1.1 	A bill for an act
1.2 	relating to insurance; regulating agency terminations,
1.3 	coverages, fees, forms, disclosures, reports,
1.4 	information security, and premiums; amending Minnesota
1.5 	Statutes 2004, sections 60A.14, subdivision 1;
1.6 	60A.171, subdivision 11; 60A.23, subdivision 8;
1.7 	60A.966; 60A.969; 62A.136; 62A.31, subdivision 1h;
1.8 	62A.315; 62A.316; 62E.12; 62E.13, subdivision 2;
1.9 	62Q.471; 62Q.65; 65A.29, subdivision 11; 65B.48,
1.10 	subdivision 3; 72A.20, subdivisions 13, 36; 79.211, by
1.11 	adding a subdivision; 79.40; 79.56, subdivisions 1, 3;
1.12 	79.62, subdivision 3; 79A.03, subdivision 9; 79A.04,
1.13 	subdivisions 2, 10; 79A.06, subdivision 5; 79A.12,
1.14 	subdivision 2; 79A.22, subdivision 11, by adding a
1.15 	subdivision; 123A.21, by adding a subdivision;
1.16 	176.191, subdivision 3; Laws 1985, chapter 85, section
1.17 	1; proposing coding for new law in Minnesota Statutes,
1.18 	chapters 60A; 60D; 65A; 65B; repealing Minnesota
1.19 	Statutes 2004, sections 61A.072, subdivision 2; 62E.03.
1.20 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.21 	Section 1. Minnesota Statutes 2004, section 60A.14,
1.22 	subdivision 1, is amended to read:
1.23 		Subdivision 1.Fees other than examination fees.  In
1.24 	addition to the fees and charges provided for examinations, the
1.25 	following fees must be paid to the commissioner for deposit in
1.26 	the general fund:
1.27 	(a) by township mutual fire insurance companies;
1.28 	(1) for filing certificate of incorporation $25 and
1.29 	amendments thereto, $10;
1.30 	(2) for filing annual statements, $15;
1.31 	(3) for each annual certificate of authority, $15;
1.32 	(4) for filing bylaws $25 and amendments thereto, $10;
2.1 	(b) by other domestic and foreign companies including
2.2 	fraternals and reciprocal exchanges;
2.3 	(1) for filing certified copy of certificate of articles of
2.4 	incorporation, $100;
2.5 	(2) for filing annual statement, $225;
2.6 	(3) for filing certified copy of amendment to certificate
2.7 	or articles of incorporation, $100;
2.8 	(4) for filing bylaws, $75 or amendments thereto, $75;
2.9 	(5) for each company's certificate of authority, $575,
2.10 	annually;
2.11 	(c) the following general fees apply:
2.12 	(1) for each certificate, including certified copy of
2.13 	certificate of authority, renewal, valuation of life policies,
2.14 	corporate condition or qualification, $25;
2.15 	(2) for each copy of paper on file in the commissioner's
2.16 	office 50 cents per page, and $2.50 for certifying the same;
2.17 	(3) for license to procure insurance in unadmitted foreign
2.18 	companies, $575;
2.19 	(4) for valuing the policies of life insurance companies,
2.20 	one cent per $1,000 of insurance so valued, provided that the
2.21 	fee shall not exceed $13,000 per year for any company.  The
2.22 	commissioner may, in lieu of a valuation of the policies of any
2.23 	foreign life insurance company admitted, or applying for
2.24 	admission, to do business in this state, accept a certificate of
2.25 	valuation from the company's own actuary or from the
2.26 	commissioner of insurance of the state or territory in which the
2.27 	company is domiciled;
2.28 	(5) for receiving and filing certificates of policies by
2.29 	the company's actuary, or by the commissioner of insurance of
2.30 	any other state or territory, $50;
2.31 	(6) for each appointment of an agent filed with the
2.32 	commissioner, $10;
2.33 	(7) for filing forms and rates, $75 $90 per filing,
2.34 	which or $75 per filing when submitted via electronic filing
2.35 	system.  Filing fees may be paid on a quarterly basis in
2.36 	response to an invoice.  Billing and payment may be made
3.1 	electronically;
3.2 	(8) for annual renewal of surplus lines insurer license,
3.3 	$300;
3.4 	(9) $250 filing fee for a large risk alternative rating
3.5 	option plan that meets the $250,000 threshold requirement.
3.6 	The commissioner shall adopt rules to define filings that
3.7 	are subject to a fee.

3.8 	Sec. 2. Minnesota Statutes 2004, section 60A.171,
3.9 	subdivision 11, is amended to read:
3.10 		Subd. 8.Self-insurance or insurance plan administrators
3.27 	who are vendors of risk management services.  (1)  [SCOPE.] This
3.28 	subdivision applies to any vendor of risk management services
3.29 	and to any entity which administers, for compensation, a
3.30 	self-insurance or insurance plan.  This subdivision does not
3.31 	apply (a) to an insurance company authorized to transact
3.32 	insurance in this state, as defined by section 60A.06,
3.33 	subdivision 1, clauses (4) and (5); (b) to a service plan
3.34 	corporation, as defined by section 62C.02, subdivision 6; (c) to
3.35 	a health maintenance organization, as defined by section 62D.02,
3.36 	subdivision 4; (d) to an employer directly operating a
4.1 	self-insurance plan for its employees' benefits; (e) to an
4.2 	entity which administers a program of health benefits
4.3 	established pursuant to a collective bargaining agreement
4.4 	between an employer, or group or association of employers, and a
4.5 	union or unions; or (f) to an entity which administers a
4.6 	self-insurance or insurance plan if a licensed Minnesota insurer
4.7 	is providing insurance to the plan and if the licensed insurer
4.8 	has appointed the entity administering the plan as one of its
4.9 	licensed agents within this state.
4.10 	(2)  [DEFINITIONS.] For purposes of this subdivision the
4.11 	following terms have the meanings given them.
4.12 	(a) "Administering a self-insurance or insurance plan"
4.13 	means (i) processing, reviewing or paying claims, (ii)
4.14 	establishing or operating funds and accounts, or (iii) otherwise
4.15 	providing necessary administrative services in connection with
4.16 	the operation of a self-insurance or insurance plan.
4.17 	(b) "Employer" means an employer, as defined by section
4.18 	62E.02, subdivision 2.
4.19 	(c) "Entity" means any association, corporation,
4.20 	partnership, sole proprietorship, trust, or other business
4.21 	entity engaged in or transacting business in this state.
4.22 	(d) "Self-insurance or insurance plan" means a plan
4.23 	providing life, medical or hospital care, accident, sickness or
4.24 	disability insurance for the benefit of employees or members of
4.25 	an association, or a plan providing liability coverage for any
4.26 	other risk or hazard, which is or is not directly insured or
4.27 	provided by a licensed insurer, service plan corporation, or
4.28 	health maintenance organization.
4.29 	(e) "Vendor of risk management services" means an entity
4.30 	providing for compensation actuarial, financial management,
4.31 	accounting, legal or other services for the purpose of designing
4.32 	and establishing a self-insurance or insurance plan for an
4.33 	employer.
4.34 	(3)  [LICENSE.] No vendor of risk management services or
4.35 	entity administering a self-insurance or insurance plan may
4.36 	transact this business in this state unless it is licensed to do
5.1 	so by the commissioner.  An applicant for a license shall state
5.2 	in writing the type of activities it seeks authorization to
5.3 	engage in and the type of services it seeks authorization to
5.4 	provide.  The license may be granted only when the commissioner
5.5 	is satisfied that the entity possesses the necessary
5.6 	organization, background, expertise, and financial integrity to
5.7 	supply the services sought to be offered.  The commissioner may
5.8 	issue a license subject to restrictions or limitations upon the
5.9 	authorization, including the type of services which may be
5.10 	supplied or the activities which may be engaged in.  The license
5.11 	fee is $1,000 $1,500 for the initial application and
5.12 	$1,000 $1,500 for each two-year three-year renewal.  All
5.13 	licenses are for a period of two three years.
5.14 	(4)  [REGULATORY RESTRICTIONS; POWERS OF THE COMMISSIONER.]
5.15 	To assure that self-insurance or insurance plans are financially
5.16 	solvent, are administered in a fair and equitable fashion, and
5.17 	are processing claims and paying benefits in a prompt, fair, and
5.18 	honest manner, vendors of risk management services and entities
5.19 	administering insurance or self-insurance plans are subject to
5.20 	the supervision and examination by the commissioner.  Vendors of
5.21 	risk management services, entities administering insurance or
5.22 	self-insurance plans, and insurance or self-insurance plans
5.23 	established or operated by them are subject to the trade
5.24 	practice requirements of sections 72A.19 to 72A.30.  In lieu of
5.25 	an unlimited guarantee from a parent corporation for a vendor of
5.26 	risk management services or an entity administering insurance or
5.27 	self-insurance plans, the commissioner may accept a surety bond
5.28 	in a form satisfactory to the commissioner in an amount equal to
5.29 	120 percent of the total amount of claims handled by the
5.30 	applicant in the prior year.  If at any time the total amount of
5.31 	claims handled during a year exceeds the amount upon which the
5.32 	bond was calculated, the administrator shall immediately notify
5.33 	the commissioner.  The commissioner may require that the bond be
5.34 	increased accordingly.
5.35 	No contract entered into after July 1, 2001, between a
5.36 	licensed vendor of risk management services and a group
6.1 	authorized to self-insure for workers' compensation liabilities
6.2 	under section 79A.03, subdivision 6, may take effect until it
6.3 	has been filed with the commissioner, and either (1) the
6.4 	commissioner has approved it or (2) 60 days have elapsed and the
6.5 	commissioner has not disapproved it as misleading or violative
6.6 	of public policy.
6.7 	(5)  [RULEMAKING AUTHORITY.] To carry out the purposes of
6.8 	this subdivision, the commissioner may adopt rules pursuant to
6.9 	sections 14.001 to 14.69.  These rules may:
6.10 	(a) establish reporting requirements for administrators of
6.11 	insurance or self-insurance plans;
6.12 	(b) establish standards and guidelines to assure the
6.13 	adequacy of financing, reinsuring, and administration of
6.14 	insurance or self-insurance plans;
6.15 	(c) establish bonding requirements or other provisions
6.16 	assuring the financial integrity of entities administering
6.17 	insurance or self-insurance plans; or
6.18 	(d) establish other reasonable requirements to further the
6.19 	purposes of this subdivision.

