piers109uk/MN-Statutes huggingface dataset:
59C.07 DISCLOSURE TO WARRANTY HOLDER.
A vehicle protection product warranty must not be sold or offered for sale in this state unless the warranty:
(1) states, "The obligations of the warrantor to the warranty holder are guaranteed under a warranty reimbursement insurance policy" if the warrantor elects to meet its financial responsibility obligations under section 59C.05, subdivision 2, or states "The obligations of the warrantor under this warranty are backed by the full faith and credit of the warrantor" if the warrantor elects to meet its financial responsibility obligations under section 59C.05, subdivision 3;
(2) states that in the event a warranty holder must make a claim against a party other than the warranty reimbursement insurance policy issuer, the warranty holder is entitled to make a direct claim against the insurer upon the failure of the warrantor to pay any claim or meet any obligation under the terms of the warranty within 60 days after proof of loss has been filed with the warrantor, if the warrantor elects to meet its financial responsibility obligations under section 59C.05, subdivision 2;
(3) states the name and address of the issuer of the warranty reimbursement insurance policy, and this information need not be preprinted on the warranty form, but may be added to or stamped on the warranty, if the warrantor elects to meet its financial responsibility obligations under section 59C.05, subdivision 2;
(4) identifies the warrantor, the seller, and the warranty holder;
(5) sets forth the total purchase price and the terms under which it is to be paid, however, the purchase price is not required to be preprinted on the vehicle protection product warranty and may be negotiated with the consumer at the time of sale;
(6) sets forth the procedure for making a claim, including a telephone number;
(7) specifies the payments or performance to be provided under the warranty including payments for incidental costs expressed as either a fixed amount specified in the warranty or sales agreement or by the use of a formula itemizing specific incidental costs incurred by the warranty holder, the manner of calculation or determination of payments or performance, and any limitations, exceptions, or exclusions;
(8) sets forth all of the obligations and duties of the warranty holder such as the duty to protect against any further damage to the vehicle, the obligation to notify the warrantor in advance of any repair, or other similar requirements, if any;
(9) sets forth any terms, restrictions, or conditions governing transferability and cancellation of the warranty, if any; and
(10) contains a disclosure that reads substantially as follows: "This agreement is a product warranty and is not insurance."
59D.02 DEFINITIONS.
For purposes of this chapter, the terms defined in subdivisions 2 to 10 have the meanings given them.
"Administrator" means a person, other than an insurer or creditor who performs administrative or operational functions pursuant to guaranteed asset protection waiver programs.
"Borrower" means a debtor, retail buyer, or lessee under a finance agreement.
"Creditor" means:
(1) the lender in a loan or credit transaction;
(2) the lessor in a lease transaction;
(3) a dealer or seller of motor vehicles that provides credit to purchasers of the motor vehicles provided that the entities comply with this section;
(4) the seller in commercial retail installment transactions; or
(5) the assignees of any of the forgoing to whom the credit obligation is payable.
"Finance agreement" means a loan, lease, or retail installment sales contract for the purchase or lease of a motor vehicle.
"Free-look period" means the period of time from the effective date of the GAP waiver until the date the borrower may cancel the contract without penalty, fees, or costs to the borrower. This period of time must not be shorter than 30 days.
"Guaranteed asset protection waiver" or "GAP waiver" means a contractual agreement wherein a creditor agrees for a separate charge to cancel or waive all or part of amounts due on a borrower's finance agreement in the event of a total physical damage loss or unrecovered theft of the motor vehicle.
"Insurer" means an insurance company licensed, registered, or otherwise authorized to do business under Minnesota law.
"Motor vehicle" means self-propelled or towed vehicles designed for personal or commercial use, including, but not limited to, automobiles; trucks; motorcycles; recreational vehicles; all-terrain vehicles; snowmobiles; campers; boats; personal watercraft; and motorcycle, boat, camper, and personal watercraft trailers. A creditor is prohibited from selling a GAP waiver in conjunction with the sale or lease of any used motor vehicle that is an automobile or truck that is valued at less than $5,000.
"Person" includes an individual, company, association, organization, partnership, business trust, corporation, and every form of legal entity.
59C.12 APPLICABILITY.
This chapter applies to all vehicle protection products sold or offered for sale on or after January 1, 2008. The failure of any person to comply with this chapter before January 1, 2008, is not admissible in any court proceeding, administrative proceeding, arbitration, or alternative dispute resolution proceeding and may not otherwise be used to prove that the action of any person or the affected vehicle protection product was unlawful or otherwise improper. The adoption of this chapter does not imply that a vehicle protection product warranty was insurance before January 1, 2008. Nothing in this section may be construed to require the application of the penalty provisions where this section is not applicable.
