HF1014

This legislative bill, H.F. No. 1014, involves an amendment to the Minnesota Insurance Guarantee Association's operational functions as outlined in the Minnesota Statutes. Specifically, it proposes modifications to Section 60C.09, Subdivision 2 regarding the types of claims that are not covered ("excluded claims") and the circumstances under which financial information can be requested from insured entities.

Here are the key changes proposed by the bill:

1. Requesting Financial Information: It grants the board of directors of the Minnesota Insurance Guarantee Association the authority to request financial information from insured entities to determine their net worth. This is particularly relevant for determining if an insured's net worth exceeds $25 million, as such entities are excluded from certain claims if their insurer becomes insolvent.

2. Deemed Net Worth: If an insured fails to provide requested financial information within 60 days, their net worth is automatically deemed to exceed $25 million. This is critical for evaluating claims under Section 60C.10. The bill emphasizes that insured must be clearly informed of the consequences of failing to provide the requested financial information.

3. Types of Excluded Claims: The bill clarifies the types of claims that are generally not covered by the Minnesota Insurance Guarantee Association:

   • Claims by an affiliate of the insurer
   • Claims involving reinsurance and other similar recoveries
   • Claims from insolvencies occurring after July 31, 1996, by very large insureds (net worth exceeding $25 million)
   • Claims under policies with a high deductible or self-insured retention (over $300,000)
   • Claims for fines, penalties, interest, and punitive or exemplary damages

This bill aims to refine and clarify the operational scope of the Minnesota Insurance Guarantee Association, particularly concerning large financial entities, and to ensure effective management and assessment of claims in cases of insurer insolvency.