6.20 	Sec. 4. Minnesota Statutes 2004, section 60A.966, is
6.21 	amended to read:
6.22 	60A.966 APPROVAL OF VIATICAL SETTLEMENTS CONTRACT FORMS.
6.23 	A viatical settlement provider or broker may not use a
6.24 	viatical settlement contract form in this state unless it has
6.25 	been filed with and approved by the commissioner.  A viatical
6.26 	settlement contract form filed with the commissioner is
6.27 	considered to have been approved if it has not been disapproved
6.28 	within 60 days of the filing.  The commissioner shall disapprove
6.29 	a viatical settlement contract form if, in the commissioner's
6.30 	opinion, the contract or contract provisions are unreasonable,
6.31 	contrary to the interests of the public, or otherwise misleading
6.32 	or unfair to the policy owner.

6.33 	Sec. 5. Minnesota Statutes 2004, section 60A.969, is
6.34 	amended to read:
6.35 	60A.969 DISCLOSURE.
6.36 	A viatical settlement provider or a broker shall disclose
7.1 	the following information to the viator no later than the
7.2 	date the viatical settlement contract is signed by all
7.3 	parties an application is given to the viator:
7.4 	(1) possible alternatives to viatical settlement contracts
7.5 	for persons with catastrophic or life threatening illnesses,
7.6 	including accelerated benefits offered by the issuer of the life
7.7 	insurance policy;
7.8 	(2) the fact that some or all of the proceeds of the
7.9 	viatical settlement may be taxable and that assistance should be
7.10 	sought from a personal tax advisor;
7.11 	(3) the fact that the viatical settlement may be subject to
7.12 	the claims of creditors;
7.13 	(4) the fact that receipt of a viatical settlement may
7.14 	adversely affect the recipients' eligibility for Medicaid or
7.15 	other government benefits or entitlements and that advice should
7.16 	be obtained from the appropriate agencies;
7.17 	(5) the policy owner's right to rescind a viatical
7.18 	settlement contract within 30 days of the date it is executed by
7.19 	all parties or 15 days of the receipt of the viatical settlement
7.20 	proceeds by the viator, whichever is less, as provided in
7.21 	section 60A.970, subdivision 3; and
7.22 	(6) the date by which the funds will be available to the
7.23 	viator and the source of the funds.

7.24 	Sec. 6. [60A.98] DEFINITIONS.
7.25 		Subdivision 1.Scope. For purposes of sections 60A.98
7.26 	and 60A.981, the terms defined in this section have the meanings
7.27 	given them.
7.28 		Subd. 2.Customer. "Customer" means a consumer who has a
7.29 	continuing relationship with a licensee under which the licensee
7.30 	provides one or more insurance products or services to the
7.31 	consumer that are to be used primarily for personal, family, or
7.32 	household purposes.
7.33 		Subd. 3.Customer information. "Customer information"
7.34 	means nonpublic personal information about a customer, whether
7.35 	in paper, electronic, or other form, that is maintained by or on
7.36 	behalf of the licensee.
8.1 		Subd. 4.Customer information systems. "Customer
8.2 	information systems" means the electronic or physical methods
8.3 	used to access, collect, store, use, transmit, protect, or
8.4 	dispose of customer information.
8.5 		Subd. 5.Licensee. "Licensee" means all licensed
8.6 	insurers, producers, and other persons licensed or required to
8.7 	be licensed, authorized or required to be authorized, or
8.8 	registered or required to be registered pursuant to the
8.9 	insurance laws of this state, except that "licensee" does not
8.10 	include a purchasing group or an ineligible insurer in regard to
8.11 	the surplus line insurance conducted pursuant to sections
8.12 	60A.195 to 60A.209.  "Licensee" does not include producers until
8.13 	January 1, 2007.
8.14 		Subd. 6.Nonpublic financial information. "Nonpublic
8.15 	financial information" means:
8.16 	(1) personally identifiable financial information; and 
8.17 	(2) any list, description, or other grouping of consumers,
8.18 	and publicly available information pertaining to them, that is
8.19 	derived using any personally identifiable financial information
8.20 	that is not publicly available.
8.21 		Subd. 7.Nonpublic personal health
8.22 	information. "Nonpublic personal health information" means
8.23 	health information:
8.24 	(1) that identifies an individual who is the subject of the
8.25 	information; or 
8.26 	(2) with respect to which there is a reasonable basis to
8.27 	believe that the information could be used to identify an
8.28 	individual.
8.29 		Subd. 8.Nonpublic personal information. "Nonpublic
8.30 	personal information" means nonpublic financial information and
8.31 	nonpublic personal health information.
8.32 		Subd. 9.Personally identifiable financial
8.33 	information. "Personally identifiable financial information"
8.34 	means any information:
8.35 	(1) a consumer provides to a licensee to obtain an
8.36 	insurance product or service from the licensee;
9.1 	(2) about a consumer resulting from a transaction involving
9.2 	an insurance product or service between a licensee and a
9.3 	consumer; or 
9.4 	(3) the licensee otherwise obtains about a consumer in
9.5 	connection with providing an insurance product or service to
9.6 	that consumer.
9.7 		Subd. 10.Service provider. "Service provider" means a
9.8 	person that maintains, processes, or otherwise is permitted
9.9 	access to customer information through its provision of services
9.10 	directly to the licensee.

9.11 	Sec. 7. [60A.981] INFORMATION SECURITY PROGRAM.
9.12 		Subdivision 1.General requirements. Each licensee shall
9.13 	implement a comprehensive written information security program
9.14 	that includes administrative, technical, and physical safeguards
9.15 	for the protection of customer information.  The administrative,
9.16 	technical, and physical safeguards included in the information
9.17 	security program must be appropriate to the size and complexity
9.18 	of the licensee and the nature and scope of its activities.
9.19 		Subd. 2.Objectives. A licensee's information security
9.20 	program must be designed to:
9.21 	(1) ensure the security and confidentiality of customer
9.22 	information;
9.23 	(2) protect against any anticipated threats or hazards to
9.24 	the security or integrity of the information; and 
9.25 	(3) protect against unauthorized access to or use of the
9.26 	information that could result in substantial harm or
9.27 	inconvenience to any customer.
9.28 		Subd. 3.Examples of methods of development and
9.29 	implementation. The following actions and procedures are
9.30 	examples of methods of implementation of the requirements of
9.31 	subdivisions 1 and 2.  These examples are nonexclusive
9.32 	illustrations of actions and procedures that licensees may
9.33 	follow to implement subdivisions 1 and 2:
9.34 	(1) the licensee:
9.35 	(i) identifies reasonably foreseeable internal or external
9.36 	threats that could result in unauthorized disclosure, misuse,
10.1 	alteration, or destruction of customer information or customer
10.2 	information systems;
10.3 	(ii) assesses the likelihood and potential damage of these
10.4 	threats, taking into consideration the sensitivity of customer
10.5 	information; and 
10.6 	(iii) assesses the sufficiency of policies, procedures,
10.7 	customer information systems, and other safeguards in place to
10.8 	control risks;
10.9 	(2) the licensee:
10.10 	(i) designs its information security program to control the
10.11 	identified risks, commensurate with the sensitivity of the
10.12 	information, as well as the complexity and scope of the
10.13 	licensee's activities;
10.14 	(ii) trains staff, as appropriate, to implement the
10.15 	licensee's information security program; and 
10.16 	(iii) regularly tests or otherwise regularly monitors the
10.17 	key controls, systems, and procedures of the information
10.18 	security program.  The frequency and nature of these tests or
10.19 	other monitoring practices are determined by the licensee's risk
10.20 	assessment;
10.21 	(3) the licensee:
10.22 	(i) exercises appropriate due diligence in selecting its
10.23 	service providers; and 
10.24 	(ii) requires its service providers to implement
10.25 	appropriate measures designed to meet the objectives of this
10.26 	regulation, and, where indicated by the licensee's risk
10.27 	assessment, takes appropriate steps to confirm that its service
10.28 	providers have satisfied these obligations; and 
10.29 	(4) the licensee monitors, evaluates, and adjusts, as
10.30 	appropriate, the information security program in light of any
10.31 	relevant changes in technology, the sensitivity of its customer
10.32 	information, internal or external threats to information, and
10.33 	the licensee's own changing business arrangements, such as
10.34 	mergers and acquisitions, alliances and joint ventures,
10.35 	outsourcing arrangements, and changes to customer information
10.36 	systems.

11.1 	Sec. 8. [60A.982] UNFAIR TRADE PRACTICES.
11.2 	A violation of sections 60A.98 and 60A.981 is considered to
11.3 	be a violation of sections 72A.17 to 72A.32.

11.4 	Sec. 9. [60D.30] ELIGIBILITY DETERMINATION.
11.5 	Section 302A.521, subdivision 3, applies to a corporation
11.6 	that is a member of an insurance holding company system, except
11.7 	if a determination for advancement is not made under section
11.8 	302A.521, subdivision 6, clauses (1) to (4), the corporation
11.9 	that is a member of an insurance holding company system may make
11.10 	the determination that a person is entitled to payment or
11.11 	reimbursement of expenses in advance of the final disposition of
11.12 	a proceeding upon receipt of a written affirmation as provided
11.13 	in section 302A.521, subdivision 3.

11.14 	Sec. 10. Minnesota Statutes 2004, section 62A.136, is
11.15 	amended to read:
11.16 	62A.136 DENTAL AND VISION PLAN COVERAGE.
11.17 	The following provisions do not apply to health plans as
11.18 	defined in section 62A.011, subdivision 3, clause (6),providing
11.19 	dental or vision coverage only:  sections 62A.041; 62A.0411;
11.20 	62A.047; 62A.149; 62A.151; 62A.152; 62A.154; 62A.155; 62A.17,
11.21 	subdivision 6; 62A.21, subdivision 2b; 62A.26; 62A.28; 62A.285;
11.22 	62A.30; 62A.304; 62A.3093; and 62E.16.

