1.1 	A bill for an act
1.2 	relating to insurance; modernizing insurance regulation; amending mutual 
1.3 	holding company laws; enacting the interstate insurance product regulation 
1.4 	compact; making miscellaneous insurance law changes; amending Minnesota 
1.5 	Statutes 2004, sections 60A.075, subdivision 1; 60A.077, subdivisions 1, 3,  by 
1.6 	adding a subdivision; 60A.207; 60D.19, subdivision 1; 60K.56, subdivisions 5, 
1.7 	6; 64B.13; Minnesota Statutes 2005 Supplement, sections 66A.02, subdivisions 
1.8 	2, 3; 66A.07, subdivision 2; proposing coding for new law in Minnesota Statutes, 
1.9 	chapter 60A.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	ARTICLE 1
1.12 	MUTUAL HOLDING COMPANY CHANGES

1.13 	Section 1. Minnesota Statutes 2004, section 60A.075, subdivision 1, is amended to 
1.14 	read:
1.15 		Subdivision 1.Definitions. (a) For the purposes of this section, the terms in this 
1.16 	subdivision have the meanings given them.
1.17 	(b) "Converting mutual insurer" means a Minnesota domestic mutual insurance 
1.18 	company seeking to reorganize according to this section.
1.19 	(c) "Converting mutual holding company" means a Minnesota domestic mutual 
1.20 	insurance holding company seeking to reorganize according to this section.
1.21 	(d) "Converting mutual company" means a converting mutual insurer or a converting 
1.22 	mutual holding company seeking to convert according to this section.
1.23 	(e) "Reorganized company" means a converting mutual insurer or a converting 
1.24 	mutual holding company, as the case may be, that has reorganized according to this section.
1.25 	(f) "Eligible member" means:
2.1 	(1) for converting mutual insurers, a policyholder whose policy is in force as of the 
2.2 	record date. Unless otherwise provided in the plan, a person insured covered under a 
2.3 	group policy is not an eligible member, unless except that a person insured under a group 
2.4 	life insurance policy is an eligible member if, on the record date:
2.5 	(i) the person is insured or covered under a group life policy or group annuity 
2.6 	contract under which funds are cash value has accumulated and been allocated to the 
2.7 	respective covered insured persons; and
2.8 	(ii) the person has the right to direct the application of the funds so allocated;
2.9 	(iii) (ii) the group policyholder makes no contribution to the premiums or deposits
2.10 	for the group policy or contract; and
2.11 	(iv) the converting mutual company has the names and addresses of the persons 
2.12 	covered under the group life policy or group annuity contract;
2.13 	(2) for converting mutual holding companies, a person who is a member of the 
2.14 	converting mutual holding company, as defined by the converting mutual holding 
2.15 	company's articles of incorporation and bylaws, determined as of the record date.
2.16 	(g) "Plan of conversion" or "plan" means a plan adopted by a converting mutual 
2.17 	company's board of directors under this section.
2.18 	(h) "Policy" means a policy or contract of insurance, including an annuity contract, 
2.19 	issued by a converting mutual insurer or issued by a stock reorganized insurance company 
2.20 	subsidiary of a mutual holding company, but excluding individual noncontributory 
2.21 	insurance policies for which the premiums are paid by a financial institution, association, 
2.22 	employer, or other institutional entity.
2.23 	(i) "Active participating policy" means an individual policy of a converting mutual 
2.24 	company or its subsidiary that: (1) is a participating policy; (2) is among a class of similar 
2.25 	policies that have been credited with policy dividends at any time within the 12 months 
2.26 	preceding the effective date of the conversion or that will, under the then current dividend 
2.27 	scale, be credited with policy dividends if in force on a future policy anniversary; (3) gives 
2.28 	rise to membership interests in the converting mutual company; and (4) is in force on the 
2.29 	effective date or some other reasonable date identified in the plan.
2.30 	(j) "Commissioner" means the commissioner of commerce.
2.31 	(k) "Effective date of a conversion" means the date determined according to 
2.32 	subdivision 6.
2.33 	(l) "Record date" means the date that the converting mutual company's board 
2.34 	of directors adopts a plan of conversion, unless another date is specified in the plan of 
2.35 	conversion and approved by the commissioner.
3.1 	(m) "Membership interests" means all rights as members of the converting 
3.2 	mutual company, including, but not limited to, the rights to vote and to participate in 
3.3 	any distributions of distributable net worth, whether or not incident to the company's 
3.4 	liquidation.
3.5 	(n) "Distributable net worth" means the value of the converting mutual company 
3.6 	as of the record date of the conversion, or other date approved by the commissioner, 
3.7 	determined as set forth in the plan and approved by the commissioner. The commissioner 
3.8 	may approve a valuation method based on any of the following: (1) the surplus as regards 
3.9 	policyholders of a converting mutual insurer determined according to statutory accounting 
3.10 	principles, which may be adjusted to reflect the current market values of assets and 
3.11 	liabilities, together with any other adjustments that are appropriate in the circumstances; 
3.12 	(2) the net equity of a converting mutual holding company or a converting mutual insurer 
3.13 	determined according to generally accepted accounting principles, which may be adjusted 
3.14 	to reflect the current market values of assets and liabilities, together with any other 
3.15 	adjustments that are appropriate in the circumstances; (3) the fair market value of the 
3.16 	converting mutual company determined by an independent, qualified person; or (4) any 
3.17 	other reasonable valuation method.
3.18 	(o) "Permitted issuer" means: (1) a corporation organized and owned by the 
3.19 	converting mutual company or by any other insurance company or insurance holding 
3.20 	company for the purpose of purchasing and holding securities representing a majority of 
3.21 	voting control of the reorganized company; (2) a stock insurance company owned by the 
3.22 	converting mutual company or by any other insurance company or insurance holding 
3.23 	company into which the converting mutual company will be merged; or (3) any other 
3.24 	corporation approved by the commissioner.

3.25 	Sec. 2. Minnesota Statutes 2004, section 60A.077, subdivision 1, is amended to read:
3.26 		Subdivision 1.Formation. (a) A domestic mutual insurance company, upon 
3.27 	approval of the commissioner, may reorganize by forming an insurance holding company 
3.28 	based upon a mutual plan and continuing the corporate existence of the reorganizing 
3.29 	insurance company as a stock insurance company. The commissioner, if satisfied that the 
3.30 	interests of the policyholders are properly protected and that the plan of reorganization is 
3.31 	fair and equitable to the policyholders, may approve the proposed plan of reorganization 
3.32 	and may require as a condition of approval the modifications of the proposed plan of 
3.33 	reorganization as the commissioner finds necessary for the protection of the policyholders' 
3.34 	interests. The commissioner shall retain jurisdiction over the mutual insurance holding 
4.1 	company according to this section and chapter 60D to assure that policyholder and 
4.2 	member interests are protected.
4.3 	(b) All of the initial voting shares of the capital stock of the reorganized insurance 
4.4 	company must be issued to the mutual insurance holding company or to an intermediate 
4.5 	stock holding company. The membership interests of the policyholders of the reorganized 
4.6 	insurance company become membership interests in the mutual insurance holding 
4.7 	company. "Membership interests" means those interests described in section  60A.075, 
4.8 	subdivision 1, paragraph (h) (m). Policyholders of the reorganized insurance company 
4.9 	shall be members of the mutual insurance holding company and their voting rights must 
4.10 	be determined in accordance with the articles of incorporation and bylaws of the mutual 
4.11 	insurance holding company. Policyholders of any other insurance company subsidiary 
4.12 	of a mutual insurance holding company shall not be members of the mutual insurance 
4.13 	holding company unless otherwise specified in the articles of incorporation or bylaws of 
4.14 	the mutual insurance holding company. For purposes of this paragraph, "other insurance 
4.15 	company subsidiary" means an insurance company subsidiary of a mutual insurance 
4.16 	holding company that has not reorganized under this chapter or a comparable statute in 
4.17 	another jurisdiction. The mutual insurance holding company shall, at all times, directly 
4.18 	or through one or more intermediate stock holding companies, control a majority of the 
4.19 	voting shares of the capital stock of the reorganized insurance company, taking into 
4.20 	account any potential dilution resulting from convertible securities. 
4.21 	(c) A majority of the board of directors of a mutual insurance holding company 
4.22 	must be disinterested directors. For purposes of this section, a director is disinterested if 
4.23 	(i) the director is not or has not within the past two years been an officer or employee of 
4.24 	the mutual insurance holding company or any subsidiary or predecessor corporation, and 
4.25 	(ii) the director does not hold, directly or indirectly, a material ownership interest in any 
4.26 	subsidiary of the mutual insurance holding company. An ownership interest is material 
4.27 	if it represents more than one-half of one percent of the voting securities of the issuer, 
4.28 	or a larger percentage as the commissioner may approve.

