1.1 	A bill for an act
1.2 	relating to commerce; consumer protection; prohibiting an adjuster or insurer from 
1.3 	certain actions relating to motor vehicle repairs and claims;amending Minnesota 
1.4 	Statutes 2018, sections 72A.201, subdivision 6; 72B.092, subdivision 1.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2018, section 72A.201, subdivision 6, is amended to read:
1.7 		Subd. 6.Standards for automobile insurance claims handling, settlement offers, 
1.8 	and agreements. In addition to the acts specified in subdivisions 4, 5, 7, 8, and 9, the 
1.9 	following acts by an insurer, adjuster, or a self-insured or self-insurance administrator 
1.10 	constitute unfair settlement practices:
1.11 	(1) if an automobile insurance policy provides for the adjustment and settlement of an 
1.12 	automobile total loss on the basis of actual cash value or replacement with like kind and 
1.13 	quality and the insured is not an automobile dealer, failing to offer one of the following 
1.14 	methods of settlement:
1.15 	(a) comparable and available replacement automobile, with all applicable taxes, license 
1.16 	fees, at least pro rata for the unexpired term of the replaced automobile's license, and other 
1.17 	fees incident to the transfer or evidence of ownership of the automobile paid, at no cost to 
1.18 	the insured other than the deductible amount as provided in the policy;
1.19 	(b) a cash settlement based upon the actual cost of purchase of a comparable automobile, 
1.20 	including all applicable taxes, license fees, at least pro rata for the unexpired term of the 
1.21 	replaced automobile's license, and other fees incident to transfer of evidence of ownership, 
1.22 	less the deductible amount as provided in the policy. The costs must be determined by:
2.1 	(i) the cost of a comparable automobile, adjusted for mileage, condition, and options, 
2.2 	in the local market area of the insured, if such an automobile is available in that area; or
2.3 	(ii) one of two or more quotations obtained from two or more qualified sources located 
2.4 	within the local market area when a comparable automobile is not available in the local 
2.5 	market area. The insured shall be provided the information contained in all quotations prior 
2.6 	to settlement; or
2.7 	(iii) any settlement or offer of settlement which deviates from the procedure above must 
2.8 	be documented and justified in detail. The basis for the settlement or offer of settlement 
2.9 	must be explained to the insured;
2.10 	(2) if an automobile insurance policy provides for the adjustment and settlement of an 
2.11 	automobile partial loss on the basis of repair or replacement with like kind and quality and 
2.12 	the insured is not an automobile dealer, failing to offer one of the following methods of 
2.13 	settlement:
2.14 	(a) to assume all costs, including reasonable towing costs, for the satisfactory repair of 
2.15 	the motor vehicle. Satisfactory repair includes repair of both obvious and hidden damage 
2.16 	as caused by the claim incident. This assumption of cost may be reduced by applicable 
2.17 	policy provision; or
2.18 	(b) to offer a cash settlement sufficient to pay for satisfactory repair of the vehicle. 
2.19 	Satisfactory repair includes repair of obvious and hidden damage caused by the claim 
2.20 	incident, and includes reasonable towing costs;
2.21 	(3) regardless of whether the loss was total or partial, in the event that a damaged vehicle 
2.22 	of an insured cannot be safely driven, failing to exercise the right to inspect automobile 
2.23 	damage prior to repair within five business days following receipt of notification of claim. 
