Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1986, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1986
CHAPTER 455-S.F.No. 2078
An act relating to insurance; providing for government
immunity; requiring certain annual reports of property
and casualty insurers; prohibiting certain tying
arrangements; providing for remitting of certain
premiums; providing deposit requirements for domestic
companies; extending certain filing, approval, and
disapproval dates; creating a joint underwriting
association; requiring participation by insurers;
broadening fair plan coverage; regulating rates, forms
and cancellations; regulating medical malpractice
insurance to health care providers who are unable to
obtain the coverage in the voluntary market;
regulating malpractice actions against health care
providers; providing certification of expert review
and the waiver of privilege by health care providers;
requiring disclosure of experts; revising the statute
of limitations for medical malpractice claims by
minors; regulating claims for punitive damages;
changing the collateral source rule; providing for
discount of future damages; regulating civil actions;
limiting intangible loss; amending Minnesota Statutes
1984, sections 60A.06, by adding a subdivision;
60A.13, by adding a subdivision; 60A.25; 62A.02,
subdivisions 2 and 3; 62B.07, subdivisions 2 and 3;
62C.14, subdivision 10; 62E.14, by adding a
subdivision; 62F.01; 62F.02, subdivision 1; 62F.03,
subdivision 2; 62F.04, by adding a subdivision;
62G.16, subdivision 9; 65A.32; 65A.33; 65A.34,
subdivision 1; 65A.35, subdivisions 1 and 2; 65A.37;
65B.13; 65B.47, subdivision 1; 70A.04, subdivision 2;
70A.06, subdivisions 1 and 2; 70A.08, by adding a
subdivision; 70A.10; 70A.11; 72A.13, subdivision 1;
245.814; 398A.04, subdivision 6; 465.72; 466.01,
subdivision 1; 466.03, subdivision 4, and by adding
subdivisions; 466.05; 466.07, by adding a subdivision;
471.982, subdivision 3; 541.051; 541.15; 549.09,
subdivision 1; 549.21; 595.02, by adding a
subdivision; 604.02, subdivision 1, and by adding a
subdivision; Minnesota Statutes 1985 Supplement,
sections 3.736, subdivisions 1 and 3; 60A.10,
subdivision 1; and 62B.05; proposing coding for new
law in Minnesota Statutes, chapters 16B; 60A; 65B;
145; 317; 466; 541; 548; 549; and 604; proposing
coding for new law as Minnesota Statutes, chapter 62I;
repealing Minnesota Statutes 1984, section 70A.06,
subdivision 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1985 Supplement, section
3.736, subdivision 1, is amended to read:
Subdivision 1. [GENERAL RULE.] The state will pay
compensation for injury to or loss of property or personal
injury or death caused by an act or omission of any employee of
the state while acting within the scope of his office or
employment or peace officer who is not acting on behalf of a
private employer and who is acting in good faith pursuant to
section 629.40, subdivision 3, under circumstances where the
state, if a private person, would be liable to the claimant,
whether arising out of a governmental or proprietary function.
Nothing in this section waives the defense of judicial or
legislative immunity except to the extent provided in
subdivision 8.
Sec. 2. Minnesota Statutes 1985 Supplement, section 3.736,
subdivision 3, is amended to read:
Subd. 3. [EXCLUSIONS.] Without intent to preclude the
courts from finding additional cases where the state and its
employees should not, in equity and good conscience, pay
compensation for personal injuries or property losses, the
legislature declares that the state and its employees are not
liable for the following losses:
(a) Any loss caused by an act or omission of a state
employee exercising due care in the execution of a valid or
invalid statute or regulation;
(b) Any loss caused by the performance or failure to
perform a discretionary duty, whether or not the discretion is
abused;
(c) Any loss in connection with the assessment and
collection of taxes;
(d) Any loss caused by snow or ice conditions on any
highway or other public place or public sidewalk that does not
abut a publicly-owned building or a publicly-owned parking lot,
except when the condition is affirmatively caused by the
negligent acts of a state employee;
(e) Any loss caused by wild animals in their natural state;
(f) Any loss other than injury to or loss of property or
personal injury or death;
(g) Any loss caused by the condition of unimproved real
property owned by the state, which means land that the state has
not improved, and appurtenances, fixtures and attachments to
land that the state has neither affixed nor improved;
(h) Any loss incurred by a user within the boundaries of
the outdoor recreation system and arising from the construction,
operation, or maintenance of the system, as defined in section
86A.04, or from the clearing of land, removal of refuse, and
creation of trails or paths without artificial surfaces, or from
the construction, operation, or maintenance of a water access
site created by the iron range resources and rehabilitation
board, except that the state is liable for conduct that would
entitle a trespasser to damages against a private person.
(i) Any loss of benefits or compensation due under a
program of public assistance or public welfare, except where
state compensation for loss is expressly required by federal law
in order for the state to receive federal grants-in-aid;
(j) Any loss based on the failure of any person to meet the
standards needed for a license, permit, or other authorization
issued by the state or its agents;
(k) Any loss based on the usual care and treatment, or lack
of care and treatment, of any person at a state hospital or
state corrections facility where reasonable use of available
appropriations has been made to provide care;
(l) Any loss, damage, or destruction of property of a
patient or inmate of a state institution;
(m) Any loss for which recovery is prohibited by section
169.121, subdivision 9.
The state will not pay punitive damages.
Sec. 3. [16B.85] [RISK MANAGEMENT.]
Subdivision 1. [ALTERNATIVES TO CONVENTIONAL
INSURANCE.] In the event that the state is unable to obtain
certain types of insurance, or the commissioner determines
insurance to be unreasonably costly, the commissioner may
implement alternatives to the purchase of conventional
insurance. A mechanism for implementing possible alternatives
to conventional insurance is the risk management fund created in
subdivision 2.
Subd. 2. [RISK MANAGEMENT FUND.] A state risk management
fund is created. All state agencies which have had or may have
casualty claims against them with respect to the risks for which
the commissioner has implemented conventional insurance
alternatives shall contribute to the fund a portion of the money
appropriated to them. The commissioner shall determine the
proportionate share of each agency on the basis of the agency's
casualty claim experience as compared to other affected
agencies. The money in the fund to pay casualty claims arising
from state activities and for administrative costs, including
costs for the adjustment and defense of the claims, is
appropriated to the commissioner. Interest earned from the
investment of money in the fund shall be credited to the fund
and be available to the commissioner for the expenditures
authorized in this subdivision. The fund is exempt from the
provisions of section 16A.15, subdivision 1. In the event that
proceeds in the fund are insufficient to pay outstanding claims
and associated administrative costs, the commissioner, in
consultation with the commissioner of finance, may assess state
agencies participating in the fund amounts sufficient to pay the
costs. The commissioner shall determine the proportionate share
of the assessment of each agency on the basis of the agency's
casualty claim experience as compared to other affected agencies.
Sec. 4. Minnesota Statutes 1984, section 60A.06, is
amended by adding a subdivision to read:
Subd. 3. Unless specifically authorized by section 60A.06,
subdivision 1, clause (4), it is unlawful to combine in one
policy coverage permitted by section 60A.06, 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. This subdivision does not
apply to group policies.
Sec. 5. Minnesota Statutes 1985 Supplement, section
60A.10, subdivision 1, is amended to read:
Subdivision 1. [DOMESTIC COMPANIES.] (1) [DEPOSIT AS
SECURITY FOR ALL POLICYHOLDERS REQUIRED.] No company in this
state, other than farmers' mutual, or real estate title
insurance companies, shall do business in this state unless it
has on deposit with the commissioner, for the protection of both
its resident and nonresident policyholders, securities to an
amount, the actual market value of which, exclusive of interest,
shall never be less than $200,000 until July 1, 1986, $300,000
until July 1, 1987, $400,000 until July 1, 1988, and $500,000 on
and after July 1, 1988 or one-half the applicable financial
requirement set forth in section 60A.07, whichever is less. The
securities shall be retained under the control of the
commissioner as long as any policies of the depositing company
remain in force.
(2) [SECURITIES DEFINED.] For the purpose of this
subdivision, the word "securities" means bonds or other
obligations of, or bonds or other obligations insured or
guaranteed by, the United States, any state of the United
States, any municipality of this state, or any agency or
instrumentality of the foregoing.
(3) [PROTECTION OF DEPOSIT FROM LEVY.] No judgment creditor
or other claimant may levy upon any securities held on deposit
with, or for the account of, the commissioner. Upon the entry
of an order by a court of competent jurisdiction for the
rehabilitation, liquidation or conservation of any depositing
company as provided in chapter 60B, that company's deposit
together with any accrued income thereon shall be transferred to
the commissioner as rehabilitator, liquidator, or conservator.
Sec. 6. Minnesota Statutes 1984, section 60A.13, is
amended by adding a subdivision to read:
Subd. 8. [ANNUAL REPORTS.] Each insurer licensed to write
property and casualty insurance in this state, as a supplement
to the annual statement required by this section, shall submit a
report on a form furnished by the commissioner separately
showing its direct writings in Minnesota and in the United
States on: liquor liability, product liability, medical
malpractice, and any other line so designated by the
commissioner on January 1 of each year.
The supplemental reports must include the following data
for the previous year ending on the 31st day of December:
(1) direct premiums written;
(2) direct premiums earned;
(3) net investment income, including net realized capital
gains and losses, using appropriate estimates where necessary;
(4) incurred claims, developed as the sum, and with figures
provided for, of the following:
(a) dollar amount of claims closed with payment, plus
(b) reserves for reported claims at the end of the current
year, minus
(c) reserves for reported claims at the end of the previous
year, plus
(d) reserves for incurred but not reported claims at the
end of the current year, minus
(e) reserves for incurred but not reported claims at the
end of the previous year, plus
(f) reserves for loss adjustment expense at the end of the
current year, minus
(g) reserves for loss adjustment expense at the end of the
previous year;
(5) actual incurred expenses allocated separately to loss
adjustment, commissions, other acquisition costs, general office
expenses, taxes, licenses and fees, and all other expenses;
(6) net underwriting gain or loss; and
(7) net operation gain or loss, including net investment
income.
This report is due by the first of May of each year and the
report due May 1, 1987 must cover the last six months of 1986.
The commissioner shall annually compile and review all reports
submitted by insurers pursuant to this section. These filings
must be published and made available to any interested insured
or citizen.
Sec. 7. Minnesota Statutes 1984, section 60A.25, is
amended to read:
60A.25 [INSOLVENT COMPANIES, NOTIFICATION OF
POLICYHOLDERS.]
Subdivision 1. [NOTIFICATION OF POLICYHOLDERS.] Whenever
any foreign or domestic insurance company authorized to transact
the business of insurance in Minnesota is adjudicated insolvent,
or whenever its policies are declared null and void by court
order, the commissioner of commerce shall ascertain the names
and last known addresses of all Minnesota policyholders of said
company, and shall notify all Minnesota policyholders within 30
days of such adjudication or court order. In the case of
foreign insurers authorized to do business in this state, the
commissioner of commerce may elect to notify all of the
company's licensed agents in Minnesota with a directive that the
agents notify all insureds of the company's insolvency or that
its policies have been declared null and void.
Subd. 2. [REMITTANCE OF PREMIUMS.] Every agency contract
written by an insurance company writing property and casualty
insurance in Minnesota shall contain or be construed to contain
the following provision: "Notwithstanding any other provision
of this contract, the obligation of the agent to remit written
premiums to the company shall be changed upon the commencement
of any administrative or legal proceeding by any state against
the carrier regarding its financial condition. After the
commencement of the proceedings, the obligation of the agent to
remit premiums shall be confined to the premiums earned before
the commencement of the proceedings. The agent shall not owe or
remit to the company or to the liquidator or receiver any
premiums that are unearned as of the date of the commencement of
the delinquency proceedings, and any unearned premiums in the
possession of the agent on the date shall be returned promptly
by the agent to the insured or, with the approval of the
insured, be used to purchase new coverage for the insured with a
different insurer.
Sec. 8. [60A.29] [NONPROFIT RISK INDEMNIFICATION TRUST
ACT.]
Subdivision 1. [TITLE.] This section may be cited as the
"nonprofit risk indemnification trust act."
Subd. 2. [PURPOSE.] The purpose of this section is to
authorize the establishment of trust funds for the purpose of
indemnifying nonprofit beneficiary organizations and their
officers, directors, and agents for financial loss due to the
imposition of legal liability, and to regulate the operation of
trust funds established under this section.
Subd. 3. [APPROVAL OF COMMISSIONER.] No trust fund with
the purpose of indemnifying multiple nonprofit beneficiary
organizations shall be established without the prior approval of
the commissioner of the department of commerce. The
commissioner shall withhold approval of any trust fund that
fails to comply with the provisions and requirements of this
section.
Subd. 4. [ELIGIBLE BENEFICIARIES.] No organization,
corporation, agency, or program shall be a beneficiary of any
trust fund established under this section unless it is exempt
from taxation under section 501(c)(3) of the Internal Revenue
Code of 1954, as amended through December 30, 1985. No trust
fund established under this section shall agree to indemnify the
state of Minnesota, any political subdivision of the state, or
any hospital licensed pursuant to section 144.55. No trust fund
established under this section shall indemnify any beneficiary
for loss or damage to property permanently located outside the
boundaries of this state or for legal liabilities arising from
operations or activities occurring outside this state, except
where those operations or activities are of a nonroutine nature;
provided, however, that this restriction shall not apply to a
beneficiary which is incorporated under the laws of this state
and has its principal office located in this state.
