Minnesota Office of the Revisor of Statutes
[*Add Subtitle/link: Office]

Menu

Revisor of Statutes Menu

SF 1045

2nd Engrossment - 87th Legislature (2011 - 2012) Posted on 03/06/2012 02:47pm

KEY: stricken = removed, old language. underscored = added, new language.

Pdf

Version List Authors and Status

Current Version - 2nd Engrossment

1.1A bill for an act
1.2relating to commerce; regulating continuing education and prelicensing
1.3requirements, insurance coverages, certain disclosures, nonadmitted insurers,
1.4insolvencies, real estate closing agents, adjusters, and appraisers;amending
1.5Minnesota Statutes 2010, sections 45.011, subdivision 1; 45.25, by adding
1.6subdivisions; 45.30, subdivision 7, by adding a subdivision; 45.35; 60A.06,
1.7subdivision 3; 60A.19, subdivision 8; 60A.196; 60A.198; 60A.199, subdivision
1.81; 60A.201; 60A.202; 60A.203; 60A.204, subdivision 2; 60A.205, subdivisions
1.91, 2; 60A.206, subdivisions 1, 3; 60A.207; 60A.208; 60A.2085, subdivisions 1,
1.103, 7, 8; 60A.2086, subdivisions 1, 2; 60A.209, subdivision 1; 60K.56, subdivision
1.116; 62A.095, subdivision 1; 62A.318, subdivision 17; 62E.14, subdivision 3, by
1.12adding a subdivision; 62J.81, subdivision 1; 62L.03, subdivision 3; 72A.20,
1.13subdivision 24; 72B.041, subdivision 5; 79A.06, subdivision 5; 79A.24, by
1.14adding subdivisions; 82.641, subdivision 1; 82B.11, subdivision 6; 82B.13, by
1.15adding a subdivision; 82B.14; 82C.08, subdivision 2; proposing coding for new
1.16law in Minnesota Statutes, chapters 45; 72B.
1.17BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.18    Section 1. Minnesota Statutes 2010, section 45.011, subdivision 1, is amended to read:
1.19    Subdivision 1. Scope. As used in chapters 45 to 80C, 80E to 83, 155A, 332,
1.20332A, 332B, 345, and 359, and sections 123A.21, subdivision 7, paragraph (a), clause
1.21(23); 123A.25; 325D.30 to 325D.42; 326B.802 to 326B.885; 386.61 to 386.78; 471.617;
1.22and 471.982, unless the context indicates otherwise, the terms defined in this section
1.23have the meanings given them.

1.24    Sec. 2. Minnesota Statutes 2010, section 45.25, is amended by adding a subdivision to
1.25read:
1.26    Subd. 2a. Classroom course. "Classroom course" means an educational process
1.27based on no geographical separation of instructor and learner.

2.1    Sec. 3. Minnesota Statutes 2010, section 45.25, is amended by adding a subdivision to
2.2read:
2.3    Subd. 5a. Distance learning course. "Distance learning course" means an
2.4education process based on the geographical separation of instructor and learner. This
2.5includes, but is not limited to:
2.6    (1) an interactive Internet course; and
2.7    (2) a course taught live by the instructor via the Internet, video, or other electronic
2.8means.

2.9    Sec. 4. Minnesota Statutes 2010, section 45.25, is amended by adding a subdivision to
2.10read:
2.11    Subd. 14. Self-study course. "Self-study course" means a distance learning course
2.12that is not entirely taught by the instructor live via the Internet, video, or other electronic
2.13means.

2.14    Sec. 5. Minnesota Statutes 2010, section 45.30, is amended by adding a subdivision to
2.15read:
2.16    Subd. 6a. Professional designation coursework. Approved courses leading to
2.17the achievement or maintenance of a professional designation listed in section 60K.36,
2.18subdivision 4a, qualify for continuing education.

2.19    Sec. 6. Minnesota Statutes 2010, section 45.30, subdivision 7, is amended to read:
2.20    Subd. 7. Courses open to all. (a) All course offerings must be open to any
2.21interested individuals. Access may be restricted by the education provider based on class
2.22size only, except that access to a course offering sponsored by, offered by, or affiliated with
2.23an insurance company or agency may be restricted to agents of the company or agency.
2.24Courses must not be approved if attendance is restricted to any particular group of people,
2.25except for company-sponsored courses allowed by statute.
2.26    (b) Notwithstanding paragraph (a), attendance at approved courses leading to the
2.27achievement or maintenance of a professional designation listed in section 60K.36,
2.28subdivision 4a, may be limited to those producers seeking the professional designation or
2.29those producers who have met prerequisite coursework for the course offering. Courses
2.30leading to the achievement or maintenance of a professional designation listed in section
2.3160K.36, subdivision 4a, may require a prerequisite such as candidacy for the designation
2.32or sequential coursework relating to the attainment or maintenance of the designation.
2.33A course leading to the achievement or maintenance of a professional designation listed
3.1in section 60K.36, subdivision 4a, is not considered to be company sponsored unless
3.2it is provided by an insurance company.

3.3    Sec. 7. [45.304] VERIFICATION REQUIREMENTS.
3.4    A self-study course must not be approved unless it is objectively verifiable that:
3.5    (1) it includes a closed-book, end-of-course examination; and
3.6    (2) successful completion of the end-of-course examination can be objectively
3.7documented.

3.8    Sec. 8. Minnesota Statutes 2010, section 45.35, is amended to read:
3.945.35 FACILITIES.
3.10    Each course of study, except self-study courses, must be conducted in a classroom or
3.11other facility that is adequate to comfortably accommodate the faculty and the number
3.12of students enrolled. The education provider may limit the number of students enrolled
3.13in a course. Approved courses must not be held on the premises of a company doing
3.14business in the regulated area, except for company-sponsored courses allowed by statute
3.15or noncompany sponsored courses offered by a bona fide trade association. A bona
3.16fide trade association may offer noncompany sponsored courses on the premises of an
3.17insurance company or agency so long as the course is not restricted to employees or
3.18appointed agents of the insurance company or agency.

3.19    Sec. 9. Minnesota Statutes 2010, section 60A.06, subdivision 3, is amended to read:
3.20    Subd. 3. Limitation on combination policies. (a) Unless specifically authorized by
3.21subdivision 1, clause (4), it is unlawful to combine in one policy coverage permitted by
3.22subdivision 1, clauses (4) and (5)(a). This subdivision does not prohibit the simultaneous
3.23sale of these products, but the sale must involve two separate and distinct policies.
3.24(b) This subdivision does not apply to group policies.
3.25(c) This subdivision does not apply to policies permitted by subdivision 1, clause
3.26(4), that contain benefits providing acceleration of life, endowment, or annuity benefits
3.27in advance of the time they would otherwise be payable, or to long-term care policies as
3.28defined in section 62A.46, subdivision 2, or chapter 62S.
3.29(d) This subdivision does not prohibit combining life coverage with one or more of
3.30the following coverages:
3.31(1) specified disease or illness coverage;
3.32(2) other limited benefit health coverage;
3.33(3) hospital indemnity coverage;
4.1(4) other fixed indemnity products,
4.2provided that the prescribed minimum standards applicable to those categories of
4.3coverage are met.

4.4    Sec. 10. Minnesota Statutes 2010, section 60A.19, subdivision 8, is amended to read:
4.5    Subd. 8. Insurance from unlicensed foreign companies. Any person, firm, or
4.6corporation desiring to obtain insurance upon any property, interests, or risks of any nature
4.7other than life insurance in this state in companies not authorized to do business in the
4.8state whose home state is Minnesota, that procures insurance on any property, interests,
4.9or risks of any nature other than life insurance directly from a nonadmitted insurer, must
4.10agree to file with the commissioner of revenue all returns required under chapter 297I and
4.11pay to the commissioner of revenue any amounts required to be paid under chapter 297I.
4.12Upon that agreement, the commissioner of commerce shall issue a license, good for one
4.13year. Insurance procured under the license is valid and the provisions of the policies are
4.14considered to be in accordance, and construed as if identical in effect, with the standard
4.15policy prescribed by the laws of this state. The insurers may enter the state to perform
4.16any act necessary or proper in the conduct of the business.
4.17EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
4.18that go into effect after July 20, 2011.

