1.1 A bill for an act
1.2 relating to commerce; requiring the commissioner of commerce to create a low-cost
1.3 motor vehicle insurance program for low-income residents; requiring a report;
1.4 appropriating money; amending Minnesota Statutes 2024, section 65B.49, by
1.5 adding a subdivision; proposing coding for new law in Minnesota Statutes, chapters
1.6 65B; 297I.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. [65B.121] MINNESOTA LIFELINE INSURANCE PROGRAM.
1.9 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
1.10the meanings given.
1.11 (b) "Commissioner" means the commissioner of commerce or the commissioner's
1.12representative.
1.13 (c) "Eligible applicant" means an individual who meets the requirements of subdivision
1.146 and has applied for a lifeline policy under the program.
1.15 (d) "Facility" has the meaning given in section 65B.02, subdivision 3.
1.16 (e) "Insured" means a driver insured under the program.
1.17 (f) "Lifeline policy" or "policy" means a motor vehicle insurance policy issued in
1.18compliance with subdivision 5.
1.19 (g) "Member" has the meaning given in section 65B.02, subdivision 4.
1.20 (h) "Minnesota lifeline insurance program" or "program" means the program created
1.21under this section.
1.22 (i) "Motor vehicle" has the meaning given in section 169.011, subdivision 42.
1Section 1.
25-03199 as introduced02/21/25 REVISOR RSI/KR
SENATE
STATE OF MINNESOTA
S.F. No. 2455NINETY-FOURTH SESSION
(SENATE AUTHORS: PUTNAM, McEwen and Dibble)
OFFICIAL STATUSD-PGDATE
Introduction and first reading03/13/2025
Referred to Commerce and Consumer Protection 2.1 (j) "Moving violation" means a violation of a law or municipal ordinance regulating the
2.2operation of motor vehicles on streets or highways. Moving violation does not include a
2.3law or ordinance related to parking or motor vehicle equipment.
2.4 (k) "Primary online producer" means the producer of record for a policy sold through
2.5the website described in subdivision 3, paragraph (g).
2.6 (l) "Qualified health coverage" means medical assistance, MinnesotaCare, Medicare,
2.7general assistance medical care, TRICARE, or other medical insurance that covers
2.8hospitalization and emergency services.
2.9 Subd. 2.Commissioner duties.(a) The commissioner must consult with the facility to
2.10develop and operate the program. The program must be developed and operated by the
2.11facility as described in subdivision 3.
2.12 (b) By March 1 of each year, the commissioner must present the report issued by the
2.13facility under subdivision 3 to the chairs and ranking minority members of the legislative
2.14committees with jurisdiction over motor vehicle insurance. The commissioner must also
2.15provide a description of marketing and outreach efforts and the commissioner's expenditures
2.16related to the program, including expenditures from the Minnesota lifeline insurance program
2.17account under section 297I.12. The commissioner may recommend modifications to this
2.18section and present any other information that the commissioner determines would enhance
2.19the legislature's understanding of the program and the program's participants.
2.20 Subd. 3.Facility duties.(a) The facility must:
2.21 (1) develop and operate the program in consultation with the commissioner;
2.22 (2) determine whether an applicant is eligible for the program; and
2.23 (3) sell, issue, and deliver lifeline policies under the program.
2.24 (b) The facility must determine the rates charged for lifeline policies and file rates with
2.25the commissioner, in compliance with section 65B.08. Prior to determining the rates, the
2.26facility must conduct a meeting to provide an opportunity for public comment on the proposed
2.27rates and the rate setting process.
2.28 (c) The facility must set rates for the program in an amount adequate to pay for losses
2.29incurred for claims filed under the program and program expenses related to selling and
2.30servicing policies, including:
2.31 (1) underwriting;
2.32 (2) producer commissions;
2Section 1.
25-03199 as introduced02/21/25 REVISOR RSI/KR 3.1 (3) claims adjusting;
3.2 (4) subrogation;
3.3 (5) taxes, licenses, and fees; and
3.4 (6) other administrative and overhead expenses specifically associated with the servicing
3.5of lifeline policies.