Subd. 5. [INELIGIBLE RISKS.] No trust fund established
under this section shall indemnify any beneficiary for property
loss, liabilities incurred under the workers' compensation act,
or for benefits provided to employees pursuant to any medical,
dental, life, or disability income protection plan.
Subd. 6. [BENEFIT SCHEDULES.] Every trust fund established
under this section shall establish in its bylaws or plan of
operation a schedule of benefits, to be approved by the
commissioner, governing the indemnification of beneficiaries of
the trust. The schedule of benefits shall include all
conditions, limitations, and exclusions relevant to
indemnification.
Subd. 7. [INDEMNIFICATION AGREEMENTS.] Every trust fund
established under this section shall provide each of its
beneficiaries with a written indemnification agreement
specifying the rights and obligations of the trust fund and the
beneficiary under the agreement. Each form of indemnification
agreement shall be filed with and approved by the commissioner.
Subd. 8. [CONTRIBUTIONS.] The trust fund shall establish
contributions required of beneficiaries necessary to fund the
operations of the fund. All contribution schedules shall be
filed with and approved by the commissioner prior to use.
Contributions must be based on sound actuarial principles and be
adequate to fund the operation of the trust fund. Contributions
may not be excessive, in relation to the benefits provided, or
unfairly discriminatory.
Subd. 9. [MULTIPLE TRUST AGREEMENTS PROHIBITED.] No trust
fund established under this section shall enter into an
agreement with any other trust fund whereby the risks assumed by
each are pooled or shared.
Subd. 10. [BOARD OF TRUSTEES.] Every trust fund
established under this section shall be governed by a board of
no fewer than five trustees. The initial trustees need not be
appointed or elected by the beneficiaries of the trust fund.
During the second year following the creation of an authorized
trust fund, at least one-fourth of all its trustees in office
shall have been elected or appointed by the beneficiaries.
After the end of the second year following the creation of an
authorized trust fund, a majority of all trustees in office
shall have been elected or appointed by the beneficiaries. All
trustees serving during the first two years following the
creation of an authorized trust fund shall be elected or
appointed for one-year terms. All trustees serving thereafter
shall be elected or appointed for two-year terms, provided that
the trustees may be elected or appointed for one-year terms to
the extent necessary in order to create staggered terms. Any
trustee may be removed at any time, with or without cause, by a
majority vote of the beneficiaries. The board of trustees shall
meet no fewer than four times each year.
Subd. 11. [TRUSTEES; COMPENSATION.] No trustee shall be
paid a salary or receive other compensation for service as a
trustee, except that the bylaws or plan of operation may provide
for reimbursement for actual expenses incurred on behalf of the
trust fund and for the payment of a reasonable per diem amount
for attendance at meetings of the board.
Subd. 12. [BYLAWS; PLAN OF OPERATION.] The trustees of
each trust fund authorized under this section shall cause to be
adopted a set of bylaws or plan of operation which shall govern
the operation of the trust fund. All bylaws or plans of
operation or amendments to them are subject to prior approval by
the commissioner. The commissioner shall adopt rules governing
the content and approval of bylaws or plans of operation.
Subd. 13. [FINANCIAL STATEMENT; REPORT ON OPERATIONS.]
Every trust fund authorized under this section shall, by June 1
of every year, file with the commissioner a financial statement
for the previous year's operations. The financial statement
must include the opinion of a certified public accountant that
the statement was prepared in conformity with generally accepted
accounting principles. Also by June 1 of every year, every
trust fund must file with the commissioner, on forms provided by
the department, a report summarizing the trust fund's operations
during the previous year.
Subd. 14. [FINANCIAL STANDARDS.] Every authorized trust
fund shall have and maintain financial assets sufficient to
satisfy all current and future financial obligations and
responsibilities to beneficiaries. The commissioner shall adopt
rules establishing minimum financial standards for authorized
trust funds.
Subd. 15. [CONTRACTS; FEES.] Authorized trust funds may
enter into contracts with risk management service providers,
actuarial consultants, or other vendors as are necessary to
ensure the effective and efficient operation of the trust fund.
Fees paid to vendors for services provided must not be excessive.
Subd. 16. [REINSURANCE.] Authorized trust funds may insure
or reinsure their obligations and liabilities with insurance
companies authorized to do business in Minnesota, pursuant to
section 60A.06, or with companies similarly authorized in any
other state of the United States.
Subd. 17. [INTERBENEFICIARY CAUSE OF ACTION.] No
beneficiary shall have any cause of action against any other
beneficiary arising solely out of the insolvency of inability of
the trust fund to meet its obligations.
Subd. 18. [EXAMINATION.] The commissioner may examine
authorized trust funds to the same extent and with the same
purpose as is provided, with respect to insurance companies, by
section 60A.031.
Subd. 19. [SECURITY DEPOSIT.] As a condition of
authorization, every trust fund shall deposit with the
commissioner an acceptable security of a value equal to not less
than $500,000. In the event that a trust fund fails to honor
the obligations assumed by it under trust agreements issued to
its beneficiaries, use of the security deposit shall revert to
the commissioner for the purpose of executing the trust fund's
obligations to its beneficiaries. The commissioner shall adopt
rules governing the amount of security required and the
acceptable forms of security.
Subd. 20. [RULES.] The commissioner may adopt rules to
enforce and administer the requirements of this section.
Subd. 21. [TRUST FUNDS NOT SUBJECT TO INSURANCE
REGULATIONS.] Trust funds established under this section shall
not be considered insurance companies or to be in the business
of insurance nor shall they be subject to regulation by the
commissioner, except as provided for in this section.
Sec. 9. Minnesota Statutes 1984, section 62A.02,
subdivision 2, is amended to read:
Subd. 2. [APPROVAL.] No such policy shall be issued, nor
shall any application, rider, or endorsement be used in
connection therewith, until the expiration of 30 60 days after
it has been so filed unless the commissioner shall sooner give
his written approval thereto.
Sec. 10. Minnesota Statutes 1984, section 62A.02,
subdivision 3, is amended to read:
Subd. 3. [DISAPPROVAL.] The commissioner shall, within
30 60 days after the filing of any form, disapprove the form:
(1) if the benefits provided therein are unreasonable in
relation to the premium charged;
(2) if it contains a provision or provisions which are
unjust, unfair, inequitable, misleading, deceptive or encourage
misrepresentation of the policy; or
(3) If the proposed premium rate is excessive because the
insurer has failed to exercise reasonable cost control.
For the purposes of clause (1), the commissioner shall
establish by rule a schedule of minimum anticipated loss ratios
which shall be based on (i) the type or types of coverage
provided, (ii) whether the policy is for group or individual
coverage, and (iii) the size of the group for group policies.
Except for individual policies of disability or income
protection insurance, the minimum anticipated loss ratio shall
not be less than 50 percent after the first year that a policy
is in force. All applicants for a policy shall be informed in
writing at the time of application of the anticipated loss ratio
of the policy. For the purposes of this subdivision,
"anticipated loss ratio" means the ratio at the time of form
filing or at the time of subsequent rate revision of the present
value of all expected future benefits, excluding dividends, to
the present value of all expected future premiums. Nothing in
this paragraph shall prohibit the commissioner from disapproving
a form which meets the requirements of this paragraph but which
the commissioner determines still provides benefits which are
unreasonable in relation to the premium charged. The
commissioner may until December 31, 1978, exercise emergency
power for the purpose of implementing the minimum anticipated
loss ratio requirement, and for this purpose may adopt emergency
rules as provided in sections 14.29 to 14.36. Notwithstanding
the expiration of the commissioner's emergency power, any
emergency rule adopted by him prior to the expiration of his
emergency power may remain effective for the periods authorized
in sections 14.29 to 14.36.
If the commissioner notifies an insurer which has filed any
form that the form does not comply with the provisions of this
section or sections 62A.03 to 62A.05 and section 72A.20, it
shall be unlawful thereafter for the insurer to issue the form
or use it in connection with any policy. In the notice the
commissioner shall specify the reasons for his disapproval and
state that a hearing will be granted within 20 days after
request in writing by the insurer.
Sec. 11. Minnesota Statutes 1984, section 62B.07,
subdivision 2, is amended to read:
Subd. 2. The commissioner shall within 30 60 days after
the filing of policies, certificates of insurance, notices of
proposed insurance, applications for insurance, endorsements and
riders, disapprove any such form if the premium rates charged or
to be charged are excessive in relation to benefits, or if it
contains provisions which are unjust, unfair, inequitable,
misleading, deceptive or encourage misrepresentation of the
coverage, or are contrary to any provision of the insurance laws
or of any rule or regulation promulgated thereunder. In order
to determine whether the premium to be charged under a
particular policy form submitted by an insurer is excessive in
relation to benefits, and to facilitate the submission and
approval of policy forms and premium rates to be used in
connection therewith, the commissioner shall give full
consideration to and make reasonable allowances for underwriting
expenses including, but not limited to, claim adjustment
expenses, general administrative expenses including costs for
handling return premiums, compensation to agents, expense
allowances to creditors, if any, branch and field expenses and
other acquisition costs, the types of policies actually issued
and authorized as defined in section 62B.03, (1), (2), (3) and
(4), and any and all other factors and trends demonstrated to be
relevant. An insurer may support these factors by statistical
information, experience, actuarial computations, and/or
estimates certified by an executive officer of the insurer, and
the commissioner shall give due consideration to such supporting
data.
Sec. 12. Minnesota Statutes 1984, section 62B.07,
subdivision 3, is amended to read:
Subd. 3. If the commissioner notifies the insurer that the
form is disapproved, it is unlawful thereafter for the insurer
to issue or use it. In his notice, the commissioner shall
specify the reason for his disapproval and state that a hearing
will be granted within 20 days after a request in writing by the
insurer. No policy, certificate of insurance, notice of
proposed insurance, nor any application, endorsement or rider,
shall be issued or used until the expiration of 30 60 days after
it has been filed, unless the commissioner gives his prior
written approval thereto.
Sec. 13. Minnesota Statutes 1984, section 62C.14,
subdivision 10, is amended to read:
Subd. 10. Except as otherwise provided in subdivision 9,
all forms received by the commissioner shall be deemed filed 30
60 days after received unless disapproved by order transmitted
to the corporation stating that the form used in a specified
respect is contrary to law, contains a provision or provisions
which are unfair, inequitable, misleading, inconsistent or
ambiguous, or is in part illegible. It shall be unlawful to
issue or use a document disapproved by the commissioner.
Sec. 14. Minnesota Statutes 1984, section 62E.14, is
amended by adding a subdivision to read:
Subd. 4. Notwithstanding the above, any Minnesota resident
holder of a policy or certificate of medicare supplement
coverages pursuant to sections 62A.32 to 62A.35, or medicare
supplement plans previously approved by the commissioner, may
enroll in the comprehensive health insurance plan as described
in section 62E.07, with a waiver of the preexisting condition as
described in subdivision 3, without interruption in coverage,
provided, the policy or certificate has been terminated by the
insuror for reasons other than nonpayment of premium and,
provided further, that the option to enroll in the plan is
exercised within 30 days of termination of the existing contract.
Coverage in the state plan for purposes of this section
shall be effective on the date of termination upon completion of
the proper application and payment of the required premium. The
application must include evidence of termination of the existing
policy or certificate.
Sec. 15. Minnesota Statutes 1984, section 62F.01, is
amended to read:
62F.01 [CITATION; EXPIRATION DATE.]
Subdivision 1. Sections 62F.01 to 62F.14 may be cited as
the "Temporary Joint Underwriting Association Act".
Subd. 2. Sections 62F.01 to 62F.14 expire September 1,
1988.
Sec. 16. Minnesota Statutes 1984, section 62F.02,
subdivision 1, is amended to read:
Subdivision 1. [CREATION.] There is created a temporary
joint underwriting association to provide medical malpractice
insurance coverage to any licensed health care provider unable
to obtain this insurance through ordinary methods. Every
insurer authorized to write and writing personal injury
liability insurance in this state shall be a member of the
association as a condition to obtaining and retaining a license
to write insurance in this state.
Sec. 17. Minnesota Statutes 1984, section 62F.03,
subdivision 2, is amended to read:
Subd. 2. "Association" means the temporary joint
underwriting association.
Sec. 18. Minnesota Statutes 1984, section 62F.04, is
amended by adding a subdivision to read:
Subd. 1a. [REAUTHORIZATION.] The authorization to issue
insurance is valid for a period of two years from the date it
was made. The commissioner may reauthorize the issuance of
insurance for additional two-year periods under the terms of
subdivision 1. This subdivision is not a limitation on the
number of times the commissioner may reauthorize the issuance of
insurance.
Sec. 19. Minnesota Statutes 1984, section 62G.16,
subdivision 9, is amended to read:
Subd. 9. All forms received by the commissioner shall be
deemed filed 30 60 days after received unless disapproved by
order transmitted to the legal service plan corporation stating
that the form used in a specified respect is contrary to law,
contains a provision or provisions which are unfair,
inequitable, misleading, inconsistent or ambiguous, or is in
part illegible. It shall be unlawful to issue or use a document
disapproved by the commissioner.
Sec. 20. [62I.01] [CITATION.]
Sections 20 to 41 may be cited as the Minnesota joint
underwriting association act.
Sec. 21. [62I.02] [MINNESOTA JOINT UNDERWRITING
ASSOCIATION.]
Subdivision 1. [CREATION.] The Minnesota joint
underwriting association is created to provide insurance
coverage to any person or entity unable to obtain insurance
through ordinary methods if the insurance is required by
statute, ordinance, or otherwise required by law, or is
necessary to earn a livelihood or conduct a business and serves
a public purpose. Prudent business practice or mere desire to
have insurance coverage is not a sufficient standard for the
association to offer insurance coverage to a person or entity.