59D.01 APPLICATION.
(a) This chapter does not apply to:
(1) a policy of insurance offered in compliance with chapters 60A to 79A;
(2) a debt cancellation or debt suspension contract, including a guaranteed asset protection waiver, being offered by a banking institution or credit union in compliance with chapter 48 or 52; and
(3) a debt cancellation or debt suspension contract being offered in compliance with Code of Federal Regulations, title 12, parts 37, 721, or other federal law.
(b) Guaranteed asset protection waivers regulated under this chapter are not insurance and are not subject to chapters 60A to 79A. Persons selling, soliciting, or negotiating guaranteed asset protection waivers to borrowers in compliance with this chapter are exempt from chapter 60K.
(c) The commissioner of commerce has the full investigatory authority of chapter 45 to enforce the terms of this chapter.
59D.05 CONTRACTUAL LIABILITY OR OTHER INSURANCE POLICIES.
Contractual liability or other insurance policies insuring GAP waivers must state the obligation of the insurer to reimburse or pay to the creditor any sums the creditor is legally obligated to waive under the GAP waivers issued by the creditor and purchased or held by the borrower.
Coverage under a contractual liability or other insurance policy insuring a GAP waiver must also cover a subsequent assignee upon the assignment, sale, or transfer of the finance agreement.
Coverage under a contractual liability or other insurance policy insuring a GAP waiver must remain in effect unless canceled or terminated in compliance with applicable laws.
The cancellation or termination of a contractual liability or other insurance policy must not reduce the insurer's responsibility for GAP waivers issued by the creditor before the date of cancellation or termination and for which a premium has been received by the insurer.
59D.04 GUARANTEED ASSET PROTECTION WAIVER REQUIREMENTS.
GAP waivers may be offered, sold, or provided to borrowers in Minnesota in compliance with this chapter.
GAP waivers may, at the option of the creditor, be sold for a single payment or may be offered with a monthly or periodic payment option.
Notwithstanding any other provision of law, any cost to the borrower for a guaranteed asset protection waiver entered into in compliance with United States Code, title 15, sections 1601 to 1667F, and its implementing regulations under Code of Federal Regulations, title 12, part 226, as they may be amended from time to time, must be separately stated and is not to be considered a finance charge or interest.
A retail seller must insure its GAP waiver obligations under a contractual liability or other insurance policy issued by an insurer. A creditor, other than a retail seller, may insure its GAP waiver obligations under a contractual liability policy or other such policy issued by an insurer. The insurance policy may be directly obtained by a creditor or retail seller, or may be procured by an administrator to cover a creditor's or retail seller's obligations. Retail sellers that are lessors on motor vehicles are not required to insure obligations related to GAP waivers on leased vehicles.
The GAP waiver must be part of, or a separate addendum to, the finance agreement and must remain a part of the finance agreement upon the assignment, sale, or transfer of the finance agreement by the creditor.
The extension of credit, the terms of the credit, or the terms and conditions of the related motor vehicle sale or lease must not be conditioned upon the purchase of a GAP waiver.
A creditor that offers a GAP waiver must report the sale of, and forward funds received on, all such waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy, or other specified program documents.
Funds received or held by a creditor or administrator and belonging to an insurer, creditor, or administrator, pursuant to the terms of a written agreement, must be held by the creditor or administrator in a fiduciary capacity.
The terms defined in section 59D.02 are not intended to provide actual terms that are required in guaranteed asset protection waivers.
59C.08 PROHIBITED ACTS.
(a) Unless licensed as an insurance company, a vehicle protection product warrantor shall not use in its name, contracts, or literature, any of the words "insurance," "casualty," "surety," "mutual," or any other words descriptive of the insurance, casualty, or surety business or deceptively similar to the name or description of any insurance or surety corporation, or any other vehicle protection product warrantor. A warrantor may use the term "guaranty" or similar word in the warrantor's name.
(b) A vehicle protection product seller or warrantor may not require as a condition of financing that a retail purchaser of a motor vehicle purchase a vehicle protection product.
59C.09 RECORD KEEPING.
(a) All vehicle protection product warrantors shall keep accurate accounts, books, and records concerning transactions regulated under this chapter.
(b) A vehicle protection product warrantor's accounts, books, and records must include:
(1) copies of all vehicle protection product warranties;
(2) the name and address of each warranty holder; and
(3) the dates, amounts, and descriptions of all receipts, claims, and expenditures.
