1.1.................... moves to amend H.F. No. 3146 as follows:
1.2Page 1, after line 11, insert:

1.5Page 20, after line 22, insert:


1.8    Section 1. Minnesota Statutes 2008, section 64B.19, is amended by adding a
1.9subdivision to read:
1.10    Subd. 4a. Notice of extra assessments. In the event that a society intends to make
1.11extra assessments, as provided in subdivision 4, it shall provide notice of the assessments
1.12it plans to make to the commissioner, and to the commissioner of its state of domicile if it
1.13is a foreign society, at least 90 days before the effective date of the assessments.

1.14    Sec. 2. [64B.40] DEFINITIONS.
1.15    Subdivision 1. Scope. For the purposes of sections 64B.40 to 64B.48, the terms
1.16defined in this section have the meanings given them.
1.17    Subd. 2. Adjusted risk-based capital report. "Adjusted risk-based capital report"
1.18means a risk-based capital report that has been adjusted by the commissioner according
1.19to section 64B.41, subdivision 4.
1.20    Subd. 3. Corrective order. "Corrective order" means an order issued by the
1.21commissioner specifying corrective actions that the commissioner has determined are
1.22required.
1.23    Subd. 4. NAIC. "NAIC" means the National Association of Insurance
1.24Commissioners.
2.1    Subd. 5. Negative trend. "Negative trend" means, with respect to a society,
2.2negative trend over a period of time, as determined according to the "trend test calculation"
2.3included in the risk-based capital instructions.
2.4    Subd. 6. Risk-based capital instructions. "Risk-based capital instructions" means
2.5the risk-based capital report including risk-based capital instructions adopted by the
2.6NAIC, as those risk-based instructions may be amended by the NAIC from time to time
2.7according to the procedures adopted by the NAIC.
2.8    Subd. 7. Risk-based capital level. "Risk-based capital level" means a fraternal
2.9action level risk-based capital or fraternal authorized control level risk-based capital
2.10where:
2.11(1) "fraternal action level risk-based capital" means the product of 2.0 and its
2.12authorized control level risk-based capital; and
2.13(2) "fraternal authorized control level risk-based capital" means the number
2.14determined under the risk-based capital formula according to the risk-based capital
2.15instructions.
2.16    Subd. 8. Risk-based capital plan. "Risk-based capital plan" means a
2.17comprehensive financial plan containing the elements specified in section 64B.42. If the
2.18commissioner rejects the risk-based capital plan, and it is revised by the society, with
2.19or without the commissioner's recommendation, the plan must be called the "revised
2.20risk-based capital plan."
2.21    Subd. 9. Risk-based capital report. "Risk-based capital report" means the report
2.22required in section 64B.41.
2.23    Subd. 10. Society. "Society" means a fraternal benefit society that is admitted to do
2.24business in this state under this chapter.
2.25    Subd. 11. Total adjusted capital. "Total adjusted capital" means the sum of:
2.26(1) a society's statutory capital and surplus as determined in accordance with
2.27statutory accounting applicable to the annual statement required to be filed under section
2.2860A.13; and
2.29(2) other items, if any, as the risk-based capital instructions may provide.

2.30    Sec. 3. [64B.41] RISK-BASED CAPITAL REPORTS.
2.31    Subdivision 1. General requirements. Every society shall, on or before each March
2.321, prepare and submit to the commissioner a report of its risk-based capital levels as of the
2.33end of the calendar year just ended, in a form and containing the information required
2.34by the risk-based capital instructions. In addition, every society shall file its risk-based
2.35capital report with the NAIC according to the risk-based capital instructions.
3.1    Subd. 2. Specific requirements. A society's risk-based capital must be determined
3.2according to the formula set forth in the risk-based capital instructions. The formula must
3.3take into account, and may adjust for the covariance between:
3.4(1) the risk with respect to the society's assets;
3.5(2) the risk of adverse insurance experience with respect to the society's liabilities
3.6and obligations;
3.7(3) the interest rate risk with respect to the society's business; and
3.8(4) all other business risks and other relevant risks set forth in the risk-based capital
3.9instructions;
3.10determined in each case by applying the factors in the manner set forth in the risk-based
3.11capital instructions.
3.12    Subd. 3. Adjusted risk-based capital report. If a society files a risk-based capital
3.13report that in the judgment of the commissioner is inaccurate, then the commissioner shall
3.14adjust the risk-based capital report to correct the inaccuracy and shall notify the society of
3.15the adjustment. The notice must contain a statement of the reason for the adjustment. A
3.16risk-based capital report as so adjusted is referred to as an "adjusted risk-based capital
3.17report."

