Bill Text: MN HF78 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Homeowner's insurance surcharge disclosure required.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2011-01-13 - Introduction and first reading, referred to Commerce and Regulatory Reform [HF78 Detail]
Download: Minnesota-2011-HF78-Introduced.html
1.2relating to insurance; requiring surcharge disclosure for homeowner's insurance;
1.3proposing coding for new law in Minnesota Statutes, chapter 65A.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [65A.285] SURCHARGE DISCLOSURE.
1.6 Subdivision 1. Definitions. For the purposes of this section, the terms defined in
1.7this section have the meanings given them.
1.8(a) "Computed premium" means the rate in effect before the application of a
1.9surcharge.
1.10(b) "Chargeable claim" means a claim that is taken into consideration in applying a
1.11surcharge.
1.12(c) "Policy" means a policy providing homeowner's insurance.
1.13(d) "Surcharge" means an increase in premium for a policy, including the removal of
1.14a claim-free discount, based upon a claim.
1.15(e) "Surcharge disclosure statement" means a written statement disclosing the
1.16surcharge plan of an insurer, the effective date of the surcharge plan, the name of the
1.17insurer, and other information the commissioner requires to be disclosed to assist insureds
1.18in comparing surcharge plans among insurers.
1.19(f) "Surcharge plan" means the conditions under which an insurer applies a surcharge
1.20including but not limited to: (1) the maximum dollar amount that an insurer pays due to a
1.21claim without applying a surcharge; (2) claims that are not chargeable; (3) the length of
1.22time that a claim is chargeable; and (4) surcharge rates for the first and each successive
1.23claim.
2.1(g) "Surcharge rate" means the amount of a surcharge expressed as a percentage of
2.2the computed premium rate or as a dollar amount surcharge, if a percentage surcharge is
2.3not used.
2.4 Subd. 2. Disclosure to applicants. Before accepting the initial premium payment,
2.5an insurer or its agent shall provide a surcharge disclosure statement to a person who
2.6applies for a policy that is effective on or after January 1, 2012. If the insurer provides
2.7the surcharge disclosure statement on the insurer's Web site, the insurer or agent may
2.8notify the applicant orally or in writing of its availability for review on the insurer's Web
2.9site before accepting the initial payment, in lieu of providing a disclosure statement to
2.10the applicant in writing, if the insurer so notifies the applicant of the availability of a
2.11written version of this statement upon the applicant's request. The insurer shall provide
2.12the surcharge disclosure statement in writing if requested by the applicant. An oral notice
2.13is presumed delivered if the agent or insurer makes a contemporaneous notation in the
2.14applicant's record of the notice having been delivered or if the insurer or agent retains an
2.15audio recording of the notification provided to the applicant.
2.16 Subd. 3. Disclosure to policyholders. An insurer or its agent shall mail or deliver
2.17a surcharge disclosure statement or written notice of the statement's availability on the
2.18insurer's Web site to the named insured either before or with the first notice to renew a
2.19policy on or after January 1, 2012. If a surcharge disclosure statement or written Web site
2.20notice has been provided pursuant to subdivision 2, no surcharge disclosure statement is
2.21required to be mailed or delivered to the same named insured pursuant to this subdivision.
2.22 Subd. 4. Notification of change. No insurer may change its surcharge plan unless
2.23a surcharge disclosure statement or written Web site notice is mailed or delivered to the
2.24named insured before the change is made. A surcharge disclosure statement disclosing
2.25a change applicable on the renewal of a policy may be mailed with an offer to renew
2.26the policy. Surcharges cannot be applied to claims that occurred before a change in a
2.27surcharge plan except to the extent provided under the prior plan.
2.28 Subd. 5. Penalty. Failure to comply with this section constitutes a violation of
2.29section70A.04 and the violator is subject to the penalties prescribed in section
70A.21 .
2.30 Subd. 6. Commissioner may adopt rules. The commissioner may adopt rules
2.31reasonably necessary to carry out and make effective this section.
1.3proposing coding for new law in Minnesota Statutes, chapter 65A.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [65A.285] SURCHARGE DISCLOSURE.
1.6 Subdivision 1. Definitions. For the purposes of this section, the terms defined in
1.7this section have the meanings given them.
1.8(a) "Computed premium" means the rate in effect before the application of a
1.9surcharge.
1.10(b) "Chargeable claim" means a claim that is taken into consideration in applying a
1.11surcharge.
1.12(c) "Policy" means a policy providing homeowner's insurance.
1.13(d) "Surcharge" means an increase in premium for a policy, including the removal of
1.14a claim-free discount, based upon a claim.
1.15(e) "Surcharge disclosure statement" means a written statement disclosing the
1.16surcharge plan of an insurer, the effective date of the surcharge plan, the name of the
1.17insurer, and other information the commissioner requires to be disclosed to assist insureds
1.18in comparing surcharge plans among insurers.
1.19(f) "Surcharge plan" means the conditions under which an insurer applies a surcharge
1.20including but not limited to: (1) the maximum dollar amount that an insurer pays due to a
1.21claim without applying a surcharge; (2) claims that are not chargeable; (3) the length of
1.22time that a claim is chargeable; and (4) surcharge rates for the first and each successive
1.23claim.
2.1(g) "Surcharge rate" means the amount of a surcharge expressed as a percentage of
2.2the computed premium rate or as a dollar amount surcharge, if a percentage surcharge is
2.3not used.
2.4 Subd. 2. Disclosure to applicants. Before accepting the initial premium payment,
2.5an insurer or its agent shall provide a surcharge disclosure statement to a person who
2.6applies for a policy that is effective on or after January 1, 2012. If the insurer provides
2.7the surcharge disclosure statement on the insurer's Web site, the insurer or agent may
2.8notify the applicant orally or in writing of its availability for review on the insurer's Web
2.9site before accepting the initial payment, in lieu of providing a disclosure statement to
2.10the applicant in writing, if the insurer so notifies the applicant of the availability of a
2.11written version of this statement upon the applicant's request. The insurer shall provide
2.12the surcharge disclosure statement in writing if requested by the applicant. An oral notice
2.13is presumed delivered if the agent or insurer makes a contemporaneous notation in the
2.14applicant's record of the notice having been delivered or if the insurer or agent retains an
2.15audio recording of the notification provided to the applicant.
2.16 Subd. 3. Disclosure to policyholders. An insurer or its agent shall mail or deliver
2.17a surcharge disclosure statement or written notice of the statement's availability on the
2.18insurer's Web site to the named insured either before or with the first notice to renew a
2.19policy on or after January 1, 2012. If a surcharge disclosure statement or written Web site
2.20notice has been provided pursuant to subdivision 2, no surcharge disclosure statement is
2.21required to be mailed or delivered to the same named insured pursuant to this subdivision.
2.22 Subd. 4. Notification of change. No insurer may change its surcharge plan unless
2.23a surcharge disclosure statement or written Web site notice is mailed or delivered to the
2.24named insured before the change is made. A surcharge disclosure statement disclosing
2.25a change applicable on the renewal of a policy may be mailed with an offer to renew
2.26the policy. Surcharges cannot be applied to claims that occurred before a change in a
2.27surcharge plan except to the extent provided under the prior plan.
2.28 Subd. 5. Penalty. Failure to comply with this section constitutes a violation of
2.29section
2.30 Subd. 6. Commissioner may adopt rules. The commissioner may adopt rules
2.31reasonably necessary to carry out and make effective this section.
