A bill for an act
relating to insurance; requiring the commissioner of commerce to create a low-cost
motor vehicle insurance program for low-income residents; requiring a report;
appropriating money; amending Minnesota Statutes 2022, section 65B.49, by
adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter
65B.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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For the purposes of this section, the following terms have
the meanings given.
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(a) "Commissioner" means the commissioner of commerce or the commissioner's
representative.
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(b) "Eligible applicant" means an individual who meets the requirements of subdivision
6 and who has applied for a low-cost policy under the program.
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(c) "Facility" has the meaning given in section 65B.02, subdivision 3.
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(d) "Insured" means a driver insured under the program.
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(e) "Low-cost policy" means a low-cost motor vehicle insurance policy issued in
compliance with subdivision 5.
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(f) "Member" has the meaning given in section 65B.02, subdivision 4.
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(g) "Minnesota lifeline insurance program" or "program" means the program created
under this section.
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(h) "Motor vehicle" has the meaning given in section 169.011, subdivision 42.
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(i) "Moving violation" means a violation of law or municipal ordinance regulating the
operation of motor vehicles on the streets or highways. Moving violation does not include
a law or ordinance related to parking or equipment.
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(j) "Qualified health coverage" means medical assistance, MinnesotaCare, Medicare, or
TRICARE.
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(a) The commissioner must establish the Minnesota lifeline
automobile insurance program to offer more affordable motor vehicle insurance policies to
low-income Minnesota drivers, reduce the number of uninsured motorists, and promote
public safety.
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(b) The commissioner must consult with the facility in creating and operating the program.
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(c) By March 1 of each year, the commissioner must issue a report to the standing
committees of the legislature with jurisdiction over insurance that evaluates the
competitiveness of the private passenger vehicle insurance market in Minnesota in order to
evaluate whether the program is having an effect on uninsured motorist rates.
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(d) The report under paragraph (c) must:
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(1) compare the average rates charged by auto insurers in Minnesota with the premium
rates charged by the facility;
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(2) provide market information, including but not limited to the number of carriers,
market shares, and losses; and
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(3) recommend to the legislature appropriate modifications to this section.
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(a) The facility must:
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(1) assist the commissioner establish and develop the program;
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(2) determine whether an applicant is eligible for the program; and
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(3) sell, issue, and deliver low-cost policies under the program and accept payment for
premiums by cash, if requested by the insured.
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(b) The facility must determine the rates charged for low-cost policies and file rates with
the commissioner, in compliance with section 70A.06. Prior to determining the rates, the
facility must conduct a meeting with opportunity for public comment on the proposed rates
and the rate setting process.
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(c) The facility must determine the rates for the program based on:
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(1) the rate, claims, and loss data for, at minimum, the two prior years, including but
not limited to overall losses for private passenger auto insurance policies required under
state law;
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(2) the distribution of losses for private passenger auto insurance policies based on
criminal driving history and geographic area;
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(3) actual losses on policies sold by the facility under the program, when available;
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(4) overall private passenger auto insurance industry trends in Minnesota, but only to
the extent that program data are not available or not credible and adjusted to reflect the
eligibility factors described in subdivision 6;
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(5) up to three geographic locations; and
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(6) public comments submitted under paragraph (b).
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(d) When assessing loss reserve of the program, the commissioner must only allow loss
reserves that are estimated based on actual claim losses under low-cost policies or comparable
data by a statistician, as adjusted to reflect the coverage provided by low-cost policies and
eligibility factors used to become an insured.
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(e) The facility must set rates for the program in an amount adequate to pay for losses
incurred for claims filed under the program and program expenses incurred by the facility
to operate the program, including those related to administration, underwriting, subrogation,
rate setting, taxes, commission, and claims adjusting.
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(f) The facility must create and maintain a website for the program that includes the
information necessary for an eligible applicant to apply for the program.
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(g) The program may accept funding from sources other than members to support the
program's marketing, outreach, and public education efforts.
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(h) Money for marketing, outreach, and public education must be awarded equitably
among geographic regions, taking into consideration a region's target population and
marketing goals.
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(i) The facility has the authority to form a subcommittee, subject to chapter 13D, to
make recommendations regarding the program's operation.
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(a) A licensed producer must provide to an applicant for a low-cost
policy the following information in no smaller than 14-point type on a form prescribed by
the commissioner:
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(1) notice that a low-cost policy under this section satisfies the requirements under
section 65B.48 to maintain automobile liability insurance;
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(2) premium cost;
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(3) how eligibility is determined; and
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(4) the difference between the coverage available under a low-cost policy and the
minimum coverage requirements that apply to policies sold outside of the program and in
compliance with section 65B.48.
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(b) A licensed producer is entitled to receive a commission on each low-cost policy sold
that is equal to 12 percent of the policy premiums, provided that the commission is not less
than $50. The facility or any insurance company issuing a low-cost policy under this section
is prohibited from requiring a producer to return any portion of the commission paid for the
sale of a low-cost policy if the insured, facility, or issuing carrier cancels the policy before
the end of the policy term.
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(c) A licensed producer that complies with the disclosure requirements of this subdivision
in conjunction with the sale of a low-cost policy is not liable for selling a policy that does
not provide the coverage required in section 65B.49.
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(d) A producer is not required to accept cash as a payment.
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