11.23 	Sec. 11. Minnesota Statutes 2004, section 62A.31,
11.24 	subdivision 1h, is amended to read:
11.25 		Subd. 1h.Limitations on denials, conditions, and pricing
11.26 	of coverage.  No health carrier issuing Medicare-related
11.27 	coverage in this state may impose preexisting condition
11.28 	limitations or otherwise deny or condition the issuance or
11.29 	effectiveness of any such coverage available for sale in this
11.30 	state, nor may it discriminate in the pricing of such coverage,
11.31 	because of the health status, claims experience, receipt of
11.32 	health care, medical condition, or age of an applicant where an
11.33 	application for such coverage is submitted prior to or during
11.34 	the six-month period beginning with the first day of the month
11.35 	in which an individual first enrolled for benefits under
11.36 	Medicare Part B.  This subdivision applies to each
12.1 	Medicare-related coverage offered by a health carrier regardless
12.2 	of whether the individual has attained the age of 65 years.  If
12.3 	an individual who is enrolled in Medicare Part B due to
12.4 	disability status is involuntarily disenrolled due to loss of
12.5 	disability status, the individual is eligible for another
12.6 	six-month enrollment period provided under this subdivision
12.7 	beginning the first day of the month in which the individual
12.8 	later becomes eligible for and enrolls again in Medicare Part
12.9 	B.  An individual who is or was previously enrolled in Medicare
12.10 	Part B due to disability status is eligible for another
12.11 	six-month enrollment period under this subdivision beginning the
12.12 	first day of the month in which the individual has attained the
12.13 	age of 65 years and either maintains enrollment in, or enrolls
12.14 	again in, Medicare Part B.  If an individual enrolled in
12.15 	Medicare Part B voluntarily disenrolls from Medicare Part B
12.16 	because the individual becomes reemployed and is enrolled under
12.17 	an employee welfare benefit plan, the individual is eligible for
12.18 	another six-month enrollment period, as provided in this
12.19 	subdivision, beginning the first day of the month in which the
12.20 	individual later becomes eligible for and enrolls again in
12.21 	Medicare Part B.

12.22 	Sec. 12. Minnesota Statutes 2004, section 62A.315, is
12.23 	amended to read:
12.24 	62A.315 EXTENDED BASIC MEDICARE SUPPLEMENT PLAN;
12.25 	COVERAGE.
12.26 	The extended basic Medicare supplement plan must have a
12.27 	level of coverage so that it will be certified as a qualified
12.28 	plan pursuant to section 62E.07, and will provide:
12.29 	(1) coverage for all of the Medicare Part A inpatient
12.30 	hospital deductible and coinsurance amounts, and 100 percent of
12.31 	all Medicare Part A eligible expenses for hospitalization not
12.32 	covered by Medicare;
12.33 	(2) coverage for the daily co-payment amount of Medicare
12.34 	Part A eligible expenses for the calendar year incurred for
12.35 	skilled nursing facility care;
12.36 	(3) coverage for the coinsurance amount or in the case of
13.1 	hospital outpatient department services paid under a prospective
13.2 	payment system, the co-payment amount, of Medicare eligible
13.3 	expenses under Medicare Part B regardless of hospital
13.4 	confinement, and the Medicare Part B deductible amount;
13.5 	(4) 80 percent of the usual and customary hospital and
13.6 	medical expenses and supplies described in section 62E.06,
13.7 	subdivision 1, not to exceed any charge limitation established
13.8 	by the Medicare program or state law, the usual and customary
13.9 	hospital and medical expenses and supplies, described in section
13.10 	62E.06, subdivision 1, while in a foreign country, and
13.11 	prescription drug expenses, not covered by Medicare;
13.12 	(5) coverage for the reasonable cost of the first three
13.13 	pints of blood, or equivalent quantities of packed red blood
13.14 	cells as defined under federal regulations under Medicare parts
13.15 	A and B, unless replaced in accordance with federal regulations;
13.16 	(6) 100 percent of the cost of immunizations not otherwise
13.17 	covered under Part D of the Medicare program and routine
13.18 	screening procedures for cancer, including mammograms and pap
13.19 	smears;
13.20 	(7) preventive medical care benefit:  coverage for the
13.21 	following preventive health services not covered by Medicare:
13.22 	(i) an annual clinical preventive medical history and
13.23 	physical examination that may include tests and services from
13.24 	clause (ii) and patient education to address preventive health
13.25 	care measures;
13.26 	(ii) any one or a combination of the following preventive
13.27 	screening tests or preventive services, the selection and 
13.28 	frequency of which is considered determined to be medically
13.29 	appropriate:by the attending physician.
13.30 	(A) fecal occult blood test and/or digital rectal
13.31 	examination;
13.32 	(B) dipstick urinalysis for hematuria, bacteriuria, and
13.33 	proteinuria;
13.34 	(C) pure tone (air only) hearing screening test
13.35 	administered or ordered by a physician;
13.36 	(D) serum cholesterol screening every five years;
14.1 	(E) thyroid function test;
14.2 	(F) diabetes screening;
14.3 	(iii) any other tests or preventive measures determined
14.4 	appropriate by the attending physician.
14.5 	Reimbursement shall be for the actual charges up to 100
14.6 	percent of the Medicare-approved amount for each service as if
14.7 	Medicare were to cover the service as identified in American
14.8 	Medical Association current procedural terminology (AMA CPT)
14.9 	codes to a maximum of $120 annually under this benefit.  This
14.10 	benefit shall not include payment for any procedure covered by
14.11 	Medicare;
14.12 	(8) at-home recovery benefit:  coverage for services to
14.13 	provide short-term at-home assistance with activities of daily
14.14 	living for those recovering from an illness, injury, or surgery:
14.15 	(i) for purposes of this benefit, the following definitions
14.16 	shall apply:
14.17 	(A) "activities of daily living" include, but are not
14.18 	limited to, bathing, dressing, personal hygiene, transferring,
14.19 	eating, ambulating, assistance with drugs that are normally
14.20 	self-administered, and changing bandages or other dressings;
14.21 	(B) "care provider" means a duly qualified or licensed home
14.22 	health aide/homemaker, personal care aide, or nurse provided
14.23 	through a licensed home health care agency or referred by a
14.24 	licensed referral agency or licensed nurses registry;
14.25 	(C) "home" means a place used by the insured as a place of
14.26 	residence, provided that the place would qualify as a residence
14.27 	for home health care services covered by Medicare.  A hospital
14.28 	or skilled nursing facility shall not be considered the
14.29 	insured's place of residence;
14.30 	(D) "at-home recovery visit" means the period of a visit
14.31 	required to provide at-home recovery care, without limit on the
14.32 	duration of the visit, except each consecutive four hours in a
14.33 	24-hour period of services provided by a care provider is one
14.34 	visit;
14.35 	(ii) coverage requirements and limitations:
14.36 	(A) at-home recovery services provided must be primarily
15.1 	services that assist in activities of daily living;
15.2 	(B) the insured's attending physician must certify that the
15.3 	specific type and frequency of at-home recovery services are
15.4 	necessary because of a condition for which a home care plan of
15.5 	treatment was approved by Medicare;
15.6 	(C) coverage is limited to:
15.7 	(I) no more than the number and type of at-home recovery
15.8 	visits certified as medically necessary by the insured's
15.9 	attending physician.  The total number of at-home recovery
15.10 	visits shall not exceed the number of Medicare-approved home
15.11 	health care visits under a Medicare-approved home care plan of
15.12 	treatment;
15.13 	(II) the actual charges for each visit up to a maximum
15.14 	reimbursement of $100 per visit;
15.15 	(III) $4,000 per calendar year;
15.16 	(IV) seven visits in any one week;
15.17 	(V) care furnished on a visiting basis in the insured's
15.18 	home;
15.19 	(VI) services provided by a care provider as defined in
15.20 	this section;
15.21 	(VII) at-home recovery visits while the insured is covered
15.22 	under the policy or certificate and not otherwise excluded;
15.23 	(VIII) at-home recovery visits received during the period
15.24 	the insured is receiving Medicare-approved home care services or
15.25 	no more than eight weeks after the service date of the last
15.26 	Medicare-approved home health care visit;
15.27 	(iii) coverage is excluded for:
15.28 	(A) home care visits paid for by Medicare or other
15.29 	government programs; and
15.30 	(B) care provided by unpaid volunteers or providers who are
15.31 	not care providers.