4.29 	Sec. 3. Minnesota Statutes 2004, section 60A.077, subdivision 3, is amended to read:
4.30 		Subd. 3.Plan of reorganization; approval by commissioner. (a) A reorganizing or 
4.31 	merging insurer or a merging mutual insurance holding company shall, by the affirmative 
4.32 	vote of a majority of its board of directors, adopt a plan of reorganization or merger 
4.33 	consistent with the requirements of this section and file the plan with the commissioner. 
4.34 	At any time before the approval of a plan by the commissioner, the company, by the 
5.1 	affirmative vote of a majority of its directors, may amend or withdraw the plan. The plan 
5.2 	must provide for the following:
5.3 	(1) in the case of a reorganization under subdivision 1, establishing a mutual 
5.4 	insurance holding company with at least one stock insurance company subsidiary, or in 
5.5 	the case of a reorganization under subdivision 2, a description of the terms and conditions 
5.6 	of the proposed merger;
5.7 	(2) analyzing the benefits and risks attendant to the proposed reorganization, 
5.8 	including the rationale for the reorganization and analysis of the comparative benefits and 
5.9 	risks of a demutualization under section  60A.075; 
5.10 	(3) protecting the immediate and long-term interests of existing policyholders;
5.11 	(4) ensuring immediate membership in the mutual insurance holding company of all 
5.12 	existing policyholders of the reorganizing domestic insurance company;
5.13 	(5) describing a plan providing for membership interests of future policyholders;
5.14 	(6) describing the number of members of the board of directors of the mutual 
5.15 	insurance holding company required to be policyholders;
5.16 	(7) describing the mutual insurance holding company's plan for distributions to 
5.17 	members or other uses of accumulated mutual holding company earnings;
5.18 	(8) describing the nature and content of the annual report and financial statement 
5.19 	to be sent or otherwise made available to each member;
5.20 	(9) describing a plan to send or otherwise make available to members the annual 
5.21 	report and financial statement;
5.22 	(10) a copy of the proposed mutual insurance holding company's articles of 
5.23 	incorporation and bylaws specifying all membership rights;
5.24 	(10) (11) the names, addresses, and occupational information of all corporate officers 
5.25 	and members of the proposed mutual insurance holding company board of directors;
5.26 	(11) (12) information sufficient to demonstrate that the financial condition of the 
5.27 	reorganizing or merging company will not be materially diminished upon reorganization, 
5.28 	including information concerning any subsidiaries of the reorganizing or merging insurers 
5.29 	that will become subsidiaries of the mutual insurance holding company or an intermediate 
5.30 	holding company as part of the reorganization;
5.31 	(12) (13) a copy of the articles of incorporation and bylaws for any proposed 
5.32 	insurance company subsidiary or intermediate holding company subsidiary;
5.33 	(13) (14) describing any plans for an initial sale or subscription of stock or other 
5.34 	securities of the reorganized insurance company or any intermediate holding company; and
5.35 	(14) (15) any other information requested by the commissioner or required by rule.
6.1 	(b) The commissioner may approve the plan upon finding that the requirements of 
6.2 	this section have been fully met and the plan will protect the immediate and long-term 
6.3 	interests of policyholders.
6.4 	(c) The commissioner may retain, at the reorganizing or merging mutual company's 
6.5 	expense, any qualified experts not otherwise a part of the commissioner's staff to assist in 
6.6 	reviewing the plan.
6.7 	(d) The commissioner may, but need not, conduct a public hearing regarding the 
6.8 	proposed plan. The hearing must be held within 30 days after submission of a completed 
6.9 	plan of reorganization to the commissioner. The commissioner shall give the reorganizing 
6.10 	mutual company at least 20 days' notice of the hearing. At the hearing, the reorganizing 
6.11 	mutual company, its policyholders, and any other person whose interest may be affected 
6.12 	by the proposed reorganization, may present evidence, examine and cross-examine 
6.13 	witnesses, and offer oral and written arguments or comments according to the procedure 
6.14 	for contested cases under chapter 14. The persons participating may conduct discovery 
6.15 	proceedings in the same manner as prescribed for the district courts of this state. All 
6.16 	discovery proceedings must be concluded no later than three days before the scheduled 
6.17 	commencement of the public hearing.

6.18 	Sec. 4. Minnesota Statutes 2004, section 60A.077, is amended by adding a subdivision 
6.19 	to read:
6.20 		Subd. 13.Conversion. (a) With the approval of the commissioner, a domestic 
6.21 	insurance company that previously reorganized under this section into a stock subsidiary 
6.22 	of a mutual insurance holding company may convert back into a mutual insurance 
6.23 	company. It shall effect the conversion by merging with its parent mutual insurance 
6.24 	holding company (a "parent mutual"), but only if the parent mutual owns or controls, 
6.25 	directly or indirectly, all of the voting shares of capital stock of the reorganized insurance 
6.26 	company. The reorganized subsidiary, as the surviving company, shall continue its 
6.27 	corporate existence as a domestic mutual insurance company (a "remutualized company"). 
6.28 	A conversion under this subdivision may, but need not, occur in connection with the 
6.29 	simultaneous or subsequent merger of the remutualized company with a domestic or 
6.30 	foreign mutual insurance company. Section 61A.37 is not applicable to a conversion 
6.31 	under this subdivision.
6.32 	(b) The conversion can be effected by the parent mutual pursuant to a plan of 
6.33 	conversion adopted as follows:
6.34 	(1) The parent mutual shall, by the affirmative vote of a majority of its board of 
6.35 	directors, adopt a plan of conversion consistent with the requirements of this subdivision.
7.1 	(2) The parent mutual, by the affirmative vote of a majority of its board of directors, 
7.2 	may amend the plan at any time before approval of the plan by the commissioner and may 
7.3 	withdraw the plan at any time before the effective date of the plan.
7.4 	(3) The duties of the board of directors of the parent mutual, in considering or acting 
7.5 	upon a proposed plan of conversion or related transaction, shall be as set forth in section 
7.6 	302A.251 and, to the extent not inconsistent with that section, the parent mutual's articles 
7.7 	of incorporation and bylaws.
7.8 	(c) The parent mutual shall file with the commissioner an application for approval 
7.9 	of, and permission to carry out the reorganization according to, the plan of conversion. 
7.10 	The application must include the following:
7.11 	(1) the plan of conversion;
7.12 	(2) the form of notice of meeting for eligible members to vote on the plan;
7.13 	(3) the form of any proxies to the solicited from eligible members;
7.14 	(4) the proposed articles of incorporation and bylaws of the remutualized company;
7.15 	(5) information required under chapter 60D if the plan results in a change of control 
7.16 	of the remutualizing company;
7.17 	(6) if required by the commissioner, an independent actuarial opinion on matters 
7.18 	affecting the structure or fairness of the plan; and
7.19 	(7) other information or documentation required by the commissioner or required by 
7.20 	rule.
7.21 	(d) The commissioner shall determine, within 30 days of submission of the 
7.22 	application, whether the application is complete.
7.23 	(e) If the plan of conversion proposes a simultaneous merger of the remutualized 
7.24 	company with a foreign or domestic mutual insurance company, the commissioner may 
7.25 	conduct concurrent proceedings under this subdivision and section 60A.16.
7.26 	(f) The commissioner may retain, at the parent mutual's expense, qualified experts 
7.27 	not otherwise a part of the commissioner's staff, including without limitation, actuaries, 
7.28 	accountants, investment bankers, and attorneys, to assist in reviewing the plan and 
7.29 	supplemental materials and valuations.
7.30 	(g) The commissioner may, but need not, conduct a public hearing regarding the 
7.31 	proposed plan of conversion. If a hearing is to be held, the commissioner shall designate a 
7.32 	date for the public hearing promptly upon determining that the application is complete 
7.33 	and that the forms of notice are adequate. The public hearing must be held on one or 
7.34 	more days, the first beginning within 90 days after the date on which the commissioner 
7.35 	determines the application is complete, unless the parent mutual requests, and the 
7.36 	commissioner agrees to, a longer period for the purpose of preparing and distributing the 
8.1 	notices required by this paragraph and by paragraph (i), clause (1). The hearing shall be in 
8.2 	the nature of a legislative hearing and shall not constitute or be considered a contested 
8.3 	case under chapter 14. The hearing may be conducted by the commissioner or by a 
8.4 	person designated by the commissioner, which designee may be an administrative law 
8.5 	judge. The parent mutual shall provide its eligible members with at least 45 days' notice 
8.6 	of the hearing, the notice to be in the form, and provided in a manner, approved by the 
8.7 	commissioner. The purpose of the hearing is to receive comments and information for 
8.8 	the purpose of aiding the commissioner in making a decision on the plan of conversion. 
8.9 	Persons wishing to make comments and submit information may submit written 
8.10 	statements before the public hearing and may appear and be heard at the hearing. The 
8.11 	commissioner's order or determination must be issued within 45 days after the closing of 
8.12 	the record of the hearing by the commissioner or the hearing officer, as applicable, which 
8.13 	record must not be closed until the record includes certification of the vote on the plan 
8.14 	of conversion by the eligible members of the parent mutual. The commissioner shall 
8.15 	issue a written decision detailing the reasons why the parent mutual company's plan 
8.16 	of conversion is approved or disapproved.
8.17 	(h) The commissioner shall approve the application and permit the conversion 
8.18 	according to the plan if the commissioner finds that: 
8.19 	(1) the provisions of this subdivision have been fully met; and
8.20 	(2) the plan is not unfair or inequitable to the members of the parent mutual. 
8.21 	The commissioner's order approving or disapproving a plan of conversion is a final agency 
8.22 	decision subject to appeal according to sections 14.63 to 14.68.
8.23 	(i)(1) No later than 90 days following the date of the public hearing, if any, or the 
8.24 	date the commissioner determines the application is complete if no hearing is held, the 
8.25 	parent mutual shall give all eligible members notice of a regular or special meeting of the 
8.26 	members called for the purpose of considering the plan and any corporate actions that 
8.27 	are a part of, or are reasonably attendant to, the accomplishment of the plan, including 
8.28 	without limitation, any proposed merger of the remutualizing company with a domestic or 
8.29 	foreign mutual insurance company.
8.30 	(2) A copy of the plan or a summary of the plan must accompany the notice. The 
8.31 	notice must be mailed to each eligible member's last known address, as shown on the 
8.32 	parent mutual's records, not less than 45 days before the date of the meeting, unless the 
8.33 	commissioner directs a later date for mailing. If the meeting to vote upon the plan is held 
8.34 	coincident with the parent mutual's annual meeting of members, only one combined notice 
8.35 	of meeting is required. The notice of the meeting of eligible members may be combined 
8.36 	with the notice of hearing described in paragraph (g).
9.1 	(3) If the parent mutual complies substantially and in good faith with the notice 
9.2 	requirements of this section, the parent mutual's failure to give any member or members 
9.3 	required notice does not impair the validity of an action taken under this section.
9.4 	(j)(1) The plan must be adopted upon receiving the affirmative vote of a majority of 
9.5 	the votes cast by eligible members.
9.6 	(2) Eligible members may vote in person or by proxy. The form of any proxy must 
9.7 	be filed with and approved by the commissioner.
9.8 	(k)(1) Following approval by the eligible members, the parent mutual shall file a 
9.9 	copy of the converting subsidiary's amended or restated articles of incorporation with the 
9.10 	commissioner, together with a certified copy of the minutes of the meeting of the members 
9.11 	of the parent mutual at which the plan was adopted and a certified copy of the plan. The 
9.12 	commissioner shall review and, if appropriate, approve the amended or restated articles. 
9.13 	After approval by the commissioner, the parent mutual shall file the articles with the 
9.14 	secretary of state as provided by section 60A.07, subdivision 1d, and chapter 302A.
9.15 	(2) The conversion is effective on the date of filing an amendment or restatement of 
9.16 	the articles of incorporation with the secretary of state, or on a later date if the plan so 
9.17 	specifies.
9.18 	(l) Upon the effective date of the conversion in accordance with this subdivision:
9.19 	(1) The corporate existence of the parent mutual is continued in the converted 
9.20 	subsidiary. All the rights, privileges, powers, franchises, and interests of the parent 
9.21 	mutual in and to all property and things in action belonging to the parent company are 
9.22 	considered transferred to and vested in the converted subsidiary without any deed or 
9.23 	transfer. Simultaneously, the converted subsidiary is considered to have assumed all the 
9.24 	obligations and liabilities of the parent mutual.
9.25 	(2) The directors and officers of the parent mutual, unless otherwise specified in the 
9.26 	plan of conversion, shall serve as directors and officers of the converted subsidiary until 
9.27 	new directors and officers of the converted subsidiary are duly elected according to the 
9.28 	articles of incorporation and bylaws of the converted subsidiary.
9.29 	(3) All policies issued by the converted subsidiary in force on the effective date 
9.30 	of the conversion remain in force subject to the terms of those policies, except that the 
9.31 	membership interests in the parent mutual shall become membership interests in the 
9.32 	converted subsidiary, and member voting rights in the converted subsidiary shall be 
9.33 	exclusively governed by the converted subsidiary??a??a??s articles and bylaws.
9.34 	(4) Except as otherwise provided in the plan of conversion, the converted subsidiary 
9.35 	is no longer subject to the requirements of subdivisions 1 to 12 of this section or to the 
9.36 	terms of the original plan of reorganization.
10.1 	(5) At the effective time of the merger, all of the voting shares of capital stock of the 
10.2 	converted subsidiary shall be deemed to be redeemed and canceled.
10.3 	(6) Any provisions of the original plan of reorganization pertaining to the protection 
10.4 	of reasonable policyholder dividend expectations may be continued, modified, or 
10.5 	extinguished as provided under the plan of conversion and approved by the commissioner.
10.6 	(m) No director, officer, agent, employee of the parent mutual or the converting 
10.7 	subsidiary, or any other person shall receive a fee, commission, or other valuable 
10.8 	consideration, other than the person's usual regular salary and compensation, for in any 
10.9 	manner aiding, promoting, or assisting in the conversion except as set forth in the plan 
10.10 	approved by the commissioner. This provision does not prohibit the payment of reasonable 
10.11 	fees and compensation to attorneys, accountants, investment bankers, and actuaries for 
10.12 	services performed in the independent practice of their professions.
10.13 	(n) All the costs and expenses connected with a plan of conversion must be paid 
10.14 	for or reimbursed by the parent mutual or converted subsidiary except where the plan 
10.15 	provides otherwise.
10.16 	(o)(1) An action challenging the validity of or arising out of acts taken or proposed 
10.17 	to be taken according to this section must be commenced within 180 days after the 
10.18 	effective date of the conversion.
10.19 	(2) The parent mutual, the converted subsidiary, or any defendant in an action 
10.20 	described in clause (1) may petition the court in the action to order a party to give security 
10.21 	for the reasonable attorney fees that may be incurred by a party to the action. The amount 
10.22 	of security may be increased or decreased in the discretion of the court having jurisdiction 
10.23 	if a showing is made that the security provided is or may become inadequate or excessive.
10.24 	(p) For purposes of this subdivision, the following terms have the meanings given.
10.25 	(1) "Eligible member" means a person who is a member of the parent mutual, as 
10.26 	defined by the parent mutual??a??a??s articles of incorporation and bylaws, determined as of 
10.27 	the record date.
10.28 	(2) "Membership interests" means all rights as members of  the parent mutual, 
10.29 	including, but not limited to, the rights to vote.
10.30 	(3) "Plan of conversion" or "plan" means a plan adopted by a parent mutual??a??a??s board 
10.31 	of directors under this section.
10.32 	(4) "Record date" means the date that the parent mutual??a??a??s board of directors adopts a 
10.33 	plan of conversion, unless another date is specified in the plan of conversion and approved 
10.34 	by the commissioner.
10.35 	(5) "Converted subsidiary" means a converting subsidiary that has converted into a 
10.36 	mutual insurance company under this subdivision.
11.1 	(6) "Converting subsidiary" means a Minnesota domestic insurance company that 
11.2 	previously reorganized under this section that is seeking to convert back into a mutual 
11.3 	insurance company in accordance with this subdivision.

