piers109uk/MN-Statutes huggingface dataset:
64B.35 SERVICE OF PROCESS.
Every society authorized to do business in this state shall appoint in writing the commissioner and each successor in office to be its true and lawful attorney upon whom all lawful process in any action or proceeding against it shall be served, and shall agree in writing that any lawful process against it which is served on the attorney shall be of the same legal force and validity as if served upon the society, and that the authority shall continue in force so long as any liability remains outstanding in this state. Copies of the appointment, certified by the commissioner, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted.
Service under this section shall be made in compliance with section 45.028, subdivision 2. No service shall require a society to file its answer, pleading, or defense in less than 30 days from the date of mailing the copy of the service to a society. Legal process shall not be served upon a society except in the manner herein provided.
64B.34 UNFAIR METHODS OF COMPETITION AND UNFAIR AND DECEPTIVE ACTS AND PRACTICES.
Every society authorized to do business in this state shall be subject to the provisions of chapter 72A relating to prohibitions and penalties in general and the regulation of trade practices; provided, however, that nothing in those provisions shall be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership, or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society.
64B.36 REVIEW.
All decisions and findings of the commissioner made under the provisions of this chapter shall be subject to review by proper proceedings in any court of competent jurisdiction in this state.
64B.37 PENALTIES.
Any person violating the provisions of section 64B.14, subdivisions 2 and 3, shall be guilty of a felony; and, upon conviction, liable to a fine of not more than $10,000, or to imprisonment for not more than five years, or to both fine and imprisonment.
Any person, officer, member, or examining physician, who knowingly or willfully makes any false or fraudulent statement or representation in, or with reference to, any application for membership for the purpose of obtaining money from or benefit in any society transacting business under this chapter is guilty of a misdemeanor:
(1) any person who willfully makes a false statement of any material fact or thing in a sworn statement as to the death or disability of a certificate holder in any such society, for the purpose of procuring payment of a benefit named in the certificate of such holder, and any person who willfully makes any false statement and any verified report or declaration under oath, required or authorized under this chapter, is guilty of perjury and shall be proceeded against and punished as provided by the statutes of this state in relation to the crime of perjury;
(2) any person who solicits membership for, or in any manner assists in procuring membership in, any society not licensed to do business in this state, or who solicits membership for or in any manner assists in procuring membership in, any such society not authorized to do business in this state, is guilty of a misdemeanor;
(3) any society, or any officer, agent, or employee thereof, neglecting, refusing to comply with, or violating, any of the provisions of this chapter, the penalty for which neglect, refusal, or violation is not specified in this section, shall be fined not more than $1,000.
64B.39 BENEFICIARY ASSOCIATIONS.
"Beneficiary association" means a corporation, society, or voluntary association heretofore organized and now existing and carried on for the sole benefit of its members and their families, relatives, or dependents, but not for profit, to insure the lives of its members only upon the whole life assessment plan, so-called, and in which organization admission to membership by a vote of the members or some governing body thereof, is a prerequisite to being entitled to such relief or policy of insurance, and which association sells neither endowments nor annuities.
Any beneficiary association may make provisions for the payment of benefits in case of sickness, or temporary or permanent physical disability, as a result of disease, accident, or age exceeding 70 years, and may also provide for the payment of funeral expenses of a member not exceeding $250; in any case, all of these benefits to be paid, subject to compliance by its members with its constitution and bylaws, out of funds derived from assessments and dues collected from its members.
Payments of death benefits shall be made only to the families, heirs, blood relatives, adopted children, fiance or fiancee of the member, or persons dependent upon the member, or, when the certificate of membership may so provide, the executor or administrator of the estate of the member in trust for the person or persons above mentioned as may be designated in the certificate. Any member who, by reason of old age, or other disability, is dependent for support, in whole or in part, upon another, whether or not such other stands in the above relationship to the member, may, with the consent of the association, and under regulations it prescribes, designate the person upon whom the member is so dependent as a beneficiary under the certificate; and, in that case, the death benefits shall be paid according to this designation.
Every association may create and maintain a reserve fund for that purpose and shall be held to be an institution of public charity, and shall be exempt from payment of any taxes for state, county, or municipal purposes, except that the real estate of the association shall be taxed as other real estate in the state.
The beneficiary society or association shall be governed by the provisions of this chapter not inconsistent with this section and be excluded from all provisions of the insurance laws of this state to the same extent as fraternal benefit societies.
64B.40 DEFINITIONS.
For the purposes of sections 64B.40 to 64B.48, the terms defined in this section have the meanings given them.
"Adjusted risk-based capital report" means a risk-based capital report that has been adjusted by the commissioner according to section 64B.41, subdivision 3.
"Corrective order" means an order issued by the commissioner specifying corrective actions that the commissioner has determined are required.
