Bill Text: MN SF26 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Homeowners insurance surcharge disclosure requirement
Sponsorship: Partisan Bill (Democrat 2)
Status: (Introduced - Dead) 2011-04-27 - Comm report: To pass as amended and re-refer to Finance [SF26 Detail]
Download: Minnesota-2011-SF26-Engrossed.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.291] SURCHARGE DISCLOSURE.
1.6 Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in
1.7this section have the meanings given them.
1.8(b) "Policy" means a policy providing homeowner's insurance as defined in section
1.965A.27, subdivision 4.
1.10(c) "Surcharge" means an increase in policy premium due to claims reported,
1.11incurred, or paid during a period of time that the policy was in effect, including the loss
1.12of a claim-free discount.
1.13(d) "Surcharge plan" means a rating plan under which an insurer may apply a
1.14surcharge.
1.15 Subd. 2. Disclosure to applicants. Before accepting the initial premium payment,
1.16an insurer shall provide a disclosure statement to any person who applies for a policy that
1.17is effective on or after January 1, 2012. The insurer may provide the disclosure statement
1.18on its Web site. If the insurer provides the disclosure statement on its Web site, the insurer
1.19may notify the applicant, either in writing or orally, of its availability for review on that
1.20site before accepting the initial payment, in lieu of providing a disclosure statement
1.21to the applicant in writing. An oral notice regarding the availability of the disclosure
1.22statement on the insurer's Web site shall be presumed delivered if the insurer makes a
1.23contemporaneous notation in the applicant's record of the notice having been delivered or
2.1if the insurer retains an audio recording of the notification provided to the applicant. An
2.2insurer shall advise the applicant of the availability of a written disclosure statement.
2.3 Subd. 3. Disclosure to policyholders. An insurer or its agent shall mail or deliver a
2.4disclosure statement or written notice of the statement's availability on the insurer's Web
2.5site to the named insured either before or with the first notice to renew a policy on or after
2.6January 1, 2012. If a disclosure statement or written Web site notice has been provided
2.7under subdivision 2, no disclosure statement is required to be mailed or delivered to the
2.8same named insured under this subdivision.
2.9 Subd. 4. Notification of change. No insurer may change its surcharge plan unless a
2.10disclosure statement or written notice of the statement's availability on the insurer's Web
2.11site is mailed or delivered to the named insured before the change is made. A disclosure
2.12statement reflecting a change applicable on the renewal of a policy may be mailed with an
2.13offer to renew the policy. Surcharges cannot be applied to claims that occurred before a
2.14change in a surcharge plan except to the extent provided under the prior plan.
2.15 Subd. 5. Penalty. Failure to comply with this section constitutes a violation of
2.16section 70A.04.
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.291] SURCHARGE DISCLOSURE.
1.6 Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in
1.7this section have the meanings given them.
1.8(b) "Policy" means a policy providing homeowner's insurance as defined in section
1.965A.27, subdivision 4.
1.10(c) "Surcharge" means an increase in policy premium due to claims reported,
1.11incurred, or paid during a period of time that the policy was in effect, including the loss
1.12of a claim-free discount.
1.13(d) "Surcharge plan" means a rating plan under which an insurer may apply a
1.14surcharge.
1.15 Subd. 2. Disclosure to applicants. Before accepting the initial premium payment,
1.16an insurer shall provide a disclosure statement to any person who applies for a policy that
1.17is effective on or after January 1, 2012. The insurer may provide the disclosure statement
1.18on its Web site. If the insurer provides the disclosure statement on its Web site, the insurer
1.19may notify the applicant, either in writing or orally, of its availability for review on that
1.20site before accepting the initial payment, in lieu of providing a disclosure statement
1.21to the applicant in writing. An oral notice regarding the availability of the disclosure
1.22statement on the insurer's Web site shall be presumed delivered if the insurer makes a
1.23contemporaneous notation in the applicant's record of the notice having been delivered or
2.1if the insurer retains an audio recording of the notification provided to the applicant. An
2.2insurer shall advise the applicant of the availability of a written disclosure statement.
2.3 Subd. 3. Disclosure to policyholders. An insurer or its agent shall mail or deliver a
2.4disclosure statement or written notice of the statement's availability on the insurer's Web
2.5site to the named insured either before or with the first notice to renew a policy on or after
2.6January 1, 2012. If a disclosure statement or written Web site notice has been provided
2.7under subdivision 2, no disclosure statement is required to be mailed or delivered to the
2.8same named insured under this subdivision.
2.9 Subd. 4. Notification of change. No insurer may change its surcharge plan unless a
2.10disclosure statement or written notice of the statement's availability on the insurer's Web
2.11site is mailed or delivered to the named insured before the change is made. A disclosure
2.12statement reflecting a change applicable on the renewal of a policy may be mailed with an
2.13offer to renew the policy. Surcharges cannot be applied to claims that occurred before a
2.14change in a surcharge plan except to the extent provided under the prior plan.
2.15 Subd. 5. Penalty. Failure to comply with this section constitutes a violation of
2.16section 70A.04.