(c) A vehicle protection product warrantor shall retain all required accounts, books, and records pertaining to each warranty holder for at least two years after the specified period of coverage has expired. A warrantor discontinuing business in this state shall maintain its records until it furnishes the commissioner satisfactory proof that it has discharged all obligations to warranty holders in this state.
59D.07 CANCELLATION; REFUNDS.
A GAP waiver must provide that, if a borrower cancels a waiver within the free-look period, the borrower will be entitled to a full refund of the purchase price, so long as no benefits have been provided.
(a) Guaranteed asset protection waivers may be cancelable or noncancelable after the free-look period.
(b) In the event of a borrower's cancellation of the GAP waiver or early termination of the finance agreement, after the agreement has been in effect beyond the free-look period, the borrower may be entitled to a refund of any unearned portion of the purchase price of the waiver unless the waiver provides otherwise. In order to receive a refund, the borrower, in accordance with any applicable terms of the waiver, must provide a written request to the creditor, administrator, or other party. If such a request is being made because of the termination of the finance agreement, notice must be provided to the creditor, administrator, or other party within 90 days of the occurrence of the event terminating the finance agreement.
(c) If the cancellation of a GAP waiver occurs as a result of a default under the finance agreement or the repossession of the motor vehicle associated with the finance agreement, or any other termination of the finance agreement, any refund due may be paid directly to the creditor or administrator and applied as set forth in subdivision 3.
A refund under subdivision 1 or 2 may be applied by the creditor as a reduction of the amount owed under the finance agreement, unless the borrower can show that the finance agreement has been paid in full.
59D.06 DISCLOSURES.
(a) Guaranteed asset protection waivers must disclose, as applicable, in writing and in clear, understandable language that is easy to read, the following:
(1) the name and address of the initial creditor and the borrower at the time of sale, and the identity of any administrator if different from the creditor;
(2) the purchase price and the terms of the GAP waiver, including without limitation, the requirements for protection, conditions, or exclusions associated with the GAP waiver;
(3) that the borrower may cancel the GAP waiver within a free-look period as specified in the waiver, and will be entitled to a full refund of the purchase price, so long as no benefits have been provided;
(4) the procedure the borrower must follow, if any, to obtain GAP waiver benefits under the terms and conditions of the waiver, including a telephone number and address where the borrower may apply for waiver benefits;
(5) whether or not the GAP waiver is cancelable after the free-look period and the conditions under which it may be canceled or terminated including the procedures for requesting a refund due;
(6) that in order to receive a refund due in the event of a borrower's cancellation of the GAP waiver agreement or early termination of the finance agreement after the free-look period of the GAP waiver, the borrower, in accordance with the terms of the waiver, must provide a written cancellation request to the creditor, administrator, or other party. If such a request is being made because of the termination of the finance agreement, notice must be provided to the creditor, administrator, or other party within 90 days of the occurrence of the event terminating the finance agreement;
(7) the methodology for calculating a refund of the unearned purchase price of the GAP waiver due in the event of cancellation of the GAP waiver or early termination of the finance agreement; and
(8) that the extension of credit, the terms of the credit, or the terms and conditions of the related motor vehicle sale or lease are not conditioned upon the purchase of the GAP waiver.
(b) The creditor or any person offering a GAP waiver must provide the following verbatim disclosure in bold, 14-point type, either in a separate writing or as part of the agreement: "THE GAP WAIVER IS OPTIONAL. YOU DO NOT HAVE TO PURCHASE THIS PRODUCT IN ORDER TO BUY [OR LEASE] THIS MOTOR VEHICLE. YOU ALSO HAVE A LIMITED RIGHT TO CANCEL."
59D.03 COMMERCIAL TRANSACTIONS EXEMPTED.
Sections 59D.04, subdivision 3, and 59D.06 do not apply to a guaranteed asset protection waiver offered in connection with a lease or retail installment sale associated with any transaction not for personal, family, or household purposes.
60B.01 TITLE, CONSTRUCTION, AND PURPOSE.
Sections 60B.01 to 60B.61 may be cited as the "Insurers Rehabilitation and Liquidation Act" and shall appear in the next edition of Minnesota Statutes as chapter 60B but subject to the provisions of section 3C.10, subdivision 1.
Sections 60B.01 to 60B.61 shall not be interpreted to limit the powers granted the commissioner by other provisions of the law.
Sections 60B.01 to 60B.61 shall be liberally construed to effect the purpose stated in subdivision 4.