3.6The rates must also account for investment income.
3.7 (d) To determine rates, the facility must rely on:
3.8 (1) loss data associated with policies sold by the facility under the lifeline program,
3.9when program loss data is available; and
3.10 (2) private passenger automobile insurance loss data in Minnesota, adjusted to reflect
3.11the eligibility factors described in subdivision 6. Private passenger automobile insurance
3.12loss data must be used only to the extent that program data are not available or in conjunction
3.13with program data in order to meet actuarial standards of credibility.
3.14 (e) The rates may include the cost to offer, at no additional cost to insureds, a deferred
3.15payment plan designed by the facility that allows an insured to pay the insured's premium
3.16in no fewer than six installments.
3.17 (f) The facility, in consultation with the commissioner, may establish up to three
3.18geographic regions of the state and set different premiums by region to reflect different loss
3.19costs associated with each region, except that the premium charged in a region must not be
3.20more than 25 percent higher than an otherwise similar policy in another region of the state.
3.21 (g) The facility, in consultation with the commissioner, must create and maintain a
3.22website for the program that includes the information necessary for an eligible applicant to
3.23apply for the program. The website must initially include sufficient functionality to provide
3.24prospective applicants with information about the program, the lifeline policy, the premium
3.25the applicant would be charged, and contact information for licensed producers that sell the
3.26lifeline policy. The website must add functionality necessary to allow a policy to be sold
3.27online, to the extent possible, in accordance with the following timeline:
3.28 (1) within one year of enactment of the program, the facility must solicit bids and award
3.29a contract to a producer licensed to sell insurance in the state, including a policy under this
3.30section, to become the primary online producer; and
3.31 (2) the facility must work with the primary online producer to increase the functionality
3.32of the website in order to allow a prospective lifeline policyholder to apply online no later
3Section 1.
25-03199 as introduced02/21/25 REVISOR RSI/KR 4.1than one year after the effective date of the facility's contract with the primary online
4.2producer.
4.3 (h) The primary online producer must earn a commission associated with a policy
4.4produced online and has the same responsibilities to the policyholder as a producer that
4.5sells a policy without the assistance of the website.
4.6 (i) The facility may accept funding from sources other than members to support the
4.7program's marketing, outreach, and public education efforts.
4.8 (j) Money for marketing, outreach, and public education must be awarded equitably
4.9among geographic regions, taking into consideration a region's target population and
4.10marketing goals.
4.11 (k) The facility must develop a process for applicants to demonstrate program eligibility
4.12under subdivision 6 that minimizes the burden on the applicant and barriers to participation
4.13in the program.
4.14 (l) The facility may require policy holders to recertify eligibility for the program with
4.15regard to residency, income, and qualified health coverage at intervals no shorter than three
4.16years.
4.17 (m) By February 1 of each year, the facility must issue a report to the commissioner that
4.18presents information regarding the implementation and operation of the program and
4.19participation in the program. The report must include:
4.20 (1) the total number of applications received by the facility during the prior year;
4.21 (2) the total number of policies issued by the facility during the prior year;
4.22 (3) the total number of policies rejected by the facility during the prior year;
4.23 (4) the total number of policies in force on March 31, June 30, September 30, and
4.24December 31 of the prior year;
4.25 (5) information indicating the geographic distribution of policies throughout the state;
4.26 (6) the total premium collected during the prior year;
4.27 (7) the estimate of incurred losses for the prior year or the most recent 12-month period
4.28for which data are available;
4.29 (8) a summary of the disputed issues regarding a rate change submitted to the
4.30commissioner by the facility in the event that the rate change was not adopted unanimously
4.31by the facility's governing committee;
4Section 1.
25-03199 as introduced02/21/25 REVISOR RSI/KR 5.1 (9) any modifications to this section that the facility recommends; and
5.2 (10) any other information that the facility determines would enhance the legislature's
5.3understanding of the program and the program's participants.
