relating to commerce; regulating continuing education and prelicensing
requirements, insurance coverages, certain disclosures, nonadmitted insurers,
insolvencies, real estate closing agents, adjusters, and appraisers;amending
Minnesota Statutes 2010, sections 45.011, subdivision 1; 45.25, by adding
subdivisions; 45.30, subdivision 7, by adding a subdivision; 45.35; 60A.06,
subdivision 3; 60A.19, subdivision 8; 60A.196; 60A.198; 60A.199, subdivision
1; 60A.201; 60A.202; 60A.203; 60A.204, subdivision 2; 60A.205, subdivisions
1, 2; 60A.206, subdivisions 1, 3; 60A.207; 60A.208; 60A.2085, subdivisions 1,
3, 7, 8; 60A.2086, subdivisions 1, 2; 60A.209, subdivision 1; 60K.56, subdivision
6; 62A.095, subdivision 1; 62A.318, subdivision 17; 62E.14, subdivision 3, by
adding a subdivision; 62J.81, subdivision 1; 62L.03, subdivision 3; 72A.20,
subdivision 24; 72B.041, subdivision 5; 79A.06, subdivision 5; 79A.24, by
adding subdivisions; 82.641, subdivision 1; 82B.11, subdivision 6; 82B.13, by
adding a subdivision; 82B.14; 82C.08, subdivision 2; proposing coding for new
law in Minnesota Statutes, chapters 45; 72B.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2010, section 45.011, subdivision 1, is amended to read:
Subdivision 1. Scope.
As used in chapters 45 to 80C, 80E to
83, 155A, 332,
332A, 332B, 345, and 359, and sections
123A.21, subdivision 7
, paragraph (a), clause
, unless the context indicates otherwise, the terms defined in this section
have the meanings given them.
Sec. 2. Minnesota Statutes 2010, section 45.25, is amended by adding a subdivision to
1.26 Subd. 2a. Classroom course. "Classroom course" means an educational process
1.27based on no geographical separation of instructor and learner.
Sec. 3. Minnesota Statutes 2010, section 45.25, is amended by adding a subdivision to
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
Sec. 4. Minnesota Statutes 2010, section 45.25, is amended by adding a subdivision to
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
Sec. 5. Minnesota Statutes 2010, section 45.30, is amended by adding a subdivision to
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.
Sec. 6. Minnesota Statutes 2010, section 45.30, subdivision 7, is amended to read:
Subd. 7. Courses open to all. (a)
All course offerings must be open to any
interested individuals. Access may be restricted by the education provider based on class
size only, except that access to a course offering sponsored by, offered by, or affiliated with
an insurance company or agency may be restricted to agents of the company or agency.
Courses must not be approved if attendance is restricted to any particular group of people,
except 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.
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
Sec. 8. Minnesota Statutes 2010, section 45.35, is amended to read:
Each course of study, except self-study courses, must be conducted in a classroom or
other facility that is adequate to comfortably accommodate the faculty and the number
of students enrolled. The education provider may limit the number of students enrolled
in a course. Approved courses must not be held on the premises of a company doing
business 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
Sec. 9. Minnesota Statutes 2010, section 60A.06, subdivision 3, is amended to read:
Subd. 3. Limitation on combination policies.
(a) Unless specifically authorized by
subdivision 1, clause (4), it is unlawful to combine in one policy coverage permitted by
subdivision 1, clauses (4) and (5)(a). This subdivision does not prohibit the simultaneous
sale of these products, but the sale must involve two separate and distinct policies.
(b) This subdivision does not apply to group policies.
(c) This subdivision does not apply to policies permitted by subdivision 1, clause
(4), that contain benefits providing acceleration of life, endowment, or annuity benefits
in advance of the time they would otherwise be payable, or to long-term care policies as
defined 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.
Sec. 10. Minnesota Statutes 2010, section 60A.19, subdivision 8, is amended to read:
Subd. 8. Insurance from unlicensed foreign companies.
Any person, firm, or
desiring to obtain insurance upon any property, interests, or risks of any nature
4.7 other than life insurance in this state in companies not authorized to do business in the
4.8 state 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,
agree to file with the commissioner of revenue all returns required under chapter 297I and
pay to the commissioner of revenue any amounts required to be paid under chapter 297I.
Upon that agreement, the commissioner of commerce shall issue a license, good for one
year. Insurance procured under the license is valid and the provisions of the policies are
considered to be in accordance, and construed as if identical in effect, with the standard
policy prescribed by the laws of this state. The insurers may enter the state to perform
any 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.
Sec. 11. Minnesota Statutes 2010, section 60A.196, is amended to read:
Unless the context otherwise requires, the following terms have the meanings given
them for the purposes of sections
(a) "Surplus lines insurance" means insurance placed with an insurer permitted
4.24 to transact the business of insurance in this state only pursuant to sections
4.25 60A.209 .
4.26 (b) "Eligible surplus lines insurer" means an insurer recognized as eligible to write
4.27 insurance business under sections
60A.209 but not licensed by any other
4.28 Minnesota law to transact the business of insurance.
4.29 (c) "Ineligible surplus lines insurer" means an insurer not recognized as an eligible
4.30 surplus lines insurer pursuant to sections
60A.209 and not licensed by any
4.31 other Minnesota law to transact the business of insurance. "Ineligible surplus lines
4.32 insurer" includes a risk retention group as defined under the Liability Risk Retention
4.33 Act, Public Law 99-563.
5.1 (d) "Surplus lines licensee" or "licensee" means a person licensed under sections
5.2 60A.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
5.4 (f) "Alien insurer" means any insurer which is incorporated or otherwise organized
5.5 outside 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
5.8 specific 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
5.18 (d) "Eligible surplus lines insurer" means a nonadmitted insurer recognized as
5.19eligible to write insurance business under sections
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
5.24(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
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
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
6.27(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
7.15(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
7.25EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
7.26that go into effect after July 20, 2011.
