As Passed by the Senate

129th General Assembly Regular Session 2011-2012

Sub. H. B. No. 341

Representative Henne 

Cosponsors: Representatives Blair, Schuring, Stebelton, Hackett, Foley, Sears, Hottinger, Amstutz, Hagan, C., Hill, Murray, Thompson 

Senators Hite, Beagle, Bacon, Brown, Hughes, Lehner, Peterson, Seitz 

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A BILL

To amend sections 3903.81, 3907.14, 3921.10, 3921.13,

1

3921.19, 3921.22, 3921.28, 3921.29, 3921.30,

2

3921.31, 3921.33, 3922.01, 3922.02, 3922.03,

3

3922.04, 3922.05, 3922.06, 3922.09, 3922.10,

4

3922.11, 3922.14, 3922.15, 3922.16, 3922.19, and

5

3925.08, to enact new section 3921.35 and sections

6

3921.101 and 3921.191, and to repeal section

7

3921.35 of the Revised Code to make changes to the

8

law regulating fraternal benefit societies, the

9

laws regulating insurance company investments, and

10

the law regulating adverse benefit determinations.

11

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1.  That sections 3903.81, 3907.14, 3921.10, 3921.13,	12
3921.19, 3921.22, 3921.28, 3921.29, 3921.30, 3921.31, 3921.33,	13
3922.01, 3922.02, 3922.03, 3922.04, 3922.05, 3922.06, 3922.09,	14
3922.10, 3922.11, 3922.14, 3922.15, 3922.16, 3922.19, and 3925.08	15
be amended and new section 3921.35 and sections 3921.101 and	16
3921.191 of the Revised Code be enacted to read as follows:	17

Sec. 3903.81.  As used in sections 3903.81 to 3903.93 of the	18
Revised Code:	19

(A) "Adjusted RBC report" means an RBC report that has been	20
adjusted by the superintendent of insurance in accordance with	21
division (C) of section 3903.82 of the Revised Code.	22

(B) "Authorized control level RBC" means the number	23
determined under the risk-based capital formula in accordance with	24
the RBC instructions.	25

(C) "Company action level RBC" means the product of 2.0 and	26
an insurer's authorized control level RBC.	27

(D) "Corrective order" means an order issued by the	28
superintendent of insurance in accordance with division (B)(3) of	29
section 3903.84 of the Revised Code specifying corrective actions	30
that the superintendent has determined are required.	31

(E) "Domestic insurer" means any insurance company organized	32
under Chapter 3907. or 3925. of the Revised Code.	33

(F) "Foreign insurer" means any insurance company licensed	34
under section 3909.01 or 3927.01 of the Revised Code.	35

(G) "Life or health insurer" means any insurance company	36
licensed under section 3907.08 or 3909.01 of the Revised Code, or	37
a company possessing a certificate of authority pursuant to	38
section 3929.01 of the Revised Code that writes only accident and	39
health insurance, or a fraternal benefit society licensed under	40
Chapter 3921. of the Revised Code.	41

(H) "Mandatory control level RBC" means the product of .70	42
and an insurer's authorized control level RBC.	43

(I) "NAIC" means the national association of insurance	44
commissioners.	45

(J) "Negative trend" means a negative trend over a period of	46
time for a life or health insurer as determined in accordance with	47
the trend test calculation included in the RBC instructions.	48

(K) "Property and casualty insurer" means any insurance	49
company that has a certificate of authority pursuant to section	50
3929.01 of the Revised Code. "Property and casualty insurer" does	51
not include monoline mortgage guarantee insurers, financial	52
guarantee insurers, or title insurers.	53

(L) "RBC" means risk-based capital.

54

(M) "RBC instructions" means the RBC report, including	55
risk-based capital instructions, as adopted by the NAIC and as	56
amended by the NAIC from time to time in accordance with the	57
procedures adopted by the NAIC. "RBC instructions" shall also	58
include any modifications adopted by the superintendent, as the	59
superintendent considers to be necessary.	60

(N) "RBC level" means an insurer's company action level RBC,	61
regulatory action level RBC, authorized control level RBC, or	62
mandatory control level RBC.	63

(O) "RBC plan" means a comprehensive financial plan	64
containing the elements specified in division (B) of section	65
3903.83 of the Revised Code.	66

(P) "Revised RBC plan" means an RBC plan rejected by the	67
superintendent of insurance and then revised by an insurer with or	68
without incorporating the superintendent of insurance's	69
recommendation.	70

(Q) "RBC report" means the report required by section 3903.82	71
of the Revised Code.	72

(R) "Regulatory action level RBC" means the product of 1.5	73
and an insurer's authorized control level RBC.	74

(S) "Total adjusted capital" means the sum of both of the	75
following:	76

(1) An insurer's statutory capital and surplus as determined	77
in accordance with the statutory accounting applicable to the	78
annual statements prepared on a form adopted under section 3901.77	79
of the Revised Code, as required to be filed by sections 3907.19,	80
3909.06, and 3929.30 of the Revised Code;	81

(2) Such other items, if any, as the RBC instructions may	82
provide.	83

Sec. 3907.14.  The capital, surplus, and all accumulations of	84
every domestic life insurance company shall be invested as	85
follows:	86

(A) A domestic company may acquire, hold, and convey real	87
estate:	88

(1) Which has been acquired or is acquired for its principal	89
offices, or which is used in connection therewith, provided that	90
it shall not invest more than five per cent of its admitted assets	91
on the preceding thirty-first day of December in such real estate;	92

(2) Which has been mortgaged to it in good faith by way of	93
security for loans previously contracted or for money due;	94

(3) Which has been conveyed to it in satisfaction of debts	95
previously contracted in the course of its dealings, or which it	96
may receive in or on account of an exchange for real estate	97
acquired in its operations;	98

(4) Which it has purchased at sales under mortgages and on	99
any legal process in connection with its investments or under	100
decrees obtained or made for such debts;	101

(5) Which is acquired, owned, or held for the purpose of	102
developing, improving, or otherwise utilizing such real estate for	103
the production of income, without restriction or limitation as to	104
time, and may acquire, lease, hold, and manage personal property	105
used in connection therewith. No investments in real estate to be	106
used primarily for recreational, agricultural, or mining purposes	107
shall be made under authority of division (A)(5) of this section	108
and except for investments authorized under divisions (A)(1), (2),	109
(3), and (4) of this section, no domestic life insurance company	110
shall invest in real estate under divisions (A)(5) and (R) of this	111
section a sum exceeding in the aggregate ten per cent of its	112
admitted assets on the preceding thirty-first day of December.	113

All real estate specified in divisions (A)(3) and (4) of this	114
section, which is not necessary for its accommodation in the	115
convenient transaction of its business, shall be sold by the	116
company and disposed of within five years after it has acquired	117
the title to such real estate or within five years after such real	118
estate has ceased to be necessary for the accommodation of its	119
business, unless the company procures the certificate of the	120
superintendent of insurance that its interests will suffer	121
materially by a forced sale of the real estate, in which event the	122
time for the sale may be extended to such time as the	123
superintendent directs in such certificate.	124

(B) A domestic company may acquire, hold, and convey tangible	125
personal property or interests therein for the production of	126
income, provided no domestic company shall invest in excess of two	127
per cent of its admitted assets as of the preceding thirty-first	128
day of December under this division.	129

(C) In loans and liens upon the security of its own policies,	130
not exceeding the reserve or present value of the policies,	131
computed according to any standard authorized by law or according	132
to such higher standard as the company has adopted and maintains	133
on the policy, the reserve being the amount of debts of the life	134
insurance company by reason of its outstanding policies in gross,	135
which may be so treated in the returns for taxation made by it;	136

(D) In bankers' acceptances and bills of exchange of the	137
kinds and maturities made eligible by law for rediscount with	138
federal reserve banks, provided that such acceptances and bills of	139
exchange are accepted by a bank or trust company incorporated	140
under the laws of the United States or of this state or any other	141
bank or trust company which is a member of the federal reserve	142
system;	143

(E) In equipment trust obligations or certificates, security	144
agreements, or other evidences of indebtedness entered into	145
directly or guaranteed by any company operating wholly or partly	146
within the United States or Canada, provided that the debt	147
obligation is secured by a first lien on tangible personal	148
property which is purchased or secured for payment thereof and the	149
debt obligation is repayable within twenty years from the date of	150
issue in annual, semiannual, or more frequent installments	151
beginning not later than the first year after such date;	152

(F) In bonds issued by or for federal land banks and any	153
debentures issued by or for federal intermediate credit banks	154
under the "Federal Farm Loan Act of 1916," 39 Stat. 360, 12	155
U.S.C.A. 641 as amended; any debentures issued by or for banks for	156
cooperatives under the "Farm Credit Act of 1933," 48 Stat. 257, 12	157
U.S.C.A. 131 as amended;	158

(G) In bonds issued under the "Home Owners' Loan Act of	159
1933," 48 Stat. 128, 12 U.S.C.A. 1461;	160

(H) In notes, bonds, debentures, or other such obligations	161
issued by the federal housing administrator;	162

(I)(1)(a) In bonds or other evidences of indebtedness, not in	163
default as to principal or interest, which are valid obligations	164
issued, assumed or guaranteed by the United States, by any state	165
thereof, by the Commonwealth of Puerto Rico, by any territory or	166
insular possession of the United States, or by the District of	167
Columbia, or which are valid obligations issued, assumed, or	168
guaranteed by any county, municipal corporation, district, or	169
political subdivision, or by any civil division or public	170
instrumentality of such governmental units, if by statutory or	171
other legal requirements such obligations are payable, as to both	172
principal and interest, from taxes levied upon all taxable	173
property within the jurisdiction of such governmental unit;	174

(b) In bonds or other obligations issued by or for account of	175
any such governmental unit having a population of five thousand or	176
more by the latest official federal or state census, which are	177
payable as to both principal and interest from revenues or	178
earnings from the whole or any part of a publicly owned utility	179
supplying water, gas, sewage disposal facility, or electricity, or	180
any or all of them, provided that by statute or other applicable	181
legal requirements, rates from the service or operation of such	182
utility must be fixed, maintained, and collected at all times so	183
as to produce sufficient revenues or earnings to pay both	184
principal and interest of such bonds or obligations as they become	185
due;	186

(c) In any bonds or obligations payable from and secured by	187
revenues of the United States, the Commonwealth of Puerto Rico, or	188
any state or instrumentality of any of them, or of the District of	189
Columbia or of any commission, board, or other instrumentality of	190
one or more of them, provided there is a specific pledge of	191
revenues, and provided that there is adequate provision for	192
payment of interest prior to completion of construction and that	193
rates, fees, tolls, or charges fixed are, after completion of	194
construction, sufficient to pay all expenses of operation and	195
maintenance and the principal and interest when due.	196

(2) In legally authorized and executed bonds, notes,	197
warrants, and securities which are the direct obligation of or are	198
guaranteed by Canada, or which are the direct obligation of or are	199
guaranteed as to both principal and interest by any province of	200
Canada, or which are the direct obligation of or are guaranteed as	201
to both principal and interest by any municipality of Canada	202
having a population of fifty thousand or more by the latest	203
official census, and which are not in default as to principal or	204
interest;	205

(3) In bonds or other evidence of indebtedness, not in	206
default as to principal or interest, which are valid obligations	207
issued, assumed, or guaranteed by the United States, by any state	208
thereof, the Commonwealth of Puerto Rico, or by the District of	209
Columbia, if by statutory or other legal requirements such	210
obligations are payable, as to both principal and interest, from	211
selective taxes levied by such governmental unit.	212

(J)(1) In mortgage bonds which are the direct obligation of a	213
railroad, and which are the first lien on a substantial portion of	214
its property, situated wholly in the United States or partly in	215
the United States and partly in Canada, the average net yearly	216
earnings of which, after deducting proper charges for maintenance	217
of way and equipment, for the five fiscal years preceding such	218
investments, have been at least one and one-half times the average	219
yearly interest for the same period on its mortgages, bonds, and	220
funded debts, and in the junior mortgage bond issues of such	221
railroad corporations of the same character and under the same	222
conditions where the average net yearly earnings for the five	223
fiscal years preceding such investment, after deducting proper	224
charges for maintenance of way and equipment, have been at least	225
three times the average yearly interest charges on such issues and	226
all prior liens; or in the mortgage bonds of any incorporated	227
railroad company which have been assumed or guaranteed, both as to	228
principal and interest, by any incorporated railroad company whose	229
bonds constitute a legal investment under division (J)(1) of this	230
section. In applying the earnings test to any issuing, assuming,	231
or guaranteeing company, whether or not in legal existence during	232
the whole of such five years next preceding the date of investment	233
by such insurer, which has at any time during such five-year	234
period acquired the assets of any other company by purchase,	235
merger, consolidation, or otherwise, substantially as an entirety,	236
or has been reorganized pursuant to the bankruptcy law, the	237
earnings of such other predecessor or constituent companies, or of	238
the company so reorganized, available for interest for such	239
portion of such period that has preceded such acquisition, or such	240
reorganization, may be included in the earnings of such issuing,	241
assuming, or guaranteeing company for such portion of such period	242
as is determined in accordance with adjusted or pro forma	243
consolidated earnings statements covering such portion of such	244
period. In such cases the requirements as to earnings shall be	245
based upon the mortgages, bonds, and funded debts as they exist	246
immediately after such acquisitions or such reorganizations.	247

(2) In mortgage bonds or other interest-bearing obligations	248
of terminal companies organized under the laws of the United	249
States or any state thereof, provided such bonds or obligations	250
have been assumed or guaranteed jointly or severally by two or	251
more railroad corporations whose bonds constitute legal	252
investments under division (J)(1) of this section;	253

(3) In loans to veterans guaranteed in whole or in part by	254
the United States pursuant to Title III of the "Servicemen's	255
Readjustment Act of 1944," 58 Stat. 284, 38 U.S.C.A. 693, as	256
amended, provided such guaranteed loans are liens upon real	257
estate;	258

(4) In mortgage bonds which are the direct obligation of and	259
first lien upon the property of a corporation engaged directly and	260
primarily in the production and sale of, or in the purchase and	261
sale of electricity or gas, or in the operation of telephone or	262
telegraph systems or waterworks, or in some combination of them,	263
and situated wholly in the United States, or the Commonwealth of	264
Puerto Rico, or partly in the United States and partly in Canada,	265
the average net yearly earnings of which, after deducting proper	266
charges for replacements, depreciation, and obsolescence, for the	267
five fiscal years preceding such investment, have been at least	268
one and one-half times the average yearly interest for the same	269
period on its mortgages, bonds, and funded debts;	270

(5) Any such corporation, or any of its predecessors,	271
constituent, or successor corporations, must have been in business	272
not less than ten years prior to the date of the purchase of such	273
bonds, and must not have defaulted on the interest or principal of	274
any of its bonds or funded debts outstanding during the five years	275
immediately preceding the date of purchase, provided that division	276
(J)(5) of this section does not preclude investments in mortgage	277
bonds of railroads reorganized through purchase of assets, merger,	278
consolidation, bankruptcy proceedings, or otherwise if such bonds	279
are eligible for investment under division (J)(1) of this section;	280

(6) No investment shall be made under division (J)(1), (2),	281
(4), or (5) of this section if such railroad or other utility	282
corporation and its business, and its issue of bonds, funded	283
debts, and stocks are not under the supervision and control of an	284
authorized state or federal official or commission, provided that	285
division (J)(6) of this section does not apply to the mortgage	286
bonds or other interest-bearing obligations of companies engaged	287
in the operation of telephone or telegraph systems.	288

(K)(1) In bonds or notes secured by mortgages or deeds of	289
trust which are a first lien upon unencumbered fee simple real	290
estate in any state, the Commonwealth of Puerto Rico, the District	291
of Columbia, or Canada, provided the amount loaned does not exceed	292
eighty per cent of the actual market value of such property.	293

The actual market value of any such property shall be shown	294
by a valuation and appraisement in writing by a qualified land	295
appraiser.	296

In the event the amount loaned under division (K)(1) of this	297
section exceeds eighty per cent of the actual market value of the	298
land, the structures on the land must be insured by an authorized	299
fire insurance company or covered by other comparable	300
indemnification, and the policies or indemnifications shall be	301
payable or assigned to the mortgagee or to a trustee in its behalf	302
and shall be held by the mortgagee or an agent of the mortgagee or	303
by such trustee; or in lieu of holding such policies or	304
indemnifications, the mortgagee may purchase a policy or policies	305
of mortgage protection insurance, payable to the mortgagee or a	306
trustee in its behalf, insuring the mortgagee against loss	307
resulting from the failure of the mortgagor to acquire and	308
maintain, from such an authorized fire insurance company or other	309
comparable source, insurance or indemnification.	310

