2007 Minnesota Statutes

65A.36 UNDERWRITING.
    Subdivision 1. Evaluation of risk. Agents are not permitted to bind coverage. The Minnesota
FAIR plan shall issue a policy if the risk meets preliminary underwriting requirements. The plan
may request an inspection report to obtain further underwriting information. If the inspection
reveals that the applicant is not eligible for the coverage applied for, the plan shall inform the
applicant within 59 days of the inception of the policy that the policy will be rescinded under
section 65A.01, subdivision 3, paragraph (b), or canceled under section 65A.38. If the applicant is
eligible for other coverage provided by the plan, the plan will offer to replace the rescinded or
canceled policy with a policy providing coverage for which the applicant is eligible.
Before the 60th day after the inception of the policy, the FAIR plan shall advise the applicant
that:
(1) the risk is acceptable with or without a condition charge or adjustment of policy limits.
If a condition charge applies, the plan will tell the insured what improvements are necessary in
order to remove the charge;
(2) the risk is not acceptable unless improvements noted by the plan are made by the
applicant and confirmed by the plan; or
(3) the risk is not acceptable for the reasons stated by the plan.
    Subd. 2. Premium invoice. If the risk is accepted, an invoice will be delivered to the
applicant requiring remittance of the appropriate premium.
    Subd. 3. Declining a risk. In the event a risk is declined because it fails to meet reasonable
underwriting standards, the applicant must be so notified. Reasonable underwriting standards
include, but are not limited to:
(1) the physical condition of the property, such as its construction, heating, wiring, evidence
of previous fires, significant unrepaired damage, or general deterioration;
(2) the present use or housekeeping of the property such as vacancy, overcrowding, storage
of rubbish, or flammable materials; or
(3) other specific characteristics of ownership, condition, occupancy, or maintenance which
are violative of public policy and result in increased exposure to loss.
Neighborhood or area location or any environmental hazard beyond the control of the
property owner are not acceptable criteria for declining a risk.
    Subd. 4. Appeal of plan decision. In the event that a risk is declined on the basis that it does
not meet reasonable underwriting standards, or the coverage will be written on condition that
the property be improved, the plan shall, within five business days, send copies of the inspection
report to the applicant and the commissioner, and shall advise the applicant of the right to and the
procedure for an appeal to the governing board and to the commissioner.
    Subd. 5. Action on completed application. The plan must within five business days of the
receipt of a completed application advise the applicant that the risk has been declined, the risk has
been accepted, or that the limit of coverage has been adjusted to reflect the insurable value of
the subject property.
History: 1969 c 483 s 6; 1986 c 444; 1993 c 248 s 9; 1999 c 120 s 7,8; 2003 c 40 s 13