71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 597
A-Engrossed
Senate Bill 268
Ordered by the Senate April 3
Including Senate Amendments dated April 3
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor John A. Kitzhaber,
M.D., for Department of Consumer and Business Services)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Establishes process for licensing resident and nonresident
insurance agents to facilitate interstate licensing of agents
according to federal law. Establishes separate licensing process
for adjusters and insurance consultants. Makes related changes.
Authorizes Director of Department of Consumer and Business
Services to issue written consent in certain cases to person who
is otherwise prohibited by federal law from engaging or
participating in business of insurance because person was
convicted of certain felonies.
Declares emergency, effective July 1, 2001.
A BILL FOR AN ACT
Relating to regulation of persons in insurance business; creating
new provisions; amending ORS 708A.005, 708A.120, 708A.200,
715.075, 716.594, 716.610, 731.062, 731.116, 731.136, 735.405,
735.410, 735.415, 735.420, 735.425, 735.435, 735.450, 735.460,
735.465, 735.470, 735.475, 735.480, 735.485, 735.490, 744.001,
744.002, 744.003, 744.008, 744.009, 744.011, 744.013, 744.014,
744.018, 744.022, 744.024, 744.026, 744.028, 744.031, 744.033,
744.037, 744.039, 744.061, 744.175, 744.225, 744.227, 744.300,
744.704, 744.800, 746.182, 746.600 and 750.055; repealing ORS
744.016, 744.051, 744.054, 744.057, 744.066, 744.069, 744.071,
744.075, 744.085, 744.115, 744.119, 744.123, 744.127, 744.145,
744.155, 744.165, 744.182 and 744.231; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
{ +
INSURANCE AGENTS + }
SECTION 1. { + Sections 2 to 19 of this 2001 Act are added to
and made a part of ORS chapter 744. + }
SECTION 2. { + As used in sections 2 to 19 of this 2001 Act:
(1) 'Business entity' has the meaning given that term in ORS
731.116.
(2) 'Home state' means any state, district or territory of the
United States, in which an insurance producer maintains the
insurance producer's principal place of residence or principal
place of business and is licensed to act as an insurance
producer.
(3) 'Insurance producer' means a person required to be licensed
under the laws of another state to sell, solicit or negotiate
insurance.
(4) 'Limited class credit insurance' includes credit life,
credit disability, credit property, credit unemployment,
involuntary unemployment, mortgage life, mortgage guaranty,
mortgage disability, and guaranteed automobile protection
insurance, and any other form of insurance offered in connection
with an extension of credit that is limited to partially or
wholly extinguishing the credit obligation that the Director of
the Department of Consumer and Business Services determines
should be designated a form of limited class credit insurance.
(5) 'Limited class credit insurance agent' and 'limited class
credit insurance producer' mean a person required to be licensed
to sell, solicit or negotiate one or more forms of limited class
credit insurance coverage to individuals through a master,
corporate, group or individual policy.
(6) 'Limited class insurance' includes credit, mortgage,
automobile dealer guaranteed automobile protection and any other
form of insurance designated by the director as a form of limited
class insurance.
(7) 'Limited class insurance agent' and 'limited class
insurance producer' mean a person required to be licensed to
sell, solicit or negotiate one or more forms of limited class
insurance coverage to individuals through a master, corporate,
group or individual policy.
(8) 'Negotiate,' 'sell' and 'solicit' have the meanings given
those terms in ORS 731.062, except that for an insurance
producer, 'negotiate' applies to a person engaged in negotiation
who obtains insurance from insurers for purchasers as well as to
a person engaged in negotiation who sells insurance.
(9) 'Terminate' means to cancel the relationship between an
insurance agent and the insurer or to cancel an agent's authority
to sell, solicit or negotiate insurance.
(10) 'Uniform Application' means the current version of the
Uniform Application for resident and nonresident insurance
producer licensing, produced by the National Association of
Insurance Commissioners.
(11) 'Uniform Business Entity Application' means the current
version of the Uniform Business Entity Application for resident
and nonresident business entities, produced by the National
Association of Insurance Commissioners. + }
SECTION 3. { + A person shall not sell, solicit or negotiate
insurance in this state for any class or classes of insurance
unless the person is licensed as an agent for that class or those
classes in accordance with sections 2 to 19 of this 2001 Act. + }
SECTION 4. { + (1) Sections 2 to 19 of this 2001 Act do not
require an insurer to obtain a license as an agent as required by
section 3 of this 2001 Act. For purposes of this section, the
term ' insurer' does not include an insurer's officers,
directors, employees, subsidiaries or affiliates.