(2) In bonds or notes secured by mortgages insured by the	311
federal housing administrator;	312

(3) In bonds or notes secured by mortgages or deeds of trust	313
which are a first lien on leasehold estates in wholly or partly	314
improved real property, unencumbered, except rentals accruing from	315
the property to the owner of the fee, provided that any loan	316
secured by a leasehold estate must provide for amortization by	317
repayment of principal at least once in each year in amounts	318
sufficient to repay the loan within a period of four-fifths of the	319
unexpired term of the leasehold but within a period of not more	320
than thirty years, and further provided that the amount loaned on	321
the leasehold estate does not exceed seventy-five per cent of	322
total market value of the leasehold estate determined by	323
appraisements in writing made under oath by two real estate	324
owners, residents of the county or local district in which the	325
real estate is located, or by a qualified land appraiser; if the	326
amount loaned exceeds seventy-five per cent of the value of that	327
portion of the leasehold estate represented by the value of the	328
land, exclusive of improvements on the land, such improvements	329
shall be insured against fire for the benefit of the mortgagee in	330
an amount not less than the difference between seventy-five per	331
cent of the value of such land, exclusive of buildings, and the	332
amount loaned; the policies for such amount shall be payable to	333
and held by the mortgagee or a trustee named in the lease who	334
shall be required by the terms of said lease to use and apply the	335
proceeds of such insurance for repairing, restoring, or rebuilding	336
such buildings;	337

(4) The following shall not be considered as prior liens or	338
encumbrances in the construction and application of this section:	339
leasehold estates of any duration, rights-of-way, servitudes,	340
joint driveways, easements, party wall agreements, current taxes	341
and assessments not delinquent, and restrictions as to building,	342
use, and occupancy.	343

(5) This section does not prohibit a domestic life insurance	344
company from renewing or extending a loan for the original or a	345
lesser amount nor does it prohibit a company from accepting as	346
part payment for real estate sold by it a mortgage on the real	347
estate for a greater percentage of the purchase price of the real	348
estate than is otherwise permitted by this section.	349

(L) In bonds, notes, or other evidences of indebtedness of	350
corporations, trusts, partnerships, or similar business entities	351
organized under the laws of the United States, or any state	352
thereof, the Commonwealth of Puerto Rico, the District of	353
Columbia, or Canada or any province of Canada, secured by	354
assignment of lease or leases or the rentals payable under such	355
leases, of real or personal property or both to (1) the United	356
States or any instrumentality thereof, or any state of the United	357
States, the Commonwealth of Puerto Rico, or the District of	358
Columbia, or any county, city, town, school, or water district,	359
authority, or other political subdivision in any such government,	360
or Canada, any province of Canada, or any municipal corporation of	361
Canada that has a population of fifty thousand or more by the	362
latest official census; or (2) one or more corporations, trusts,	363
partnerships, or similar business entities organized under the	364
laws of the United States, any state thereof, the Commonwealth of	365
Puerto Rico, the District of Columbia, or Canada or any province	366
of Canada, provided that (a) the fixed rentals assigned shall be	367
sufficient to repay the indebtedness within the unexpired term of	368
the lease, exclusive of the term which may be provided by an	369
enforceable option of renewal; (b) such lessee has not defaulted	370
in payment of interest or principal on any of its bonds, notes,	371
debentures, or other evidences of indebtedness during the five	372
years immediately preceding the date of the investment, and	373
provided the average net earnings available for fixed charges of	374
such lessee under division (L)(2) of this section for not less	375
than five fiscal years preceding such investment have been at	376
least one and one-half times average fixed charges for that period	377
and during either of the last two years of such period, the net	378
earnings available for fixed charges shall have been not less than	379
one and one-half times fixed charges for such year, except that	380
railroad companies and utility companies may qualify as lessees	381
herein by application of the earnings test provided for railroads	382
under division (J)(1) of this section and for utilities under	383
division (J)(4) of this section; and (c) a first lien on the	384
interest of the lessor in the unencumbered property so leased	385
shall be obtained as additional security for the indebtedness;	386

(M) In ground rents, land trust certificates, or fee	387
ownership certificates representing or evidencing beneficial	388
ownership of or interest in improved real estate under lease for	389
not less than twenty-five years from the date of such lease, in	390
which it must be provided that the lessee shall pay all taxes and	391
assessments levied on or assessed against said real estate, shall	392
maintain the improvements on the real estate in good repair, and	393
shall provide and maintain fire insurance in an amount equal to	394
the insurable value of the building on the real estate; provided:	395

(1) The value of the land and improvements shall be evidenced	396
by an appraisement made under oath by a disinterested appraiser	397
resident in and the owner of real estate in the city in which the	398
property is situated, and such appraisement shall not be less than	399
one and sixty-seven hundredths times the amount of such land trust	400
certificates, which amount shall be not less than twenty times the	401
net annual rental distributable to holders of outstanding	402
certificates;	403

(2) Such beneficial interests shall only be in properties on	404
which actual earning records for five years immediately preceding	405
are available;	406

(3) Such declaration of trust or other trust instrument shall	407
provide for a depreciation or other similar fund, in an amount	408
which is not less than nine per cent of the net annual	409
distributable rental, for the benefit of the holders of	410
outstanding certificates.	411

(N)(1) In certificates of deposit or other evidence of	412
indebtedness of a savings and loan association provided the	413
certificates or other evidence of deposit are insured pursuant to	414
the "Financial Institutions Reform, Recovery, and Enforcement Act	415
of 1989," 103 Stat. 183, 12 U.S.C.A. 1811, as amended;	416

(2) In interest-bearing obligations, including savings	417
accounts and time certificates of deposit of a national bank or	418
state bank provided such bank is a member of the federal deposit	419
insurance corporation created pursuant to the "Banking Act of	420
1933," 92 Stat. 624, 12 U.S.C.A. 624, as amended.	421

(O) In obligations issued, assumed, or guaranteed by the	422
international finance corporation or by the international bank for	423
reconstruction and development, the Asian development bank, the	424
inter-American development bank, the African development bank, or	425
other similar development bank in which the president, as	426
authorized by congress and on behalf of the United States, has	427
accepted membership;	428

(P)(1) In the preferred stocks of any company organized under	429
the laws of the United States or of any state thereof engaged	430
directly and primarily in the production and sale of, or in the	431
purchase and sale of electricity or gas, or in the operation of	432
telephone or telegraph systems or water works, or in some	433
combination of them, if the average annual net earnings of such	434
company, for not less than five fiscal years preceding purchase	435
thereof, after deduction of interest on all mortgages, bonds,	436
debentures, and funded debts and after deduction of the proper	437
charges for replacements, depreciation, and obsolescence, have	438
been at least two times the average yearly amount which is	439
required to pay the dividends or distributions on all preferred	440
stocks; and in which the mortgages, bonds, debentures, funded	441
debts, and preferred stocks shall not in the aggregate exceed	442
seventy per cent of the total capitalization of such company,	443
including mortgages, bonds, debentures, funded debts, and	444
preferred and common stocks;	445

(2) In the preferred stocks of any other company organized	446
under the laws of the United States, or of any state thereof if	447
the average annual net earnings of such company for a period of	448
not less than five fiscal years preceding purchase thereof, after	449
deduction of interest on all mortgages, bonds, debentures, and	450
funded debts and after deduction of the proper charges for	451
replacements, depreciation, and obsolescence, have been at least	452
four times the amount which is required to pay the dividends or	453
distributions on all preferred stocks, and in which the mortgages,	454
bonds, debentures, funded debts, and preferred stocks shall not in	455
the aggregate exceed sixty per cent of the total capitalization of	456
such company, including mortgages, bonds, debentures, funded	457
debts, and preferred and common stocks;	458

(3) A domestic life insurance company shall not purchase any	459
preferred stocks when the total market values of such stocks then	460
owned with those purchased exceed in the aggregate of book values	461
and purchase price the capital, surplus, and contingency funds,	462
excluding all reserves required by law, of such company on the	463
thirty-first day of December preceding the date of such purchase,	464
or contemplated purchase, provided that in case of appreciations	465
in values of stocks owned the cost rather than the market values	466
shall be used in arriving at such aggregate; the purpose being to	467
restrict the investments of such company in all preferred stocks	468
to capital, surplus, and contingency funds.	469

(4) In the bonds, notes, debentures, or other evidences of	470
indebtedness of a solvent corporation, trust, partnership, or	471
similar business entity existing under the laws of the United	472
States, of any state thereof, the Commonwealth of Puerto Rico, or	473
Canada or any province of Canada, provided that either:	474

(a) The bonds, notes, debentures, or other evidences of	475
indebtedness of such corporation, trust, partnership, or similar	476
business entity are rated 1 or 2 by the securities valuation	477
office of the national association of insurance commissioners;	478

(b) The corporation, trust, partnership, or similar business	479
entity has not defaulted in payment of interest or principal on	480
any of its bonds, notes, debentures, or other evidences of	481
indebtedness during the five years immediately preceding the date	482
of purchase, and the average annual net earnings of such	483
corporation, trust, partnership, or similar business entity that	484
are available for fixed charges for not less than five fiscal	485
years preceding such purchase have been at least one and one-half	486
times the average fixed charges of such corporation, trust,	487
partnership, or similar business entity for that period and during	488
either of the last two years of such period, the net earnings	489
available for fixed charges shall have been not less than one and	490
one-half times the fixed charges of such corporation, trust,	491
partnership, or similar business entity for such year.	492

(5) In common stocks or shares of any solvent incorporated	493
company organized under the laws of the United States, or of any	494
state, district, or territory thereof, or the Commonwealth of	495
Puerto Rico, provided that a dividend or distribution has been	496
paid by the corporation in the preceding twelve months upon such	497
stock to be purchased, or that such corporation, together with its	498
predecessor corporation or corporations, has been in existence for	499
a period of at least five years. No domestic company shall invest	500
in common stock or shares under divisions (P)(5) and (R) of this	501
section a sum exceeding in the aggregate ten per cent of its	502
admitted assets on the preceding thirty-first day of December.	503

(6) In the stocks or, limited liability company membership	504
interests, limited partnership interests, or limited liability	505
partnership interests of insurance, financial, investment, and	506
investment management companies, which investment management	507
companies are registered with the securities and exchange	508
commission under the "Investment Company Act of 1940," 54 Stat.	509
789, 15 80a-1, as amended, or the stocks, limited liability	510
company membership interests, limited partnership interests, or	511
limited liability partnership interests in an entity wholly owned	512
by a domestic company or by a domestic company and its affiliates,	513
that is formed and maintained to acquire or hold specific assets	514
or liabilities for bankruptcy remoteness or limitation of	515
liability purposes, except its own stock, but no domestic life	516
insurance company shall invest in such stocks or, limited	517
liability company membership interests, or limited liability	518
partnership interests under division (P)(6) of this section,	519
exclusive of its investments in stocks or limited liability	520
company membership interests of insurance company subsidiaries or	521
subsidiaries engaged exclusively in the ownership of insurance	522
company subsidiaries, a sum exceeding the lesser of fifty per cent	523
of its policyholder surplus or ten per cent of its admitted assets	524
as of the preceding thirty-first day of December unless the	525
approval of the superintendent of insurance is first obtained.	526
Whenever the superintendent has reason to believe that the	527
retention, investment, or acquisition of the stock or, limited	528
liability company membership interest, limited partnership	529
interest, or limited liability partnership interest of any such	530
company substantially lessens competition generally in the	531
business of insurance or creates a monopoly therein the	532
superintendent shall proceed under section 3901.13 of the Revised	533
Code to cause such domestic insurance company to divest itself of	534
such stock or, limited liability company membership interest,	535
limited partnership interest, or limited liability partnership	536
interest.	537

(7)(a) In bonds, notes, debentures, or other evidences of	538
indebtedness issued, assumed, or guaranteed by a solvent	539
corporation, trust, or partnership formed or existing under the	540
laws of a foreign jurisdiction, provided each such foreign	541
investment is of the same kind and quality as United States	542
investments authorized under this section; or in common or	543
preferred stock or, shares, membership interest, or partnership	544
interest of any solvent corporationbusiness entity formed or	545
existing under the laws of a foreign jurisdiction provided each	546
such foreign investment is of the same kind and quality as United	547
States investments authorized under this section; or in bonds or	548
other evidences of indebtedness issued, assumed, or guaranteed by	549
a foreign jurisdiction.	550

An insurer shall not invest in foreign investments under	551
division (P)(7) of this section, including investments denominated	552
in foreign currency, a sum exceeding in the aggregate fifteen per	553
cent of its admitted assets as of the preceding thirty-first day	554
of December. The aggregate amount of investments held by an	555
insurer in a single foreign jurisdiction shall not exceed three	556
per cent of its admitted assets as of the preceding thirty-first	557
day of December.	558

As used in division (P)(7)(a) of this section, "foreign	559
jurisdiction" means a jurisdiction outside the United States,	560
Puerto Rico, or canada, whose bonds are rated 1 by the securities	561
valuation office of the national association of insurance	562
commissioners.	563

(b) An insurer may acquire investments denominated in foreign	564
currency whether or not they are foreign investments.	565

An insurer shall not invest in investments denominated in	566
foreign currency a sum exceeding in the aggregate ten per cent of	567
its admitted assets as of the preceding thirty-first day of	568
December. The aggregate amount of investments denominated in a	569
single foreign currency held by an insurer shall not exceed three	570
per cent of an insurer's admitted assets as of the preceding	571
thirty-first day of December.	572

(c) As used in division (P)(7) of this section, "foreign	573
currency" means a currency other than that of the United States.	574

(8) An insurer may invest without limitation in investments	575
of government money market funds. As used in division (P)(8) of	576
this section, "government money market fund" means a mutual fund	577
that at all times invests in obligations issued, guaranteed, or	578
insured by the federal government of the United States, or	579
collateralized repurchase agreements comprised of these	580
obligations, and that qualifies for investment without a reserve	581
pursuant to the purposes and procedures of the securities	582
valuation office of the national association of insurance	583
commissioners.	584

(Q) In loans upon the pledge of any securities in which such	585
companies are authorized by this section to invest, provided that	586
any loan upon such a pledge shall not exceed eighty per cent of	587
the cash market value of the collateral at the time of the making	588
of such loan and at the end of each twelve-month period	589
thereafter, and such company, through the collateral pledged to	590
it, shall not exceed the amounts which it may, under this section,	591
invest in one corporation so that, in the stocks and securities	592
which may be owned and those which are pledged to it, the	593
limitations in this section might be indirectly evaded;	594

(R)(1) Any domestic legal reserve life insurance company may	595
loan or invest its funds, to an extent not exceeding in the	596
aggregate five per cent of its total admitted assets, in loans or	597
investments not permitted under this section. Any such company may	598
also invest up to an additional five per cent of its total	599
admitted assets, in loans or investments in small businesses	600
having more than half of their assets or employees in this state	601
and in venture capital firms having an office within this state,	602
provided that, as a condition of a company making an investment in	603
a venture capital firm, the firm must agree to use its best	604
efforts to make investments, in an aggregate amount at least equal	605
to the investment to be made by the company in that venture	606
capital firm, in small businesses having their principal offices	607
within this state and having either more than one-half of their	608
assets within this state or more than one-half of their employees	609
employed within this state.	610

As used in division (R) of this section:

611

(a) "Small businesses" means any corporation, partnership,	612
proprietorship, or other entity that either does not have more	613
than four hundred employees, or would qualify as a small business	614
for the purpose of receiving financial assistance from small	615
business investment companies licensed under the "Small Business	616
Investment Act of 1958," 72 Stat. 689, 15 U.S.C.A. 661, as	617
amended, and rules of the small business administration.	618

(b) "Venture capital firms" means any corporation,	619
partnership, proprietorship, or other entity, the principal	620
business of which is or will be the making of investments in small	621
businesses.	622

(c) "Investments" means any equity investment, including	623
limited partnership interests and other equity interests in which	624
liability is limited to the amount of the investment, but does not	625
include general partnership interests or other interests involving	626
general liability.	627

(2) In the event that, subsequent to being made under	628
provisions of division (R) of this section, an investment is	629
determined to have become qualified as an investment for a	630
domestic life insurance company as provided for in this section,	631
the company may consider such investment as held under the	632
applicable provisions of the foregoing divisions (A) to (Q) of	633
this section and such investment shall no longer be considered as	634
having been made under the provisions of this division.	635