15.32 	Sec. 13. Minnesota Statutes 2004, section 62A.316, is
15.33 	amended to read:
15.34 	62A.316 BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.
15.35 	(a) The basic Medicare supplement plan must have a level of
15.36 	coverage that will provide:
16.1 	(1) coverage for all of the Medicare part A inpatient
16.2 	hospital coinsurance amounts, and 100 percent of all Medicare
16.3 	part A eligible expenses for hospitalization not covered by
16.4 	Medicare, after satisfying the Medicare part A deductible;
16.5 	(2) coverage for the daily co-payment amount of Medicare
16.6 	part A eligible expenses for the calendar year incurred for
16.7 	skilled nursing facility care;
16.8 	(3) coverage for the coinsurance amount, or in the case of
16.9 	outpatient department services paid under a prospective payment
16.10 	system, the co-payment amount, of Medicare eligible expenses
16.11 	under Medicare part B regardless of hospital confinement,
16.12 	subject to the Medicare part B deductible amount;
16.13 	(4) 80 percent of the hospital and medical expenses and
16.14 	supplies incurred during travel outside the United States as a
16.15 	result of a medical emergency;
16.16 	(5) coverage for the reasonable cost of the first three
16.17 	pints of blood, or equivalent quantities of packed red blood
16.18 	cells as defined under federal regulations under Medicare parts
16.19 	A and B, unless replaced in accordance with federal regulations;
16.20 	(6) 100 percent of the cost of immunizations not otherwise
16.21 	covered under part D of the Medicare program and routine
16.22 	screening procedures for cancer screening including mammograms
16.23 	and pap smears; and
16.24 	(7) 80 percent of coverage for all physician prescribed
16.25 	medically appropriate and necessary equipment and supplies used
16.26 	in the management and treatment of diabetes not otherwise
16.27 	covered under Part D of the Medicare program.  Coverage must
16.28 	include persons with gestational, type I, or type II diabetes.
16.29 	(b) Only the following optional benefit riders may be added
16.30 	to this plan:
16.31 	(1) coverage for all of the Medicare part A inpatient
16.32 	hospital deductible amount;
16.33 	(2) a minimum of 80 percent of eligible medical expenses
16.34 	and supplies not covered by Medicare part B, not to exceed any
16.35 	charge limitation established by the Medicare program or state
16.36 	law;
17.1 	(3) coverage for all of the Medicare part B annual
17.2 	deductible;
17.3 	(4) coverage for at least 50 percent, or the equivalent of
17.4 	50 percent, of usual and customary prescription drug expenses;
17.5 	(5) coverage for the following preventive health services 
17.6 	medical care benefit coverage for the following preventative
17.7 	health services not covered by Medicare:
17.8 	(i) an annual clinical preventive medical history and
17.9 	physical examination that may include tests and services from
17.10 	clause (ii) and patient education to address preventive health
17.11 	care measures;
17.12 	(ii) any one or a combination of the following preventive
17.13 	screening tests or preventive services, the selection and 
17.14 	frequency of which is considered determined to be medically
17.15 	appropriate:by the attending physician.
17.16 	(A) fecal occult blood test and/or digital rectal
17.17 	examination;
17.18 	(B) dipstick urinalysis for hematuria, bacteriuria, and
17.19 	proteinuria;
17.20 	(C) pure tone (air only) hearing screening test,
17.21 	administered or ordered by a physician;
17.22 	(D) serum cholesterol screening every five years;
17.23 	(E) thyroid function test;
17.24 	(F) diabetes screening;
17.25 	(iii) any other tests or preventive measures determined
17.26 	appropriate by the attending physician.
17.27 	Reimbursement shall be for the actual charges up to 100
17.28 	percent of the Medicare-approved amount for each service, as if
17.29 	Medicare were to cover the service as identified in American
17.30 	Medical Association current procedural terminology (AMA CPT)
17.31 	codes, to a maximum of $120 annually under this benefit.  This
17.32 	benefit shall not include payment for a procedure covered by
17.33 	Medicare;
17.34 	(6) coverage for services to provide short-term at-home
17.35 	assistance with activities of daily living for those recovering
17.36 	from an illness, injury, or surgery:
18.1 	(i) For purposes of this benefit, the following definitions
18.2 	apply:
18.3 	(A) "activities of daily living" include, but are not
18.4 	limited to, bathing, dressing, personal hygiene, transferring,
18.5 	eating, ambulating, assistance with drugs that are normally
18.6 	self-administered, and changing bandages or other dressings;
18.7 	(B) "care provider" means a duly qualified or licensed home
18.8 	health aide/homemaker, personal care aid, or nurse provided
18.9 	through a licensed home health care agency or referred by a
18.10 	licensed referral agency or licensed nurses registry;
18.11 	(C) "home" means a place used by the insured as a place of
18.12 	residence, provided that the place would qualify as a residence
18.13 	for home health care services covered by Medicare.  A hospital
18.14 	or skilled nursing facility shall not be considered the
18.15 	insured's place of residence;
18.16 	(D) "at-home recovery visit" means the period of a visit
18.17 	required to provide at-home recovery care, without limit on the
18.18 	duration of the visit, except each consecutive four hours in a
18.19 	24-hour period of services provided by a care provider is one
18.20 	visit;
18.21 	(ii) Coverage requirements and limitations:
18.22 	(A) at-home recovery services provided must be primarily
18.23 	services that assist in activities of daily living;
18.24 	(B) the insured's attending physician must certify that the
18.25 	specific type and frequency of at-home recovery services are
18.26 	necessary because of a condition for which a home care plan of
18.27 	treatment was approved by Medicare;
18.28 	(C) coverage is limited to:
18.29 	(I) no more than the number and type of at-home recovery
18.30 	visits certified as necessary by the insured's attending
18.31 	physician.  The total number of at-home recovery visits shall
18.32 	not exceed the number of Medicare-approved home care visits
18.33 	under a Medicare-approved home care plan of treatment;
18.34 	(II) the actual charges for each visit up to a maximum
18.35 	reimbursement of $40 per visit;
18.36 	(III) $1,600 per calendar year;
19.1 	(IV) seven visits in any one week;
19.2 	(V) care furnished on a visiting basis in the insured's
19.3 	home;
19.4 	(VI) services provided by a care provider as defined in
19.5 	this section;
19.6 	(VII) at-home recovery visits while the insured is covered
19.7 	under the policy or certificate and not otherwise excluded;
19.8 	(VIII) at-home recovery visits received during the period
19.9 	the insured is receiving Medicare-approved home care services or
19.10 	no more than eight weeks after the service date of the last
19.11 	Medicare-approved home health care visit;
19.12 	(iii) Coverage is excluded for:
19.13 	(A) home care visits paid for by Medicare or other
19.14 	government programs; and
19.15 	(B) care provided by family members, unpaid volunteers, or
19.16 	providers who are not care providers;
19.17 	(7) coverage for at least 50 percent, or the equivalent of
19.18 	50 percent, of usual and customary prescription drug expenses to
19.19 	a maximum of $1,200 paid by the issuer annually under this
19.20 	benefit.  An issuer of Medicare supplement insurance policies
19.21 	that elects to offer this benefit rider shall also make
19.22 	available coverage that contains the rider specified in clause
19.23 	(4).

19.24 	Sec. 14. Minnesota Statutes 2004, section 62E.12, is
19.25 	amended to read:
19.26 	62E.12 MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE
19.27 	PLAN.
19.28 	(a) The association through its comprehensive health
19.29 	insurance plan shall offer policies which provide the benefits
19.30 	of a number one qualified plan and a number two qualified plan,
19.31 	except that the maximum lifetime benefit on these plans shall be
19.32 	$2,800,000; and an extended basic Medicare supplement plan and a
19.33 	basic Medicare supplement plan as described in sections 62A.31
19.34 	to 62A.44.  The association may also offer a plan that is
19.35 	identical to a number one and number two qualified plan except
19.36 	that it has a $2,000 annual deductible and a $2,800,000 maximum
20.1 	lifetime benefit.  The association, subject to the approval of
20.2 	the commissioner, may also offer plans that are identical to the
20.3 	number one or number two qualified plan, except that they have
20.4 	annual deductibles of $5,000 and $10,000, respectively; have
20.5 	limitations on total annual out-of-pocket expenses equal to
20.6 	those annual deductibles and therefore cover 100 percent of the
20.7 	allowable cost of covered services in excess of those annual
20.8 	deductibles; and have a $2,800,000 maximum lifetime
20.9 	benefit. The association, subject to approval of the
20.10 	commissioner, may also offer plans that meet all other
20.11 	requirements of state law except those that are inconsistent
20.12 	with high deductible health plans as defined in sections 220 and
20.13 	223 of the Internal Revenue Code and supporting regulations.As
20.14 	of January 1, 2006, the association shall no longer be required
20.15 	to offer an extended basic Medicare supplement plan.
20.16 	(b) The requirement that a policy issued by the association
20.17 	must be a qualified plan is satisfied if the association
20.18 	contracts with a preferred provider network and the level of
20.19 	benefits for services provided within the network satisfies the
20.20 	requirements of a qualified plan.  If the association uses a
20.21 	preferred provider network, payments to nonparticipating
20.22 	providers must meet the minimum requirements of section 72A.20,
20.23 	subdivision 15.
20.24 	(c) The association shall offer health maintenance
20.25 	organization contracts in those areas of the state where a
20.26 	health maintenance organization has agreed to make the coverage
20.27 	available and has been selected as a writing carrier.
20.28 	(d) Notwithstanding the provisions of section 62E.06 and
20.29 	unless those charges are billed by a provider that is part of
20.30 	the association's preferred provider network, the state plan
20.31 	shall exclude coverage of services of a private duty nurse other
20.32 	than on an inpatient basis and any charges for treatment in a
20.33 	hospital located outside of the state of Minnesota in which the
20.34 	covered person is receiving treatment for a mental or nervous
20.35 	disorder, unless similar treatment for the mental or nervous
20.36 	disorder is medically necessary, unavailable in Minnesota and
21.1 	provided upon referral by a licensed Minnesota medical
21.2 	practitioner.

21.3 	Sec. 15. Minnesota Statutes 2004, section 62E.13,
21.4 	subdivision 2, is amended to read:
21.5 		Subd. 2.Selection of writing carrier.  The association
21.6 	may select policies and contracts, or parts thereof, submitted
21.7 	by a member or members of the association, or by the association
21.8 	or others, to develop specifications for bids from any entity
21.9 	which wishes to be selected as a writing carrier to administer
21.10 	the state plan.  The selection of the writing carrier shall be
21.11 	based upon criteria established by the board of directors of the
21.12 	association and approved by the commissioner.  The criteria
21.13 	shall outline specific qualifications that an entity must
21.14 	satisfy in order to be selected and, at a minimum, shall include
21.15 	the entity's proven ability to handle large group accident and
21.16 	health insurance cases, efficient claim paying capacity, and the
21.17 	estimate of total charges for administering the plan.  The
21.18 	association may select separate writing carriers for the two
21.19 	types of qualified plans and the $2,000, $5,000, and $10,000
21.20 	deductible plans, the qualified Medicare supplement plan plans,
21.21 	and the health maintenance organization contract.

21.22 	Sec. 16. Minnesota Statutes 2004, section 62Q.471, is
21.23 	amended to read:
21.24 	62Q.471 EXCLUSION FOR SUICIDE ATTEMPTS PROHIBITED.
21.25 	(a) No health plan may exclude or reduce coverage for
21.26 	health care for an enrollee who is otherwise covered under the
21.27 	health plan on the basis that the need for the health care arose
21.28 	out of a suicide or suicide attempt by the enrollee.
21.29 	(b) For purposes of this section, "health plan" has the
21.30 	meaning given in section 62Q.01, subdivision 3, but includes the
21.31 	coverages described in section 62A.011, clauses (4), (6),
21.32 	and (7) and through (10).

21.33 	Sec. 17. Minnesota Statutes 2004, section 62Q.65, is
21.34 	amended to read:
21.35 	62Q.65 ACCESS TO PROVIDER DISCOUNTS.
21.36 		Subdivision 1.Requirement. A high deductible health
22.1 	plan must, when used in connection with a medical savings
22.2 	account or health savings account, provide the enrollee access
22.3 	to any discounted provider fees for services covered by the high
22.4 	deductible health plan, regardless of whether the enrollee has
22.5 	satisfied the deductible for the high deductible health plan.
22.6 		Subd. 2.Definitions. For purposes of this section, the
22.7 	following terms have the meanings given:
22.8 	(1) "high deductible health plan" has the meaning given
22.9 	under the Internal Revenue Code of 1986, section 220(c)(2), with
22.10 	respect to a medical savings account; and the meaning given
22.11 	under Internal Revenue Code of 1986, section 223(c)(2), with
22.12 	respect to a health savings account;
22.13 	(2) "medical savings account" has the meaning given under
22.14 	the Internal Revenue Code of 1986, section 220(d)(1); and 
22.15 	(3) "discounted provider fees" means fees contained in a
22.16 	provider agreement entered into by the issuer of the high
22.17 	deductible health plan, or an affiliate of the issuer, for use
22.18 	in connection with the high deductible health plan; and 
22.19 	(4) "health savings account" has the meaning given under
22.20 	the Internal Revenue Code of 1986, section 223(d).

22.21 	Sec. 18. Minnesota Statutes 2004, section 65A.29,
22.22 	subdivision 11, is amended to read:
22.23 		Subd. 11.Nonrenewal.  Every insurer shall establish a
22.24 	plan that sets out the minimum number and amount of claims
22.25 	during an experience period that may result in a
22.26 	nonrenewal. For purposes of the plan, the insurer may not
22.27 	consider as a claim the insured's inquiry about a hypothetical
22.28 	claim, or the insured's inquiry to the insured's agent regarding
22.29 	a potential claim.
22.30 	No homeowner's insurance policy may be nonrenewed based on
22.31 	the insured's loss experience unless the insurer has sent a
22.32 	written notice that any future losses may result in nonrenewal
22.33 	due to loss experience.
22.34 	Any nonrenewal of a homeowner's insurance policy must, at a
22.35 	minimum, comply with the requirements of subdivision 8 and the
22.36 	rules adopted by the commissioner.