The association shall be specifically authorized to provide
insurance coverage to day care providers, foster parents, foster
homes, developmental achievement centers, group homes, and
sheltered workshops for mentally, emotionally, or physically
handicapped persons, and citizen participation groups
established pursuant to the housing and community redevelopment
act of 1974, Public Law Number 93-383. Because the activities
of certain persons or entities present a risk that is so great,
the association shall not offer insurance coverage to any person
or entity the board of directors of the association determines
is outside the intended scope and purpose of the association
because of the gravity of the risk of offering insurance
coverage. The association shall not offer environmental
impairment liability or product liability insurance, or coverage
for activities that are conducted substantially outside the
state of Minnesota unless the insurance is required by statute,
ordinance, or otherwise required by law. Every insurer
authorized to write property and casualty insurance in this
state shall be a member of the association as a condition to
obtaining and retaining a license to write insurance in this
state.
Subd. 2. [DIRECTOR.] The association shall have a board of
directors composed of 11 persons chosen annually as follows:
five persons elected by members of the association at a meeting
called by the commissioner; three public members, as defined in
section 214.02, appointed by the commissioner; and three
members, appointed by the commissioner representing groups to
whom coverage has been extended by the association. If at any
time no coverage is currently extended by the association, then
either additional public members may be appointed to fill these
three positions or, at the option of the commissioner,
representatives from groups who had previously been covered by
the association may serve as directors.
Subd. 3. [REAUTHORIZATION.] The authorization to issue
insurance to day care providers, foster parents, foster homes,
developmental activity centers, group homes, and sheltered
workshops for mentally, emotionally, or physically handicapped
persons, and citizen participation groups established pursuant
to the housing and community redevelopment act of 1974, Public
Law Number 93-383, is valid for a period of two years from the
date it was made. The commissioner may reauthorize the issuance
of insurance for additional two-year periods pursuant to
sections 40 and 41. This subdivision is not a limitation on the
number of times the commissioner may reauthorize the issuance of
insurance. Insurance may not be offered pursuant to this
section to persons or entities other than those listed in this
subdivision after December 31, 1989.
Sec. 22. [62I.03] [DEFINITION.]
Subdivision 1. [SCOPE.] As used in sections 20 to 41 the
following terms have the meanings given them in this section.
Subd. 2. [ASSOCIATION.] "Association" means the Minnesota
joint underwriting association.
Subd. 3. [COMMISSIONER.] "Commissioner" means the
commissioner of commerce.
Subd. 4. [DIRECT WRITTEN PREMIUMS.] "Direct written
premiums" means that amount at column (2), lines 5, 8, 9, 17,
21.2, 22, 23, 24, 25, 26, and 27, page 14, of the annual
statement filed annually with the department of commerce
pursuant to section 60A.13.
Subd. 5. [DEFICIT.] "Deficit" means, for a particular
policy year and line or type of insurance, that amount by which
total paid and outstanding losses and loss adjustment expenses
exceed premium revenue, including retrospective premium revenue.
Sec. 23. [62I.04] [POLICY ISSUANCE.]
Any person or entity that is a resident of the state of
Minnesota who has a current written notice of refusal to insure
from an insurer licensed to offer insurance in the state of
Minnesota may make written application to the association for
coverage. The applicable premium or required portion of it must
be paid prior to coverage by the association.
The application shall be filed simultaneously with the
association and the market assistance plan for the association.
The association is authorized to (1) issue or cause to be
issued insurance policies to applicants subject to limits
specified in the plan of operation; (2) underwrite the insurance
and adjust and pay losses with respect to it, or appoint service
companies to perform those functions; (3) assume reinsurance
from its members; and (4) cede reinsurance.
Sec. 24. [62I.05] [PLAN OF OPERATION.]
Within 45 days after the appointment of the directors of
the association, the directors shall submit to the commissioner
for review, a proposed plan of operation, consistent with the
provisions of this chapter.
The plan of operation shall provide economic, fair, and
nondiscriminatory administration and for the prompt, efficient
provision of insurance coverage of the types provided by section
20. It shall provide for an expedited review and determination
by the board of any application for a type of coverage that has
not been previously excluded or authorized. The action of the
board on the application shall be an amendment to the plan of
operation and the type of coverage shall thereafter be specified
in the plan as either excluded or authorized. It may contain
other provisions necessary for the operation of the association,
including but not limited to preliminary assessment of all
members for initial expenses necessary to commence operations,
establishment of necessary facilities, management of the
association, assessment of members to defray losses and
expenses, commission arrangements, reasonable and objective
underwriting standards, acceptance and cessation of reinsurance,
appointment of servicing carriers or other servicing
arrangements and procedures for determining amounts of insurance
to be provided by the association.
The plan of operation is subject to approval by the
commissioner. If the commissioner disapproves all or any part
of the proposed plan of operation, the directors shall within 15
days submit for review an appropriate revised plan of
operation. If a revised plan is not submitted within 15 days
the commissioner shall promulgate a plan of operation. The plan
of operation approved or promulgated by the commissioner is
effective and operational upon the order of the commissioner.
Amendments to the plan of operation may be made by the
directors of the association subject to approval by the
commissioner.
Sec. 25. [62I.06] [POLICY FORMS; PREMIUM RATE.]
Subdivision 1. [REQUIREMENT.] The policies and contracts
of coverage issued pursuant to this chapter shall contain the
usual and customary provisions of similar insurance policies
issued by private insurance companies. If a standard form is
used in the private marketplace for any type of coverage that is
to be extended by the association, then the association shall
use that form. If there are varying types of forms used in the
marketplace the association may choose to use a standard policy
form issued by a service organization or other entity who
commonly prepares standardized types of forms. If the board
determines that neither of these alternatives is appropriate,
then it shall adopt a policy form based upon the terms and
conditions of the policies used for this type of coverage that
are the most commonly used in the private market. As far as
practical the board shall attempt to adopt forms that are
consistent with the practice in the private market. No policy
forms shall be used by the association unless it has been filed
with the commissioner, and the commissioner may disapprove the
form within 30 days if the commissioner determines that it is
misleading, it violates public policy, or for any reason that
the commissioner would be empowered to reject a similar form
filed by a private company.
Subd. 2. [CANCELLATION.] If the insured fails to pay a
stabilization reserve fund charge the association may cancel the
policy by mailing or delivering to the insured at the insured's
address shown on the policy at least ten days written notice
stating the date that the cancellation is effective.
Subd. 3. [RATES.] The rates, rating plan, rating rules,
rating classification and territories applicable to insurance
written by the association and related statistics are subject to
chapter 70A. Rates shall be on an actuarially sound basis,
giving consideration to the group retrospective rating plan.
The commissioner shall take all appropriate steps to make
available, upon request of the association, loss and expense
experience of insurers previously writing or currently writing
insurance of any type the association offers or intends to offer.
Subd. 4. [APPROVAL.] All policies issued by the
association are subject to the group retrospective rating plan
approved by the commissioner under which the final premium for
the insureds of the association, as a group, will be equal to
the administrative expenses, loss and loss adjustment expenses
and taxes, plus a reasonable allowance for contingency and
servicing. If the board of directors feels it is appropriate
and in the interest of fairness and equity, the insureds of the
association may be broken down into more than one group. The
rating plan may provide for varying rates within the rating plan
for such groups as their relative burden to the group as a whole
would merit. Policyholders shall be given full credit for all
investment income, net of expenses and reasonable management fee
on policyholder supplied funds. The standard premium, before
retrospective adjustment, for each policy issued by the
association shall be established for portions of the policy
period coinciding with the association's fiscal year on the
basis of the association rates, rating plans, rating rules,
rating classifications and territories then in effect. The
maximum premium for all policyholders of the association as a
group shall be limited as provided in sections 20 to 41.
Subd. 5. [EXAMINATIONS.] The commissioner shall examine
the business of the association as often as is appropriate to
insure that the group retrospective rating plan is operating in
a manner consistent with this chapter or other Minnesota laws.
If it is found that the operation is deficient or inconsistent
with this chapter or other Minnesota laws the commissioner may
order the association to take corrective action.
Subd. 6. [DEFICITS.] The association shall certify to the
commissioner the estimated amount of any deficit remaining after
the stabilization reserve fund has been exhausted and payment of
the maximum final premium for all policyholders of the
association. Within 60 days after the certification, the
commissioner shall authorize the association to recover the
members' respective shares of the deficit by assessing all
members an amount sufficient to fully fund the obligations of
the association. The assessment of each member shall be
determined in the manner provided in section 26. An assessment
made pursuant to this section shall be deductible by the member
from past or future premium taxes due the state.
Subd. 7. [AMENDMENTS TO RATING PLAN.] In addition to the
usual manner of amending the rating plan set forth in this
section and section 24, the following procedure may also be used:
(1) Any person may, by written petition served upon the
commissioner of commerce request that a hearing be held to amend
the rating plan, or any part of the rating plan.
(2) The commissioner shall forward a copy of the petition
to the chief administrative law judge within three business days
of its receipt. The chief administrative law judge shall,
within three business days of receipt of the copy of the
petition or a request for hearing by the commissioner, set a
hearing date, assign an administrative law judge to hear the
matter, and notify the commissioner of the hearing date and the
administrative law judge assigned to hear the matter. The
hearing date must be set not less than 60 days nor more than 90
days from the date of receipt of the petition by the
commissioner or the date of the commissioner's request for
hearing if the commissioner is the person requesting a hearing.
(3) The commissioner shall publish a notice of the hearing
in the State Register at least 30 days before the hearing date.
The notice should be similar to that used for rulemaking under
the administrative procedure act. Approval of the notice by the
administrative law judge is not required.
(4) The hearing and all matters which occur after the
hearing are a contested case under chapter 14. Within 45 days
from the commencement of the hearing and within 15 days of the
completion of the hearing the administrative law judge shall
submit a report to the commissioner of commerce. The parties,
or the administrative law judge, if the parties cannot agree,
shall adjust all time requirements under the contested case
procedure to conform with the 45-day requirement.
(5) The commissioner shall render a decision within ten
business days of the receipt of the administrative law judge's
report.
(6) If all parties to the proceeding agree, any of the
previous requirements may be waived or modified.
(7) A petition for a hearing to amend the rating plan or
any part of the rating plan received by the commissioner within
180 days of the date of the commissioner's decision in a prior
proceeding to amend the rating plan is invalid and requires no
action provided the petition involves the same rates as the
previous hearing. If the petition involves matters in addition
to those dealt with in the previous hearing, then the additional
matters shall be treated as a separate petition for hearing and
a hearing may be held on those matters.
Sec. 26. [62I.07] [MEMBERSHIP ASSESSMENTS.]
Each member of the association shall participate in its
losses and expenses in the proportion that the direct written
premiums of the member bears to the total aggregate direct
written premiums written in this state by all members. The
members' participation in the association shall be determined
annually on the direct written premiums written during the
preceding calendar year as reported on the annual statements and
other reports filed by the member with the commissioner.
Sec. 27. [62I.08] [APPLICATION PROCEDURE.]
A person or entity that has been denied coverage or is
unable to find an insurer willing to write coverage is eligible
to make an application to the association. The application
shall be on a form approved by the board of directors. To show
eligibility to participate in the association the applicant
shall certify that the applicant has been unable to find anyone
to offer the coverage sought by the applicant. No further proof
shall be required of the applicant. The application shall be
filed simultaneously with the association and the market
assistance plan of the association.
Sec. 28. [62I.09] [MARKET ASSISTANCE PLAN.]
Subdivision 1. [CREATION.] A market assistance program
committee consisting of 12 members is created. The 12 members
shall be appointed by the commissioner of commerce. The
commissioner's designated representative shall serve as an ex
officio member. The commissioner shall appoint six members of
the committee as representatives of insurers; two members who
are insurance agents; two public members; and two members
representative of groups to whom the association has issued
coverage. If, at any time after appointment, a member of the
committee, through change of employment or similar
circumstances, is no longer representative of the group the
member was appointed to represent, that member shall be deemed
unable to continue to serve as a member of the committee and the
commissioner shall appoint a replacement for the balance of that
member's term.
Subd. 2. [TERMS AND VACANCIES.] In the event of a member's
inability to continue to serve, the commissioner shall appoint a
replacement. The committee shall elect a chair and vice chair
from among the members. The term of each member is one year
commencing on June 1, except that the first members to be
appointed to the committee shall serve from the date of their
appointment until June 1 immediately following their appointment.
Subd. 3. [MEETINGS.] The committee shall convene upon the
call of the commissioner, the chair or vice chair or at the
request of one of the committee members. No quorum requirements
are necessary.
Sec. 29. [62I.10] [DISPOSITION OF APPLICATION.]
Subdivision 1. [ACTION UPON APPLICATION.] Upon receipt of
an application, the committee or persons the committee appoints
or designates will immediately review the application to
determine what assistance the committee can give. The
assistance may include: (1) discussion with the applicant's
most recent underwriter, if any, to determine if the applicant's
coverage can be maintained with the most recent carrier; (2)
discussion with other known available insurance markets to
determine if any other carrier will accept the applicant; (3)
negotiating extensions of coverage with the most recent carrier
or a temporary carrier, if possible, to permit additional
exploration of insurance markets or accumulation of essential
underwriting data; and (4) referring the application to the
first five participating insurers (participants) on the relevant
list provided in subdivision 2. Subsequent applications will be
sent to the next five participants on a rotating basis. If at
any time there are less than ten participants on the master list
then the master list will no longer be utilized.