(S)(1) No domestic life insurance company shall subscribe to	636
or participate in any underwriting for the purchase or sale of	637
securities or property, nor shall it enter into any such	638
transaction for purchase or sale on account of said company	639
jointly with any other person, nor shall any such company enter	640
into any agreement to withhold from sale any of its property, but	641
the disposition of its property shall be at all times within the	642
control of its board of directors. Nothing contained in division	643
(S)(1) of this section shall be construed to invalidate or	644
prohibit an agreement by an insurance company for the purchase for	645
its own account of an entire issue of the securities of a	646
corporation or to invalidate or prohibit an agreement by an	647
insurance company and one or more other investors to join and	648
share in the purchase of investments for their individual accounts	649
and for bona fide investment purposes.	650

(2) In the determination of capitalization in this section	651
the value of all bonds, debentures, and funded debts, and	652
nonconvertible or nonparticipating preferred stocks shall be	653
figured at par. Participating or convertible preferred shares	654
shall be figured at par or market on the preceding thirty-first	655
day of December, whichever is higher, and the value of all common	656
shares shall be figured at the market on the preceding	657
thirty-first day of December.	658

(3) As used in this section:

659

(a) "Funded debt" means all interest-bearing obligations	660
maturing in more than one year from their issuance and all	661
guaranteed or assumed interest-bearing obligations or stock.	662
Securities or stock of a corporation pledged to secure other	663
funded debt of the corporation are not included in the funded	664
debt.	665

(b) "Fixed charges" include actual interest incurred in each	666
year on funded and unfunded debt and annual apportionment of debt	667
discount or premium. Where interest is partially or entirely	668
contingent upon earnings, "fixed charges" include contingent	669
interest payments.	670

(c) "Net earnings available for fixed charges" means income	671
after deducting operating and maintenance expenses, taxes other	672
than income taxes, depreciation, and depletion. Extraordinary,	673
nonrecurring items of income or expense shall be excluded.	674

(4) Except as provided in a plan of mutualization adopted	675
pursuant to the provisions of sections 3913.01 to 3913.10 of the	676
Revised Code, no domestic life insurance company may invest in or	677
loan upon its own stock, either directly or indirectly.	678

(5) If the investments of any domestic life insurance company	679
are at the time of the making thereof or on October 13, 1953,	680
otherwise than as authorized in this section, such investments	681
shall not be admitted or accepted as authorized investments for	682
such company.	683

(6) Any earnings test provided for in this section shall be	684
deemed to have been met if the requirements of such earnings test	685
are met by any company which assumes or guarantees the investment	686
or which assumes or guarantees the performance of any lease which	687
is the security for the investment. In applying any such earnings	688
test, the operations of a company's predecessor companies, if any,	689
for the stipulated period shall be included.	690

(7) No domestic life insurance company shall at any time have	691
invested in or loaned upon the security of the obligations,	692
property, or securities of a particular corporation, trust,	693
partnership, or similar business entity a sum exceeding the	694
greater of two per cent of its admitted assets as of the preceding	695
thirty-first day of December or twenty-five per cent of that	696
portion of its capital and surplus, or its surplus in the case of	697
a mutual company, that exceeds the minimum required capital and	698
surplus under section 3907.05 of the Revised Code unless the	699
approval of the superintendent of insurance is first obtained. The	700
restrictions of division (S)(7) of this section do not apply to	701
divisions (C), (F), (G), (H), (P)(6), and (R) of this section or	702
to any valid obligation issued, assumed, or guaranteed by the	703
United States, or any state thereof, the Commonwealth of Puerto	704
Rico, the District of Columbia, or Canada or any province of	705
Canada. For purposes of division (S)(7) of this section, such	706
company may, at its option, consider either the lessor or the	707
lessee under division (L) of this section to be the person to whom	708
any such investment or loan is made.	709

(8) This section does not affect the propriety or legality of	710
an investment made by a domestic life insurance company which was	711
in accordance with the laws in force at the time of the making of	712
the investment.	713

Sec. 3921.10.  A domestic fraternal benefit society organized	714
on or after January 1, 1997, shall be formed as follows:	715

(A) Seven or more citizens of the United States, a majority	716
of whom are residents of this state, who desire to form a	717
fraternal benefit society, may make, sign, and acknowledge before	718
some officer competent to take acknowledgement of deeds, articles	719
of incorporation stating all of the following:	720

(1) The proposed corporate name of the society, which name	721
shall not so closely resemble the name of any society or insurance	722
company as to be misleading or confusing;	723

(2) The purposes for which it is being formed and the mode in	724
which its corporate powers are to be exercised. Such purposes	725
shall not include more liberal powers than are granted by this	726
chapter.	727

(3) The names and residences of the incorporators and the	728
names, residences, and official titles of all the officers,	729
trustees, directors, or other persons who are to have and exercise	730
the general control of the management of the affairs and funds of	731
the society for the first year or until the ensuing election at	732
which all such officers shall be elected by the supreme governing	733
body, which election shall be held not later than one year from	734
the date of the issuance of the permanent certificate of	735
authority.	736

(B) The articles of incorporation, duly certified copies of	737
the society's bylaws and rules, copies of all proposed forms of	738
certificates, applications for certificates, and circulars to be	739
issued by the society, and a bond conditioned upon the return to	740
applicants of the advanced payments if the organization is not	741
completed within one year, shall be filed with the superintendent	742
of insurance, who may require any other information the	743
superintendent considers necessary. The bond with sureties	744
approved by the superintendent shall be in such amount, not less	745
than three hundred thousand dollars nor more than one million five	746
hundred thousand dollars, as required by the superintendent. All	747
documents filed shall be in the English language. If the purposes	748
of the society conform to the requirements of this chapter and all	749
provisions of the laws of this state have been complied with, the	750
superintendent shall so certify, retain and file the articles of	751
incorporation, and furnish the incorporators a preliminary	752
certificate of authority authorizing the society to solicit	753
members as provided in this section.	754

(C) No preliminary certificate of authority granted under	755
this section shall be valid after one year from its date or after	756
such additional period, not exceeding one year, as may be	757
authorized by the superintendent upon cause shown, unless the five	758
hundred applicants required in division (D) of this section have	759
been secured and the organization has been completed as provided	760
in this section. The articles of incorporation and all other	761
proceedings thereunder shall be void one year after the date of	762
the preliminary certificate of authority, or at the expiration of	763
the extended period, unless the society has completed its	764
organization and has received a certificate of authority to do	765
business as provided in division (E) of this section.	766

(D) Upon receipt of a preliminary certificate of authority	767
from the superintendent, the society may solicit members for the	768
purpose of completing its organization, shall collect from each	769
applicant the amount of not less than one regular monthly premium	770
in accordance with its table of rates, and shall issue to each	771
applicant a receipt for the amount so collected. No society shall	772
incur any liability other than for the return of such advance	773
premium, nor issue any certificate, nor pay, allow, or offer, or	774
promise to pay or allow, any benefit to any person until all of	775
the following apply:	776

(1) Actual bona fide applications for benefits have been	777
secured aggregating at least two million five hundred thousand	778
dollars on not less than five hundred applicants, and any	779
necessary evidence of insurability has been furnished to and	780
approved by the society.	781

(2) At least ten subordinate lodges have been established	782
into which the five hundred applicants have been admitted.	783

(3) There has been submitted to the superintendent, under	784
oath of the president or secretary, or corresponding officer of	785
the society, a list of such applicants, giving their names,	786
addresses, date each was admitted, name and number of the	787
subordinate lodge of which each applicant is a member, amount of	788
benefits to be granted, and premiums for the benefits.	789

(4) It has been shown to the superintendent, by sworn	790
statement of the treasurer, or corresponding officer of the	791
society, that at least five hundred applicants have each paid in	792
cash at least one regular monthly premium as provided in this	793
section, which premiums in the aggregate amount to at least one	794
hundred fifty thousand dollars, all of which is credited to the	795
fund or funds from which benefits are to be paid and no part of	796
which may be used for expenses. These advance premiums shall be	797
held in trust during the period of organization and if the society	798
has not qualified for a certificate of authority within one year,	799
as provided in this section, the premiums shall be returned to the	800
applicants.	801

(E) The superintendent may make such examination and require	802
such further information as the superintendent considers	803
advisable. Upon presentation of satisfactory evidence that the	804
society has complied with all the provisions of law including the	805
surplus requirements of section 3921.101 of the Revised Code, the	806
superintendent shall issue to the society a certificate of	807
authority to that effect and that the society is authorized to	808
transact business pursuant to the provisions of this chapter. The	809
certificate of authority shall be prima facie evidence of the	810
existence of the society at the date of the certificate. The	811
superintendent shall cause a record of the certificate of	812
authority to be made. A certified copy of the record may be given	813
in evidence with like effect as the original certificate of	814
authority.	815

(F) An incorporated society that was organized prior to	816
January 1, 1997, and that, as of December 31, 1996, is authorized	817
to transact business in this state shall not be required to	818
reincorporate, and may exercise all the rights, powers, and	819
privileges conferred in this chapter and in the society's articles	820
of incorporation to the extent that the articles are consistent	821
with this chapter.	822

Sec. 3921.101.  (A)(1) On and after January 1, 2016, a	823
fraternal benefit society that provides the contractual benefits	824
listed in division (A)(1) of section 3921.16 of the Revised Code	825
in this state in a benefit amount of greater than ten thousand	826
dollars shall have and maintain a surplus of two million five	827
hundred thousand dollars for all lines written.	828

(2) On and after January 1, 2016, a fraternal benefit society	829
that provides the contractual benefits listed in division (A)(1)	830
of section 3921.16 of the Revised Code in this state in a benefit	831
amount of ten thousand dollars or less shall have and maintain a	832
surplus of five hundred thousand dollars.	833

(B)(1) On and after January 1, 2016, a fraternal benefit	834
society that provides the contractual benefits listed in division	835
(A)(2) of section 3921.16 of the Revised Code in this state in a	836
benefit amount of greater than ten thousand dollars shall have and	837
maintain a surplus of two million five hundred thousand dollars	838
for all lines written.	839

(2) On and after January 1, 2016, a fraternal benefit society	840
that provides the contractual benefits listed in division (A)(2)	841
of section 3921.16 of the Revised Code in this state in a benefit	842
amount of ten thousand dollars or less shall have and maintain a	843
surplus of five hundred thousand dollars.	844

(C)(1) On and after January 1, 2016, a fraternal benefit	845
society that provides the contractual benefits listed in division	846
(A)(3) of section 3921.16 of the Revised Code in this state in a	847
benefit amount of greater than ten thousand dollars shall have and	848
maintain a surplus in the aggregate of two million five hundred	849
thousand dollars for all lines written.	850

(2) On and after January 1, 2016, a fraternal benefit society	851
that provides the contractual benefits listed in division (A)(3)	852
of section 3921.16 of the Revised Code in this state in a benefit	853
amount of ten thousand dollars or less shall have and maintain a	854
surplus of five hundred thousand dollars.	855

(D) On and after January 1, 2016, a fraternal benefit society	856
that provides the contractual benefits listed in division (A)(4)	857
of section 3921.16 of the Revised Code in this state shall have	858
and maintain a surplus of two million five hundred thousand	859
dollars for all lines written.	860

(E) On and after January 1, 2016, a fraternal benefit society	861
that provides the contractual benefits listed in division (A)(5)	862
of section 3921.16 of the Revised Code in this state shall have	863
and maintain a surplus of two million five hundred thousand	864
dollars for all lines written.	865

(F) On and after January 1, 2016, a fraternal benefit society	866
that provides the contractual benefits listed in division (A)(6)	867
of section 3921.16 of the Revised Code in this state shall have	868
and maintain a surplus of five hundred thousand dollars.	869

(G) On and after January 1, 2016, a fraternal benefit society	870
that provides the contractual benefits listed in division (A)(7)	871
of section 3921.16 of the Revised Code in this state shall have	872
and maintain a surplus of two million five hundred thousand	873
dollars for all lines written.	874

(H) The surplus requirements of this section are not	875
cumulative. A society with a surplus of at least two million five	876
hundred thousand dollars on and after January 1, 2016, satisfies	877
the surplus requirements of this section.	878

Sec. 3921.13.  (A) A domestic fraternal benefit society may,	879
by a reinsurance agreement, cede any individual risk or risks in	880
whole or in part to an insurer, other than another fraternal	881
benefit society, having the power to make such reinsurance and	882
authorized to do business in this state, or if not so authorized,	883
one which is approved by the superintendent of insurance; however,	884
no society may reinsure substantially all of its insurance in	885
force without the written permission of the superintendent. It may	886
take credit for the reserves on the ceded risks to the extent	887
reinsured, but no credit shall be allowed as an admitted asset or	888
as a deduction from liability, to a ceding society for reinsurance	889
made, ceded, renewed, or otherwise becoming effective after	890
January 1, 1997, unless the reinsurance is payable by the assuming	891
insurer on the basis of the liability of the ceding society under	892
the contract or contracts reinsured without diminution because of	893
the insolvency of the ceding society.	894

(B) Notwithstanding division (A) of this section, a society	895
may reinsure the risks of another society in a consolidation or	896
merger approved by the superintendent under section 3921.14 of the	897
Revised Code.	898

(C) A society with assets of less than five billion dollars	899
that provides contract benefits of major medical, medicare	900
supplemental, or long-term care pursuant to division (A)(5) of	901
section 3921.16 of the Revised Code shall reinsure not less than	902
fifty per cent of the risk arising from those contracts if the	903
society's risk based capital is less than three hundred per cent.	904

Sec. 3921.19.  (A) Each fraternal benefit society authorized	905
to do business in this state shall issue to each owner of a	906
benefit contract a certificate specifying the amount of benefits	907
provided under the contract. The certificate, together with any	908
riders or endorsements attached to the certificate, the laws of	909
the society, the application for membership, the application for	910
insurance and declaration of insurability, if any, signed by the	911
applicant, and all amendments to each such document, constitute	912
the benefit contract, as of the date of issuance, between the	913
society and the owner, and the certificate shall so state. A copy	914
of the application for insurance and declaration of insurability,	915
if any, shall be endorsed upon or attached to the certificate.	916

All statements made on the application are representations	917
and not warranties. Any waiver of this provision is void.	918

(B) Any changes, additions, or amendments to the laws of the	919
society duly made or enacted subsequent to the issuance of the	920
certificate, shall bind the owner and the beneficiaries, and shall	921
govern and control the benefit contract in all respects the same	922
as though such changes, additions, or amendments had been made	923
prior to and were in force at the time of the application for	924
insurance, except that no change, addition, or amendment shall	925
destroy or diminish benefits that the society contracted to give	926
the owner as of the date of issuance.	927

(C) Any person upon whose life a benefit contract is issued	928
prior to attaining the age of majority shall be bound by the terms	929
of the application and certificate and by all of the laws and	930
rules of the society to the same extent as though the age of	931
majority had been attained at the time of application.	932

(D) A society shall provide in its laws that if its reserves	933
as to all or any class of certificates become impaired its board	934
of directors or corresponding body may require that there shall be	935
paid by the owner to the society the amount of the owner's	936
equitable proportion of such deficiency as ascertained by its	937
board, and that if the payment is not made, either of the	938
following applies:	939

(1) It shall stand as an indebtedness against the certificate	940
and draw interest not to exceed the rate specified for certificate	941
loans under the certificates;	942

(2) In lieu of or in combination with division (D)(1) of this	943
section, the owner may accept a proportionate reduction in	944
benefits under the certificate.	945

The society may specify the manner of the election and which	946
alternative is to be presumed if no election is made.	947

(E) At least thirty days prior to imposing any indebtedness	948
upon any owner as provided in division (D) of this section, the	949
board of directors or corresponding body shall notify the	950
superintendent of insurance in writing of the board's intent to	951
require the payment and a statement of the reason that request is	952
necessary. The notice shall be confidential and not a public	953
record under section 149.43 of the Revised Code.	954

(F)(1) Certificates that are delivered or issued for delivery	955
in this state on or after January 1, 1997, but prior to January 1,	956
1998, shall comply with the requirements that would have applied	957
under the laws in effect on December 31, 1996.	958

(2) No certificate shall be delivered or issued for delivery	959
in this state on or after January 1, 1998, unless a copy of the	960
form is filed with and approved by the superintendent of insurance	961
in accordance with the provisions of law applicable to like	962
policies issued by life or sickness and accident insurers in this	963
state.	964

(3) Each life, sickness and accident, or disability insurance	965
certificate, and each annuity certificate, that is delivered or	966
issued for delivery in this state on or after January 1, 1998,	967
shall comply with the standard contract provision requirements	968
applicable to like policies issued by life or sickness and	969
accident insurers in this state, if those requirements are not	970
inconsistent with this chapter. However, a society may provide in	971
its certificates for a grace period of one full month for payment	972
of premiums. A certificate shall also contain a provision that	973
states the amount of premiums that is payable under the	974
certificate and that sets forth the substance of any sections of	975
the society's laws or rules in force at the time of issuance of	976
the certificate which, if violated, will result in the termination	977
or reduction of benefits payable under the certificate. If the	978
laws of the society provide for the expulsion or suspension of a	979
member, the certificate shall also contain a provision stating	980
that any member expelled or suspended, except a member expelled or	981
suspended because of nonpayment of a premium, may maintain, other	982
than during the contestable period for material misrepresentation	983
in the application for membership or insurance, the certificate in	984
force by continuing payment of the required premium.	985