4.19    Sec. 11. Minnesota Statutes 2010, section 60A.196, is amended to read:
4.2060A.196 DEFINITIONS.
4.21    Unless the context otherwise requires, the following terms have the meanings given
4.22them for the purposes of sections 60A.195 to 60A.209:
4.23    (a) "Surplus lines insurance" means insurance placed with an insurer permitted
4.24to transact the business of insurance in this state only pursuant to sections 60A.195 to
4.2560A.209.
4.26    (b) "Eligible surplus lines insurer" means an insurer recognized as eligible to write
4.27insurance business under sections 60A.195 to 60A.209 but not licensed by any other
4.28Minnesota law to transact the business of insurance.
4.29    (c) "Ineligible surplus lines insurer" means an insurer not recognized as an eligible
4.30surplus lines insurer pursuant to sections 60A.195 to 60A.209 and not licensed by any
4.31other Minnesota law to transact the business of insurance. "Ineligible surplus lines
4.32insurer" includes a risk retention group as defined under the Liability Risk Retention
4.33Act, Public Law 99-563.
5.1    (d) "Surplus lines licensee" or "licensee" means a person licensed under sections
5.260A.195 to 60A.209 to place insurance with an eligible or ineligible surplus lines insurer.
5.3    (e) "Association" means an association registered under section 60A.208.
5.4    (f) "Alien insurer" means any insurer which is incorporated or otherwise organized
5.5outside of the United States.
5.6    (g) "Insurance laws" means chapters 60 to 79 inclusive.
5.7    (h) "Stamping" means electronically assigning a unique identifying number that is
5.8specific to a submitted policy, contract, or insurance document.
5.9(a) "Affiliated group" means a group which includes the insured and any entity, or
5.10group of entities, that controls, is controlled by, or is under common control with the
5.11insured. An entity has control over another entity when: (1) the entity directly, indirectly,
5.12or acting through one or more persons owns, controls, or has the power to vote 25 percent
5.13or more of any class of voting securities of the other entity; or (2) the entity controls in any
5.14manner the election of a majority of the directors or trustees of the other entity.
5.15    (b) "Alien insurer" means any insurer which is incorporated or otherwise organized
5.16outside of the United States.
5.17    (c) "Association" means an association registered under section 60A.208.
5.18    (d) "Eligible surplus lines insurer" means a nonadmitted insurer recognized as
5.19eligible to write insurance business under sections 60A.195 to 60A.209.
5.20(e) "Exempt commercial purchaser" means any person purchasing commercial
5.21insurance that, at the time of placement, meets the following requirements:
5.22(1) the person employs or retains a qualified risk manager to negotiate insurance
5.23coverage;
5.24(2) the person has paid aggregate nationwide commercial property and casualty
5.25insurance premiums in excess of $100,000 in the immediately preceding 12 months;
5.26(3) the person meets at least one of the following criteria:
5.27(i) the person possesses a net worth in excess of $20,000,000, as such amount is
5.28adjusted pursuant to clause (4);
5.29(ii) the person generates annual revenues in excess of $50,000,000, as such amount
5.30is adjusted pursuant to clause (4);
5.31(iii) the person employs more than 500 full-time or full-time equivalent employees
5.32per individual insured or is a member of an affiliated group employing more than 1,000
5.33employees in the aggregate;
5.34(iv) the person is a not-for-profit organization or public entity generating annual
5.35budgeted expenditures of at least $30,000,000, as such amount is adjusted pursuant to
5.36clause (4); or
6.1(v) the person is a municipality with a population in excess of 50,000 persons.
6.2(4) Effective January 1, 2015, and every five years thereafter, the amounts in clause
6.3(3), items (i), (ii), and (iv), shall be adjusted to reflect the percentage change for the
6.4five-year period in the Consumer Price Index for All Urban Consumers published by the
6.5Bureau of Labor Statistics of the Department of Labor.
6.6(f) "Home state" means the state in which an insured maintains its principal place of
6.7business, or in the case of an individual, the individual's principal residence. If 100 percent
6.8of the insured risk is located out of the state, the term means the state to which the greatest
6.9percentage of the insured's taxable premium for that insurance contract is allocated. If
6.10more than one insured from an affiliated group are named insureds on a single nonadmitted
6.11insurance contract, the term means the home state of the member of the affiliated group
6.12that has the largest percentage of premium attributed to it under that insurance contract.
6.13    (g) "Ineligible surplus lines insurer" means a nonadmitted insurer not recognized as
6.14an eligible surplus lines insurer under sections 60A.195 to 60A.209.
6.15    (h) "Insurance laws" means chapters 60 to 79 inclusive.
6.16    (i) "Nonadmitted insurance" means any property and casualty insurance permitted to
6.17be placed directly or through a surplus lines broker with a nonadmitted insurer in this state
6.18only under sections 60A.195 to 60A.209.
6.19(j) "Nonadmitted insurer" means an insurer not licensed to engage in the business
6.20of insurance in Minnesota, but does not include a risk retention group, as the term is
6.21defined in section 2(a)(4) of the Liability Risk Retention Act of 1986, United States Code,
6.22title 15, section 3901(a)(4).
6.23(k) "Qualified risk manager" means, with respect to a policyholder of commercial
6.24insurance, a person who meets all of the following requirements:
6.25(1) the person is an employee of, or third-party consultant retained by, the
6.26commercial policyholder;
6.27(2) the person provides skilled services in loss prevention, loss reduction, or risk and
6.28insurance coverage analysis, and purchase of insurance;
6.29(3) the person:
6.30(i) has a bachelor's degree or higher from an accredited college or university
6.31in risk management, business administration, finance, economics, or any other field
6.32determined by a state insurance commissioner or other state regulatory official or entity to
6.33demonstrate minimum competence in risk management and has three years of experience
6.34in risk financing, claims administration, loss prevention, risk and insurance analysis, or
6.35purchasing commercial lines of insurance;
7.1(ii) has a designation as a Chartered Property and Casualty Underwriter (CPCU)
7.2issued by the American Institute for CPCU/Insurance Institute of America, an Associate
7.3in Risk Management (ARM) issued by the American Institute for CPCU/Insurance
7.4Institute of America, a Certified Risk Manager (CRM) issued by the National Alliance
7.5for Insurance Education and Research, a RIMS Fellow (RF) issued by the Global Risk
7.6Management Institute, or any other designation, certification, or license determined by
7.7a state insurance commissioner or other state insurance regulatory official or entity to
7.8demonstrate minimum competency in risk management;
7.9(iii) has at least seven years of experience in risk financing, claims administration,
7.10loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of
7.11insurance and one of the designations specified in clause (ii);
7.12(iv) has at least ten years of experience in risk financing, claims administration,
7.13loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of
7.14insurance; or
7.15(v) has a graduate degree from an accredited college or university in risk
7.16management, business administration, finance, economics, or any other field determined
7.17by a state insurance commissioner or other state regulatory official or entity to demonstrate
7.18minimum competence in risk management.
7.19    (l) "Stamping" means electronically assigning a unique identifying number that is
7.20specific to a submitted policy, contract, or insurance document.
7.21    (m) "Surplus lines broker" or "broker" means an individual, firm, or corporation
7.22which is licensed in this state to sell, solicit, or negotiate insurance on properties, risks, or
7.23exposures located or to be performed in this state with nonadmitted insurers only under
7.24sections 60A.195 to 60A.209.
7.25EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
7.26that go into effect after July 20, 2011.

7.27    Sec. 12. Minnesota Statutes 2010, section 60A.198, is amended to read:
7.2860A.198 TRANSACTION OF SURPLUS LINES NONADMITTED
7.29INSURANCE.
7.30    Subdivision 1. License required. A person, as defined in section 60A.02,
7.31subdivision 7
, shall not act in any other manner as an agent or broker in the transaction of
7.32surplus lines nonadmitted insurance unless licensed under sections 60A.195 to 60A.209.
7.33A surplus lines license is not required for a licensed agent who assists in the placement
7.34of surplus lines nonadmitted insurance with a surplus lines licensee broker pursuant to
8.1sections 60A.195 to 60A.209. This subdivision does not apply to nonadmitted insurance
8.2procured by a surplus lines broker when an insured's home state is a state other than
8.3Minnesota.
8.4    Subd. 2. Compliance with statutory provisions. A person shall not offer, solicit,
8.5make a quotation on, sell, or issue a policy of insurance, binder, or any other evidence
8.6of insurance with an eligible or ineligible surplus lines a nonadmitted insurer, except in
8.7compliance with sections 60A.195 to 60A.209. This subdivision does not apply when an
8.8insured's home state is a state other than Minnesota.
8.9    Subd. 3. Procedure for obtaining license. A person licensed as an agent in this
8.10state pursuant to other law may obtain a surplus lines license by doing the following:
8.11(a) filing an application in the form and with the information the commissioner
8.12may reasonably require to determine the ability of the applicant to act in accordance
8.13with sections 60A.195 to 60A.209;
8.14(b) maintaining an agent's license in this state;
8.15(c) registering with the association created pursuant to section 60A.2085;
8.16(d) agreeing to file with the commissioner of revenue all returns required by chapter
8.17297I and paying to the commissioner of revenue all amounts required under chapter 297I;
8.18(e) agreeing to file all documents required pursuant to section 60A.2086 and to pay
8.19the stamping fee assessed pursuant to section 60A.2085, subdivision 7; and
8.20(f) paying a fee as prescribed by section 60K.55.
8.21    Subd. 4. Licensee's Broker's powers. A surplus lines licensee broker may do
8.22any or all of the following:
8.23(a) place insurance on risks in this state with eligible surplus lines insurers;
8.24(b) place insurance on risks in this state with ineligible surplus lines insurers in strict
8.25compliance with section 60A.209. If the insurance is provided through the participation of
8.26several surplus lines nonadmitted insurers and the licensee broker has reason to believe
8.27that a substantial portion of the insurance would be assumed by eligible surplus lines
8.28insurers, then with respect to the ineligible surplus lines insurers, the insured or the
8.29insured's representative shall be informed as provided in section 60A.209, subdivision 1,
8.30clause (a); or
8.31(c) engage in any other acts expressly or implicitly authorized by sections 60A.195
8.32to 60A.209 and the other insurance laws.
8.33    Subd. 5. Disclosures. Before placement of insurance with an eligible surplus
8.34lines insurer, a surplus lines licensee broker shall inform an insured or the insured's
8.35representative that coverage may be placed in conformance with sections 60A.195
9.1to 60A.209 with an insurer not licensed in this state and that payment of loss is not
9.2guaranteed in the event of insolvency of the eligible surplus lines insurer.
9.3    Subd. 7. Participation in national producer database for surplus lines brokers.
9.4For the purposes of carrying out the provisions of the Nonadmitted and Reinsurance
9.5Reform Act of 2010, the commissioner is authorized to utilize the national insurance
9.6producer database of the National Association of Insurance Commissioners, or any other
9.7equivalent uniform national database, for the licensure of surplus lines brokers and for
9.8renewal of the licenses.
9.9EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
9.10that go into effect after July 20, 2011.