Subd. 2. [LIST OF PARTICIPATING INSURERS.] A list of
participants shall be prepared and updated at least every two
years in the following manner: (1) the committee will secure a
mailing list from the department of commerce of every licensed
insurer admitted to do business as well as every eligible
licensed surplus lines licensee; (2) the committee will mail to
each admitted insurer and eligible surplus lines licensee an
outline of the conditions of participation; (3) a master list of
participants willing to take part in the market assistance
program will be created from the responses to the initial
mailing. The master list will be updated at least every two
years pursuant to clauses (1) and (2). Order on the master list
will be determined by random selection.
Subd. 3. [REFERRAL TO PARTICIPANTS.] Upon receipt of an
application, the committee or the persons the committee appoints
or designates may mail or telex copies of the application to the
first five participants on the master list.
Subd. 4. [QUOTES.] Participants must quote on at least one
out of every three applications submitted. Each participant
will have the right to individually evaluate the risk the
applicant poses and develop a price commensurate with that risk.
Subd. 5. [REFERRAL.] If no quote is received from the
first five participants on the list, the next five participants
on the list shall receive the application and the same procedure
shall be followed until a quote is obtained or the list is
exhausted. All participants may, if the committee feels it
appropriate, be given the application at once.
Subd. 6. [RESPONSE FROM PARTICIPANT.] Participants may
provide a quote on the same coverage basis they normally provide
for similar coverage for that type of insurance in Minnesota.
Participants will return their quotations or refusals to quote
to the committee within ten days. The applicant or the
applicant's agent, if any, will be notified of the quotations.
The agent will then complete the placement of the insurance, if
the applicant accepts coverage from the participant at the price
quoted, without need for an agency appointment from that
participant. The insurer is not required to pay the agent any
commission, but the agent may negotiate a fee with the applicant
prior to initial submission of the application.
Subd. 7. [LIMITATION ON REAPPLICATION.] An applicant
provided a quotation in accordance with the above procedure will
not be eligible to seek additional quotations from the market
assistance plan or to obtain coverage from the association if
the quotation received would not be deemed to be a notice of
refusal for purposes of determining eligibility for
participation in the association.
Subd. 8. [REVIEW BY THE COMMITTEE.] If the procedures in
subdivisions 1 to 7 do not produce a quote, the application may
be submitted to the committee. The committee after reviewing
the application shall proceed as follows: (1) attempt to place
the applicant with a single carrier; or (2) attempt to arrange
coverage on a quota share basis with a number of carriers.
Subd. 9. [DISQUALIFICATION AFTER COVERAGE GRANTED.] If an
application is filed with the market assistance program less
than 30 business days before the expiration date of the
applicant's current insurance coverage the market assistance
program may continue to seek coverage for the applicant after
coverage is extended by the association. The market assistance
program will have 30 business days from the date of filing of
the application with the market assistance program to obtain an
offer of coverage for the applicant. If the market assistance
program is able to secure an offer of coverage for the applicant
within 30 business days of filing of the application and if the
offer of coverage would not otherwise be considered a refusal
for purposes of the association, the applicant will be deemed to
not be qualified to participate in the association and coverage,
if any, shall be terminated. If the applicant accepts the
coverage obtained by the market assistance plan, coverage from
the association will terminate when the new coverage begins.
Subd. 10. [NOTIFICATION OF FAILURE TO PLACE.] If the
market assistance program does not produce a quote, it shall
notify the submitting agent or the applicant at least 24 hours
before the time the applicant's current insurance coverage
terminates. A copy of the notification must be submitted to the
commissioner and the association at the same time notice is made
to the agent or applicant. Notwithstanding the foregoing, the
market assistance program may continue to act pursuant to
subdivision 9. Notice that the market assistance program is
continuing to act pursuant to subdivision 9 shall be included in
the notice required by this subdivision.
Sec. 30. [62I.11] [PROGRAM PARTICIPATION.]
Subdivision 1. [TERMINATION.] A participant may terminate
its participation in the program at any time by providing
written notice of the termination 90 days in advance of the
effective date of the termination to the commissioner and to the
committee.
Subd. 2. [NEW PARTICIPANTS.] New participants may join the
program at any time by submitting a written request to the
commissioner and to the committee.
Sec. 31. [62I.12] [ASSOCIATION ADMINISTRATION.]
Subdivision 1. [ADMINISTRATOR.] The association shall be
administered by a qualified insurer or vendor of risk management
services selected by the commissioner. If the commissioner
deems it necessary, the commissioner may select more than one
person to administer the association.
Subd. 2. [DUTIES.] The administrator shall perform all
services necessary to accomplish the purposes of the
association, including the servicing of policies or contracts of
coverage, data management, and collection of assessments.
Subd. 3. [APPEALS.] Anyone adversely affected by the
decision of the administrator may object to the decision by
appealing to the commissioner within 15 days after the
decision. The appeal must be made by letter mailed to the
commissioner with a copy to the administrator within the 15-day
period. The letter must include a summary of the
administrator's decision from which the appeal is taken, the
basis for the objection to the administrator's decision, and any
argument or evidence in support of the appeal. Within 15 days
after receipt of the letter, the administrator shall file a
response, including the basis of the administrator's decision
and all argument and evidence in support of the decision, with
the commissioner. Within ten days after receipt of the
administrator's response, the commissioner shall either affirm,
reverse, or modify the administrator's decision as the
commissioner deems appropriate.
Sec. 32. [62I.13] [ACTION BY THE MINNESOTA JOINT
UNDERWRITING ASSOCIATION UPON THE APPLICATION.]
Subdivision 1. [GENERALLY.] Eligibility for coverage by
the association is subject to the terms and conditions of
subdivisions 2 and 3.
Subd. 2. [MINIMUM OF QUALIFICATIONS.] Anyone who is unable
to obtain insurance in the private market and who so certifies
to the association in the application is eligible to make
written application to the association for coverage. Payment of
the applicable premium or required portion of it must be paid
prior to coverage by the association. An offer of coverage at a
rate in excess of the rate that would be charged by the
association for similar coverage and risk shall be deemed to be
a refusal of coverage for purposes of eligibility for
participation in the association. It shall not be deemed to be
a written notice of refusal if the rate for coverage offered is
less than five percent in excess of the joint underwriting
association rates for similar coverage and risk. However, the
offered rate must also be the rate that the insurer has filed
with the department of commerce if the insurer is required to
file its rates with the department. If the insurer is not
required to file its rates with the department, the offered rate
must be the rate generally charged by the insurer for similar
coverage and risk.
Subd. 3. [DISQUALIFYING FACTORS.] For good cause, coverage
may be denied or terminated by the association. Good cause may
exist if the applicant or insured: (1) has an outstanding debt
due or owing to the association at the time of application or
renewal arising from a prior policy; (2) refuses to permit
completion of an audit requested by the commissioner or
administrator; (3) submits misleading or erroneous information
to the commissioner or administrator; (4) disregards safety
standards, laws, rules or ordinance pertaining to the risk being
insured; (5) fails to supply information requested by the
commissioner or administrator; (6) fails to comply with the
terms of the policies or contracts for coverage issued by the
association; and (7) has not satisfied the requirements of the
market assistance program as set forth in section 28.
Subd. 4. [DISQUALIFICATION AFTER COVERAGE GRANTED.] If an
application is filed with the market assistance program less
than 30 business days before the expiration of the applicant's
current insurance coverage, the market assistance program may
continue to seek coverage for the applicant after coverage is
extended by the association. The market assistance program will
have 30 business days from the date of filing the application
with the market assistance program to obtain an offer of
coverage for the applicant. If the market assistance program is
able to secure an offer of coverage for the applicant within 30
business days of filing of the application and if the offer of
coverage would not otherwise be considered refusal for purposes
of the association, the applicant will be deemed to be not
qualified to participate in the association plan and coverage,
if any, shall be terminated.
Subd. 5. [NOTICE.] An application for coverage under the
association must be granted or denied within ten days after
receipt by the administrator of a properly completed application
and any supplemental information requested by the
administrator. Anyone covered by the association must be given
at least 30 days notice of nonrenewal or cancellation of
coverage.
Sec. 33. [62I.14] [ASSESSMENTS.]
In the event the commissioner deems it necessary to make an
assessment, an assessed insurer must pay the assessment within
30 days of receipt of notice of the assessment. The
commissioner may suspend or revoke an insurer's certificate of
authority and impose a civil penalty in an amount not to exceed
$5,000 for an insurer's failure to pay the assessment within the
30 day period.
Sec. 34. [62I.15] [EXTENSION OF COVERAGE.]
If the association determines that the applicant meets the
underwriting standards of the association as described in the
plan of operation and there is no unpaid, uncontested premium
due from the application for prior insurance, including failure
to make written objections to premium charges within 30 days
after billing, or if there is no other allowable reason as set
forth in this chapter for denial of coverage, the association
upon receipt of the premium or portion of it as described in the
plan of operation shall issue a policy of insurance to the
applicant.
Sec. 35. [62I.16] [STABILIZATION RESERVE FUND.]
Subdivision 1. [CREATION.] There is created a
stabilization reserve fund. Each policyholder shall pay to the
association a stabilization reserve fund charge of 33 percent of
each premium payment due for insurance through the association.
This charge shall be separately stated in the policy. The
association shall cancel the policy of any policyholder who
fails to pay the stabilization reserve fund charge.
Subd. 2. [PAYMENT.] The association shall promptly pay
into the stabilization reserve fund all fund charges it collects
from its policyholders and any retrospective premium refunds
payable under the group retrospective rating plan.
Subd. 3. [SUPERVISION.] All money paid into the fund shall
be held in trust by the corporate trustee selected by the board
of directors. The corporate trustee may invest the money held
in trust subject to the approval of the board. All investment
income shall be credited to the fund. All expenses of the
administration of the fund shall be charged against the fund.
The money held in trust shall be used solely for the purpose of
discharging when due any retrospective premium charges payable
by policyholders and any retrospective premium refunds payable
to policyholders under the group retrospective rating plan.
Payment of retrospective premium charges shall be made upon
certification of the amount due. If all money accruing to the
fund is exhausted in payment of retrospective premium charges,
all liability and obligations of the association's policyholders
with respect to the payment of retrospective premium charges
shall terminate and shall be conclusively presumed to have been
discharged. Any stabilization reserve fund charges from a
particular policy year and line or type of insurance not used to
pay retrospective premiums must be returned to policyholders
after all claims and expense obligations from that particular
policy year and line or type of insurance are satisfied.
Subd. 4. [EXEMPTION.] The board of directors may, upon
their own motion or upon application of any applicant or
insured, exempt any group from the payment of the stabilization
reserve charge. The exemption shall be granted only to those
groups who are unable to obtain insurance coverage in the
private market as a result of the private market's refusal to
write coverage for that group rather than because of loss
experiences or risks posed by the applicant or insured as an
individual. It shall be presumed that a group is qualified for
this exemption if more than 20 percent of the members of that
group are unable to obtain the insurance coverage that they
seek. The board of directors shall also consider granting
exemption if any members of the same group are unable to obtain
coverage in the private market even though no claims have been
made against them or payments made on their behalf by any
insurer within the last three years.
Subd. 5. [SURCHARGE.] In addition to determining the basic
rate for coverages to be offered by the joint underwriting
association, the association shall also develop a surcharge plan
or similar method for adjusting the rate to be charged to those
persons who have had claims made against them. The surcharge
plan shall take into effect the risk posed to the association by
the applicant or the insured. The surcharge plan shall be
sufficient to provide for the sound financial operation of the
plan based upon commonly agreed upon actuarial principles.
Sec. 36. [62I.17] [IMMUNITY FROM LIABILITY.]
No cause of action of any nature shall arise against the
association, the commissioner or the commissioner's authorized
representatives, or any other person or organization, for any
statements made in good faith by them during any proceedings or
concerning any matters within the scope of this chapter.
Sec. 37. [62I.18] [RIGHT OF APPEAL.]
Any applicant to the association, any person insured
pursuant to this chapter or their representatives, any affected
insurer, or any person who has applied for coverage pursuant to
this chapter may appeal to the commissioner within 30 days after
any ruling, action, or decision by or on behalf of the
association with respect to those items that the plan of
operation defines as appealable matters.
Sec. 38. [62I.19] [ANNUAL STATEMENTS.]
On March 1 of each year the association shall file with the
commissioner a report of its transactions, financial conditions,
and operations during the preceding year. The report shall be
on a form approved by the commissioner. The commissioner may at
any time require the association to furnish additional
information to assist in evaluating the scope, operation, and
experience of the association.
Sec. 39. [62I.20] [MERGER OF OTHER PLANS.]
Upon application by the governing body of the liquor
liability assigned risk plan authorized by section 340A.409 or
the joint underwriting association authorized by chapter 62F to
be merged with the association, the commissioner shall, if the
commissioner deems it appropriate, hold a public hearing in
regard to the merger. The commissioner upon motion or upon the
motion of any insured under plans shall hold a hearing. Unless
it can be shown that the rights of the insured would be
adversely affected by the merger or that it would be less
efficient or more costly to merge the plans, the commissioner
shall consent to the merger. The commissioner shall also
consent to the merger at any time there are less than ten
insureds in any plan.
Sec. 40. [62I.21] [ACTIVATION OF MARKET ASSISTANCE PLAN
AND JOINT UNDERWRITING ASSOCIATION.]
