Long Term Care Insurance
Effective for tax year 2000, persons will no longer be required to purchase inflation protection in order to receive the long-term care insurance tax credit. The state will require only that an offer of inflation protection be made pursuant to federal qualification regulations. To receive the tax credit, policies must be federally qualified or approved for tax credit by the state and have a lifetime benefit of at least $100,000.
The tax credit will now be allowed on a per beneficiary rather than a policy basis, so that each beneficiary under a policy may apply for a credit. This change was enacted to allow each spouse who is a beneficiary under one joint policy to qualify for the income tax credit. The maximum credit remains $100 per beneficiary.
Auto Glass Replacement
The state legislature, passed and the governor signed into law a bill to address the
rising costs of auto glass repair in Minnesota. Under this new law, any rebate or
incentive to have broken glass repaired at a particular glass vendor, cannot exceed a value
of $35. If the rebate can be redeemed for cash, the law limits the redeemable cash value
of the rebate to 50 percent or less of the retail value of the item offered.
No glass vendor may waive, forgive, or pay all or any part of an applicable
insurance deductible. This law is effective immediately.
The new law also changes the state standards for handling auto glass
replacement costs eliminating the requirement that insurers pay "all
reasonable costs". Under the new law, insurers must pay the insured's
chosen vendor based on a "competitive price". In most cases, the
insurer will pay the charge submitted by the glass vendor. However, if an
insurer disputes a charge by an auto glass vendor, the insurer must pay the
charge established by a market survey conducted through the department of
commerce. The department will confer with both the insurance and auto
glass industries prior to adopting this survey. The first auto glass
survey is expected later this year.
Rental Car Coverage
A change in the state's priority of liability coverage for rental cars was
enacted this session. Under the change, a person using a vehicle loaned or
rented while the person's auto is being serviced or repaired, will have
liability coverage of the rented vehicle under their private passenger
policy. The additional coverage is extended regardless of whether a fee is
charged for the use of the vehicle provided that the auto service or repair shop
owns the loaned vehicle. The residual liability coverage under the private
passenger policy will be primary to any similar coverage on the loaned
vehicle. This law will become effective August 1, 2000.
Minnesota Comprehensive Health Association
(MCHA)
MCHA changes that were enacted include requiring MCHA to annually identify
individuals that may be eligible for private coverage or more likely government
programs and notifying those individuals and a requirement to annually verify
the uninsurability of each MCHA policyholder.
The new law will authorize MCHA to offer a high deductible product.
MCHA may offer a plan identical to its current two plans but with a $2,000
annual deductible. MCHA will now have $500, $1,000 and $2,000 deductible
plans. The new legislation will also allow MCHA to offer differing rates
to smokers and non-smokers. These changes are effective immediately.
Credit Underwriting
The state legislature enacted a proposal relating to the use of credit
in underwriting for auto and homeowners insurance this year. If
credit information results in an "adverse underwriting
decision" by the insurer, the insurer or agent must provide to the
policyholder or applicant in writing the primary reason or reasons for
the negative credit score or information used in the underwriting
decision. An "adverse underwriting decision" includes a
refusal of an application, or renewal or insurance or an alteration of
insurance rates to the disadvantage of the policyholder. This new
law is effective August 1, 2000.
