1.1.................... moves to amend H.F. No. 3799, the first engrossment, as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2016, section 60B.03, subdivision 15, is amended to read:
1.4    Subd. 15. Insolvency or insolvent. "Insolvency" or "insolvent" means:
1.5(a) For an insurer organized under sections 67A.01 to 67A.26, the inability to pay any
1.6uncontested debt as it becomes due.
1.7(b) For purposes of a liquidation under section 64B.43, subdivision 4, a fraternal
1.8authorized control level event under circumstances the commissioner determines will not
1.9be promptly remedied pursuant to the plan submitted under section 64B.43, subdivision 3,
1.10a society's inability to pay its debts or meet its obligations as they mature, or that a society's
1.11assets do not exceed its liabilities plus the greater of any surplus required by law to be
1.12constantly maintained.
1.13(b) (c) For any other insurer, that it is unable to pay its debts or meet its obligations as
1.14they mature or that its assets do not exceed its liabilities plus the greater of (1) any capital
1.15and surplus required by law to be constantly maintained, or (2) its authorized and issued
1.16capital stock. For purposes of this subdivision, "assets" includes one-half of the maximum
1.17total assessment liability of the policyholders of the insurer, and "liabilities" includes reserves
1.18required by law. For policies issued on the basis of unlimited assessment liability, the
1.19maximum total liability, for purposes of determining solvency only, shall be deemed to be
1.20that amount that could be obtained if there were 100 percent collection of an assessment at
1.21the rate of ten mills per dollar of insurance written by it and in force.

1.22    Sec. 2. Minnesota Statutes 2016, section 64B.19, subdivision 4a, is amended to read:
1.23    Subd. 4a. Notice of extra assessments. In the event that a society intends to make extra
1.24assessments, as provided in subdivision 4, it shall provide notice of the assessments it plans
2.1to make to the commissioner, and to the commissioner insurance regulator of its state of
2.2domicile if it is a foreign society, at least 90 days before the effective date of the assessments.

2.3    Sec. 3. Minnesota Statutes 2016, section 64B.19, is amended by adding a subdivision to
2.4read:
2.5    Subd. 4b. Disapproval. Within 60 days of filing, the commissioner may disapprove the
2.6assessment of a domestic society that has had a fraternal action level event under section
2.764B.42, or a fraternal authorized control level event under section 64B.43, if the
2.8commissioner determines that the assessment was not duly adopted, is not in the best interests
2.9of the benefit members, or does not materially improve the long-term viability of the society.
2.10The commissioner may approve an earlier effective date for the assessment.

