60A.21 UNAUTHORIZED INSURERS PROCESS ACT.
    Subdivision 1. Purpose. The purpose of the Unauthorized Insurers Process Act is to subject
certain insurers to the jurisdiction of courts of this state in suits by or on behalf of insureds or
beneficiaries under insurance contracts.
The legislature declares that it is a subject of concern that many residents of this state hold
policies of insurance issued or delivered in this state by insurers while not authorized to do
business in this state, thus presenting to such residents the often insuperable obstacle of resorting
to distant forums for the purpose of asserting legal rights under such policies. In furtherance of
such state interest the legislature herein provides a method of substituted service of process upon
such insurers and declares that in so doing it exercises its power to protect its residents and
to define for the purpose of this statute what constitutes doing business in this state and also
exercises powers and privileges available to the state by virtue of Public Law 15, 79th Congress
of the United States, chapter 20, 1st Session, section 340, which declares that the business of
insurance and every person engaged therein shall be subject to the laws of the several states.
    Subd. 2. Service of process upon unauthorized insurer. (1) Any of the following acts in
this state effected by mail or otherwise by an unauthorized foreign or alien insurer: (a) the issuance
or delivery of contracts of insurance to residents of this state or to corporations authorized to
do business therein; (b) the solicitation of applications for such contracts; (c) the collection of
premiums, membership fees, assessments, or other considerations for such contracts; or (d) any
other transaction of insurance business, is equivalent to and shall constitute an appointment by
such insurer of the commissioner of commerce and the commissioner's successor or successors
in office to be its true and lawful attorney upon whom may be served all lawful process in any
action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of
any such contract of insurance and any such act shall be signification of its agreement that such
service of process is of the same legal force and validity as personal service of process in this
state upon such insurer.
(2) Such service of process shall be made in compliance with section 45.028, subdivision 2.
(3) Service of process in any such action, suit, or proceeding shall in addition to the manner
provided in clause (2) of this subdivision be valid if served upon any person within this state who,
in this state on behalf of such insurer, is: (a) soliciting insurance, or (b) making, issuing, or
delivering any contract of insurance, or (c) collecting or receiving any premium, membership
fee, assessment, or other consideration for insurance; and if a copy of such process is sent within
ten days thereafter by certified mail by the plaintiff or plaintiff's attorney to the defendant at the
last known principal place of business of the defendant and the defendant's receipt, or the receipt
issued by the post office with which the letter is certified showing the name of the sender of the
letter and the name and address of the person to whom the letter is addressed, and the affidavit of
the plaintiff or plaintiff's attorney showing a compliance herewith are filed with the administrator
of the court in which such action is pending on or before the date the defendant is required to
appear or within such further time as the court may allow.
(4) No plaintiff or complainant shall be entitled to a judgment by default under this
subdivision until the expiration of 30 days from the date of the filing of the affidavit of compliance.
(5) Nothing in this subdivision contained shall limit or abridge the right to serve any process,
notice, or demand upon any insurer in any other manner now or hereafter permitted by law.
(6) The provisions of this section shall not apply to surplus line insurance lawfully
effectuated under Minnesota law, or to reinsurance, nor to any action or proceeding against an
unauthorized insurer arising out of:
(a) wet marine and transportation insurance;
(b) insurance on or with respect to subjects located, resident, or to be performed wholly
outside this state, or on or with respect to vehicles or aircraft owned and principally garaged
outside this state;
(c) insurance on property or operations of railroads engaged in interstate commerce; or
(d) insurance on aircraft or cargo of such aircraft, or against liability, other than employer's
liability, arising out of the ownership, maintenance, or use of such aircraft, where the policy or
contract contains a provision designating the commissioner as its attorney for the acceptance of
service of lawful process in any action or proceeding instituted by or on behalf of an insured or
beneficiary arising out of any such policy, or where the insurer enters a general appearance in
any such action.
    Subd. 3. Defense of action by unauthorized insurer. (1) Before any unauthorized foreign or
alien insurer shall file or cause to be filed any pleading in any action, suit, or proceeding instituted
against it such unauthorized insurer shall: (a) Deposit with the administrator of the court in which
such action, suit, or proceeding is pending cash or securities or file with such administrator a bond
with good and sufficient sureties to be approved by the court in an amount to be fixed by the court
sufficient to secure the payment of any final judgment which may be rendered in such action; or
(b) procure a certificate of authority to transact the business of insurance in this state.
(2) The court in any action, suit, or proceeding in which service is made in the manner
provided in clauses (2) or (3) of subdivision 2 hereof, may, in its discretion, order such
postponement as may be necessary to afford the defendant reasonable opportunity to comply with
the provisions of clause (1) of this subdivision and to defend such action.
(3) Nothing in clause (1) is to be construed to prevent an unauthorized foreign or alien insurer
from filing a motion to quash a writ or to set aside service thereof made in the manner provided
in clauses (2) and (3) of subdivision 2 hereof on the ground either (a) that such unauthorized
insurer has not done any of the acts enumerated in clause (1) of subdivision 2 hereof, or (b)
that the person on whom service was made pursuant to clause (3) of subdivision 2 hereof, was
not doing any of the acts therein enumerated.
    Subd. 4. Attorney fees and judgment. In any action hereunder against an unauthorized
foreign or alien insurer upon a contract of insurance issued or delivered in this state to a resident
thereof or to a corporation authorized to do business therein, if the insurer has failed for 30 days
after demand prior to the commencement of the action to make payment in accordance with the
terms of the contract and it appears to the court that such refusal was vexatious and without
reasonable cause, the court may allow to the plaintiff a reasonable attorney fee and include such
fee in any judgment that may be rendered in such action. Failure of an insurer to defend any such
action shall be deemed prima facie evidence that its failure to make payment was vexatious and
without reasonable cause.
    Subd. 5. Constitutionality. If any provision of this section or the application thereof to
any person or circumstances is held invalid such invalidity shall not affect other provisions or
applications of the act which can be given effect without the invalid provision or application and
to this end the provisions of this section are declared to be severable.
    Subd. 6. Citation. This section may be cited as the Unauthorized Insurers Process Act.
History: 1967 c 395 art 1 s 21; 1978 c 674 s 60; 1983 c 289 s 114 subd 1; 1984 c 592 s 42;
1984 c 655 art 1 s 92; 1986 c 444; 1Sp1986 c 3 art 1 s 82; 1992 c 564 art 2 s 4; 1994 c 485 s
12; 1994 c 632 art 4 s 26