Sec. 12. Minnesota Statutes 2010, section 60A.198, is amended to read:
7.2860A.198 TRANSACTION OF
SURPLUS LINES NONADMITTED
Subdivision 1. License required.
A person, as defined in section
, shall not act in any other manner as an agent or broker in the transaction of
surplus lines nonadmitted
insurance unless licensed under sections
A surplus lines license is not required for a licensed agent who assists in the placement
surplus lines nonadmitted
insurance with a surplus lines
. 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
Subd. 2. Compliance with statutory provisions.
A person shall not offer, solicit,
make a quotation on, sell, or issue a policy of insurance, binder, or any other evidence
of insurance with
an eligible or ineligible surplus lines a nonadmitted
insurer, except in
compliance with sections
. This subdivision does not apply when an
8.8insured's home state is a state other than Minnesota.
Subd. 3. Procedure for obtaining license.
A person licensed as an agent in this
state pursuant to other law may obtain a surplus lines license by doing the following:
(a) filing an application in the form and with the information the commissioner
may reasonably require to determine the ability of the applicant to act in accordance
(b) maintaining an agent's license in this state;
(c) registering with the association created pursuant to section
(d) agreeing to file with the commissioner of revenue all returns required by chapter
297I and paying to the commissioner of revenue all amounts required under chapter 297I;
(e) agreeing to file all documents required pursuant to section
and to pay
the stamping fee assessed pursuant to section
60A.2085, subdivision 7
(f) paying a fee as prescribed by section
Licensee's Broker's powers.
A surplus lines
any or all of the following:
(a) place insurance on risks in this state with eligible surplus lines insurers;
(b) place insurance on risks in this state with ineligible surplus lines insurers in strict
compliance with section
. If the insurance is provided through the participation of
surplus lines nonadmitted
insurers and the
has reason to believe
that a substantial portion of the insurance would be assumed by eligible surplus lines
insurers, then with respect to the ineligible surplus lines insurers, the insured or the
insured's representative shall be informed as provided in section
60A.209, subdivision 1
clause (a); or
(c) engage in any other acts expressly or implicitly authorized by sections
and the other insurance laws.
Subd. 5. Disclosures.
Before placement of insurance with an eligible surplus
lines insurer, a surplus lines
shall inform an insured or the insured's
representative that coverage may be placed in conformance with sections
with an insurer not licensed in this state and that payment of loss is not
guaranteed 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.
Sec. 13. Minnesota Statutes 2010, section 60A.199, subdivision 1, is amended to read:
Subdivision 1. Examination of books and records.
If the commissioner considers
it necessary, the commissioner may examine the books and records of a surplus lines
to determine whether the
is conducting business
in accordance with sections
. For the purposes of facilitating
shall allow the commissioner free access at reasonable
times to all of the
books and records relating to the transactions to
apply. If an examination is conducted, the cost of the
examination 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.
Sec. 14. Minnesota Statutes 2010, section 60A.201, is amended to read:
9.2360A.201 PLACEMENT OF INSURANCE BY
Subdivision 1. Restrictions.
Insurance shall not be placed by the surplus lines
an eligible or ineligible surplus lines a nonadmitted
coverage is available from a licensed insurer.
Subd. 2. Availability of other coverage; presumption.
There shall be a rebuttable
presumption that the following coverages are available from a licensed insurer:
(a) all mandatory automobile insurance coverages required by chapter 65B;
(b) private passenger automobile physical damage coverage;
(c) homeowners and property insurance on owner-occupied dwellings whose value
is less than $500,000. This figure shall be changed annually by the commissioner by the
same percentage as the Consumer Price Index for the Minneapolis-St. Paul Metropolitan
Area is changed;
(d) any coverage readily available from three or more licensed insurers unless the
licensed insurers quote a premium and terms not competitive with a premium and terms
quoted by an eligible surplus lines insurer; and
(e) workers' compensation insurance, except excess workers' compensation insurance
which is not available from the Workers' Compensation Reinsurance Association.
Subd. 3. Unavailability of other coverage; presumption.
There shall be a
rebuttable presumption that the following coverages are unavailable from a licensed
(a) coverages where one portion of the risk is acceptable to licensed insurers but
another portion of the same risk is not acceptable. The entire coverage may be placed with
eligible surplus lines insurers if it can be shown that the eligible surplus lines insurer will
accept the entire coverage but not the rejected portion alone; and
(b) any coverage that the
is unable to procure after diligent search
among 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.
Sec. 15. Minnesota Statutes 2010, section 60A.202, is amended to read:
10.2960A.202 EVIDENCE OF PLACEMENT OF INSURANCE BY
Subdivision 1. Restriction.
Only a surplus lines
shall issue evidence
of placement of insurance with
an eligible or ineligible surplus lines a nonadmitted
Subd. 2. Written communication of coverage to be delivered.
shall, within seven working days after the date on which the risk was bound or the insured
or applicant was advised that coverage has been or will be obtained, deliver to the insured
or the insured's representative a policy, a written binder, a certificate or other written
evidence of insurance placed with
an eligible or ineligible surplus lines a nonadmitted
Subd. 3. Contents of written communication.
