1.1 	A bill for an act
1.2 	relating to insurance; changing the method of
1.3 	calculating certain refunds in premium finance
1.4 	transactions; amending Minnesota Statutes 2004,
1.5 	section 59A.12, subdivision 2.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 59A.12,
1.8 	subdivision 2, is amended to read:
1.9 		Subd. 2.Premium audit; determination of final premium
1.10 	amount.  In the event that a premium is subject to an audit to
1.11 	determine the final premium amount, the gross unearned premium
1.12 	will be calculated based upon the deposit audited premium and
1.13 	the insurer shall return whatever gross unearned premiums are
1.14 	due based upon the deposit rather than the actual unearned
1.15 	premium under the contract to the finance company for the
1.16 	account of the insured or insureds within 60 days after receipt
1.17 	of the notice of cancellation.

1.18 	Sec. 2. EFFECTIVE DATE.
 1.19 	This section is effective August 1, 2005, and applies to
1.20 	premium finance contracts entered into on or after that date.