(2) A license as an agent shall not be required of any of the
following:
(a) An officer, director or employee of an insurer, an agent or
an insurance producer, if the officer, director or employee does
not receive any commission on or fee for policies written or sold
to insure risks residing, located or to be performed in this
state and:
(A) The officer's, director's or employee's activities are
executive, administrative, managerial, clerical or a combination
of these, and are only indirectly related to the sale,
solicitation or negotiation of insurance;
(B) The officer's, director's or employee's function relates to
underwriting, loss control, inspection or the processing,
adjusting, investigating or settling of a claim on a contract of
insurance; or
(C) The officer, director or employee is acting in the capacity
of an agency supervisor assisting licensed agents or insurance
producers when the person's activities are limited to providing
technical advice and assistance to licensed agents or insurance
producers and do not include the sale, solicitation or
negotiation of insurance.
(b) A person who does either of the following, when the person
does not receive any commission or fee for the service:
(A) Secures and furnishes information for the purpose of group
life insurance, group property and casualty insurance, group
annuities or group or blanket health insurance or for the purpose
of enrolling individuals under plans, issuing certificates under
plans or otherwise assisting in administrative plans; or
(B) Performs administrative services related to mass-marketed
property and casualty insurance.
(c) An employer or an association of employers or its officers,
directors or employees, or the trustees of an employee trust
plan:
(A) To the extent that the employers, associations, directors,
officers, employees or trustees are engaged in the administration
or operation of a program of employee benefits for the employer's
or association's own employees or the employees of its
subsidiaries or affiliates;
(B) To the extent that the program of employee benefits
involves the use of insurance issued by an insurer; and
(C) As long as the employers, associations, officers,
directors, employees or trustees are not in any manner
compensated, directly or indirectly, by the insurer issuing the
insurance.
(d) An employee of an insurer or an organization employed by
insurers who is engaging in the inspection, rating or
classification of risks, or in the supervision of the training of
agents or insurance producers and who is not individually engaged
in the sale, solicitation or negotiation of insurance.
(e) A person whose activities in this state are limited to
advertising without the intent to solicit insurance in this state
through communications in printed publications or electronic mass
media, the distribution of which is not limited to residents of
this state, but only if the person does not sell, solicit or
negotiate insurance that would insure risks residing, located or
to be performed in this state.
(f) A person who is not a resident of this state who sells,
solicits or negotiates a policy of insurance for commercial
property and casualty risks to an insured with risks located in
more than one state insured under that policy, but only if the
person is otherwise licensed as an insurance producer to sell,
solicit or negotiate that insurance in the state where the
insured maintains its principal place of business and the
contract of insurance insures risks located in that state.
(g) A salaried full-time employee who counsels or advises the
employer of the employee relative to the insurance interests of
the employer or of the subsidiaries or business affiliates of the
employer, but only if the employee does not sell or solicit
insurance or receive any commission.
(h) An attorney in fact of an authorized reciprocal insurer, or
the salaried representative of the insurer or attorney who does
not receive any commission.
(i) A person engaging in the lawful transaction of reinsurance.
(j) Salaried employees of title insurance agents or insurers,
except for the individual or individuals designated as exercising
the powers conferred by a title insurance agent's license.
(k) Any agent or representative of persons exempt from the
Insurance Code under ORS 731.032 or 731.036, with respect to the
exempted transactions.
(L) Any agent or representative of a fraternal benefit society
who devotes, or intends to devote, less than 50 percent of the
agent's or representative's time to the solicitation and
procurement of insurance policies for that society. Any person
who in the preceding calendar year has solicited and procured
life insurance policies on behalf of any fraternal benefit
society for an amount of insurance in excess of $50,000 or, in
the case of any other class or classes of insurance that the
society might write, on the persons of more than 25 individuals,
and who has received or will receive a commission or other
compensation therefor, shall be presumed to be devoting, or
intending to devote, 50 percent or more of the person's time to
the solicitation and procurement of insurance policies for that
society.