9.11    Sec. 13. Minnesota Statutes 2010, section 60A.199, subdivision 1, is amended to read:
9.12    Subdivision 1. Examination of books and records. If the commissioner considers
9.13it necessary, the commissioner may examine the books and records of a surplus lines
9.14licensee broker to determine whether the licensee broker is conducting business
9.15in accordance with sections 60A.195 to 60A.209. For the purposes of facilitating
9.16examinations, the licensee broker shall allow the commissioner free access at reasonable
9.17times to all of the licensee's broker's books and records relating to the transactions to
9.18which sections 60A.195 to 60A.209 apply. If an examination is conducted, the cost of the
9.19examination shall be paid by the surplus line agent or agency.
9.20EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
9.21that go into effect after July 20, 2011.

9.22    Sec. 14. Minnesota Statutes 2010, section 60A.201, is amended to read:
9.2360A.201 PLACEMENT OF INSURANCE BY LICENSEE BROKER.
9.24    Subdivision 1. Restrictions. Insurance shall not be placed by the surplus lines
9.25licensee broker with an eligible or ineligible surplus lines a nonadmitted insurer when
9.26coverage is available from a licensed insurer.
9.27    Subd. 2. Availability of other coverage; presumption. There shall be a rebuttable
9.28presumption that the following coverages are available from a licensed insurer:
9.29(a) all mandatory automobile insurance coverages required by chapter 65B;
9.30(b) private passenger automobile physical damage coverage;
9.31(c) homeowners and property insurance on owner-occupied dwellings whose value
9.32is less than $500,000. This figure shall be changed annually by the commissioner by the
10.1same percentage as the Consumer Price Index for the Minneapolis-St. Paul Metropolitan
10.2Area is changed;
10.3(d) any coverage readily available from three or more licensed insurers unless the
10.4licensed insurers quote a premium and terms not competitive with a premium and terms
10.5quoted by an eligible surplus lines insurer; and
10.6(e) workers' compensation insurance, except excess workers' compensation insurance
10.7which is not available from the Workers' Compensation Reinsurance Association.
10.8    Subd. 3. Unavailability of other coverage; presumption. There shall be a
10.9rebuttable presumption that the following coverages are unavailable from a licensed
10.10insurer:
10.11    (a) coverages where one portion of the risk is acceptable to licensed insurers but
10.12another portion of the same risk is not acceptable. The entire coverage may be placed with
10.13eligible surplus lines insurers if it can be shown that the eligible surplus lines insurer will
10.14accept the entire coverage but not the rejected portion alone; and
10.15    (b) any coverage that the licensee broker is unable to procure after diligent search
10.16among licensed insurers.
10.17    Subd. 5. Streamlined application for exempt commercial purchasers. A surplus
10.18lines broker is not required to make a diligent search to determine whether the full amount
10.19or type of insurance can be obtained from licensed insurers when the broker is seeking to
10.20procure or place nonadmitted insurance for an exempt commercial purchaser provided:
10.21(1) the broker procuring or placing the nonadmitted insurance has disclosed to the
10.22exempt commercial purchaser that the insurance may or may not be available from a
10.23licensed insurer that may provide greater protection with more regulatory oversight; and
10.24(2) the exempt commercial purchaser has subsequently requested in writing for the
10.25broker to procure or place the insurance from a nonadmitted insurer.
10.26EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
10.27that go into effect after July 20, 2011.

10.28    Sec. 15. Minnesota Statutes 2010, section 60A.202, is amended to read:
10.2960A.202 EVIDENCE OF PLACEMENT OF INSURANCE BY LICENSEE
10.30BROKER.
10.31    Subdivision 1. Restriction. Only a surplus lines licensee broker shall issue evidence
10.32of placement of insurance with an eligible or ineligible surplus lines a nonadmitted insurer.
10.33    Subd. 2. Written communication of coverage to be delivered. A licensee broker
10.34shall, within seven working days after the date on which the risk was bound or the insured
11.1or applicant was advised that coverage has been or will be obtained, deliver to the insured
11.2or the insured's representative a policy, a written binder, a certificate or other written
11.3evidence of insurance placed with an eligible or ineligible surplus lines a nonadmitted
11.4insurer.
11.5    Subd. 3. Contents of written communication. The written communication
11.6showing that insurance has been obtained shall identify all known surplus lines
11.7nonadmitted insurers directly assuming any risk of loss. If there is more than one
11.8surplus lines nonadmitted insurer, any document issued or certified by the licensee broker
11.9pursuant to subdivision 2 shall specify, to the extent known by the licensee broker,
11.10whether the obligation is joint or several, and if the obligation is several, the proportion of
11.11the obligation assumed by each insurer.
11.12EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
11.13that go into effect after July 20, 2011.

11.14    Sec. 16. Minnesota Statutes 2010, section 60A.203, is amended to read:
11.1560A.203 RETENTION OF RECORDS.
11.16Each surplus lines licensee broker shall keep a separate account of each transaction
11.17entered into pursuant to sections 60A.195 to 60A.209. Evidence of these transactions shall
11.18be documented in the form and manner designated by the commissioner and retained by
11.19the licensee broker for a minimum of five years. The forms must be readily available
11.20for review and audit by the commissioner.
11.21EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
11.22that go into effect after July 20, 2011.

11.23    Sec. 17. Minnesota Statutes 2010, section 60A.204, subdivision 2, is amended to read:
11.24    Subd. 2. Regulation of fees and commissions. A surplus lines licensee broker
11.25may charge a fee and commission, in addition to the premium, that is not excessive or
11.26discriminatory. The licensee broker shall maintain complete documentation of all fees
11.27and commissions charged.
11.28EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
11.29that go into effect after July 20, 2011.

11.30    Sec. 18. Minnesota Statutes 2010, section 60A.205, subdivision 1, is amended to read:
12.1    Subdivision 1. Authorization. A surplus lines licensee broker may be compensated
12.2by an eligible surplus lines insurer and the licensee broker may compensate a licensed
12.3agent in this state for obtaining surplus lines nonadmitted insurance business. A licensed
12.4agent authorized by the licensee broker may collect a premium on behalf of the licensee
12.5broker, and as between the insured and the licensee broker, the licensee broker shall be
12.6considered to have received the premium if the premium payment has been made to
12.7the agent.
12.8EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
12.9that go into effect after July 20, 2011.

12.10    Sec. 19. Minnesota Statutes 2010, section 60A.205, subdivision 2, is amended to read:
12.11    Subd. 2. Consequences of receipt. If an eligible surplus lines insurer has assumed a
12.12risk, and if the premium for that risk has been received by the licensee broker who placed
12.13the insurance, then as between the insurer and the insured, the insurer shall be considered
12.14to have received the premium due to it for the coverage and shall be liable to the insured
12.15for any loss covered by the insurance and for the unearned premium upon cancellation of
12.16the insurance, regardless of whether the licensee broker is indebted to the insurer.
12.17EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
12.18that go into effect after July 20, 2011.