The written communication
showing that insurance has been obtained shall identify all known
insurers directly assuming any risk of loss. If there is more than one
surplus lines nonadmitted
insurer, any document issued or certified by the
pursuant to subdivision 2 shall specify, to the extent known by the
whether the obligation is joint or several, and if the obligation is several, the proportion of
the 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.
Sec. 16. Minnesota Statutes 2010, section 60A.203, is amended to read:
11.1560A.203 RETENTION OF RECORDS.
Each surplus lines
shall keep a separate account of each transaction
entered into pursuant to sections
. Evidence of these transactions shall
be documented in the form and manner designated by the commissioner and retained by
for a minimum of five years. The forms must be readily available
for 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.
Sec. 17. Minnesota Statutes 2010, section 60A.204, subdivision 2, is amended to read:
Subd. 2. Regulation of fees and commissions.
A surplus lines
may charge a fee and commission, in addition to the premium, that is not excessive or
shall maintain complete documentation of all fees
and commissions charged.
11.28EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
11.29that go into effect after July 20, 2011.
Sec. 18. Minnesota Statutes 2010, section 60A.205, subdivision 1, is amended to read:
Subdivision 1. Authorization.
A surplus lines
may be compensated
by an eligible surplus lines insurer and the
may compensate a licensed
agent in this state for obtaining
surplus lines nonadmitted
insurance business. A licensed
agent authorized by the
may collect a premium on behalf of the
, and as between the insured and the
considered to have received the premium if the premium payment has been made to
12.8EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
12.9that go into effect after July 20, 2011.
Sec. 19. Minnesota Statutes 2010, section 60A.205, subdivision 2, is amended to read:
Subd. 2. Consequences of receipt.
If an eligible surplus lines insurer has assumed a
risk, and if the premium for that risk has been received by the
the insurance, then as between the insurer and the insured, the insurer shall be considered
to have received the premium due to it for the coverage and shall be liable to the insured
for any loss covered by the insurance and for the unearned premium upon cancellation of
the insurance, regardless of whether the
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.
Sec. 20. Minnesota Statutes 2010, section 60A.206, subdivision 1, is amended to read:
Subdivision 1. Insurers to be recognized by commissioner.
A surplus lines
surplus lines nonadmitted
insurance only with insurers
which are in a stable and unimpaired financial condition. An insurer recognized by the
commissioner as an eligible surplus lines insurer pursuant to subdivision 2 shall be
considered to meet the requirements of this subdivision. Recognition as an eligible surplus
lines insurer shall be conditioned upon the insurers continued compliance with sections
12.27EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
12.28that go into effect after July 20, 2011.
Sec. 21. Minnesota Statutes 2010, section 60A.206, subdivision 3, is amended to read:
Subd. 3. Standards to be met by insurers.
(a) The commissioner shall recognize
the insurer as an eligible surplus lines insurer when satisfied that the insurer is in a stable,
unimpaired financial condition and that the insurer is qualified to provide coverage in
compliance with sections
. If filed with full supporting documentation
before July 1 of any year, applications submitted under subdivision 2 shall be acted upon
by the commissioner before December 31 of the year of submission.
(b) The commissioner shall not authorize
an a foreign
insurer as an eligible surplus
lines 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
13.7 otherwise, to its policyholders, its creditors, or the public. Each alien surplus lines
13.8 insurer shall have current financial data filed with the National Association of Insurance
13.9 Commissioners 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.
(c) Eligible surplus lines insurers domiciled within the United States shall file an
annual 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
and are subject to section
60A.03, subdivision 5
, in regard to those requirements. The
commissioner also has the powers provided in section
60A.13, subdivision 2
, in regard
to eligible surplus lines insurers.
(d) Eligible surplus lines insurers domiciled outside the United States shall file
an annual statement on the standard nonadmitted insurers information office financial
reporting format as prescribed by the National Association of Insurance Commissioners
and 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.
Sec. 22. Minnesota Statutes 2010, section 60A.207, is amended to read:
14.660A.207 POLICIES TO INCLUDE NOTICE.
Each policy, cover note, or instrument evidencing
surplus lines nonadmitted
insurance from an eligible surplus lines insurer which is delivered to an insured or a
representative of an insured shall have printed, typed, or stamped upon its face in not less
than 10 point type, the following notice: "THIS INSURANCE IS ISSUED PURSUANT
TO THE MINNESOTA SURPLUS LINES INSURANCE ACT. THE INSURER IS AN
ELIGIBLE SURPLUS LINES INSURER BUT IS NOT OTHERWISE LICENSED BY
THE STATE OF MINNESOTA. IN CASE OF INSOLVENCY, PAYMENT OF CLAIMS
IS 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.
Sec. 23. Minnesota Statutes 2010, section 60A.208, is amended to read:
LICENSEE BROKER ASSOCIATION.
Licensee's Broker's right to associate.
may associate and the commissioner may register the association for one or more
of the following purposes:
(a) advising the commissioner as to the availability of
surplus lines nonadmitted
coverage and market practices and standards for
surplus lines nonadmitted
(b) collecting and furnishing records and statistics; or
(c) submitting recommendations regarding administration of sections
Subd. 2. Filing requirements.