(F)(G) Benefit contracts issued on the lives of persons under	986
the society's minimum age for adult membership may provide for	987
transfer of control of ownership to the insured at an age	988
specified in the certificate. A society may require approval of an	989
application for membership in order to effect this transfer, and	990
may provide in all other respects for the regulation, government,	991
and control of such certificates and all rights, obligations, and	992
liabilities incident to and connected with such certificates.	993
Ownership rights prior to such a transfer shall be specified in	994
the certificate.	995

(G)(H) A society may specify the terms and conditions on	996
which benefit contracts may be assigned.	997

(H)(I) A copy of any of the documents described in this	998
section, if certified by the secretary or corresponding officer of	999
the society, is prima facie evidence of the terms and conditions	1000
of the documents.	1001

Sec. 3921.191.  (A) A fraternal benefit society shall provide	1002
an applicant for contractual benefits a disclosure statement at	1003
the time of sale substantially as follows:	1004

".......... (Name of the fraternal benefit society) IS	1005
LICENSED TO DO BUSINESS IN THE STATE OF OHIO. AS A ........	1006
(not-for-profit, tax-exempt, self-governing, or membership	1007
organization), FRATERNAL BENEFIT SOCIETIES ARE NOT INCLUDED IN THE	1008
OHIO GUARANTY ASSOCIATION. THIS MEANS THAT FRATERNAL BENEFIT	1009
SOCIETIES CANNOT BE ASSESSED FOR THE INSOLVENCY OF OTHER LIFE	1010
INSURERS OR OTHER FRATERNAL BENEFIT SOCIETIES. BY LAW, A FRATERNAL	1011
BENEFIT SOCIETY IS RESPONSIBLE FOR ITS OWN SOLVENCY. IF THERE IS	1012
AN IMPAIRMENT OF RESERVES, A CERTIFICATE HOLDER MAY BE ASSESSED A	1013
PROPORTIONATE SHARE OF THE IMPAIRMENT. THIS PROCESS IS DESCRIBED	1014
IN THE CERTIFICATE ISSUED BY THE SOCIETY."	1015

(B) The statement must be signed by the applicant and	1016
maintained in the certificate or contract file by the fraternal	1017
benefit society. The statement may be part of the society's	1018
membership application or certificate or policy application.	1019

(C) This section is applicable only to new business written	1020
by a fraternal benefit society after the effective date of this	1021
section.	1022

Sec. 3921.22.  (A) A fraternal benefit society shall hold,	1023
invest, and disburse all assets for the use and benefit of the	1024
society. No member or beneficiary shall have or acquire individual	1025
rights to the assets, or be entitled to any apportionment on the	1026
surrender of any part of the assets, except as provided in the	1027
benefit contract.	1028

(B) A society may create, maintain, invest, disburse, and	1029
apply any special fund or funds necessary to carry out any purpose	1030
permitted by the laws of the society. No society shall, directly	1031
or indirectly, pay or use, or offer, consent, or agree to pay or	1032
use, any of its funds, money, or property for or in aid of any	1033
political party, campaign committee, political action committee,	1034
continuing association, or any other political organization.	1035

(C) A society may, pursuant to resolution of its supreme	1036
governing body, establish and operate one or more separate	1037
accounts and issue contracts on a variable basis, subject to the	1038
provisions of law regulating life insurers that establish such	1039
accounts and issue such contracts including those described in	1040
section 3911.011 of the Revised Code. To the extent the society	1041
considers it necessary in order to comply with any applicable	1042
federal or state law, or any rule issued under that law, the	1043
society may do any of the following:	1044

(1) Adopt special procedures for the conduct of the business	1045
and affairs of a separate account;	1046

(2) For persons having beneficial interests in the account,	1047
provide special voting and other rights, including special rights	1048
and procedures relating to investment policy, investment advisory	1049
services, selection of certified public accountants, and selection	1050
of a committee to manage the business and affairs of the account;	1051

(3) Issue contracts on a variable basis to which divisions	1052
(B) and (D) of section 3921.19 of the Revised Code do not apply.	1053

Sec. 3921.28.  (A)(1) Each domestic fraternal benefit society	1054
and each applicant for a certificate of incorporation as a	1055
domestic fraternal benefit society shall be subject to examination	1056
by the superintendent of insurance in accordance with section	1057
3901.07 of the Revised Code. Section 3901.07 of the Revised Code	1058
shall govern every aspect of the examination, including the	1059
circumstances under and frequency with which it is conducted, and	1060
the authority of the superintendent and any examiner or other	1061
person appointed by the superintendent.	1062

(2)(a) A domestic fraternal benefit society shall be liable	1063
for the payment of any additional expense of an examination	1064
resulting from unreasonable delays by the society in fulfilling a	1065
request for documents or information by the examiner conducting	1066
the examination. A delay is deemed unreasonable if the examiner	1067
has made two separate unfulfilled requests for the same documents	1068
or information. A request for records or information from an	1069
examiner shall allow the fraternal benefit society a minimum of	1070
ten business days to fulfill the request.	1071

(b) In the event of an unreasonable delay, the examiner shall	1072
notify the superintendent, who shall set a hearing, under Chapter	1073
119. of the Revised Code, to determine if there has been an	1074
unreasonable delay because of the fraternal benefit society's	1075
response to a request for documents or information and to	1076
calculate the additional expense incurred by the superintendent as	1077
a result of the unreasonable delay.	1078

(3) A summary of the examination of the superintendent and	1079
any recommendations or statements of the superintendent that	1080
accompany the report, shall be read at the first meeting of the	1081
board of directors or corresponding body of the society following	1082
the receipt thereof, and if directed so to do by the	1083
superintendent, shall also be read at the first meeting of the	1084
supreme legislative or governing body of the society following the	1085
receipt thereof. A copy of the report, recommendations, and	1086
statements of the superintendent shall be furnished by the society	1087
to each member of the board of directors or other governing body.	1088

(B) Each foreign or alien fraternal benefit society	1089
transacting or applying for admission to transact business in this	1090
state shall be subject to examination by the superintendent in	1091
accordance with section 3901.07 of the Revised Code. Section	1092
3901.07 of the Revised Code shall govern every aspect of the	1093
examination, including the circumstances under and frequency with	1094
which it is conducted, the authority of the superintendent and any	1095
examiner or other person appointed by the superintendent, the	1096
liability for the assessment of expenses incurred in conducting	1097
the examination, and the remittance of the assessment to the	1098
superintendent's examination fund.	1099

Sec. 3921.29.  No foreign or alien fraternal benefit society	1100
shall transact business in this state without a license issued by	1101
the superintendent of insurance. Any such society may be licensed	1102
to transact business in this state upon filing all of the	1103
following with the superintendent:	1104

(A) A duly certified copy of its articles of incorporation;

1105

(B) A copy of its bylaws certified by its secretary or	1106
corresponding officer;	1107

(C) A power of attorney to the superintendentwritten	1108
appointment of an agent as prescribed in section 3921.35 of the	1109
Revised Code;	1110

(D) A statement of its business made under oath of its	1111
president and secretary or corresponding officers in a form	1112
prescribed by the superintendent and duly verified by an	1113
examination made by the supervising insurance official of its	1114
state of domicile or of any other state, district, territory,	1115
province, or country, which examination is satisfactory to the	1116
superintendent;	1117

(E) Certification from the proper official of its state,	1118
district, territory, province, or country of domicile that the	1119
society is legally incorporated and licensed to transact business	1120
in that state, district, territory, province, or country;	1121

(F) Copies of its certificate forms;

1122

(G) A description of its investments that shows that its	1123
assets are invested in accordance with this chapter;	1124

(H) Any other information the superintendent considers	1125
necessary.	1126

Sec. 3921.30. (A) If the superintendent of insurance finds,	1127
upon investigation, that a domestic fraternal benefit society has	1128
exceeded its powers, has failed to comply with any provision of	1129
this chapter, is not fulfilling its contracts in good faith, has a	1130
membership of less than four hundred after an existence of one	1131
year or more, or is conducting business fraudulently or in a	1132
manner hazardous to its members, creditors, the public, or the	1133
business, the superintendent shall issue a written notice to the	1134
society that sets forth the deficiency and the reasons for the	1135
superintendent's dissatisfaction, and that requires the society to	1136
correct the deficiency within thirty days after receipt of the	1137
notice. If the society fails to correct the deficiency within that	1138
thirty-day period, the superintendent shall notify the society of	1139
its failure to correct the deficiency and shall require the	1140
society to show cause on a date named why it should not be	1141
enjoined from carrying on any business until the violation	1142
complained of has been corrected, or why an action in quo warranto	1143
should not be commenced against the society.	1144

If on that date the society does not present good and	1145
sufficient reasons why it should not be enjoined or why such	1146
action should not be commenced, the superintendent may present the	1147
facts relating thereto to the attorney general. If the attorney	1148
general determines that the circumstances warrant, the attorney	1149
general shall commence an action to enjoin the society from	1150
transacting business or in quo warranto.	1151

The court shall thereupon notify the officers of the society	1152
of a hearing. If after a full hearing it appears that the society	1153
should be enjoined or liquidated or a receiver appointed, the	1154
court shall enter the necessary order.	1155

(B) A society enjoined pursuant to division (A) of this	1156
section shall not have the authority to do business until all of	1157
the following occur:	1158

(1) The superintendent finds that the violation complained of	1159
has been corrected.	1160

(2) The costs of the action have been paid by the society if	1161
the court finds that the society was in default as charged.	1162

(3) The court has dissolved its injunction.

1163

(4) The superintendent has reinstated the certificate of	1164
authority.	1165

(C) If the court orders the society liquidated, the society	1166
shall be enjoined from carrying on any further business, whereupon	1167
the receiver of the society shall proceed at once to take	1168
possession of the books, papers, money, and other assets of the	1169
society and, under the direction of the court, shall close the	1170
affairs of the society and distribute its funds to those entitled	1171
to them.	1172

(D) No action under this section shall be recognized in any	1173
court of this state unless brought by the attorney general upon	1174
request of the superintendent. Whenever a receiver is to be	1175
appointed for a domestic society, the court shall appoint the	1176
superintendent as the receiver.	1177

(E) The provisions of this section relating to a hearing by	1178
the superintendent, action by the attorney general at the request	1179
of the superintendent, hearing by the court, injunction, and	1180
receivership shall apply to any society that voluntarily	1181
determines to discontinue business.	1182

(F) Nothing in this section shall be construed as preventing	1183
the lodges and members of a society from commencing a civil action	1184
against a society for the enforcement of a contract provision or	1185
for the resolution of a dispute concerning an interpretation of	1186
the society's laws, which action is not based on the	1187
superintendent's exercise of authority under this section. A	1188
society shall not prohibit a lodge or member from commencing such	1189
commence an action against itthe society under sections 3903.01	1190
to 3903.59 of the Revised Code.	1191

Sec. 3921.31. (A) If the superintendent of insurance finds,	1192
upon investigation, that a foreign or alien fraternal benefit	1193
society transacting or applying to transact business in this state	1194
has exceeded its powers, has failed to comply with any provision	1195
of this chapter, is not fulfilling its contracts in good faith, or	1196
is conducting its business fraudulently or in a manner hazardous	1197
to its members or creditors or the public, the superintendent	1198
shall issue a written notice to the society that sets forth the	1199
deficiency and the reasons for the superintendent's	1200
dissatisfaction, and that requires the society to correct the	1201
deficiency within thirty days after receipt of the notice. If the	1202
society fails to correct the deficiency within that thirty-day	1203
period, the superintendent shall notify the society of its failure	1204
to correct the deficiency and shall require the society to show	1205
cause on a date named why its license should not be suspended,	1206
revoked, or refused.	1207

If on that date the society does not present good and	1208
sufficient reason why its authority to do business in this state	1209
should not be suspended, revoked, or refused, the superintendent	1210
may suspend or refuse the license of the society to do business in	1211
this state until satisfactory evidence is furnished to the	1212
superintendent that the suspension or refusal should be withdrawn,	1213
or the superintendent may revoke the authority of the society to	1214
do business in this state.	1215

(B) Nothing in this section shall be construed as preventing	1216
any foreign or alien society from continuing in good faith all	1217
contracts made in this state during the time the society was	1218
legally authorized to transact business in this statecommence an	1219
action against the society under section 3903.71 of the Revised	1220
Code.	1221

Sec. 3921.33.  (A) Agents of fraternal benefit societies	1222
shall be licensed in the manner provided for agents of insurance	1223
companies in Chapter 3905. of the Revised Code, and shall be	1224
required to complete continuing education as set forth in section	1225
3905.481 of the Revised Code starting with the twenty-four-month	1226
period commencing on the first day of January of 1999. However, no	1227
written or other examination shall be required of any person whose	1228
application for the original issuance of a license to represent a	1229
fraternal benefit society as its agent was filed with the	1230
superintendent of insurance prior to January 1, 1997.	1231

(B) The following persons shall not be required to be	1232
licensed in accordance with division (A) of this section:	1233

(1) Any regularly salaried officer, employee, or member of a	1234
licensed society who devotes substantially all of the person's	1235
services to activities other than the solicitation of fraternal	1236
insurance contracts from the public, and who receives for the	1237
solicitation of any such contracts no commission or other	1238
compensation directly dependent upon the amount of business	1239
obtained.	1240

The officers, employees, and members described in division	1241
(B)(1) of this section also are not subject to examination by the	1242
superintendent under Chapter 3905. of the Revised Code.	1243

(2) Any agent or representative of a society who devotes, or	1244
intends to devote, less than fifty per cent of the person's time	1245
to the solicitation and procurement of insurance contracts for the	1246
society. For purposes of division (B)(2) of this section, any	1247
person who, in the preceding calendar year, has received a	1248
commission or other compensation for soliciting and procuring any	1249
of the following contracts on behalf of an individual society is	1250
presumed to have devoted, or to have intended to devote, fifty per	1251
cent of the person's time to the solicitation and procurement of	1252
insurance contracts:	1253

(a) Life insurance contracts that, in the aggregate, exceeded	1254
two hundred thousand dollars of coverage for all lives insured for	1255
the preceding calendar year;	1256

(b) A permanent life insurance contract offering more than	1257
ten thousand dollars of coverage on an individual life;	1258

(c) A term life insurance contract offering more than fifty	1259
thousand dollars of coverage on an individual life;	1260

(d) Any insurance contracts other than life that the society	1261
may write and that insure the individual lives of more than	1262
twenty-five individuals;	1263

(e) Any contract issued on a variable basis, as authorized by	1264
division (C) of section 3921.22 of the Revised Code.	1265

(C) Notwithstanding division (B) of this section, any person	1266
selling an annuity contract under the authority of division (A)(3)	1267
of section 3921.16 of the Revised Code shall be licensed pursuant	1268
to Chapter 3905. of the Revised Code.	1269

Sec. 3921.35.  (A) Any fraternal benefit society authorized	1270
to transact business in this state shall have and maintain an	1271
agent upon whom may be served any process, notice, or demand	1272
required or permitted by law to be served upon a society.	1273

The agent required under this section may be a natural person	1274
residing in this state or a corporation holding a license under	1275
the laws of this state that is authorized by its articles of	1276
incorporation to act as an agent and that maintains a business	1277
address in this state. A statutory agent is not required to be a	1278
licensed insurance agent.	1279

(B) The written appointment of an agent shall be in the form	1280
the superintendent of insurance prescribes and may include a	1281
consent to service of process.	1282

The appointment shall set forth the name and complete address	1283
of the agent. The agent shall reside or maintain a business	1284
address within this state.	1285

(C) The superintendent shall keep a record of the fraternal	1286
benefit societies transacting business in this state and the name	1287
and address of their respective agents.	1288

(D)(1) If any agent dies, moves out of the state, or resigns,	1289
the society immediately shall appoint another agent and file with	1290
the superintendent a written appointment as described in division	1291
(B) of this section.	1292

(2) If an agent changes the agent's address, the society or	1293
agent immediately shall notify the superintendent of the change,	1294
and shall set forth the agent's new address, on a form prescribed	1295
by the superintendent.	1296

(E) An agent may resign by filing with the superintendent a	1297
written notice signed by the agent. The agent shall send a copy of	1298
the notice to the society at the current or last known address of	1299
the society's principal office prior to the date the notice is	1300
filed with the superintendent.	1301