2.24 	In other cases the inspection must be made in 15 days;
2.25 	(4) regardless of whether the loss was total or partial, requiring unreasonable travel of 
2.26 	a claimant or insured to inspect a replacement automobile, to obtain a repair estimate, to 
2.27 	allow an insurer to inspect a repair estimate, to allow an insurer to inspect repairs made 
2.28 	pursuant to policy requirements, or to have the automobile repaired;
2.29 	(5) regardless of whether the loss was total or partial, if loss of use coverage exists under 
2.30 	the insurance policy, failing to notify an insured at the time of the insurer's acknowledgment 
2.31 	of claim, or sooner if inquiry is made, of the fact of the coverage, including the policy terms 
2.32 	and conditions affecting the coverage and the manner in which the insured can apply for 
2.33 	this coverage;
3.1 	(6) regardless of whether the loss was total or partial, failing to include the insured's 
3.2 	deductible in the insurer's demands under its subrogation rights. Subrogation recovery must 
3.3 	be shared at least on a proportionate basis with the insured, unless the deductible amount 
3.4 	has been otherwise recovered by the insured, except that when an insurer is recovering 
3.5 	directly from an uninsured third party by means of installments, the insured must receive 
3.6 	the full deductible share as soon as that amount is collected and before any part of the total 
3.7 	recovery is applied to any other use. No deduction for expenses may be made from the 
3.8 	deductible recovery unless an attorney is retained to collect the recovery, in which case 
3.9 	deduction may be made only for a pro rata share of the cost of retaining the attorney. An 
3.10 	insured is not bound by any settlement of its insurer's subrogation claim with respect to the 
3.11 	deductible amount, unless the insured receives, as a result of the subrogation settlement, 
3.12 	the full amount of the deductible. Recovery by the insurer and receipt by the insured of less 
3.13 	than all of the insured's deductible amount does not affect the insured's rights to recover 
3.14 	any unreimbursed portion of the deductible from parties liable for the loss;
3.15 	(7) suggesting or requiring as a condition of payment of a claim that repairs to any 
3.16 	damaged vehicle must be made by a particular contractor or repair shop or that parts, other 
3.17 	than window glass, must be replaced with parts other than original equipment parts or 
3.18 	engaging in any act or practice of intimidation, coercion, threat, incentive, or inducement 
3.19 	for or against an insured to use a particular contractor or repair shop. ~~Consumer benefits~~ 
3.20 	~~included within preferred vendor programs must not be considered an incentive or~~ 
3.21 	~~inducement.~~ At the time a claim is reported, the insurer must provide the following advisory 
3.22 	to the insured or claimant:
3.23 	"You have the legal right to choose a repair shop to fix your vehicle. Your policy will 
3.24 	cover the reasonable costs of repairing your vehicle to its pre-accident condition no matter 
3.25 	where you have repairs made. ~~Have you selected a repair shop or would you like a referral?~~"
3.26 	~~After an insured has indicated that the insured has selected a repair shop, the~~ An insurer 
3.27 	~~must cease all efforts to~~ is prohibited from attempting to influence the insured's or claimant's 
3.28 	choice of repair shop;
3.29 	(8) where liability is reasonably clear, failing to inform the claimant in an automobile 
3.30 	property damage liability claim that the claimant may have a claim for loss of use of the 
3.31 	vehicle;
3.32 	(9) failing to make a good faith assignment of comparative negligence percentages in 
3.33 	ascertaining the issue of liability;
4.1 	(10) failing to pay any interest required by statute on overdue payment for an automobile 
4.2 	personal injury protection claim;
4.3 	(11) if an automobile insurance policy contains either or both of the time limitation 
4.4 	provisions as permitted by section 65B.55, subdivisions 1 and 2, failing to notify the insured 
4.5 	in writing of those limitations at least 60 days prior to the expiration of that time limitation;
4.6 	(12) if an insurer chooses to have an insured examined as permitted by section 65B.56, 
4.7 	subdivision 1, failing to notify the insured of all of the insured's rights and obligations under 
4.8 	that statute, including the right to request, in writing, and to receive a copy of the report of 
4.9 	the examination;
4.10 	(13) failing to provide, to an insured who has submitted a claim for benefits described 
4.11 	in section 65B.44, a complete copy of the insurer's claim file on the insured, excluding 
4.12 	internal company memoranda, all materials that relate to any insurance fraud investigation, 
4.13 	materials that constitute attorney work product or that qualify for the attorney-client privilege, 
4.14 	and medical reviews that are subject to section 145.64, within ten business days of receiving 
4.15 	a written request from the insured. The insurer may charge the insured a reasonable copying 
4.16 	fee. This clause supersedes any inconsistent provisions of sections 72A.49 to 72A.505;
4.17 	(14) if an automobile policy provides for the adjustment or settlement of an automobile 
4.18 	loss due to damaged window glass, failing to provide payment to the insured's chosen vendor 
4.19 	based on a competitive price that is fair and reasonable within the local industry at large.