12.19    Sec. 20. Minnesota Statutes 2010, section 60A.206, subdivision 1, is amended to read:
12.20    Subdivision 1. Insurers to be recognized by commissioner. A surplus lines
12.21licensee broker shall place surplus lines nonadmitted insurance only with insurers
12.22which are in a stable and unimpaired financial condition. An insurer recognized by the
12.23commissioner as an eligible surplus lines insurer pursuant to subdivision 2 shall be
12.24considered to meet the requirements of this subdivision. Recognition as an eligible surplus
12.25lines insurer shall be conditioned upon the insurers continued compliance with sections
12.2660A.195 to 60A.209.
12.27EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
12.28that go into effect after July 20, 2011.

12.29    Sec. 21. Minnesota Statutes 2010, section 60A.206, subdivision 3, is amended to read:
12.30    Subd. 3. Standards to be met by insurers. (a) The commissioner shall recognize
12.31the insurer as an eligible surplus lines insurer when satisfied that the insurer is in a stable,
12.32unimpaired financial condition and that the insurer is qualified to provide coverage in
13.1compliance with sections 60A.195 to 60A.209. If filed with full supporting documentation
13.2before July 1 of any year, applications submitted under subdivision 2 shall be acted upon
13.3by the commissioner before December 31 of the year of submission.
13.4(b) The commissioner shall not authorize an a foreign insurer as an eligible surplus
13.5lines insurer unless the insurer continuously maintains capital and surplus of at least
13.6$3,000,000 and transaction of business by the insurer is not hazardous, financially or
13.7otherwise, to its policyholders, its creditors, or the public. Each alien surplus lines
13.8insurer shall have current financial data filed with the National Association of Insurance
13.9Commissioners Nonadmitted Insurers Information Office.:
13.10(1) is domiciled within a United States jurisdiction and authorized to write the type
13.11of insurance in its domiciliary jurisdiction; and
13.12(2) qualifies under one of the following items:
13.13(i) has capital and surplus or its equivalent under the laws of its domiciliary
13.14jurisdiction which equals the greater of:
13.15(A) the minimum capital and surplus requirements under the laws of Minnesota; or
13.16(B) $15,000,000; or
13.17(ii) the requirements of item (i)(A) may be satisfied by an insurer's possessing less
13.18than the minimum capital and surplus upon an affirmative finding of acceptability by the
13.19commissioner. The finding shall be based upon factors such as quality of management,
13.20capital and surplus of any parent company, company underwriting profit and investment
13.21income trends, market availability, and company record and reputation within the industry.
13.22In no event shall the commissioner make an affirmative finding of acceptability when the
13.23surplus lines insurer's capital and surplus is less than $4,500,000.
13.24(c) Eligible surplus lines insurers domiciled within the United States shall file an
13.25annual statement and an annual financial audit, under the terms and conditions of section
13.2660A.13, subdivisions 1, 3a, and 6 , and are subject to the penalties of section 72A.061,
13.27and are subject to section 60A.03, subdivision 5, in regard to those requirements. The
13.28commissioner also has the powers provided in section 60A.13, subdivision 2, in regard
13.29to eligible surplus lines insurers.
13.30(d) Eligible surplus lines insurers domiciled outside the United States shall file
13.31an annual statement on the standard nonadmitted insurers information office financial
13.32reporting format as prescribed by the National Association of Insurance Commissioners
13.33and an annual financial audit performed by an independent accounting firm. The
13.34commissioner shall not prohibit a surplus lines broker from placing nonadmitted insurance
13.35with, or procuring nonadmitted insurance from, an alien insurer that is included on the
14.1Quarterly Listing of Alien Insurers maintained by the National Association of Insurance
14.2Commissioners International Insurers Department.
14.3EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
14.4that go into effect after July 20, 2011.

14.5    Sec. 22. Minnesota Statutes 2010, section 60A.207, is amended to read:
14.660A.207 POLICIES TO INCLUDE NOTICE.
14.7Each policy, cover note, or instrument evidencing surplus lines nonadmitted
14.8insurance from an eligible surplus lines insurer which is delivered to an insured or a
14.9representative of an insured shall have printed, typed, or stamped upon its face in not less
14.10than 10 point type, the following notice: "THIS INSURANCE IS ISSUED PURSUANT
14.11TO THE MINNESOTA SURPLUS LINES INSURANCE ACT. THE INSURER IS AN
14.12ELIGIBLE SURPLUS LINES INSURER BUT IS NOT OTHERWISE LICENSED BY
14.13THE STATE OF MINNESOTA. IN CASE OF INSOLVENCY, PAYMENT OF CLAIMS
14.14IS NOT GUARANTEED." This notice shall not be covered or concealed in any manner.
14.15EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
14.16that go into effect after July 20, 2011.

14.17    Sec. 23. Minnesota Statutes 2010, section 60A.208, is amended to read:
14.1860A.208 LICENSEE BROKER ASSOCIATION.
14.19    Subdivision 1. Licensee's Broker's right to associate. Surplus lines licensees
14.20brokers may associate and the commissioner may register the association for one or more
14.21of the following purposes:
14.22(a) advising the commissioner as to the availability of surplus lines nonadmitted
14.23insurance coverage and market practices and standards for surplus lines nonadmitted
14.24insurers and licensees brokers;
14.25(b) collecting and furnishing records and statistics; or
14.26(c) submitting recommendations regarding administration of sections 60A.195 to
14.2760A.209 .
14.28    Subd. 2. Filing requirements. (a) Each association shall file with the commissioner
14.29for approval all of the following:
14.30(1) a copy of the association's constitution and articles of agreement or association,
14.31or the association's certificate of incorporation and bylaws and any rules governing the
14.32association's activities; and
15.1(2) an agreement that, as a condition of continued registration under subdivision 1,
15.2the commissioner may examine the association.
15.3(b) Each association shall file with the commissioner and keep current all of the
15.4following:
15.5(1) a list of members; and
15.6(2) the name and address of a resident of this state upon whom notices or orders of
15.7the commissioner or process issued by the commissioner may be served.
15.8    Subd. 3. Commissioner's powers; suspension of registration. The commissioner
15.9may refuse to register, or may suspend or revoke the registration of an association for any
15.10of the following reasons:
15.11(a) it reasonably appears that the association will not be able to carry out the
15.12purposes of sections 60A.195 to 60A.209;
15.13(b) the association fails to maintain and enforce rules which will assure that
15.14members of the association and persons associated with those members comply with
15.15sections 60A.195 to 60A.209, other applicable chapters of the insurance laws and rules
15.16promulgated under either;
15.17(c) the rules of the association do not assure a fair representation of its members in
15.18the selection of directors and in the administration of its affairs;
15.19(d) the rules of the association do not provide for an equitable allocation of
15.20reasonable dues, fees, and other charges among members;
15.21(e) the rules of the association impose a burden on competition; or
15.22(f) the association fails to meet other applicable requirements prescribed in sections
15.2360A.195 to 60A.209.
15.24    Subd. 4. Membership limited to licensees brokers. An association shall deny
15.25membership to any person who is not a licensee broker.
15.26    Subd. 5. Association is voluntary. No licensee broker may be compelled to join
15.27an association as a condition of receiving a license or continuing to be licensed under
15.28sections 60A.195 to 60A.209.
15.29    Subd. 6. Financial statement to be filed. Each association shall annually file a
15.30certified audited financial statement.
15.31    Subd. 7. Reports and recommendations by the association. An association may
15.32submit reports and make recommendations to the commissioner regarding the financial
15.33condition of any eligible surplus lines insurer. These reports and recommendations shall
15.34not be considered to be public information. There shall not be liability on the part of, or a
15.35cause of action of any nature shall not arise against, eligible surplus lines insurers, the
15.36association or its agents or employees, the directors, or the commissioner or authorized
16.1representatives of the commissioner, for statements made by them in any reports or
16.2recommendations made under this subdivision.
16.3    Subd. 8. Operating assessment. (a) Upon request from the association, the
16.4commissioner may approve the levy of an assessment of not more than one-half of one
16.5percent of premiums charged pursuant to sections 60A.195 to 60A.209 for operation
16.6of the association to the extent that the operation relieves the commissioner of duties
16.7otherwise required of the commissioner pursuant to sections 60A.195 to 60A.209. Any
16.8assessment so approved may be subtracted from the premium tax owed by the licensee
16.9broker under chapter 297I.
16.10(b) The association may revoke the membership and the commissioner may revoke
16.11the license in this state, of any licensee broker who fails to pay an assessment when due, if
16.12the assessment has been approved by the commissioner.
16.13EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
16.14that go into effect after July 20, 2011.