At any time the commissioner of commerce deems it necessary
to provide assistance with respect to the placement of general
liability insurance coverage on Minnesota risks for a class of
business, the commissioner shall by notice in the state register
activate the market assistance plan and the joint underwriting
association. The plan and association are activated for a
period of 180 days from publication of the notice. At the same
time the notice is published, the commissioner shall prepare a
written petition requesting that a hearing be held to determine
whether activation of the market assistance plan and the joint
underwriting association is necessary beyond the 180-day
period. The hearing must be held in accordance with section
41. The commissioner by order shall deactivate a market
assistance program and the joint underwriting association at any
time the commissioner finds that the market assistance program
and the joint underwriting association are not necessary.
Sec. 41. [62I.22] [HEARING.]
Subdivision 1. [ADMINISTRATIVE LAW JUDGE.] The
commissioner shall forward a copy of the petition to activate
the market assistance plan and the joint underwriting
association with respect to a class of business to the chief
administrative law judge. The chief administrative law judge
shall, within three business days of receipt of the copy of the
petition, set a hearing date, assign an administrative law judge
to hear the matter, and notify the commissioner of the hearing
date and the administrative law judge assigned to hear the
matter. The hearing date must be no less than 60 days nor more
than 90 days from the date of receipt of the petition by the
chief administrative law judge.
Subd. 2. [NOTICE.] The commissioner of commerce shall
publish notice of the hearing in the State Register at least 30
days before the hearing date. The notice should be that used
for rulemaking under chapter 14. Approval by the administrative
law judge of the notice prior to publication is not required.
Subd. 3. [CONTESTED CASE; REPORT.] The hearing and all
matters after the hearing are a contested case under chapter 14.
Within 45 days from the commencement of the hearing and within
15 days of the completion of the hearing the administrative law
judge shall submit a report to the commissioner of commerce.
The parties, or the administrative law judge, if the parties
cannot agree, shall adjust all time requirements under the
contested case procedure to conform with the 45-day requirement.
Subd. 4. [DECISION.] The commissioner shall make a
decision within ten days of the receipt of the administrative
law judge's report.
Subd. 5. [WAIVER OR MODIFICATION.] If all parties to the
proceeding agree, any of the requirements of this section may be
waived or modified.
Sec. 42. Minnesota Statutes 1984, section 65A.32, is
amended to read:
65A.32 [PURPOSES.]
The purposes of sections 65A.31 to 65A.43 are:
(1) To encourage stability in the property and liability
insurance market for property located in urban areas of this
state;
(2) To encourage maximum use, in obtaining basic property
and liability insurance, as defined in sections 65A.31 to
65A.43, of the normal insurance market provided by the private
property and casualty insurance industry;
(3) To encourage the improvement of the condition of
properties located in urban areas of this state and to further
orderly community development generally;
(4) To provide for the formulation and administration by an
industry placement facility of a plan assuring fair access to
insurance requirements (FAIR Plan) in order that no property
shall be denied basic property or liability insurance through
the normal insurance market provided by the private property and
casualty insurance industry except after a physical inspection
of such property and a fair evaluation of its individual
underwriting characteristics;
(5) To publicize the purposes and procedures of the FAIR
Plan to the end that no one may fail to seek its assistance
through ignorance thereof;
(6) To provide for the formulation and administration by
the industry placement facility of a reinsurance arrangement
whereby property and casualty insurers shall share equitably the
responsibility for insuring insurable property for which basic
property and liability insurance cannot be obtained through the
normal insurance markets; and
(7) To provide a framework for participation by the state
in a sharing of insured losses resulting from riots and other
civil disorders occurring in this state as required by section
1223 of the Housing and Urban Development Act of 1968 (Public
Law 90-448, Ninetieth Congress, August 1, 1968).
Sec. 43. Minnesota Statutes 1984, section 65A.33, is
amended to read:
65A.33 [DEFINITIONS.]
Subdivision 1. As used in sections 65A.31 to 65A.43,
unless the context otherwise requires, the terms defined in this
section have the following meaning given to them.
Subd. 2. "Insurer" means any insurance company or other
organization licensed to write and engaged in writing
property or liability insurance business, including the property
or liability insurance components of multi-peril policies, on a
direct basis, in this state, except where such insurer is
specifically exempted by statute from participation in this
program.
Subd. 3. "Basic Property or liability insurance" means the
coverage against direct loss to real or tangible personal
property at a fixed location that is provided in the standard
fire policy, extended coverage endorsement, homeowners
insurance, as defined in section 65A.27, subdivision 4,
cooperative housing insurance, condominium insurance, builders
risk, and such vandalism and malicious mischief insurance and
such other classes of insurance as may be added to the program
with respect to said property by amendment as hereinafter
provided. Basic Property or liability insurance does not
include automobile, farm, commercial liability, or such
manufacturing risks as may be excluded by the commissioner.
Subd. 4. "Industry placement facility", hereinafter
referred to as the facility, means the organization formed by
insurers to assist applicants in urban areas in securing basic
property or liability insurance and to administer the FAIR Plan
and the joint reinsurance association.
Subd. 5. "Inspection bureau" means the fire insurance
rating organization designated by the facility with the approval
of the commissioner to make inspections as required under this
program and to perform such other duties as may be authorized by
the facility.
Subd. 6. "Urban area" includes any municipality or other
political subdivision, subject to population or other
limitations defined in rules and regulations of the secretary
and such additional areas as may be designated by the
commissioner.
Subd. 7. "Premiums written" means gross direct premiums,
excluding that portion of premium on risks ceded to the joint
reinsurance association, charged during the second preceding
calendar year with respect to property in this state on all
policies of basic property or liability insurance and the basic
property or liability insurance premium components of all
multi-peril policies, as computed by the facility, less return
premiums, dividends paid or credited to policyholders, or the
unused or unabsorbed portions of premium deposits.
Subd. 8 7. "Commissioner" means the commissioner of
commerce of the state of Minnesota.
Subd. 9 8. "Secretary" means the secretary of the United
States department of housing and urban development.
Subd. 10. "Servicing Insurer" means an insurer designated
by the governing committee to issue policies on behalf of the
industry placement facility.
Sec. 44. Minnesota Statutes 1984, section 65A.34,
subdivision 1, is amended to read:
65A.34 [FAIR PLAN; INSPECTIONS AND REPORTS.]
Subdivision 1. Any person having an insurable interest in
real or tangible personal property at a fixed location in an
urban area shall be entitled upon oral or written application
therefor to the facility to a prompt inspection of the property
by the inspection bureau without cost.
Sec. 45. Minnesota Statutes 1984, section 65A.35,
subdivision 1, is amended to read:
65A.35 [FAIR PLAN BUSINESS; DISTRIBUTION AND PLACEMENT.]
Subdivision 1. [MEMBERSHIP.] Each insurer which is
authorized to write and is engaged in writing within this state,
on a direct basis, basic property or liability insurance or any
component thereof contained in a multi-peril policy, including
homeowners and commercial multi-peril policies, shall
participate in the industry placement facility, as hereinafter
described, as a condition of its authority to write such kinds
of insurance within this state.
Sec. 46. Minnesota Statutes 1984, section 65A.35,
subdivision 2, is amended to read:
Subd. 2. [PURPOSES.] The purposes of the facility shall be
twofold, as more fully set forth in this section:
(1) To formulate and administer, subject to the approval of
the commissioner, a plan assuring fair access to insurance
requirements in order that no property in urban areas shall be
denied basic property or liability insurance through the normal
insurance market provided by the private property and casualty
insurance industry, except after a physical inspection of such
property and a fair evaluation of its individual underwriting
characteristics; and
(2) To formulate and administer, subject to the approval of
the commissioner, a reinsurance arrangement whereby the members
of the facility shall share equitably the responsibility for
insuring property in urban areas which is insurable but for
which basic property or liability insurance cannot be obtained
through normal insurance markets.
Sec. 47. Minnesota Statutes 1984, section 65A.37, is
amended to read:
65A.37 [STANDARD POLICY COVERAGE.]
All policies issued, except homeowners policies, shall be
for basic property insurance on standard policy forms at rates
published by the inspection bureau Insurance Services Office and
shall be issued for a term of one year. All homeowners,
cooperative housing insurance, and condominium insurance
policies must be on forms published by Insurance Services Office
and approved by the commissioner.
Sec. 48. Minnesota Statutes 1984, section 65B.13, is
amended to read:
65B.13 [AUTOMOBILE INSURANCE, DISCRIMINATION IN AUTOMOBILE
POLICIES FORBIDDEN.]
No insurance company, or its agent, shall refuse to issue
any standard or preferred policy of motor vehicle insurance or
make any discrimination in the acceptance of risks, in rates,
premiums, dividends, or benefits of any kind, or by way of
rebate:
(a) between persons of the same class, or
(b) on account of race, or
(c) on account of physical handicap if the handicap is
compensated for by special training, equipment, prosthetic
device, corrective lenses, or medication and if the physically
handicapped person;
(1) is licensed by the department of public safety to
operate a motor vehicle in this state, and
(2) operates only vehicles which are equipped with
auxiliary devices and equipment necessary for safe and effective
operation by the handicapped person, or
(d) on account of marital dissolution.
Every company or agent violating any of the foregoing
provisions shall be fined not more than $100 per violation, and
every officer, agent, or solicitor violating the same shall be
guilty of a misdemeanor. The commissioner of commerce is
authorized to treat violations of this section as an unfair
insurance practice and to enforce this section using the
procedures, remedies, and penalties provided in sections 72A.17
to 72A.32.
Sec. 49. [65B.1311] [COVERAGE FOR FORMER SPOUSE.]
Subdivision 1. [NEW POLICY ISSUED.] If the former spouse
of a named insured under a policy of private passenger vehicle
insurance applies within 60 days of entry of a valid decree of
dissolution of the marriage and the former spouse was an insured
driver under the policy for at least 12 months prior to entry of
the decree, the insurer must issue a policy, upon payment of the
appropriate premium, to the former spouse only on the basis of
the driving record applicable to the former spouse and any
person who is to be an insured, as defined in section 65B.43,
under the policy to be issued, provided the person or persons to
be insured meets the insurer's eligibility standards.
Subd. 2. [NAMED INSURED.] A named insured under a policy
of private passenger vehicle insurance shall have the premium
determined at the first and any subsequent renewals of the
policy after entry of a valid decree of dissolution of the
marriage of the named insured only on the basis of the driving
record applicable to the named insured and any person who is to
be an insured, as defined in section 65B.43, under the policy to
be renewed.
Sec. 50. Minnesota Statutes 1984, section 65B.47,
subdivision 1, is amended to read:
Subdivision 1. In case of injury to the driver or other
occupant of a motor vehicle other than a commuter van, or other
than a vehicle being used to transport children to school or to
a school sponsored activity or other bus while it is in
operation within the state of Minnesota as to any Minnesota
resident who is an insured as defined in section 65B.43,
subdivision 5, if the accident causing the injury occurs while
the vehicle is being used in the business of transporting
persons or property, the security for payment of basic economic
loss benefits is the security covering the vehicle or, if none,
the security under which the injured person is an insured.
Sec. 51. Minnesota Statutes 1984, section 70A.04,
subdivision 2, is amended to read:
Subd. 2. [EXCESSIVENESS; MARKET TEST.] (a) Rates are
presumed not to be excessive if a reasonable degree of price
competition exists at the consumer level with respect to the
class of business to which they apply. In determining whether a
reasonable degree of price competition exists, the commissioner
shall consider all relevant tests, including, but not limited
to, the following:
1. The number of insurers actively engaged in the class of
business.
2. The nature of rate differentials in that class of
business.
3. Whether long-run profitability for insurers generally
of the class of business is unreasonably high in relation to its
riskiness.
In addition to any other manner of determining whether a
reasonable degree of price competition exists with respect to
any class of insurance, it is presumed that a reasonable degree
of competition does not exist if less than five insurers write
more than 75 percent of the direct written premiums.
(b) If such competition does not exist, rates are excessive
if they are likely to produce a long-run profit that is
unreasonably high in relation to the riskiness of the class of
business, or if expenses are unreasonably high in relation to
the services rendered.
In determining whether an excessive rate is being charged
by an individual insurer for a class of insurance where a
reasonable degree of competition does not exist, the
commissioner shall determine whether the rate charged produces a
rate of return that is not in excess of a reasonable rate of
return. To determine what is a reasonable rate of return, the
riskiness of the class of insurance, the profitability of the
insurer in that class of business, and other relevant factors
shall be considered.
Sec. 52. Minnesota Statutes 1984, section 70A.06,
subdivision 1, is amended to read:
Subdivision 1. Every licensed insurer and every rate
service organization licensed under section 70A.14 shall furnish
file with the commissioner all rates and all changes and
amendments of rates made by it for use in this state not later
than their effective date. No rates contained in a filing shall
become effective unless they have been filed with the
commissioner. In any filing, the commissioner may require the
insurer or rate service organization to file supporting data and
explanatory data which shall include:
(1) the experience and judgment of the filer, and, to the
extent it wishes or the commissioner requires, of other insurers
or rate service organizations;
(2) its interpretation of any statistical data relied upon;
(3) descriptions of the actuarial and statistical methods
employed; and
(4) any other matters deemed relevant by the commissioner
or the filer.
Notwithstanding the foregoing, if the supporting data is
not filed within 30 days after so requested by the commissioner,
the rate is no longer effective and is presumed to be an
excessive rate.
Sec. 53. Minnesota Statutes 1984, section 70A.06,
subdivision 2, is amended to read:
Subd. 2. No policy form shall be delivered or issued for
delivery unless it has been filed with the commissioner and
either (i) he has approved it or (ii) 30 60 days have elapsed
and he has not disapproved it as misleading or violative of
public policy, which period may be extended by the commissioner
for an additional period not to exceed 30 60 days.