(a) Each association shall file with the commissioner
for approval all of the following:
(1) a copy of the association's constitution and articles of agreement or association,
or the association's certificate of incorporation and bylaws and any rules governing the
association's activities; and
(2) an agreement that, as a condition of continued registration under subdivision 1,
the commissioner may examine the association.
(b) Each association shall file with the commissioner and keep current all of the
(1) a list of members; and
(2) the name and address of a resident of this state upon whom notices or orders of
the commissioner or process issued by the commissioner may be served.
Subd. 3. Commissioner's powers; suspension of registration.
may refuse to register, or may suspend or revoke the registration of an association for any
of the following reasons:
(a) it reasonably appears that the association will not be able to carry out the
purposes of sections
(b) the association fails to maintain and enforce rules which will assure that
members of the association and persons associated with those members comply with
, other applicable chapters of the insurance laws and rules
promulgated under either;
(c) the rules of the association do not assure a fair representation of its members in
the selection of directors and in the administration of its affairs;
(d) the rules of the association do not provide for an equitable allocation of
reasonable dues, fees, and other charges among members;
(e) the rules of the association impose a burden on competition; or
(f) the association fails to meet other applicable requirements prescribed in sections
Subd. 4. Membership limited to
An association shall deny
membership to any person who is not a
Subd. 5. Association is voluntary.
may be compelled to join
an association as a condition of receiving a license or continuing to be licensed under
Subd. 6. Financial statement to be filed.
Each association shall annually file a
certified audited financial statement.
Subd. 7. Reports and recommendations by the association.
An association may
submit reports and make recommendations to the commissioner regarding the financial
condition of any eligible surplus lines insurer. These reports and recommendations shall
not be considered to be public information. There shall not be liability on the part of, or a
cause of action of any nature shall not arise against, eligible surplus lines insurers, the
association or its agents or employees, the directors, or the commissioner or authorized
representatives of the commissioner, for statements made by them in any reports or
recommendations made under this subdivision.
Subd. 8. Operating assessment.
(a) Upon request from the association, the
commissioner may approve the levy of an assessment of not more than one-half of one
percent of premiums charged pursuant to sections
of the association to the extent that the operation relieves the commissioner of duties
otherwise required of the commissioner pursuant to sections
assessment so approved may be subtracted from the premium tax owed by the
under chapter 297I.
(b) The association may revoke the membership and the commissioner may revoke
the license in this state, of any
who fails to pay an assessment when due, if
the 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.
Sec. 24. Minnesota Statutes 2010, section 60A.2085, subdivision 1, is amended to read:
Subdivision 1. Association created; duties.
There is hereby created a nonprofit
association to be known as the Surplus Lines Association of Minnesota. The association
is not a state agency for purposes of chapter 16A, 16B, 16C, or 43A. All surplus lines
are members of this association. Section
does not apply to
the association created pursuant to the provisions of this section. The association shall
perform its functions under the plan of operation established under subdivision 3 and must
exercise its powers through a board of directors established under subdivision 2 as set
forth in the plan of operation. The association shall be authorized and have the duty to:
(1) receive, record, and stamp all
surplus lines nonadmitted
that surplus lines
are required to file with the association;
(2) prepare and deliver monthly to the commissioners of revenue and commerce a
report regarding surplus lines business. The report must include a list of all the business
procured during the preceding month, in the form the commissioners prescribe;
(3) educate its members regarding the surplus lines law of this state including
insurance tax responsibilities and the rules and regulations of the commissioners of
revenue and commerce relative to
surplus lines nonadmitted
(4) communicate with organizations of agents, brokers, and admitted insurers with
respect to the proper use of the surplus lines market;
(5) employ and retain persons necessary to carry out the duties of the association;
(6) borrow money necessary to effect the purposes of the association and grant a
security interest or mortgage in its assets, including the stamping fees charged pursuant to
subdivision 7 in order to secure the repayment of any such borrowed money;
(7) enter contracts necessary to effect the purposes of the association;
(8) provide other services to its members that are incidental or related to the
purposes of the association;
(9) form and organize itself as a nonprofit corporation under chapter 317A, with the
powers set forth in section
that are not otherwise limited by this section or in
its articles, bylaws, or plan of operation;
(10) file such applications and take such other action as necessary to establish and
maintain the association as tax exempt pursuant to the federal income tax code;
(11) recommend to the commissioner of commerce revisions to Minnesota law
relating to the regulation of
surplus lines nonadmitted
insurance in order to improve the
efficiency and effectiveness of that regulation; and
(12) take other actions reasonably required to implement the provisions of this
17.17EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
17.18that go into effect after July 20, 2011.
Sec. 25. Minnesota Statutes 2010, section 60A.2085, subdivision 3, is amended to read:
Subd. 3. Plan of operation.
(a) The plan of operation shall provide for the
formation, operation, and governance of the association as a nonprofit corporation under
chapter 317A. The plan of operation must provide for the election of a board of directors
by the members of the association. The board of directors shall elect officers as provided
for in the plan of operation. The plan of operation shall establish the manner of voting and
may weigh each member's vote to reflect the annual
surplus lines nonadmitted
premium written by the member. Members employed by the same or affiliated employers
may consolidate their premiums written and delegate an individual officer or partner
to represent the member in the exercise of association affairs, including service on the
board of directors.
(b) The plan of operation shall provide for an independent audit once each year of all
the books and records of the association and a report of such independent audit shall be
made to the board of directors, the commissioner of revenue, and the commissioner of
commerce, with a copy made available to each member to review at the association office.
