Bill Text: MN HF1405 | 2011-2012 | 87th Legislature | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Claims processing regulated for insurance on portable electronics products, and automated claims processing system use permitted to requirements and safeguards.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2011-05-27 - Secretary of State Chapter 95 [HF1405 Detail]
Download: Minnesota-2011-HF1405-Engrossed.html
Bill Title: Claims processing regulated for insurance on portable electronics products, and automated claims processing system use permitted to requirements and safeguards.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2011-05-27 - Secretary of State Chapter 95 [HF1405 Detail]
Download: Minnesota-2011-HF1405-Engrossed.html
1.2relating to insurance; regulating claims processing for insurance on portable
1.3electronics products; permitting use of an automated claims processing system
1.4subject to certain requirements and safeguards;amending Minnesota Statutes
1.52010, sections 72B.02, by adding a subdivision; 72B.03, subdivision 1; 72B.041,
1.6subdivisions 1, 2, by adding a subdivision; 72B.05.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 72B.02, is amended by adding a
1.9subdivision to read:
1.10 Subd. 23. Automated claims adjudication system. "Automated claims
1.11adjudication system" means a preprogrammed computer system designed for the
1.12collection, data entry, calculation, and final resolution of portable electronics insurance
1.13claims relating to coverage regulated by section 60K.381, which:
1.14(1) may be utilized only by a licensed independent adjuster; licensed insurance
1.15producer as defined in section 60K.31, subdivision 6; or a supervised individual operating
1.16under section 72B.03, subdivision 1, paragraph (a), clause (14); and
1.17(2) must comply with all claims payment requirements of the insurance laws of
1.18this state.
1.19EFFECTIVE DATE.This section is effective January 1, 2012.
1.20 Sec. 2. Minnesota Statutes 2010, section 72B.03, subdivision 1, is amended to read:
1.21 Subdivision 1. Requirement; exceptions. (a) A person shall not act or hold out
1.22as an independent adjuster, public adjuster, or public adjuster solicitor unless the person
1.23is licensed as an independent adjuster, public adjuster, or public adjuster solicitor in
2.1accordance with this chapter, or is exempt from licensure as an independent adjuster,
2.2public adjuster, or public adjuster solicitor under this chapter.
2.3(b) The definition of adjuster does not include, and a license as an adjuster is not
2.4required of, the following:
2.5(1) attorneys-at-law admitted to practice in this state, when acting in the attorney's
2.6professional capacity as an attorney;
2.7(2) a person employed solely to obtain facts surrounding a claim or to furnish
2.8technical assistance to a licensed adjuster;
2.9(3) an individual who is employed to investigate suspected fraudulent insurance
2.10claims but who does not adjust losses or determine claims payments;
2.11(4) a person who solely performs executive, administrative, managerial, or clerical
2.12duties or any combination of these duties and who does not investigate, negotiate, or settle
2.13claims with policyholders, claimants, or their legal representative;
2.14(5) a licensed health care provider or its employee who provides managed care
2.15services so long as the services do not include the determination of compensability;
2.16(6) a managed care organization or any of its employees or an employee of any
2.17organization providing managed care services so long as the services do not include the
2.18determination of compensability;
2.19(7) a person who settles only reinsurance or subrogation claims;
2.20(8) an officer, director, manager, or employee of an authorized insurer, a surplus lines
2.21insurer, a risk retention group, or an attorney-in-fact of a reciprocal insurer;
2.22(9) a United States manager of the United States branch of an alien insurer;
2.23(10) a person who investigates, negotiates, or settles life, accident and health,
2.24annuity, or disability insurance claims;
2.25(11) an individual employee, under a self-insured arrangement, who adjusts claims
2.26on behalf of the employee's employer;
2.27(12) a licensed insurance producer, attorney-in-fact of a reciprocal insurer, or
2.28managing general agent of the insurer to whom claim authority has been granted by the
2.29insurer;
2.30(13) a person authorized to adjust workers' compensation or disability claims under
2.31the authority of a third-party administrator license pursuant to section60A.23, subdivision
2.328.; or
2.33(14) an individual who:
2.34(i) collects claim information from, or furnishes claim information to, insureds or
2.35claimants; and
3.1(ii) conducts data entry including entering data into an automated claims adjudication
3.2system, provided that the individual is an employee of a licensed independent adjuster or
3.3its affiliate where no more than 25 such persons are under the supervision of one licensed
3.4independent adjuster or licensed insurance producer who is exempt from licensure under
3.5clause (12).