"NAIC" means the National Association of Insurance Commissioners.
"Negative trend" means, with respect to a society, negative trend over a period of time, as determined according to the "trend test calculation" included in the risk-based capital instructions.
"Risk-based capital instructions" means the risk-based capital report including risk-based capital instructions adopted by the NAIC, as those risk-based instructions may be amended by the NAIC from time to time according to the procedures adopted by the NAIC.
"Risk-based capital level" means a fraternal action level risk-based capital or fraternal authorized control level risk-based capital where:
(1) "fraternal action level risk-based capital" means the product of 2.0 and its authorized control level risk-based capital; and
(2) "fraternal authorized control level risk-based capital" means the number determined under the risk-based capital formula according to the risk-based capital instructions.
"Risk-based capital plan" means a comprehensive financial plan containing the elements specified in section 64B.42. If the commissioner rejects the risk-based capital plan, and it is revised by the society, with or without the commissioner's recommendation, the plan must be called the "revised risk-based capital plan."
"Risk-based capital report" means the report required in section 64B.41.
"Society" means a fraternal benefit society that is admitted to do business in this state under this chapter.
"Total adjusted capital" means the sum of:
(1) a society's statutory capital and surplus as determined in accordance with statutory accounting applicable to the annual statement required to be filed under section 60A.13; and
(2) other items, if any, as the risk-based capital instructions may provide.
64B.41 RISK-BASED CAPITAL REPORTS.
Every society shall, on or before each March 1, prepare and submit to the commissioner a report of its risk-based capital levels as of the end of the calendar year just ended, in a form and containing the information required by the risk-based capital instructions. In addition, every society shall file its risk-based capital report with the NAIC according to the risk-based capital instructions.
A society's risk-based capital must be determined according to the formula set forth in the risk-based capital instructions. The formula must take into account, and may adjust for the covariance between:
(1) the risk with respect to the society's assets;
(2) the risk of adverse insurance experience with respect to the society's liabilities and obligations;
(3) the interest rate risk with respect to the society's business; and
(4) all other business risks and other relevant risks set forth in the risk-based capital instructions;
determined in each case by applying the factors in the manner set forth in the risk-based capital instructions.
If a society files a risk-based capital report that in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the risk-based capital report to correct the inaccuracy and shall notify the society of the adjustment. The notice must contain a statement of the reason for the adjustment. A risk-based capital report as so adjusted is referred to as an "adjusted risk-based capital report."
64B.44 HEARINGS.
Upon notification to a society by the commissioner:
(1) that the risk-based capital report is being adjusted by the commissioner;
(2) that the society's risk-based capital plan or revised risk-based capital plan is unsatisfactory, and that the notification constitutes a fraternal action level event or fraternal authorized control level event with respect to the society;
(3) that the society has failed to adhere to its risk-based capital plan or revised risk-based capital plan and that the failure has substantial adverse effect on the ability of the society to eliminate the fraternal action level event with respect to the society according to its risk-based capital plan or revised risk-based capital plan; or
(4) that a corrective order will be issued with respect to the society;
the society has the right to a contested case hearing conducted in accordance with chapter 14, on a record, at which the society may challenge a determination or action by the commissioner. The society shall notify the commissioner of its request for a hearing within five days after the notification by the commissioner under clause (1), (2), (3), or (4). Upon receipt of the society's request for a hearing, the commissioner shall set a date for the hearing no less than ten nor more than 30 days after the date of the society's request.
64B.45 PROHIBITION ON ANNOUNCEMENTS.
Except as otherwise required under sections 64B.40 to 64B.48, the making, publishing, dissemination, circulating, or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in any other way, an advertisement, announcement, or statement containing an assertion, representation, or statement with regard to the risk-based capital levels of a society, or of any component derived in the calculation, by a society, agent, broker, or other person engaged in any manner in the insurance business would be misleading and is prohibited.
64B.46 SUPPLEMENTAL PROVISIONS.
Sections 64B.40 to 64B.48 are supplemental to other laws of this state and do not preclude or limit other powers or duties of the commissioner under those laws, including, but not limited to, chapters 60B and 60G.
64B.47 IMMUNITY.
There is no liability on the part of, and no cause of action arises against, the commissioner or the Department of Commerce or its employees or agents for an action taken by them in the performance of their powers and duties under sections 64B.40 to 64B.48.
64B.48 NOTICES.
All notices by the commissioner to a society that may result in regulatory action under sections 64B.40 to 64B.48 are effective upon dispatch if transmitted by registered or certified mail, or, in the case of other transmission, are effective upon the society's receipt of the notice.
65A.05 NUCLEAR REACTION, RADIATION OR RADIOACTIVE CONTAMINATION; ENDORSEMENT.