(c) The plan of operation and any amendments to the plan of operation shall be
submitted to the commissioner and shall be effective upon approval in writing by the
commissioner. The association and all members shall comply with the plan of operation or
any amendments to it. Failure to comply with the plan of operation or any amendments
shall constitute a violation for which the commissioner may issue an order requiring
discontinuance of the violation.
(d) If the interim board of directors fails to submit a suitable plan of operation
within 60 days following the creation of the interim board, or if at any time thereafter the
association fails to submit required amendments to the plan, the commissioner may submit
to the association a plan of operation or amendments to the plan, which the association
must follow. The plan of operation or amendments submitted by the commissioner shall
continue in force until amended by the commissioner or superseded by a plan of operation
or amendment submitted by the association and approved by the commissioner. A plan
of operation or an amendment submitted by the commissioner constitutes an order of
18.14EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
18.15that go into effect after July 20, 2011.
Sec. 26. Minnesota Statutes 2010, section 60A.2085, subdivision 7, is amended to read:
Subd. 7. Stamping fee.
The services performed by the association shall be
funded by a stamping fee assessed for each premium-bearing document submitted to
the association. The stamping fee shall be established by the board of directors of the
association from time to time. The stamping fee shall be paid by the insured to the surplus
and remitted to the association by the surplus lines
the 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.
Sec. 27. Minnesota Statutes 2010, section 60A.2085, subdivision 8, is amended to read:
Subd. 8. Data classification.
Unless otherwise classified by statute, a temporary
classification under section
, or federal law, information obtained by the
commissioner from the association is public, except that any data identifying insureds or
the Social Security number of a
or any information derived therefrom is
private data on individuals or nonpublic data as defined in section
9 and 12.
18.32EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
18.33that go into effect after July 20, 2011.
Sec. 28. Minnesota Statutes 2010, section 60A.2086, subdivision 1, is amended to read:
Subdivision 1. Submission of documents to Surplus Lines Association of
(a) A surplus lines
shall submit every insurance
policy or contract issued under the
license to the Surplus Lines
Association of Minnesota for recording and stamping. The submission and stamping must
be effected through electronic means. The submission must include:
(1) the name of the insured;
(2) a description and location of the insured property or risk;
(3) the amount insured;
(4) the gross premiums charged or returned;
(5) the name of the
surplus lines nonadmitted
insurer from whom coverage has
(6) the kind or kinds of insurance procured; and
(7) the amount of premium subject to tax.
(b) The submission of insurance policies or contracts to the Surplus Lines
Association of Minnesota constitutes a certification by the surplus lines
by the insurance producer who presented the risk to the surplus lines
placement as a surplus lines risk, that the insurance policies or contracts were procured in
accordance with sections
19.20EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
19.21that go into effect after July 20, 2011.
Sec. 29. Minnesota Statutes 2010, section 60A.2086, subdivision 2, is amended to read:
Subd. 2. Stamping requirement; penalty.
(a) It shall be unlawful for an insurance
agent, broker, or surplus lines
to deliver in this state any
insurance policy or contract unless the insurance document is stamped by the
licensee's surplus lines broker's
failure to comply with the requirements of
this subdivision shall not affect the validity of the coverage.
(b) Any insurance agent
or surplus lines
who delivers in this
state any insurance policy or contract that has not been stamped by the association shall be
subject to a penalty payable to the commissioner as follows:
(1) $50 for delivery of the first unstamped policy;
(2) $250 for delivery of a second unstamped policy; and
(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.
Sec. 30. Minnesota Statutes 2010, section 60A.209, subdivision 1, is amended to read:
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
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
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
(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, as provided under chapter
297I, 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
20.27EFFECTIVE DATE.This section is effective for nonadmitted insurance policies
20.28that go into effect after July 20, 2011.
Sec. 31. Minnesota Statutes 2010, section 60K.56, subdivision 6, is amended to read:
Subd. 6. Minimum education requirement.
Each person subject to this section
shall complete a minimum of 24 credit hours of courses accredited by the commissioner
during each licensing period. No more than one-half of the credit hours per licensing
period required under this section may be credited to a person for attending courses either
sponsored by, offered by, or affiliated with an insurance company or its agents. For the
purposes of this subdivision, a course provided by a bona fide insurance trade association
is not considered to be sponsored by, offered by, or affiliated with an insurance company
or its agents regardless of the location of the course offering. A licensee must obtain three
hours of the credit hours per licensing period from a class or classes in the area of ethics.
Courses sponsored by, offered by, or affiliated with an insurance company or agent may
restrict 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.
Sec. 32. Minnesota Statutes 2010, section 62A.095, subdivision 1, is amended to read:
Subdivision 1. Applicability.
shall may not
be offered, sold,
or issued to a resident of this state, or to cover a resident of this state, unless the health
plan complies with subdivision 2.
(b) Health plans providing benefits under health care programs administered by the
commissioner of human services are not subject to the limits described in subdivision
2 but are subject to the right of subrogation provisions under section
lien provisions under section
256D.03, subdivision 8
For purposes of this section, "health plan" includes coverage that is excluded under
, subdivision 3, clauses (4), (6),
(7), (8), (9),
Sec. 33. Minnesota Statutes 2010, section 62A.318, subdivision 17, is amended to read:
Subd. 17. Types of plans.