3.6EFFECTIVE DATE.This section is effective January 1, 2012.
3.7 Sec. 3. Minnesota Statutes 2010, section 72B.041, subdivision 1, is amended to read:
3.8 Subdivision 1. Application. (a) An individual applying for a resident adjuster
3.9license must make application to the commissioner on the appropriate National
3.10Association of Insurance Commissioners (NAIC) Uniform Individual Application in
3.11a format prescribed by the commissioner and declare under penalty of suspension,
3.12revocation, or refusal of the license that the statements made in the application are true,
3.13correct, and complete to the best of the individual's knowledge and belief. Before
3.14approving the application, the commissioner must find that the individual:
3.15(1) is at least 18 years of age;
3.16(2) is eligible to designate this state as the individual's home state;
3.17(3) is trustworthy, reliable, and of good reputation, evidence of which must be
3.18determined by the commissioner;
3.19(4) has not committed any act that is a ground for probation, suspension, revocation,
3.20or refusal of an adjuster's license as set forth in section72B.08 ;
3.21(5) has successfully passed the examination for the lines of authority for which
3.22the individual has applied; and
3.23(6) has paid the fees set forth in subdivision 9.
3.24An applicant for licensing as a public adjuster solicitor under sections72B.01 to
3.2572B.14
must be at least 18 years of age, must be competent and trustworthy, and must not
3.26have been engaged in any practice which would be grounds for suspension or revocation
3.27of a license under sections72B.01 to
72B.14 within the three years next preceding the
3.28date of the application.
3.29In the case of any applicant who has been convicted of a felony within the ten years
3.30next preceding the date of the application, and who in the judgment of the commissioner,
3.31meets the other qualifications, the commissioner may impose the additional requirement of
3.32the filing of a bond in accordance with the requirements of section72B.08, subdivision 8 .
3.33(b) A business entity applying for a resident adjuster license must make application
3.34to the commissioner on the appropriate NAIC Uniform Business Entity Application
3.35in a format prescribed by the commissioner and declare under penalty of suspension,
4.1revocation, or refusal of the license that the statements made in the application are true,
4.2correct, and complete to the best of the business entity's knowledge and belief. Before
4.3approving the application, the commissioner shall find that the business entity:
4.4(1) is eligible to designate this state as its home state;
4.5(2) has designated a licensed independent or public adjuster responsible for the
4.6business entity's compliance with the insurance laws, rules, and regulations of this state;
4.7(3) has not committed an act that is a ground for probation, suspension, revocation,
4.8or refusal of an adjuster's license as set forth in section72B.08 ; and
4.9(4) has paid the fees set forth in subdivision 9.
4.10(c) No resident of Canada may be licensed under this section or may designate
4.11Minnesota as the applicant's home state, unless the applicant has successfully passed
4.12the adjuster examination and has complied with the other applicable provisions of this
4.13section, except that such applicant shall not be subject to paragraph (a), clause (2), and
4.14section 270C.72, subdivision 4.
4.15EFFECTIVE DATE.This section is effective January 1, 2012.
4.16 Sec. 4. Minnesota Statutes 2010, section 72B.041, subdivision 2, is amended to read:
4.17 Subd. 2. Criminal history record check; fingerprints. (a) An individual applying
4.18for a resident independent or public adjuster license must:
4.19(1) consent to a criminal history record check;
4.20(2) submit a fingerprint card in a form acceptable to the commissioner; and
4.21(3) pay the fee required to perform criminal history record checks with the Minnesota
4.22Bureau of Criminal Apprehension and the Federal Bureau of Investigation.