11.4 	Sec. 5. Minnesota Statutes 2005 Supplement, section 66A.02, subdivision 2, is 
11.5 	amended to read:
11.6 		Subd. 2.Mutual holding companies. For purposes of sections 66A.01 to 66A.07
11.7 	and 66A.21, the termunless the context clearly suggests otherwise, "domestic mutual 
11.8 	insurance company" is deemed to include domestic mutual insurance holding companies 
11.9 	organized under section 60A.077 and the term "member" is deemed to include members of 
11.10 	a domestic mutual insurance holding company as specified in section 60A.077, subdivision 
11.11 	1, paragraph (b). For purposes of section 60A.07, subdivisions 1, 1a, 1b, 1c, 1d, and 1e, a 
11.12 	domestic mutual insurance holding company is deemed to be an insurance corporation.

11.13 	Sec. 6. Minnesota Statutes 2005 Supplement, section 66A.02, subdivision 3, is 
11.14 	amended to read:
11.15 		Subd. 3.Terms. For purposes of applying chapter 302A to domestic mutual 
11.16 	insurance companies, members of a domestic mutual insurance company must be treated 
11.17 	in the same manner as shareholders of a stock corporation, except as otherwise provided 
11.18 	in this chapter. Every member of the mutual insurance company shall be deemed to hold 
11.19 	one share of the company for purposes of applying provisions of chapter 302A relating 
11.20 	to voting. Mutual insurance companies are not included in the definitions of "closely 
11.21 	held corporation," "publicly held corporation," or "issuing public corporation." The term 
11.22 	"distribution" does not include dividends paid on participating policies issued by the 
11.23 	mutual insurance company or any reorganized insurance company subsidiary in the case 
11.24 	of a mutual insurance holding company.

11.25 	Sec. 7. Minnesota Statutes 2005 Supplement, section 66A.07, subdivision 2, is 
11.26 	amended to read:
11.27 		Subd. 2.Life insurance companies. (a) Unless otherwise approved by the 
11.28 	commissioner of commerce, a domestic mutual life insurance company member is any 
11.29 	person who is listed on the records of the company as the owner of an in-force policy, and 
11.30 	each member is entitled to one vote regardless of the number of policies owned by the 
11.31 	member or the amounts of coverage provided to the member. For purposes of this section, 
11.32 	"policy" means a policy or contract of insurance, including an annuity contract issued by 
11.33 	the company, but excluding individual noncontributory insurance policies for which the 
12.1 	premiums are paid by a financial institution, association, employer, or other institutional 
12.2 	entity. Except as otherwise provided in the company's certificate or bylaws, a person 
12.3 	insured covered under a group policy is not a member by virtue of such coverage, unless
12.4 	except that a person insured under a group life insurance policy is a member if: (1) the 
12.5 	person is insured or covered under a group life policy or group annuity contract under 
12.6 	which funds are cash value has accumulated and been allocated to the respective covered
12.7 	insured persons; and (2) the person has the right to direct the application of the funds so 
12.8 	allocated; (3) the group policyholder makes no contribution to the premiums or deposits 
12.9 	for the policy or contract; and (4) the company has the names and addresses of the persons 
12.10 	covered under the group life policy or group annuity contract.
12.11 	(b) Every member of a mutual life insurance company must be notified of its annual 
12.12 	meetings by a written notice mailed to the member's address, or by an imprint on the front 
12.13 	or back of the policy, premium notice, receipt, or certificate of renewal, substantially 
12.14 	as follows:
12.15 	"The policyowner is hereby notified that by virtue of his or her ownership of this 
12.16 	policy, the policyowner is a member of the .......... Insurance Company, and that the annual 
12.17 	meetings of said company are held at its home office on the .... day of .... in each year, 
12.18 	at .... o'clock."
12.19 	For mutual life insurance holding companies, the notice of the annual meeting 
12.20 	may be modified to reflect that the policyowner, by virtue of his or her ownership of a 
12.21 	policy issued by a subsidiary insurance company reorganized under section 60A.077, is a 
12.22 	member of the mutual insurance holding company. Notice given in this manner is deemed 
12.23 	to comply with the requirements of section 302A.435.