The notice required under this division shall set forth the	1302
society's name, the current or last known address of the society,	1303
the name and address of the agent, the resignation of the agent,	1304
and a statement that a copy of the notice has been sent to the	1305
society and the date the copy was sent.	1306

The agent's authority to represent the fraternal benefit	1307
society shall terminate thirty days after the notice is filed with	1308
the superintendent under this division.	1309

(F) A society may revoke the appointment of an agent by	1310
filing with the superintendent a written appointment of another	1311
agent and a statement that the appointment of the former agent is	1312
revoked. The authority of the agent whose appointment has been	1313
revoked shall terminate thirty days after the notice required	1314
under this division is filed with the superintendent.	1315

(G) Any process, notice, or demand required or permitted by	1316
law to be served upon a society may be served by delivering a copy	1317
of the process, notice, or demand to the agent of record at the	1318
address appearing in the superintendent's records.	1319

If the agent cannot be found, the agent no longer has that	1320
address, or the society has failed to maintain an agent as	1321
required by this section, the party desiring that the process,	1322
notice, or demand be served, or its agent, may file with the	1323
superintendent an affidavit stating that one of the foregoing	1324
conditions exists and stating the most recent address of the	1325
society that the party, after diligent search, has been able to	1326
ascertain.	1327

Upon the filing of the affidavit, service of process, notice,	1328
or demand may be initiated upon the superintendent as the	1329
society's agent by delivering two copies of the process, notice,	1330
or demand to the superintendent. The superintendent shall give	1331
notice to the society at its principal office as shown in the	1332
superintendent's records or at the address set forth in the	1333
affidavit. The superintendent shall give notice by regular mail	1334
with a copy of the process, notice, or demand enclosed. After the	1335
superintendent has mailed the appropriate documents, service upon	1336
the society is deemed complete.	1337

(H) The superintendent shall keep a record of each process,	1338
notice, and demand delivered to the superintendent under division	1339
(G) of this section or any other law of this state that authorizes	1340
service upon the superintendent.	1341

(I) This section does not limit or affect the right to serve	1342
any process, notice, or demand upon a society in any other manner	1343
permitted by law.	1344

(J) A society shall include a fee of five dollars with any	1345
change of agent appointment or change of address. This division	1346
does not apply to an agent appointment filed with an original	1347
application for a certificate of authority.	1348

(K) If a society fails to appoint or maintain an agent or to	1349
notify the superintendent of an agent's change of address, the	1350
superintendent shall provide notice of that failure to the society	1351
by certified mail. If the society does not remedy the society's	1352
failure within thirty days after the date of the mailing of the	1353
notice or within any additional time the superintendent allows,	1354
the superintendent shall fine the society not less than	1355
twenty-five dollars nor more than two hundred dollars per	1356
violation. The superintendent also may charge a society a	1357
fifty-dollar fee for each time the superintendent is required to	1358
give notice to the society in accordance with division (G) of this	1359
section.	1360

(L) The superintendent shall pay all moneys collected by the	1361
superintendent in accordance with this section into the state	1362
treasury to the credit of the department of insurance operating	1363
fund.	1364

Sec. 3922.01.  As used in this chapter:

1365

(A) "Adverse benefit determination" means a decision by a	1366
health plan issuer:	1367

(1) To deny, reduce, or terminate a requested health care	1368
service or payment in whole or in part, including all of the	1369
following:	1370

(a) A determination that the health care service does not	1371
meet the health plan issuer's requirements for medical necessity,	1372
appropriateness, health care setting, level of care, or	1373
effectiveness, including experimental or investigational	1374
treatments;	1375

(b) A determination of an individual's eligibility for	1376
individual health insurance coverage, including coverage offered	1377
to individuals through a nonemployer group, to participate in a	1378
plan or health insurance coverage;	1379

(c) A determination that a health care service is not a	1380
covered benefit;	1381

(d) The imposition of an exclusion, including exclusions for	1382
pre-existing conditions, source of injury, network, or any other	1383
limitation on benefits that would otherwise be covered.	1384

(2) Not to issue individual health insurance coverage to an	1385
applicant, including coverage offered to individuals through a	1386
nonemployer group;	1387

(3) To rescind coverage on a health benefit plan.

1388

(B) "Ambulatory review" has the same meaning as in section	1389
1751.77 of the Revised Code.	1390

(C) "Authorized representative" means an individual who	1391
represents a covered person in an internal appeal or external	1392
review process of an adverse benefit determination who is any of	1393
the following:	1394

(1) A person to whom a covered individual has given express,	1395
written consent to represent that individual in an internal	1396
appeals process or external review process of an adverse benefit	1397
determination;	1398

(2) A person authorized by law to provide substituted consent	1399
for a covered individual;	1400

(3) A family member or a treating health care professional,	1401
but only when the covered person is unable to provide consent.	1402

(D) "Best evidence" means evidence based on all of the	1403
following sources, listed according to priority, as they are	1404
available:	1405

(1) Randomized clinical trials;

1406

(2) Cohort studies or case-control studies;

1407

(3) Case series;

1408

(4) Expert opinion.

1409

(E) "Covered person" means a policyholder, subscriber,	1410
enrollee, member, or individual covered by a health benefit plan.	1411
"Covered person" does include the covered person's authorized	1412
representative with regard to an internal appeal or external	1413
review in accordance with division (C) of this section. "Covered	1414
person" does not include the covered person's representative in	1415
any other context.	1416

(F) "Covered benefits" or "benefits" means those health care	1417
services to which a covered person is entitled under the terms of	1418
a health benefit plan.	1419

(G) "Emergency medical condition" has the same meaning as in	1420
section 1753.28 of the Revised Code.	1421

(H) "Emergency services" has the same meaning as in section	1422
1753.28 of the Revised Code.	1423

(I) "Evidence-based standard" means the conscientious,	1424
explicit, and judicious use of the current best evidence, based on	1425
a systematic review of the relevant research, in making decisions	1426
about the care of individuals.	1427

(J) "Facility" means an institution providing health care	1428
services, or a health care setting, including hospitals and other	1429
licensed inpatient centers, ambulatory, surgical, treatment,	1430
skilled nursing, residential treatment, diagnostic, laboratory,	1431
and imaging centers, and rehabilitation and other therapeutic	1432
health settings.	1433

(K) "Final adverse benefit determination" means an adverse	1434
benefit determination that is upheld at the completion of a health	1435
plan issuer's internal appeals process.	1436

(L) "Health benefit plan" means a policy, contract,	1437
certificate, or agreement offered by a health plan issuer to	1438
provide, deliver, arrange for, pay for, or reimburse any of the	1439
costs of health care services, including benefit plans marketed in	1440
the individual or group market by all associations, whether bona	1441
fide or non-bona fide. "Health benefit plan" also means a limited	1442
benefit plan, except as follows. "Health benefit plan" does not	1443
mean any of the following types of coverage: a policy, contract,	1444
certificate, or agreement that covers only a specified accident,	1445
accident only, credit, dental, disability income, long-term care,	1446
hospital indemnity, medicare supplementsupplemental coverage, as	1447
described in section 3923.37 of the Revised Code, medicare,	1448
tricare, specified disease, or vision care; coverage issued as a	1449
supplement to liability insurance; insurance arising out of	1450
workers' compensation or similar law; automobile medical payment	1451
insurance; or insurance under which benefits are payable with or	1452
without regard to fault and which is statutorily required to be	1453
contained in any liability insurance policy or equivalent	1454
self-insurance; a medicare supplement policy of insurance, as	1455
defined by the superintendent of insurance by rule, coverage under	1456
a plan through medicare, medicaid, or the federal employees	1457
benefit program; any coverage issued under Chapter 55 of Title 10	1458
of the United States Code and any coverage issued as a supplement	1459
to that coverage.	1460

(M) "Health care professional" means a physician,	1461
psychologist, nurse practitioner, or other health care	1462
practitioner licensed, accredited, or certified to perform health	1463
care services consistent with state law.	1464

(N) "Health care provider" or "provider" means a health care	1465
professional or facility.	1466

(O) "Health care services" means services for the diagnosis,	1467
prevention, treatment, cure, or relief of a health condition,	1468
illness, injury, or disease.	1469

(P) "Health plan issuer" means an entity subject to the	1470
insurance laws and rules of this state, or subject to the	1471
jurisdiction of the superintendent of insurance, that contracts,	1472
or offers to contract to provide, deliver, arrange for, pay for,	1473
or reimburse any of the costs of health care services under a	1474
health benefit plan, including a sickness and accident insurance	1475
company, a health insuring corporation, a fraternal benefit	1476
society, a self-funded multiple employer welfare arrangement, or a	1477
nonfederal, government health plan. "Health plan issuer" includes	1478
a third party administrator licensed under Chapter 3959. of the	1479
Revised Code to the extent that the benefits that such an entity	1480
is contracted to administer under a health benefit plan are	1481
subject to the insurance laws and rules of this state or subject	1482
to the jurisdiction of the superintendent.	1483

(Q) "Health information" means information or data, whether	1484
oral or recorded in any form or medium, and personal facts or	1485
information about events or relationships that relates to all of	1486
the following:	1487

(1) The past, present, or future physical, mental, or	1488
behavioral health or condition of a covered person or a member of	1489
the covered person's family;	1490

(2) The provision of health care services or health-related	1491
benefits to a covered person;	1492

(3) Payment for the provision of health care services to or	1493
for a covered person.	1494

(R) "Independent review organization" means an entity that is	1495
accredited by a nationally recognized private accrediting	1496
organization to conduct independent external reviews of adverse	1497
benefit determinations and is accredited pursuant to section	1498
3922.13 of the Revised Code.	1499

(S) "Medical or scientific evidence" means evidence found in	1500
any of the following sources:	1501

(1) Peer-reviewed scientific studies published in, or	1502
accepted for publication by, medical journals that meet nationally	1503
recognized requirements for scientific manuscripts and that submit	1504
most of their published articles for review by experts who are not	1505
part of the editorial staff;	1506

(2) Peer-reviewed medical literature, including literature	1507
relating to therapies reviewed and approved by a qualified	1508
institutional review board, biomedical compendia and other medical	1509
literature that meet the criteria of the national institutes of	1510
health's library of medicine for indexing in index medicus and	1511
elsevier science ltd. for indexing in excerpta medicus;	1512

(3) Medical journals recognized by the secretary of health	1513
and human services under section 1861(t)(2) of the federal social	1514
security act;	1515

(4) The following standard reference compendia:

1516

(a) The American hospital formulary service drug information;

1517

(b) Drug facts and comparisons;

1518

(c) The American dental association accepted dental	1519
therapeutics;	1520

(d) The United States pharmacopoeia drug information.

1521

(5) Findings, studies or research conducted by or under the	1522
auspices of a federal government agency or nationally recognized	1523
federal research institute, including any of the following:	1524

(a) The federal agency for health care research and quality;

1525

(b) The national institutes of health;

1526

(c) The national cancer institute;

1527

(d) The national academy of sciences;

1528

(e) The centers for medicare and medicaid services;

1529

(f) The federal food and drug administration;

1530

(g) Any national board recognized by the national institutes	1531
of health for the purpose of evaluating the medical value of	1532
health care services.	1533

(6) Any other medical or scientific evidence that is	1534
comparable.	1535

(T) "Person" has the same meaning as in section 3901.19 of	1536
the Revised Code.	1537

(U) "Protected health information" means health information	1538
related to the identity of an individual, or information that	1539
could reasonably be used to determine the identity of an	1540
individual.	1541

(V) "Rescission""Rescind" means a cancellation or	1542
discontinuance of coverage that has a retroactive effectto	1543
retroactively cancel or discontinue coverage. "Rescission"	1544
"Rescind" does not include a cancellation or discontinuance of	1545
canceling or discontinuing coverage that only has only a	1546
prospective effect or a cancellation or discontinuance of	1547
canceling or discontinuing coverage that is effective	1548
retroactively to the extent it is attributable to a failure to	1549
timely pay required premiums or contributions towards the cost of	1550
coverage.	1551

(W) "Retrospective review" means a review conducted after	1552
services have been provided to a covered person.	1553

(X) "Superintendent" means the superintendent of insurance.

1554

(Y) "Utilization review" has the same meaning as in section	1555
1751.77 of the Revised Code.	1556

(Z) "Utilization review organization" has the same meaning as	1557
in section 1751.77 of the Revised Code.	1558

Sec. 3922.02.  (A) A covered person may make a request for an	1559
external review of an adverse benefit determination.	1560

(B) All requests for external review shall be made in	1561
writing, except when making a request for an expedited review	1562
under section 3922.09 of the Revised Codeincluding by electronic	1563
means, by the covered person to the health plan issuer within one	1564
hundred eighty days of the date of the final adverse benefit	1565
determination in a form prescribed by the superintendent. Requests	1566
for an expedited. However, in the case of an expedited external	1567
review under section 3922.09 of the Revised Code, the review may	1568
be requested orally or by electronic means. When an oral or	1569
electronic request for review is made, written confirmation of the	1570
request must be submitted to the health plan issuer no later than	1571
five days after the initial request was made.	1572

(C) An adverse benefit determination shall be eligible for	1573
internal appeal or external review, regardless of how small the	1574
cost of the requested health care service related to the adverse	1575
benefit determination is.	1576

Sec. 3922.03.  (A) All health plan issuers shall implement an	1577
internal appeal process under which a covered person may appeal an	1578
adverse benefit determination. This process must be in compliance	1579
with the "Patient Protection and Affordable Care Act of 2010,"	1580
Pub. L. 111-148, 124 Stat. 119, as amended, and the associated	1581
regulations, as well as any other applicable state laws or rules	1582
or federal regulations.	1583

(B) Review of a final adverse benefit determination shall be	1584
through an external review under section 3922.08, 3922.09, or	1585
3922.10 of the Revised Code.	1586

(C) All health plan issuers shall provide notice to covered	1587
persons, pursuant to and in accordance with federal regulations,	1588
of all internal appeal processes, external review processes, the	1589
availability of any applicable office of health insurance	1590
assistance, ombudsman program, or other similar program in this	1591
state to assist consumers.	1592

Sec. 3922.04.  (A) Except as provided in division (E) of this	1593
section, a health plan issuer is not required to grant a request	1594
for a standard external review made under section 3922.08 or	1595
3922.10 of the Revised Code until the covered person has exhausted	1596
the health plan issuer's internal appeal process.	1597

(B) An internal appeal process shall be considered exhausted	1598
if a covered person has requested an internal appeal and has not	1599
received a written decision from the health plan issuer within the	1600
time frame required by 2329 C.F.R. 2560.503-1 or the health plan	1601
issuer fails to adhere to all requirements of the internal appeals	1602
process.	1603

(C) Notwithstanding division (B) of this section, the	1604
internal appeals process will not be deemed exhausted based on de	1605
minimis violations that do not cause, and are not likely to cause,	1606
prejudice or harm to the covered person so long as the health plan	1607
issuer demonstrates that the violation was for good cause or due	1608
to matters beyond the control of the health plan issuer and that	1609
the violation occurred in the context of an ongoing, good faith	1610
exchange of information between the health plan issuer and the	1611
covered person, and is not reflective of a pattern or practice of	1612
noncompliance, except that:	1613

(1) If the health plan issuer denies a request for external	1614
review under this division, the covered person may request written	1615
explanation from the health plan issuer, and the health plan	1616
issuer shall provide the explanation within ten days, including a	1617
specific description of its basesbasis, if any, for asserting	1618
that the delay should not cause the internal appeals process to be	1619
considered exhausted;	1620

(2) The covered person may request review by the	1621
superintendent of the health plan issuer's explanation provided	1622
under division (C)(1) of this section and if the superintendent	1623
affirms the health plan issuer's explanation, the covered person	1624
may, within ten days of the superintendent's notice of decision,	1625
resubmit and pursue the internal appeal process. Time periods for	1626
refiling the internal appeal shall begin to run upon receipt of	1627
such notice by the covered person.	1628

(D) Notwithstanding division (B) of this section, a covered	1629
person shall not make a request for an external review of an	1630
adverse benefit determination involving a retrospective review	1631
determination made pursuant to a utilization review until the	1632
covered person has exhausted the health plan issuer's internal	1633
appeals process.	1634

(E) A request for an external review of an adverse benefit	1635
determination may be made before the covered person has exhausted	1636
the health plan issuer's internal appeals procedures whenever the	1637
health plan issuer agrees to waive the exhaustion requirement. If	1638
the internal appeal process is waived, the covered person may file	1639
a request in writing for a standard external review under section	1640
3922.08 or 3922.10 of the Revised Code.	1641

(F) Notwithstanding any other section in this chapter, health	1642
plan issuers offering individual health insurance coverage,	1643
including coverage offered to individuals through nonemployer	1644
groups shall not require more than one level of internal appeal	1645
before the individual may request an external review.	1646

