Minnesota Insurance Guarantee Association board allowed to request financial information from insureds.
Summary
HF1014 amends Minnesota’s insurance guaranty law to let the Minnesota Insurance Guaranty Association (MIGA) request financial information from an insured when determining whether a claim is excluded because the insured’s net worth exceeds $25 million. The bill applies to claims arising from insurer insolvencies after July 31, 1996, and clarifies that the insured’s net worth is measured on December 31 of the year before the insurer becomes insolvent, including the consolidated net worth of the insured and its subsidiaries and affiliates.
The bill also creates a consequence for nonresponse: if an insured does not provide the requested financial information within 60 days, the insured is deemed to exceed the $25 million net worth threshold for purposes of MIGA’s claim evaluation. Any request for information must notify the insured of that consequence. The bill leaves in place other existing exclusions from covered claims, including claims by affiliates or reinsurers, claims tied to large deductibles or self-insured retentions of $300,000 or more, and claims for fines, penalties, interest, or punitive damages.
Impact
The bill amends Minnesota Statutes 2024, section 60C.09, subdivision 2, by expanding MIGA’s authority to gather financial information from insureds to determine whether a claim is excluded under the high-net-worth insured provision. This affects how the guaranty association evaluates claims after insurer insolvencies and may reduce disputes or delays over whether an insured qualifies for coverage under the guaranty system. It primarily impacts insured businesses with substantial assets, along with MIGA and claim administrators.
Sentiment
The bill appears to have been broadly supported and noncontroversial in the Legislature. It passed the House 132-0, the Senate 60-0, and the House again 131-0 after Senate amendments, indicating unanimous or near-unanimous agreement. The lack of committee transcript material also suggests there was little recorded opposition or public dispute around the measure.
Contention
No significant contention is evident in the available record. The main policy issue is administrative: whether MIGA should be allowed to demand financial information and treat nonresponse as proof of high net worth. That approach could be viewed as burdensome by some insureds, especially large businesses concerned about confidentiality, but the unanimous votes suggest legislators generally viewed the change as a practical enforcement tool rather than a substantive expansion of liability. The bill does not alter the $25 million threshold itself or the existing exclusions, which likely helped keep the measure uncontroversial.
Allows DCI to share confidential information with guaranty associations on insolvency matters, amends composition of board members, and suspends plan of operation for association if medical malpractice insurance is available in voluntary market