Sec. 54. Minnesota Statutes 1984, section 70A.08, is
amended by adding a subdivision to read:
Subd. 3. Until January 1, 1988, the commissioner may
restrict approval on claims-made policies to forms filed by a
rate service organization which have been approved.
Sec. 55. Minnesota Statutes l984, section 70A.10, is
amended to read:
70A.10 [DELAYED EFFECT OF RATES.]
Subdivision 1. [RULE ORDER INSTITUTING DELAYED EFFECT.] If
the commissioner finds, after a hearing, that competition is not
an effective regulator of the rates charged or that a
substantial number of companies are competing irresponsibly
through the rates charged, or that there are widespread
violations of this chapter, in any kind or line of insurance or
subdivision thereof or in any rating class or rating territory,
he may issue a rule an order requiring that in the kind or line
of insurance or subdivision thereof or rating class or rating
territory comprehended by the finding any subsequent changes in
the rates or supplementary rate information be filed with him at
least 30 60 days before they become effective. He may extend
the waiting period for not to exceed 15 30 additional days by
written notice to the filer before the 30 60 day period expires.
Subd. 2. [SUPPORTING DATA.] In the rule order issued under
subdivision 1 or in any supplementary rule order, the
commissioner may require the filing of supporting data as to any
or all kinds or lines of insurance or subdivisions thereof or
classes of risks or combinations thereof as he deems necessary
for the proper functioning of the rate monitoring and regulating
process. The supporting data shall include:
(a) The experience and judgment of the filer, and, to the
extent it wishes or the commissioner requires, of other insurers
or rate service organizations;
(b) Its interpretation of any statistical data relied upon;
(c) Descriptions of the actuarial and statistical methods
employed; and
(d) Any other matters deemed relevant by the commissioner
or the filer.
Subd. 3. [EXPIRATION OF REGULATION ORDER.] A regulation An
order issued under subdivision 1 shall expire no more than one
year two years after issue. The commissioner may renew it after
a hearing and appropriate findings as provided under subdivision
1.
Subd. 4. [SUPPORTING INFORMATION.] Whenever a filing is
not accompanied by such information as the commissioner has
required under subdivision 2, he may so inform the insurer and
the filing shall be deemed to be made when the information is
furnished.
Sec. 56. Minnesota Statutes 1984, section 70A.11, is
amended to read:
70A.11 [DISAPPROVAL OF RATES.]
Subdivision 1. [ORDER IN EVENT OF VIOLATION AFTER
HEARING.] If the commissioner finds after a hearing contested
case proceeding under chapter 14 that a rate is not in
compliance with section 70A.04, he shall order that its use is
to be discontinued on a date not less than 30 days after the
order and shall order the excess premium plus interest at the
rate specified in section 549.09 to be refunded to the
policyholder. The amount of the refund, plus interest, must be
computed from the commencement date of the contested case
hearing on the rate. Interest must be computed as simple
interest per annum.
Subd. 2. [TIMING OF ORDER.] The order under subdivision 1
shall be issued within 30 60 days after the close of the hearing
or within such reasonable time extension as the commissioner may
fix.
Subd. 3. [APPROVAL OF SUBSTITUTED RATE.] No rate replacing
a disapproved rate may be used until it has been filed with the
commissioner and not disapproved within 30 60 days thereafter,
except that the rate disapproved under subdivision 1, with the
consent of the commissioner, or the last previous rate in effect
for the insurer may be used for a period of not more than three
months pending the approval of a substituted rate. The
commissioner's order may include provision for a premium
adjustment in a rate charged pending approval of a substituted
rate.
Sec. 57. Minnesota Statutes 1984, section 72A.13,
subdivision 1, is amended to read:
Subdivision 1. Any company, corporation, association,
society, or other insurer, or any officer or agent thereof,
which or who solicits, issues or delivers to any person in this
state any policy in violation of the provisions of sections 4 or
62A.01 to 62A.10, may be punished by a fine of not more than
$100 for each offense, and the commissioner may revoke the
license of any company, corporation, association, society, or
other insurer of another state or country, or of the agent
thereof, which or who wilfully violates any provision of
sections 4 or 62A.01 to 62A.10.
Sec. 58. [60A.30] [RENEWAL OF INSURANCE POLICY WITH
ALTERED RATES.]
If an insurance company licensed to do business in this
state offers or purports to offer to renew any commercial
liability and/or property insurance policy at less favorable
terms as to the dollar amount of coverage or deductibles, higher
rates, and/or higher rating plan, the new terms, the new rates
and/or rating plan may take effect on the renewal date of the
policy if the insurer has sent to the policyholder notice of the
new terms, new rates and/or rating plan at least 30 days prior
to the expiration date. If the insurer has not so notified the
policyholder, the policyholder may elect to cancel the renewal
policy within the 30-day period after receipt of the notice.
Earned premium for the period of coverage, if any, shall be
calculated pro rata upon the prior rate. This subdivision does
not apply to ocean marine insurance, accident and health
insurance, and reinsurance.
Sec. 59. [60A.31] [MID TERM CANCELLATION.]
In addition to the requirements of Minnesota Statutes 1984,
section 176.185, subdivision 1, no policy of insurance issued to
cover the liability to pay compensation under Minnesota Statutes
1984, chapter 176, shall be canceled by the insurer within the
policy period unless the insurer has also complied with the
requirements of such rules as the commissioner of commerce may
adopt in regard to the cancellation of commercial liability and/
or commercial property insurance policies.
Sec. 60. [145.682] [CERTIFICATION OF EXPERT REVIEW;
AFFIDAVIT.]
Subdivision 1. [DEFINITION.] For purposes of this section,
"health care provider" means a physician, surgeon, dentist, or
other health care professional or hospital, including all
persons or entities providing health care as defined in section
145.61, subdivisions 2 and 4, or a certified health care
professional employed by or providing services as an independent
contractor in a hospital.
Subd. 2. [REQUIREMENT.] In an action alleging malpractice,
error, mistake, or failure to cure, whether based on contract or
tort, against a health care provider which includes a cause of
action as to which expert testimony is necessary to establish a
prima facie case, the plaintiff must: (1) unless otherwise
provided in subdivision 3, paragraph (b), serve upon defendant
with the summons and complaint an affidavit as provided in
subdivision 3; and (2) serve upon defendant within 180 days
after commencement of the suit an affidavit as provided by
subdivision 4.
Subd. 3. [AFFIDAVIT OF EXPERT REVIEW.] The affidavit
required by subdivision 2, clause (1), must be by the
plaintiff's attorney and state that:
(a) the facts of the case have been reviewed by the
plaintiff's attorney with an expert whose qualifications provide
a reasonable expectation that the expert's opinions could be
admissible at trial and that, in the opinion of this expert, one
or more defendants deviated from the applicable standard of care
and by that action caused injury to the plaintiff; or
(b) the expert review required by paragraph (a) could not
reasonably be obtained before the action was commenced because
of the applicable statute of limitations. If an affidavit is
executed pursuant to this paragraph, the affidavit in paragraph
(a) must be served on defendant or the defendant's counsel
within 90 days after service of the summons and complaint.
Subd. 4. [IDENTIFICATION OF EXPERTS TO BE CALLED.] The
affidavit required by subdivision 2, clause (2), must be by the
plaintiff's attorney and state the identity of each person whom
plaintiff expects to call as an expert witness at trial to
testify with respect to the issues of malpractice or causation,
the substance of the facts and opinions to which the expert is
expected to testify, and a summary of the grounds for each
opinion. Answers to interrogatories that state the information
required by this subdivision satisfy the requirements of this
subdivision if they are signed by the plaintiff's attorney and
served upon the defendant within 180 days after commencement of
the suit against the defendant.
The parties or the court for good cause shown, may by
agreement, provide for extensions of the time limits specified
in subdivision 2, 3, or this subdivision. Nothing in this
subdivision may be construed to prevent either party from
calling additional expert witnesses or substituting other expert
witnesses.
Subd. 5. [RESPONSIBILITIES OF PLAINTIFF AS ATTORNEY.] If
the plaintiff is acting pro se, the plaintiff shall sign the
affidavit or answers to interrogatories referred to in this
section and is bound by those provisions as if represented by an
attorney.
Subd. 6. [PENALTY FOR NONCOMPLIANCE.] Failure to comply
with subdivision 2, clause (1), within 60 days after demand for
the affidavit results, upon motion, in mandatory dismissal with
prejudice of each cause of action as to which expert testimony
is necessary to establish a prima facie case.
Failure to comply with subdivision 2, clause (2), and
subdivision 4 results, upon motion, in mandatory dismissal with
prejudice of each cause of action as to which expert testimony
is necessary to establish a prima facie case.
Subd. 7. [CONSEQUENCES OF SIGNING AFFIDAVIT.] The
signature of the plaintiff or the plaintiff's attorney
constitutes a certification that the person has read the
affidavit or answers to interrogatories, and that to the best of
the person's knowledge, information, and belief formed after a
reasonable inquiry, it is true, accurate, and made in good
faith. A certification made in violation of this subdivision
subjects the attorney or plaintiff responsible for such conduct
to reasonable attorney's fees, costs, and disbursements.
Sec. 61. Minnesota Statutes 1984, section 245.814, is
amended to read:
245.814 [LIABILITY INSURANCE FOR FOSTER PARENTS LICENSED
PROVIDERS.]
Subdivision 1. [INSURANCE FOR FOSTER PARENTS.] The
commissioner of human services shall within the appropriation
provided purchase and provide insurance to foster parents to
cover their liability for:
(1) injuries or property damage caused or sustained by
foster children in their home; and
(2) actions arising out of alienation of affections
sustained by the natural parents of a foster child.
Coverage shall apply to all foster boarding homes licensed
by the department of human services, licensed by a federally
recognized tribal government, or established by the juvenile
court and certified by the commissioner of corrections pursuant
to section 260.185, subdivision 1, clause (c) (5), to the extent
that the liability is not covered by the provisions of the
standard homeowner's or automobile insurance policy. The
insurance shall not cover property owned by the foster parents,
damage caused intentionally by a child over 12 years of age, or
property damage arising out of business pursuits or the
operation of any vehicle, machinery, or equipment.
Subd. 2. [LIABILITY INSURANCE; RISK POOL.] If the
commissioner determines that appropriate commercial liability
insurance coverage is not available for a licensed foster home,
group home, developmental achievement center, or day care
provider, and that coverage available through the joint
underwriting authority of the commissioner of commerce or other
public entity is not appropriate for the provider or a class of
providers, the commissioner of human services and the
commissioner of commerce may jointly establish a risk pool to
provide coverage for licensed providers out of premiums or fees
paid by providers. The commissioners may set limits on
coverage, establish premiums or fees, determine the
proportionate share of each provider to be collected in a
premium or fee based on the provider's claim experience and
other factors the commissioners consider appropriate, establish
eligibility and application requirements for coverage, and take
other action necessary to accomplish the purposes of this
subdivision. A human services risk pool fund is created for the
purposes of this subdivision. Fees and premiums collected from
providers for risk pool coverage are appropriated to the risk
pool fund. Interest earned from the investment of money in the
fund must be credited to the fund and money in the fund is
appropriated to the commissioner of human services to pay
administrative costs and covered claims for participating
providers. In the event that money in the fund is insufficient
to pay outstanding claims and associated administrative costs,
the commissioner of human services may assess providers
participating in the risk pool amounts sufficient to pay the
costs. The commissioner of human services may not assess a
provider an amount exceeding one year's premiums collected from
that provider.
Sec. 62. [317.201] [UNPAID DIRECTORS OR TRUSTEES;
LIABILITY FOR DAMAGES.]
A director or trustee of a nonprofit corporation or
association who is not paid for services to the corporation or
association is not individually liable for damages occasioned
solely by reason of membership on or participation in board
activities.
Sec. 63. Minnesota Statutes 1984, section 398A.04,
subdivision 6, is amended to read:
Subd. 6. [INSURANCE AND INDEMNITY.] (a) The authority
shall be subject to tort liability to the extent provided in
chapter 466 and may procure insurance against the liability, and
may indemnify and purchase and maintain insurance on behalf of
any of its commissioners, officers, employees, or agents, in
connection with any threatened, pending, or completed action,
suit, or proceeding, as provided in chapter 466, and to the same
extent and in the same manner and with the same force and effect
as provided in the case of a private corporation by section
300.082 300.083. It may also procure insurance against loss of
or damage to property in the amounts, by reason of the risks,
and from the insurers as it deems prudent.
(b) A railroad leasing its tracks and right-of-way to a
railroad authority that is created under this chapter and
affiliated with a railroad museum is subject to tort liability
only to the extent provided for municipalities in chapter 466 as
to any claims arising out of fare-paying passenger operations
carried on by the railroad authority primarily for the purpose
of promoting tourism on tracks and right-of-way leased from the
railroad.
Sec. 64. Minnesota Statutes 1984, section 466.01,
subdivision 1, is amended to read:
Subdivision 1. [MUNICIPALITY.] For the purposes of
sections 466.01 to 466.15, "municipality" means any city,
whether organized under home rule charter or otherwise, any
county, town, public authority, public corporation, special
district, school district, however organized, county
agricultural society organized pursuant to chapter 38, joint
powers board or organization created under section 471.59 or
other statute, public library, regional public library system,
multicounty multitype library system, or other political
subdivision.