Sec. 3922.05.  (A) A health plan issuer shall afford the	1647
opportunity for an external review by an independent review	1648
organization for an adverse benefit determination if the	1649
determination involved a medical judgment or if the decision was	1650
based on any medical information, pursuant to the following	1651
sections:	1652

(1) Section 3922.08 of the Revised Code for a standard	1653
review;	1654

(2) Section 3922.09 of the Revised Code for an expedited	1655
review;	1656

(3) Section 3922.10 of the Revised Code for reviews involving	1657
experimental procedures.	1658

(B) A health plan issuer shall afford the opportunity for an	1659
external review by the superintendent of insurance for an adverse	1660
benefit determination by the health plan issuer based on a	1661
contractual issue that did not involve a medical judgment or any	1662
medical information, pursuant to section 3922.11 of the Revised	1663
Code.	1664

(C) For an adverse benefit determination in which emergency	1665
medical services have been determined to be not medically	1666
necessary or appropriate after an external review pursuant to	1667
division (A) of this section, the health plan issuer shall afford	1668
the covered person the opportunity for an external review by the	1669
superintendent of insurance, based on the prudent layperson	1670
standard, pursuant to section 3922.11 of the Revised Code.	1671

(D) Upon receipt of a request for an external review from a	1672
covered person, the health plan issuer shall review it for	1673
completeness as prescribed under any associated rules, policies,	1674
or procedures adopted by the superintendent.	1675

(1) If the request is complete, the health plan issuer shall	1676
initiate an external review in accordance with any associated	1677
rules, policies, or procedures adopted by the superintendent of	1678
insurance and shall notify the covered person in writing, in a	1679
form specified by the superintendent of insurance, that the	1680
request is complete. This notification shall include both of the	1681
following:	1682

(a) The name and contact information for the assigned	1683
independent review organization or the superintendent of	1684
insurance, as applicable, for the purpose of submitting additional	1685
information;	1686

(b) Except for when an expedited request is made under	1687
section 3922.09 or 3922.10 of the Revised Code, a statement that	1688
the covered person may, withwithin ten business days after the	1689
date of receipt of the notice, submit, in writing, additional	1690
information for either the independent review organization or the	1691
superintendent of insurance to consider when conducting the	1692
external review.	1693

(2) If the request for an external review is not complete,	1694
the health plan issuer shall, in accordance with any associated	1695
rules, policies, or procedures adopted by the superintendent of	1696
insurance, inform the covered person in writing, including what	1697
information is needed to make the request complete.	1698

(E)(1) If the health plan issuer denies a request for an	1699
external review on the basis that the adverse benefit	1700
determination is not eligible for an external review, the health	1701
plan issuer shall notify the covered person in writing of both of	1702
the following:	1703

(a) The reason for the denial;

1704

(b) That the denial may be appealed to the superintendent.

1705

(2) If the health plan issuer denies a request for external	1706
review on the basis that the adverse benefit determination is not	1707
eligible for an external review, the covered person may appeal the	1708
denial to the superintendent of insurance.	1709

(3) Regardless of a determination made by a health plan	1710
issuer, the superintendent of insurance may determine that a	1711
request is eligible for external review. The superintendent's	1712
determination shall be made in accordance with the terms of the	1713
covered person's benefit plan and shall be subject to all	1714
applicable provisions of this chapter.	1715

(F)(1) If an external review of an adverse benefit	1716
determination is granted, the superintendent, according to any	1717
rules, policies, or procedures adopted by the superintendent shall	1718
assign an independent review organization from the list of	1719
organizations maintained by the superintendent under section	1720
3922.13 of the Revised Code to conduct the external review and	1721
shall notify the health plan issuer of the name of the assigned	1722
independent review organization.	1723

(2) The assignment of an approved independent review	1724
organization shall be done on a random basis from those	1725
independent review organizations qualified to conduct the review	1726
in question based on the nature of the health care service that is	1727
the subject of the adverse benefit determination.	1728

(3) The superintendent of insurance shall not choose an	1729
independent review organization with a conflict of interest, as	1730
prescribed under section 3922.14 of the Revised Code.	1731

(G) In its review of an adverse benefit determination under	1732
section 3922.08, 3922.09, or 3922.10 of the Revised Code, an	1733
assigned independent review organization is not bound by any	1734
decisions or conclusions reached by the health plan issuer during	1735
its utilization review process or internal appeals process. The	1736
organization is not required to, but may, accept and consider	1737
additional information submitted after the end of the	1738
ten-business-day period described in division (D)(1)(b) of this	1739
section.	1740

(H)(1) An independent review organization assigned to review	1741
an adverse benefit determination shall provide written notice of	1742
its decision to either uphold or reverse the determination within	1743
thirty days of receipt by the health plan issuer of a request for	1744
a standard review or a standard review involving an experimental	1745
or investigational treatment, or within seventy-two hours of	1746
receipt by the health plan issuer of an expedited request.	1747

(2) The written notice shall be sent to all of the following:

1748

(a) The covered person;

1749

(b) The health plan issuer;

1750

(c) The superintendent of insurance.

1751

(3) The written notification shall include all of the	1752
following:	1753

(a) A general description of the reason for the request for	1754
external review;	1755

(b) The date the independent review organization was assigned	1756
by the superintendent of insurance to conduct the external review;	1757

(c) The dates over which the external review was conducted;

1758

(d) The date on which the independent review organization's	1759
decision was made;	1760

(e) The rationale for its decision;

1761

(f) References to the evidence or documentation, including	1762
any evidence-based standards used, that were considered in	1763
reaching its decision.	1764

(I) Upon receipt of a notice by an independent review	1765
organization to reverse the adverse benefit determination, a	1766
health plan issuer shall immediately provide coverage for the	1767
health care service or services in question.	1768

Sec. 3922.06. Except for when an expedited request is made	1769
under section 3922.09 or 3922.10 of the Revised Code, an	1770
independent review organization shall forward upon receipt a copy	1771
of any information received from a covered person pursuant to	1772
division (D)(1) of section 3922.05 of the Revised Code, as well as	1773
any other information received from the covered person, to the	1774
health plan issuer.	1775

Upon receipt of that information or the information described	1776
in division (K) of section 3922.10 of the Revised Code, a health	1777
plan issuer may reconsider its adverse benefit determination and	1778
provide coverage for the health service in question.	1779

Reconsideration of an adverse benefit determination by a	1780
health plan issuer based upon receipt of information under this	1781
section shall not delay or terminate an external review.	1782

If a health plan issuer reverses an adverse benefit	1783
determination under this section, the health plan issuer shall	1784
notify, in writing and within one business day of making such a	1785
decision, the covered person, the assigned independent review	1786
organization, and the superintendent of insurance.	1787

Upon receipt of such a notification, the assigned independent	1788
review organization shall terminate the associated external	1789
review.	1790

Sec. 3922.09.  (A) A covered person may make a request for an	1791
expedited external review, except as provided in division (J)(I)	1792
of this section:	1793

(1) After an adverse benefit determination, if both of the	1794
following apply:	1795

(a) The covered person's treating physician certifies that	1796
the adverse benefit determination involves a medical condition	1797
that could seriously jeopardize the life or health of the covered	1798
person, or would jeopardize the covered person's ability to regain	1799
maximum function, if treated after the time frame of an expedited	1800
internal reviewappeal;	1801

(b) The covered person has filed a request for an expedited	1802
internal reviewappeal.	1803

(2) After a final adverse benefit determination, if either of	1804
the following apply:	1805

(a) The covered person's treating physician certifies that	1806
the adverse benefit determination involves a medical condition	1807
that could seriously jeopardize the life or health of the covered	1808
person, or would jeopardize the covered person's ability to regain	1809
maximum function, if treated after the time frame of a standard	1810
external review;	1811

(b) The final adverse benefit determination concerns an	1812
admission, availability of care, continued stay, or health care	1813
service for which the covered person received emergency services,	1814
but has not yet been discharged from a facility.	1815

(B) Immediately upon receipt of a request for an expedited	1816
external review, the health plan issuer shall determine if the	1817
request is complete under any associated rules, policies, or	1818
procedures adopted by the superintendent of insurance and eligible	1819
for expedited external review under division (B)(A) of this	1820
section. The health plan issuer shall immediately notify the	1821
covered person of its determination in accordance with any	1822
associated rules, policies, or procedures adopted by the	1823
superintendent of insurance.	1824

(C) If a request for an expedited review is complete and	1825
eligible, the health plan issuer shall immediately provide or	1826
transmit all necessary documents and information considered in	1827
making the adverse benefit determination in question to the	1828
assigned independent review organization electronically, or by	1829
telephone, facsimile, or other available expeditious method.	1830

(D) In addition to the information transmitted under division	1831
(D)(C) of this section, the assigned independent review	1832
organization shall also consider relevant information as required	1833
under section 3922.07 of the Revised Code.	1834

(E) As expeditiously as the covered person's medical	1835
condition requires, but no more than seventy-two hours after being	1836
assignedreceipt by the health plan issuer of a request for an	1837
expedited, external review, the assigned independent review	1838
organization shall uphold or reverse the adverse benefit	1839
determination.	1840

(F) If a health plan issuer fails to provide the documents	1841
and information as required in division (D)(C) of this section,	1842
the independent review organization shall not delay the external	1843
review and may accordingly reverse the adverse benefit	1844
determination.	1845

(G) An independent review organization shall promptly notify	1846
the covered person, health plan issuer, and superintendent of	1847
insurance of any decision made under this section. If such a	1848
notice is not made in writing, the independent review	1849
organization, shall provide, within forty-eight hours of making	1850
the decision, written confirmation, including the information	1851
required under division (H)(3) of section 3922.05 of the Revised	1852
Code, of its decision to the covered person, the health plan	1853
issuer, and the superintendent of insurance.	1854

(H) Upon receipt of a notice by an independent review	1855
organization to reverse the adverse benefit determination, a	1856
health plan issuer shall immediately provide coverage for the	1857
health care service or services in question.	1858

(I) An expedited, external review may not be provided for	1859
retrospective final adverse benefit determinations.	1860

Sec. 3922.10.  The provisions of this section apply only to	1861
external reviews that involve an experimental or investigational	1862
treatment.	1863

(A) A covered person may request an external review of an	1864
adverse benefit determination based on the conclusion that a	1865
requested health care service is experimental or investigational,	1866
except when the requested health care service is explicitly listed	1867
as an excluded benefit under the covered person's benefit plan.	1868

(B) To be eligible for an external review under this section,	1869
a covered person's treating physician shall certify that one of	1870
the following situations is applicable:	1871

(1) Standard health care services have not been effective in	1872
improving the condition of the covered person;.	1873

(2) Standard health care services are not medically	1874
appropriate for the covered person;.	1875

(3) There is no available standard health care services	1876
service covered by the health plan issuer that is more beneficial	1877
than the requested health care service.	1878

(C)(1) A covered person may request orally or by electronic	1879
means an expedited review under this section if the person's	1880
treating physician certifies that the requested health care	1881
service in question would be significantly less effective if not	1882
promptly initiated.	1883

(2) Immediately upon receipt of a request for an expedited	1884
external review, the health plan issuer shall determine if the	1885
request is complete under any associated rules, policies, or	1886
procedures adopted by the superintendent of insurance and eligible	1887
for expedited external review under division (B)(C)(1) of this	1888
section. The health plan issuer shall immediately notify the	1889
covered person of its determination in accordance with any	1890
associated rules adopted by the superintendent of insurance.	1891

(D) The health plan issuer shall provide to the assigned	1892
independent review organization all documents and information	1893
considered in making the adverse benefit determination within	1894
whichever of the following applies:	1895

(1) Within five days after the receipt of a request for ana	1896
standard external review;	1897

(2) For an expedited external review, immediately	1898
electronically, or by telephone, facsimile, or any other	1899
available expeditious method.	1900

(E) An independent review organization assigned by the	1901
superintendent of insurance under division (F) of section 3922.05	1902
of the Revised Code shall do both of the following:	1903

(1) Select at least one clinical reviewer, pursuant to	1904
divisions (F) and (G) of this section to conduct the external	1905
review;	1906

(2) Make a decision to uphold or reverse the adverse benefit	1907
determination based upon the opinion of the clinical reviewer or	1908
reviewers.	1909

(F) In selecting clinical reviewers under division (E) of	1910
this section, the assigned independent review organization shall	1911
select physicians or other health care professionals who meet the	1912
minimum qualifications described in section 3922.15 of the Revised	1913
Code, and through clinical experience in the last three years, are	1914
experts in the treatment of the covered person's condition and	1915
have knowledge of the requested health care service.	1916

(G) Neither the covered person, nor the health plan issuer,	1917
shall choose or have any influence over the choice of the clinical	1918
reviewer or reviewers chosen under division (E) of this section.	1919

(H)(1) Each chosen clinical reviewer shall provide a written	1920
opinion to the assigned independent review organization on whether	1921
the adverse benefit determination should be upheld or reversed.	1922

(2) In reaching such opinions, a clinical reviewer is not	1923
bound by any conclusions reached by the health plan issuer during	1924
a utilization review process or its internal appeals process.	1925

(3) Any such opinion shall be in writing and shall include	1926
all of the following information:	1927

(a) A description of the covered person's condition;

1928

(b) A description of the indicators relevant to determining	1929
whether there is sufficient evidence to demonstrate that the	1930
recommended or requested therapy is more likely than not to be	1931
more beneficial to the covered person than any available standard	1932
health care service, and that the adverse risks of the requested	1933
health care service would not be substantially greater than those	1934
of available standard health care services;	1935

(c) A description and analysis of any medical or scientific	1936
evidence considered in reaching the opinion;	1937

(d) A description and analysis of any evidence-based standard	1938
considered;	1939

(e) Information on whether the reviewer's rationale for the	1940
opinion is based on division (L)(2)(K)(2)(b) or (L)(3)(c) of this	1941
section.	1942

(I) An external review shall not be delayed due to failure on	1943
the part of the health plan issuer to provide the information	1944
required under division (D) of this section.	1945

(J)(1) An independent review organization may reverse an	1946
adverse benefit determination, if the information required under	1947
division (D) of this section is not provided in the allotted time.	1948
The externalindependent review committeeorganization may also	1949
grant a request from the health plan issuer for more time to	1950
provide the required information.	1951

(2) If an adverse benefit determination is reversed under	1952
division (J)(1) of this section, the independent review	1953
organization shall immediately notify the covered person, the	1954
health plan issuer, and the superintendent of insurance.	1955

(K)(1) Each clinical reviewer shall review all of the	1956
information received pursuant to division (D) of this section, as	1957
well as any other information submitted in writing by the covered	1958
person pursuant to division (D) of section 3922.05 of the Revised	1959
Code.	1960

(2) In addition to the documents and information provided	1961
pursuant to division (D) of this section and division (D) of	1962
section 3922.05 of the Revised Code, each clinical reviewer shall	1963
consider the following:	1964

(a) Information required under section 3922.07 of the Revised	1965
Code;	1966

(b) Whether the requested health care service has been	1967
approved by the federal food and drug administration, if	1968
applicable, for the condition;	1969

(c) Whether medical or scientific evidence, or evidence-based	1970
standards, demonstrate that the expected benefits of the requested	1971
health care service is more likely than not to be beneficial to	1972
the covered person than any available standard health care	1973
service, and that the adverse risks of the requested health care	1974
service would not be substantially greater than those of available	1975
standard health care services.	1976

(L) Within one business day after the receipt of any such	1977
information submitted by the covered person in accordance with	1978
division (K)(1) of this section, the independent review	1979
organization shall forward the information to the health plan	1980
issuer. Upon receipt of any such forwarded information in	1981
accordance with division (K)(1) of this section, a health plan	1982
issuer may reconsider its adverse benefit determination underas	1983
described in section 3922.06 of the Revised Code.	1984

(M)(1) Within thirty days after the date of receipt by the	1985
health plan issuer of a request for a standard external review, or	1986
within seventy-two hours of receipt by the health plan issuer of a	1987
request for an expedited external review, the assigned independent	1988
review organization shall provide written notice of its decision	1989
to uphold or reverse the adverse benefit determination to the	1990
covered person, the health plan issuer, and the superintendent of	1991
insurance.	1992

(2)(a) If a majority of the clinical reviewers recommend that	1993
the requested health care service should be covered, the	1994
independent review organization shall make a decision to reverse	1995
the health plan issuer's adverse benefit determination.	1996

(b) If a majority of the clinical reviewers recommend that	1997
the recommended or requested health care service or treatment	1998
should not be covered, the independent review organization shall	1999
make a decision to uphold the health plan issuer's adverse benefit	2000
determination.	2001

(c)(i) If the clinical reviewers are evenly split as to	2002
whether the adverse benefit determination should be reversed or	2003
upheld, the independent review organization shall obtain the	2004
opinion of an additional clinical reviewer in order for the	2005
independent review organization to make a decision based on the	2006
opinions of a majority of the clinical reviewers pursuant to this	2007
division.	2008

(ii) The additional clinical reviewer selected shall use the	2009
same information to reach an opinion as the clinical reviewers who	2010
have already submitted their opinions pursuant to this section.	2011

(iii) The selection of the additional clinical reviewer under	2012
this division shall not extend the time within which the assigned	2013
independent review organization is required to make a decision.	2014

(3) The independent review organization shall include in the	2015
notice provided pursuant to division (M)(1) of this section all of	2016
the following:	2017

(a) A general description of the reason for the request for	2018
external review;	2019

(b) The written opinion of each clinical reviewer, including	2020
the recommendation of each clinical reviewer as to whether the	2021
recommended or requested health care service or treatment should	2022
be covered and the rationale for that recommendation;	2023

(c) The date the independent review organization was assigned	2024
by the superintendent to conduct the external review;	2025

(d) The dates over which the external review was conducted;

2026

(e) The date of its decision;

2027

(f) The principal reason or reasons for its decision;

2028

(g) The rationale for its decision.