Medicare select policies and certificates offered by the
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
issued in this state, the applicant must be provided with an explanation of coverage for
both 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
with the opportunity of purchasing
either a Medicare select basic or a Medicare select
21.27 extended basic policy such coverage if offered by the issuer
. The basic plan may also
include any of the optional benefit riders authorized by section
. Preventive care
provided by Medicare select policies or certificates must be provided as set forth in section
, except that the benefits are as defined in chapter 62D.
Sec. 34. Minnesota Statutes 2010, section 62E.14, subdivision 3, is amended to read:
Subd. 3. Preexisting conditions.
person who obtains coverage pursuant to
shall be is not
covered for any preexisting condition during the first six months
of coverage under the state plan if the person was diagnosed or treated for that condition
during the 90 days immediately preceding the date the application was received by the
writing carrier, except as provided under subdivisions 3a,
4, 4a, 4b, 4c, 4d, 4e,
5, 6, and 7
Sec. 35. Minnesota Statutes 2010, section 62E.14, is amended by adding a subdivision
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.
Sec. 36. Minnesota Statutes 2010, section 62J.81, subdivision 1, is amended to read:
Subdivision 1. Required disclosure of estimated payment.
(a) A health care
provider, as defined in section
62J.03, subdivision 8
, or the provider's designee as agreed to
by that designee, shall, at the request of a consumer, and at no cost to the consumer or the
consumer's employer, provide that consumer with a good faith estimate of the allowable
payment the provider has agreed to accept from the consumer's health plan company
for the services specified by the consumer, specifying the amount of the allowable
payment due from the health plan company. Health plan companies must allow contracted
providers, or their designee, to release this information. If a consumer has no applicable
public or private coverage, the health care provider must give the consumer, and at no
cost to the consumer, a good faith estimate of the average allowable reimbursement the
provider accepts as payment from private third-party payers for the services specified by
the consumer and the estimated amount the noncovered consumer will be required to pay.
Payment information provided by a provider, or by the provider's designee as agreed to by
that designee, to a patient pursuant to this subdivision does not constitute a legally binding
estimate of the allowable charge for or cost to the consumer of services.
(b) A health plan company, as defined in section
, subdivision 10, shall, at the
request of an enrollee intending to receive specific health care services
or the enrollee's
designee, provide that enrollee with a good faith estimate of the allowable amount the
health plan company has contracted for with a specified provider within the network
as total payment for a health care service specified by the enrollee and the portion of
the allowable amount due from the enrollee and the enrollee's out-of-pocket costs. An
estimate provided to an enrollee under this paragraph is not a legally binding estimate of
the allowable amount or enrollee's out-of-pocket cost.
23.9EFFECTIVE DATE.This section is effective retroactively from January 1, 2011.
Sec. 37. Minnesota Statutes 2010, section 62L.03, subdivision 3, is amended to read:
Subd. 3. Minimum participation and contribution.
(a) A small employer that has
at least 75 percent of its eligible employees who have not waived coverage participating in
a health benefit plan and that contributes at least 50 percent toward the cost of coverage of
each eligible employee must be guaranteed coverage on a guaranteed issue basis from
any health carrier participating in the small employer market. The participation level
of eligible employees must be determined at the initial offering of coverage and at the
renewal date of coverage. A health carrier must not increase the participation requirements
applicable to a small employer at any time after the small employer has been accepted for
coverage. For the purposes of this subdivision, waiver of coverage includes only waivers
due to: (1) coverage under another group health plan; (2) coverage under Medicare Parts
A and B; or
coverage under MCHA permitted under section
62E.141 ; or (4)
under medical assistance under chapter 256B or general assistance medical care under
(b) If a small employer does not satisfy the contribution or participation requirements
under this subdivision, a health carrier may voluntarily issue or renew individual health
plans, or a health benefit plan which must fully comply with this chapter. A health carrier
that provides a health benefit plan to a small employer that does not meet the contribution
or participation requirements of this subdivision must maintain this information in its files
for audit by the commissioner. A health carrier may not offer an individual health plan,
purchased through an arrangement between the employer and the health carrier, to any
employee unless the health carrier also offers the individual health plan, on a guaranteed
issue basis, to all other employees of the same employer. An arrangement permitted under
, subdivision 2, paragraph (k), is not an arrangement between the employer
and the health carrier for purposes of this paragraph.
(c) Nothing in this section obligates a health carrier to issue coverage to a small
employer that currently offers coverage through a health benefit plan from another health
carrier, unless the new coverage will replace the existing coverage and not serve as one
of two or more health benefit plans offered by the employer. This paragraph does not
apply if the small employer will meet the required participation level with respect to
the new coverage.
Sec. 38. Minnesota Statutes 2010, section 72A.20, subdivision 24, is amended to read:
Subd. 24. Cancellations and nonrenewals. (a)
No insurer shall
cancel or fail to
24.9 renew an individual life or individual health policy or an individual nonprofit health
24.10 service 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
named insured policy owner
, at the
address shown on the policy or subscriber
24.14 contract policy owner's last known address,
at least 30 days before lapse, final notice of
the 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
insured 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
subdivision must also
be sent to the named insured at the named
insured's last known
, if any, and to the owner's last known address
Proof of mailing of the notice of lapse under paragraph (a) or (b)
for failure to
pay the premium before the expiration of the grace period is sufficient proof that notice
required in this subdivision has been given.
This subdivision does not apply to a life or health insurance policy or contract
upon which premiums are paid at a monthly interval or less and that contains any grace
period required by statute for the payment of premiums during which time the insurance
continues in force.