4.23(b) The commissioner may contract for the collection and transmission of
4.24fingerprints required under this chapter and may order the fee for collecting and
4.25transmitting fingerprints to be payable directly to the contractor by the applicant. The
4.26commissioner may agree to a reasonable fingerprinting fee to be charged by the contractor.
4.27(c) The commissioner must treat and maintain an applicant's fingerprints and any
4.28criminal history record information obtained under this chapter as confidential and must
4.29apply security measures consistent with the standards specified by the Criminal Justice
4.30Information Services Division of the Federal Bureau of Investigation for the electronic
4.31storage of fingerprints and necessary identifying information. The commissioner must
4.32limit the use of records solely to the purposes authorized in this chapter. The fingerprints
4.33and any criminal history record information must not be subject to subpoena, other than
4.34one issued in a criminal action or investigation.
5.1(d) The commissioner may receive criminal history record information from another
5.2government agency in lieu of the Minnesota Bureau of Criminal Apprehension.
5.3(e) The commissioner may require any documents reasonably necessary to verify the
5.4information contained in the application.
5.5(f) All applicants for a license as a public adjuster must attach to their application
5.6evidence that the bonding requirement in subdivision 3 has been satisfied.
5.7(g) All executive officers and directors of a business entity applying for a resident
5.8independent adjuster license to adjust claims relating to portable electronics insurance
5.9claims relating to coverage regulated by section 60K.381 and all executive officers
5.10and directors of entities and any individuals owning, directly or indirectly, more than
5.1150 percent of the outstanding voting securities of that applicant, are subject to the
5.12requirements of this subdivision, paragraphs (a) to (e).
5.13EFFECTIVE DATE.This section is effective January 1, 2012.
5.14 Sec. 5. Minnesota Statutes 2010, section 72B.041, is amended by adding a subdivision
5.15to read:
5.16 Subd. 10. Business entity. All executive officers and directors of a business
5.17entity applying for a nonresident independent adjuster license to adjust claims relating to
5.18portable electronics insurance claims relating to coverage regulated by section 60K.381
5.19and all executive officers and directors of entities and any individuals owning, directly or
5.20indirectly, more than 50 percent of the outstanding voting securities of that applicant, are
5.21subject to the requirements of subdivision 2, paragraphs (a) to (e). A nonresident business
5.22entity whose home state subjects the applicant to requirements substantially similar to
5.23those under subdivision 2 is not required to comply with subdivision 2.
5.24EFFECTIVE DATE.This section is effective January 1, 2012.
5.25 Sec. 6. Minnesota Statutes 2010, section 72B.05, is amended to read:
5.2672B.05 NONRESIDENTS.
5.27(a) Unless refused licensure pursuant to section72B.08 , a nonresident person shall
5.28receive a nonresident adjuster license if:
5.29(1) the person is currently licensed in good standing as an adjuster in the person's
5.30resident or home state;
5.31(2) the person has submitted the proper request for licensure and has paid the fees
5.32required by section72B.041, subdivision 9 ;
6.1(3) the person has submitted or transmitted to the commissioner the appropriate
6.2completed application for licensure; and
6.3(4) the person's designated home state awards nonresident adjuster licenses to
6.4persons of this state on the same basis.
6.5(b) The commissioner may verify the adjuster's licensing status through any
6.6appropriate database, including the producer database maintained by the National
6.7Association of Insurance Commissioners, its affiliates, or its subsidiaries, or may request
6.8certification of good standing as described in section72B.041, subdivision 5 .
6.9(c) As a condition to the continuation of a nonresident adjuster license, the licensee
6.10must maintain a resident adjuster license in the licensee's home state. The nonresident
6.11adjuster license issued under this chapter must terminate and be surrendered immediately
6.12to the commissioner if the resident adjuster license terminates for any reason, unless
6.13the termination is due to the adjuster being issued a new resident adjuster license in the
6.14adjuster's new home state. The new state resident adjuster license must have reciprocity
6.15with the licensing nonresident states, otherwise, the nonresident adjuster license must
6.16terminate. Notice of resident adjuster license termination must be given to any state
6.17that issued a nonresident adjuster license. Notice must be given within 30 days of the
6.18termination date; if terminated for change in the resident home state, then the notice must
6.19include both the previous and current address. Maintaining a resident adjuster license is
6.20required for the nonresident adjuster license to remain valid.