Loss or damage caused by nuclear reaction, nuclear radiation or radioactive contamination, all whether directly or indirectly resulting from an insured peril under the standard policy issued pursuant to sections 65A.01, 65A.02, 65A.03, and 65A.04, may be insured under said policy only by a written endorsement providing such insurance, with such endorsement affixed to said standard policy.
65A.09 INSURANCE IN EXCESS OF REPLACEMENT COST.
No company shall knowingly issue any policy upon property in this state for an amount which, together with any existing insurance thereon, exceeds the replacement cost of the buildings and any other covered improvements on the property. Any company willfully insuring property for more than that amount shall forfeit to the state, for the benefit of the school fund, double the premium collected on the policy.
No mortgage company, bank, savings association, finance company, or other mortgage lender of any kind may require insurance coverage in violation of section 72A.31, subdivision 1, clause (4). Any lender that willfully violates this subdivision is subject to penalties available under chapter 45.
65A.061 CREDITORS LIMITED TO EXISTING INSURANCE.
When a creditor requires a debtor to provide insurance on real or personal property security against reasonable risks of loss, damage, or destruction, no insurance shall be sold or placed by or through the creditor if the debtor provides the creditor with a loss payable through existing policies of insurance that the debtor owns or controls. This section does not apply if the existing insurance is in an amount less than the amount of indebtedness to be secured on the real or personal property.
This section does not prevent the disapproval of the insurer or a policy of insurance where there are reasonable grounds for believing that the insurer is insolvent or that the insurance is unsatisfactory as to placement with an unauthorized insurer, adequacy of the coverage, adequacy of the insurer to assume the risk to be insured, the assessment features to which the policy is subject, or other grounds that are based on the nature of the coverage and that are not arbitrary, unreasonable, or discriminatory. This section does not prevent a mortgage lender or mortgage servicer from requiring that a policy of insurance or renewal of the policy be in conformance with standards of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, nor does this section forbid the securing of a policy of insurance or a renewal of the policy at the request of the borrower or because of the borrower's failure to furnish the necessary insurance or renewal.
This section supersedes any inconsistent provision of law to the contrary.
65A.02 JOINT POLICY.
When two or more authorized companies unite in the issue of a joint policy, the heading thereof may show the severalty of the contract, and the policy shall show the proportion of premiums to be paid to each, and the proportion of liability which each assumes, and shall contain a provision to the effect that service of process, or any notice or proof of loss required by such policy, upon any of the insurers executing such policy, shall be deemed to be service upon all such insurers.
65A.11 PAYMENT TO MORTGAGEE.
When the whole, or any part, of the loss is payable, in terms or otherwise, to or for one or more mortgagees, upon proof before payment of the rights of the parties, the company shall pay the same in the order of priority to the extent of its liability and every such payment to such extent shall be payment and satisfaction of its liability under the policy.
65A.03 BINDERS, TEMPORARY INSURANCE.
Binders or other contracts for temporary insurance may be made orally or in writing, and shall be deemed to include all the terms of such standard fire insurance policy and all such applicable endorsements as may be designated in such contract of temporary insurance; except that the clause specifying the hour of the day at which the insurance shall commence, may be superseded by the express terms of such contract of temporary insurance.
A duly authorized binder shall be acceptable as evidence of insurance coverage required as a condition of financing the purchase of real or personal property, provided that a mortgagee or lender shall not be required to accept renewal or extension thereof. This section does not require the approval of a binder by any person, firm, corporation, trustee, director, officer, agent, or employee, where there are reasonable grounds for believing that the insurance evidenced by the binder is unsatisfactory as to placement with an unauthorized insurer, the financial solvency of the insurer, adequacy of the coverage, adequacy of the insurer to assume the risk to be insured, the assessment feature to which the policy is subject, or other grounds which are not arbitrary, unreasonable, or discriminatory, nor does this section forbid the securing of insurance or a renewal thereof at the request of the borrower or because of the borrower's failure to furnish necessary insurance or renewal thereof.
If any person, firm, corporation, trustee, director, officer, agent, or employee, refuses to accept a duly authorized binder pursuant to subdivisions 1 and 2, the commissioner of commerce may issue an order requiring acceptance and impose a civil penalty of $500 per violation.
65A.10 LIMITATION.
Nothing contained in sections 65A.08 and 65A.09 shall be construed to preclude insurance against the cost, in excess of actual cash value at the time any loss or damage occurs, of actually repairing, rebuilding or replacing the insured property. Subject to any applicable policy limits, where an insurer offers replacement cost insurance: (i) the insurance must cover the cost of replacing, rebuilding, or repairing any loss or damaged property in accordance with the minimum code as required by state or local authorities; and (ii) the insurance coverage may not be conditioned on replacing or rebuilding the damaged property at its original location on the owner's property if the structure must be relocated because of zoning or land use regulations of state or local government. In the case of a partial loss, unless more extensive coverage is otherwise specified in the policy, this coverage applies only to the damaged portion of the property.