The purpose of sections 60B.01 to 60B.61 is the protection of the interests of insureds, creditors, and the public generally, with minimum interference with the normal prerogatives of proprietors, through:
(a) early detection of any potentially dangerous condition in an insurer, and prompt application of appropriate corrective measures, neither unduly harsh nor subject to the kind of publicity that would needlessly damage or destroy the insurer;
(b) improved methods for rehabilitating insurers, by enlisting the advice and management expertise of the insurance industry;
(c) enhanced efficiency and economy of liquidation, through clarification and specification of the law, to minimize legal uncertainty and litigation;
(d) equitable apportionment of any unavoidable loss;
(e) lessening the problems of interstate rehabilitation and liquidation by facilitating cooperation between states in the liquidation process, and by extension of the scope of personal jurisdiction over debtors of the insurer outside this state; and
(f) regulation of the insurance business by the impact of the law relating to delinquency procedures and substantive rules on the entire insurance business.
60B.02 PERSONS COVERED.
The proceedings authorized by sections 60B.01 to 60B.61 may be applied to:
(1) all insurers who are doing, or have done, an insurance business in this state, and against whom claims arising from that business may exist now or in the future;
(2) all insurers who purport to do an insurance business in this state;
(3) all insurers who have insureds resident in this state;
(4) all other persons organized or in the process of organizing with the intent to do an insurance business in this state; and
(5) all nonprofit service plan corporations incorporated or operating under the Nonprofit Health Service Plan Corporation Act, all health maintenance organizations operating under chapter 62D, any health plan incorporated under chapter 317A, all fraternal benefit societies operating under chapter 64B, except those associations enumerated in section 64B.38, all township mutual or other companies operating under chapter 67A, and all reciprocals or interinsurance exchanges operating under chapter 71A.
60B.06 COSTS AND EXPENSES OF LITIGATION.
In any proceeding under sections 60B.01 to 60B.61, the court may award such costs and other expenses of litigation as justice requires, without regard to the limitations otherwise prescribed by law. If costs and expenses are taxed against the commissioner, they shall be paid from funds appropriated to the Department of Commerce.
60B.09 COMMISSIONER'S REPORTS.
The commissioner shall include in a biennial report:
(a) the names of the insurers proceeded against under sections 60B.15, 60B.20, 60B.52, 60B.53, and 60B.55, and such other facts as indicate in reasonable detail formal proceedings under sections 60B.01 to 60B.61; and
(b) such facts as generally indicate the utilization and effectiveness of proceedings under sections 60B.11, 60B.12, and 60B.13.
(a) The commissioner shall include in the biennial report, not later than the second biennial report following the initiation of any formal proceedings under sections 60B.01 to 60B.61, a detailed analysis of the basic causes and the contributing factors making the initiation of formal proceedings necessary, and shall make recommendations for remedial legislation if any. For this purpose the commissioner may appoint and determine the compensation of a special assistant who shall be in the unclassified service, qualified to conduct the study and prepare the analysis.
(b) The commissioner shall include in the biennial report, not later than the biennial report following discharge of the receiver, a detailed study of the delinquency proceeding for each insurer subjected to a formal proceeding, with an analysis of the problems faced and their solutions. The commissioner shall also suggest alternative solutions, as well as other material of interest, for the purpose of assisting and guiding liquidators or rehabilitators in the future.
The commissioner as receiver shall make and file annual reports and any other required reports for the companies proceeded against under sections 60B.15, 60B.20, 60B.52, 60B.53, and 60B.55 in the manner and form and within the time required by law of insurers authorized to do business in this state, and under the same penalties for failure to do so.
60B.07 COOPERATION OF OFFICERS AND EMPLOYEES.
Any officer, manager, trustee, agent or general agent of any insurer and any other person with executive authority over or in charge of any segment of the insurer's affairs having notice of the proceedings shall cooperate with the commissioner in any proceeding under sections 60B.01 to 60B.61 or any investigation preliminary or incidental to the proceeding. "To cooperate" includes, but is not limited to, the following:
(a) to reply promptly in writing to any inquiry from the commissioner requesting such a reply; and
(b) to make available and deliver to the commissioner any books, accounts, documents, or other records, or information or property of or pertaining to the insurer and in that person's possession, custody, or control.
No person shall obstruct or interfere with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto.
This section shall not render it illegal to resist by legal proceedings the petition for liquidation or other delinquency proceedings, other orders or the request or demand for cooperation under subdivision 1.