Sec. 65. Minnesota Statutes 1984, section 466.03,
subdivision 4, is amended to read:
Subd. 4. [ACCUMULATIONS OF SNOW AND ICE.] Any claim based
on snow or ice conditions on any highway or other public place
or public sidewalk that does not abut a publicly-owned building
or publicly-owned parking lot, except when the condition is
affirmatively caused by the negligent acts of the municipality.
Sec. 66. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 6e. [PARKS AND RECREATION AREAS.] Any claim based
upon the construction, operation, or maintenance of any property
owned or leased by the municipality that is intended or
permitted to be used as a park, as an open area for recreational
purposes, or for the provision of recreational services, or from
any claim based on the clearing of land, removal of refuse, and
creation of trails or paths without artificial surfaces, if the
claim arises from a loss incurred by a user of park and
recreation property or services. Nothing in this subdivision
limits the liability of a municipality for conduct that would
entitle a trespasser to damages against a private person.
Sec. 67. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 8. Any claim for a loss other than injury to or loss
of property or personal injury or death.
Sec. 68. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 9. Any claim for a loss of benefits or compensation
due under a program of public assistance or public welfare,
except where municipal compensation for loss is expressly
required by federal law in order for the municipality to receive
federal grants-in-aid.
Sec. 69. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 10. Any claim for a loss based on the failure of any
person to meet the standards needed for a license, permit, or
other authorization issued by the municipality or its agents.
Sec. 70. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 11. Any claim for a loss based on the usual care and
treatment, or lack of care and treatment, of any person at a
municipal hospital or corrections facility where reasonable use
of available funds has been made to provide care.
Sec. 71. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 12. Any claim for a loss, damage, or destruction of
property of a patient or inmate of a municipal institution.
Sec. 72. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 13. Any claim for a loss caused by the condition of
unimproved real property owned by a municipality, which means
land that the municipality has not improved, and appurtenances,
fixtures and attachments to land that the municipality has
neither affixed nor improved.
Sec. 73. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 14. Any claim for a loss for which recovery is
prohibited by section 169.121, subdivision 9.
Sec. 74. Minnesota Statutes 1984, section 466.03, is
amended by adding a subdivision to read:
Subd. 15. Any claim against a municipality, if the same
claim would be excluded under section 3.736, if brought against
the state.
Sec. 75. Minnesota Statutes 1984, section 466.05, is
amended to read:
466.05 [NOTICE OF CLAIM.]
Subdivision 1. [NOTICE REQUIRED.] Except as provided in
subdivisions 2 and 3, every person, whether plaintiff, defendant
or third party plaintiff or defendant, who claims damages from
any municipality or municipal employee acting within the scope
of employment for or on account of any loss or injury within the
scope of section 466.02 shall cause to be presented to the
governing body of the municipality within 180 days after the
alleged loss or injury is discovered a notice stating the time,
place and circumstances thereof, the names of the municipal
employees known to be involved, and the amount of compensation
or other relief demanded. Actual notice of sufficient facts to
reasonably put the governing body of the municipality or its
insurer on notice of a possible claim shall be construed to
comply with the notice requirements of this section. Failure to
state the amount of compensation or other relief demanded does
not invalidate the notice; but in such case, the claimant shall
furnish full information regarding the nature and extent of the
injuries and damages within 15 days after demand by the
municipality. No action therefor shall be maintained unless
such notice has been given and unless the action is commenced
within one year after such notice. The time for giving such
notice does not include the time, not exceeding 90 days, during
which the person injured is incapacitated by the injury from
giving the notice.
Subd. 2. [EXCEPTIONS TO THE NOTICE REQUIREMENT.] Notice
shall not be required to maintain an action for damages for or
on account of any loss or injury within the scope of section
466.02 if such injury or loss:
(a) arises out of an intentional tort committed by an
officer, employee or agent of the municipality; or
(b) involves a motor vehicle or other equipment owned by
the municipality or operated by an officer, employee or agent of
the municipality.
Where no notice of claim is required under this chapter, no
action shall be maintained unless the action is commenced within
two years after the date of the incident, accident or
transaction out of which the cause of action arises.
Subd. 3 2. [CLAIMS FOR WRONGFUL DEATH; NOTICE.] When the
claim is one for death by wrongful act or omission, the notice
may be presented by the personal representative, surviving
spouse, or next of kin, or the consular officer of the foreign
country of which the deceased was a citizen, within one year
after the alleged injury or loss resulting in such death; if the
person for whose death the claim is made has presented a notice
that would have been sufficient had he lived an action for
wrongful death may be brought without any additional notice.
Sec. 76. Minnesota Statutes 1984, section 466.07, is
amended by adding a subdivision to read:
Subd. 4. [PUNITIVE DAMAGES.] A municipality may not save
harmless, indemnify or insure an officer or employee for
punitive damages levied against the officer or employer. The
municipality may provide a defense against a claim for punitive
damages as a necessary incident to other elements of a defense.
Sec. 77. [466.101] [LAW ENFORCEMENT COSTS.]
When costs are assessed against a municipality for injuries
incurred or other medical expenses connected with the arrest of
individuals violating Minnesota Statutes, the municipality
responsible for the hiring, firing, training, and control of the
law enforcement and other employees involved in the arrest is
responsible for those costs.
Sec. 78. Minnesota Statutes 1984, section 471.982,
subdivision 3, is amended to read:
Subd. 3. Self-insurance pools established and open for
enrollment on a statewide basis by the Minnesota league of
cities insurance trust, the Minnesota school boards association
insurance trust or the Minnesota association of counties
insurance trust and the political subdivisions that belong to
them are exempt from the requirements of this section and
section 65B.48, subdivision 3.
Sec. 79. Minnesota Statutes 1984, section 541.15, is
amended to read:
541.15 [PERIODS OF DISABILITY NOT COUNTED.]
(a) Except as provided in paragraph (b), any of the
following grounds of disability, existing at the time when a
cause of action accrued or arising anytime during the period of
limitation, shall suspend the running of the period of
limitation until the same is removed; provided that such period,
except in the case of infancy, shall not be extended for more
than five years, nor in any case for more than one year after
the disability ceases:
(1) That the plaintiff is within the age of 18 years;
(2) His insanity;
(3) His imprisonment on a criminal charge, or under a
sentence of a criminal court for a term less than his natural
life;
(4) Is an alien and the subject or citizen of a country at
war with the United States;
(5) When the beginning of the action is stayed by
injunction or by statutory prohibition.
If two or more disabilities shall coexist, the suspension
shall continue until all are removed.
(b) In actions alleging malpractice, error, mistake, or
failure to cure, whether based on contract or tort, against a
health care provider, the ground of disability specified in
paragraph (a), clause (1), suspends the period of limitation
until the disability is removed. The suspension may not be
extended for more than seven years, or for more than one year
after the disability ceases.
For purposes of this paragraph, health care provider means
a physician, surgeon, dentist, or other health care professional
or hospital, including all persons or entities providing health
care as defined in section 145.61, subdivisions 2 and 4, or a
certified health care professional employed by or providing
services as an independent contractor in a hospital.
Sec. 80. [548.36] [COLLATERAL SOURCE CALCULATIONS.]
Subdivision 1. [DEFINITION.] For purposes of this section,
"collateral sources" means payments related to the injury or
disability in question made to the plaintiff, or on the
plaintiff's behalf up to the date of the verdict, by or pursuant
to:
(1) a federal, state, or local income disability or
workers' compensation act; or other public program providing
medical expenses, disability payments, or similar benefits;
(2) health, accident and sickness, or automobile accident
insurance or liability insurance that provides health benefits
or income disability coverage; except life insurance benefits
available to the plaintiff, whether purchased by the plaintiff
or provided by others, payments made pursuant to the United
States Social Security Act, or pension payments;
(3) a contract or agreement of a group, organization,
partnership, or corporation to provide, pay for, or reimburse
the costs of hospital, medical, dental or other health care
services; or
(4) a contractual or voluntary wage continuation plan
provided by employers or any other system intended to provide
wages during a period of disability, except benefits received
from a private disability insurance policy where the premiums
were wholly paid for by the plaintiff.
Subd. 2. [MOTION.] In a civil action, whether based on
contract or tort, when liability is admitted or is determined by
the trier of fact, and when damages include an award to
compensate the plaintiff for losses available to the date of the
verdict by collateral sources, a party may file a motion within
ten days of the date of entry of the verdict requesting
determination of collateral sources. If the motion is filed,
the parties shall submit written evidence of, and the court
shall determine:
(1) amounts of collateral sources that have been paid for
the benefit of the plaintiff or are otherwise available to the
plaintiff as a result of losses except those for which a
subrogation right has been asserted; and
(2) amounts that have been paid, contributed, or forfeited
by, or on behalf of, the plaintiff or members of the plaintiff's
immediate family for the two-year period immediately before the
accrual of the action to secure the right to a collateral source
benefit that the plaintiff is receiving as a result of losses.
Subd. 3. [DUTIES OF THE COURT.] (a) The court shall reduce
the award by the amounts determined under subdivision 2, clause
(1), and offset any reduction in the award by the amounts
determined under subdivision 2, clause (2).
(b) If the court cannot determine the amounts specified in
paragraph (a) from the written evidence submitted, the court may
within ten days request additional written evidence or schedule
a conference with the parties to obtain further evidence.
Subd. 4. [CALCULATION OF ATTORNEYS' FEES.] If the fees for
legal services provided to the plaintiff are based on a
percentage of the amount of money awarded to the plaintiff, the
percentage must be based on the amount of the award as adjusted
under subdivision 3. Any subrogated provider of a collateral
source not separately represented by counsel shall pay the same
percentage of attorneys' fees as paid by the plaintiff and shall
pay its proportionate share of the costs.
Subd. 5. [JURY NOT INFORMED OF COLLATERAL SOURCES.] The
jury shall not be informed of the existence of collateral
sources or any future benefits which may or may not be payable
to the plaintiff.
Sec. 81. Minnesota Statutes 1984, section 549.09,
subdivision 1, is amended to read:
Subdivision 1. [WHEN OWED; RATE.] (a) When the judgment is
for the recovery of money, including a judgment for the recovery
of taxes, interest from the time of the verdict or report until
judgment is finally entered shall be computed by the clerk as
provided in clause (c) and added to the judgment. (b) Except as
otherwise provided by contract or allowed by law, pre-verdict or
pre-report interest on pecuniary damages shall be computed as
provided in clause (c) from the time of the commencement of the
action, or the time of a written settlement demand, whichever
occurs first, except as provided herein. The action must be
commenced within 60 days of a written settlement demand for
interest to begin to accrue from the time of the demand. If
either party serves a written offer of settlement, the other
party may serve a written acceptance or a written counter-offer
within 60 days. After that time interest on the judgment shall
be calculated by the judge in the following manner. The
prevailing party shall receive interest on any judgment from the
time the action was commenced or a written settlement demand was
made, or as to special damages from the time when special
damages were incurred, if later than commencement of the action,
until the time of verdict or report only if the amount of its
offer is closer to the judgment than the amount of the opposing
party's offer. If the amount of the losing party's offer was
closer to the judgment than the prevailing party's offer, the
prevailing party shall receive interest only on the amount of
the settlement offer or the judgment, whichever is less, and
only from the time the action was commenced or a written
settlement demand was made, or as to special damages from when
the special damages were incurred, if later than commencement of
the action, until the time the settlement offer was
made. Subsequent offers and counteroffers supersede the legal
effect of earlier offers and counteroffers. For the purposes of
clause (3), the amount of settlement offer must be allocated
between past and future damages in the same proportion as
determined by the trier of fact. Except as otherwise provided
by contract or allowed by law, pre-verdict or pre-report
interest shall not be awarded on the following:
(1) judgments, awards, or benefits in workers' compensation
cases, but not including third-party actions;
(2) judgments, decrees, or orders in dissolution,
annulment, or legal separation actions;
(3) judgments for future damages;
(4) punitive damages, fines, or other damages that are
noncompensatory in nature;
(4) (5) judgments not in excess of the amount specified in
section 487.30; and
(5) (6) that portion of any verdict or report which is
founded upon interest, or costs, disbursements, attorney fees,
or other similar items added by the court. (c) The interest
shall be computed as simple interest per annum. The rate of
interest shall be based on the secondary market yield of one
year United States treasury bills, calculated on a bank discount
basis as provided in this section.
On or before the 20th day of December of each year the
state court administrator shall determine the rate from the
secondary market yield on one year United States treasury bills
for the most recent calendar month, reported on a monthly basis
in the latest statistical release of the board of governors of
the federal reserve system. This yield, rounded to the nearest
one percent, shall be the annual interest rate during the
succeeding calendar year; provided, however, that in no event
shall the rate of interest be less than eight percent per
annum. The state court administrator shall also determine the
average rate of interest on judgments to be used during the
succeeding calendar year for computation of the discount rate
under section 86, subdivision 4. The state court administrator
shall communicate the interest rate rates to the clerks of court
for their use in computing the interest on verdicts and the
discount rate under section 86.
Sec. 82. [549.191] [CLAIM FOR PUNITIVE DAMAGES.]
Upon commencement of a civil action, the complaint must not
seek punitive damages. After filing the suit a party may make a
motion to amend the pleadings to claim punitive damages. The
motion must allege the applicable legal basis under section
549.20 or other law for awarding punitive damages in the action
and must be accompanied by one or more affidavits showing the
factual basis for the claim. At the hearing on the motion, if
the court finds prima facie evidence in support of the motion,
the court shall grant the moving party permission to amend the
pleadings to claim punitive damages. For purposes of tolling
the statute of limitations, pleadings amended under this section
relate back to the time the action was commenced.
