H.F. No. 417, 1st Engrossment - 86th Legislative Session (2009-2010) Posted on Feb 19, 2009
1.1A bill for an act1.2relating to insurance; providing recovery of damages and attorney fees for breach
1.3of an insurance policy;amending Minnesota Statutes 2008, section 471.982,
1.4subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 60A.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [60A.0811] BREACH OF INSURANCE POLICY; RECOVERY OF
1.7DAMAGES AND ATTORNEY FEES.
1.8 Subdivision 1. Definitions. For purposes of this section:
1.9(1) "insurance policy" means a commercial or professional insurance policy or
1.10contract other than:
1.11(i) a workers' compensation insurance policy or contract;
1.12(ii) a health insurance policy or contract issued, executed, renewed, maintained, or
1.13delivered in this state by a health carrier as defined in section 62A.011, subdivision 2;
1.14(iii) a life insurance or disability insurance policy or contract; or
1.15(iv) a policy or contract issued by a township mutual fire insurance company or
1.16farmers mutual fire insurance company operating under chapter 65A or 67A;
1.17(2) "insured" means any named insured, additional insured, or insured under an
1.18insurance policy; and
1.19(3) "insurer" means an insurer:
1.20(i) incorporated or organized in this state; or
1.21(ii) admitted, authorized, or licensed to do business or doing business in this state but
1.22not incorporated or organized in this state. Insurer does not include the joint underwriting
1.23association operating under chapter 62F or 62I; or a township mutual fire insurance
1.24company or farmers mutual fire insurance company operating under chapter 65A or 67A.
2.1 Subd. 2. Damages. (a) In addition to breach of insurance contract damages, attorney
2.2fees, costs, or other remedies allowable under law or an insurance policy, an insured
2.3who prevails in any claim against an insurer based on the insurer's breach, repudiation
2.4or denial of, failure to fulfill, or delay in fulfilling, a duty to provide services or make
2.5payments is entitled to recover:
2.6(1) 12 percent per annum interest on monetary amounts due under the insurance
2.7policy, calculated from the date the request for payment of those benefits was made to
2.8the insurer; and
2.9(2) costs and disbursements plus reasonable attorney fees as provided under this
2.11(b) Punitive damages or damages for nonmonetary losses are not recoverable
2.12under this section.
2.13 Subd. 3. Effect of arbitration under section 65B.525. If an insurer agrees to
2.14liability for personal injury protection, uninsured, or underinsured benefits under a policy
2.15of private passenger vehicle insurance under chapter 65B and only the amount of benefits
2.16is disputed, the insured is not entitled to recover attorney fees under this section if the
2.17insurer agrees to submit the dispute to binding arbitration or if binding arbitration is
2.18required under section 65B.525.
2.19 Subd. 4. Factors to consider in awarding attorney fees. An award of attorney
2.20fees and costs under this section may include consideration of the following factors: the
2.21amount of time reasonably expended before and during the court action or arbitration
2.22proceeding; reasonable hourly rates; the outcome obtained; and the nature and complexity
2.23of the matter.
2.24 Subd. 5. Insurance producers; liability limited. Except as otherwise provided
2.25by law, a licensed insurance producer is not liable for damages and attorney fees under
2.26this section for a breach of insurance policy by the insurer that appointed the producer
2.27to transact on its behalf, except to the extent the producer has caused or contributed to
2.29 Subd. 6. Application. This section applies to a court action or arbitration
2.30proceeding, including an action seeking declaratory judgment.
2.31EFFECTIVE DATE.This section is effective August 1, 2009, and applies to a
2.32cause of action existing on or arising on or after that date.
2.33 Sec. 2. Minnesota Statutes 2008, section 471.982, subdivision 3, is amended to read:
2.34 Subd. 3. Exemptions. Self-insurance pools established and open for enrollment
2.35on a statewide basis by the Minnesota League of Cities Insurance Trust, the Minnesota
3.1School Boards Association Insurance Trust, the Minnesota Association of Townships
3.2Insurance and Bond Trust, or the Minnesota Association of Counties Insurance Trust
3.3and the political subdivisions that belong to them are exempt from the requirements of
3.4this section and
3.5Minnesota Association of Townships Insurance and Bond Trust and the townships that
3.6belong to it are exempt from the requirement to hold the certificate of surety authorization
3.7issued by the commissioner of commerce as provided in section