3.18    Sec. 4. [64B.42] FRATERNAL ACTION LEVEL EVENT.
3.19    Subdivision 1. Definition. "Fraternal action level event" means, with respect to a
3.20society, any of the following events:
3.21(1) the filing of a risk-based capital report by the society that indicates that:
3.22(i) the society's total adjusted capital is greater than or equal to its fraternal authorized
3.23control level risk-based capital but less than its fraternal action level risk-based capital; or
3.24(ii) the society's total adjusted capital is greater than or equal to its fraternal action
3.25level risk-based capital but less than the product of its fraternal authorized control level
3.26risk-based capital and 2.5 and has a negative trend;
3.27(2) the notification by the commissioner to a society of an adjusted risk-based capital
3.28report that indicates an event in clause (1), provided the society does not challenge the
3.29adjusted risk-based capital report under section 64B.44;
3.30(3) if, pursuant to section 64B.44, the society challenges an adjusted risk-based
3.31capital report that indicates an event in clause (1), the notification by the commissioner to
3.32the society that the commissioner has, after a hearing, rejected the society's challenge; or
3.33(4) the failure of the society to file a risk-based capital report by March 1, unless the
3.34society has provided an explanation for the failure that is satisfactory to the commissioner
3.35and has cured the failure within ten days after March 1.
4.1    Subd. 2. Commissioner's duties. In the event of a fraternal action level event,
4.2the commissioner shall:
4.3(1) require the society to prepare and submit a risk-based capital plan, or, if
4.4applicable, a revised risk-based capital plan that:
4.5(i) identifies the conditions that contribute to the fraternal action level event;
4.6(ii) contains proposals of corrective actions that the society intends to take and
4.7would be expected to result in the elimination of the fraternal action level event;
4.8(iii) provides projections of the society's financial results in the current year and at
4.9least the four succeeding years, both in the absence of proposed corrective actions and
4.10giving effect to the proposed corrective actions, including projected statutory balance
4.11sheets, income statements, and cash flow statements. The projections for both new and
4.12renewal business might include separate projections for each major line of business and
4.13separately identify each significant income, expense, and benefit component;
4.14(iv) identifies the key assumptions impacting the society's projections and the
4.15sensitivity of the projections to the assumptions; and
4.16(v) identifies the quality of, and problems associated with, the society's business,
4.17including, but not limited to, its assets, anticipated business growth and associated surplus
4.18strain, extraordinary exposure to risk, mix of business, and use of reinsurance, if any,
4.19in each case;
4.20(2) examine or analyze as the commissioner considers necessary the assets,
4.21liabilities, and operations of the society including reviewing its risk-based capital plan or
4.22revised risk-based capital plan; and
4.23(3) subsequent to the examination or analysis, issue a corrective order specifying the
4.24corrective actions the commissioner determines are required.
4.25    Subd. 3. Corrective action. In determining corrective actions, the commissioner
4.26may take into account factors considered relevant with respect to the society based upon
4.27the commissioner's examination or analysis of the assets, liabilities, and operations of
4.28the society, including, but not limited to, the results of any sensitivity tests undertaken
4.29pursuant to the risk-based capital instructions. The risk-based capital plan or revised
4.30risk-based capital plan must be submitted:
4.31(1) within 45 days after the occurrence of the fraternal action level event;
4.32(2) if the society challenges an adjusted risk-based capital report pursuant to section
4.3364B.44 and the challenge is not frivolous in the judgment of the commissioner, within
4.3445 days after the notification to the society that the commissioner has, after a hearing,
4.35rejected the society's challenge; or
5.1(3) if the society challenges a revised risk-based capital plan pursuant to section
5.264B.44 and the challenge is not frivolous in the judgment of the commissioner, within
5.345 days after the notification to the society that the commissioner has, after a hearing,
5.4rejected the society's challenge.
5.5    Subd. 4. Examination and review. The commissioner may retain actuaries
5.6and investment experts and other consultants as may be necessary in the judgment of
5.7the commissioner to review the society's risk-based capital plan or revised risk-based
5.8capital plan; examine or analyze the assets, liabilities, and operations of the society; and
5.9formulate the corrective order with respect to the society. The fees, costs, and expenses
5.10relating to consultants must be borne by the affected society or other party as directed by
5.11the commissioner.