Sec. 83. Minnesota Statutes 1984, section 549.21, is
amended to read:
549.21 [REIMBURSEMENT FOR CERTAIN COSTS IN CIVIL ACTIONS.]
Subdivision 1. [ACKNOWLEDGEMENT IN PLEADINGS.] The parties
by their attorneys in any civil action shall attach to and make
a part of the pleading served on the opposite party or parties a
signed acknowledgment stating that the parties acknowledge that
costs, disbursements, and reasonable attorney and witness fees
may be awarded to the opposing party or parties pursuant to
subdivision 2.
Subd. 2. [AWARD OF COSTS.] Upon motion of a party, or upon
the court's own motion, the court in its discretion may award to
that party costs, disbursements, reasonable attorney fees and
witness fees if the party or attorney against whom costs,
disbursements, reasonable attorney and witness fees are charged
acted in bad faith; asserted a claim or defense knowing it to be
that is frivolous and that is costly to the other party;
asserted an unfounded position solely to delay the ordinary
course of the proceedings or to harass; or committed a fraud
upon the court. To qualify for an award under this section, a
party shall give timely notice of intent to claim an award. An
award under this section shall be without prejudice and as an
alternative to any claim for sanctions that may be asserted
under the rules of civil procedure. Nothing herein shall
authorize the award of costs, disbursements or fees against a
party or attorney advancing a claim or defense unwarranted under
existing law, if it is supported by a good faith argument for an
extension, modification, or reversal of the existing law.
Sec. 84. Minnesota Statutes 1984, section 595.02, is
amended by adding a subdivision to read:
Subd. 5. [WAIVER OF PRIVILEGE FOR HEALTH CARE
PROVIDERS.] A party who commences an action for malpractice,
error, mistake, or failure to cure, whether based on contract or
tort, against a health care provider on the person's own behalf
or in a representative capacity, waives in that action any
privilege existing under subdivision 1, paragraphs (d) and (g),
as to any information or opinion in the possession of a health
care provider who has examined or cared for the party or other
person whose health or medical condition has been placed in
controversy in the action. This waiver must permit all parties
to the action, and their attorneys or authorized
representatives, to informally discuss the information or
opinion with the health care provider if the provider consents.
Prior to an informal discussion with a health care provider, the
defendant must mail written notice to the other party at least
15 days before the discussion. The plaintiff's attorney or
authorized representative must have the opportunity to be
present at any informal discussion. Appropriate medical
authorizations permitting discussion must be provided by the
party commencing the action upon request from any other party.
A health care provider may refuse to consent to the
discussion but, in that event, the party seeking the information
or opinion may take the deposition of the health care provider
with respect to that information and opinion, without obtaining
a prior court order.
For purposes of this subdivision, "health care provider"
means a physician, surgeon, dentist, or other health care
professional or hospital, including all persons or entities
providing health care as defined in section 145.61, subdivisions
2 and 4, or a certified health care professional employed by or
providing services as an independent contractor in a hospital.
Sec. 85. Minnesota Statutes 1984, section 604.02,
subdivision 1, is amended to read:
Subdivision 1. When two or more persons are jointly
liable, contributions to awards shall be in proportion to the
percentage of fault attributable to each, except that each is
jointly and severally liable for the whole award. If the state
or a municipality as defined in section 466.01 is jointly
liable, and its fault is less than 35 percent, it is jointly and
severally liable for an amount no greater than twice the amount
of fault.
Sec. 86. [604.07] [DISCOUNT, FUTURE DAMAGE AWARDS.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the following terms have the meanings given them.
(b) "Economic loss" means all pecuniary harm for which
damages are recoverable, including, but not limited to, medical
expenses, loss of earnings, and loss of earning capacity.
(c) "Future damages" means all damages which the trier of
fact finds will accrue after the damage findings are made.
(d) "Intangible loss" means embarrassment, emotional
distress, and loss of consortium.
(d) "Noneconomic loss" means pain, disability, and
disfigurement.
(e) "Past damages" means all damages that have accrued when
the damage findings are made.
Subd. 2. [DISCOUNT REQUIRED.] In all actions seeking
damages for personal injury, wrongful death, or loss of means of
support, awards of all future damages, including economic,
noneconomic and intangible loss, reasonably certain to occur
must be discounted to present value as provided in this section.
Subd. 3. [FUTURE DAMAGES; EVIDENCE.] The amount of all
future damages, including economic, noneconomic and intangible
loss reasonably certain to occur, must be ascertained at the
time of trial without reference to projected inflationary or
noninflationary changes. Evidence of noninflationary changes in
earnings or earning capacity that are reasonably certain to
occur are admissible, but this evidence is limited to the
present value of the future changes without regard to
inflationary changes. Projected increases in earnings or
earning capacity dependent upon general economic statistics are
not admissible.
Subd. 4. [DISCOUNT RATE.] The award calculated under
subdivision 3 must be reduced to present value at the time of
trial by application of a discount rate equal to:
(1) the average rate of interest on judgments under section
549.09 for the five calendar years immediately preceding the
commencement of trial, rounded to the nearest one-tenth, less
(2) the average increase in the Consumer Price Index for
all Urban Consumers, all items, as published by the U.S.
Department of Labor, Bureau of Labor Statistics, rounded to the
nearest one-tenth, for the same five-year period. If the Labor
Department statistics are not published by the time of trial,
the court shall employ the average increase over the most recent
five-year period available in the published statistics.
In no instance may the discount rate fall below two percent
or rise above six percent.
Sec. 87. Minnesota Statutes 1985 Supplement, section
62B.05, is amended to read:
62B.05 [TERM OF CREDIT LIFE INSURANCE AND CREDIT ACCIDENT
AND HEALTH INSURANCE.]
The term of any credit life insurance or credit accident
and health insurance shall, subject to acceptance by the
insurer, commence on the date when the debtor becomes obligated
to the creditor, except that, where a group policy provides
coverage with respect to existing obligations, the insurance on
a debtor with respect to the indebtedness shall commence on the
effective date of the policy. Where evidence of insurability is
required and the evidence is furnished more than 30 days after
the date when the debtor becomes obligated to the creditor, the
term of the insurance may commence on the date on which the
insurance company determines the evidence to be satisfactory,
and in that event there shall be an appropriate refund or
adjustment of any charge to the debtor for insurance. The term
of the insurance shall not extend more than 15 days beyond the
scheduled maturity date of the indebtedness except when extended
without additional cost to the debtor.
If an indebtedness is prepaid in full before its scheduled
maturity, except by performance of the insurer's obligation
under the policy, the insurance shall be deemed canceled and a
refund shall be paid or credited as provided in section 62B.08.
Upon prepayment in full, the creditor shall make the refund of
unearned premium, unless the credit insurance was originated by
a third party, in which case the creditor shall promptly notify
the third party who shall make the refund.
Sec. 88. [549.23] [INTANGIBLE LOSSES; LIMITATIONS.]
Subdivision 1. [DEFINITION.] For purposes of this section,
"intangible loss" means embarrassment, emotional distress, and
loss of consortium. Intangible loss does not include pain,
disability or disfigurement.
Subd. 2. [LIMITATION.] In civil actions, whether based on
contract or tort, the amount of damages per person for
intangible losses may not exceed $400,000.
Subd. 3. [JURY NOT INFORMED OF LIMITATION.] The court may
not inform the jury of the existence of the limitation in
subdivision 2.
Subd. 4. [NOT NEW ACTION.] This section does not create a
new cause of action for intangible loss.
Sec. 89. [549.24] [SPECIFIC DAMAGE FINDINGS BY JURY.]
The court shall require the jury to specify amounts for
past damages and future damages as defined in section 86.
Within each category of damages, the jury must further specify
amounts for intangible loss as defined in section 88.
Sec. 90. [466.132] [INDEMNIFICATION BY STATE.]
Municipalities, when performing, as required or mandated by
state law, inspections or investigations of persons prior to the
issuance of state licenses, are employees of the state for
purposes of the indemnification provisions of section 3.736,
subdivision 9. A municipality is not, however, an employee of
the state for purposes of this section if in hiring,
supervising, or continuing to employ the person performing an
inspection or investigation for the municipality, the
municipality was clearly negligent.
Sec. 91. Minnesota Statutes 1984, section 465.72, is
amended to read:
465.72 [SEVERANCE PAY.]
Subdivision 1. [PAYMENT; LIMITS.] Except as may otherwise
be provided in Laws 1959, Chapter 690, as amended, any county,
city, township, school district or other governmental
subdivision may pay severance pay to its employees and
promulgate rules for the payment of severance pay to an employee
who leaves employment on or before or subsequent to the normal
retirement date. Severance pay shall also include the payment
of accumulated vacation leave, accumulated sick leave or a
combination thereof. The severance pay shall be excluded from
retirement deductions and from any calculations in retirement
benefits. It shall be paid in a manner mutually agreeable to
the employee and employer and, except as provided in subdivision
2, over a period not to exceed five years from retirement or
termination of employment. If a retired or terminated employee
dies before all or a portion of the severance pay has been
disbursed, that balance due shall be paid to a named beneficiary
or, lacking same, to the deceased's estate. Except as provided
in subdivision 2, in no event shall severance pay provided for
an employee leaving employment exceed an amount equivalent to
one year of pay.
Subd. 2. [EXCEPTIONS.] The provisions of subdivision 1
requiring that severance pay be paid over a period not to exceed
five years from retirement or termination of employment and
limiting severance pay to an amount equal to one year of pay do
not apply to severance pay constituting compensation for
accumulated sick leave in the form of periodic contributions
toward premiums for group insurance policies provided for a
former employee by a governmental subdivision.
This subdivision applies only to periodic contributions
that have commenced before the effective date of this act or
that are required under contracts, or, with respect to employees
not covered by contracts, personnel policies, formally adopted
by the governing body of the governmental subdivision, in
existence on the effective date of this act. After the
effective date of this act, a governmental subdivision may not
enter into a contract or adopt a personnel policy providing for
a payment in violation of subdivision 1. A personnel policy or
portion of a personnel policy in existence on the effective date
of this act and providing for a payment in violation of
subdivision 1 is null and void (i) upon the expiration of a
collective bargaining agreement containing a similar provision
and covering employees of the governmental subdivision that has
adopted the policy, or (ii) two years from the effective date of
this act, whichever is earlier. Any payments by governmental
subdivisions in accordance with this subdivision before the
effective date of this act are validated.
Sec. 92. Minnesota Statutes 1984, section 541.051, is
amended to read:
541.051 [LIMITATION OF ACTION FOR DAMAGES BASED ON SERVICES
OR CONSTRUCTION TO IMPROVE REAL PROPERTY.]
Subdivision 1. Except where fraud is involved, no action
by any person in contract, tort, or otherwise to recover damages
for any injury to property, real or personal, or for bodily
injury or wrongful death, arising out of the defective and
unsafe condition of an improvement to real property, nor any
action for contribution or indemnity for damages sustained on
account of the injury, shall be brought against any person
performing or furnishing the design, planning, supervision,
materials, or observation of construction or construction of the
improvement to real property or against the owner of the real
property more than two years after discovery thereof, nor, in
any event shall such a cause of action accrue more than 15 ten
years after substantial completion of the construction. Date of
substantial completion shall be determined by the date when
construction is sufficiently completed so that the owner or his
representative can occupy or use the improvement for the
intended purpose.
Nothing in this section shall apply to actions for damages
resulting from negligence in the maintenance, operation or
inspection of the real property improvement against the owner or
other person in possession.
Subd. 2. Notwithstanding the provisions of subdivision 1,
in the case of an action which accrues during the 14th ninth or
15th tenth year after substantial completion of the
construction, an action to recover damages may be brought within
two years after the date on which the action accrued, but in no
event may an action be brought more than 17 twelve years after
substantial completion of the construction.
Subd. 3. Nothing in this section shall be construed as
extending the period prescribed by the laws of this state for
the bringing of any action.
Subd. 4. This section shall not apply to actions based on
breach of the statutory warranties set forth in section 327A.02,
or to actions based on breach of an express written warranty,
provided such actions shall be brought within two years of the
discovery of the breach.
Sec. 93. [541.052] [LIMITATION OF ACTIONS FOR DAMAGES
BASED ON ERRORS IN LAND SURVEYS.]
Subdivision 1. Except where fraud is involved, no action
to recover damages for an error in the survey of land, nor any
action for contribution or indemnity for damages sustained on
account of an error, may be brought against any person
performing the survey more than two years after the discovery of
the error, nor in any event more than ten years after the date
of the survey.
Subd. 2. Notwithstanding the provisions of subdivision 1,
in the case of action which occurs during the ninth or tenth
year after the date of the survey, an action to recover damages
may be brought within two years after the date on which the
action occurred, but in no event may an action be brought more
than twelve years after the date of the survey.
Sec. 94. [REPEALER.]
Minnesota Statutes 1984, section 70A.06, subdivision 4, is
repealed.
Sec. 95. [EFFECTIVE DATES.]
Sections 2, 63 to 77, and 90 are effective July 1, 1986,
and apply to claims arising from incidents that occur on or
after that date.
Sections 60, 79, 82, and 83 apply to all actions commenced
on or after the effective date of those sections. Sections 80,
84, 85, 86, 88, and 89 apply to actions pending on or commenced
on or after the effective date of those sections.
Sections 3 to 59, 61, 62, 78, and 94 are effective the day
following final enactment. Section 79 is effective January 1,
1987.
Approved March 25, 1986
Official Publication of the State of Minnesota
Revisor of Statutes