1997 Minnesota Statutes

     60K.14 Prohibited acts; required acts. 

    Subdivision 1.    Personal solicitation of insurance 
 sales.  (a)    Definitions.  For the purposes of this 
 section, the following terms have the meanings given them:  

    (1) "agent" means a person, copartnership, or corporation 
 required to be licensed pursuant to section 60K.02; and 

    (2) "personal solicitation" means any contact by an agent, 
 or any person acting on behalf of an agent, made for the purpose 
 of selling or attempting to sell insurance, when either the 
 agent or a person acting for the agent contacts the buyer by 
 telephone or in person, except:  (i) an attempted sale in which 
 the buyer personally knows the identity of the agent, the name 
 of the general agency, if any, which the agent represents, and 
 the fact that the agent is an insurance agent; (ii) an attempted 
 sale in which the prospective purchaser of insurance initiated 
 the contact; or (iii) a personal contact which takes place at 
 the agent's place of business.  

    (b)    Disclosure requirement.  Before a personal 
 solicitation, the agent or person acting for an agent shall, at 
 the time of initial personal contact with the potential buyer, 
 clearly and expressly disclose in writing:  

    (1) the name and state insurance agent license number of 
 the person making the contact; 

    (2) the name of the agent, general agency, or insurer that 
 person represents; and 

    (3) the fact that the agent, agency, or insurer is in the 
 business of selling insurance.  

    If the initial personal contact is made by telephone, the 
 disclosures required by this subdivision need not be made in 
 writing. 

    (c)    False representation of government affiliation.  
 No agent or person acting for an agent shall make any 
 communication to a potential buyer that indicates or gives the 
 impression that the agent is acting on behalf of a government 
 agency.  

    Subd. 2.    Fees for services.  No person shall charge a 
 fee for any services rendered in connection with the 
 solicitation, negotiation, or servicing of any insurance 
 contract unless: 

    (1) before rendering the services, a written statement is 
 provided disclosing: 

    (i) the services for which fees are charged; 

    (ii) the amount of the fees; 

    (iii) that the fees are charged in addition to premiums; 
 and 

    (iv) that premiums include a commission; and 

    (2) all fees charged are reasonable in relation to the 
 services rendered. 

    Subd. 3.    Commissions or compensation.  No commission 
 or other compensation shall be paid or allowed by any person, 
 firm, or corporation to any other person, firm, or corporation 
 acting, or assuming to act, as an insurance agent without a 
 license therefor.  A duly licensed agent may pay commissions or 
 assign or direct that commissions be paid to a partnership of 
 which the agent is a member, employee, or agent, or to a 
 corporation of which the agent is an officer, employee, or 
 agent.  This subdivision does not prevent the payment or receipt 
 of renewal or other deferred commissions to or by any person 
 solely because the person has ceased to hold a license to act as 
 an insurance agent. 

    Subd. 4.    Suitability of insurance.  In recommending 
 the purchase of any life, endowment, individual accident and 
 sickness, long-term care, annuity, life-endowment, or Medicare 
 supplement insurance to a customer, an agent must have 
 reasonable grounds for believing that the recommendation is 
 suitable for the customer and must make reasonable inquiries to 
 determine suitability.  The suitability of a recommended 
 purchase of insurance will be determined by reference to the 
 totality of the particular customer's circumstances, including, 
 but not limited to, the customer's income, the customer's need 
 for insurance, and the values, benefits, and costs of the 
 customer's existing insurance program, if any, when compared to 
 the values, benefits, and costs of the recommended policy or 
 policies. 

    Subd. 5.    Premiums.  All premiums or other money 
 received by an agent from an insured or applicant for insurance 
 must be forthwith deposited directly in a business checking, 
 savings, or other similar account maintained by the agent or 
 agency, unless the money is forwarded directly to the designated 
 insurer. 

    Subd. 6.    Privacy of client.  Except as otherwise 
 provided by law, no insurance agent may disclose nor cause to be 
 disclosed to any other person the identity of a person insured 
 through the agent without the consent of the insured.  

    Subd. 7.    Disclosure of commissions.  Before selling 
 any health plan as defined in section 62A.011, subdivision 3, an 
 agent shall disclose in writing to the prospective purchaser the 
 amount of any commission or other compensation the agent will 
 receive as a direct result of the sale.  The disclosure may be 
 expressed in dollars or as a percentage of the premium.  The 
 amount disclosed need not include any anticipated renewal 
 commissions. 

    HIST: 1992 c 564 art 3 s 16; 1993 c 345 art 5 s 3; 1994 c 485 
 s 15; 1994 c 625 art 10 s 2; 1995 c 258 s 14