23.1 	Sec. 19. [65A.297] ACTIVE DUTY MEMBER OF ARMED SERVICES
23.2 	RESERVE OR NATIONAL GUARD; USE IN UNDERWRITING PROHIBITED.
23.3 	No insurer, including the Minnesota FAIR plan, shall refuse
23.4 	to renew, decline to offer or write, reduce the limits of,
23.5 	cancel, or charge differential rates for equivalent coverage for
23.6 	any coverage in a homeowner's policy because the dwelling is
23.7 	vacant or occupied by a caretaker if the insured's absence is
23.8 	caused solely by the insured being called to active duty as a
23.9 	member of the armed services reserve or the National Guard.

23.10 	Sec. 20. [65B.286] SNOWMOBILE AUXILIARY LIGHTING SYSTEM
23.11 	DISCOUNT.
23.12 		Subdivision 1.Definition. For the purposes of this
23.13 	section, the term "auxiliary hazard warning lighting system"
23.14 	means a system installed by the manufacturer of a snowmobile as
23.15 	original equipment or installed in a snowmobile by the
23.16 	manufacturer or an authorized dealer of that manufacturer as an
23.17 	aftermarket system that does the following when activated:
23.18 	(1) a yellow light emitting diode (L.E.D.) light on the
23.19 	front of the snowmobile that flashes at least once per second
23.20 	and is visable at least one-half mile in front of the
23.21 	snowmobile; and 
23.22 	(2) a red light emitting diode (L.E.D.) light on the rear
23.23 	of the snowmobile that flashes at least once per second and is
23.24 	visable at least one-half mile from behind the snowmobile.
23.25 		Subd. 2.Required reduction. An insurer must provide an
23.26 	appropriate premium reduction of at least five percent on a
23.27 	policy insuring the snowmobile, or on that portion of a policy
23.28 	insuring a snowmobile that is issued, delivered, or renewed in
23.29 	this state, to the insured whose snowmobile is equipped with an
23.30 	authorized auxiliary hazard warning lighting system.  The
23.31 	premium reduction required by this subdivision applies to every
23.32 	snowmobile of the insured that is equipped with an auxiliary
23.33 	hazard warning lighting system.

23.34 	Sec. 21. Minnesota Statutes 2004, section 65B.48,
23.35 	subdivision 3, is amended to read:
23.36 		Subd. 13.Refusal to renew.  Refusing to renew, declining
24.23 	to offer or write, or charging differential rates for an
24.24 	equivalent amount of homeowner's insurance coverage, as defined
24.25 	by section 65A.27, for property located in a town or statutory
24.26 	or home rule charter city, in which the insurer offers to sell
24.27 	or writes homeowner's insurance, solely because:
24.28 	(a) of the geographic area in which the property is
24.29 	located;
24.30 	(b) of the age of the primary structure sought to be
24.31 	insured;
24.32 	(c) the insured or prospective insured was denied coverage
24.33 	of the property by another insurer, whether by cancellation,
24.34 	nonrenewal or declination to offer coverage, for a reason other
24.35 	than those specified in section 65A.01, subdivision 3a, clauses
24.36 	(a) to (e); or 
25.1 	(d) the property of the insured or prospective insured has
25.2 	been insured under the Minnesota FAIR Plan Act, shall constitute
25.3 	an unfair method of competition and an unfair and deceptive act
25.4 	or practice; or 
25.5 	(e) the insured has inquired about coverage for a
25.6 	hypothetical claim or has made an inquiry to the insured's agent
25.7 	regarding a potential claim.
25.8 	This subdivision prohibits an insurer from filing or
25.9 	charging different rates for different zip code areas within the
25.10 	same town or statutory or home rule charter city.
25.11 	This subdivision shall not prohibit the insurer from
25.12 	applying underwriting or rating standards which the insurer
25.13 	applies generally in all other locations in the state and which
25.14 	are not specifically prohibited by clauses (a) to (d) (e).  Such
25.15 	underwriting or rating standards shall specifically include but
25.16 	not be limited to standards based upon the proximity of the
25.17 	insured property to an extraordinary hazard or based upon the
25.18 	quality or availability of fire protection services or based
25.19 	upon the density or concentration of the insurer's risks.
25.20 	Clause (b) shall not prohibit the use of rating standards based
25.21 	upon the age of the insured structure's plumbing, electrical,
25.22 	heating or cooling system or other part of the structure, the
25.23 	age of which affects the risk of loss.  Any insurer's failure to
25.24 	comply with section 65A.29, subdivisions 2 to 4, either (1) by
25.25 	failing to give an insured or applicant the required notice or
25.26 	statement or (2) by failing to state specifically a bona fide
25.27 	underwriting or other reason for the refusal to write shall
25.28 	create a presumption that the insurer has violated this
25.29 	subdivision.

25.30 	Sec. 23. Minnesota Statutes 2004, section 72A.20,
25.31 	subdivision 36, is amended to read:
25.32 		Subd. 36.Limitations on the use of credit information.
 25.33 	(a) No insurer or group of affiliated insurers may reject,
25.34 	cancel, or nonrenew a policy of private passenger motor vehicle
25.35 	insurance as defined under section 65B.01 or a policy of
25.36 	homeowner's insurance as defined under section 65A.27, for any
26.1 	person in whole or in part on the basis of credit information,
26.2 	including a credit reporting product known as a "credit score"
26.3 	or "insurance score," without consideration and inclusion of any
26.4 	other applicable underwriting factor.
26.5 	(b) If credit information, credit scoring, or insurance
26.6 	scoring is to be used in underwriting, the insurer must disclose
26.7 	to the consumer that credit information will be obtained and
26.8 	used as part of the insurance underwriting process.
26.9 	(c) Insurance inquiries and non-consumer-initiated
26.10 	inquiries must not be used as part of the credit scoring or
26.11 	insurance scoring process.
26.12 	(d) If a credit score, insurance score, or other credit
26.13 	information relating to a consumer, with respect to the types of
26.14 	insurance referred to in paragraph (a), is adversely impacted or
26.15 	cannot be generated because of the absence of a credit history,
26.16 	the insurer must exclude the use of credit as a factor in the
26.17 	decision to reject, cancel, or nonrenew.
26.18 	(e) Insurers must upon the request of a policyholder
26.19 	reevaluate the policyholder's score.  Any change in premium
26.20 	resulting from the reevaluation must be effective upon the
26.21 	renewal of the policy.  An insurer is not required to reevaluate
26.22 	a policyholder's score pursuant to this paragraph more than
26.23 	twice in any given calendar year.
26.24 	(f) Insurers must upon request of the applicant or
26.25 	policyholder provide reasonable underwriting exceptions based
26.26 	upon prior credit histories for persons whose credit information
26.27 	is unduly influenced by expenses related to a catastrophic
26.28 	injury or illness, temporary loss of employment, or the death of
26.29 	an immediate family member.  The insurer may require reasonable
26.30 	documentation of these events prior to granting an exception.
26.31 	(f) (g) A credit scoring or insurance scoring methodology
26.32 	must not be used by an insurer if the credit scoring or
26.33 	insurance scoring methodology incorporates the gender, race,
26.34 	nationality, or religion of an insured or applicant.
26.35 	(g) (h) Insurers that employ a credit scoring or insurance
26.36 	scoring system in underwriting of coverage described in
27.1 	paragraph (a) must have on file with the commissioner:
27.2 	(1) the insurer's credit scoring or insurance scoring
27.3 	methodology; and
27.4 	(2) information that supports the insurer's use of a credit
27.5 	score or insurance score as an underwriting criterion.
27.6 	(h) (i) Insurers described in paragraph (g) shall file the
27.7 	required information with the commissioner within 120 days of
27.8 	August 1, 2002, or prior to implementation of a credit scoring
27.9 	or insurance scoring system by the insurer, if that date is
27.10 	later.
27.11 	(i) (j) Information provided by, or on behalf of, an
27.12 	insurer to the commissioner under this subdivision is trade
27.13 	secret information under section 13.37.

27.14 	Sec. 24. Minnesota Statutes 2004, section 79.211, is
27.15 	amended by adding a subdivision to read:
27.16 		Subd. 4.Experience modification factor revision for
27.17 	certain closed claims. An insurer or an employer insured under
27.18 	a workers' compensation policy subject to an experience rating
27.19 	plan may request in writing of the data service organization
27.20 	computing the policy's experience modification factor that the
27.21 	most recent factor be revised if each of the following criteria
27.22 	is met:
27.23 	(1) a workers' compensation claim under that policy is
27.24 	closed between the normal valuation date for that claim and the
27.25 	next time that valuation is used in experience modification
27.26 	factor on the policy;
27.27 	(2) the data service organization receives a revised unit
27.28 	statistical report containing data on the closed claim in a form
27.29 	consistent with its filed unit statistical plan; and 
27.30 	(3) inclusion of the closed claim in the experience
27.31 	modification factor calculation would impact that factor by five
27.32 	percentage points or more.

27.33 	Sec. 25. Minnesota Statutes 2004, section 79.40, is
27.34 	amended to read:
27.35 	79.40 PREMIUM INCLUSION IN RATEMAKING.
27.36 	Premiums charged members by the reinsurance association
28.1 	shall be recognized in the ratemaking procedures for insurance
28.2 	rates in the same manner as assessments for the special
28.3 	compensation fund.