Any person included within subdivision 1 who fails to cooperate with the commissioner, or any person who obstructs or interferes with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto, may be fined not more than $10,000 or imprisoned in the county jail not more than 364 days or both.
60B.05 INJUNCTIONS AND ORDERS.
Any receiver appointed in a proceeding under sections 60B.01 to 60B.61 may at any time apply for and any court of general jurisdiction in this state may grant, under the relevant sections of rules of Minnesota Rules of Civil Procedure, such restraining orders, temporary and permanent injunctions, and other orders as are deemed necessary and proper to prevent:
(a) the transaction of further business;
(b) the transfer of property;
(c) interference with the receiver or with the proceedings;
(d) waste of the insurer's assets;
(e) dissipation and transfer of bank accounts;
(f) the institution or further prosecution of any actions or proceedings;
(g) the obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer or its assets;
(h) the levying of execution against the insurer or its assets;
(i) the making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;
(j) the withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or
(k) any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors, or shareholders or the administration of the proceeding.
The receiver may apply to any court outside of this state for the relief described in subdivision 1.
60B.10 CONTINUATION OF DELINQUENCY PROCEEDINGS.
Every proceeding commenced before May 25, 1969 is deemed to have commenced under sections 60B.01 to 60B.61 for the purpose of conducting the proceeding thereafter, except that in the discretion of the commissioner the proceeding may be continued, in whole or in part, as it would have been continued had sections 60B.01 to 60B.61 not been enacted.
60B.13 COMMISSIONER'S SEIZURE ORDER.
If it appears to the commissioner that an emergency exists whereby the interests of the creditors, policyholders, or the public will be endangered by the delay incident to applying for a court seizure order, then on any ground that would justify a court seizure order under section 60B.12, without notice and without applying to the court, the commissioner may issue a seizure order which must contain a verified statement of the grounds of action. As directed by the seizure order, the commissioner or any representatives of the commissioner shall forthwith take possession and control of all or any part of the property, books, accounts, documents, and other records of the insurer, and of the premises occupied by the insurer for the transaction of its business. The commissioner shall retain possession and control until the order is vacated by the commissioner, is set aside by order of court, is replaced by an order of the court pursuant to a proceeding commenced under subdivision 2, a formal proceeding under sections 60B.01 to 60B.61, or until the expiration of ten days without a filing by the commissioner of a petition for a court order as required by subdivision 2.
Within ten days after the issuance of a seizure order under subdivision 1, the commissioner shall file with a district court a petition under section 60B.12, subdivision 1, for a court order of seizure, with written or oral notice of such petition to the insurer to the extent feasible; otherwise, the commissioner shall state to the court in writing the efforts made to give notice or the reasons why notice is not feasible. Thereafter, the matter shall proceed as provided in section 60B.12, except that the commissioner's seizure order shall remain in effect as provided in subdivision 1.
Every law enforcement officer shall assist the commissioner in making and enforcing any such seizure, and every sheriff and police department shall furnish such deputies, patrol officers, or officers as are necessary to assist the commissioner.
Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the insurer.
60B.14 CONDUCT OF HEARINGS IN SUMMARY PROCEEDINGS.
The commissioner shall hold all hearings in summary proceedings privately unless the insurer requests a public hearing, in which case the hearing shall be public.
The court may hold all hearings in summary proceedings and judicial reviews thereof privately in chambers, and shall do so on request of the insurer proceeded against.
In all summary proceedings and judicial reviews thereof, all records of the company, other documents, and all Department of Commerce files and court records and papers, so far as they pertain to or are a part of the record of the summary proceedings, shall be and remain confidential except as is necessary to obtain compliance therewith, unless the court, after hearing arguments from the parties in chambers, shall order otherwise, or unless the insurer requests that the matter be made public. Until such court order, all papers filed with the court administrator shall be held in a confidential file.
If at any time it appears to the court that any person whose interest is or will be substantially affected by an order did not appear at the hearing and has not been served, the court may order that notice be given and the proceedings be adjourned to give that person opportunity to appear on such terms as may be just.
Any person having possession or custody of and refusing to deliver any of the property, books, accounts, documents, or other records of an insurer against which a seizure order or a summary order has been issued by the commissioner or by the court, may be fined not more than $20,000 or imprisoned in the county jail for not more than 364 days or both.
60B.11 COMMISSIONER'S SUMMARY ORDERS.
