1.1                          A bill for an act 
  1.2             relating to insurance; requiring notice to the 
  1.3             homeowner prior to cancellation of homeowner's 
  1.4             insurance for nonpayment of premium by a mortgage 
  1.5             escrow servicer; amending Minnesota Statutes 2002, 
  1.6             section 65A.01, subdivision 3c. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 65A.01, 
  1.9   subdivision 3c, is amended to read: 
  1.10     Subd. 3c.  [TIME REQUIREMENTS.] (a) In the event of a 
  1.11  policy less than 60 days old that is not being renewed, or a 
  1.12  policy that it is being canceled for nonpayment of premium, the 
  1.13  notice must be mailed to the insured so that it is received at 
  1.14  least 20 days before the effective cancellation date.  If a 
  1.15  policy is being canceled for underwriting considerations, the 
  1.16  insured must be informed of the source from which the 
  1.17  information was received. 
  1.18     (b) In the event of a midterm cancellation, for reasons 
  1.19  listed in subdivision 3a, or according to policy provisions, the 
  1.20  insured must receive a 30-day notice. 
  1.21     (c) In the event of a nonrenewal, a 60-day notice must be 
  1.22  sent to the insured, containing the specific underwriting or 
  1.23  other reason for the indicated actions. 
  1.24     (d) This subdivision does not apply to commercial policies 
  1.25  regulated under sections 60A.36 and 60A.37. 
  1.26     (e) If an insurer sends the premium billing for homeowner's 
  2.1   insurance to a residential mortgage servicer with the 
  2.2   expectation of payment out of a mortgage escrow account, the 
  2.3   insurer shall not cancel the homeowner's insurance for 
  2.4   nonpayment of premium unless the insurer has sent the notice 
  2.5   required under this section to the homeowner, meeting the time 
  2.6   requirement specified under this subdivision, by certified mail, 
  2.7   return receipt requested, and has received the return receipt, 
  2.8   signed by the homeowner.  The insurer shall retain in its files 
  2.9   proof of the mailing, showing the date of mailing, and the 
  2.10  signed return receipt.  If the United States Postal Service 
  2.11  returns the mailing to the insurer, indicating that it was not 
  2.12  received by the homeowner, the insurer must not cancel the 
  2.13  homeowner's insurance until ensuring that the homeowner has 
  2.14  personally received the notice and has had at least ten days to 
  2.15  pay the premium after receiving the notice.  A cancellation 
  2.16  carried out in violation of this paragraph is void.  This 
  2.17  paragraph applies to notice required under paragraph (a) or (b), 
  2.18  whichever applies.  For purposes of this paragraph: 
  2.19     (1) "homeowner's insurance" has the meaning given in 
  2.20  section 65A.27, subdivision 4; and 
  2.21     (2) "residential mortgage servicer" has the meaning given 
  2.22  in section 58.02, subdivision 20. 
  2.23     Sec. 2.  [EFFECTIVE DATE.] 
  2.24     Section 1 is effective August 1, 2003.