Subject to applicable policy limits, replacement cost insurance coverage for personal property must cover the cost of replacing or repairing any loss or damaged property. In the case of a partial loss, unless more extensive coverage is otherwise specified in the policy, this coverage applies only to the damaged portion of the property. If a homeowner's policy does not provide replacement cost coverage for personal property, the declarations page of the policy shall so indicate by containing the term "nonreplacement cost."
65A.04 EFFECT ON SECTION 65A.08.
Nothing in the preceding sections of this chapter shall be construed to limit the effect of or in any way modify or repeal section 65A.08.
65A.08 SPECIAL PROVISIONS.
[Repealed, 1979 c 175 s 1]
(a) In the absence of any change increasing the risk, without the consent of the insurer, of which the burden of proof shall be upon it, and in the absence of intentional fraud on the part of the insured, the insurer shall pay the whole amount mentioned in the policy or renewal upon which it receives a premium, in case of total loss, and in case of partial loss, the full amount thereof.
(b) Notwithstanding paragraph (a), on a policy issued by the Minnesota FAIR plan under section 65A.36, the Minnesota FAIR plan may contest the whole amount set forth in the policy in the case of a total loss. If the Minnesota FAIR plan takes the position that the value of the property was less than the whole amount set forth in the policy, the Minnesota FAIR plan has the burden of proving by clear and convincing evidence that the value was less than that set forth in the policy. If the Minnesota FAIR plan pays less than the whole amount mentioned in the policy for a total loss, pursuant to this paragraph, the Minnesota FAIR plan shall refund to the insured the premium paid attributable to the difference between the whole amount mentioned in the policy and the amount paid for the total loss.
Policies on farm buildings or other structures may, in consideration of a reduction in the premium by the company, include a provision determining the amount of loss in connection with repair or replacement of the insured property.
If there are two or more policies upon the property, each shall contribute to the payment of the whole or partial loss in proportion to the amount specified.
Any policy may contain a coinsurance clause, if the insured requests the same, in writing, of which fact such writing shall be the only evidence, and if, in consideration thereof, a reduction in the rate of premium is made by the company. When so demanded and attached to the policy, this agreement shall be binding upon both the insured and the company, and, in case of loss, the actual cash value of the property so insured at the time of the loss, including the buildings, shall be the basis for determining the proper amount of the coinsurance, and the amount of loss, notwithstanding any previous valuation of the building.
No company shall knowingly issue any policy upon property in this state for a longer term than five years.
65A.07 CANCELLATION OF FIRE POLICY.
Any fire insurance company which has not collected the premium on its policy at the time of the delivery thereof may print or endorse, or attach by rider, on its policy the following clause:
"If the insured hereunder shall not have actually paid the premium hereon, or any part thereof, within 60 days from the date of this policy, then this policy may be canceled by the insurer by giving five days' written notice to the insured and to the mortgagee, or other person to whom the policy is made payable, if any, without tendering any part or portion of such premium, anything to the contrary in the policy contract notwithstanding."
65A.06 MOTOR VEHICLE, OCEAN AND INLAND MARINE POLICIES.
Insurance on automobiles, motorcycles, other motor vehicles, or on property insured by ocean marine, and inland marine policies as defined by section 70A.03, clause (3), against loss or damage by fire, when combined in one policy with insurance against one or more of the other hazards mentioned in section 60A.06, subdivision 1, clause (1), need not be in accordance with section 65A.01, but in no event shall this section be applicable to insurance on buildings or structures.
65A.12 WAIVER OF RIGHT TO APPRAISAL.
Any person who shall not, within 20 days after written request, appoint a qualified appraiser, as provided in the policy, shall at the election of the other party be deemed to have waived the right to appraisal, and, if it be the insurer, shall be liable to suit.
No person shall be a qualified appraiser who is not disinterested and willing to act.
65B.001 DEFINITIONS.
Unless a different meaning is expressly made applicable, the terms defined in this section shall, for the purposes of this chapter, have the meanings given them.
"Private passenger vehicle insurance" means a policy insuring a natural person as named insured, and any relative of the named insured who is a resident of the same household, covering private passenger vehicles or utility vehicles owned by the insured. This term does not include a policy insuring more than four vehicles rated on a fleet basis or covering garage, automobiles sales agency, repair shop, service station or public parking place operation hazards.
"Private passenger vehicle" means a passenger automobile defined in section 168.002, or a jeep type automobile, that is not rented to others or used as a public or livery conveyance for passengers.
"Utility vehicle" means any four wheel vehicle, other than a private passenger vehicle, which has a pickup, van, or panel truck type body and is not used primarily in the occupation, profession or business of the insured, other than farming or ranching.