Whenever the commissioner has reasonable cause to believe, and determines, after a hearing held as prescribed in subdivision 3, that any insurer has committed or engaged in, or is committing or engaging in or is about to commit or engage in any act, practice, or transaction that would subject it to formal delinquency proceedings under sections 60B.01 to 60B.61, the commissioner may make and serve upon the insurer and any other persons involved such orders other than seizure orders under sections 60B.12 and 60B.13 as are reasonably necessary to correct, eliminate, or remedy such conduct, condition, or ground.
If the conditions of subdivision 1 are satisfied, and if it appears to the commissioner that irreparable harm to the property or business of the insurer or to the interests of its policyholders, creditors, or the public may occur unless the commissioner issues with immediate effect the orders described in subdivision 1, the commissioner may make and serve such orders without notice and before hearing, simultaneously serving upon the insurer notice of the hearing upon such order.
The notice of hearing under subdivision 1 or 2 and the summary order issued under subdivision 1 or 2 shall be served personally or by sending a copy of such notice of order by prepaid certified mail. The notice of hearing under subdivision 1 shall state the time and place of hearing, and the conduct, condition, or ground upon which the commissioner would base an order; the notice of hearing under subdivision 2 shall state the time and place of hearing. Unless mutually agreed between the commissioner and the insurer, the hearing shall occur not less than ten days nor more than 30 days after notice is served and shall be either in Ramsey County or in some other place convenient to the parties to be designated by the commissioner.
If the commissioner issues a summary order before hearing under subdivision 2, the insurer may at any time waive the commissioner's hearing and the summary decision shall be treated as a final decision in a contested case under chapter 14, and the insurer may apply for immediate judicial relief by means of any remedy afforded by law without first exhausting administrative remedies. Subsequent to a hearing the insurer or any person whose interests are substantially affected shall be entitled to judicial review in accordance with chapter 14 of any order issued by the commissioner.
If any person has violated any order issued under this section which as to that person was then still in effect, that person shall be liable to forfeit a sum not to exceed $10,000. The penalty shall be imposed and collected in an action brought by the attorney general and shall be paid into the state treasury to the credit of the general fund.
The commissioner may apply for and any court of general jurisdiction may grant, under the relevant sections of Minnesota Rules of Civil Procedure, such restraining orders, temporary and permanent injunctions, and other orders as are deemed necessary to enforce a summary order.
60B.12 COURT'S SEIZURE ORDER.
Upon the filing by the commissioner in any district court in this state of a verified petition establishing to the satisfaction of the court that sufficient grounds exist for a formal delinquency proceeding against an insurer under sections 60B.01 to 60B.61 and that the interests of policyholders, creditors, or the public will be endangered by delay, and setting out the order deemed necessary by the commissioner, the court shall issue forthwith, ex parte and without a hearing, an order which may (a) authorize the commissioner to take possession and control of all or a part of the property, books, accounts, documents, and other records of an insurer and of the premises occupied by it for the transaction of its business, and (b) until further order of the court, enjoin the insurer and its officers, managers, agents, and employees from disposition of its property and from transaction of its business except with the written consent of the commissioner, and (c) provide such other terms as the court deems appropriate for the protection of the insurer, its policyholders, its creditors, and the public during the duration of the order. The order shall also direct the service of a copy of the order forthwith upon the insurer and all persons in possession of any property seized under the order.
The court shall specify in the order what its duration shall be and order the insurer to appear at a specified time within the duration of the order and show cause why the order should not be continued in effect. The duration of the order may be such time as the court deems necessary for the commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may hold such hearings as it deems desirable after such notice as it deems appropriate, and may set aside, extend, shorten, or modify the terms of the seizure order. The court shall vacate the seizure order if the commissioner fails to commence a formal proceeding under sections 60B.01 to 60B.61 after having had a reasonable opportunity to do so. The issuance of an order of the court pursuant to a formal proceeding under sections 60B.01 to 60B.61 vacates the seizure order.
Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the insurer.
60B.16 REHABILITATION ORDERS.
An order to rehabilitate the business of a domestic insurer, or an alien insurer domiciled in this state, shall appoint the commissioner and successors in office rehabilitator and shall direct the rehabilitator forthwith to take possession of the assets of the insurer and to administer them under the orders of the court. The recording of the order with any county recorder in the state imparts the same notice as a deed, bill of sale, or other evidence of title duly recorded with that county recorder.
Entry of an order of rehabilitation shall not constitute an anticipatory breach of any contracts of the insurer.
60B.171 USE, SALE, OR TRANSFER OF ASSETS DURING REHABILITATION.
In addition to the powers of the rehabilitator provided in this chapter, during rehabilitation of a health maintenance organization, the rehabilitator may use, sell, or transfer assets as provided in this section.
