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Minnesota Senate
S.F No. 3441, as introduced: 81st
Legislative Session (1999-2000)
Posted on Feb 18, 2000
KEY: stricken
= old language to be removed
underscored = new language to be added
1.1
A bill for an act
1.2
relating to consumer protection; regulating auto glass
1.3
repair and replacement; restricting certain rebates
1.4
and incentives; requiring prompt payment; amending
1.5
Minnesota Statutes 1998, section 72A.201, subdivision
1.6
6; proposing coding for new law in Minnesota Statutes,
1.7
chapter 325F.
1.8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE
OF MINNESOTA:
1.9 Section 1. Minnesota
Statutes 1998, section 72A.201,
1.10 subdivision 6, is amended to read:
1.11 Subd. 6. [STANDARDS FOR
AUTOMOBILE INSURANCE CLAIMS
1.12 HANDLING, SETTLEMENT OFFERS, AND AGREEMENTS.] In
addition to the
1.13 acts specified in subdivisions 4, 5, 7, 8, and 9,
the following
1.14 acts by an insurer, adjuster, or a self-insured
or
1.15 self-insurance administrator constitute unfair
settlement
1.16 practices:
1.17 (1) if an automobile insurance
policy provides for the
1.18 adjustment and settlement of an automobile total
loss on the
1.19 basis of actual cash value or replacement with like
kind and
1.20 quality and the insured is not an automobile dealer,
failing to
1.21 offer one of the following methods of
settlement:
1.22 (a) comparable and available
replacement automobile, with
1.23 all applicable taxes, license fees, at least pro
rata for the
1.24 unexpired term of the replaced automobile's license,
and other
1.25 fees incident to the transfer or evidence of
ownership of the
1.26 automobile paid, at no cost to the insured other
than the
2.1 deductible amount as provided in the
policy;
2.2 (b) a cash settlement based
upon the actual cost of
2.3 purchase of a comparable automobile, including
all applicable
2.4 taxes, license fees, at least pro rata for the
unexpired term of
2.5 the replaced automobile's license, and other
fees incident to
2.6 transfer of evidence of ownership, less the
deductible amount as
2.7 provided in the policy. The costs must be
determined by:
2.8 (i) the cost of a comparable
automobile, adjusted for
2.9 mileage, condition, and options, in the local
market area of the
2.10 insured, if such an automobile is available in that
area; or
2.11 (ii) one of two or more quotations
obtained from two or
2.12 more qualified sources located within the local
market area when
2.13 a comparable automobile is not available in the
local market
2.14 area. The insured shall be provided the
information contained
2.15 in all quotations prior to settlement; or
2.16 (iii) any settlement or offer of
settlement which deviates
2.17 from the procedure above must be documented and
justified in
2.18 detail. The basis for the settlement or offer
of settlement
2.19 must be explained to the insured;
2.20 (2) if an automobile insurance
policy provides for the
2.21 adjustment and settlement of an automobile partial
loss on the
2.22 basis of repair or replacement with like kind and
quality and
2.23 the insured is not an automobile dealer, failing to
offer one of
2.24 the following methods of settlement:
2.25 (a) to assume all costs, including
reasonable towing costs,
2.26 for the satisfactory repair of the motor
vehicle. Satisfactory
2.27 repair includes repair of both obvious and hidden
damage as
2.28 caused by the claim incident. This assumption
of cost may be
2.29 reduced by applicable policy provision; or
2.30 (b) to offer a cash settlement
sufficient to pay for
2.31 satisfactory repair of the vehicle.
Satisfactory repair
2.32 includes repair of obvious and hidden damage caused
by the claim
2.33 incident, and includes reasonable towing
costs;
2.34 (3) regardless of whether the loss
was total or partial, in
2.35 the event that a damaged vehicle of an insured
cannot be safely
2.36 driven, failing to exercise the right to inspect
automobile
3.1 damage prior to repair within five business
days following
3.2 receipt of notification of claim. In
other cases the inspection
3.3 must be made in 15 days;
3.4 (4) regardless of whether the
loss was total or partial,
3.5 requiring unreasonable travel of a claimant or
insured to
3.6 inspect a replacement automobile, to obtain a
repair estimate,
3.7 to allow an insurer to inspect a repair
estimate, to allow an
3.8 insurer to inspect repairs made pursuant to
policy requirements,
3.9 or to have the automobile repaired;
3.10 (5) regardless of whether the loss
was total or partial, if
3.11 loss of use coverage exists under the insurance
policy, failing
3.12 to notify an insured at the time of the insurer's
acknowledgment
3.13 of claim, or sooner if inquiry is made, of the fact
of the
3.14 coverage, including the policy terms and conditions
affecting
3.15 the coverage and the manner in which the insured can
apply for
3.16 this coverage;
3.17 (6) regardless of whether the loss
was total or partial,
3.18 failing to include the insured's deductible in the
insurer's
3.19 demands under its subrogation rights.