(m) A person engaging in the lawful transaction of home
protection insurance if the person is a real estate licensee as
defined in ORS 696.010, and if the transaction of such insurance
by the person is subject to a written contract, to which the
insurer is a party, governing the person's activities in the
transaction.
(n) Salaried employees of a financial institution or trust
company, as those terms are defined in ORS 706.008, who, in the
regular course of business with the customers of the financial
institution or trust company, present the customers with written
information about savings account annuities issued by an
authorized insurer. Any person who purchases such an annuity may
rescind the transaction within 10 days after the issuance of the
contract. For purposes of this paragraph, 'savings account
annuities' means annuities purchased with the proceeds of a
savings account, certificate or share in a financial institution
or trust company.
(3) A person who provides general insurance advice in
connection with providing other professional services such as
legal services, trust services, tax and accounting services,
financial planning or investment advisory services is not
considered to be soliciting the sale of insurance for the purpose
of the definition of 'agent' in ORS 731.062.
(4) Except as provided in sections 7 and 9 of this 2001 Act and
ORS 735.450, the provisions of this chapter relating to agents do
not apply to a surplus lines agent authorized pursuant to ORS
735.450. + }
SECTION 5. { + (1) An individual applying for a resident agent
license must pass a written examination unless the individual is
exempt from the prelicensing education and examination
requirement as provided in section 10 of this 2001 Act. The
examination must test the knowledge of the individual concerning
the class or classes of insurance for which application is made,
the duties and responsibilities of an agent and the insurance
statutes and rules of this state. Except as provided in
subsection (2) of this section, the examination required by this
section shall be developed and conducted by the Director of the
Department of Consumer and Business Services. An individual may
apply for a resident agent license only if the individual has
established in this state a residence or a place of business for
acting as an agent.
(2) The director may make arrangements, including contracting
with a private testing service, for developing and administering
the examination and collecting applicable fees.
(3) Each individual applying to take an examination shall pay
fees as established by the director.
(4) An individual who fails to appear for the examination as
scheduled or fails to pass the examination may reapply to take
the examination according to requirements and procedures
established by the director by rule. + }
SECTION 6. { + (1) An individual applying for a resident agent
license shall apply to the Director of the Department of Consumer
and Business Services on the Uniform Application and shall
declare that the statements made in the application are true,
correct and complete to the best of the individual's knowledge
and belief. Before approving the application, the director must
find that the individual:
(a) Is at least 18 years of age;
(b) Has not committed an act that is a ground for action on a
license set forth in section 14 of this 2001 Act;
(c) When required by the director, has completed a prelicensing
course of study for the lines of authority for which the person
has applied;
(d) Has paid all applicable fees; and
(e) Has successfully passed the examination for the lines of
authority for which the person has applied.
(2) A business entity acting as an agent is required to obtain
an agent license. Application shall be made on the Uniform
Business Entity Application. Before approving the application,
the director must find that:
(a) The business entity has paid all applicable fees; and
(b) The business entity has designated a licensed agent
responsible for the business entity's compliance with the
insurance laws and rules of this state.
(3) The director may require any documents necessary to verify
the information contained in an application.
(4) Each insurer that sells, solicits or negotiates any form of
limited class credit insurance shall provide to each limited
class credit insurance agent a program of instruction, which is
subject to review and approval by the director. + }
SECTION 7. { + (1) Unless the Director of the Department of
Consumer and Business Services refuses to issue or renew a
license pursuant to section 14 of this 2001 Act, a nonresident
person shall receive a nonresident agent license if:
(a) The person is currently licensed as a resident insurance
producer and is in good standing in the person's home state;
(b) The person has submitted the proper request for a
nonresident agent license and has paid the applicable fees;
(c) The person has submitted or transmitted to the director the
resident insurance producer license application that the person
submitted to the person's home state, or in lieu of that
application, a completed Uniform Application;
(d) The person has filed with the director, in writing, an
appointment of the director to be the attorney of the person upon
whom all legal process in any action or proceeding against the
person may be served. In the appointment, the person must agree
that any lawful process against the person that is served upon
the director shall be of the same legal force and validity as if
served upon the applicant, and that the authority shall continue
in force so long as any liability remains outstanding in this
state. An appointment under this paragraph becomes effective on
the date that the director issues the nonresident agent license
to the applicant; and
(e) The person's home state grants nonresident insurance
producer licenses to residents of this state on the same basis.