"Motorcycle" means a self-propelled vehicle designed to travel on fewer than four wheels that has an engine rated at greater than five horsepower, and includes a trailer with one or more wheels, when the trailer is connected to or being towed by a motorcycle. For purposes of this chapter, motorcycle includes a motorized bicycle as defined in section 169.011, subdivision 45, but does not include an electric-assisted bicycle as defined in section 169.011, subdivision 27.
65B.01 PURPOSES, CONSTRUCTION AND SCOPE.
The purposes of sections 65B.01 to 65B.12 are to provide the guarantee that automobile insurance coverage will be available to any person who is unable to procure such insurance through ordinary methods by providing a facility for the placement of automobile insurance risks with insurers, and to preserve to the public the benefits of price competition by encouraging maximum use of the normal private insurance system. Sections 65B.01 to 65B.12 shall be liberally construed to effect the purposes stated.
Every insurer authorized to write automobile liability or physical damage insurance in this state, as a condition precedent to being licensed or to retain such license to write such insurance in this state, shall be a member of the facility and shall participate therein under the terms and provisions of sections 65B.01 to 65B.12.
65A.13 LIABILITY OF COMPANY.
Notwithstanding any penalty prescribed for the making, issuing, or delivery of any policy in violation of any provision of law, every such policy shall be binding upon the company issuing the same.
65A.14 PERSON WHO PROCURES AN APPLICATION AGENT OF ISSUING COMPANY.
Every person who solicits insurance and procures an application therefor shall be held to be the agent of the party afterward issuing insurance thereon or a renewal thereof.
65B.03 GOVERNING COMMITTEE.
An election must be held among every insurer subject to sections 65B.01 to 65B.12, for the election of insurer representatives on the facility governing committee. The governing committee shall be made up of nine individuals, five of whom shall be elected by members of the facility and four who shall be public members. Public members may include licensed insurance agents. The public members shall be appointed by the commissioner. The term of office for members of the governing committee is two years.
Each member serving on the governing committee shall be represented by a salaried employee of that member, and not more than one member in a group under the same management shall serve on the governing committee at the same time.
The governing committee members shall serve two-year terms. Vacancies shall be filled as provided in the plan of operation.
65A.15 VIOLATION.
Every company and every agent who shall willfully make, issue, or deliver a policy in violation of sections 65A.01, 65A.02, and 65A.03 shall be guilty of a gross misdemeanor; but every stipulation of the policy in favor of the insured shall, nevertheless, be binding upon the company issuing the same.
65B.04 PLAN OF OPERATION.
[Repealed, 1992 c 520 s 18]
The plan of operation consists of the operation procedures of the facility.
[Repealed, 1992 c 520 s 18]
The plan of operation may be amended by a majority vote of the governing committee and the approval of the commissioner. An order by the commissioner disapproving an amendment to the plan of operation must be issued within 30 days of receipt by the commissioner of the proposed amendment, certified by the governing committee as having been adopted by that committee by a majority vote, or the amendment shall be deemed approved by the commissioner. An order of disapproval may be appealed as provided in chapter 14.
Every insurer authorized to write automobile bodily injury liability, property damage liability or physical damage insurance in this state, as a condition to maintaining its authorization to transact the business of insurance in this state, shall adhere to the plan of operation.
65B.05 POWER OF FACILITY, GOVERNING COMMITTEE.
The governing committee shall have the power to direct the operation of the facility in all pursuits consistent with the purposes and terms of sections 65B.01 to 65B.12, including but not limited to the following:
(1) To sue and be sued in the name of the facility and to assess each member in accord with its participation ratio to pay any judgment against the facility as an entity, provided, however, that no judgment against the facility shall create any liabilities in one or more members disproportionate to their participation ratio or an individual representing members on the governing committee.
(2) To delegate ministerial duties, to hire a manager and to contract for goods and services from others.
(3) To assess members on the basis of participation ratios to cover anticipated costs of operation and administration of the facility.
(4) To impose limitations on cancellation or nonrenewal by members of insureds covered pursuant to placement through the facility in addition to the limitations imposed by chapter 72A and sections 65B.1311 to 65B.21.
65A.16 GUARANTY SURPLUS AND SPECIAL RESERVE FUND.
Any insurance company organized under the laws of this state authorized to transact a fire insurance business may create the funds herein provided for, to be known and designated as the guaranty surplus fund and the special reserve fund, and may avail itself of the provisions of sections 65A.16 to 65A.24, upon complying with the requirements thereof.
65B.06 DISTRIBUTION OF RISKS; COVERAGE.
With respect to private passenger, nonfleet automobiles, the facility shall provide for the equitable distribution of qualified applicants to members in accordance with the participation ratio or among these insurance companies as selected under the provisions of the plan of operation.
