Sections 2 through 4 modify the Insurers Rehabilitation and Liquidation Act.

Section 2, subdivision 21 (Netting agreement) defines a "netting agreement" for purposes of the Insurers Rehabilitation and Liquidation Act.

Section 3, subdivision 22 (Qualified financial contract) defines "qualified financial contract," "commodity contract," "forward contract," "repurchase agreement," "securities contract," and "swap agreement" for purposes of the Insurers Rehabilitation and Liquidation Act.

Section 4 [Qualified Financial Contracts], subdivision 1 (Exercise of contractual rights) provides that an individual may not be stayed or prohibited from exercising specified rights with respect to a netting agreement or a qualified financial contract.

Subdivision 2 (Termination of agreement; transfer to insurer's receiver) describes how the net or settlement amount owed by a nondefaulting party to an insurer shall be transferred upon termination of a netting agreement or a qualified financial contract.

Subdivision 3 (Transfer by receiver) describes how a receiver may transfer a netting agreement or a qualified financial contract.

Subdivision 4 (Transfer by receiver; obligation to notify certain parties) describes a receiver's notification requirements for transferring a netting agreement or a qualified financial contract.

Subdivision 5 (Avoidance of transfer by receiver) provides that a receiver may not avoid a transfer of money or other property arising under a netting agreement, a qualified financial contract, or other specified agreements that is made before commencement of a formal delinquency proceeding under this chapter. Provides that a transfer may be avoided if it was made with actual intent to hinder, delay, or defraud the insurer or creditors.

Subdivision 6 (Disaffirmance or repudiation by receiver; damages) specifies requirements with respect to a receiver's right to disaffirm or repudiate a netting agreement or a qualified financial contract.

Subdivision 7 (Sources of contractual right) defines "contractual right" for purposes of the section.

Subdivision 8 (Affiliates of insurer; nonapplication) exempts persons who are affiliates of an insurer that is the subject of a proceeding from the provisions of the section.

Subdivision 9 (Allocating among accounts) specifies when rights of counterparties apply to netting agreements and qualified financial contracts.

Section 5, subdivision 6 (Minimum education requirement) specifies that regardless of the location of a course offering, a continuing education course provided by a bona fide insurance trade association is not considered to be sponsored by, offered by, or affiliated with an insurance company or its agents. This change is made in a chapter of law that regulates the licensing of insurance producers.

Sections 6 though 8 make changes to a chapter of law that regulates life insurance.

Section 6, subdivision 4 (Limits of group life insurance) provides requirements for group life insurance offered to residents of the state under a group life insurance policy issued to a group other than one described in Minnesota Statutes, section 60A.02.

Section 7, subdivision 2 (2001 CSO Preferred Class Structure Mortality Table) extends the time period during which a 2001 CSO Preferred Class Structure Mortality Table may be substituted as the minimum valuation standard for policies issued.

Section 8, subdivision 3 (Conditions) specifies when the 2001 CSO Preferred Class Structure Mortality Table is not permitted for use.

Sections 9 through 11 make changes to the Minnesota Life and Health Insurance Guaranty Association Act.

Section 9, subdivision 3 (Limitation of coverage) adds a policy or contract providing hospital, medical, prescription drug, and other benefits pursuant to Medicare Part C & D to the list of items that are not protected by the Life and Health Guaranty Association ("association").

Section 10, subdivision 4 (Limitation of benefits) modifies the limitation of benefits for which the association may be liable. Makes changes to the table in clause 10 to reflect the modification.

Section 11, subdivision 7 (Notice concerning limitations and exclusions) modifies notice requirements with respect to a policy covered by the association.

Sections 12 and 13 make changes to a chapter of law that regulates mutual insurance companies.

Section 12, subdivision 11 (Sale of stock and payment of dividends) changes a reference from "securities" to "common or preferred stock" with respect to the Commissioner's approval of its sale by a reorganized insurance company or an intermediate stock holding company.

Section 13 [Domestic Insurance Corporations May Become Mutual Corporations] allows insurance companies other than life insurance companies to demutualize or re-mutualize.

DS/syl

Check on the status of this bill

Back to Senate Counsel and Research Bill Summaries page

This page is maintained by the Office of Senate Counsel, Research, and Fiscal Analysis for the Minnesota Senate.

Last review or update: 03/18/2010

If you see any errors on this page, please e-mail us at webmaster@senate.mn.