28.4 	Sec. 26. Minnesota Statutes 2004, section 79.56,
28.5 	subdivision 1, is amended to read:
28.6 		Subdivision 1.Prefiling of rates. (a) Each insurer
28.7 	shall file with the commissioner a complete copy of its rates
28.8 	and rating plan, and all changes and amendments thereto, and
28.9 	such supporting data and information that the commissioner may
28.10 	by rule require, at least 60 days prior to its effective date.
28.11 	The commissioner shall advise an insurer within 30 days of the
28.12 	filing if its submission is not accompanied with such supporting
28.13 	data and information that the commissioner by rule may require.
28.14 	The commissioner may extend the filing review period and
28.15 	effective date for an additional 30 days if an insurer, after
28.16 	having been advised of what supporting data and information is
28.17 	necessary to complete its filing, does not provide such
28.18 	information within 15 days of having been so notified.  If any
28.19 	rate or rating plan filing or amendment thereto is not
28.20 	disapproved by the commissioner within the filing review period,
28.21 	the insurer may implement it.  For the period August 1, 1995, to
28.22 	December 31, 1995, the filing shall be made at least 90 days
28.23 	prior to the effective date and the department shall advise an
28.24 	insurer within 60 days of such filing if the filing is
28.25 	insufficient under this section.
28.26 	(b) A rating plan or rates are not subject to the
28.27 	requirements of paragraph (a), where the insurer files a
28.28 	certification verifying that it will use the mutually agreed
28.29 	upon rating plan or rates only to write a specific employer that
28.30 	generates $250,000 in annual written workers' compensation
28.31 	premiums before the application of any large deductible rating
28.32 	plan.  The certification must be refiled upon each renewal of
28.33 	the employer's policy.  The $250,000 threshold includes premiums
28.34 	generated in any state.  The designation and certification must
28.35 	be submitted in substantially the following form:
28.36 	Name and address of insurer:.................................
29.1 	Name and address of insured employer:........................
29.2 	Policy period:...............................................
29.3 	I certify that the employer named above generates $250,000 or
29.4 	more in annual countrywide written workers' compensation
29.5 	premiums, and that the calculation of this threshold is based on
29.6 	the rates and rating plans that have been approved by the
29.7 	appropriate state regulatory authority.  The filing of this
29.8 	certification authorizes the use of this rate or rating plan
29.9 	only for the named employer.
29.10 	Name of responsible officer:.................................
29.11 	Title:.......................................................
29.12 	Signature:...................................................

29.13 	Sec. 27. Minnesota Statutes 2004, section 79.56,
29.14 	subdivision 3, is amended to read:
29.15 		Subd. 3.Penalties. (a) Any insurer using a rate or a
29.16 	rating plan which has not been filed or certified under
29.17 	subdivision 1 shall be subject to a fine of up to $100 for each
29.18 	day the failure to file continues.  The commissioner may, after
29.19 	a hearing on the record, find that the failure is willful.  A
29.20 	willful failure to meet filing requirements shall be punishable
29.21 	by a fine of up to $500 for each day during which a willful
29.22 	failure continues.  These penalties shall be in addition to any
29.23 	other penalties provided by law.
29.24 	(b) Notwithstanding this subdivision, an employer that
29.25 	generates $250,000 in annual written workers' compensation
29.26 	premium under the rates and rating plan of an insurer before the
29.27 	application of any large deductible rating plans, may be written
29.28 	by that insurer using rates or rating plans that are not subject
29.29 	to disapproval but which have been filed.  For the purposes of
29.30 	this paragraph, written workers' compensation premiums generated
29.31 	from states other than Minnesota are included in calculating the
29.32 	$250,000 threshold for large risk alternative rating option
29.33 	plans.

29.34 	Sec. 28. Minnesota Statutes 2004, section 79.62,
29.35 	subdivision 3, is amended to read:
29.36 		Subd. 3.Issuance.  The commissioner, upon finding that
30.1 	the applicant organization is qualified to provide the services
30.2 	required and proposed, or has contracted with a licensed data
30.3 	service organization to purchase these services which are
30.4 	required by this chapter but are not provided directly by the
30.5 	applicant, and that all requirements of law are met, shall issue
30.6 	a license.  Each license is subject to annual renewal effective
30.7 	June 30.  Each new or renewal license application must be
30.8 	accompanied by a fee of $50 $1,000.

30.9 	Sec. 29. Minnesota Statutes 2004, section 79A.03,
30.10 	subdivision 9, is amended to read:
30.11 		Subd. 9.Filing reports.  (a) Incurred losses, paid and
30.12 	unpaid, specifying indemnity and medical losses by
30.13 	classification, payroll by classification, and current estimated
30.14 	outstanding liability for workers' compensation shall be
30.15 	reported to the commissioner by each self-insurer on a calendar
30.16 	year basis, in a manner and on forms available from the
30.17 	commissioner.  Payroll information must be filed by April 1 of
30.18 	the following year.
30.19 	(b) Each self-insurer shall, under oath, attest to the
30.20 	accuracy of each report submitted pursuant to paragraph (a).
30.21 	Upon sufficient cause, the commissioner shall require the
30.22 	self-insurer to submit a certified audit of payroll and claim
30.23 	records conducted by an independent auditor approved by the
30.24 	commissioner, based on generally accepted accounting principles
30.25 	and generally accepted auditing standards, and supported by an
30.26 	actuarial review and opinion of the future contingent
30.27 	liabilities.  The basis for sufficient cause shall include the
30.28 	following factors:  where the losses reported appear
30.29 	significantly different from similar types of businesses; where
30.30 	major changes in the reports exist from year to year, which are
30.31 	not solely attributable to economic factors; or where the
30.32 	commissioner has reason to believe that the losses and payroll
30.33 	in the report do not accurately reflect the losses and payroll
30.34 	of that employer.  If any discrepancy is found, the commissioner
30.35 	shall require changes in the self-insurer's or workers'
30.36 	compensation service company record-keeping practices.
31.1 	(c) An annual status report due August 1 by each
31.2 	self-insurer shall be filed in a manner and on forms prescribed
31.3 	by the commissioner.
31.4 	(d) Each individual self-insurer shall, within four months
31.5 	after the end of its fiscal year, annually file with the
31.6 	commissioner its latest 10K report required by the Securities
31.7 	and Exchange Commission.  If an individual self-insurer does not
31.8 	prepare a 10K report, it shall file an annual certified
31.9 	financial statement, together with such other financial
31.10 	information as the commissioner may require to substantiate data
31.11 	in the financial statement.
31.12 	(e) Each member of the group shall, within seven six months
31.13 	after the end of each fiscal year for that group, file submit to
31.14 	a certified public accountant designated by the group,the most
31.15 	recent annual financial statement, reviewed by a certified
31.16 	public accountant in accordance with the Statements on Standards
31.17 	for Accounting and Review Services, Volume 2, the American
31.18 	Institute of Certified Public Accountants Professional
31.19 	Standards, or audited in accordance with generally accepted
31.20 	auditing standards, together with such other financial
31.21 	information the commissioner may require.  In addition, the
31.22 	group shall file with the commissioner, within seven months
31.23 	after the end of each fiscal year for that group, combining
31.24 	financial statements of the group members, compiled by a
31.25 	certified public accountant in accordance with the Statements on
31.26 	Standards for Accounting and Review Services, Volume 2, the
31.27 	American Institute of Certified Public Accountants Professional
31.28 	Standards.  The combining financial statements shall include,
31.29 	but not be limited to, a balance sheet, income statement,
31.30 	statement of changes in net worth, and statement of cash flow.
31.31 	Each combining financial statement shall include a column for
31.32 	each individual group member along with a total column. Each
31.33 	combined statement shall have a statement from the certified
31.34 	public accountant confirming that each member has submitted the
31.35 	required financial statement as defined in this section.  The
31.36 	certified public accountant shall notify the commissioner if any
32.1 	statement is qualified or otherwise conditional.  The
32.2 	commissioner may require additional financial information from
32.3 	any group member.
32.4 	Where a group has 50 or more members, the group shall file,
32.5 	in lieu of the combining financial statements, a combined
32.6 	financial statement showing only the total column for the entire
32.7 	group's balance sheet, income statement, statement of changes in
32.8 	net worth, and statement of cash flow.  Additionally, the group
32.9 	shall disclose, for each member, the total assets, net worth,
32.10 	revenue, and income for the most recent fiscal year.  The
32.11 	combining and combined financial statements may omit all
32.12 	footnote disclosures.
32.13 	(f) In addition to the financial statements required by
32.14 	paragraphs (d) and (e), interim financial statements or 10Q
32.15 	reports required by the Securities and Exchange Commission may
32.16 	be required by the commissioner upon an indication that there
32.17 	has been deterioration in the self-insurer's financial
32.18 	condition, including a worsening of current ratio, lessening of
32.19 	net worth, net loss of income, the downgrading of the company's
32.20 	bond rating, or any other significant change that may adversely
32.21 	affect the self-insurer's ability to pay expected losses.  Any
32.22 	self-insurer that files an 8K report with the Securities and
32.23 	Exchange Commission shall also file a copy of the report with
32.24 	the commissioner within 30 days of the filing with the
32.25 	Securities and Exchange Commission.

