of the insolvent insurer to satisfy your claim.
Residents of Minnesota who purchase property and casualty or liability insurance from
insurance companies licensed to do business in Minnesota are protected, SUBJECT TO LIMITS
AND EXCLUSIONS, in the event the insurer becomes insolvent. This protection is provided by
the Minnesota Insurance Guaranty Association.
Minnesota Insurance Guaranty Association
(insert current address)
The maximum amount that the Minnesota Insurance Guaranty Association will pay in regard
to a claim under all policies issued by the same insurer is limited to $300,000. This limit does
not apply to workers' compensation insurance. Protection by the guaranty association is subject
to other substantial limitations and exclusions. If your claim exceeds the guaranty association's
limits, you may still recover a part or all of that amount from the proceeds from the liquidation of
the insolvent insurer, if any exist. Funds to pay claims may not be immediately available. The
guaranty association assesses insurers licensed to sell property and casualty or liability insurance
in Minnesota after the insolvency occurs. Claims are paid from the assessment.
THE PROTECTION PROVIDED BY THE GUARANTY ASSOCIATION IS NOT A
SUBSTITUTE FOR USING CARE IN SELECTING INSURANCE COMPANIES THAT ARE
WELL MANAGED AND FINANCIALLY STABLE. IN SELECTING AN INSURANCE
COMPANY OR POLICY, YOU SHOULD NOT RELY ON PROTECTION BY THE
THIS NOTICE IS REQUIRED BY MINNESOTA STATE LAW TO ADVISE
POLICYHOLDERS OF PROPERTY AND CASUALTY INSURANCE POLICIES OF THEIR
RIGHTS IN THE EVENT THEIR INSURANCE CARRIER BECOMES INSOLVENT. THIS
NOTICE IN NO WAY IMPLIES THAT THE COMPANY CURRENTLY HAS ANY TYPE OF
FINANCIAL PROBLEMS. ALL PROPERTY AND CASUALTY INSURANCE POLICIES
ARE REQUIRED TO PROVIDE THIS NOTICE."
Additional language may be added to the notice if approved by the commissioner prior
to its use in the form.
Subd. 3. Effect of notice.
The distribution, delivery, contents, or interpretation of the notice
required by this section shall not mean that the policy would be covered in the event of the
insolvency of a member insurer if coverage is not otherwise provided by this chapter. Failure to
receive the notice does not give the policyholder, certificate holder, or any other interested party
any greater rights than those provided by this chapter.
Subd. 4. Exemption.
This section does not apply to fraternal benefit societies regulated
under chapter 64B or to fidelity or surety bonds, policies, or contracts.
History: 1992 c 540 art 2 s 10; 1997 c 52 s 14