16.15    Sec. 24. Minnesota Statutes 2010, section 60A.2085, subdivision 1, is amended to read:
16.16    Subdivision 1. Association created; duties. There is hereby created a nonprofit
16.17association to be known as the Surplus Lines Association of Minnesota. The association
16.18is not a state agency for purposes of chapter 16A, 16B, 16C, or 43A. All surplus lines
16.19licensees brokers are members of this association. Section 60A.208 does not apply to
16.20the association created pursuant to the provisions of this section. The association shall
16.21perform its functions under the plan of operation established under subdivision 3 and must
16.22exercise its powers through a board of directors established under subdivision 2 as set
16.23forth in the plan of operation. The association shall be authorized and have the duty to:
16.24    (1) receive, record, and stamp all surplus lines nonadmitted insurance documents
16.25that surplus lines licensees brokers are required to file with the association;
16.26    (2) prepare and deliver monthly to the commissioners of revenue and commerce a
16.27report regarding surplus lines business. The report must include a list of all the business
16.28procured during the preceding month, in the form the commissioners prescribe;
16.29    (3) educate its members regarding the surplus lines law of this state including
16.30insurance tax responsibilities and the rules and regulations of the commissioners of
16.31revenue and commerce relative to surplus lines nonadmitted insurance;
16.32    (4) communicate with organizations of agents, brokers, and admitted insurers with
16.33respect to the proper use of the surplus lines market;
16.34    (5) employ and retain persons necessary to carry out the duties of the association;
17.1    (6) borrow money necessary to effect the purposes of the association and grant a
17.2security interest or mortgage in its assets, including the stamping fees charged pursuant to
17.3subdivision 7 in order to secure the repayment of any such borrowed money;
17.4    (7) enter contracts necessary to effect the purposes of the association;
17.5    (8) provide other services to its members that are incidental or related to the
17.6purposes of the association;
17.7(9) form and organize itself as a nonprofit corporation under chapter 317A, with the
17.8powers set forth in section 317A.161 that are not otherwise limited by this section or in
17.9its articles, bylaws, or plan of operation;
17.10(10) file such applications and take such other action as necessary to establish and
17.11maintain the association as tax exempt pursuant to the federal income tax code;
17.12(11) recommend to the commissioner of commerce revisions to Minnesota law
17.13relating to the regulation of surplus lines nonadmitted insurance in order to improve the
17.14efficiency and effectiveness of that regulation; and
17.15    (12) take other actions reasonably required to implement the provisions of this
17.16section.
17.17EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
17.18that go into effect after July 20, 2011.

17.19    Sec. 25. Minnesota Statutes 2010, section 60A.2085, subdivision 3, is amended to read:
17.20    Subd. 3. Plan of operation. (a) The plan of operation shall provide for the
17.21formation, operation, and governance of the association as a nonprofit corporation under
17.22chapter 317A. The plan of operation must provide for the election of a board of directors
17.23by the members of the association. The board of directors shall elect officers as provided
17.24for in the plan of operation. The plan of operation shall establish the manner of voting and
17.25may weigh each member's vote to reflect the annual surplus lines nonadmitted insurance
17.26premium written by the member. Members employed by the same or affiliated employers
17.27may consolidate their premiums written and delegate an individual officer or partner
17.28to represent the member in the exercise of association affairs, including service on the
17.29board of directors.
17.30    (b) The plan of operation shall provide for an independent audit once each year of all
17.31the books and records of the association and a report of such independent audit shall be
17.32made to the board of directors, the commissioner of revenue, and the commissioner of
17.33commerce, with a copy made available to each member to review at the association office.
17.34    (c) The plan of operation and any amendments to the plan of operation shall be
17.35submitted to the commissioner and shall be effective upon approval in writing by the
18.1commissioner. The association and all members shall comply with the plan of operation or
18.2any amendments to it. Failure to comply with the plan of operation or any amendments
18.3shall constitute a violation for which the commissioner may issue an order requiring
18.4discontinuance of the violation.
18.5    (d) If the interim board of directors fails to submit a suitable plan of operation
18.6within 60 days following the creation of the interim board, or if at any time thereafter the
18.7association fails to submit required amendments to the plan, the commissioner may submit
18.8to the association a plan of operation or amendments to the plan, which the association
18.9must follow. The plan of operation or amendments submitted by the commissioner shall
18.10continue in force until amended by the commissioner or superseded by a plan of operation
18.11or amendment submitted by the association and approved by the commissioner. A plan
18.12of operation or an amendment submitted by the commissioner constitutes an order of
18.13the commissioner.
18.14EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
18.15that go into effect after July 20, 2011.

18.16    Sec. 26. Minnesota Statutes 2010, section 60A.2085, subdivision 7, is amended to read:
18.17    Subd. 7. Stamping fee. The services performed by the association shall be
18.18funded by a stamping fee assessed for each premium-bearing document submitted to
18.19the association. The stamping fee shall be established by the board of directors of the
18.20association from time to time. The stamping fee shall be paid by the insured to the surplus
18.21lines licensee broker and remitted to the association by the surplus lines licensee broker in
18.22the manner established by the association.
18.23EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
18.24that go into effect after July 20, 2011.

18.25    Sec. 27. Minnesota Statutes 2010, section 60A.2085, subdivision 8, is amended to read:
18.26    Subd. 8. Data classification. Unless otherwise classified by statute, a temporary
18.27classification under section 13.06, or federal law, information obtained by the
18.28commissioner from the association is public, except that any data identifying insureds or
18.29the Social Security number of a licensee broker or any information derived therefrom is
18.30private data on individuals or nonpublic data as defined in section 13.02, subdivisions
18.319 and 12.
18.32EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
18.33that go into effect after July 20, 2011.

19.1    Sec. 28. Minnesota Statutes 2010, section 60A.2086, subdivision 1, is amended to read:
19.2    Subdivision 1. Submission of documents to Surplus Lines Association of
19.3Minnesota; certification. (a) A surplus lines licensee broker shall submit every insurance
19.4policy or contract issued under the licensee's broker's license to the Surplus Lines
19.5Association of Minnesota for recording and stamping. The submission and stamping must
19.6be effected through electronic means. The submission must include:
19.7    (1) the name of the insured;
19.8    (2) a description and location of the insured property or risk;
19.9    (3) the amount insured;
19.10    (4) the gross premiums charged or returned;
19.11    (5) the name of the surplus lines nonadmitted insurer from whom coverage has
19.12been procured;
19.13    (6) the kind or kinds of insurance procured; and
19.14    (7) the amount of premium subject to tax.
19.15    (b) The submission of insurance policies or contracts to the Surplus Lines
19.16Association of Minnesota constitutes a certification by the surplus lines licensee broker, or
19.17by the insurance producer who presented the risk to the surplus lines licensee broker for
19.18placement as a surplus lines risk, that the insurance policies or contracts were procured in
19.19accordance with sections 60A.195 to 60A.209.
19.20EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
19.21that go into effect after July 20, 2011.

19.22    Sec. 29. Minnesota Statutes 2010, section 60A.2086, subdivision 2, is amended to read:
19.23    Subd. 2. Stamping requirement; penalty. (a) It shall be unlawful for an insurance
19.24agent, broker, or surplus lines licensee broker to deliver in this state any surplus lines
19.25nonadmitted insurance policy or contract unless the insurance document is stamped by the
19.26association. A licensee's surplus lines broker's failure to comply with the requirements of
19.27this subdivision shall not affect the validity of the coverage.
19.28    (b) Any insurance agent, broker, or surplus lines licensee broker who delivers in this
19.29state any insurance policy or contract that has not been stamped by the association shall be
19.30subject to a penalty payable to the commissioner as follows:
19.31    (1) $50 for delivery of the first unstamped policy;
19.32    (2) $250 for delivery of a second unstamped policy; and
19.33    (3) $1,000 per policy for delivery of any additional unstamped policies.
20.1EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
20.2that go into effect after July 20, 2011.

20.3    Sec. 30. Minnesota Statutes 2010, section 60A.209, subdivision 1, is amended to read:
20.4    Subdivision 1. Authorization; regulation. A resident of this state may obtain
20.5insurance from an ineligible surplus lines insurer in this state through a surplus lines
20.6licensee broker. The licensee broker shall first attempt to place the insurance with a
20.7licensed insurer, or if that is not possible, with an eligible surplus lines insurer. If coverage
20.8is not obtainable from a licensed insurer or an eligible surplus lines insurer, the licensee
20.9broker shall certify to the commissioner, on a form prescribed by the commissioner, that
20.10these attempts were made. Upon obtaining coverage from an ineligible surplus lines
20.11insurer, the licensee broker shall:
20.12(a) Have printed, typed, or stamped in red ink upon the face of the policy in
20.13not less than 10-point type the following notice: "THIS INSURANCE IS ISSUED
20.14PURSUANT TO THE MINNESOTA SURPLUS LINES INSURANCE ACT. THIS
20.15INSURANCE IS PLACED WITH AN INSURER THAT IS NOT LICENSED BY THE
20.16STATE NOR RECOGNIZED BY THE COMMISSIONER OF COMMERCE AS AN
20.17ELIGIBLE SURPLUS LINES INSURER. IN CASE OF ANY DISPUTE RELATIVE
20.18TO THE TERMS OR CONDITIONS OF THE POLICY OR THE PRACTICES OF
20.19THE INSURER, THE COMMISSIONER OF COMMERCE WILL NOT BE ABLE TO
20.20ASSIST IN THE DISPUTE. IN CASE OF INSOLVENCY, PAYMENT OF CLAIMS IS
20.21NOT GUARANTEED." The notice may not be covered or concealed in any manner; and
20.22(b) Collect from the insured appropriate premium taxes, as provided under chapter
20.23297I, and report the transaction to the commissioner of revenue on a form prescribed by
20.24the commissioner. If the insured fails to pay the taxes when due, the insured shall be
20.25subject to a civil fine of not more than $3,000, plus accrued interest from the inception of
20.26the insurance.
20.27EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
20.28that go into effect after July 20, 2011.