Subrogation recovery must
3.20 be shared at least on a proportionate basis with the
insured,
3.21 unless the deductible amount has been otherwise
recovered by the
3.22 insured, except that when an insurer is recovering
directly from
3.23 an uninsured third party by means of installments,
the insured
3.24 must receive the full deductible share as soon as
that amount is
3.25 collected and before any part of the total recovery
is applied
3.26 to any other use. No deduction for expenses
may be made from
3.27 the deductible recovery unless an attorney is
retained to
3.28 collect the recovery, in which case deduction may be
made only
3.29 for a pro rata share of the cost of retaining the
attorney. An
3.30 insured is not bound by any settlement of its
insurer's
3.31 subrogation claim with respect to the deductible
amount, unless
3.32 the insured receives, as a result of the subrogation
settlement,
3.33 the full amount of the deductible. Recovery by
the insurer and
3.34 receipt by the insured of less than all of the
insured's
3.35 deductible amount does not affect the insured's
rights to
3.36 recover any unreimbursed portion of the deductible
from parties
4.1 liable for the loss;
4.2 (7) requiring as a condition
of payment of a claim that
4.3 repairs to any damaged vehicle must be made by
a particular
4.4 contractor or repair shop or that parts, other
than window
4.5 glass, must be replaced with parts other than
original equipment
4.6 parts;
4.7 (8) where liability is
reasonably clear, failing to inform
4.8 the claimant in an automobile property damage
liability claim
4.9 that the claimant may have a claim for loss of
use of the
4.10 vehicle;
4.11 (9) failing to make a good faith
assignment of comparative
4.12 negligence percentages in ascertaining the issue of
liability;
4.13 (10) failing to pay any interest
required by statute on
4.14 overdue payment for an automobile personal injury
protection
4.15 claim;
4.16 (11) if an automobile insurance
policy contains either or
4.17 both of the time limitation provisions as permitted
by section
4.18 65B.55, subdivisions 1 and 2, failing to notify the
insured in
4.19 writing of those limitations at least 60 days prior
to the
4.20 expiration of that time limitation;
4.21 (12) if an insurer chooses to have
an insured examined as
4.22 permitted by section 65B.56, subdivision 1, failing
to notify
4.23 the insured of all of the insured's rights and
obligations under
4.24 that statute, including the right to request, in
writing, and to
4.25 receive a copy of the report of the
examination;
4.26 (13) failing to provide, to an
insured who has submitted a
4.27 claim for benefits described in section 65B.44, a
complete copy
4.28 of the insurer's claim file on the insured,
excluding internal
4.29 company memoranda, all materials that relate to any
insurance
4.30 fraud investigation, materials that constitute
attorney
4.31 work-product or that qualify for the attorney-client
privilege,
4.32 and medical reviews that are subject to section
145.64, within
4.33 ten business days of receiving a written request
from the
4.34 insured. The insurer may charge the insured a
reasonable
4.35 copying fee. This clause supersedes any
inconsistent provisions
4.36 of sections 72A.49 to 72A.505;
5.1 (14) if an automobile policy
provides for the adjustment or
5.2 settlement of an automobile loss due to damaged
window motor
5.3 vehicle glass, failing to: (i)
assume all the reasonable costs
5.4 sufficient to pay of the
insured's chosen vendor for the repair
5.5 or replacement of comparable window the
motor vehicle glass; and
5.6 (ii) pay these costs within 30 days of the
completion of the
5.7 repair or replacement. "Reasonable
costs" means the actual
5.8 costs of repair or replacement, including
labor, molding, and
5.9 other expenses determined by the National
Auto Glass
5.10 Specifications and applicable state taxes, but
not including any
5.11 rebate, discount, or other incentive offered by
the vendor to
5.12 perform the repair or replacement. For
purposes of this clause,
5.13 costs are not reasonable to the extent they
exceed 100 percent,
5.14 or are less than 50 percent, of glass repair or
replacement as
5.15 determined by the National Auto Glass
Specifications quarterly
5.16 pricing report for the corresponding months.