(2) The director may verify the insurance producer's licensing
status through the Producer Database maintained by the National
Association of Insurance Commissioners, its affiliates or
subsidiaries.
(3) A nonresident agent licensed in this state who moves from
one state to another state or a resident agent who moves from
this state to another state shall file with the director a change
of address and provide certification from the new resident state
not later than the 30th day after the change of legal residence.
No fee or license application is required under this subsection.
(4) A person licensed as a surplus lines insurance producer in
the person's home state shall receive a nonresident surplus lines
agent license pursuant to subsection (1) of this section. Except
as provided in subsection (1) of this section, nothing in this
section supersedes any provision of ORS 735.400 to 735.495.
(5) Notwithstanding any other provision of sections 2 to 19 of
this 2001 Act, the director shall issue a nonresident limited
class insurance agent license pursuant to subsection (1) of this
section to a person who is licensed as a limited class credit
insurance producer or as another type of limited class insurance
producer under the laws of the person's home state that restrict
the authority of the license to less than the authority
prescribed in section 8 of this 2001 Act for the classes of life
insurance, health insurance, property insurance or casualty
insurance.
(6) A license for the class of title insurance may not be
issued to a nonresident agent. + }
SECTION 8. { + (1) Unless the Director of the Department of
Consumer and Business Services refuses to issue or renew a
license pursuant to section 14 of this 2001 Act, a person who has
met the requirements of sections 5 and 6 of this 2001 Act, or
section 7 of this 2001 Act, shall be issued an agent license. An
agent may receive qualification for a license in one or more of
the following classes of insurance:
(a) Life insurance as defined in ORS 731.170.
(b) Health insurance as defined in ORS 731.162.
(c) Property insurance as defined in ORS 731.182.
(d) Casualty insurance as defined in ORS 731.158.
(e) Variable life insurance, including variable annuities.
(f) Property and casualty insurance coverage sold to
individuals and families for primarily noncommercial purposes.
(g) Limited class credit insurance.
(h) Any form of insurance designated by the director as a form
of limited class insurance.
(i) Title insurance as defined in ORS 731.190. A license for
the class of title insurance may be issued only to a resident
agent.
(j) Any other class of insurance permitted under the Insurance
Code or rules adopted thereunder.
(2) For assistance in performance of the director's duties, the
director may participate with the National Association of
Insurance Commissioners, or any affiliate or subsidiary that the
National Association of Insurance Commissioners oversees, in a
centralized producer licensing registry in which insurance agent
and producer licenses and appointments are centrally or
simultaneously effected for all states that require an insurance
producer license. The director may adopt by rule any uniform
standards and procedures as are necessary to participate in the
registry, including the centralized collection of fees for
licenses or appointments that are processed through the registry.
(3) An agent may apply to amend a license for the purpose of
adding or deleting a class of insurance on the license in the
manner prescribed for license application in section 6 or 7 of
this 2001 Act, or as otherwise prescribed by the director. + }
SECTION 9. { + (1) Unless denied a license pursuant to section
14 of this 2001 Act, a person who is currently licensed as a
resident insurance producer in a Canadian province, in Mexico or
in a state that does not grant nonresident producer licenses to
residents of this state on the same basis that this state grants
nonresident agent licenses under section 7 of this 2001 Act shall
receive a nonresident agent license if the insurance regulator in
the person's place of residence grants nonresident insurance
producer licenses to residents of this state on the same basis
and if the person meets all of the following requirements:
(a) The person is in good standing as a resident agent in the
person's place of residence in Canada, Mexico or the person's
state of residence.
(b) The person has submitted the proper request for a
nonresident agent license and has paid the applicable fees.
(c) The person has submitted or transmitted to the Director of
the Department of Consumer and Business Services the resident
agent license application that the person submitted to the
insurance regulator in the person's place of residence, or in
lieu of that application, a completed Uniform Application.
(d) The person has taken and passed a written examination
specified by the director under this section with respect to the
authority to transact the class or classes of insurance for which
the applicant has applied. The requirement of an examination does
not apply to an applicant that is a business entity.
(e) The person has submitted or transmitted to the director an
appointment of the director to be the attorney of the person upon
whom all legal process in any action or proceeding against the
person may be served. In the appointment, the person must agree
that any lawful process against the person that is served upon
the director shall be of the same legal force and validity as if
served upon the person, and that the authority shall continue in
force so long as any liability remains outstanding in this state.