20.29    Sec. 31. Minnesota Statutes 2010, section 60K.56, subdivision 6, is amended to read:
20.30    Subd. 6. Minimum education requirement. Each person subject to this section
20.31shall complete a minimum of 24 credit hours of courses accredited by the commissioner
20.32during each licensing period. No more than one-half of the credit hours per licensing
20.33period required under this section may be credited to a person for attending courses either
20.34sponsored by, offered by, or affiliated with an insurance company or its agents. For the
21.1purposes of this subdivision, a course provided by a bona fide insurance trade association
21.2is not considered to be sponsored by, offered by, or affiliated with an insurance company
21.3or its agents regardless of the location of the course offering. A licensee must obtain three
21.4hours of the credit hours per licensing period from a class or classes in the area of ethics.
21.5Courses sponsored by, offered by, or affiliated with an insurance company or agent may
21.6restrict its students to agents of the company or agency. Courses not sponsored by an
21.7insurance company must be open to all unless an exception listed in section 45.30 applies.

21.8    Sec. 32. Minnesota Statutes 2010, section 62A.095, subdivision 1, is amended to read:
21.9    Subdivision 1. Applicability. (a) No A health plan shall may not be offered, sold,
21.10or issued to a resident of this state, or to cover a resident of this state, unless the health
21.11plan complies with subdivision 2.
21.12    (b) Health plans providing benefits under health care programs administered by the
21.13commissioner of human services are not subject to the limits described in subdivision
21.142 but are subject to the right of subrogation provisions under section 256B.37 and the
21.15lien provisions under section 256.015; 256B.042; 256D.03, subdivision 8; or 256L.03,
21.16subdivision 6
.
21.17    For purposes of this section, "health plan" includes coverage that is excluded under
21.18section 62A.011, subdivision 3, clauses (4), (6), (7), (8), (9), and (10).

21.19    Sec. 33. Minnesota Statutes 2010, section 62A.318, subdivision 17, is amended to read:
21.20    Subd. 17. Types of plans. Medicare select policies and certificates offered by the
21.21issuer must be either a basic plan or an extended basic plan provide the coverages specified
21.22in sections 62A.315 to 62A.3165. Before a Medicare select policy or certificate is sold or
21.23issued in this state, the applicant must be provided with an explanation of coverage for
21.24both a Medicare select basic and a Medicare select extended basic policy or certificate
21.25each of the coverages specified in sections 62A.315 to 62A.3165 and must be provided
21.26with the opportunity of purchasing either a Medicare select basic or a Medicare select
21.27extended basic policy such coverage if offered by the issuer. The basic plan may also
21.28include any of the optional benefit riders authorized by section 62A.316. Preventive care
21.29provided by Medicare select policies or certificates must be provided as set forth in section
21.3062A.315 or 62A.316, except that the benefits are as defined in chapter 62D.

21.31    Sec. 34. Minnesota Statutes 2010, section 62E.14, subdivision 3, is amended to read:
21.32    Subd. 3. Preexisting conditions. No A person who obtains coverage pursuant to
21.33this section shall be is not covered for any preexisting condition during the first six months
22.1of coverage under the state plan if the person was diagnosed or treated for that condition
22.2during the 90 days immediately preceding the date the application was received by the
22.3writing carrier, except as provided under subdivisions 3a, 4, 4a, 4b, 4c, 4d, 4e, 5, 6, and 7
22.4and section 62E.18.

22.5    Sec. 35. Minnesota Statutes 2010, section 62E.14, is amended by adding a subdivision
22.6to read:
22.7    Subd. 4f. Waiver of preexisting conditions; persons covered by a
22.8community-based health care coverage program. A person may enroll in the
22.9comprehensive plan, with a waiver of preexisting condition limitation in subdivision
22.103, if the following requirements are met:
22.11    (1) the person was formerly enrolled in a community-based health care coverage
22.12program under section 62Q.80;
22.13    (2) the person is a Minnesota resident; and
22.14    (3) the person submits an application for coverage that is received by the writing
22.15carrier no later than 90 days after coverage under the community-based health care
22.16program is terminated. For purposes of this clause, termination of coverage includes
22.17exceeding the maximum lifetime or annual benefit on existing coverage, or moving out of
22.18an area served by the program.

22.19    Sec. 36. Minnesota Statutes 2010, section 62J.81, subdivision 1, is amended to read:
22.20    Subdivision 1. Required disclosure of estimated payment. (a) A health care
22.21provider, as defined in section 62J.03, subdivision 8, or the provider's designee as agreed to
22.22by that designee, shall, at the request of a consumer, and at no cost to the consumer or the
22.23consumer's employer, provide that consumer with a good faith estimate of the allowable
22.24payment the provider has agreed to accept from the consumer's health plan company
22.25for the services specified by the consumer, specifying the amount of the allowable
22.26payment due from the health plan company. Health plan companies must allow contracted
22.27providers, or their designee, to release this information. If a consumer has no applicable
22.28public or private coverage, the health care provider must give the consumer, and at no
22.29cost to the consumer, a good faith estimate of the average allowable reimbursement the
22.30provider accepts as payment from private third-party payers for the services specified by
22.31the consumer and the estimated amount the noncovered consumer will be required to pay.
22.32Payment information provided by a provider, or by the provider's designee as agreed to by
22.33that designee, to a patient pursuant to this subdivision does not constitute a legally binding
22.34estimate of the allowable charge for or cost to the consumer of services.
23.1    (b) A health plan company, as defined in section 62J.03, subdivision 10, shall, at the
23.2request of an enrollee intending to receive specific health care services or the enrollee's
23.3designee, provide that enrollee with a good faith estimate of the allowable amount the
23.4health plan company has contracted for with a specified provider within the network
23.5as total payment for a health care service specified by the enrollee and the portion of
23.6the allowable amount due from the enrollee and the enrollee's out-of-pocket costs. An
23.7estimate provided to an enrollee under this paragraph is not a legally binding estimate of
23.8the allowable amount or enrollee's out-of-pocket cost.
23.9EFFECTIVE DATE.This section is effective retroactively from January 1, 2011.

23.10    Sec. 37. Minnesota Statutes 2010, section 62L.03, subdivision 3, is amended to read:
23.11    Subd. 3. Minimum participation and contribution. (a) A small employer that has
23.12at least 75 percent of its eligible employees who have not waived coverage participating in
23.13a health benefit plan and that contributes at least 50 percent toward the cost of coverage of
23.14each eligible employee must be guaranteed coverage on a guaranteed issue basis from
23.15any health carrier participating in the small employer market. The participation level
23.16of eligible employees must be determined at the initial offering of coverage and at the
23.17renewal date of coverage. A health carrier must not increase the participation requirements
23.18applicable to a small employer at any time after the small employer has been accepted for
23.19coverage. For the purposes of this subdivision, waiver of coverage includes only waivers
23.20due to: (1) coverage under another group health plan; (2) coverage under Medicare Parts
23.21A and B; or (3) coverage under MCHA permitted under section 62E.141; or (4) coverage
23.22under medical assistance under chapter 256B or general assistance medical care under
23.23chapter 256D.
23.24    (b) If a small employer does not satisfy the contribution or participation requirements
23.25under this subdivision, a health carrier may voluntarily issue or renew individual health
23.26plans, or a health benefit plan which must fully comply with this chapter. A health carrier
23.27that provides a health benefit plan to a small employer that does not meet the contribution
23.28or participation requirements of this subdivision must maintain this information in its files
23.29for audit by the commissioner. A health carrier may not offer an individual health plan,
23.30purchased through an arrangement between the employer and the health carrier, to any
23.31employee unless the health carrier also offers the individual health plan, on a guaranteed
23.32issue basis, to all other employees of the same employer. An arrangement permitted under
23.33section 62L.12, subdivision 2, paragraph (k), is not an arrangement between the employer
23.34and the health carrier for purposes of this paragraph.
24.1    (c) Nothing in this section obligates a health carrier to issue coverage to a small
24.2employer that currently offers coverage through a health benefit plan from another health
24.3carrier, unless the new coverage will replace the existing coverage and not serve as one
24.4of two or more health benefit plans offered by the employer. This paragraph does not
24.5apply if the small employer will meet the required participation level with respect to
24.6the new coverage.