5.4 Subd. 4.Producer duties.(a) A licensed producer must provide to an applicant for a
5.5lifeline policy the following information in no smaller than 14-point type on a form prescribed
5.6by the commissioner:
5.7 (1) notice that a lifeline policy under this section satisfies the requirements under section
5.865B.48 to maintain automobile liability insurance;
5.9 (2) premium cost;
5.10 (3) how eligibility is determined; and
5.11 (4) the difference between the coverage available under a lifeline policy and the minimum
5.12coverage requirements that apply to policies sold outside of the program and in compliance
5.13with section 65B.48.
5.14 (b) A licensed producer is entitled to receive a commission on each lifeline policy sold
5.15that is equal to 12 percent of the policy premiums, provided that the commission is not less
5.16than $50. The facility or any insurance company issuing a lifeline policy under this section
5.17is prohibited from requiring a producer to return any portion of the commission paid for the
5.18sale of a lifeline policy if the insured, facility, or issuing carrier cancels the policy before
5.19the end of the policy term.
5.20 (c) A licensed producer that complies with the disclosure requirements of this subdivision
5.21in conjunction with the sale of a lifeline policy is not liable for selling a policy that does
5.22not provide the coverage required in section 65B.49.
5.23 (d) A licensed producer must accept payment for premiums under the program by cash
5.24and by all other methods approved by the facility.
5.25 (e) Payment of premiums for a lifeline policy through an insurance premium finance
5.26agreement, as defined under section 59A.02, is prohibited.
5.27 Subd. 5.Lifeline policies.The program must include and the facility must offer a lifeline
5.28policy, with a length of six or 12 months, that includes:
5.29 (1) basic economic loss benefits that provide a minimum of $5,000 for income loss,
5.30replacement services loss, funeral expense loss, survivor's economic loss, and survivor's
5.31replacement services loss arising out of the injury to any one person;
5Section 1.
25-03199 as introduced02/21/25 REVISOR RSI/KR 6.1 (2) the payment of claims for bodily injury or death arising from an accident of $30,000
6.2for any one person and $60,000 for any two or more persons, in addition to interest and
6.3costs;
6.4 (3) the payment of claims for property of others damaged or destroyed in an accident
6.5of $10,000, in addition to interest and costs; and
6.6 (4) uninsured and underinsured motorist coverage with limits of $25,000 because of
6.7injury to or the death of one person in any accident and $50,000 because of injury to or the
6.8death of two or more persons in any accident.
6.9 Subd. 6.Eligible applicant.(a) An eligible applicant must:
6.10 (1) be a resident of Minnesota;
6.11 (2) have a household adjusted gross income that is no more than 300 percent of the
6.12federal poverty level at the time the policy is issued or reissued;
6.13 (3) demonstrate that all household members are enrolled in qualified health coverage;
6.14and
6.15 (4) have been continuously licensed as a driver for the three years immediately preceding
6.16application, except that a license suspension or revocation does not constitute a break in
6.17continuous licensure for the purposes of satisfying this requirement if the revocation or
6.18suspension was due to any of the following:
6.19 (i) a conviction for a violation under section 169.791, 169.797, or 171.24, subdivision
6.201 or 2;
6.21 (ii) a violation of section 171.18, subdivision 1, paragraph (a), clause (1), for being cited
6.22for a violation of section 169.791 or 169.797;
6.23 (iii) failure to appear in court under section 171.16, subdivision 3a, for a petty
6.24misdemeanor; or
6.25 (iv) failure to pay a fine under section 171.16, subdivision 3.
6.26 (b) A policy may be issued to an eligible applicant who has had continuous licensure
6.27for less than three years. The facility, in consultation with the commissioner, may establish
6.28different premiums for an insured with less than three years' continuous licensure to reflect
6.29different loss costs associated with insureds with less that three years' continuous licensure,
6.30except that the premium charged must not be more than 25 percent higher than the premium
6.31charged to an insured with three years of continuous licensure in the same region of the
6.32state.
6Section 1.