(a) The rehabilitator may use, sell, or transfer assets in which a person has a lien, which are not cash or cash equivalents, in the ordinary course of business without approval of the court, except that the rehabilitator must provide sufficient protection for that lien unless the lienholder consents.
(b) The rehabilitator may use, sell, or transfer cash or cash equivalents in which any person has a lien in the ordinary course of business only if:
(1) each person who has a lien in the assets consents; or
(2) after notice and a hearing, the court finds that the rehabilitator has or will provide the person who has a lien with sufficient protection for that lien.
(a) The rehabilitator may use, sell, or transfer assets in which any person has a lien out of the ordinary course of business with court approval where:
(1) the person that has a lien consents; or
(2) the rehabilitator provides sufficient protection for that lien. Sufficient protection includes, but is not limited to, equivalent substitute collateral or payments in the amount approximately equal to decrease in value or amount of collateral.
(b) Any sale or transfer shall be free and clear of all lien interests if:
(1) all persons with liens in the assets to be sold or transferred consent to the sale or transfer;
(2) the consideration for the sale or transfer exceeds the total amount of all liens in the assets to be transferred;
(3) the rehabilitator provides sufficient protection for all lien claims in the assets; or
(4) other law permits a sale or transfer free and clear of any lien.
60B.18 ACTIONS BY AND AGAINST REHABILITATOR.
On request of the rehabilitator, any court in this state before which any action or proceeding by or against an insurer is pending when a rehabilitation order against the insurer is entered shall stay the action or proceeding for such time as is necessary for the rehabilitator to obtain proper representation and prepare for further proceedings. The court that entered the rehabilitation order shall order the rehabilitator to take such action respecting the pending litigation as the court deems necessary in the interests of justice and for the protection of creditors, policyholders, and the public. The rehabilitator shall immediately consider all litigation pending outside this state and shall petition the courts having jurisdiction over that litigation for stays whenever necessary to protect the estate of the insurer.
The time between the filing of a petition for rehabilitation against an insurer and denial of the petition or an order of rehabilitation shall not be considered to be a part of the time within which any action may be commenced by the insurer. Any action by the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the order of rehabilitation is entered.
The time between the filing of a petition for rehabilitation against an insurer and the denial of the petition or an order of rehabilitation shall not be considered to be a part of the time within which any action may be commenced against the insurer. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least 60 days after the order of rehabilitation is entered or the petition is denied.
60B.181 NOTICE REGARDING REHABILITATION OR LIQUIDATION PROCEEDING.
In an insolvency proceeding against a health maintenance organization, at the time the rehabilitator or liquidator gives notice to creditors and enrollees according to section 60B.26, the rehabilitator or liquidator shall also give notice that any interested party may request in writing notice of subsequent actions or hearings in the proceeding. After the initial notice, the rehabilitator or liquidator may give notice only to those with a direct stake in any action or hearing and to those who have requested notice in writing. However, the rehabilitator or liquidator must give all claimants who timely file proofs of claims notice of any plan of rehabilitation or liquidation.
60B.19 TERMINATION OF REHABILITATION.
Whenever the rehabilitator believes that further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public, or would be futile, the rehabilitator may petition the court for an order of liquidation. A petition under this subdivision shall have the same effect as a petition under section 60B.20. The court shall permit the directors to defend against the petition and shall order payment from the estate of the insurer of such costs and other expenses of defense as justice requires.
The rehabilitator may at any time petition the court for an order terminating rehabilitation of an insurer. If the court finds that rehabilitation has been accomplished and that grounds for rehabilitation under section 60B.15 no longer exist, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also make that finding and issue that order at any time upon its own motion.
60B.191 CLAIMS REGARDING REHABILITATION AND LIQUIDATION OF HEALTH MAINTENANCE ORGANIZATIONS.
The rehabilitator or liquidator of a health maintenance organization shall, in lieu of the classification otherwise provided in this chapter, classify all approved claims into the following classes:
(1) claims for ordinary and necessary expenses of operating and administering the health maintenance organization during rehabilitation or liquidation proceeding. Administrative expenses of a rehabilitation proceeding shall constitute administrative expenses of the liquidation proceeding;
(2) claims of the United States government for unpaid taxes;
(3) claims by persons employed by the health maintenance organization for services rendered within the four months before the initiation of any insolvency proceeding, up to $1,000. Employee claimants shall not be entitled to any lien claim or other claim under chapter 514;
(4) claims by all providers for health care goods and services to the extent covered under a health maintenance contract between enrollees and the health maintenance organization, and claims by enrollees for coverage under a health maintenance contract with the health maintenance organization;
(5) claims which are not secured by any perfected lien or security interest in assets of the health maintenance organization and which are not otherwise classified; or
(6) claims subordinated under this chapter, chapter 62D, or by agreement with the health maintenance organization or the commissioner of health.