24.7    Sec. 38. Minnesota Statutes 2010, section 72A.20, subdivision 24, is amended to read:
24.8    Subd. 24. Cancellations and nonrenewals. (a) No insurer shall cancel or fail to
24.9renew an individual life or individual health policy or an individual nonprofit health
24.10service plan subscriber contract, within one year after default in the payment of any
24.11premium on an individual life insurance policy, declare the individual life insurance policy
24.12to be canceled or nonrenewed for nonpayment of premium unless it mails or delivers
24.13to the named insured policy owner, at the address shown on the policy or subscriber
24.14contract policy owner's last known address, at least 30 days before lapse, final notice of
24.15the cancellation or nonrenewal and the effective date of the cancellation or nonrenewal.
24.16For purposes of this subdivision, "individual life insurance policy" includes policies in
24.17default on or after the effective date of this section.
24.18    (b) No insurer on an individual health policy or on an individual nonprofit health
24.19service plan corporation subscriber contract shall cancel or fail to renew the policy or
24.20contract for nonpayment of premium unless it mails or delivers to the named policy owner
24.21or named contract owner, at the policy or subscriber contract owner's last known address,
24.22at least 30 days before lapse, final notice of the cancellation or nonrenewal. If the named
24.23insured is not the policy or subscriber contract owner of the individual health policy or the
24.24individual nonprofit health service plan subscriber contract, the notice required by this
24.25subdivision must also be sent to the named insured at the named insured's last known
24.26address, if any, and to the owner's last known address.
24.27    (c) Proof of mailing of the notice of lapse under paragraph (a) or (b) for failure to
24.28pay the premium before the expiration of the grace period is sufficient proof that notice
24.29required in this subdivision has been given.
24.30    (d) This subdivision does not apply to a life or health insurance policy or contract
24.31upon which premiums are paid at a monthly interval or less and that contains any grace
24.32period required by statute for the payment of premiums during which time the insurance
24.33continues in force.

24.34    Sec. 39. Minnesota Statutes 2010, section 72B.041, subdivision 5, is amended to read:
25.1    Subd. 5. Exceptions. (a) An individual who applies for an adjuster license in this
25.2state who is or was licensed in another state for the same lines of authority based on
25.3an adjuster examination is not required to complete a prelicensing examination. This
25.4exemption is only available if the person is currently licensed in another state or if that
25.5state license has expired and the application is received by this state within 90 days of
25.6expiration. The applicant must provide certification from the other state that the applicant's
25.7license is currently in good standing or was in good standing at the time of expiration
25.8or certification from the other state that its producer database records, maintained by
25.9the NAIC, its affiliates, or its subsidiaries, indicate that the applicant or the applicant's
25.10company is or was licensed in good standing. The certification must be of a license with
25.11the same line of authority for which the individual has applied.
25.12    (b) A person licensed as an adjuster in another state based on an adjuster examination
25.13who establishes legal residency in this state must make application within 90 days to
25.14become a resident adjuster licensee pursuant to this section, with the exception that no
25.15prelicensing examination is required of this person.
25.16    (c) A person who has held a license of any given class or in any field or fields within
25.17three years prior to the application shall be entitled to a renewal of the license in the same
25.18class or in the same fields without taking an examination.
25.19    (d) A person applying for a license as a crop hail adjuster shall not be required to
25.20comply with the requirements of subdivision 4.
25.21    (d) A person applying for the crop line of authority who has satisfactorily completed
25.22the National Crop Insurance Services Crop Adjuster Proficiency Program or the loss
25.23adjustment training curriculum and competency testing required by the Federal Crop
25.24Insurance Corporation Standard Reinsurance Agreement is exempt from the requirements
25.25of subdivision 4.

25.26    Sec. 40. [72B.055] MULTIPLE PERIL CROP INSURANCE ADJUSTMENTS.
25.27    A licensed crop hail adjuster who has satisfactorily completed the loss adjustment
25.28training curriculum and competency testing required by the Federal Crop Insurance
25.29Corporation (FCIC) Standard Reinsurance Agreement may act as an adjuster in this state
25.30in regard to Multiple Peril Crop Insurance policies regulated by the FCIC.

25.31    Sec. 41. Minnesota Statutes 2010, section 79A.06, subdivision 5, is amended to read:
25.32    Subd. 5. Private employers who have ceased to be self-insured. (a) Private
25.33employers who have ceased to be private self-insurers shall discharge their continuing
25.34obligations to secure the payment of compensation which is accrued during the period of
26.1self-insurance, for purposes of Laws 1988, chapter 674, sections 1 to 21, by compliance
26.2with all of the following obligations of current certificate holders:
26.3    (1) Filing reports with the commissioner to carry out the requirements of this chapter;
26.4    (2) Depositing and maintaining a security deposit for accrued liability for the
26.5payment of any compensation which may become due, pursuant to chapter 176. However,
26.6if a private employer who has ceased to be a private self-insurer purchases an insurance
26.7policy from an insurer authorized to transact workers' compensation insurance in this state
26.8which provides coverage of all claims for compensation arising out of injuries occurring
26.9during the entire period the employer was self-insured, whether or not reported during
26.10that period, the policy will:
26.11    (i) discharge the obligation of the employer to maintain a security deposit for the
26.12payment of the claims covered under the policy;
26.13    (ii) discharge any obligation which the self-insurers' security fund has or may have
26.14for payment of all claims for compensation arising out of injuries occurring during the
26.15period the employer was self-insured, whether or not reported during that period; and
26.16    (iii) discharge the obligations of the employer to pay any future assessments to
26.17the self-insurers' security fund; provided, however, that a member that terminates its
26.18self-insurance authority on or after August 1, 2010, shall be liable for an assessment under
26.19paragraph (b). The actuarial opinion shall not take into consideration any transfer of the
26.20member's liabilities to an insurance policy if the member obtains a replacement policy as
26.21described in this subdivision within one year of the date of terminating its self-insurance.
26.22    A private employer who has ceased to be a private self-insurer may instead buy an
26.23insurance policy described above, except that it covers only a portion of the period of time
26.24during which the private employer was self-insured; purchase of such a policy discharges
26.25any obligation that the self-insurers' security fund has or may have for payment of all
26.26claims for compensation arising out of injuries occurring during the period for which the
26.27policy provides coverage, whether or not reported during that period.
26.28    A policy described in this clause may not be issued by an insurer unless it has
26.29previously been approved as to the insurer, form, and substance by the commissioner; and
26.30    (3) Paying within 30 days all assessments of which notice is sent by the security
26.31fund, for a period of seven years from the last day its certificate of self-insurance was in
26.32effect. Thereafter, the private employer who has ceased to be a private self-insurer may
26.33either: (i) continue to pay within 30 days all assessments of which notice is sent by the
26.34security fund until it has no incurred liabilities for the payment of compensation arising
26.35out of injuries during the period of self-insurance; or (ii) pay the security fund a cash
26.36payment equal to four percent of the net present value of all remaining incurred liabilities
27.1for the payment of compensation under sections 176.101 and 176.111 as certified by a
27.2member of the casualty actuarial society. Assessments shall be based on the benefits paid
27.3by the employer during the calendar year immediately preceding the calendar year in
27.4which the employer's right to self-insure is terminated or withdrawn.
27.5    (b) With respect to a self-insurer who terminates its self-insurance authority after
27.6April 1, 1998, that member shall obtain and file with the commissioner an actuarial
27.7opinion of its outstanding liabilities as determined by an associate or fellow of the
27.8Casualty Actuarial Society within 120 days of the date of its termination. If the actuarial
27.9opinion is not timely filed, the self-insurers' security fund may, at its discretion, engage
27.10the services of an actuary for this purpose. The expense of this actuarial opinion must be
27.11assessed against and be the obligation of the self-insurer. The commissioner may issue
27.12a certificate of default against the self-insurer for failure to pay this assessment to the
27.13self-insurers' security fund as provided by section 79A.04, subdivision 9. The opinion
27.14may discount liabilities up to four percent per annum to net present value. Within 60 days
27.15after notification of approval of the actuarial opinion by the commissioner, the exiting
27.16member shall pay to the security fund an amount determined as follows: a percentage will
27.17be determined by dividing the security fund's members' deficit as determined by the most
27.18recent audited financial statement of the security fund by the total actuarial liability of all
27.19members of the security fund as calculated by the commissioner within 30 days of the
27.20exit date of the member. This quotient will then be multiplied by that exiting member's
27.21total future liability as contained in the exiting member's actuarial opinion. If the payment
27.22is not made within 30 days of the notification, interest on it at the rate prescribed by
27.23section 549.09 must be paid by the former member to the security fund until the principal
27.24amount is paid in full.
27.25    (c) A former member who terminated its self-insurance authority before April 1,
27.261998, who has paid assessments to the self-insurers' security fund for seven years, and
27.27whose annualized assessment is $15,000 or less, may buy out of its outstanding liabilities
27.28to the self-insurers' security fund by an amount calculated as follows: 1.35 multiplied by
27.29the indemnity case reserves at the time of the calculation, multiplied by the then current
27.30self-insurers' security fund annualized assessment rate.
27.31    (d) A former member who terminated its self-insurance authority before April 1,
27.321998, and who is paying assessments within the first seven years after ceasing to be
27.33self-insured under paragraph (a), clause (3), may elect to buy out its outstanding liabilities
27.34to the self-insurers' security fund by obtaining and filing with the commissioner an
27.35actuarial opinion of its outstanding liabilities as determined by an associate or fellow of
27.36the Casualty Actuarial Society. The opinion must separate liability for indemnity benefits
28.1from liability for medical benefits, and must discount each up to four percent per annum to
28.2net present value. Within 30 days after notification of approval of the actuarial opinion
28.3by the commissioner, the member shall pay to the security fund an amount equal to 120
28.4percent of that discounted outstanding indemnity liability, multiplied by the greater of the
28.5average annualized assessment rate since inception of the security fund or the annual rate
28.6at the time of the most recent assessment.
28.7    (e) A former member who has paid the security fund according to paragraphs (b) to
28.8(d) and subsequently receives authority from the commissioner to again self-insure shall be
28.9assessed under section 79A.12, subdivision 2, only on indemnity benefits paid on injuries
28.10that occurred after the former member received authority to self-insure again; provided
28.11that the member furnishes verified data regarding those benefits to the security fund.
28.12    (f) In addition to proceedings to establish liabilities and penalties otherwise
28.13provided, a failure to comply may be the subject of a proceeding before the commissioner.
28.14An appeal from the commissioner's determination may be taken pursuant to the contested
28.15case procedures of chapter 14 within 30 days of the commissioner's written determination.
28.16    Any current or past member of the self-insurers' security fund is subject to service of
28.17process on any claim arising out of chapter 176 or this chapter in the manner provided by
28.18section 5.25, or as otherwise provided by law. The issuance of a certificate to self-insure
28.19to the private self-insured employer shall be deemed to be the agreement that any process
28.20which is served in accordance with this section shall be of the same legal force and effect
28.21as if served personally within this state.
28.22EFFECTIVE DATE.This section is effective the day following final enactment.