6.21(d) No resident of Canada may be licensed under this section, unless the applicant is
6.22licensed as a resident adjuster under the laws of another state, except that such applicant
6.23shall not be subject to section 270C.72, subdivision 4.
6.24EFFECTIVE DATE.This section is effective January 1, 2012.
1.3electronics products; permitting use of an automated claims processing system
1.4subject to certain requirements and safeguards;amending Minnesota Statutes
1.52010, sections 72B.02, by adding a subdivision; 72B.03, subdivision 1; 72B.041,
1.6subdivisions 1, 2, by adding a subdivision; 72B.05.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 72B.02, is amended by adding a
1.9subdivision to read:
1.10 Subd. 23. Automated claims adjudication system. "Automated claims
1.11adjudication system" means a preprogrammed computer system designed for the
1.12collection, data entry, calculation, and final resolution of portable electronics insurance
1.13claims relating to coverage regulated by section 60K.381, which:
1.14(1) may be utilized only by a licensed independent adjuster; licensed insurance
1.15producer as defined in section 60K.31, subdivision 6; or a supervised individual operating
1.16under section 72B.03, subdivision 1, paragraph (a), clause (14); and
1.17(2) must comply with all claims payment requirements of the insurance laws of
1.18this state.
1.19EFFECTIVE DATE.This section is effective January 1, 2012.
1.20 Sec. 2. Minnesota Statutes 2010, section 72B.03, subdivision 1, is amended to read:
1.21 Subdivision 1. Requirement; exceptions. (a) A person shall not act or hold out
1.22as an independent adjuster, public adjuster, or public adjuster solicitor unless the person
1.23is licensed as an independent adjuster, public adjuster, or public adjuster solicitor in
2.1accordance with this chapter, or is exempt from licensure as an independent adjuster,
2.2public adjuster, or public adjuster solicitor under this chapter.
2.3(b) The definition of adjuster does not include, and a license as an adjuster is not
2.4required of, the following:
2.5(1) attorneys-at-law admitted to practice in this state, when acting in the attorney's
2.6professional capacity as an attorney;
2.7(2) a person employed solely to obtain facts surrounding a claim or to furnish
2.8technical assistance to a licensed adjuster;
2.9(3) an individual who is employed to investigate suspected fraudulent insurance
2.10claims but who does not adjust losses or determine claims payments;
2.11(4) a person who solely performs executive, administrative, managerial, or clerical
2.12duties or any combination of these duties and who does not investigate, negotiate, or settle
2.13claims with policyholders, claimants, or their legal representative;
2.14(5) a licensed health care provider or its employee who provides managed care
2.15services so long as the services do not include the determination of compensability;
2.16(6) a managed care organization or any of its employees or an employee of any
2.17organization providing managed care services so long as the services do not include the
2.18determination of compensability;
2.19(7) a person who settles only reinsurance or subrogation claims;
2.20(8) an officer, director, manager, or employee of an authorized insurer, a surplus lines
2.21insurer, a risk retention group, or an attorney-in-fact of a reciprocal insurer;
2.22(9) a United States manager of the United States branch of an alien insurer;
2.23(10) a person who investigates, negotiates, or settles life, accident and health,
2.24annuity, or disability insurance claims;
2.25(11) an individual employee, under a self-insured arrangement, who adjusts claims
2.26on behalf of the employee's employer;
2.27(12) a licensed insurance producer, attorney-in-fact of a reciprocal insurer, or
2.28managing general agent of the insurer to whom claim authority has been granted by the
2.29insurer;
2.30(13) a person authorized to adjust workers' compensation or disability claims under
2.31the authority of a third-party administrator license pursuant to section
2.33(14) an individual who:
2.34(i) collects claim information from, or furnishes claim information to, insureds or
2.35claimants; and
3.1(ii) conducts data entry including entering data into an automated claims adjudication
3.2system, provided that the individual is an employee of a licensed independent adjuster or
3.3its affiliate where no more than 25 such persons are under the supervision of one licensed
3.4independent adjuster or licensed insurance producer who is exempt from licensure under
3.5clause (12).