An appointment under this paragraph becomes effective on the date
that the director issues the nonresident agent license to the
person.
(f) The person has satisfied any other qualifications
established by the director by rule or has satisfied
qualifications that the director establishes by rule in lieu of
the qualifications established in this subsection.
(2) A person who is licensed by this state to sell, solicit or
negotiate insurance as a nonresident agent under this section may
sell, solicit or negotiate any policy of insurance upon domestic
risks to the same extent and upon the same terms as provided by
the insurance regulator in the person's place of residence for
residents of this state transacting a like business in a province
of Canada, in Mexico or in the person's state of residence.
(3) The examination requirement under subsection (1) of this
section is subject to waiver if the director has entered into a
reciprocal agreement as provided in subsection (4) of this
section with the insurance regulator in the person's place of
residence.
(4) The director may enter into a reciprocal agreement with the
appropriate insurance regulator in a province of Canada or in
Mexico that waives any or all of the requirements for issuance of
a license under this section if:
(a) A written examination is required of applicants for a
resident agent license in the jurisdiction of the insurance
regulator;
(b) The insurance regulator of the other jurisdiction certifies
that the applicant holds a valid license as a resident insurance
producer in the other jurisdiction and either passed the written
examination or was the holder of a resident insurance producer
license prior to the time the written examination was first
required; and
(c) In the other jurisdiction, a resident of this state is
privileged to procure an insurance producer license upon
conditions no less favorable than the conditions stated in this
section.
(5) The director shall establish the form of the nonresident
agent license issued under this section. + }
SECTION 10. { + (1) An individual who applies for a resident
agent license in this state who is or was previously licensed as
an insurance producer for the same lines of authority in another
state is not required to complete any prelicensing education or
examination. The exemption under this subsection is available
only if the individual is currently licensed in the other state
or if the application is received by the Director of the
Department of Consumer and Business Services not later than the
90th day after the applicant's previous license was terminated
and if the other state issues a certification that, at the time
of termination, the applicant was in good standing in that state
or the state's Producer Database maintained by the National
Association of Insurance Commissioners, its affiliates or
subsidiaries indicate that the applicant is or was licensed in
good standing for the class of insurance requested.
(2) A person licensed as an insurance producer in another state
who moves to this state must apply for a resident agent license
not later than the 90th day after the date on which the person
established legal residence in order to qualify for a resident
agent license pursuant to section 6 of this 2001 Act. Neither
prelicensing education nor an examination is required of a person
to whom this subsection applies in order to obtain a license in a
class of insurance described in section 8 of this 2001 Act if the
person held a license in that class in the other state, except
when the director has determined otherwise by rule.
(3) An individual who holds an industry designation described
in this subsection is not required to complete prelicensing
education or the examination required in section 5 of this 2001
Act if the director is satisfied, by examination or otherwise,
that the applicant is knowledgeable in the particulars of the
applicable provisions of the Insurance Code. This subsection
applies to:
(a) An applicant for a license authorizing the applicant to
transact property or casualty insurance or both, upon whom the
American Institute for Chartered Property Casualty Underwriters
has conferred the Chartered Property Casualty Underwriter
(C.P.C.U.) designation.
(b) An applicant for a license authorizing the applicant to
transact life or health insurance, or both, upon whom the
American College has conferred the Chartered Life Underwriter
(C.L.U.) designation.
(4) The director may recognize one or more industry
designations as exempting an applicant from the prelicensing
education requirement or the examination required in section 5 of
this 2001 Act or both. For each industry designation that the
director recognizes and for the extent of the exemption to be
given, the director shall consider the content, quality and scope
of the educational program required for the designation as well
as other factors determined by the director to be relevant.
(5) An individual is not required to complete prelicensing
education or the examination required in section 5 or 9 of this
2001 Act for the following licenses:
(a) A license authorizing the individual to transact a type of
limited class insurance, except as the director otherwise
provides by rule.
(b) A license authorizing the individual to transact title
insurance. + }
SECTION 11. { + (1) An agent shall notify the Director of the
Department of Consumer and Business Services prior to transacting
business under the agent license under any name other than the
agent's legal name and prior to changing, deleting or adding an
assumed business name in connection with the agent's business
under the agent license.