This clause does
5.17 not prohibit an insurer from recommending a vendor
to the
5.18 insured or from agreeing with a vendor to perform
work at an
5.19 agreed-upon price, provided, however, that before
recommending a
5.20 vendor, the insurer shall offer its insured the
opportunity to
5.21 choose the vendor;
5.22 (15) requiring that the repair or
replacement of motor
5.23 vehicle glass and related products and services be
made in a
5.24 particular place or shop or by a particular entity,
or by
5.25 otherwise limiting the ability of the insured to
select the
5.26 place, shop, or entity to repair or replace the
motor vehicle
5.27 glass and related products and services; or
5.28 (16) engaging in any act or
practice of intimidation,
5.29 coercion, threat, incentive, or inducement for or
against an
5.30 insured to use a particular company or location to
provide the
5.31 motor vehicle glass repair or replacement services
or products.
5.32 For purposes of this section, a warranty shall not
be considered
5.33 an inducement or incentive.
5.34 Sec. 2. [325F.783] [AUTO
GLASS REPAIR OR REPLACEMENT.]
5.35 Subdivision 1.
[REBATES AND INCENTIVES.] A motor vehicle
5.36 glass vendor may not offer any rebate, discount,
or other
6.1 incentive to perform any motor vehicle glass
replacement or
6.2 repair work that is being covered by
insurance unless the
6.3 rebate, discount, or incentive:
6.4 (1) has a value of $50 or
less and if in a form other than
6.5 cash, is also offered in the alternative in
the form of a cash
6.6 payment that does not exceed 50 percent of
the value of rebate,
6.7 discount, or incentive;
6.8 (2) is given within seven
working days of the completion of
6.9 the work; and
6.10 (3) is made unconditionally.
6.11 A person who violates this
subdivision is subject to the
6.12 penalties and remedies in section 8.31.
6.13 Subd. 2. [PROMPT
PAYMENT REQUIRED.] An insurer that does
6.14 not pay the reasonable costs of repairing or
replacing motor
6.15 vehicle glass within 30 days of completion of the
repair or
6.16 replacement as required by section 72A.201,
subdivision 6,
6.17 clause (14), shall pay interest of 1-1/2 percent
per month to
6.18 the vendor on the amount not paid. The
minimum monthly interest
6.19 penalty payment for an unpaid balance of $100 or
more is $10.
6.20 For an unpaid balance of less then $100, the
insurer shall pay
6.21 the actual penalty due to the vendor. A
vendor requesting
6.22 payment who prevails in a civil action to collect
interest
6.23 penalties from an insurer shall be awarded its
costs and
6.24 disbursements, including attorney fees incurred
in bringing the
6.25 action.
S.F No. 3441, 1st Engrossment:
81st Legislative Session (1999-2000)
Posted on Mar
15, 2000
KEY: stricken
= old language to be removed
underscored = new language to be added
1.1 A bill for an act
1.2 relating to consumer protection; regulating auto glass
1.3 repair and replacement; restricting certain rebates
1.4 and incentives; amending Minnesota Statutes 1998,
1.5 section 72A.201, subdivision 6; proposing coding for
1.6 new law in Minnesota Statutes, chapter 325F.
1.7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 1998, section 72A.201,
1.9 subdivision 6, is amended to read:
1.10 Subd. 6. [STANDARDS FOR AUTOMOBILE INSURANCE CLAIMS
1.11 HANDLING, SETTLEMENT OFFERS, AND AGREEMENTS.] In addition to the
1.12 acts specified in subdivisions 4, 5, 7, 8, and 9, the following
1.13 acts by an insurer, adjuster, or a self-insured or
1.14 self-insurance administrator constitute unfair settlement
1.15 practices:
1.16 (1) if an automobile insurance policy provides for the
1.17 adjustment and settlement of an automobile total loss on the
1.18 basis of actual cash value or replacement with like kind and
1.19 quality and the insured is not an automobile dealer, failing to
1.20 offer one of the following methods of settlement:
1.21 (a) comparable and available replacement automobile, with
1.22 all applicable taxes, license fees, at least pro rata for the
1.23 unexpired term of the replaced automobile's license, and other
1.24 fees incident to the transfer or evidence of ownership of the
1.25 automobile paid, at no cost to the insured other than the
1.26 deductible amount as provided in the policy;
2.1 (b) a cash settlement based upon the actual cost of
2.2 purchase of a comparable automobile, including all applicable
2.3 taxes, license fees, at least pro rata for the unexpired term of
2.4 the replaced automobile's license, and other fees incident to
2.5 transfer of evidence of ownership, less the deductible amount as
2.6 provided in the policy. The costs must be determined by:
2.7 (i) the cost of a comparable automobile, adjusted for
2.8 mileage, condition, and options, in the local market area of the
2.9 insured, if such an automobile is available in that area; or