4.20 	Where facts establish that a different rate in a specific geographic area actually served by 
4.21 	the vendor is required by that market, that geographic area must be considered. This clause 
4.22 	does not prohibit an insurer from recommending a vendor to the insured or from agreeing 
4.23 	with a vendor to perform work at an agreed-upon price, provided, however, that before 
4.24 	recommending a vendor, the insurer shall offer its insured the opportunity to choose the 
4.25 	vendor. If the insurer recommends a vendor, the insurer must also provide the following 
4.26 	advisory:
4.27 	"Minnesota law gives you the right to go to any glass vendor you choose, and prohibits 
4.28 	me from pressuring you to choose a particular vendor.";
4.29 	(15) requiring that the repair or replacement of motor vehicle glass and related products 
4.30 	and services be made in a particular place or shop or by a particular entity, or by otherwise 
4.31 	limiting the ability of the insured to select the place, shop, or entity to repair or replace the 
4.32 	motor vehicle glass and related products and services;
5.1 	(16) engaging in any act or practice of intimidation, coercion, threat, incentive, or 
5.2 	inducement for or against an insured to use a particular company or location to provide the 
5.3 	motor vehicle glass repair or replacement services or products. For purposes of this section, 
5.4 	a warranty shall not be considered an inducement or incentive; or
5.5 	(17) failing to inform an insured making a claim under collision or comprehensive 
5.6 	coverage, that includes rental vehicle reimbursement coverage, of the insured's right to 
5.7 	select any rental vehicle company. If the insurer recommends a rental vehicle company to 
5.8 	the insured, the insurer must also provide the following advisory: "Minnesota law gives 
5.9 	you the right to choose any rental vehicle company, and prohibits me from requiring you 
5.10 	to choose a particular vendor."

5.11 	Sec. 2. Minnesota Statutes 2018, section 72B.092, subdivision 1, is amended to read:
5.12 		Subdivision 1.Prohibitions on insurer. No adjuster or insurer, director, officer, broker, 
5.13 	agent, attorney-in-fact, employee, or other representative of an insurer shall in collision 
5.14 	cases:
5.15 	(1) limit the freedom of an insured or claimant to choose the shop;
5.16 	(2) require that an insured or claimant present the claim or the automobile for loss 
5.17 	adjustment or inspection at a "drive-in" claim center or any other similar facility solely 
5.18 	under the control of the insurer;
5.19 	(3) engage in boycotts, intimidation or coercive tactics in negotiating repairs to damaged 
5.20 	motor vehicles which they insure or are liable to claimants to have repaired;
5.21 	(4) attempt to secure, except in an emergency, the insured's or claimant's signature 
5.22 	authorizing the party securing the signature to act in behalf of the insured or claimant in 
5.23 	selection of a repair shop facility;
5.24 	(5) adjust a damage appraisal of a repair shop when the extent of damage is in dispute 
5.25 	without conducting a physical inspection of the vehicle;
5.26 	(6) specify the use of a particular vendor for the procurement of parts or other materials 
5.27 	necessary for the satisfactory repair of the vehicle~~. This clause does not require the insurer~~ 
5.28 	~~to pay more than a reasonable market price for parts of like kind and quality in adjusting a~~ 
5.29 	~~claim~~, or specify a price for a part or other materials necessary for the satisfactory repair of 
5.30 	the vehicle; ~~or~~
5.31 	(7) require a vehicle to be repaired with a specific part or product solely because it is 
5.32 	the least expensive part or product available;
6.1 	(8) require a vehicle to be repaired with a part that costs less than the reasonable and 
6.2 	necessary amount of the part. For purposes of this section "reasonable and necessary amount" 
6.3 	means the amount determined by the original equipment manufacturer and estimating 
6.4 	systems required to repair a vehicle to the condition before the damage to the vehicle 
6.5 	occurred; or
6.6 	~~(7) unilaterally and arbitrarily~~(9) disregard a repair operation or cost identified by an 
6.7 	estimating system~~, which an insurer and collision repair facility have agreed to utilize in~~ 
6.8 	~~determining the cost of repair~~, including the system's procedural pages and any repair, 
6.9 	process, or procedure recommended by the original equipment manufacturer of a part or 
6.10 	product.