2.11    Sec. 4. Minnesota Statutes 2016, section 64B.43, is amended to read:
2.1264B.43 FRATERNAL AUTHORIZED CONTROL LEVEL EVENT; DOMESTIC
2.13SOCIETIES.
2.14    Subdivision 1. Definition Definitions. (a) For purposes of this section, the terms in this
2.15subdivision have the meanings given.
2.16(b) "Fraternal authorized control level event" means any of the following events:
2.17(1) the filing of a risk-based capital report by the society that indicates that the society's
2.18total adjusted capital is less than its fraternal authorized control level risk-based capital;
2.19(2) the notification by the commissioner to the society of an adjusted risk-based capital
2.20report that indicates the event in clause (1), provided the society does not challenge the
2.21adjusted risk-based capital report under section 64B.44;
2.22(3) if, pursuant to section 64B.44, the society challenges an adjusted risk-based capital
2.23report that indicates the event in clause (1), notification by the commissioner to the society
2.24that the commissioner has, after a hearing, rejected the society's challenge;
2.25(4) the failure of the society to respond, in a manner satisfactory to the commissioner,
2.26to a corrective order, provided the society has not challenged the corrective order under
2.27section 64B.44;
2.28(5) if the society has challenged a corrective order under section 64B.44 and the
2.29commissioner has, after a hearing, rejected the challenge or modified the corrective order,
2.30the failure of the society to respond, in a manner satisfactory to the commissioner, to the
2.31corrective order subsequent to rejection or modification by the commissioner;
3.1(6) the failure of the society to submit a risk-based capital plan to the commissioner
3.2within the time period in section 64B.42;
3.3(7) notification by the commissioner to the society that:
3.4(i) the risk-based capital plan or revised risk-based capital plan submitted by the society
3.5is, in the judgment of the commissioner, unsatisfactory; and
3.6(ii) the society has not challenged the determination under section 64B.44;
3.7(8) if, pursuant to section 64B.44, the society challenges a determination by the
3.8commissioner under the notification by the commissioner to the society that the commissioner
3.9has, after a hearing, rejected the challenge;
3.10(9) notification by the commissioner to the society that the society has failed to adhere
3.11to its risk-based capital plan or revised risk-based capital plan, but only if the failure has a
3.12substantial adverse effect on the ability of the society to eliminate the fraternal action level
3.13event according to its risk-based capital plan or revised risk-based capital plan and the
3.14commissioner has so stated in the notification, provided the society has not challenged the
3.15determination under section 64B.44; or
3.16(10) if, pursuant to section 64B.44, the society challenges a determination by the
3.17commissioner under clause (9), the notification by the commissioner to the society that the
3.18commissioner has, after a hearing, rejected the challenge.
3.19(c) "Society" means a domestic fraternal benefit society organized and operated under
3.20the laws of this state.
3.21    Subd. 2. Commissioner's duties. In the event of a fraternal authorized control level
3.22event with respect to a society, the commissioner shall:
3.23(1) take the actions required under section 64B.42 regarding a society with respect to
3.24which a fraternal action level event has occurred; or
3.25(2) if the commissioner considers it to be in the best interests of the certificate holders
3.26of the society, require the society to take one or more of the following actions:
3.27(i) merge or otherwise consolidate with another willing authorized society;
3.28(ii) cede any individual risk or risks, in whole or in part, to a willing society or life
3.29insurer;
3.30(iii) suspend the issuance of new business; and
3.31(iv) discontinue its insurance operations; or
4.1(3) take the actions necessary to cause the society to be placed under regulatory control
4.2under chapter 60B. In the event the commissioner takes these actions, the fraternal authorized
4.3control level event is considered sufficient grounds for the commissioner to take action
4.4under chapter 60B, and the commissioner has the rights, powers, and duties with respect to
4.5the society set forth in chapter 60B. In the event the commissioner takes actions under this
4.6clause pursuant to an adjusted risk-based capital report, the society is entitled to the
4.7protections afforded to societies under section 60B.11 pertaining to summary proceedings.
4.8    Subd. 3. Plan to transfer members. (a) Within 45 days of a fraternal authorized control
4.9level event with respect to a society, the society shall present to the commissioner a plan to
4.10protect the interests of its members. The plan shall include transferring all members,
4.11certificates, and related assets and liabilities of the society, together with any other assets
4.12and liabilities the society desires to transfer, to another firm, corporation, or organization
4.13through merger, consolidation, assumption, or other means. Any transfer shall constitute a
4.14novation of the transferring society's certificates effective upon the date of transfer. The
4.15commissioner shall review the plan within 45 days of its submission and may approve the
4.16plan within that time frame if the plan provides sound financial security for the payment of
4.17obligations arising under the certificates of the society and is otherwise in the best interest
4.18of the members.
4.19(b) The transfer shall be:
4.20(1) concluded within the time frame established by the commissioner, which shall not
4.21exceed 90 days;
4.22(2) approved by the society upon majority vote of its board of directors prior to the
4.23submission of the plan to the commissioner; and
4.24(3) effective notwithstanding the provisions of section 64B.14 or any other requirement
4.25of statute or rule or the laws of the society requiring another form of notice to members or
4.26approval by the supreme governing body.
4.27Any notice to or approval of a transfer required by the laws of the society or statute or rule
4.28shall be suspended by this subdivision.
4.29(c) Upon application, the commissioner may approve a transfer under this subdivision
4.30to a foreign fraternal benefit society that does not have a certificate of authority to transact
4.31insurance in this state if the foreign fraternal benefit society is authorized to transact insurance
4.32by and is domiciled in a state accredited by the National Association of Insurance
4.33Commissioners. If the commissioner determines that the foreign fraternal benefit society
4.34has sufficient financial strength and servicing capabilities to satisfy the obligations arising
5.1under the transferring society's certificates, the commissioner may issue an order to authorize
5.2the foreign fraternal benefit society to service the certificates resulting from a transfer,
5.3including issuing any amendments or revisions requested by the holder of the certificate
5.4and to fulfill all obligations arising under the certificate, but not to otherwise transact
5.5insurance business in this state.
5.6(d) Upon the effective date of a transfer to an insurer with a certificate of authority to
5.7do business in this state and in consideration of that transfer, each member of the society
5.8shall be deemed to agree that any terms of a certificate subjecting the certificate to the laws
5.9of the society or providing rights or obligations of membership, except to the extent of any
5.10outstanding lien not released by the terms of the transfer, shall be null and void and the
5.11insurer shall endorse the certificates accordingly.
5.12(e) Upon the effective date of a transfer to a firm, corporation, or organization that is
5.13not a fraternal benefit society and in consideration of that transfer, each member of the
5.14society shall be deemed to agree that any terms of a certificate subjecting the certificate to
5.15the laws of the society or providing rights or obligations of membership, except to the extent
5.16of any outstanding lien not released by the terms of the transfer, shall be null and void and
5.17the firm, corporation, or organization shall endorse the certificates accordingly.
5.18(f) The board of directors of a society may suspend or modify its qualifications for
5.19membership as necessary or appropriate to facilitate a transfer under this subdivision,
5.20notwithstanding the laws of the society or any statute or rule to the contrary.
5.21(g) Each society shall amend their laws to permit the transactions contemplated by this
5.22subdivision, including suspending any provisions requiring any notice to members or
5.23approval of the supreme governing body with respect to the transfer of its certificates and
5.24policies, if the society has a fraternal authorized control level event and the transfer is
5.25approved by the commissioner.
5.26    Subd. 4. Liquidation. (a) In the event of a fraternal authorized control level event with
5.27respect to a society under circumstances the commissioner determines will not be promptly
5.28remedied pursuant to the authorization provided in subdivision 3, the commissioner may
5.29apply for a verified petition to commence liquidation of the society under section 60B.20.
5.30These circumstances qualify as grounds to commence a liquidation under section 60B.20,
5.31clause (1).
5.32(b) If the requirements of paragraph (a) are met, the commissioner may issue an order
5.33declaring the society to be in hazardous financial condition under the standards of section
5.3460G.20, and initiate proceedings pursuant to this subdivision. Nothing in this subdivision
6.1prevents the commissioner from applying for an order to commence the liquidation of a
6.2society under any of the grounds in section 60B.20.
6.3(c) Liquidation proceedings for a society shall be governed by chapter 60B, except to
6.4the extent the provisions of chapter 60B are in conflict or inconsistent with any provisions
6.5in this chapter.
6.6(d) Liquidation proceedings for a society shall be conducted consistent with the purposes
6.7of section 60B.01, subdivision 4, paragraph (c), in a manner designed to conserve assets
6.8and to limit expenses of the liquidation under section 60B.44, subdivision 2."
6.9Amend the title accordingly