1999 Minnesota Statutes

     60A.209 Insurance procured from ineligible insurers. 

    Subdivision 1.    Authorization; regulation.  A resident 
 of this state may obtain insurance from an ineligible surplus 
 lines insurer in this state through a surplus lines licensee.  
 The licensee shall first attempt to place the insurance with a 
 licensed insurer, or if that is not possible, with an eligible 
 surplus lines insurer.  If coverage is not obtainable from a 
 licensed insurer or an eligible surplus lines insurer, the 
 licensee shall certify to the commissioner, on a form prescribed 
 by the commissioner, that these attempts were made.  Upon 
 obtaining coverage from an ineligible surplus lines insurer, the 
 licensee shall:  

    (a) Have printed, typed, or stamped in red ink upon the 
 face of the policy in not less than 10-point type the following 
 notice:  "THIS INSURANCE IS ISSUED PURSUANT TO THE MINNESOTA 
 SURPLUS LINES INSURANCE ACT.  THIS INSURANCE IS PLACED WITH AN 
 INSURER THAT IS NOT LICENSED BY THE STATE NOR RECOGNIZED BY THE 
 COMMISSIONER OF COMMERCE AS AN ELIGIBLE SURPLUS LINES INSURER.  
 IN CASE OF ANY DISPUTE RELATIVE TO THE TERMS OR CONDITIONS OF 
 THE POLICY OR THE PRACTICES OF THE INSURER, THE COMMISSIONER OF 
 COMMERCE WILL NOT BE ABLE TO ASSIST IN THE DISPUTE.  IN CASE OF 
 INSOLVENCY, PAYMENT OF CLAIMS IS NOT GUARANTEED."  The notice 
 may not be covered or concealed in any manner; and 

    (b) Collect from the insured appropriate premium taxes and 
 report the transaction to the commissioner of revenue on a form 
 prescribed by the commissioner.  If the insured fails to pay the 
 taxes when due, the insured shall be subject to a civil fine of 
 not more than $3,000, plus accrued interest from the inception 
 of the insurance.  

    Subd. 2.    Penalty.  Except as provided in this 
 section, a person who assists or in any manner aids directly or 
 indirectly in the procurement of insurance from an ineligible 
 surplus lines insurer in this state is guilty of a misdemeanor, 
 punishable by imprisonment for not more than one year, or by a 
 fine of not more than $1,000, or both.  

    Subd. 3.    Duty to report.  Each insured in this state 
 who procures, causes to be procured, or continues or renews 
 insurance with an ineligible surplus lines insurer or any 
 self-insurer in this state who procures or continues excess of 
 loss, catastrophe, or other insurance upon a subject of 
 insurance resident, located, or to be performed within this 
 state, other than insurance procured pursuant to section 60A.201 
 or subdivision 1 shall file a written report regarding the 
 insurance with the commissioner of revenue on forms prescribed 
 by the commissioner of revenue and furnished to the insured upon 
 request.  The report shall be filed within 30 days after the 
 date the insurance was procured, continued, or renewed and shall 
 be accompanied by the tax on the premiums of two percent.  The 
 report shall show all of the following:  

    (a) The name and address of the insured; 

    (b) The name and address of the insurer; 

    (c) The subject of the insurance; 

    (d) A general description of the coverage; 

    (e) The amount of premium currently charged for the 
 insurance; and 

    (f) Any additional pertinent information reasonably 
 requested by the commissioner of revenue. 

    Subd. 4.    Allocation of premiums according to location 
 of subject matter.  If the insurance described in subdivision 
 1 also covers a subject of insurance residing, located, or to be 
 performed outside this state, for the purposes of this section, 
 a proper pro rata portion of the entire premium payable for all 
 of that insurance shall be allocated according to the subjects 
 of insurance residing, located, or to be performed in this state.

    Subd. 5.    Acts constituting procurement of insurance in 
 the state.  Any insurance placed with an ineligible surplus 
 lines insurer procured through negotiations or an application in 
 whole or in part occurring or made within or from without this 
 state, or for which premiums in whole or in part are remitted 
 directly or indirectly from within this state, shall be 
 considered to be insurance procured, continued, or renewed in 
 this state under subdivision 3.  

    Subd. 6.    Ineligible surplus lines insurers; liability 
 on policies or contracts.  Except with respect to placement 
 pursuant to section 60A.198, subdivision 4, if an ineligible 
 insurer offering benefits under a written contract which 
 constitutes the transaction of insurance or which offers 
 benefits substantially similar to benefits under policies of 
 insurance, whether or not the benefits are identified or 
 described as insurance, fails to pay a claim or loss within the 
 provision of the contract, any person who assisted or aided, 
 directly or indirectly, in the procurement of the contract shall 
 be liable to the person to whom the obligations are owed for the 
 full amount of the claim or loss, in the manner provided by the 
 contract.  

    HIST: 1981 c 221 s 14; 1983 c 289 s 114 subd 1; 1984 c 628 art 
 3 s 11; 1984 c 655 art 1 s 92; 1987 c 268 art 2 s 11,12