12.24 	Sec. 8. EFFECTIVE DATE.
 12.25 	Sections 1 to 7 are effective the day following final enactment.

12.26 	ARTICLE 2
12.27 	INTERSTATE INSURANCE PRODUCT REGULATION COMPACT

12.28 	Section 1. [60A.99] INTERSTATE INSURANCE PRODUCT REGULATION 
12.29 	COMPACT.
12.30 		Subdivision 1.Enactment and form. The Interstate Insurance Product Regulation 
12.31 	Compact is enacted into law and entered into with all other states legally joining in it is 
12.32 	substantially the following form:
12.33 	Article I. Purposes
13.1 	The purposes of this Compact are, through means of joint and cooperative action 
13.2 	among the Compacting States:
13.3 	1. To promote and protect the interest of consumers of individual and group annuity, 
13.4 	life insurance, disability income and long-term care insurance products;
13.5 	2. To develop uniform standards for insurance products covered under the Compact;
13.6 	3. To establish a central clearinghouse to receive and provide prompt review of 
13.7 	insurance products covered under the Compact and, in certain cases, advertisements related 
13.8 	thereto, submitted by insurers authorized to do business in one or more Compacting States;
13.9 	4. To give appropriate regulatory approval to those product filings and 
13.10 	advertisements satisfying the applicable uniform standard;
13.11 	5. To improve coordination of regulatory resources and expertise between state 
13.12 	insurance departments regarding the setting of uniform standards and review of insurance 
13.13 	products covered under the Compact;
13.14 	6. To create the Interstate Insurance Product Regulation Commission; and
13.15 	7. To perform these and such other related functions as may be consistent with the 
13.16 	state regulation of the business of insurance.
13.17 	Article II. Definitions
13.18 	For purposes of this Compact:
13.19 	1. "Advertisement" means any material designed to create public interest in 
13.20 	a Product, or induce the public to purchase, increase, modify, reinstate, borrow on, 
13.21 	surrender, replace or retain a policy, as more specifically defined in the Rules and 
13.22 	Operating Procedures of the Commission.
13.23 	2. "Bylaws" mean those bylaws established by the Commission for its governance, 
13.24 	or for directing or controlling the Commission's actions or conduct.
13.25 	3. "Compacting State" means any State which has enacted this Compact legislation 
13.26 	and which has not withdrawn pursuant to Article XIV, Section 1, or been terminated 
13.27 	pursuant to Article XIV, Section 2.
13.28 	4. "Commission" means the "Interstate Insurance Product Regulation Commission" 
13.29 	established by this Compact.
13.30 	5. "Commissioner" means the chief insurance regulatory official of a State including, 
13.31 	but not limited to commissioner, superintendent, director or administrator.
13.32 	6. "Domiciliary State" means the state in which an Insurer is incorporated or 
13.33 	organized; or, in the case of an alien Insurer, its state of entry.
13.34 	7. "Insurer" means any entity licensed by a State to issue contracts of insurance for 
13.35 	any of the lines of insurance covered by this Act.
14.1 	8. "Member" means the person chosen by a Compacting State as its representative 
14.2 	to the Commission, or his or her designee.
14.3 	9. "Noncompacting State" means any State which is not at the time a Compacting 
14.4 	State.
14.5 	10. "Operating Procedures" mean procedures promulgated by the Commission 
14.6 	implementing a Rule, Uniform Standard, or a provision of this Compact.
14.7 	11. "Product" means the form of a policy or contract, including any application, 
14.8 	endorsement, or related form which is attached to and made a part of the policy or 
14.9 	contract, and any evidence of coverage or certificate, for an individual or group annuity, 
14.10 	life insurance, disability income or long-term care insurance product that an Insurer is 
14.11 	authorized to issue.
14.12 	12. "Rule" means a statement of general or particular applicability and future effect 
14.13 	promulgated by the Commission, including a Uniform Standard developed pursuant to 
14.14 	Article VII of this Compact, designed to implement, interpret, or prescribe law or policy 
14.15 	or describing the organization, procedure, or practice requirements of the Commission, 
14.16 	which shall have the force and effect of law in the Compacting States.
14.17 	13. "State" means any state, district, or territory of the United States of America.
14.18 	14. "Third Party Filer" means an entity that submits a Product filing to the 
14.19 	Commission on behalf of an Insurer.
14.20 	15. "Uniform Standard" means a standard adopted by the Commission for a 
14.21 	Product line, pursuant to Article VII of this Compact, and shall include all of the Product 
14.22 	requirements in aggregate; provided, that each Uniform Standard shall be construed, 
14.23 	whether express or implied, to prohibit the use of any inconsistent, misleading or 
14.24 	ambiguous provisions in a Product and the form of the Product made available to the public 
14.25 	shall not be unfair, inequitable or against public policy as determined by the Commission.
14.26 	Article III. Establishment of the Commission and Venue
14.27 	1. The Compacting States hereby create and establish a joint public agency known 
14.28 	as the "Interstate Insurance Product Regulation Commission." Pursuant to Article IV, 
14.29 	the Commission will have the power to develop Uniform Standards for Product lines, 
14.30 	receive and provide prompt review of Products filed therewith, and give approval to those 
14.31 	Product filings satisfying applicable Uniform Standards; provided, it is not intended for 
14.32 	the Commission to be the exclusive entity for receipt and review of insurance product 
14.33 	filings. Nothing herein shall prohibit any Insurer from filing its product in any State 
14.34 	wherein the Insurer is licensed to conduct the business of insurance; and any such filing 
14.35 	shall be subject to the laws of the State where filed.
15.1 	2. The Commission is a body corporate and politic, and an instrumentality of the 
15.2 	Compacting States.
15.3 	3. The Commission is solely responsible for its liabilities except as otherwise 
15.4 	specifically provided in this Compact.
15.5 	4. Venue is proper and judicial proceedings by or against the Commission shall be 
15.6 	brought solely and exclusively in a Court of competent jurisdiction where the principal 
15.7 	office of the Commission is located.
15.8 	Article IV. Powers of the Commission
15.9 	The Commission shall have the following powers:
15.10 	1. To promulgate Rules, pursuant to Article VII of this Compact, which shall have 
15.11 	the force and effect of law and shall be binding in the Compacting States to the extent and 
15.12 	in the manner provided in this Compact;
15.13 	2. To exercise its rule-making authority and establish reasonable Uniform Standards 
15.14 	for Products covered under the Compact, and Advertisement related thereto, which 
15.15 	shall have the force and effect of law and shall be binding in the Compacting States, 
15.16 	but only for those Products filed with the Commission, provided, that a Compacting 
15.17 	State shall have the right to opt out of such Uniform Standard pursuant to Article VII, to 
15.18 	the extent and in the manner provided in this Compact, and, provided further, that any 
15.19 	Uniform Standard established by the Commission for long-term care insurance products 
15.20 	may provide the same or greater protections for consumers as, but shall not provide less 
15.21 	than, those protections set forth in the National Association of Insurance Commissioners' 
15.22 	Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, 
15.23 	respectively, adopted as of 2001. The Commission shall consider whether any subsequent 
15.24 	amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care 
15.25 	Insurance Model Regulation adopted by the NAIC require amending of the Uniform 
15.26 	Standards established by the Commission for long-term care insurance products;
15.27 	3. To receive and review in an expeditious manner Products filed with the 
15.28 	Commission, and rate filings for disability income and long-term care insurance Products, 
15.29 	and give approval of those Products and rate filings that satisfy the applicable Uniform 
15.30 	Standard, where such approval shall have the force and effect of law and be binding on the 
15.31 	Compacting States to the extent and in the manner provided in the Compact;
15.32 	4. To receive and review in an expeditious manner Advertisement relating to 
15.33 	long-term care insurance products for which Uniform Standards have been adopted by 
15.34 	the Commission, and give approval to all Advertisement that satisfies the applicable 
15.35 	Uniform Standard. For any product covered under this Compact, other than long-term 
15.36 	care insurance products, the Commission shall have the authority to require an insurer 
16.1 	to submit all or any part of its Advertisement with respect to that product for review or 
16.2 	approval prior to use, if the Commission determines that the nature of the product is such 
16.3 	that an Advertisement of the product could have the capacity or tendency to mislead the 
16.4 	public. The actions of the Commission as provided in this section shall have the force 
16.5 	and effect of law and shall be binding in the Compacting States to the extent and in the 
16.6 	manner provided in the Compact;
16.7 	5. To exercise its rule-making authority and designate Products and Advertisement 
16.8 	that may be subject to a self-certification process without the need for prior approval 
16.9 	by the Commission;
16.10 	6. To promulgate Operating Procedures, pursuant to Article VII of this Compact, 
16.11 	which shall be binding in the Compacting States to the extent and in the manner provided 
16.12 	in this compact;
16.13 	7. To bring and prosecute legal proceedings or actions in its name as the 
16.14 	Commission; provided, that the standing of any state insurance department to sue or be 
16.15 	sued under applicable law shall not be affected;
16.16 	8. To issue subpoenas requiring the attendance and testimony of witnesses and the 
16.17 	production of evidence;
16.18 	9. To establish and maintain offices;
16.19 	10. To purchase and maintain insurance and bonds;
16.20 	11. To borrow, accept or contract for services of personnel, including, but not limited 
16.21 	to, employees of a Compacting State;
16.22 	12. To hire employees, professionals or specialists, and elect or appoint officers, and 
16.23 	to fix their compensation, define their duties and give them appropriate authority to carry 
16.24 	out the purposes of the Compact, and determine their qualifications; and to establish the 
16.25 	Commission's personnel policies and programs relating to, among other things, conflicts 
16.26 	of interest, rates of compensation and qualifications of personnel;
16.27 	13. To accept any and all appropriate donations and grants of money, equipment, 
16.28 	supplies, materials and services, and to receive, utilize and dispose of the same; provided 
16.29 	that at all times the Commission shall strive to avoid any appearance of impropriety;
16.30 	14. To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, 
16.31 	hold, improve or use, any property, real, personal or mixed; provided that at all times the 
16.32 	Commission shall strive to avoid any appearance of impropriety;
16.33 	15. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise 
16.34 	dispose of any property, real, personal or mixed;
16.35 	16. To remit filing fees to Compacting States as may be set forth in the Bylaws, 
16.36 	Rules or Operating Procedures;
17.1 	17. To enforce compliance by Compacting States with Rules, Uniform Standards, 
17.2 	Operating Procedures and Bylaws;
17.3 	18. To provide for dispute resolution among Compacting States;
17.4 	19. To advise Compacting States on issues relating to Insurers domiciled or doing 
17.5 	business in Noncompacting jurisdictions, consistent with the purposes of this Compact;
17.6 	20. To provide advice and training to those personnel in state insurance departments 
17.7 	responsible for product review, and to be a resource for state insurance departments;
17.8 	21. To establish a budget and make expenditures;
17.9 	22. To borrow money;