2029

(N) Upon receipt of a notice of a decision by an independent	2030
review organization pursuant to division (M)(1) of this section	2031
reversing the adverse benefit determination, a health plan issuer	2032
shall immediately provide coverage of the requested health care	2033
service in question.	2034

Sec. 3922.11.  (A) The superintendent of insurance shall	2035
establish and maintain a system for receiving and reviewing	2036
requests for external review for adverse benefit determinations	2037
where the determination by the health plan issuer was based on a	2038
contractual issue and did not involve a medical judgment or a	2039
determination based on any medical information, except for	2040
emergency services, as specified in division (C) of section	2041
3922.05 of the Revised Code.	2042

(B) A health plan issuer shall submit a request for external	2043
review pursuant to division (B) or (C) of section 3922.05 of the	2044
Revised Code to the superintendent, in accordance with any	2045
associated rules, policies, or procedures adopted by the	2046
superintendent of insurance.	2047

(C) On receipt of a request from a health plan issuer, the	2048
superintendent shall consider whether the health care service is a	2049
service covered under the terms of the covered person's policy,	2050
contract, certificate, or agreement, except that the	2051
superintendent shall not conduct a review under this section	2052
unless the covered person has exhausted the health plan issuer's	2053
internal reviewappeal process, pursuant to sections 3922.03 and	2054
3922.04 of the Revised Code. The health plan issuer and covered	2055
person shall provide the superintendent with any information	2056
required by the superintendent that is in their possession and is	2057
germane to the review.	2058

(D) Unless the superintendent is not able to do so because	2059
making the determination requires a medical judgement or a	2060
determination based on medical information, the superintendent	2061
shall determine whether the health care service at issue is a	2062
service covered under the terms of the covered person's contract,	2063
policy, certificate, or agreement. The superintendent shall notify	2064
the covered person, and the health plan issuer of the	2065
superintendent's determination.	2066

(E) If the superintendent notifies the health plan issuer	2067
that making the determination requires a medical judgement or a	2068
determination based on medical information, the health plan issuer	2069
shall initiate an external review under this chapter.	2070

(F) If the superintendent determines that the health service	2071
is a covered service, the health plan issuer shall cover the	2072
service.	2073

(G) If the superintendent determines that the health care	2074
service is not a covered service, the health plan issuer is not	2075
required to cover the service or afford the enrolleecovered	2076
person an external review by an independent review organization.	2077

Sec. 3922.14.  (A) To be accredited by the superintendent of	2078
insurance to conduct external reviews under section 3922.13 of the	2079
Revised Code, in addition to the requirements provided in section	2080
3922.13 of the Revised Code and any associated rules adopted by	2081
the superintendent, an independent review organization shall do	2082
all of the following:	2083

(1) Develop and maintain written policies and procedures that	2084
govern all aspects of both the standard external review process	2085
and the expedited external review process set forth in this	2086
chapter, including a quality assurance mechanism that does all of	2087
the following:	2088

(a) Ensures that external reviews are conducted within the	2089
time frames prescribed under this chapter and that the required	2090
notices are provided in a timely manner;	2091

(b) Ensures the selection of qualified and impartial clinical	2092
reviewers to conduct external reviews on behalf of the independent	2093
review organization;	2094

(c) Ensures that chosen clinical reviewers are suitably	2095
matched according to their area of expertise to specific cases and	2096
that the independent review organization employs or contracts with	2097
an adequate number of clinical reviewers to meet this requirement;	2098

(d) Ensures the confidentiality of medical and treatment	2099
records and clinical review criteria;	2100

(e) Ensures that any person employed by, or who is under	2101
contract with, the independent review organization adheres to the	2102
requirements of this chapter.	2103

(2) Maintain a toll-free telephone service to receive	2104
information on a twenty-four-hour-a-day, seven-days-a-week basis	2105
related to external reviews that is capable of accepting,	2106
recording, and providing appropriate instruction to incoming	2107
telephone callers during other than normal business hours;	2108

(3) Agree to maintain and provide to the superintendent, upon	2109
request and in accordance with any associated rules, policies, or	2110
procedures adopted by the superintendent of insurance, the	2111
information prescribed in section 3922.17 of the Revised Code.	2112

(B) An independent review organization may not own or	2113
control, be a subsidiary of or in any way be owned or controlled	2114
by, or exercise control with a benefithealth plan issuer, a	2115
national, state or local trade association of benefit planshealth	2116
plan issuers, or a national, state, or local trade association of	2117
health care providers.	2118

(C)(1) Neither the independent review organization selected	2119
to conduct the external review nor any clinical reviewer assigned	2120
by the independent organization to conduct the external review may	2121
have a material, professional, familial, or financial affiliation	2122
with any of the following:	2123

(a) The health plan issuer that is the subject of the	2124
external review, or any officer, director, or management employee	2125
of the health plan issuer;	2126

(b) The covered person whose treatment is the subject of the	2127
external review;	2128

(c) The health care provider, or the health care provider's	2129
medical group or independent practice association, recommending	2130
the health care service or treatment that is the subject of the	2131
external review;	2132

(d) The facility at which the recommended health care service	2133
would be provided;	2134

(e) The developer or manufacturer of the principal drug,	2135
device, procedure, or other therapy being recommended for the	2136
covered person whose treatment is the subject of the external	2137
review.	2138

(2) The superintendent may make a determination as to whether	2139
an independent review organization or a clinical reviewer of the	2140
independent review organization has a material professional,	2141
familial, or financial conflict of interest for purposes of	2142
division (C)(1) of this section. In making this determination, the	2143
superintendent may take into consideration situations where an	2144
independent review organization, or a clinical reviewer, may have	2145
an apparent conflict of interest, but that the characteristics of	2146
the relationship or connection in question are such that they do	2147
not fall under the definition of conflict of interest provided	2148
under division (D)(1) of this section. If the superintendent	2149
determines that a conflict of interest exists, the superintendent	2150
shall disallow an independent review organization or a clinical	2151
reviewer from conducting the external review in question. Such	2152
determinations related to conflicts of interest are the sole	2153
discretion of the superintendent of insurance.	2154

(D)(1) An independent review organization that is accredited	2155
by a nationally recognized private accrediting entity that has	2156
independent review accreditation standards that the superintendent	2157
has determined are equivalent to or exceed the minimum	2158
qualifications of this section shall be presumed in compliance	2159
with this section to be eligible for accreditation by the	2160
superintendent under section 3922.14 of the Revised Code.	2161

(2) The superintendent shall initially review and	2162
periodically review the independent review organization	2163
accreditation standards of a nationally recognized private	2164
accrediting entity to determine whether the entity's standards	2165
are, and continue to be, equivalent to or exceed the minimum	2166
qualifications established under this section. The superintendent	2167
may accept a review conducted by the national association of	2168
insurance commissioners for the purpose of the determination under	2169
this division.	2170

(3) Upon request, a nationally recognized, private	2171
accrediting entity shall make its current independent review	2172
organization accreditation standards available to the	2173
superintendent or the national association of insurance	2174
commissioners in order for the superintendent to determine if the	2175
entity's standards are equivalent to or exceed the minimum	2176
qualifications established under this section. The superintendent	2177
may exclude any private accrediting entity that is not reviewed by	2178
the national association of insurance commissioners.	2179

(E) An independent review organization shall be unbiased in	2180
its review of adverse benefit determinations and shall establish	2181
and maintain written procedures to ensure that it is unbiased.	2182

Sec. 3922.15.  All clinical reviewers assigned by an	2183
independent review organization to conduct external reviews shall	2184
have the same license as the health care provider of the service	2185
in question, and shall be physicians or other appropriate health	2186
care providers who meet all of the following minimum	2187
qualifications:	2188

(A) Be an expert in the treatment of the medical condition	2189
that is the subject of the external review;	2190

(B) Be knowledgeable about the requested health care service	2191
through clinical experience, within the last three years, treating	2192
patients with the same, or a similar, medical condition, and, in	2193
the case of an external review of an experimental or	2194
investigational health care service, be an expert, through	2195
clinical experience in the last three years, in the treatment of	2196
the covered person's condition and have knowledge of the requested	2197
health care service;	2198

(C) Hold a nonrestricted license in a state of the United	2199
States and, for physicians, a current certification by a	2200
recognized American medical specialty board in the area or areas	2201
appropriate to the subject of the external review;	2202

(D) Have no history of disciplinary actions or sanctions,	2203
including loss of staff privileges or participation restrictions,	2204
that have been taken or are pending by any hospital, governmental	2205
agency or unit, or regulatory body that raise a question as to the	2206
clinical reviewer's physical, mental, or professional competence	2207
or moral character.	2208

Sec. 3922.16.  (A) Nothing in this chapter shall be construed	2209
to create a cause of action against any of the following:	2210

(1) An employer that provides health care benefits to	2211
employees through a health plan issuer;	2212

(2) A clinical reviewer, medical expert, or independent	2213
review organization that participates in an external review under	2214
this chapter;	2215

(3) A health plan issuer that provides coverage for benefits	2216
pursuant to this chapter.	2217

(B) An independent review organization and any medical expert	2218
or clinical reviewer an independent review organization uses in	2219
conducting an external review under this chapter is not liable in	2220
damages in a civil action for injury, death, or loss to person or	2221
property and is not subject to professional disciplinary action	2222
for making, in good faith, any finding, conclusion, or	2223
determination required to complete the external review.	2224

(C) This section does not grant immunity from civil liability	2225
or professional disciplinary action to an independent review	2226
organization, medical expert, or clinical peerreviewer for an	2227
action that is outside the scope of authority granted under this	2228
chapter.	2229

Sec. 3922.19.  (A) Each health plan issuer shall include a	2230
description of its external review procedures, including the	2231
superintendent's contractual review, in, or attached to, the	2232
policy, certificate, membership booklet, or outline of coverage,	2233
or other evidence of coverage it provides to covered persons. This	2234
disclosure shall be in a form prescribed by the superintendent in	2235
any associated rules, policies, or procedures.	2236

(B) The disclosure required by division (A) of this section	2237
shall include a statement that informs the covered person of the	2238
covered person's right to file a request for an external review of	2239
an adverse benefit determination with the health plan issuer. The	2240
statement shall do all of the following:	2241

(1) Explain that external review is available when the	2242
adverse benefit determination involves an issue of medical	2243
necessity, appropriateness, health care setting, and level of care	2244
or effectiveness;	2245

(2) Include the telephone number and address of the	2246
superintendent;	2247

(3) Inform the covered person that, when filing a request for	2248
an external review, the covered person will be required to	2249
authorize the release of the covered person's medical records as	2250
necessary to conduct the external review.	2251

(C)(1) When a health plan issuer notifies a covered person of	2252
an adverse benefit determination, the health plan issuer shall	2253
also notify the covered person, in writing, of the covered	2254
person's right to request an external review, pursuant to section	2255
3922.08, 3922.09, 3922.10, or 3922.11 of the Revised Code.	2256

(2) As part of the written notice required under division	2257
(C)(1) of this section, a health plan issuer shall include all of	2258
the following:	2259

(a) Information sufficient to identify the claim or health	2260
care service involved, including the health care provider, and the	2261
date of service and claim amount, if applicable;	2262

(b) A description of the reason or reasons for the adverse	2263
benefit determination, including the denial code, such as the	2264
claim adjustment reason code and the remittance advice remark	2265
code, and each code's corresponding meaning;	2266

(c) A description of the health plan issuer's standard, if	2267
any, that was used in making the determination;	2268

(d) A description of the available internal appeals and	2269
external review processes, including information regarding how to	2270
initiate an appeal and an external review;	2271

(e) Disclosure of the availability of assistance from the	2272
superintendent with the internal appeals and external review	2273
processes, including the web site, telephone number, and mailing	2274
address of the superintendent's office of consumer services.	2275

(3) In the case of a notice of a final adverse benefit	2276
determination subsequent to an internal appeal, in addition to the	2277
information required under division (C)(2) of this section, the	2278
notice must also include a discussion of the decision.	2279

(4) Any written notice provided under division (C) of this	2280
section shall be in a form prescribed by the superintendent of	2281
insurance.	2282

(D) For an adverse benefit determination that is not a final	2283
adverse benefit determination, the health plan issuer shall	2284
include with the notice required under division (C) of this	2285
section a statement informing the covered person of all of the	2286
following:	2287

(1) If the covered person's treating physician certifies in	2288
writing that the covered person has a medical condition where the	2289
time frame for completion of an expedited review of an internal	2290
appeal involving an adverse benefit determination would seriously	2291
jeopardize the life or health of the covered person or jeopardize	2292
the covered person's ability to regain maximum function, the	2293
covered person may file a request for an expedited external review	2294
to be conducted simultaneously with the expedited internal appeal,	2295
pursuant to section 3922.09 of the Revised Code.	2296

(2) If the adverse benefit determination involves a denial of	2297
coverage based on a determination that the recommended or	2298
requested health care service or treatment is experimental or	2299
investigational and the covered person's treating physician	2300
certifies in writing that the recommended or requested health care	2301
service or treatment that is the subject of the adverse benefit	2302
determination would be significantly less effective if not	2303
promptly initiated, the covered person may file a request for an	2304
expedited external review to be conducted simultaneously with the	2305
expedited internal appeal, pursuant to section 3922.09 or 3922.10	2306
of the Revised Code.	2307

(3) If the covered person has requested an internal appeal	2308
and the health plan issuer has not issued a written decision to	2309
the covered person within thirty days following the date the	2310
covered person files the request, and the covered person has not	2311
requested or agreed to a delay, the covered person may file a	2312
request for external review pursuant to section 3922.08 of the	2313
Revised Code and may be considered to have exhausted the health	2314
plan issuer's internal appeals process for purposes of section	2315
3922.04 of the Revised Code.	2316

(E) For a final adverse benefit determination, the health	2317
plan issuer shall include with the notice required under division	2318
(C) of this section a statement informing the covered person of	2319
all of the following:	2320

(1) A written request for an external review must be	2321
submitted to the health plan issuer within one hundred eighty days	2322
after the date of the notice of final adverse benefit	2323
determination;.	2324

(2) If the covered person's treating physician certifies in	2325
writing that the covered person has a medical condition for which	2326
the time frame for completion of a standard external review	2327
pursuant to section 3922.08 of the Revised Code would seriously	2328
jeopardize the life or health of the covered person or would	2329
jeopardize the covered person's ability to regain maximum	2330
function, the covered person may file a request for an expedited	2331
external review pursuant to section 3922.09 of the Revised Code.	2332

(3)(a) If the final adverse benefit determination concerns a	2333
health care service for which the covered person received	2334
emergency services, but has not been discharged from a facility,	2335
the covered person may request an expedited external review	2336
pursuant to section 3922.09 of the Revised Code.	2337

(b) If the final adverse benefit determination concerns	2338
denial of coverage based on a determination that the recommended	2339
or requested health care service or treatment is experimental or	2340
investigational, the covered person may file a request for an	2341
external review to be conducted pursuant to section 3922.10 of the	2342
Revised Code, or if the covered person's treating physician	2343
certifies in writing that the recommended or requested health care	2344
service that is the subject of the request would be significantly	2345
less effective if not promptly initiated, the covered person may	2346
request an expedited external review to be conducted under section	2347
3922.10 of the Revised Code.	2348