3.6EFFECTIVE DATE.This section is effective January 1, 2012.
3.7 Sec. 3. Minnesota Statutes 2010, section 72B.041, subdivision 1, is amended to read:
3.8 Subdivision 1. Application. (a) An individual applying for a resident adjuster
3.9license must make application to the commissioner on the appropriate National
3.10Association of Insurance Commissioners (NAIC) Uniform Individual Application in
3.11a format prescribed by the commissioner and declare under penalty of suspension,
3.12revocation, or refusal of the license that the statements made in the application are true,
3.13correct, and complete to the best of the individual's knowledge and belief. Before
3.14approving the application, the commissioner must find that the individual:
3.15(1) is at least 18 years of age;
3.16(2) is eligible to designate this state as the individual's home state;
3.17(3) is trustworthy, reliable, and of good reputation, evidence of which must be
3.18determined by the commissioner;
3.19(4) has not committed any act that is a ground for probation, suspension, revocation,
3.20or refusal of an adjuster's license as set forth in section
3.21(5) has successfully passed the examination for the lines of authority for which
3.22the individual has applied; and
3.23(6) has paid the fees set forth in subdivision 9.
3.24An applicant for licensing as a public adjuster solicitor under sections
3.26have been engaged in any practice which would be grounds for suspension or revocation
3.27of a license under sections
3.28date of the application.
3.29In the case of any applicant who has been convicted of a felony within the ten years
3.30next preceding the date of the application, and who in the judgment of the commissioner,
3.31meets the other qualifications, the commissioner may impose the additional requirement of
3.32the filing of a bond in accordance with the requirements of section
3.33(b) A business entity applying for a resident adjuster license must make application
3.34to the commissioner on the appropriate NAIC Uniform Business Entity Application
3.35in a format prescribed by the commissioner and declare under penalty of suspension,
4.1revocation, or refusal of the license that the statements made in the application are true,
4.2correct, and complete to the best of the business entity's knowledge and belief. Before
4.3approving the application, the commissioner shall find that the business entity:
4.4(1) is eligible to designate this state as its home state;
4.5(2) has designated a licensed independent or public adjuster responsible for the
4.6business entity's compliance with the insurance laws, rules, and regulations of this state;
4.7(3) has not committed an act that is a ground for probation, suspension, revocation,
4.8or refusal of an adjuster's license as set forth in section
4.9(4) has paid the fees set forth in subdivision 9.
4.10(c) No resident of Canada may be licensed under this section or may designate
4.11Minnesota as the applicant's home state, unless the applicant has successfully passed
4.12the adjuster examination and has complied with the other applicable provisions of this
4.13section, except that such applicant shall not be subject to paragraph (a), clause (2), and
4.14section 270C.72, subdivision 4.
4.15EFFECTIVE DATE.This section is effective January 1, 2012.
4.16 Sec. 4. Minnesota Statutes 2010, section 72B.041, subdivision 2, is amended to read:
4.17 Subd. 2. Criminal history record check; fingerprints. (a) An individual applying
4.18for a resident independent or public adjuster license must:
4.19(1) consent to a criminal history record check;
4.20(2) submit a fingerprint card in a form acceptable to the commissioner; and
4.21(3) pay the fee required to perform criminal history record checks with the Minnesota
4.22Bureau of Criminal Apprehension and the Federal Bureau of Investigation.
4.23(b) The commissioner may contract for the collection and transmission of
4.24fingerprints required under this chapter and may order the fee for collecting and
4.25transmitting fingerprints to be payable directly to the contractor by the applicant. The
4.26commissioner may agree to a reasonable fingerprinting fee to be charged by the contractor.