17.10 	23. To appoint committees, including advisory committees comprising Members, 
17.11 	state insurance regulators, state legislators or their representatives, insurance industry 
17.12 	and consumer representatives, and such other interested persons as may be designated 
17.13 	in the Bylaws;
17.14 	24. To provide and receive information from, and to cooperate with law enforcement 
17.15 	agencies;
17.16 	25. To adopt and use a corporate seal; and
17.17 	26. To perform such other functions as may be necessary or appropriate to achieve 
17.18 	the purposes of this Compact consistent with the state regulation of the business of 
17.19 	insurance.
17.20 	Article V. Organization of the Commission
17.21 	1. Membership, Voting and Bylaws
17.22 	a. Each Compacting State shall have and be limited to one Member. Each Member 
17.23 	shall be qualified to serve in that capacity pursuant to applicable law of the Compacting 
17.24 	State. Any Member may be removed or suspended from office as provided by the law 
17.25 	of the State from which he or she shall be appointed. Any vacancy occurring in the 
17.26 	Commission shall be filled in accordance with the laws of the Compacting State wherein 
17.27 	the vacancy exists. Nothing herein shall be construed to affect the manner in which a 
17.28 	Compacting State determines the election or appointment and qualification of its own 
17.29 	Commissioner.
17.30 	b. Each Member shall be entitled to one vote and shall have an opportunity 
17.31 	to participate in the governance of the Commission in accordance with the Bylaws. 
17.32 	Notwithstanding any provision herein to the contrary, no action of the Commission with 
17.33 	respect to the promulgation of a Uniform Standard shall be effective unless two-thirds of 
17.34 	the Members vote in favor thereof.
18.1 	c. The Commission shall, by a majority of the Members, prescribe Bylaws to govern 
18.2 	its conduct as may be necessary or appropriate to carry out the purposes, and exercise the 
18.3 	powers, of the Compact, including, but not limited to:
18.4 	i. Establishing the fiscal year of the Commission;
18.5 	ii. Providing reasonable procedures for appointing and electing members, as well as 
18.6 	holding meetings, of the Management Committee;
18.7 	iii. Providing reasonable standards and procedures: (i) for the establishment and 
18.8 	meetings of other committees, and (ii) governing any general or specific delegation of any 
18.9 	authority or function of the Commission;
18.10 	iv. Providing reasonable procedures for calling and conducting meetings of the 
18.11 	Commission that consist of a majority of Commission members, ensuring reasonable 
18.12 	advance notice of each such meeting and providing for the right of citizens to attend each 
18.13 	such meeting with enumerated exceptions designed to protect the public's interest, the 
18.14 	privacy of individuals, and insurers' proprietary information, including trade secrets. The 
18.15 	Commission may meet in camera only after a majority of the entire membership votes to 
18.16 	close a meeting en toto or in part. As soon as practicable, the Commission must make 
18.17 	public (i) a copy of the vote to close the meeting revealing the vote of each Member with 
18.18 	no proxy votes allowed, and (ii) votes taken during such meeting;
18.19 	v. Establishing the titles, duties and authority and reasonable procedures for the 
18.20 	election of the officers of the Commission;
18.21 	vi. Providing reasonable standards and procedures for the establishment of the 
18.22 	personnel policies and programs of the Commission. Notwithstanding any civil service 
18.23 	or other similar laws of any Compacting State, the Bylaws shall exclusively govern the 
18.24 	personnel policies and programs of the Commission;
18.25 	vii. Promulgating a code of ethics to address permissible and prohibited activities of 
18.26 	commission members and employees; and 
18.27 	viii. Providing a mechanism for winding up the operations of the Commission and 
18.28 	the equitable disposition of any surplus funds that may exist after the termination of the 
18.29 	Compact after the payment and/or reserving of all of its debts and obligations.
18.30 	d. The Commission shall publish its bylaws in a convenient form and file a copy 
18.31 	thereof and a copy of any amendment thereto, with the appropriate agency or officer in 
18.32 	each of the Compacting States.
18.33 	2. Management Committee, Officers and Personnel
18.34 	a. A Management Committee comprising no more than 14 members shall be 
18.35 	established as follows:
19.1 	i. One member from each of the six Compacting States with the largest premium 
19.2 	volume for individual and group annuities, life, disability income and long-term care 
19.3 	insurance products, determined from the records of the NAIC for the prior year;
19.4 	ii. Four members from those Compacting States with at least two percent of the 
19.5 	market based on the premium volume described above, other than the six Compacting 
19.6 	States with the largest premium volume, selected on a rotating basis as provided in the 
19.7 	Bylaws; and
19.8 	iii. Four members from those Compacting States with less than two percent of the 
19.9 	market, based on the premium volume described above, with one selected from each of 
19.10 	the four zone regions of the NAIC as provided in the Bylaws.
19.11 	b. The Management Committee shall have such authority and duties as may be set 
19.12 	forth in the Bylaws, including but not limited to:
19.13 	i. Managing the affairs of the Commission in a manner consistent with the Bylaws 
19.14 	and purposes of the Commission;
19.15 	ii. Establishing and overseeing an organizational structure within, and appropriate 
19.16 	procedures for, the Commission to provide for the creation of Uniform Standards and 
19.17 	other Rules, receipt and review of product filings, administrative and technical support 
19.18 	functions, review of decisions regarding the disapproval of a product filing, and the review 
19.19 	of elections made by a Compacting State to opt out of a Uniform Standard; provided that a 
19.20 	Uniform Standard shall not be submitted to the Compacting States for adoption unless 
19.21 	approved by two-thirds of the members of the Management Committee;
19.22 	iii. Overseeing the offices of the Commission; and
19.23 	iv. Planning, implementing, and coordinating communications and activities with 
19.24 	other state, federal and local government organizations in order to advance the goals 
19.25 	of the Commission.
19.26 	c. The Commission shall elect annually officers from the Management Committee, 
19.27 	with each having such authority and duties, as may be specified in the Bylaws.
19.28 	d. The Management Committee may, subject to the approval of the Commission, 
19.29 	appoint or retain an executive director for such period, upon such terms and conditions 
19.30 	and for such compensation as the Commission may deem appropriate. The executive 
19.31 	director shall serve as secretary to the Commission, but shall not be a Member of the 
19.32 	Commission. The executive director shall hire and supervise such other staff as may be 
19.33 	authorized by the Commission.
19.34 	3. Legislative and Advisory Committees
19.35 	a. A legislative committee comprising state legislators or their designees shall be 
19.36 	established to monitor the operations of, and make recommendations to, the Commission, 
20.1 	including the Management Committee; provided that the manner of selection and term of 
20.2 	any legislative committee member shall be as set forth in the Bylaws. Prior to the adoption 
20.3 	by the Commission of any Uniform Standard, revision to the Bylaws, annual budget or 
20.4 	other significant matter as may be provided in the Bylaws, the Management Committee 
20.5 	shall consult with and report to the legislative committee.
20.6 	b. The Commission shall establish two advisory committees, one of which shall 
20.7 	comprise consumer representatives independent of the insurance industry, and the other 
20.8 	comprising insurance industry representatives.
20.9 	c. The Commission may establish additional advisory committees as its Bylaws may 
20.10 	provide for the carrying out of its functions.
20.11 	4. Corporate Records of the Commission
20.12 	The Commission shall maintain its corporate books and records in accordance 
20.13 	with the Bylaws.
20.14 	5. Qualified Immunity, Defense, and Indemnification
20.15 	a. The Members, officers, executive director, employees, and representatives of 
20.16 	the Commission shall be immune from suit and liability, either personally or in their 
20.17 	official capacity, for any claim for damage to or loss of property or personal injury or 
20.18 	other civil liability caused by or arising out of any actual or alleged act, error or omission 
20.19 	that occurred, or that the person against whom the claim is made had a reasonable 
20.20 	basis for believing occurred within the scope of Commission employment, duties or 
20.21 	responsibilities; provided, that nothing in this paragraph shall be construed to protect any 
20.22 	such person from suit and/or liability for any damage, loss, injury or liability caused by 
20.23 	the intentional or willful and wanton misconduct of that person.
20.24 	b. The Commission shall defend any Member, officer, executive director, employee, 
20.25 	or representative of the Commission in any civil action seeking to impose liability arising 
20.26 	out of any actual or alleged act, error, or omission that occurred within the scope of 
20.27 	Commission employment, duties, or responsibilities, or that the person against whom 
20.28 	the claim is made had a reasonable basis for believing occurred within the scope of 
20.29 	Commission employment, duties, or responsibilities; provided, that nothing herein shall 
20.30 	be construed to prohibit that person from retaining his or her own counsel; and provided 
20.31 	further, that the actual or alleged act, error, or omission did not result from that person's 
20.32 	intentional or willful and wanton misconduct.
20.33 	c. The Commission shall indemnify and hold harmless any Member, officer, 
20.34 	executive director, employee, or representative of the Commission for the amount of any 
20.35 	settlement or judgment obtained against that person arising out of any actual or alleged 
20.36 	act, error, or omission that occurred within the scope of Commission employment, duties, 
21.1 	or responsibilities, or that such person had a reasonable basis for believing occurred 
21.2 	within the scope of Commission employment, duties, or responsibilities, provided, that the 
21.3 	actual or alleged act, error, or omission did not result from the intentional or willful and 
21.4 	wanton misconduct of that person.
21.5 	Article VI. Meetings and Acts of the Commission
21.6 	1. The Commission shall meet and take such actions as are consistent with the 
21.7 	provisions of this Compact and the Bylaws.
21.8 	2. Each Member of the Commission shall have the right and power to cast a vote to 
21.9 	which that Compacting State is entitled and to participate in the business and affairs of the 
21.10 	Commission. A Member shall vote in person or by such other means as provided in the 
21.11 	Bylaws. The Bylaws may provide for Members' participation in meetings by telephone or 
21.12 	other means of communication.
21.13 	3. The Commission shall meet at least once during each calendar year. Additional 
21.14 	meeting shall be held as set forth in the Bylaws.
21.15 	Article VII. Rules and Operating Procedures: Rulemaking Functions
21.16 	of the Commission and Opting Out of Uniform Standards
21.17 	1. Rulemaking Authority. The Commission shall promulgate reasonable Rules, 
21.18 	including Uniform Standards, and Operating Procedures in order to effectively and 
21.19 	efficiently achieve the purposes of this Compact. Notwithstanding the foregoing, in the 
21.20 	event the Commission exercises its rulemaking authority in a manner that is beyond the 
21.21 	scope of the purposes of this Act, or the powers granted hereunder, then such an action by 
21.22 	the Commission shall be invalid and have no force and effect.
21.23 	2. Rulemaking Procedure. Rules and Operating Procedures shall be made pursuant 
21.24 	to a rulemaking process that conforms to the Model State Administrative Procedure Act of 