32.26 	Sec. 30. Minnesota Statutes 2004, section 79A.04,
32.27 	subdivision 2, is amended to read:
32.28 		Subd. 2.Minimum deposit.  The minimum deposit is 110
32.29 	percent of the private self-insurer's estimated future
32.30 	liability.  The deposit may be used to secure payment of all
32.31 	administrative and legal costs, and unpaid assessments required
32.32 	by section 79A.12, subdivision 2, relating to or arising from
32.33 	its or other employers' self-insuring.  As used in this section,
32.34 	"private self-insurer" includes both current and former members
32.35 	of the self-insurers' security fund; and "private self-insurers'
32.36 	estimated future liability" means the private self-insurers'
33.1 	total of estimated future liability as determined by an
33.2 	Associate or Fellow of the Casualty Actuarial Society every year
33.3 	for group member private self-insurers and, for a nongroup
33.4 	member private self-insurer's authority to self-insure, every
33.5 	year for the first five years.  After the first five years, the
33.6 	nongroup member's total shall be as determined by an Associate
33.7 	or Fellow of the Casualty Actuarial Society at least every two
33.8 	years, and each such actuarial study shall include a projection
33.9 	of future losses during the period until the next scheduled
33.10 	actuarial study, less payments anticipated to be made during
33.11 	that time.
33.12 	All data and information furnished by a private
33.13 	self-insurer to an Associate or Fellow of the Casualty Actuarial
33.14 	Society for purposes of determining private self-insurers'
33.15 	estimated future liability must be certified by an officer of
33.16 	the private self-insurer to be true and correct with respect to
33.17 	payroll and paid losses, and must be certified, upon information
33.18 	and belief, to be true and correct with respect to reserves.
33.19 	The certification must be made by sworn affidavit.  In addition
33.20 	to any other remedies provided by law, the certification of
33.21 	false data or information pursuant to this subdivision may
33.22 	result in a fine imposed by the commissioner of commerce on the
33.23 	private self-insurer up to the amount of $5,000, and termination
33.24 	of the private self-insurers' authority to self-insure.  The
33.25 	determination of private self-insurers' estimated future
33.26 	liability by an Associate or Fellow of the Casualty Actuarial
33.27 	Society shall be conducted in accordance with standards and
33.28 	principles for establishing loss and loss adjustment expense
33.29 	reserves by the Actuarial Standards Board, an affiliate of the
33.30 	American Academy of Actuaries.  The commissioner may reject an
33.31 	actuarial report that does not meet the standards and principles
33.32 	of the Actuarial Standards Board, and may further disqualify the
33.33 	actuary who prepared the report from submitting any future
33.34 	actuarial reports pursuant to this chapter.  Within 30 days
33.35 	after the actuary has been served by the commissioner with a
33.36 	notice of disqualification, an actuary who is aggrieved by the
34.1 	disqualification may request a hearing to be conducted in
34.2 	accordance with chapter 14.  Based on a review of the actuarial
34.3 	report, the commissioner of commerce may require an increase in
34.4 	the minimum security deposit in an amount the commissioner
34.5 	considers sufficient.
34.6 	Estimated future liability is determined by first taking
34.7 	the total amount of the self-insured's future liability of
34.8 	workers' compensation claims and then deducting the total amount
34.9 	which is estimated to be returned to the self-insurer from any
34.10 	specific excess insurance coverage, aggregate excess insurance
34.11 	coverage, and any supplementary benefits or second injury
34.12 	benefits which are estimated to be reimbursed by the special
34.13 	compensation fund. However, in the determination of estimated
34.14 	future liability, the actuary for the self-insurer shall not
34.15 	take a credit for any excess insurance or reinsurance which is
34.16 	provided by a captive insurance company which is wholly owned by
34.17 	the self-insurer.Supplementary benefits or second injury
34.18 	benefits will not be reimbursed by the special compensation fund
34.19 	unless the special compensation fund assessment pursuant to
34.20 	section 176.129 is paid and the reports required thereunder are
34.21 	filed with the special compensation fund.  In the case of surety
34.22 	bonds, bonds shall secure administrative and legal costs in
34.23 	addition to the liability for payment of compensation reflected
34.24 	on the face of the bond.  In no event shall the security be less
34.25 	than the last retention limit selected by the self-insurer with
34.26 	the Workers' Compensation Reinsurance Association, provided that
34.27 	the commissioner may allow former members to post less than the
34.28 	Workers' Compensation Reinsurance Association retention level if
34.29 	that amount is adequate to secure payment of the self-insurers'
34.30 	estimated future liability, as defined in this subdivision,
34.31 	including payment of claims, administrative and legal costs, and
34.32 	unpaid assessments required by section 79A.12, subdivision 2.
34.33 	The posting or depositing of security pursuant to this section
34.34 	shall release all previously posted or deposited security from
34.35 	any obligations under the posting or depositing and any surety
34.36 	bond so released shall be returned to the surety.  Any other
35.1 	security shall be returned to the depositor or the person
35.2 	posting the bond.
35.3 	As a condition for the granting or renewing of a
35.4 	certificate to self-insure, the commissioner may require a
35.5 	private self-insurer to furnish any additional security the
35.6 	commissioner considers sufficient to insure payment of all
35.7 	claims under chapter 176.

35.8 	Sec. 31. Minnesota Statutes 2004, section 79A.04,
35.9 	subdivision 10, is amended to read:
35.10 		Subd. 10.Notice; obligation of fund.  In the event of
35.11 	bankruptcy, insolvency, or certificate of default, the
35.12 	commissioner shall immediately notify by certified mail the
35.13 	commissioner of finance, the surety, the issuer of an
35.14 	irrevocable letter of credit, and any custodian of the security
35.15 	required in this chapter.  At the time of notification, the
35.16 	commissioner shall also call the security and transfer and
35.17 	assign it to the self-insurers' security fund.  The commissioner
35.18 	shall also immediately notify by certified mail the
35.19 	self-insurers' security fund, and order the security fund to
35.20 	assume the insolvent self-insurers' obligations for which it is
35.21 	liable under chapter 176.  The security fund shall commence
35.22 	payment of these obligations within 14 days of receipt of this
35.23 	notification and order.  Payments shall be made to claimants
35.24 	whose entitlement to benefits can be ascertained by the security
35.25 	fund, with or without proceedings before the Department of Labor
35.26 	and Industry, the Office of Administrative Hearings, the
35.27 	Workers' Compensation Court of Appeals, or the Minnesota Supreme
35.28 	Court.  Upon the assumption of obligations by the security fund
35.29 	pursuant to the commissioner's notification and order, the
35.30 	security fund has the right to immediate possession of any
35.31 	posted or deposited security and the custodian, surety, or
35.32 	issuer of any irrevocable letter of credit or the commissioner,
35.33 	if in possession of it, shall turn over the security, proceeds
35.34 	of the surety bond, or letter of credit to the security fund
35.35 	together with the interest that has accrued since the date of
35.36 	the self-insured employer's insolvency. The security fund has
36.1 	the right to the immediate possession of all relevant workers'
36.2 	compensation claim files and data of the self-insurer, and the
36.3 	possessor of the files and data must turn the files and data, or
36.4 	complete copies of them, over to the security fund within five
36.5 	days of the notification provided under this subdivision.  If
36.6 	the possessor of the files and data fails to timely turn over
36.7 	the files and data to the security fund, it is liable to the
36.8 	security fund for a penalty of $500 per day for each day after
36.9 	the five-day period has expired.  The security fund is entitled
36.10 	to recover its reasonable attorney fees and costs in any action
36.11 	brought to obtain possession of the workers' compensation claim
36.12 	files and data of the self-insurer, and for any action to
36.13 	recover the penalties provided by this subdivision.The
36.14 	self-insurers' security fund may administer payment of benefits
36.15 	or it may retain a third-party administrator to do so.

36.16 	Sec. 32. Minnesota Statutes 2004, section 79A.06,
36.17 	subdivision 5, is amended to read:
36.18 		Subd. 5.Private employers who have ceased to be
36.19 	self-insured.  (a) Private employers who have ceased to be
36.20 	private self-insurers shall discharge their continuing
36.21 	obligations to secure the payment of compensation which is
36.22 	accrued during the period of self-insurance, for purposes of
36.23 	Laws 1988, chapter 674, sections 1 to 21, by compliance with all
36.24 	of the following obligations of current certificate holders:
36.25 	(1) Filing reports with the commissioner to carry out the
36.26 	requirements of this chapter;
36.27 	(2) Depositing and maintaining a security deposit for
36.28 	accrued liability for the payment of any compensation which may
36.29 	become due, pursuant to chapter 176.  However, if a private
36.30 	employer who has ceased to be a private self-insurer purchases
36.31 	an insurance policy from an insurer authorized to transact
36.32 	workers' compensation insurance in this state which provides
36.33 	coverage of all claims for compensation arising out of injuries
36.34 	occurring during the entire period the employer was
36.35 	self-insured, whether or not reported during that period, the
36.36 	policy will:
37.1 	(i) discharge the obligation of the employer to maintain a
37.2 	security deposit for the payment of the claims covered under the
37.3 	policy;
37.4 	(ii) discharge any obligation which the self-insurers'
37.5 	security fund has or may have for payment of all claims for
37.6 	compensation arising out of injuries occurring during the period
37.7 	the employer was self-insured, whether or not reported during
37.8 	that period; and
37.9 	(iii) discharge the obligations of the employer to pay any
37.10 	future assessments to the self-insurers' security fund.
37.11 	A private employer who has ceased to be a private
37.12 	self-insurer may instead buy an insurance policy described
37.13 	above, except that it covers only a portion of the period of
37.14 	time during which the private employer was self-insured;
37.15 	purchase of such a policy discharges any obligation that the
37.16 	self-insurers' security fund has or may have for payment of all
37.17 	claims for compensation arising out of injuries occurring during
37.18 	the period for which the policy provides coverage, whether or
37.19 	not reported during that period.
37.20 	A policy described in this clause may not be issued by an
37.21 	insurer unless it has previously been approved as to form and
37.22 	substance by the commissioner; and
37.23 	(3) Paying within 30 days all assessments of which notice
37.24 	is sent by the security fund, for a period of seven years from
37.25 	the last day its certificate of self-insurance was in effect.
37.26 	Thereafter, the private employer who has ceased to be a private
37.27 	self-insurer may either:  (i) continue to pay within 30 days all
37.28 	assessments of which notice is sent by the security fund until
37.29 	it has no incurred liabilities for the payment of compensation
37.30 	arising out of injuries during the period of self-insurance; or
37.31 	(ii) pay the security fund a cash payment equal to four percent
37.32 	of the net present value of all remaining incurred liabilities
37.33 	for the payment of compensation under sections 176.101 and
37.34 	176.111 as certified by a member of the casualty actuarial
37.35 	society.  Assessments shall be based on the benefits paid by the
37.36 	employer during the calendar year immediately preceding the
38.1 	calendar year in which the employer's right to self-insure is
38.2 	terminated or withdrawn.
38.3 	(b) With respect to a self-insurer who terminates its
38.4 	self-insurance authority after April 1, 1998, that member shall
38.5 	obtain and file with the commissioner an actuarial opinion of
38.6 	its outstanding liabilities as determined by an associate or
38.7 	fellow of the Casualty Actuarial Society within 120 days of the
38.8 	date of its termination.  If the actuarial opinion is not timely
38.9 	filed, the self-insurers' security fund may, at its discretion,
38.10 	engage the services of an actuary for this purpose.  The expense
38.11 	of this actuarial opinion must be assessed against and be the
38.12 	obligation of the self-insurer.  The commissioner may issue a
38.13 	certificate of default against the self-insurer for failure to
38.14 	pay this assessment to the self-insurers' security fund as
38.15 	provided by section 79A.04, subdivision 9.  The opinion must
38.16 	separate liability for indemnity benefits from liability from
38.17 	medical benefits, and must discount each up to four percent per
38.18 	annum to net present value.  Within 30 days after notification
38.19 	of approval of the actuarial opinion by the commissioner, the
38.20 	member shall pay to the security fund an amount equal to 120
38.21 	percent of that discounted outstanding indemnity liability,
38.22 	multiplied by the greater of the average annualized assessment
38.23 	rate since inception of the security fund or the annual rate at
38.24 	the time of the most recent assessment before termination. If
38.25 	the payment is not made within 30 days of the notification,
38.26 	interest on it at the rate prescribed by section 549.09 must be
38.27 	paid by the former member to the security fund until the
38.28 	principal amount is paid in full.
38.29 	(c) A former member who terminated its self-insurance
38.30 	authority before April 1, 1998, who has paid assessments to the
38.31 	self-insurers' security fund for seven years, and whose
38.32 	annualized assessment is $500 or less, may buy out of its
38.33 	outstanding liabilities to the self-insurers' security fund by
38.34 	an amount calculated as follows:  1.35 multiplied by the
38.35 	indemnity case reserves at the time of the calculation,
38.36 	multiplied by the then current self-insurers' security fund
39.1 	annualized assessment rate.
39.2 	(d) A former member who terminated its self-insurance
39.3 	authority before April 1, 1998, and who is paying assessments
39.4 	within the first seven years after ceasing to be self-insured
39.5 	under paragraph (a), clause (3), may elect to buy out its
39.6 	outstanding liabilities to the self-insurers' security fund by
39.7 	obtaining and filing with the commissioner an actuarial opinion
39.8 	of its outstanding liabilities as determined by an associate or
39.9 	fellow of the Casualty Actuarial Society.  The opinion must
39.10 	separate liability for indemnity benefits from liability for
39.11 	medical benefits, and must discount each up to four percent per
39.12 	annum to net present value.  Within 30 days after notification
39.13 	of approval of the actuarial opinion by the commissioner, the
39.14 	member shall pay to the security fund an amount equal to 120
39.15 	percent of that discounted outstanding indemnity liability,
39.16 	multiplied by the greater of the average annualized assessment
39.17 	rate since inception of the security fund or the annual rate at
39.18 	the time of the most recent assessment.
39.19 	(e) A former member who has paid the security fund
39.20 	according to paragraphs (b) to (d) and subsequently receives
39.21 	authority from the commissioner to again self-insure shall be
39.22 	assessed under section 79A.12, subdivision 2, only on indemnity
39.23 	benefits paid on injuries that occurred after the former member
39.24 	received authority to self-insure again; provided that the
39.25 	member furnishes verified data regarding those benefits to the
39.26 	security fund.
39.27 	(f) In addition to proceedings to establish liabilities and
39.28 	penalties otherwise provided, a failure to comply may be the
39.29 	subject of a proceeding before the commissioner.  An appeal from
39.30 	the commissioner's determination may be taken pursuant to the
39.31 	contested case procedures of chapter 14 within 30 days of the
39.32 	commissioner's written determination.
39.33 	Any current or past member of the self-insurers' security
39.34 	fund is subject to service of process on any claim arising out
39.35 	of chapter 176 or this chapter in the manner provided by section
39.36 	5.25, or as otherwise provided by law.  The issuance of a
40.1 	certificate to self-insure to the private self-insured employer
40.2 	shall be deemed to be the agreement that any process which is
40.3 	served in accordance with this section shall be of the same
40.4 	legal force and effect as if served personally within this state.