As to a health maintenance organization, a claim shall be classified as an unsecured claim if it is made by an enrollee, a parent or guardian of an enrollee, or a person seeking contribution based on injuries to an enrollee, for damages of any type related to death or bodily illness or injury based on improper provisions or failure to provide health care goods or services by a health maintenance organization and its employees, or a provider and its employees to an enrollee of the health maintenance organization. However, a claimant who has secured a judgment or settlement shall receive any insurance proceeds received by the health maintenance organization based on the claims or the medical care provided to the enrollee, other than reinsurance payable because the aggregate value of services to an enrollee exceeds a certain amount, less any expenses, including reasonable attorneys' fees the health maintenance organization incurred in defending the claim or prosecuting its claim against the insurer. This section does not expand the liability of health maintenance organizations on bodily injury to enrollees.
60B.193 LIABILITY OF ENROLLEES.
Upon any Minnesota state district court's order of rehabilitation or liquidation of a health maintenance organization under this chapter, all providers of health care goods or services to enrollees of the health maintenance organization, regardless of whether they have a written contract with the health maintenance organization, are prohibited from attempting to collect or collecting payment for authorized referrals from any enrollee of the health maintenance organization for goods or services to the extent the health maintenance organization is obligated to cover the goods and services under a health maintenance contract with the enrollee. A provider's only recourse is to file a claim against the health maintenance organization in the insolvency proceeding and to receive payment in the proceeding.
60B.21 LIQUIDATION ORDERS.
An order to liquidate the business of a domestic insurer shall appoint the commissioner and successors in office liquidator and shall direct the liquidator forthwith to take possession of the assets of the insurer and to administer them under the orders of the court. The liquidator shall be vested by operation of law with the title to all of the property, contracts, and rights of action and all of the books and records of the insurer ordered liquidated, wherever located, as of the date of the filing of the petition for liquidation. The commissioner may recover and reduce the same to possession except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers which are prescribed in section 60B.55, subdivision 3, for ancillary receivers appointed in this state as to assets located in this state. The recording of the order with any county recorder in this state imparts the same notice as a deed, bill of sale, or other evidence of title duly recorded with that county recorder.
Upon issuance of the order, the rights and liabilities of any such insurer and of its creditors, policyholders, shareholders, members, and all other persons interested in its estate are fixed as of the date of filing of the petition for liquidation, except as provided in sections 60B.22, 60B.25, clause (22), and 60B.39.
An order to liquidate the business of an alien insurer domiciled in this state shall be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the business in the United States shall be the only assets and business included under the order.
At the time of petitioning for an order of liquidation, or at any time thereafter, the commissioner may petition the court to declare the insurer insolvent, and after such notice and hearing as it deems proper, the court may make the declaration.
60B.22 CONTINUANCE OF COVERAGE.
All insurance policies or similar contracts of coverage issued by the insurer shall continue in force:
(a) for a period of 30 days from the date of entry of the liquidation order;
(b) until the normal expiration of the policy or contract coverage;
(c) until the insured has replaced the coverage with equivalent coverage in another insurer; or
(d) until the liquidator has effected a transfer of the policy or contract obligation pursuant to section 60B.25, clause (8), whichever time is less.
If the coverage continued under this section is replaced by coverage that is not equivalent, the coverage continued under this section shall be excess coverage over the replacement coverage to the extent of the deficiency. Claims arising during the continuation of coverage shall be treated as if they arose immediately before the petition for liquidation. Coverage under this subdivision shall not satisfy any legal obligation of the insured to carry insurance protection or other coverage, whether the obligation is created by law or by contract.
60B.23 DISSOLUTION OF INSURER.
The commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in this state at the time the commissioner applies for a liquidation order. If the court issues a liquidation order, it also shall order dissolution if the commissioner has petitioned for it. The court shall order dissolution of the corporation upon petition by the commissioner at any time after a liquidation order has been granted. If the dissolution has not previously occurred, it shall be effected by operation of law upon the discharge of the liquidator. The commissioner shall file a dissolution with the secretary of state pursuant to section 302A.711, subdivision 2, paragraphs (a), clauses (1), (2), and (5), and (b); and subdivisions 3 and 4.