21.25 	1981 as amended, as may be appropriate to the operations of the Commission. Before 
21.26 	the Commission adopts a Uniform Standard, the Commission shall give written notice 
21.27 	to the relevant state legislative committee(s) in each Compacting State responsible for 
21.28 	insurance issues of its intention to adopt the Uniform Standard. The Commission in 
21.29 	adopting a Uniform Standard shall consider fully all submitted materials and issue a 
21.30 	concise explanation of its decision.
21.31 	3. Effective Date and Opt Out of a Uniform Standard. A Uniform Standard shall 
21.32 	become effective 90 days after its promulgation by the Commission or such later date 
21.33 	as the Commission may determine; provided, however, that a Compacting State may 
21.34 	opt out of a Uniform Standard as provided in this Article. "Opt out" shall be defined as 
21.35 	any action by a Compacting State to decline to adopt or participate in a promulgated 
21.36 	Uniform Standard. All other Rules and Operating Procedures, and amendments thereto, 
22.1 	shall become effective as of the date specified in each Rule, Operating Procedure, or 
22.2 	amendment.
22.3 	4. Opt Out Procedure. A Compacting State may opt out of a Uniform Standard, 
22.4 	either by legislation or regulation duly promulgated by the Insurance Department under 
22.5 	the Compacting State's Administrative Procedure Act. If a Compacting State elects to opt 
22.6 	out of a Uniform Standard by regulation, it must (a) give written notice to the Commission 
22.7 	no later than ten business days after the Uniform Standard is promulgated, or at the time 
22.8 	the State becomes a Compacting State and (b) find that the Uniform Standard does not 
22.9 	provide reasonable protections to the citizens of the State, given the conditions in the State. 
22.10 	The Commissioner shall make specific findings of fact and conclusions of law, based on a 
22.11 	preponderance of the evidence, detailing the conditions in the State which warrant a 
22.12 	departure from the Uniform Standard and determining that the Uniform Standard would 
22.13 	not reasonably protect the citizens of the State. The Commissioner must consider and 
22.14 	balance the following factors and find that the conditions in the State and needs of the 
22.15 	citizens of the State outweigh: (i) the intent of the legislature to participate in, and the 
22.16 	benefits of, an interstate agreement to establish national uniform consumer protections for 
22.17 	the Products subject to this Act; and (ii) the presumption that a Uniform Standard adopted 
22.18 	by the Commission provides reasonable protections to consumers of the relevant Product.
22.19 	Notwithstanding the foregoing, a Compacting State may, at the time of its enactment 
22.20 	of this Compact, prospectively opt out of all Uniform Standards involving long-term care 
22.21 	insurance products by expressly providing for such opt out in the enacted Compact, and 
22.22 	such an opt out shall not be treated as a material variance in the offer or acceptance of 
22.23 	any State to participate in this Compact. Such an opt out shall be effective at the time 
22.24 	of enactment of this Compact by the Compacting State and shall apply to all existing 
22.25 	Uniform Standards involving long-term care insurance products and those subsequently 
22.26 	promulgated.
22.27 	5. Effect of Opt Out. If a Compacting State elects to opt out of a Uniform Standard, 
22.28 	the Uniform Standard shall remain applicable in the Compacting State electing to opt out 
22.29 	until such time the opt out legislation is enacted into law or the regulation opting out 
22.30 	becomes effective.
22.31 	Once the opt out of a Uniform Standard by a Compacting State becomes effective 
22.32 	as provided under the laws of that State, the Uniform Standard shall have no further 
22.33 	force and effect in that State unless and until the legislation or regulation implementing 
22.34 	the opt out is repealed or otherwise becomes ineffective under the laws of the State. If a 
22.35 	Compacting State opts out of a Uniform Standard after the Uniform Standard has been 
23.1 	made effective in that State, the opt out shall have the same prospective effect as provided 
23.2 	under Article XIV for withdrawals.
23.3 	6. Stay of Uniform Standard. If a Compacting State has formally initiated the 
23.4 	process of opting out of a Uniform Standard by regulation, and while the regulatory 
23.5 	opt out is pending, the Compacting State may petition the Commission, at least 15 days 
23.6 	before the effective date of the Uniform Standard, to stay the effectiveness of the Uniform 
23.7 	Standard in that State. The Commission may grant a stay if it determines the regulatory 
23.8 	opt out is being pursued in a reasonable manner and there is a likelihood of success. If a 
23.9 	stay is granted or extended by the Commission, the stay or extension thereof may postpone 
23.10 	the effective date by up to 90 days, unless affirmatively extended by the Commission; 
23.11 	provided, a stay may not be permitted to remain in effect for more than one year unless the 
23.12 	Compacting State can show extraordinary circumstances which warrant a continuance of 
23.13 	the stay, including, but not limited to, the existence of a legal challenge which prevents the 
23.14 	Compacting State from opting out. A stay may be terminated by the Commission upon 
23.15 	notice that the rulemaking process has been terminated.
23.16 	7. Not later than 30 days after a Rule or Operating Procedure is promulgated, 
23.17 	any person may file a petition for judicial review of the Rule or Operating Procedure; 
23.18 	provided, that the filing of such a petition shall not stay or otherwise prevent the Rule or 
23.19 	Operating Procedure from becoming effective unless the court finds that the petitioner 
23.20 	has a substantial likelihood of success. The court shall give deference to the actions of 
23.21 	the Commission consistent with applicable law and shall not find the Rule or Operating 
23.22 	Procedure to be unlawful if the Rule or Operating Procedure represents a reasonable 
23.23 	exercise of the Commission's authority.
23.24 	Article VIII. Commission Records and Enforcement
23.25 	1. The Commission shall promulgate Rules establishing conditions and procedures 
23.26 	for public inspection and copying of its information and official records, except such 
23.27 	information and records involving the privacy of individuals and insurers' trade secrets. 
23.28 	The Commission may promulgate additional Rules under which it may make available to 
23.29 	federal and state agencies, including law enforcement agencies, records and information 
23.30 	otherwise exempt from disclosure, and may enter into agreements with such agencies to 
23.31 	receive or exchange information or records subject to nondisclosure and confidentiality 
23.32 	provisions.
23.33 	2. Except as to privileged records, data and information, the laws of any Compacting 
23.34 	State pertaining to confidentiality or nondisclosure shall not relieve any Compacting 
23.35 	State Commissioner of the duty to disclose any relevant records, data or information to 
23.36 	the Commission; provided, that disclosure to the Commission shall not be deemed to 
24.1 	waive or otherwise affect any confidentiality requirement; and further provided, that, 
24.2 	except as otherwise expressly provided in this Act, the Commission shall not be subject 
24.3 	to the Compacting State's laws pertaining to confidentiality and nondisclosure with 
24.4 	respect to records, data and information in its possession. Confidential information 
24.5 	of the Commission shall remain confidential after such information is provided to any 
24.6 	Commissioner.
24.7 	3. The Commission shall monitor Compacting States for compliance with duly 
24.8 	adopted Bylaws, Rules, including Uniform Standards, and Operating Procedures. 
24.9 	The Commission shall notify any noncomplying Compacting State in writing of 
24.10 	its noncompliance with Commission Bylaws, Rules or Operating Procedures. If a 
24.11 	noncomplying Compacting State fails to remedy its noncompliance within the time 
24.12 	specified in the notice of noncompliance, the Compacting State shall be deemed to be in 
24.13 	default as set forth in Article XIV.
24.14 	4. The Commissioner of any State in which an Insurer is authorized to do business, 
24.15 	or is conducting the business of insurance, shall continue to exercise his or her authority 
24.16 	to oversee the market regulation of the activities of the Insurer in accordance with the 
24.17 	provisions of the State's law. The Commissioner's enforcement of compliance with the 
24.18 	Compact is governed by the following provisions:
24.19 	a. With respect to the Commissioner's market regulation of a Product or 
24.20 	Advertisement that is approved or certified to the Commission, the content of the 
24.21 	Product or Advertisement shall not constitute a violation of the provisions, standards or 
24.22 	requirements of the Compact except upon a final order of the Commission, issued at the 
24.23 	request of a Commissioner after prior notice to the Insurer and an opportunity for hearing 
24.24 	before the Commission.
24.25 	b. Before a Commissioner may bring an action for violation of any provision, 
24.26 	standard or requirement of the Compact relating to the content of an Advertisement not 
24.27 	approved or certified to the Commission, the Commission, or an authorized Commission 
24.28 	officer or employee, must authorize the action. However, authorization pursuant to this 
24.29 	paragraph does not require notice to the Insurer, opportunity for hearing or disclosure of 
24.30 	requests for authorization or records of the Commission's action on such requests.
24.31 	Article IX. Dispute Resolution
24.32 	The Commission shall attempt, upon the request of a Member, to resolve any 
24.33 	disputes or other issues that are subject to this Compact and which may arise between two 
24.34 	or more Compacting States, or between Compacting States and Noncompacting States, 
24.35 	and the Commission shall promulgate an Operating Procedure providing for resolution of 
24.36 	such disputes.
25.1 	Article X. Product Filing and Approval
25.2 	1. Insurers and Third Party Filers seeking to have a Product approved by the 
25.3 	Commission shall file the Product with, and pay applicable filing fees to, the Commission. 
25.4 	Nothing in this Act shall be construed to restrict or otherwise prevent an insurer from 
25.5 	filing its Product with the insurance department in any State wherein the insurer is licensed 
25.6 	to conduct the business of insurance, and such filing shall be subject to the laws of the 
25.7 	States where filed.
25.8 	2. The Commission shall establish appropriate filing and review processes and 
25.9 	procedures pursuant to Commission Rules and Operating Procedures. Notwithstanding 
25.10 	any provision herein to the contrary, the Commission shall promulgate Rules to establish 
25.11 	conditions and procedures under which the Commission will provide public access to 
25.12 	Product filing information. In establishing such Rules, the Commission shall consider 
25.13 	the interests of the public in having access to such information, as well as protection of 
25.14 	personal medical and financial information and trade secrets, that may be contained in a 
25.15 	Product filing or supporting information.
25.16 	3. Any Product approved by the Commission may be sold or otherwise issued in 
25.17 	those Compacting States for which the Insurer is legally authorized to do business.
25.18 	Article XI. Review of Commission Decisions Regarding Filings
25.19 	1. Not later than 30 days after the Commission has given notice of a disapproved 
25.20 	Product or Advertisement filed with the Commission, the Insurer or Third Party Filer 
25.21 	whose filing was disapproved may appeal the determination to a review panel appointed 
25.22 	by the Commission. The Commission shall promulgate Rules to establish procedures for 
25.23 	appointing such review panels and provide for notice and hearing. An allegation that the 
25.24 	Commission, in disapproving a Product or Advertisement filed with the Commission, 
25.25 	acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise 