With respect to private passenger, nonfleet automobiles, the facility shall provide for the issuance of policies of automobile insurance by members with coverage as follows:
(1) bodily injury liability and property damage liability coverage in the minimum amounts specified in section 65B.49, subdivision 3;
(2) uninsured and underinsured motorist coverages as required by section 65B.49, subdivisions 3a and 4a;
(3) a reasonable selection of higher limits of liability coverage up to $50,000 because of bodily injury to or death of one person in any one accident and, subject to such limit for one person, up to $100,000 because of bodily injury to or death of two or more persons in any one accident, and up to $25,000 because of injury to or destruction of property of others in any one accident, or higher limits of liability coverage as recommended by the governing committee and approved by the commissioner;
(4) basic economic loss benefits, as required by section 65B.44, and other optional coverages as recommended by the governing committee and approved by the commissioner; and
(5) automobile physical damage coverage, including coverage of loss by collision, subject to deductible options.
With respect to all automobiles not included in subdivisions 1 and 2, the facility shall provide:
(1) the minimum limits of coverage required by section 65B.49, subdivisions 2, 3, 3a, and 4a, or higher limits of liability coverage as recommended by the governing committee and approved by the commissioner;
(2) for the equitable distribution of qualified applicants for this coverage among the members in accord with the applicable participation ratio, or among these insurance companies as selected under the provisions of the plan of operation; and
(3) for a school district or contractor transporting school children under contract with a school district, that amount of automobile liability insurance coverage, not to exceed $1,000,000, required by the school district by resolution or contract, or that portion of such $1,000,000 of coverage for which the school district or contractor applies and for which it is eligible under section 65B.10.
Coverage made available under this section shall be the automobile policy and endorsement forms, as approved by the commissioner, with such changes, additions and amendments as are adopted by the governing committee and approved by the commissioner.
65A.17 ACTION OF STOCKHOLDERS FILED WITH COMMISSIONER.
Any such insurance company, desiring to create such funds, may do so if such action is authorized by its stockholders, upon the adoption of a resolution to that effect by its board of directors at a regular meeting of the board, or at any special meeting called for that purpose, and filing with the commissioner a copy thereof, declaring the intention of the company to create these funds and to do business under the provisions of sections 65A.16 to 65A.24; and, as soon after the filing of a copy of the resolution as convenient, the commissioner shall make, or cause to be made, an examination of the company, and shall make a certificate of the result thereof, which shall particularly set forth the amount of surplus funds held by the company at the date of the examination, the whole or any part of which, under the provisions of sections 65A.16 to 65A.24, may be equally divided between and set apart to constitute guaranty surplus and special reserve funds, which certificate shall be recorded in the Department of Commerce.
65B.07 OTHER PROVISIONS AND FUNCTIONS.
The facility shall provide one or more optional deferred payment plans, which shall include sufficient advance payment to, at all times, equal at least the pro rata earned premium, and such plans shall include additional charges for deferred payments.
[Repealed, 1992 c 520 s 18]
The facility shall provide for publicizing its purposes and developing public understanding of the facility.
The facility shall provide an annual financial statement on the facility's operation to the commissioner, and shall provide an annual report of operations to the commissioner and to all members so requesting.
[Repealed, 1995 c 258 s 67]
65A.19 EXAMINATION.
When the company shall notify the commissioner that it has fulfilled the requirements already expressed in sections 65A.16 to 65A.24, and that its guaranty surplus fund and its special reserve fund, taken together, equal its capital stock or amount to the sum of $2,000,000, the commissioner shall make an examination of the company and make a certificate of the result thereof, and file the same in the commissioner's office and, if the commissioner shall find that the combined funds shall equal the capital stock of the company or amount to the sum of $2,000,000, thereafter the company may continue, out of any subsequent profits of its business, to add to these funds; provided, that when any addition is made to the special reserve fund, an equal sum shall be carried to the guaranty surplus fund.
66A.01 SCOPE OF CHAPTER.
This chapter shall apply to mutual insurance companies other than: assessment benefit associations, fraternal benefit societies, township mutual insurance companies and title insurers. Sections 66A.08 to 66A.311 do not apply to mutual life insurance companies.
Sections 60A.07, subdivision 1, clauses (1) and (2); 66A.34; 66A.35; 66A.36; 66A.37; 66A.38; and 66A.39, do not apply to mutual property and casualty insurance companies.
65B.09 AGENTS.