25-03199 as introduced02/21/25 REVISOR RSI/KR 7.1 (c) An eligible applicant must not, within the three years immediately preceding
7.2application, be:
7.3 (1) at fault in a motor vehicle accident involving bodily injury or death;
7.4 (2) convicted of a misdemeanor, gross misdemeanor, or felony for a violation arising
7.5out of the use of a motor vehicle other than for a violation of section 171.24, subdivisions
7.61 or 2; 169.791; or 169.797;
7.7 (3) convicted of a violation of section 84.765; 84.795, subdivision 5; 86B.33; or a
7.8Minnesota statute or a statute in another state that is equivalent to the sections identified in
7.9this clause;
7.10 (4) convicted of more than two moving violations; or
7.11 (5) at fault in more than one motor vehicle accident that involved only damage to property.
7.12 (d) If an applicant is rejected by the facility, the facility must allow the applicant to cure
7.13the deficiency and must accept the cured application if the applicant is otherwise eligible
7.14for the program.
7.15 (e) An enrollee may be required to provide proof of qualified health insurance.
7.16 (f) A lifeline policy may be nonrenewed if the insured no longer meets the requirements
7.17under this subdivision.
7.18 Sec. 2. Minnesota Statutes 2024, section 65B.49, is amended by adding a subdivision to
7.19read:
7.20 Subd. 11.Minnesota lifeline automobile insurance program.Notwithstanding this
7.21section or any law to the contrary, a policy issued pursuant to the Minnesota lifeline
7.22automobile insurance program under section 65B.121, meets the requirements of this section.
7.23 Sec. 3. [297I.12] LIFELINE PROGRAM MARKETING AND OUTREACH FUND.
7.24 Subdivision 1.Surcharge.(a) Each insurer engaged in writing policies of automobile
7.25insurance must collect a surcharge, at the rate of 10 cents per vehicle for every six months
7.26of coverage, on each policy of automobile insurance providing comprehensive insurance
7.27coverage issued or renewed in Minnesota. The surcharge is not considered premium for
7.28any purpose, including the computation of premium tax or agents' commissions. The amount
7.29of the surcharge must be separately stated on either a billing or policy declaration sent to
7.30an insured. An insurer must remit the revenue derived from the surcharge under this
7Sec. 3.
25-03199 as introduced02/21/25 REVISOR RSI/KR 8.1subdivision to the commissioner of revenue for marketing and outreach for the Minnesota
8.2lifeline insurance program under section 65B.121.
8.3 (b) For purposes of this subdivision, "policy of automobile insurance" has the meaning
8.4given in section 65B.14, and covers only the following types of vehicles, as defined in
8.5section 168.002, if the vehicle's gross vehicle weight does not exceed 10,000 pounds:
8.6 (1) a passenger automobile;
8.7 (2) a pickup truck;
8.8 (3) a van, but not commuter vans as defined in section 168.126; or
8.9 (4) a motorcycle.
8.10 Subd. 2.Minnesota lifeline insurance program account.The Minnesota lifeline
8.11insurance program account is created in the special revenue fund. The proceeds of surcharges
8.12imposed under subdivision 1 must be deposited in the Minnesota lifeline insurance program
8.13account. Money in the account is appropriated to the commissioner for marketing and
8.14outreach activities to promote enrollment in the Minnesota lifeline insurance program
8.15described under section 65B.121. Allowable uses include but are not limited to:
8.16 (1) grants to nonprofit organizations that provide direct services to individuals likely to
8.17benefit from information about the lifeline insurance program; and
8.18 (2) a contract with a marketing company with demonstrated success in public relations
8.19to populations likely to benefit from information about the lifeline insurance program.
8.20 Sec. 4. APPROPRIATION; MINNESOTA LIFELINE AUTOMOBILE INSURANCE
8.21PROGRAM.
8.22 (a) $....... in fiscal year 2026 is appropriated from the general fund to the commissioner
8.23of commerce to establish the Minnesota lifeline automobile insurance program.
8.24 (b) $20,000 in fiscal year 2026 and $20,000 in fiscal year 2027 are appropriated from
8.25the general fund to the commissioner of commerce to retain an independent actuary to
8.26provide actuarial consulting services to the public members of the facility.
8Sec. 4.
25-03199 as introduced02/21/25 REVISOR RSI/KR