(F)(1) In addition,to any information required to be	2349
provided under divisions (D) and (E) of this section, the health	2350
plan issuer shall include a description of both the standard and	2351
expedited external review procedures the health plan issuer is	2352
required to produce pursuant to this chapter, highlighting in the	2353
external review procedures the sections of the Revised Code that	2354
give the covered person the opportunity to submit additional	2355
information.	2356

(2) The health plan issuer shall also include any forms used	2357
to process an external review, including an authorization form, or	2358
other document approved by the superintendent that complies with	2359
the requirements of 45 C.F.R. 164.508, by which the covered	2360
person, for purposes of conducting an external review under this	2361
chapter, authorizes the health plan issuer and the covered	2362
person's treating health care provider to disclose protected	2363
health information, including medical records, concerning the	2364
covered person that are related in any manner to the external	2365
review.	2366

Sec. 3925.08.  Funds accumulated in the course of business,	2367
or surplus money above the capital stock, of any company organized	2368
under any law of this state, for the purpose provided in section	2369
3925.01 of the Revised Code, shall only be loaned or invested in	2370
the securities listed in sections 3925.05 and 3925.06 of the	2371
Revised Code, or in the following:	2372

(A)(1) Bonds and mortgages on unencumbered real estate within	2373
this or any other state worth twenty-five per cent more than the	2374
sum loaned thereon, exclusive of buildings, unless such buildings	2375
are insured in some company authorized to do business in this	2376
state, and the policy is transferred to the company making the	2377
investment; or, in lieu of transferring such policies, the	2378
mortgagee may purchase a policy or policies of mortgage protection	2379
insurance, payable to the mortgagee or a trustee in its behalf,	2380
insuring the mortgagee against loss resulting from the failure of	2381
the mortgagor to acquire and maintain, from such an authorized	2382
insurance company, insurance in the amount required by this	2383
section;	2384

(2) Bonds or notes secured by mortgages insured by the	2385
federal housing administrator;	2386

(3) Loans to veterans guaranteed in whole or in part by the	2387
United States pursuant to Title III of the "Servicemen's	2388
Readjustment Act of 1944," 58 Stat. 284, 38 U.S.C. 693, as	2389
amended, provided such guaranteed loans are liens upon real	2390
estate.	2391

(B)(1) Legally authorized and executed bonds, notes,	2392
warrants, and securities which are the direct obligation of or are	2393
guaranteed as to both principal and interest by Canada, or which	2394
are the direct obligation of or are guaranteed as to both	2395
principal and interest by any province of Canada, or which are the	2396
direct obligation of or are guaranteed as to both principal and	2397
interest by any municipal corporation of Canada having a	2398
population of one hundred thousand or more by the latest official	2399
census, and which are not in default as to principal or interest;	2400

(2) Obligations issued, assumed, or guaranteed by the	2401
international finance corporation or by the international bank for	2402
reconstruction and development, the Asian development bank, the	2403
inter-American development bank, the African development bank, or	2404
similar development bank in which the president, as authorized by	2405
congress and on behalf of the United States, has accepted	2406
membership.	2407

(C) Bonds or other evidences of indebtedness, not in default	2408
as to principal or interest, which are valid obligations issued,	2409
assumed, or guaranteed by the United States, by any state thereof,	2410
the Commonwealth of Puerto Rico, by any territory or insular	2411
possession of the United States, or by the District of Columbia,	2412
or which are valid obligations issued, assumed, or guaranteed by	2413
any county, municipal corporation, district, or political	2414
subdivision, or by any civil division or public instrumentality of	2415
such governmental units, if by statutory or other legal	2416
requirements such obligations are payable, as to both principal	2417
and interest, from taxes levied upon all taxable property within	2418
the jurisdiction of such governmental unit, or in bonds or other	2419
obligations issued by or for account of any such governmental unit	2420
having a population of five thousand or more by the latest	2421
official federal or state census, which are payable as to both	2422
principal and interest from revenues or earnings from the whole or	2423
any part of a publicly owned utility, provided that by statute or	2424
other applicable legal requirements, rates from the service or	2425
operation of such utility must be fixed, maintained, and collected	2426
at all times so as to produce sufficient revenues or earnings to	2427
pay both principal and interest of such bonds or obligations as	2428
they become due, and in any bonds or obligations issued or	2429
guaranteed by the United States, any state, the District of	2430
Columbia, the Commonwealth of Puerto Rico, any county, municipal	2431
corporation, district, political subdivision, civil division,	2432
commission, board, authority, agency, or other instrumentality of	2433
one or more of them, provided there is a specific pledge of	2434
revenues, earnings, or other adequate security and provided that	2435
no prior or parity obligation of the same issuer, payable from	2436
revenues or earnings from the same source, has been in default as	2437
to principal or interest during the five years next preceding the	2438
date of such investment, but such issuer need not have been in	2439
existence for that period, and obligations acquired under this	2440
section may be newly issued, and further provided that there is	2441
adequate provision for payment of expenses of operation and	2442
maintenance and the principal and interest on all obligations when	2443
due;	2444

(D)(1) Bonds or other evidences of indebtedness, bearing or	2445
accruing interest, issued, assumed, or guaranteed by any solvent	2446
corporation, trust, partnership, or similar business entity	2447
organized and existing under the laws of this or any other state,	2448
or of the United States, the Commonwealth of Puerto Rico, or of	2449
the District of Columbia, or of Canada or any province of Canada,	2450
upon which there is no existing interest or principal default,	2451
provided that either:	2452

(a) The bonds or other evidences of indebtedness are rated 1	2453
or 2 by the securities valuation office of the national	2454
association of insurance commissioners;	2455

(b) The corporation, together with its predecessor	2456
corporation or corporations, or the trust, partnership, or similar	2457
business entity, has been in existence for a period of at least	2458
five years.	2459

(2) Stocks or, limited liability company membership	2460
interests, limited partnership interests, or limited liability	2461
partnership interests of any insurance, financial, investment, and	2462
or investment management companies, which investment management	2463
companies are registered with the securities and exchange	2464
commission under the "Investment Company Act of 1940," 54 Stat.	2465
789, 15 U.S.C. 80a-1, as amended, or the stocks, limited	2466
liability company membership interests, limited partnership	2467
interests, or limited liability partnership interests in an entity	2468
wholly owned by a domestic company or by a domestic company and	2469
its affiliates, that is formed and maintained to acquire or hold	2470
specific assets or liabilities for bankruptcy remoteness or	2471
limitation of liability purposes, except its own stock, and stocks	2472
or, limited liability company membership interests, limited	2473
partnership interests, limited liability partnership interests,	2474
bonds, notes, and debentures of any company which is organized	2475
for, and limited in its operations to, the financing of insurance	2476
premiums, upon approval of such investments by the superintendent	2477
of insurance; except that approval shall not be required for the	2478
purchase of the outstanding stocks or, limited liability company	2479
membership interests, limited partnership interests, or limited	2480
liability partnership interests of any such company, if investment	2481
in each such company does not exceed in the aggregate two and	2482
one-half per cent of the total admitted assets of the company	2483
making the investment as of the preceding thirty-first day of	2484
December. Whenever the superintendent has reason to believe that	2485
the retention, investment, or acquisition of the stock or, limited	2486
liability company membership interest, limited partnership	2487
interest, or limited liability partnership interest of any such	2488
company substantially lessens competition generally in the	2489
business of insurance or creates a monopoly therein the	2490
superintendent shall proceed under section 3901.13 of the Revised	2491
Code to cause such domestic insurance company to divest itself of	2492
such stock or, limited liability company membership interest,	2493
limited partnership interest, or limited liability partnership	2494
interest.	2495

(3) Other stocks, limited liability company membership	2496
interests, or limited partnership interests, or limited liability	2497
partnership interests of any solvent corporation organized under	2498
the laws of this or any other state, or of the United States, or	2499
of the District of Columbia, or of Canada or any province of	2500
Canada, provided that a dividend or distribution has been paid by	2501
the corporationbusiness entity in the preceding twelve months	2502
upon the stock, membership interest, or partnership interest to be	2503
purchased or such corporationbusiness entity, together with its	2504
predecessor corporationentity or corporationsentities, has been	2505
in existence for a period of at least five years.	2506

(4) A domestic company may acquire, hold, and convey tangible	2507
personal property or interests therein for the production of	2508
income, provided no domestic company shall invest in excess of two	2509
per cent of its admitted assets as of the preceding thirty-first	2510
day of December under this division.	2511

(5) In equipment trust obligations or certificates, security	2512
agreements, or other evidences of indebtedness entered into	2513
directly or guaranteed by any company operating wholly or partly	2514
within the United States or Canada, provided that such debt	2515
obligation is secured by a first lien on tangible personal	2516
property which is purchased or secured for payment thereof and	2517
such debt obligation is repayable within twenty years from the	2518
date of issue in annual, semiannual, or more frequent installments	2519
beginning not later than the first year after such date.	2520

(6) An insurer may invest without limitation in investments	2521
of government money market funds. As used in division (D)(6) of	2522
this section, "government money market fund" means a fund that at	2523
all times invests in obligations issued, guaranteed, or insured by	2524
the federal government of the United States or collateralized	2525
repurchase agreements comprised of such obligations, and that	2526
qualifies for investment without a reserve pursuant to the	2527
purposes and procedures of the securities valuation office of the	2528
national association of insurance commissioners.	2529

(E) Negotiable promissory notes maturing in not more than six	2530
months from the date thereof, secured by collateral security	2531
through the transfer of any of the classes of securities described	2532
in this section or in sections 3925.05 and 3925.06 of the Revised	2533
Code, with absolute power of sale within twenty days after default	2534
in payment at maturity;	2535

(F)(1) Repurchase agreements with, and interest-bearing	2536
obligations, including savings accounts and time certificates of	2537
deposit of, a national bank of the United States, a commonwealth	2538
bank of Puerto Rico, a chartered bank of Canada, or a state bank,	2539
provided such bank is either a member of the federal deposit	2540
insurance corporation created pursuant to the "Banking Act of	2541
1933," as amended, or the Canada deposit insurance corporation	2542
created pursuant to the act of parliament known as the "Canada	2543
Deposit Insurance Corporation Act," as amended.	2544

(2) Certificates of deposit, savings share accounts,	2545
investment share accounts, stock deposits, stock certificates, or	2546
other evidences of indebtedness of a savings and loan association,	2547
provided all such evidences of indebtedness are insured pursuant	2548
to the "Financial Institutions Reform, Recovery, and Enforcement	2549
Act of 1989," 103 Stat. 183, 12 U.S.C.A. 1811, as amended;	2550

(3) Bankers' acceptances and bills of exchange of the kinds	2551
and maturities made eligible by law for rediscount with the	2552
federal reserve banks, provided that the same are accepted by a	2553
bank or trust company incorporated under the laws of the United	2554
States or of this state or any other bank or trust company which	2555
is a member of the federal reserve system.	2556

(G) Any securities issued as a result of any reorganization,	2557
or capital or debt adjustment, in whole or in part, in exchange	2558
for securities acquired by it prior to such reorganization, or	2559
capital or debt adjustment;	2560

(H)(1) In bonds, notes, debentures, or other evidences of	2561
indebtedness issued, assumed, or guaranteed by a solvent	2562
corporation, trust, or partnership formed or existing under the	2563
laws of a foreign jurisdiction, provided each such foreign	2564
investment is of the same kind and quality as United States	2565
investments authorized under this section; or in common or	2566
preferred stock or, shares, membership interests, or partnership	2567
interests of any solvent corporationbusiness entity formed or	2568
existing under the laws of a foreign jurisdiction, provided each	2569
such foreign investment is of the same kind and quality as United	2570
States investments authorized under this section; or in bonds or	2571
other evidences of indebtedness issued, assumed, or guaranteed by	2572
a foreign jurisdiction.	2573

An insurer shall not invest in foreign investments under	2574
division (H) of this section, including investments denominated in	2575
foreign currency, a sum exceeding in the aggregate fifteen per	2576
cent of its admitted assets as of the preceding thirty-first day	2577
of December. The aggregate amount of investments held by an	2578
insurer in a single foreign jurisdiction shall not exceed three	2579
per cent of its admitted assets as of the preceding thirty-first	2580
day of December.	2581

As used in division (H)(1) of this section, "foreign	2582
jurisdiction" means a jurisdiction outside the United States,	2583
Puerto Rico, or Canada whose bonds are rated 1 by the securities	2584
valuation office of the national association of insurance	2585
commissioners.	2586

(2) An insurer may acquire investments denominated in foreign	2587
currency whether or not they are foreign investments.	2588

An insurer shall not invest in investments denominated in	2589
foreign currency a sum exceeding in the aggregate tenfifteen per	2590
cent of its admitted assets as of the preceding thirty-first day	2591
of December. The aggregate amount of investments denominated in a	2592
single foreign currency held by an insurer shall not exceed three	2593
per cent of an insurer's admitted assets as of the preceding	2594
thirty-first day of December.	2595

(3) As used in division (H) of this section, "foreign	2596
currency" means a currency other than that of the United States.	2597

(I)(1) Any securities or other property not permitted under	2598
section 3925.05, 3925.06, 3925.08, or 3925.20 of the Revised Code	2599
to an extent not exceeding in the aggregate six per cent of the	2600
total admitted assets of such company on the preceding	2601
thirty-first day of December, within the limitations prescribed in	2602
division (J) of this section. Any such company may also invest up	2603
to an additional five per cent of the total admitted assets of	2604
such company on the preceding thirty-first day of December, within	2605
the limitations prescribed in division (J) of this section, in	2606
loans or investments in small businesses having more than half of	2607
their assets or employees in this state and in venture capital	2608
firms having an office within this state, provided that, as a	2609
condition of a company making an investment in a venture capital	2610
firm, the firm must agree to use its best efforts to make	2611
investments, in an aggregate amount at least equal to the	2612
investment to be made by the company in that venture capital firm,	2613
in small businesses having their principal offices within this	2614
state and having either more than one-half of their assets within	2615
this state or more than one-half of their employees employed	2616
within this state.	2617

As used in division (I) of this section:

2618

(a) "Small businesses" means any corporation, partnership,	2619
proprietorship, or other entity that either does not have more	2620
than four hundred employees, or would qualify as a small business	2621
for the purpose of receiving financial assistance from small	2622
business investment companies licensed under the "Small Business	2623
Investment Act of 1958," 72 Stat. 689, 15 U.S.C.A. 661, as	2624
amended, and rules of the small business administration.	2625

(b) "Venture capital firms" means any corporation,	2626
partnership, proprietorship, or other entity, the principal	2627
business of which is or will be the making of investments in small	2628
businesses.	2629

(c) "Investments" means any equity investment, including	2630
limited partnership interests and other equity interests in which	2631
liability is limited to the amount of the investment, but does not	2632
include general partnership interests or other interests involving	2633
general liability.	2634

(2) In the event that, subsequent to being made under this	2635
division, a loan or investment is determined to have become	2636
qualified as a loan or investment under any of the divisions (A)	2637
to (F) of this section or under section 3925.05, 3925.06, or	2638
3925.20 of the Revised Code, the company may consider such loan or	2639
investment as held under such other statutory provision and such	2640
loan or investment shall no longer be considered as having been	2641
made under this division.	2642

(J) No domestic insurance company shall at any time have	2643
invested a sum exceeding five per cent of its admitted assets as	2644
of the preceding thirty-first day of December in the bonds, notes,	2645
debentures, other evidences of indebtedness, and stocks of a	2646
particular corporation, trust, partnership, or similar business	2647
entity, except for investments authorized under divisions (A) and	2648
(D)(2) of this section, and no domestic insurance company together	2649
with its subsidiary, if any, shall at any time own directly or	2650
indirectly more than twenty-five per cent of the outstanding	2651
bonds, notes, debentures, other evidences of indebtedness, and	2652
stocks of any corporation, except for investments authorized under	2653
divisions (A) and (D)(2) of this section.	2654

This section does not affect the propriety or legality of an	2655
investment made by such domestic insurance company which was in	2656
accordance with the laws in force at the time of the making of the	2657
investment.	2658

Section 2.  That existing sections 3903.81, 3907.14, 3921.10,	2659
3921.13, 3921.19, 3921.22, 3921.28, 3921.29, 3921.30, 3921.31,	2660
3921.33, 3922.01, 3922.02, 3922.03, 3922.04, 3922.05, 3922.06,	2661
3922.09, 3922.10, 3922.11, 3922.14, 3922.15, 3922.16, 3922.19, and	2662
3925.08 and section 3921.35 of the Revised Code are hereby	2663
repealed.	2664

Section 3. That sections 3903.81, 3921.10, 3921.13, 3921.19,	2665
3921.22, 3921.28, 3921.29, 3921.30, 3921.31, and 3921.33 of the	2666
Revised Code, as amended by Sections 1 and 2 of this act shall	2667
take effect January 1, 2013.	2668