2.10 (ii) one of two or more quotations obtained from two or
2.11 more qualified sources located within the local market area when
2.12 a comparable automobile is not available in the local market
2.13 area. The insured shall be provided the information contained
2.14 in all quotations prior to settlement; or
2.15 (iii) any settlement or offer of settlement which deviates
2.16 from the procedure above must be documented and justified in
2.17 detail. The basis for the settlement or offer of settlement
2.18 must be explained to the insured;
2.19 (2) if an automobile insurance policy provides for the
2.20 adjustment and settlement of an automobile partial loss on the
2.21 basis of repair or replacement with like kind and quality and
2.22 the insured is not an automobile dealer, failing to offer one of
2.23 the following methods of settlement:
2.24 (a) to assume all costs, including reasonable towing costs,
2.25 for the satisfactory repair of the motor vehicle. Satisfactory
2.26 repair includes repair of both obvious and hidden damage as
2.27 caused by the claim incident. This assumption of cost may be
2.28 reduced by applicable policy provision; or
2.29 (b) to offer a cash settlement sufficient to pay for
2.30 satisfactory repair of the vehicle. Satisfactory repair
2.31 includes repair of obvious and hidden damage caused by the claim
2.32 incident, and includes reasonable towing costs;
2.33 (3) regardless of whether the loss was total or partial, in
2.34 the event that a damaged vehicle of an insured cannot be safely
2.35 driven, failing to exercise the right to inspect automobile
2.36 damage prior to repair within five business days following
3.1 receipt of notification of claim. In other cases the inspection
3.2 must be made in 15 days;
3.3 (4) regardless of whether the loss was total or partial,
3.4 requiring unreasonable travel of a claimant or insured to
3.5 inspect a replacement automobile, to obtain a repair estimate,
3.6 to allow an insurer to inspect a repair estimate, to allow an
3.7 insurer to inspect repairs made pursuant to policy requirements,
3.8 or to have the automobile repaired;
3.9 (5) regardless of whether the loss was total or partial, if
3.10 loss of use coverage exists under the insurance policy, failing
3.11 to notify an insured at the time of the insurer's acknowledgment
3.12 of claim, or sooner if inquiry is made, of the fact of the
3.13 coverage, including the policy terms and conditions affecting
3.14 the coverage and the manner in which the insured can apply for
3.15 this coverage;
3.16 (6) regardless of whether the loss was total or partial,
3.17 failing to include the insured's deductible in the insurer's
3.18 demands under its subrogation rights. Subrogation recovery must
3.19 be shared at least on a proportionate basis with the insured,
3.20 unless the deductible amount has been otherwise recovered by the
3.21 insured, except that when an insurer is recovering directly from
3.22 an uninsured third party by means of installments, the insured
3.23 must receive the full deductible share as soon as that amount is
3.24 collected and before any part of the total recovery is applied
3.25 to any other use. No deduction for expenses may be made from
3.26 the deductible recovery unless an attorney is retained to
3.27 collect the recovery, in which case deduction may be made only
3.28 for a pro rata share of the cost of retaining the attorney. An
3.29 insured is not bound by any settlement of its insurer's
3.30 subrogation claim with respect to the deductible amount, unless
3.31 the insured receives, as a result of the subrogation settlement,
3.32 the full amount of the deductible. Recovery by the insurer and
3.33 receipt by the insured of less than all of the insured's
3.34 deductible amount does not affect the insured's rights to
3.35 recover any unreimbursed portion of the deductible from parties
3.36 liable for the loss;
4.1 (7) requiring as a condition of payment of a claim that
4.2 repairs to any damaged vehicle must be made by a particular
4.3 contractor or repair shop or that parts, other than window
4.4 glass, must be replaced with parts other than original equipment
4.5 parts;
4.6 (8) where liability is reasonably clear, failing to inform
4.7 the claimant in an automobile property damage liability claim
4.8 that the claimant may have a claim for loss of use of the
4.9 vehicle;
4.10 (9) failing to make a good faith assignment of comparative
4.11 negligence percentages in ascertaining the issue of liability;
4.12 (10) failing to pay any interest required by statute on
4.13 overdue payment for an automobile personal injury protection
4.14 claim;
4.15 (11) if an automobile insurance policy contains either or
4.16 both of the time limitation provisions as permitted by section
4.17 65B.55, subdivisions 1 and 2, failing to notify the insured in