25.26 	not in accordance with the law, is subject to judicial review in accordance with Article 
25.27 	III, Section 4.
25.28 	2. The Commission shall have authority to monitor, review and reconsider Products 
25.29 	and Advertisement subsequent to their filing or approval upon a finding that the product 
25.30 	does not meet the relevant Uniform Standard. Where appropriate, the Commission may 
25.31 	withdraw or modify its approval after proper notice and hearing, subject to the appeal 
25.32 	process in Section 1 above.
25.33 	Article XII. Finance
25.34 	1. The Commission shall pay or provide for the payment of the reasonable expenses 
25.35 	of its establishment and organization. To fund the cost of its initial operations, the 
25.36 	Commission may accept contributions and other forms of funding from the National 
26.1 	Association of Insurance Commissioners, Compacting States, and other sources. 
26.2 	Contributions and other forms of funding from other sources shall be of such a nature 
26.3 	that the independence of the Commission concerning the performance of its duties shall 
26.4 	not be compromised.
26.5 	2. The Commission shall collect a filing fee from each Insurer and Third Party Filer 
26.6 	filing a product with the Commission to cover the cost of the operations and activities 
26.7 	of the Commission and its staff in a total amount sufficient to cover the Commission's 
26.8 	annual budget.
26.9 	3. The Commission's budget for a fiscal year shall not be approved until it has been 
26.10 	subject to notice and comment as set forth in Article VII of this Compact.
26.11 	4. The Commission shall be exempt from all taxation in and by the Compacting 
26.12 	states.
26.13 	5. The Commission shall not pledge the credit of any Compacting State, except by 
26.14 	and with the appropriate legal authority of that Compacting State.
26.15 	6. The Commission shall keep complete and accurate accounts of all its internal 
26.16 	receipts, including grants and donations, and disbursements of all funds under its control. 
26.17 	The internal financial accounts of the Commission shall be subject to the accounting 
26.18 	procedures established under its Bylaws. The financial accounts and reports including the 
26.19 	system of internal controls and procedures of the Commission shall be audited annually by 
26.20 	an independent certified public accountant. Upon the determination of the Commission, 
26.21 	but no less frequently than every three years, the review of the independent auditor shall 
26.22 	include a management and performance audit of the Commission. The Commission shall 
26.23 	make an Annual Report to the Governor and legislature of the Compacting States, which 
26.24 	shall include a report of the independent audit. The Commission's internal accounts shall 
26.25 	not be confidential and such materials may be shared with the Commissioner of any 
26.26 	Compacting State upon request provided, however, that any work papers related to any 
26.27 	internal or independent audit and any information regarding the privacy of individuals and 
26.28 	insurers' proprietary information, including trade secrets, shall remain confidential.
26.29 	7. No Compacting State shall have any claim to or ownership of any property 
26.30 	held by or vested in the Commission or to any Commission funds held pursuant to the 
26.31 	provisions of this Compact.
26.32 	Article XIII. Compacting States, Effective Date and Amendment
26.33 	1. Any State is eligible to become a Compacting State.
26.34 	2. The Compact shall become effective and binding upon legislative enactment 
26.35 	of the Compact into law by two Compacting States; provided, the Commission shall 
26.36 	become effective for purposes of adopting Uniform Standards for, reviewing, and giving 
27.1 	approval or disapproval of, Products filed with the Commission that satisfy applicable 
27.2 	Uniform Standards only after 26 States are Compacting States or, alternatively, by States 
27.3 	representing greater than 40 percent of the premium volume for life insurance, annuity, 
27.4 	disability income and long-term care insurance products, based on records of the NAIC 
27.5 	for the prior year. Thereafter, it shall become effective and binding as to any other 
27.6 	Compacting State upon enactment of the Compact into law by that State.
27.7 	3. Amendments to the Compact may be proposed by the Commission for enactment 
27.8 	by the Compacting States. No amendment shall become effective and binding upon the 
27.9 	Commission and the Compacting States unless and until all Compacting States enact 
27.10 	the amendment into law.
27.11 	Article XIV. Withdrawal, Default and Termination
27.12 	1. Withdrawal
27.13 	a. Once effective, the Compact shall continue in force and remain binding upon each 
27.14 	and every Compacting State; provided, that a Compacting State may withdraw from the 
27.15 	Compact ("Withdrawing State") by enacting a statute specifically repealing the statute 
27.16 	which enacted the Compact into law.
27.17 	b. The effective date of withdrawal is the effective date of the repealing statute. 
27.18 	However, the withdrawal shall not apply to any product filings approved or self-certified, 
27.19 	or any Advertisement of such products, on the date the repealing statute becomes effective, 
27.20 	except by mutual agreement of the Commission and the Withdrawing State unless the 
27.21 	approval is rescinded by the Withdrawing State as provided in Paragraph e of this section.
27.22 	c. The Commissioner of the Withdrawing State shall immediately notify the 
27.23 	Management Committee in writing upon the introduction of legislation repealing this 
27.24 	Compact in the Withdrawing State.
27.25 	d. The Commission shall notify the other Compacting States of the introduction of 
27.26 	such legislation within ten days after its receipt of notice thereof.
27.27 	e. The Withdrawing State is responsible for all obligations, duties and liabilities 
27.28 	incurred through the effective date of withdrawal, including any obligations, the 
27.29 	performance of which extend beyond the effective date of withdrawal, except to the extent 
27.30 	those obligations may have been released or relinquished by mutual agreement of the 
27.31 	Commission and the Withdrawing State. The Commission's approval of Products and 
27.32 	Advertisement prior to the effective date of withdrawal shall continue to be effective and 
27.33 	be given full force and effect in the Withdrawing State, unless formally rescinded by 
27.34 	the Withdrawing State in the same manner as provided by the laws of the Withdrawing 
27.35 	State for the prospective disapproval of products or advertisement previously approved 
27.36 	under state law.
28.1 	f. Reinstatement following withdrawal of any Compacting State shall occur upon 
28.2 	the effective date of the Withdrawing State reenacting the Compact.
28.3 	2. Default
28.4 	a. If the Commission determines that any Compacting State has at any time defaulted 
28.5 	("Defaulting State") in the performance of any of its obligations or responsibilities under 
28.6 	this Compact, the Bylaws or duly promulgated Rules or Operating Procedures, then, after 
28.7 	notice and hearing as set forth in the Bylaws, all rights, privileges and benefits conferred 
28.8 	by this Compact on the Defaulting State shall be suspended from the effective date of 
28.9 	default as fixed by the Commission. The grounds for default include, but are not limited 
28.10 	to, failure of a Compacting State to perform its obligations or responsibilities, and any 
28.11 	other grounds designated in Commission Rules. The Commission shall immediately 
28.12 	notify the Defaulting State in writing of the Defaulting State's suspension pending a cure 
28.13 	of the default. The Commission shall stipulate the conditions and the time period within 
28.14 	which the Defaulting State must cure its default. If the Defaulting State fails to cure the 
28.15 	default within the time period specified by the Commission, the Defaulting State shall 
28.16 	be terminated form the Compact and all rights, privileges and benefits conferred by this 
28.17 	Compact shall be terminated from the effective date of termination.
28.18 	b. Product approvals by the Commission or product self-certifications, or any 
28.19 	Advertisement in connection with such product, that are in force on the effective date of 
28.20 	termination shall remain in force in the Defaulting State in the same manner as if the 
28.21 	Defaulting State had withdrawn voluntarily pursuant to Section 1 of this article.
28.22 	c. Reinstatement following termination of any Compacting State requires a 
28.23 	reenactment of the Compact.
28.24 	3. Dissolution of Compact
28.25 	a. The Compact dissolves effective upon the date of the withdrawal or default of the 
28.26 	Compacting State which reduces membership in the Compact to one Compacting State.
28.27 	b. Upon the dissolution of this Compact, the Compact becomes null and void and 
28.28 	shall be of no further force or effect, and the business and affairs of the Commission shall 
28.29 	be wound up and any surplus funds shall be distributed in accordance with the Bylaws.
28.30 	Article XV. Severability and Construction
28.31 	1. The provisions of this Compact shall be severable; and if any phrase, clause, 
28.32 	sentence, or provision is deemed unenforceable, the remaining provisions of the Compact 
28.33 	shall be enforceable.
28.34 	2. The provisions of this Compact shall be liberally construed to effectuate its 
28.35 	purposes.
28.36 	Article XVI. Binding Effect of Compact and Other Laws
29.1 	1. Other Laws
29.2 	a. Nothing herein prevents the enforcement of any other law of a Compacting State, 
29.3 	except as provided in Paragraph b of this section.
29.4 	b. For any Product approved or certified to the Commission, the Rules, Uniform 
29.5 	Standards, and any other requirements of the Commission shall constitute the exclusive 
29.6 	provisions applicable to the content, approval, and certification of such Products. For 
29.7 	Advertisement that is subject to the Commission's authority, any Rule, Uniform Standard, 
29.8 	or other requirement of the Commission which governs the content of the Advertisement 
29.9 	shall constitute the exclusive provision that a Commissioner may apply to the content of 
29.10 	the Advertisement. Notwithstanding the foregoing, no action taken by the Commission 
29.11 	shall abrogate or restrict: (i) the access of any person to state courts; (ii) remedies available 
29.12 	under state law related to breach of contract, tort, or other laws not specifically directed 
29.13 	to the content of the Product; (iii) state law relating to the construction of insurance 
29.14 	contracts; or (iv) the authority of the attorney general of the state, including but not limited 
29.15 	to maintaining any actions or proceedings, as authorized by law.
29.16 	c. All insurance products filed with individual States shall be subject to the laws 
29.17 	of those States.
29.18 	2. Binding Effect of this Compact
29.19 	a. All lawful actions of the Commission, including all Rules and Operating 
29.20 	Procedures promulgated by the Commission, are binding upon the Compacting States.
29.21 	b. All agreements between the Commission and the Compacting States are binding 
29.22 	in accordance with their terms.
29.23 	c. Upon the request of a party to a conflict over the meaning or interpretation of 
29.24 	Commission actions, and upon a majority vote of the Compacting States, the Commission 
29.25 	may issue advisory opinions regarding the meaning or interpretation in dispute.
29.26 	d. In the event any provision of this Compact exceeds the constitutional limits 
29.27 	imposed on the legislature of any Compacting State, the obligations, duties, powers 
29.28 	or jurisdiction sought to be conferred by that provision upon the Commission shall 
29.29 	be ineffective as to that Compacting State, and those obligations, duties, powers, or 
29.30 	jurisdiction shall remain in the Compacting State and shall be exercised by the agency 
29.31 	thereof to which those obligations, duties, powers, or jurisdiction are delegated by law in 
29.32 	effect at the time this Compact becomes effective.
29.33 		Subd. 2.Commission representative. The commissioner of commerce is the 
29.34 	representative of this state to the commission.