Sec. 39. Minnesota Statutes 2010, section 72B.041, subdivision 5, is amended to read:
Subd. 5. Exceptions.
(a) An individual who applies for an adjuster license in this
state who is or was licensed in another state for the same lines of authority based on
an adjuster examination is not required to complete a prelicensing examination. This
exemption is only available if the person is currently licensed in another state or if that
state license has expired and the application is received by this state within 90 days of
expiration. The applicant must provide certification from the other state that the applicant's
license is currently in good standing or was in good standing at the time of expiration
or certification from the other state that its producer database records, maintained by
the NAIC, its affiliates, or its subsidiaries, indicate that the applicant or the applicant's
company is or was licensed in good standing. The certification must be of a license with
the same line of authority for which the individual has applied.
(b) A person licensed as an adjuster in another state based on an adjuster examination
who establishes legal residency in this state must make application within 90 days to
become a resident adjuster licensee pursuant to this section, with the exception that no
prelicensing examination is required of this person.
A person who has held a license of any given class or in any field or fields within
25.17 three years prior to the application shall be entitled to a renewal of the license in the same
25.18 class or in the same fields without taking an examination.
A person applying for a license as a crop hail adjuster shall not be required to
comply 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.
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.
Sec. 41. Minnesota Statutes 2010, section 79A.06, subdivision 5, is amended to read:
Subd. 5. Private employers who have ceased to be self-insured.
employers who have ceased to be private self-insurers shall discharge their continuing
obligations to secure the payment of compensation which is accrued during the period of
self-insurance, for purposes of Laws 1988, chapter 674, sections 1 to 21, by compliance
with all of the following obligations of current certificate holders:
(1) Filing reports with the commissioner to carry out the requirements of this chapter;
(2) Depositing and maintaining a security deposit for accrued liability for the
payment of any compensation which may become due, pursuant to chapter 176. However,
if a private employer who has ceased to be a private self-insurer purchases an insurance
policy from an insurer authorized to transact workers' compensation insurance in this state
which provides coverage of all claims for compensation arising out of injuries occurring
during the entire period the employer was self-insured, whether or not reported during
that period, the policy will:
(i) discharge the obligation of the employer to maintain a security deposit for the
payment of the claims covered under the policy;
(ii) discharge any obligation which the self-insurers' security fund has or may have
for payment of all claims for compensation arising out of injuries occurring during the
period the employer was self-insured, whether or not reported during that period; and
(iii) discharge the obligations of the employer to pay any future assessments to
the self-insurers' security fund; provided, however, that a member that terminates its
self-insurance authority on or after August 1, 2010, shall be liable for an assessment under
paragraph (b). The actuarial opinion shall not take into consideration any transfer of the
member's liabilities to an insurance policy if the member obtains a replacement policy as
described in this subdivision within one year of the date of terminating its self-insurance.
A private employer who has ceased to be a private self-insurer may instead buy an
insurance policy described above, except that it covers only a portion of the period of time
during which the private employer was self-insured; purchase of such a policy discharges
any obligation that the self-insurers' security fund has or may have for payment of all
claims for compensation arising out of injuries occurring during the period for which the
policy provides coverage, whether or not reported during that period.
A policy described in this clause may not be issued by an insurer unless it has
previously been approved as to the insurer,
and substance by the commissioner; and
(3) Paying within 30 days all assessments of which notice is sent by the security
fund, for a period of seven years from the last day its certificate of self-insurance was in
effect. Thereafter, the private employer who has ceased to be a private self-insurer may
either: (i) continue to pay within 30 days all assessments of which notice is sent by the
security fund until it has no incurred liabilities for the payment of compensation arising
out of injuries during the period of self-insurance; or (ii) pay the security fund a cash
payment equal to four percent of the net present value of all remaining incurred liabilities
for the payment of compensation under sections
as certified by a
member of the casualty actuarial society. Assessments shall be based on the benefits paid
by the employer during the calendar year immediately preceding the calendar year in
which the employer's right to self-insure is terminated or withdrawn.
(b) With respect to a self-insurer who terminates its self-insurance authority after
April 1, 1998, that member shall obtain and file with the commissioner an actuarial
opinion of its outstanding liabilities as determined by an associate or fellow of the
Casualty Actuarial Society within 120 days of the date of its termination. If the actuarial
opinion is not timely filed, the self-insurers' security fund may, at its discretion, engage
the services of an actuary for this purpose. The expense of this actuarial opinion must be
assessed against and be the obligation of the self-insurer. The commissioner may issue
a certificate of default against the self-insurer for failure to pay this assessment to the
self-insurers' security fund as provided by section
79A.04, subdivision 9
. The opinion
may discount liabilities up to four percent per annum to net present value. Within 60 days
after notification of approval of the actuarial opinion by the commissioner, the exiting
member shall pay to the security fund an amount determined as follows: a percentage will
be determined by dividing the security fund's members' deficit as determined by the most
recent audited financial statement of the security fund by the total actuarial liability of all
members of the security fund as calculated by the commissioner within 30 days of the
exit date of the member. This quotient will then be multiplied by that exiting member's
total future liability as contained in the exiting member's actuarial opinion. If the payment
is not made within 30 days of the notification, interest on it at the rate prescribed by
must be paid by the former member to the security fund until the principal
amount is paid in full.