5.12    Sec. 5. [64B.43] FRATERNAL AUTHORIZED CONTROL LEVEL EVENT.
5.13    Subdivision 1. Definition. "Fraternal authorized control level event" means any
5.14of the following events:
5.15(1) the filing of a risk-based capital report by the society that indicates that the
5.16society's total adjusted capital is less than its fraternal authorized control level risk-based
5.17capital;
5.18(2) the notification by the commissioner to the society of an adjusted risk-based
5.19capital report that indicates the event in clause (1), provided the society does not challenge
5.20the adjusted risk-based capital report under section 64B.44;
5.21(3) if, pursuant to section 64B.44, the society challenges an adjusted risk-based
5.22capital report that indicates the event in clause (1), notification by the commissioner to the
5.23society that the commissioner has, after a hearing, rejected the society's challenge;
5.24(4) the failure of the society to respond, in a manner satisfactory to the commissioner,
5.25to a corrective order, provided the society has not challenged the corrective order under
5.26section 64B.44;
5.27(5) if the society has challenged a corrective order under section 64B.44 and the
5.28commissioner has, after a hearing, rejected the challenge or modified the corrective order,
5.29the failure of the society to respond, in a manner satisfactory to the commissioner, to the
5.30corrective order subsequent to rejection or modification by the commissioner;
5.31(6) the failure of the society to submit a risk-based capital plan to the commissioner
5.32within the time period in section 64B.42;
5.33(7) notification by the commissioner to the society that:
5.34(i) the risk-based capital plan or revised risk-based capital plan submitted by the
5.35society is, in the judgment of the commissioner, unsatisfactory; and
6.1(ii) the society has not challenged the determination under section 64B.44;
6.2(8) if, pursuant to section 64B.44, the society challenges a determination by
6.3the commissioner under the notification by the commissioner to the society that the
6.4commissioner has, after a hearing, rejected the challenge;
6.5(9) notification by the commissioner to the society that the society has failed to
6.6adhere to its risk-based capital plan or revised risk-based capital plan, but only if the
6.7failure has a substantial adverse effect on the ability of the society to eliminate the
6.8fraternal action level event according to its risk-based capital plan or revised risk-based
6.9capital plan and the commissioner has so stated in the notification, provided the society
6.10has not challenged the determination under section 64B.44; or
6.11(10) if, pursuant to section 64B.44, the society challenges a determination by the
6.12commissioner under clause (9), the notification by the commissioner to the society that the
6.13commissioner has, after a hearing, rejected the challenge.
6.14    Subd. 2. Commissioner's duties. In the event of a fraternal authorized control level
6.15event with respect to a society, the commissioner shall:
6.16(1) take the actions required under section 64B.42 regarding a society with respect to
6.17which a fraternal action level event has occurred; or
6.18(2) if the commissioner considers it to be in the best interests of the certificate
6.19holders of the society, require the society to take one or more of the following actions:
6.20(i) merge or otherwise consolidate with another willing authorized society;
6.21(ii) cede any individual risk or risks, in whole or in part, to a willing society or
6.22life insurer;
6.23(iii) suspend the issuance of new business; and
6.24(iv) discontinue its insurance operations; or
6.25(3) take the actions necessary to cause the society to be placed under regulatory
6.26control under chapter 60B. In the event the commissioner takes these actions, the fraternal
6.27authorized control level event is considered sufficient grounds for the commissioner to
6.28take action under chapter 60B, and the commissioner has the rights, powers, and duties
6.29with respect to the society set forth in chapter 60B. In the event the commissioner takes
6.30actions under this clause pursuant to an adjusted risk-based capital report, the society
6.31is entitled to the protections afforded to societies under section 60B.11 pertaining to
6.32summary proceedings.

6.33    Sec. 6. [64B.44] HEARINGS.
6.34Upon notification to a society by the commissioner:
6.35(1) that the risk-based capital report is being adjusted by the commissioner;
7.1(2) that the society's risk-based capital plan or revised risk-based capital plan is
7.2unsatisfactory, and that the notification constitutes a fraternal action level event or fraternal
7.3authorized control level event with respect to the society;
7.4(3) that the society has failed to adhere to its risk-based capital plan or revised
7.5risk-based capital plan and that the failure has substantial adverse effect on the ability
7.6of the society to eliminate the fraternal action level event with respect to the society
7.7according to its risk-based capital plan or revised risk-based capital plan; or
7.8(4) that a corrective order will be issued with respect to the society;
7.9the society has the right to a contested case hearing conducted in accordance with chapter
7.1014, on a record, at which the society may challenge a determination or action by the
7.11commissioner. The society shall notify the commissioner of its request for a hearing
7.12within five days after the notification by the commissioner under clause (1), (2), (3), or (4).
7.13Upon receipt of the society's request for a hearing, the commissioner shall set a date for
7.14the hearing no less than ten nor more than 30 days after the date of the society's request.

7.15    Sec. 7. [64B.45] PROHIBITION ON ANNOUNCEMENTS.
7.16Except as otherwise required under sections 64B.40 to 64B.48, the making,
7.17publishing, dissemination, circulating, or placing before the public, or causing, directly or
7.18indirectly to be made, published, disseminated, circulated, or placed before the public,
7.19in a newspaper, magazine, or other publication, or in any other way, an advertisement,
7.20announcement, or statement containing an assertion, representation, or statement with
7.21regard to the risk-based capital levels of a society, or of any component derived in the
7.22calculation, by a society, agent, broker, or other person engaged in any manner in the
7.23insurance business would be misleading and is prohibited.

7.24    Sec. 8. [64B.46] SUPPLEMENTAL PROVISIONS.
7.25Sections 64B.40 to 64B.48 are supplemental to other laws of this state and do not
7.26preclude or limit other powers or duties of the commissioner under those laws, including,
7.27but not limited to, chapters 60B and 60G.

7.28    Sec. 9. [64B.47] IMMUNITY.
7.29There is no liability on the part of, and no cause of action arises against, the
7.30commissioner or the Department of Commerce or its employees or agents for an action
7.31taken by them in the performance of their powers and duties under sections 64B.40 to
7.3264B.48.

8.1    Sec. 10. [64B.48] NOTICES.
8.2All notices by the commissioner to a society that may result in regulatory action
8.3under sections 64B.40 to 64B.48 are effective upon dispatch if transmitted by registered
8.4or certified mail, or, in the case of other transmission, are effective upon the society's
8.5receipt of the notice."
8.6Amend the title accordingly