30.1 	ARTICLE 3
30.2 	MISCELLANEOUS INSURANCE REGULATORY CHANGES

30.3 	Section 1. Minnesota Statutes 2004, section 60A.207, is amended to read:
30.4 	60A.207 POLICIES TO INCLUDE NOTICE.
30.5 	Each policy, cover note, or instrument evidencing surplus lines insurance from an 
30.6 	eligible surplus lines insurer which is delivered to an insured or a representative of an 
30.7 	insured shall have printed, typed, or stamped in red ink upon its face in not less than 10 
30.8 	point type, the following notice: "THIS INSURANCE IS ISSUED PURSUANT TO THE 
30.9 	MINNESOTA SURPLUS LINES INSURANCE ACT. THE INSURER IS AN ELIGIBLE 
30.10 	SURPLUS LINES INSURER BUT IS NOT OTHERWISE LICENSED BY THE STATE 
30.11 	OF MINNESOTA. IN CASE OF INSOLVENCY, PAYMENT OF CLAIMS IS NOT 
30.12 	GUARANTEED." This notice shall not be covered or concealed in any manner.

30.13 	Sec. 2. Minnesota Statutes 2004, section 60D.19, subdivision 1, is amended to read:
30.14 		Subdivision 1.Registration. Every insurer that is authorized to do business in this 
30.15 	state and that is a member of an insurance holding company system shall register with the 
30.16 	commissioner, except a foreign insurer subject to registration requirements and standards 
30.17 	adopted by statute or regulation in the jurisdiction of its domicile that are substantially 
30.18 	similar to those contained in:
30.19 	(1) this section;
30.20 	(2) section  60D.20, subdivisions 1, paragraph (a); 2; and 4; and 
30.21 	(3) either section  60D.20, subdivision 1, paragraph (b), or a provision such as the 
30.22 	following: Each registered insurer shall keep current the information required to be 
30.23 	disclosed in its registration statement by reporting all material changes or additions within 
30.24 	15 days after the end of the month in which it learns of each such change or addition. 
30.25 	Any insurer that is subject to registration under this section shall register within 15 
30.26 	days after it becomes subject to registration, and annually thereafter by March June 1 of 
30.27 	each year for the previous calendar year, unless the commissioner for good cause shown 
30.28 	extends the time for registration, and then within such extended time. The commissioner 
30.29 	may require any insurer authorized to do business in the state that is a member of a 
30.30 	holding company system, and that is not subject to registration under this section, to 
30.31 	furnish a copy of the registration statement, the summary specified in subdivision 3 or 
30.32 	other information filed by the insurance company with the insurance regulatory authority 
30.33 	of domiciliary jurisdiction.

31.1 	Sec. 3. Minnesota Statutes 2004, section 60K.56, subdivision 5, is amended to read:
31.2 		Subd. 5.Criteria for course accreditation. (a) The commissioner may accredit a 
31.3 	course only to the extent it is designed to impart substantive and procedural knowledge of 
31.4 	the insurance field. The burden of demonstrating that the course satisfies this requirement 
31.5 	is on the individual or organization seeking accreditation. The commissioner shall approve 
31.6 	any educational program approved by Minnesota Continuing Legal Education relating to 
31.7 	the insurance field. The commissioner is authorized to establish a procedure for renewal 
31.8 	of course accreditation.
31.9 	(b) The commissioner shall approve or disapprove professional designation 
31.10 	examinations that are recommended for approval by the advisory task force. In order 
31.11 	for an insurance producer to receive full continuing education credit for a professional 
31.12 	designation examination, the producer must pass the examination. A producer may 
31.13 	not receive credit for classroom instruction preparing for the professional designation 
31.14 	examination and also receive continuing education credit for passing the professional 
31.15 	designation examination.
31.16 	(c) The commissioner may not accredit a course:
31.17 	(1) that is designed to prepare students for a license examination;
31.18 	(2) in mechanical office or business skills, including typing, speedreading, use of 
31.19 	calculators, or other machines or equipment;
31.20 	(3) (2) in sales promotion, including meetings held in conjunction with the general 
31.21 	business of the licensed agent; or
31.22 	(4) (3) in motivation, the art of selling, or psychology, or time management.

31.23 	Sec. 4. Minnesota Statutes 2004, section 60K.56, subdivision 6, is amended to read:
31.24 		Subd. 6.Minimum education requirement. Each person subject to this section 
31.25 	shall complete a minimum of 30 credit hours of courses accredited by the commissioner 
31.26 	during each 24-month licensing period. Any person whose initial licensing period extends 
31.27 	more than six months shall complete 15 hours of courses accredited by the commissioner 
31.28 	during the initial license period. Any person teaching or lecturing at an accredited 
31.29 	course qualifies for three times the number of credit hours that would be granted to a 
31.30 	person completing the accredited course. No more than one-half of the credit hours per 
31.31 	licensing period required under this section may be credited to a person for attending any 
31.32 	combination of courses either sponsored by, offered by, or affiliated with an insurance 
31.33 	company or its agents; or offered using new delivery technology, including computer, 
31.34 	interactive technology, and the Internet. A licensee may obtain up to five hours of the 
31.35 	credit hours per licensing period from classes in the area of professional development 
32.1 	including, but not limited to, best practices, ethics, privacy protection, customer/client 
32.2 	software applications, agency management, claims settlement, business perpetuation, 
32.3 	and disaster planning. Courses sponsored by, offered by, or affiliated with an insurance 
32.4 	company or agent may restrict its students to agents of the company or agency.

32.5 	Sec. 5. Minnesota Statutes 2004, section 64B.13, is amended to read:
32.6 	64B.13 REINSURANCE.
32.7 	(a) A domestic society may, by a reinsurance agreement, cede any individual risk 
32.8 	or risks in whole or in part to an insurer, other than another fraternal benefit society, 
32.9 	having the power to make such reinsurance and authorized to do business in this state, 
32.10 	or if not so authorized, one which is approved by the commissioner, but no such society 
32.11 	may reinsure substantially all of its insurance in force without the written permission of 
32.12 	the commissioner. It may take credit for the reserves on the ceded risks to the extent 
32.13 	reinsured, but no credit shall be allowed as an admitted asset or as a deduction from 
32.14 	liability to a ceding society for reinsurance made, ceded, renewed, or otherwise becoming 
32.15 	effective after August 1, 1985, unless the reinsurance is payable by the assuming insurer 
32.16 	on the basis of the liability of the ceding society under the contract or contracts reinsured 
32.17 	without diminution because of the insolvency of the ceding society.
32.18 	(b) Notwithstanding the limitation in paragraph (a), a society may reinsure the risks 
32.19 	of another society in a consolidation or merger approved by the commissioner under 
32.20 	section  64B.14, or under such other circumstances as approved by the commissioner 
32.21 	including reinsurance of an affiliated insurance company.