4.18 writing of those limitations at least 60 days prior to the
4.19 expiration of that time limitation;
4.20 (12) if an insurer chooses to have an insured examined as
4.21 permitted by section 65B.56, subdivision 1, failing to notify
4.22 the insured of all of the insured's rights and obligations under
4.23 that statute, including the right to request, in writing, and to
4.24 receive a copy of the report of the examination;
4.25 (13) failing to provide, to an insured who has submitted a
4.26 claim for benefits described in section 65B.44, a complete copy
4.27 of the insurer's claim file on the insured, excluding internal
4.28 company memoranda, all materials that relate to any insurance
4.29 fraud investigation, materials that constitute attorney
4.30 work-product or that qualify for the attorney-client privilege,
4.31 and medical reviews that are subject to section 145.64, within
4.32 ten business days of receiving a written request from the
4.33 insured. The insurer may charge the insured a reasonable
4.34 copying fee. This clause supersedes any inconsistent provisions
4.35 of sections 72A.49 to 72A.505;
4.36 (14) if an automobile policy provides for the adjustment or
5.1 settlement of an automobile loss due to damaged window glass,
5.2 failing to assume all reasonable costs sufficient to pay the
5.3 insured's chosen vendor for the repair or replacement of
5.4 comparable window glass provide payment to the insured's chosen
5.5 vendor based on a competitive price. If the insurer disputes
5.6 the amount charged by the vendor, the price shall be as
5.7 established by the commissioner through a market survey to
5.8 determine a fair and reasonable market price for similar
5.9 services. The survey shall be:
5.10 (a) an annual survey using accepted industry standards;
5.11 (b) a statistically significant sample of auto glass
5.12 vendors; and
5.13 (c) of work actually done.
5.14 The commissioner shall consult with interested parties in
5.15 designing the survey document. Reasonable deviation from the
5.16 market price determined by survey is allowed when based on the
5.17 facts in each case. This clause does not prohibit an insurer
5.18 from recommending a vendor to the insured or from agreeing with
5.19 a vendor to perform work at an agreed-upon price, provided,
5.20 however, that before recommending a vendor, the insurer shall
5.21 offer its insured the opportunity to choose the vendor;
5.22 (15) requiring that the repair or replacement of motor
5.23 vehicle glass and related products and services be made in a
5.24 particular place or shop or by a particular entity, or by
5.25 otherwise limiting the ability of the insured to select the
5.26 place, shop, or entity to repair or replace the motor vehicle
5.27 glass and related products and services; or
5.28 (16) engaging in any act or practice of intimidation,
5.29 coercion, threat, incentive, or inducement for or against an
5.30 insured to use a particular company or location to provide the
5.31 motor vehicle glass repair or replacement services or products.
5.32 For purposes of this section, a warranty shall not be considered
5.33 an inducement or incentive.
5.34 Sec. 2. [325F.783] [AUTO GLASS REPAIR OR REPLACEMENT.]
5.35 (a) No person who provides retail auto glass products or
5.36 services paid for in whole or in part, directly or indirectly,
6.1 by an insurer regarding an insurance claim may:
6.2 (1) waive, forgive, or pay all or any part of an applicable
6.3 insurance deductible; or
6.4 (2) as an inducement to the sale of goods or services to an
6.5 insured, advertise or give any rebate, gift, prize, bonus,
6.6 coupon, credit, referral fee, trade-in or trade-in payment,
6.7 advertising or other fee or payment, or any other tangible thing
6.8 or item of monetary value, directly or indirectly, to an insured
6.9 or any other person not in the employ of the seller that has a
6.10 value of more than $35. Any permissible inducement must be
6.11 given within seven business days of the completion of the work
6.12 and must have a redeemable cash value of no more than 50 percent
6.13 of the retail value of the inducement offered.
6.14 (b) The attorney general may pursue the penalties and
6.15 remedies available to the attorney general under section 8.31
6.16 against any person who violates this section.
6.17 Sec. 3. [SURVEY REVOLVING ACCOUNT.]
6.18 The commissioner shall deposit in a separate account in the
6.19 state treasury all money voluntarily contributed by insurance
6.20 companies and the auto glass industry for purposes of conducting
6.21 the market survey referenced in section 1. Money in the account
6.22 is appropriated to the commissioner for that purpose.
6.23 Sec. 4. [EFFECTIVE DATE.]
6.24 Section 2 is effective the day after final enactment.
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