Every person licensed under sections 60K.30 to 60K.56 who is authorized to solicit, negotiate or effect automobile insurance on behalf of any member shall:
(1) offer to place coverage through the facility for any qualified applicant who is ineligible or unacceptable for coverage in the insurer or insurers for whom the agent is authorized to solicit, negotiate or effect automobile insurance. Provided, that the failure of an agent to make such an offer to a qualified applicant shall not subject the agent to any liability to the applicant;
(2) forward to the facility all applications and any deposit premiums which are required by the plan of operation, rules and procedures of the facility, if the qualified applicant accepts the offer to have coverage placed through the facility;
(3) be entitled to receive compensation for placing insurance through the facility at the uniform rates of compensation as provided in the plan of operation, and all members shall pay such compensation.
A member may not include the premiums and losses incurred from risks insured through the facility in determining the loss ratio of any of its agents, or otherwise use the experience from such risks as cause for altering the relationship between the member and its agent.
65A.18 DIVIDENDS DECLARED OUT OF SURPLUS PROFITS.
After the date of filing any such resolution with the commissioner, the company shall not make or declare or pay in any form any dividend upon its capital stock, exceeding eight percent per annum thereupon and six percent per annum upon the surplus funds to be formed hereunder, until after its guaranty surplus fund and its special reserve fund shall have together accumulated to an amount equal to its capital stock or to the sum of $2,000,000; and any part of the surplus profits of the company above this annual dividend may be equally divided between and set apart to constitute the guaranty surplus fund and the special reserve fund, which funds shall be held and used as hereinafter provided, and not otherwise. Any company doing business under sections 65A.16 to 65A.24, whose guaranty surplus fund and special reserve fund shall have together accumulated to an amount equal to its capital stock or to the sum of $2,000,000, may, from time to time, declare dividends out of its surplus profits in such amounts as its board of directors may prescribe, subject only to the limitation that the payment of these dividends shall not deplete its capital, nor reduce the aggregate amount of the guaranty surplus and special reserve funds to an amount less than the amount of its capital stock, or if its capital stock exceeds $2,000,000, to an amount less than $2,000,000; and, subject to the further limitation that no dividends exceeding ten percent upon the capital stock shall be declared in any year if the payment thereof would reduce the aggregate amount of all surplus funds, including guaranty surplus and special reserve funds, below an amount equal to 30 percent of its unearned premiums. Any company doing business under sections 65A.16 to 65A.24, which shall declare or pay any dividend contrary to the provisions herein contained, shall be liable to be proceeded against under chapter 60B for its dissolution.
65B.08 RATES.
As agent for members, the facility shall file with the commissioner all manuals of classification, all manuals of rules and rates, all rating plans, and any modifications of same, proposed for use for automobile insurance placed through the facility. The classifications, rules and rates and any amendments thereto shall be subject to prior written approval by the commissioner. Rates, surcharge points, and increased limits factors filed by the facility shall not be excessive, inadequate, or unfairly discriminatory. No other entity, service or organization shall make filings for the facility or the members to apply to insurance placed through the facility.
Every member shall be authorized to use the rates and rules approved by the commissioner for use by the facility on business placed through the facility, and shall use no other rates on automobiles placed through the facility.
Laws relating to rating organizations or advisory organizations shall not apply to functions provided for under this section.
65A.20 ITEMS CONSIDERED IN ESTIMATING PROFIT.
In estimating the profit of any such company for the purpose of making a division thereof between the guaranty surplus fund and the special reserve fund, until these funds shall together amount to a sum equal to the capital stock of the company or amount to the sum of $2,000,000, there shall be deducted from the gross assets of the company, including for this purpose the amount of the special reserve fund, the sum of the following items:
(1) the amount of all outstanding claims;
(2) an amount sufficient to meet the liability of the company for the unearned premiums upon its unexpired policies, which amount shall at least equal one-half the premiums received on policies having one year or less to run from the date of policy, and a pro rata proportion of the premiums received on the policies having more than one year to run from the date of policy, and shall be known as the reinsurance liability;
(3) the amount of its guaranty surplus fund and of its special reserve fund;
(4) the amount of the capital of the company; and
(5) interest at the rate of eight percent per annum upon the amount of capital, and six percent per annum upon the amount of the said funds for whatever time shall have elapsed since the last preceding cash dividend. The balance shall constitute the net surplus of the company, any portion of which is subject to an equal division between these funds, as herein provided.
67A.02 CERTIFICATE OF INCORPORATION.
The persons who desire to form a township mutual fire insurance company, as defined in section 67A.01, shall make, sign, and acknowledge before some officer competent to take acknowledgments of deeds a certificate of incorporation which shall specify:
(1) the name;
(2) the location of the principal office;
(3) the general nature of the business;
(4) the territory in which it desires to transact business;
(5) who may become members;
(6) source from which the corporate funds shall be derived;
(7) the class of property it desires to insure;
(8) in what board its management shall be vested;
(9) the date of its annual meeting; and
(10) the corporate existence.
It may contain any other lawful provision defining and regulating the powers or business of the corporation, its officers, directors, and members.