28.23    Sec. 42. Minnesota Statutes 2010, section 79A.24, is amended by adding a subdivision
28.24to read:
28.25    Subd. 5. Purchase of insurance policy from an authorized insurer. A commercial
28.26self-insurance group may purchase an insurance policy from an insurer authorized to
28.27transact workers' compensation insurance in this state which provides coverage of all
28.28claims for compensation arising out of injuries occurring during the entire period or during
28.29a portion of the period of time in which the commercial self-insurance group has been
28.30in existence. While the insurance policy remains in effect, it discharges the obligation
28.31of the commercial self-insurance group to maintain a security deposit for the claims
28.32covered under the policy. A policy described in this subdivision may not be issued by an
28.33insurer unless it has previously been approved as to the insurer, form, and substance by
28.34the commissioner.
29.1EFFECTIVE DATE.This section is effective the day following final enactment.

29.2    Sec. 43. Minnesota Statutes 2010, section 79A.24, is amended by adding a subdivision
29.3to read:
29.4    Subd. 6. Insolvency of a commercial self-insurance group insurer. In the event
29.5of the insolvency of the insurer that issued a policy under subdivision 5 to a commercial
29.6self-insurance group, eligibility for chapter 60C coverage under the policy is determined
29.7by applying the requirements of section 60C.09, subdivision 2, clause (3), to each
29.8commercial self-insurance group member separately, rather than to the net worth of the
29.9commercial self-insurance group entity or aggregate net worth of all members of the
29.10commercial self-insurance group.
29.11EFFECTIVE DATE.This section is effective the day following final enactment.

29.12    Sec. 44. Minnesota Statutes 2010, section 82.641, subdivision 1, is amended to read:
29.13    Subdivision 1. Generally License required. A person shall not act as a real estate
29.14closing agent unless licensed as provided in this section. The commissioner shall issue
29.15a license as a closing agent to a person who qualifies for the license under the terms
29.16of this chapter.

29.17    Sec. 45. Minnesota Statutes 2010, section 82B.11, subdivision 6, is amended to read:
29.18    Subd. 6. Temporary practice. (a) The commissioner shall issue a license for
29.19temporary practice as a real estate appraiser under subdivision 3, 4, or 5 to a person
29.20certified or licensed by another state if:
29.21    (1) the property to be appraised is part of a federally related transaction and the
29.22person is licensed to appraise property limited to the same transaction value or complexity
29.23provided in subdivision 3, 4, or 5;
29.24    (2) the appraiser's business is of a temporary nature; and
29.25    (3) the appraiser registers with the commissioner to obtain a temporary license
29.26before conducting appraisals within the state.
29.27    (b) The term of a temporary practice license is the lesser of:
29.28    (1) the time required to complete the assignment; or
29.29    (2) six 12 months, with one extension allowed.
29.30    The appraiser may request one extension of no more than six months on a form
29.31provided by the commissioner. If more than 12 months are necessary to complete the
29.32assignment, a new temporary application and fee is required.

30.1    Sec. 46. Minnesota Statutes 2010, section 82B.13, is amended by adding a subdivision
30.2to read:
30.3    Subd. 8. Appraiser prelicense education. Notwithstanding section 45.22, a college
30.4or university real estate course may be approved retroactively by the commissioner for
30.5appraiser prelicense education credit if:
30.6    (1) the course was offered by a college or university physically located in Minnesota;
30.7    (2) the college or university was an approved education provider at the time the
30.8course was offered; and
30.9    (3) the commissioner's approval is made to the same extent in terms of courses and
30.10hours and with the same time limits as those specified by the Appraiser Qualifications
30.11Board.

30.12    Sec. 47. Minnesota Statutes 2010, section 82B.14, is amended to read:
30.1382B.14 EXPERIENCE REQUIREMENT.
30.14    (a) As a prerequisite for licensing as a licensed real property appraiser, an applicant
30.15must present evidence satisfactory to the commissioner that the person has obtained 2,000
30.16hours of experience in real property appraisal obtained in no fewer than 12 months.
30.17    As a prerequisite for licensing as a certified residential real property appraiser, an
30.18applicant must present evidence satisfactory to the commissioner that the person has
30.19obtained 2,500 hours of experience in real property appraisal obtained in no fewer than
30.2024 months.
30.21    As a prerequisite for licensing as a certified general real property appraiser, an
30.22applicant must present evidence satisfactory to the commissioner that the person has
30.23obtained 3,000 hours of experience in real property appraisal obtained in no fewer than 30
30.24months. At least 50 percent, or 1,500 hours, must be in nonresidential appraisal work.
30.25    (b) Each applicant for license under section 82B.11, subdivision 3, 4, or 5, shall
30.26give under oath a detailed listing of the real estate appraisal reports or file memoranda
30.27for which experience is claimed by the applicant. Upon request, the applicant shall make
30.28available to the commissioner for examination, a sample of appraisal reports that the
30.29applicant has prepared in the course of appraisal practice.
30.30    (c) Notwithstanding section 45.22, a college or university real estate course may be
30.31approved retroactively by the commissioner for appraiser prelicense education credit if:
30.32    (1) the course was offered by a college or university physically located in Minnesota;
30.33    (2) the college or university was an approved education provider at the time the
30.34course was offered;
31.1    (3) the commissioner's approval is made to the same extent in terms of courses and
31.2hours and with the same time limits as those specified by the Appraiser Qualifications
31.3Board.
31.4    (d) (c) Applicants may not receive credit for experience accumulated while
31.5unlicensed, if the experience is based on activities which required a license under this
31.6section.
31.7    (e) (d) Experience for all classifications must be obtained after January 30, 1989,
31.8and must be USPAP compliant.

31.9    Sec. 48. Minnesota Statutes 2010, section 82C.08, subdivision 2, is amended to read:
31.10    Subd. 2. Amounts. (a) Each application for initial licensure shall be accompanied
31.11by a fee of $5,000.
31.12    (b) Each application for renewal of the license must be received prior to the two-year
31.13its expiration period with the renewal fee of $2,500.

31.14    Sec. 49. REVISOR'S INSTRUCTION.
31.15The revisor of statutes shall recode Minnesota Statutes, section 60A.19, subdivision
31.168, as section 60A.198, subdivision 7.

700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569