40.5 	Sec. 33. Minnesota Statutes 2004, section 79A.12,
40.6 	subdivision 2, is amended to read:
40.7 		Subd. 2.Assessment.  The security fund may assess each
40.8 	of its members a pro rata share of the funding necessary to
40.9 	carry out its obligation and the purposes of this chapter.
40.10 	Total annual assessments in any calendar year shall not exceed
40.11 	ten percent of the workers' compensation benefits paid under
40.12 	sections 176.101 and 176.111 during the previous paid indemnity
40.13 	losses, as defined in section 176.129, made by the self-insured
40.14 	employer during the preceding calendar year.  The annual
40.15 	assessment calculation shall not include supplementary benefits
40.16 	paid which will be reimbursed by the special compensation fund.
40.17 	Funds obtained by assessments pursuant to this subdivision may
40.18 	only be used for the purposes of this chapter.  The trustees
40.19 	shall certify to the commissioner the collection and receipt of
40.20 	all money from assessments, noting any delinquencies.  The
40.21 	trustees shall take any action deemed appropriate to collect any
40.22 	delinquent assessments.

40.23 	Sec. 34. Minnesota Statutes 2004, section 79A.22,
40.24 	subdivision 11, is amended to read:
40.25 		Subd. 11.Disbursement of fund surplus.  (a) One
40.26 	hundred Except as otherwise provided in paragraphs (b) and (c),
40.27 	100 percent of any surplus money for a fund year in excess of
40.28 	125 percent of the amount necessary to fulfill all obligations
40.29 	under the Workers' Compensation Act, chapter 176, for that fund
40.30 	year may be declared refundable to a member eligible members at
40.31 	any time. The date shall be no earlier than 18 months following
40.32 	the end of such fund year.  The first disbursement of fund
40.33 	surplus may not be made prior to the written approval of the
40.34 	commissioner.  There can be no more than one refund made in any
40.35 	12-month period.
40.36 	(b) Except as otherwise provided in paragraph (c), for
41.1 	groups that have been in existence for five years or more, 100
41.2 	percent of any surplus money for a fund year in excess of 110
41.3 	percent of the amount necessary to fulfill all obligations under
41.4 	the Workers' Compensation Act, chapter 176, for that fund year
41.5 	may be declared refundable to eligible members at any time.
41.6 	(c) Excess surplus distributions under paragraphs (a) and
41.7 	(b) may not be greater than the combined surplus of the group at
41.8 	the time of the distribution.
41.9 	(d) When all the claims of any one fund year have been
41.10 	fully paid, as certified by an actuary, all surplus money from
41.11 	that fund year may be declared refundable.
41.12 	(b) (e) The commercial self-insurance group shall give ten
41.13 	days' prior notice to the commissioner of any refund. Said The 
41.14 	notice shall must be accompanied by a statement from the
41.15 	commercial self-insurer group's certified public accountant
41.16 	certifying that the proposed refund is in compliance
41.17 	with paragraph (a) this subdivision.

41.18 	Sec. 35. Minnesota Statutes 2004, section 79A.22, is
41.19 	amended by adding a subdivision to read:
41.20 		Subd. 14.All states coverage. Policies issued by
41.21 	commercial self-insurance groups pursuant to this chapter may
41.22 	also provide workers' compensation coverage required under the
41.23 	laws of states other than Minnesota, commonly known as "all
41.24 	states coverage."  The coverage must be provided to members of
41.25 	the group which are temporarily performing work in another state.

41.26 	Sec. 36. Minnesota Statutes 2004, section 123A.21, is
41.27 	amended by adding a subdivision to read:
41.28 		Subd. 12.Health coverage pool comparison shopping. (a)
41.29 	Service cooperatives must permit school districts and other
41.30 	political subdivisions participating in a service cooperative
41.31 	health coverage pool to solicit bids and other information from
41.32 	competing sources of health coverage at any time other than
41.33 	within five months prior to the end of a master agreement.
41.34 	(b) A service cooperative must not impose a fine or other
41.35 	penalty against an enrolled entity for soliciting a bid or other
41.36 	information during the allowed period.  The service cooperative
42.1 	may prohibit the entity from participating in service
42.2 	cooperative coverage for a period of up to one year, if the
42.3 	entity leaves the service cooperative pool and obtains other
42.4 	health coverage.
42.5 	(c) A service cooperative must provide each enrolled entity
42.6 	with the entity's monthly claims data.  This paragraph applies
42.7 	notwithstanding section 13.203.

42.8 	Sec. 37. Minnesota Statutes 2004, section 176.191,
42.9 	subdivision 3, is amended to read:
42.10 		Subd. 3.Insurer payment.  If a dispute exists as to
42.11 	whether an employee's injury is compensable under this chapter
42.12 	and the employee is otherwise covered by an insurer or entity 
42.13 	pursuant to chapters 62A, 62C and ,62D, 62E, 62R, and 62T,that
42.14 	insurer or entity shall pay any medical costs incurred by the
42.15 	employee for the injury up to the limits of the applicable
42.16 	coverage and shall make any disability payments otherwise
42.17 	payable by that insurer or entity in the absence of or in
42.18 	addition to workers' compensation liability.  If the injury is
42.19 	subsequently determined to be compensable pursuant to this
42.20 	chapter, the workers' compensation insurer shall be ordered to
42.21 	reimburse the insurer or entity that made the payments for all
42.22 	payments made under this subdivision by the insurer or entity,
42.23 	including interest at a rate of 12 percent a year.  If a payment
42.24 	pursuant to this subdivision exceeds the reasonable value as
42.25 	permitted by sections 176.135 and 176.136, the provider shall
42.26 	reimburse the workers' compensation insurer for all the excess
42.27 	as provided by rules promulgated by the commissioner.

42.28 	Sec. 38. Laws 1985, chapter 85, section 1, is amended to
42.29 	read:

42.30 	Section 1. Certain counties; joint agreements for
42.31 	insurance coverage.
42.32 	(a) The counties of Aitkin, Itasca, Koochiching and St.
42.33 	Louis, and political subdivisions located in those counties,
42.34 	except the city of Duluth, when two or more of them are acting
42.35 	jointly under Minnesota Statutes, section 471.61, subdivision 1,
42.36 	or section 471.59 for purposes of section 471.61, may act
43.1 	jointly for the same purposes with any nonprofit organization
43.2 	organized under the laws of Minnesota and which is exempt from
43.3 	taxation pursuant to section 501(c)(3) of the Internal Revenue
43.4 	Code 1954, as amended through December 31, 1984.
43.5 	(b) Notwithstanding Minnesota Statutes, sections 62L.03;
43.6 	62L.04; 62L.045; or any other provision of Minnesota Statutes,
43.7 	chapter 62L, an arrangement described in paragraph (a) may
43.8 	provide the same health coverage under the same plan and premium
43.9 	rates to its member employers that have 50 or fewer employees
43.10 	that the arrangement provides to its member employers that have
43.11 	more than 50 employees.  The insurer offering the plan need not
43.12 	offer this same plan to small employers that are not member
43.13 	employers in the arrangement described in paragraph (a).
43.14 	(c) Paragraph (b) is a pilot project that expires at the
43.15 	end of its third full plan year after its date of enactment.
43.16 	After the second full plan year, the entity operating an
43.17 	arrangement described in paragraph (a) shall provide a written
43.18 	report to the commissioner of commerce summarizing the
43.19 	advantages and disadvantages of the pilot project and
43.20 	recommending whether to make it permanent.

43.21 	Sec. 39 REPEALER.
 43.22 	Minnesota Statutes 2004, sections 61A.072, subdivision 2;
43.23 	and 62E.03 are repealed.

43.24 	Sec. 40. EFFECTIVE DATES.
 43.25 	(a) Sections 10, 15, 18, 22, 23, 25, 31 to 35, and 37 are
43.26 	effective the day following final enactment.  Section 19 is
43.27 	effective the day following final enactment and applies to any
43.28 	action taken by an insurer on or after that date.  Sections 1,
43.29 	3, 21, and 26 to 28 are effective July 1, 2005.  The remaining
43.30 	sections are effective August 1, 2005.
43.31 	(b) Pursuant to Minnesota Statutes, section 645.023,
43.32 	subdivision 1, clause (a), local approval of section 38 is not
43.33 	required.  Section 38 is effective the day following final
43.34 	enactment.