The certificate of every such corporation shall be presented to the commissioner for approval and, on approving the same, the commissioner shall endorse thereon the approval and the certificate shall then be filed in the commissioner's office and recorded in a book kept therein for that purpose. Upon the approval of the certificate and the filing of the same with the commissioner, the corporate organization of the incorporation shall be complete.
65B.10 ELIGIBILITY.
To be eligible for coverage through the facility an otherwise qualified applicant must have been rejected, canceled or refused renewal with respect to automobile insurance by a member.
Eligibility for placement through the facility will terminate if an insured is offered equivalent coverage in the voluntary market at a rate lower than the facility rate. If the member that is required to provide coverage by the facility makes such an offer after giving 30 days' advance written notice to the agent of record before making the offer, the member shall have no further obligation to the agent of record.
At least annually, every member shall review every private passenger nonfleet applicant which it insures through the facility and determine whether or not such applicant is acceptable for voluntary insurance at a rate lower than the facility rate. If such applicant is acceptable, the member shall make an offer to insure the applicant under voluntary coverage at such lower rate.
65A.21 INVESTMENT OF GUARANTY SURPLUS.
The guaranty surplus shall be held and be invested by the company in the same manner as its capital stock and surplus accumulation may be held and be invested, and shall be liable and applicable in the same manner as the capital stock to the payment generally of the losses of the company.
67A.03 CORPORATE EXISTENCE.
The corporate existence of any township mutual fire insurance company heretofore or hereafter organized may be made perpetual by so providing in its articles of incorporation.
65B.11 USE OF FACILITY BY PUBLIC.
If, upon a formal hearing, the commissioner finds that a large proportion of qualified and eligible persons are failing to gain the benefits of the facility, the facility shall provide service to assist the public in making application to the facility for placement.
66A.03 INCORPORATION.
Domestic mutual insurance companies must be incorporated in accordance with the provisions of section 60A.07, subdivision 1.
65A.22 INVESTMENT OF SPECIAL RESERVE FUND.
The special reserve fund shall be invested according to existing laws relating to investments of capital by fire insurance companies and shall be deposited, from time to time, as the same shall accumulate and be invested, with the commissioner in accordance with section 60A.10, subdivision 4, who shall permit the company depositing the same to change these deposits by substituting for those withdrawn others of equal amount and value, and to collect and receive the interest or dividends upon these securities as the same may accrue; and this fund shall not be regarded as any part of the assets in possession of the company, so as to be or render the same liable for any claim for loss by fire, or otherwise, except as provided in sections 65A.16 to 65A.24.
65B.12 RIGHT TO HEARING; CONSTRUCTION OF PLAN OF OPERATION.
Any member, applicant or person insured under a policy placed through the facility may request a formal hearing and ruling by the governing committee on any alleged violation of the plan of operation or any alleged improper act or ruling of the facility. The request for hearing must be filed within 30 days after the date of the alleged act or decision.
The plan of operation shall provide for prompt and fair hearings, and shall prescribe the procedure to be followed in the hearings.
Any formal ruling by the governing committee may be appealed to the commissioner by filing notice of appeal with the facility and the commissioner within 30 days after issuance of the ruling. The hearing shall be governed by the procedures for contested cases.
Upon a hearing pursuant to chapter 14, the commissioner shall issue an order approving or disapproving the action or decision of the governing committee or directing the governing committee to reconsider the ruling.
In lieu of the appeal to the commissioner, a member, applicant, or person may seek judicial review of the governing committee's action.
The plan of operation shall be interpreted to conform to the laws of this state with respect to automobile insurance coverage and any changes in the laws, unless the facility is specifically excluded from the applicability of these laws.
67A.04 AMENDMENTS TO CERTIFICATE OF INCORPORATION.
The certificate of incorporation of any township mutual fire insurance company may be amended in respect to any matter which the original certificate of incorporation might lawfully have contained, or which is authorized by the provisions of sections 67A.01 to 67A.26, by the adoption of a resolution, specifying the proposed amendment, at the regular meeting, or a special meeting called for that expressly stated purpose, by a majority vote of its members present and voting; or by a majority vote of its entire board of directors, within one year after having been thereby duly authorized by a specific resolution duly adopted at such meeting of the members, and by causing the resolution to be embraced in a certificate duly executed by its president and secretary under the corporate seal of the company, if it have one, and approved, filed, and recorded in the manner prescribed by such sections for the approval, filing, and recording of the original certificate.
67A.05 BYLAWS.
The first board of directors shall adopt bylaws, which shall remain effective until and except as amended by the members at any regular or special meeting called therefor.
Every township mutual fire insurance company doing business within this state shall be subject to the requirements of section 72A.061, subdivision 2, as to amendments or additions to its bylaws.