(c) A former member who terminated its self-insurance authority before April 1,
1998, who has paid assessments to the self-insurers' security fund for seven years, and
whose annualized assessment is $15,000 or less, may buy out of its outstanding liabilities
to the self-insurers' security fund by an amount calculated as follows:
the indemnity case reserves at the time of the calculation, multiplied by the then current
self-insurers' security fund annualized assessment rate.
(d) A former member who terminated its self-insurance authority before April 1,
1998, and who is paying assessments within the first seven years after ceasing to be
self-insured under paragraph (a), clause (3), may elect to buy out its outstanding liabilities
to the self-insurers' security fund by obtaining and filing with the commissioner an
actuarial opinion of its outstanding liabilities as determined by an associate or fellow of
the Casualty Actuarial Society. The opinion must separate liability for indemnity benefits
from liability for medical benefits, and must discount each up to four percent per annum to
net present value. Within 30 days after notification of approval of the actuarial opinion
by the commissioner, the member shall pay to the security fund an amount equal to 120
percent of that discounted outstanding indemnity liability, multiplied by the greater of the
average annualized assessment rate since inception of the security fund or the annual rate
at the time of the most recent assessment.
(e) A former member who has paid the security fund according to paragraphs (b) to
(d) and subsequently receives authority from the commissioner to again self-insure shall be
assessed under section
79A.12, subdivision 2
, only on indemnity benefits paid on injuries
that occurred after the former member received authority to self-insure again; provided
that the member furnishes verified data regarding those benefits to the security fund.
(f) In addition to proceedings to establish liabilities and penalties otherwise
provided, a failure to comply may be the subject of a proceeding before the commissioner.
An appeal from the commissioner's determination may be taken pursuant to the contested
case procedures of chapter 14 within 30 days of the commissioner's written determination.
Any current or past member of the self-insurers' security fund is subject to service of
process on any claim arising out of chapter 176 or this chapter in the manner provided by
, or as otherwise provided by law. The issuance of a certificate to self-insure
to the private self-insured employer shall be deemed to be the agreement that any process
which is served in accordance with this section shall be of the same legal force and effect
as if served personally within this state.
28.22EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 42. Minnesota Statutes 2010, section 79A.24, is amended by adding a subdivision
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
29.1EFFECTIVE DATE.This section is effective the day following final enactment.
Sec. 43. Minnesota Statutes 2010, section 79A.24, is amended by adding a subdivision
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.
Sec. 44. Minnesota Statutes 2010, section 82.641, subdivision 1, is amended to read:
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
a license as a closing agent to a person who qualifies for the license under the terms
of this chapter.
Sec. 45. Minnesota Statutes 2010, section 82B.11, subdivision 6, is amended to read:
Subd. 6. Temporary practice.
(a) The commissioner shall issue a license for
temporary practice as a real estate appraiser under subdivision 3, 4, or 5 to a person
certified or licensed by another state if:
(1) the property to be appraised is part of a federally related transaction and the
person is licensed to appraise property limited to the same transaction value or complexity
provided in subdivision 3, 4, or 5;
(2) the appraiser's business is of a temporary nature; and
(3) the appraiser registers with the commissioner to obtain a temporary license
before conducting appraisals within the state.
(b) The term of a temporary practice license is the lesser of:
(1) the time required to complete the assignment; or
, with one extension allowed
The appraiser may request one extension of no more than six months on a form
29.31 provided by the commissioner.
If more than 12 months are necessary to complete the
assignment, a new temporary application and fee is required.
Sec. 46. Minnesota Statutes 2010, section 82B.13, is amended by adding a subdivision
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
Sec. 47. Minnesota Statutes 2010, section 82B.14, is amended to read:
30.1382B.14 EXPERIENCE REQUIREMENT.
(a) As a prerequisite for licensing as a licensed real property appraiser, an applicant
must present evidence satisfactory to the commissioner that the person has obtained 2,000
hours of experience in real property appraisal obtained in no fewer than 12 months.
As a prerequisite for licensing as a certified residential real property appraiser, an
applicant must present evidence satisfactory to the commissioner that the person has
obtained 2,500 hours of experience in real property appraisal obtained in no fewer than
As a prerequisite for licensing as a certified general real property appraiser, an
applicant must present evidence satisfactory to the commissioner that the person has
obtained 3,000 hours of experience in real property appraisal obtained in no fewer than 30
months. At least 50 percent, or 1,500 hours, must be in nonresidential appraisal work.
(b) Each applicant for license under section
82B.11, subdivision 3
, 4, or 5, shall
give under oath a detailed listing of the real estate appraisal reports or file memoranda
for which experience is claimed by the applicant. Upon request, the applicant shall make
available to the commissioner for examination, a sample of appraisal reports that the
applicant has prepared in the course of appraisal practice.
(c) Notwithstanding section
45.22 , a college or university real estate course may be
30.31 approved 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
30.34 course was offered;
31.1 (3) the commissioner's approval is made to the same extent in terms of courses and
31.2 hours and with the same time limits as those specified by the Appraiser Qualifications
31.4 (d) (c)
Applicants may not receive credit for experience accumulated while
unlicensed, if the experience is based on activities which required a license under this
Experience for all classifications must be obtained after January 30, 1989,
and must be USPAP compliant.
Sec. 48. Minnesota Statutes 2010, section 82C.08, subdivision 2, is amended to read:
Subd. 2. Amounts.
(a) Each application for initial licensure shall be accompanied
by a fee of $5,000.
(b) Each application for renewal of the license must be received prior to
with the renewal fee of $2,500.
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.