4.27(c) The commissioner must treat and maintain an applicant's fingerprints and any
4.28criminal history record information obtained under this chapter as confidential and must
4.29apply security measures consistent with the standards specified by the Criminal Justice
4.30Information Services Division of the Federal Bureau of Investigation for the electronic
4.31storage of fingerprints and necessary identifying information. The commissioner must
4.32limit the use of records solely to the purposes authorized in this chapter. The fingerprints
4.33and any criminal history record information must not be subject to subpoena, other than
4.34one issued in a criminal action or investigation.
5.1(d) The commissioner may receive criminal history record information from another
5.2government agency in lieu of the Minnesota Bureau of Criminal Apprehension.
5.3(e) The commissioner may require any documents reasonably necessary to verify the
5.4information contained in the application.
5.5(f) All applicants for a license as a public adjuster must attach to their application
5.6evidence that the bonding requirement in subdivision 3 has been satisfied.
5.7(g) All executive officers and directors of a business entity applying for a resident
5.8independent adjuster license to adjust claims relating to portable electronics insurance
5.9claims relating to coverage regulated by section 60K.381 and all executive officers
5.10and directors of entities and any individuals owning, directly or indirectly, more than
5.1150 percent of the outstanding voting securities of that applicant, are subject to the
5.12requirements of this subdivision, paragraphs (a) to (e).
5.13EFFECTIVE DATE.This section is effective January 1, 2012.
5.14 Sec. 5. Minnesota Statutes 2010, section 72B.041, is amended by adding a subdivision
5.15to read:
5.16 Subd. 10. Business entity. All executive officers and directors of a business
5.17entity applying for a nonresident independent adjuster license to adjust claims relating to
5.18portable electronics insurance claims relating to coverage regulated by section 60K.381
5.19and all executive officers and directors of entities and any individuals owning, directly or
5.20indirectly, more than 50 percent of the outstanding voting securities of that applicant, are
5.21subject to the requirements of subdivision 2, paragraphs (a) to (e). A nonresident business
5.22entity whose home state subjects the applicant to requirements substantially similar to
5.23those under subdivision 2 is not required to comply with subdivision 2.
5.24EFFECTIVE DATE.This section is effective January 1, 2012.
5.25 Sec. 6. Minnesota Statutes 2010, section 72B.05, is amended to read:
5.2672B.05 NONRESIDENTS.
5.27(a) Unless refused licensure pursuant to section
5.28receive a nonresident adjuster license if:
5.29(1) the person is currently licensed in good standing as an adjuster in the person's
5.30resident or home state;
5.31(2) the person has submitted the proper request for licensure and has paid the fees
5.32required by section
6.1(3) the person has submitted or transmitted to the commissioner the appropriate
6.2completed application for licensure; and
6.3(4) the person's designated home state awards nonresident adjuster licenses to
6.4persons of this state on the same basis.
6.5(b) The commissioner may verify the adjuster's licensing status through any
6.6appropriate database, including the producer database maintained by the National
6.7Association of Insurance Commissioners, its affiliates, or its subsidiaries, or may request
6.8certification of good standing as described in section
6.9(c) As a condition to the continuation of a nonresident adjuster license, the licensee
6.10must maintain a resident adjuster license in the licensee's home state. The nonresident
6.11adjuster license issued under this chapter must terminate and be surrendered immediately
6.12to the commissioner if the resident adjuster license terminates for any reason, unless
6.13the termination is due to the adjuster being issued a new resident adjuster license in the
6.14adjuster's new home state. The new state resident adjuster license must have reciprocity
6.15with the licensing nonresident states, otherwise, the nonresident adjuster license must
6.16terminate. Notice of resident adjuster license termination must be given to any state
6.17that issued a nonresident adjuster license. Notice must be given within 30 days of the
6.18termination date; if terminated for change in the resident home state, then the notice must
6.19include both the previous and current address. Maintaining a resident adjuster license is
6.20required for the nonresident adjuster license to remain valid.
6.21(d) No resident of Canada may be licensed under this section, unless the applicant is
6.22licensed as a resident adjuster under the laws of another state, except that such applicant
6.23shall not be subject to section 270C.72, subdivision 4.
6.24EFFECTIVE DATE.This section is effective January 1, 2012.