(2) A resident agent shall keep at the principal place of
business of the agent the usual and customary records pertaining
to the business under the resident agent license. All such
records shall be kept available and open to the inspection of the
director during business hours. A resident agent shall keep
records of insurance transacted by the agent under the license
for three years following expiration of the policy unless the
director designates another period.
(3) A nonresident agent shall keep at the principal place of
business of the agent the usual and customary records pertaining
to the business under the nonresident agent license. All such
records shall be kept available and open to the inspection of the
director during business hours. For the purpose of this
subsection, if a nonresident agent has a place of transacting
insurance in this state, that place shall be the principal place
of business for the nonresident agent. A nonresident agent shall
keep records of insurance transacted by the agent under the
nonresident agent license for three years following expiration of
the policy unless the director designates another period.
(4) An agent shall notify the director of any of the following
changes not later than the 30th day after the date of the change:
(a) A change of address or telephone number of the principal
place of business or any location at which the agent transacts
business under the license in this state.
(b) The opening or closing of a location at which the agent
transacts business under the license in this state.
(c) A change of residence. This paragraph applies only to a
resident agent.
(5) Not later than the 30th day after the authority of an
individual agent to act for an agent that is a business entity
has commenced or terminated, the business entity shall notify the
director of the commencement or termination. The director may
establish by rule a different period within which the business
entity must notify the director under this subsection. + }
SECTION 12. { + (1) An agent license remains in effect unless
revoked or suspended as long as all applicable fees are paid by
the due date and, if the licensee is a resident individual agent,
as long as the licensee has met applicable continuing education
requirements for resident individual agents under subsection (4)
of this section by the due date. The renewal fee is due on the
last day of the month in which the second anniversary of the
initial issuance date of the license occurs and on the second
anniversary following each renewal. The Director of the
Department of Consumer and Business Services may establish
another renewal period for the purpose of coordination with any
national registration or licensing system.
(2) As a condition for or in connection with the renewal of an
agent license the director may require the agent to file
information with the director regarding use made of the license
during the previous year or two years, and especially showing
whether the license has been used principally for the writing of
personal or controlled insurance, as defined in ORS 746.065.
(3) The director may require an agent, as a condition for
renewal of the agent license, to fulfill any or all of the
requirements then applicable to the original issuance of the
license.
(4) The director by rule may establish requirements for
continuing education that each resident individual agent must
satisfy as a condition for renewing the resident agent license.
The hours of education so required shall not exceed 45 hours
annually during the first five years an individual is licensed,
24 hours annually during the next five years an individual is
licensed, and 12 hours annually for individuals licensed for more
than 10 years or for individuals who have received the
designation C.P.C.U., C.L.U. or comparable designation recognized
by the director. Continuing education shall not be required for:
(a) Any person to whom a license is issued without examination
pursuant to section 10 (4) of this 2001 Act;
(b) Any retired person who is authorized to transact life
insurance only, if the person is 58 years of age or more, has 10
years' experience as a licensed agent, will be servicing existing
policies only and requests an exemption from the requirement; or
(c) Any person whose license is indorsed to authorize the
person to act as an intermediary broker or intermediary manager,
or both, as described in ORS 744.800, but the exemption applies
solely for the purpose of maintaining the indorsement and does
not affect any continuing education requirement that otherwise
applies.
(5) In connection with establishing continuing education
requirements under subsection (4) of this section, the director
may make arrangements, including contracting with a private
service, for establishing and operating a program and standards
for approving and registering continuing education programs and
their providers.
(6) An individual agent who allows the agent license to lapse
may reinstate the same license within 24 months from the due date
for renewal without having to take and pass a written
examination, but the agent must pay an amount equal to double the
unpaid renewal fee for any renewal fee paid after the due date
and must complete any continuing education requirements not
satisfied to date.
(7) An individual agent who is unable to comply with license
renewal procedures due to military service or another extenuating
circumstance such as a long term medical disability may request a
waiver from compliance with those procedures. The agent may also
request a waiver of any examination requirement or any penalty
imposed for failure to comply with renewal procedures. + }
SECTION 13. { + (1) The Director of the Department of Consumer
and Business Services may issue a temporary agent license for a
period not to exceed 180 days without requiring a written
examination if the director determines that the temporary license
is necessary for the servicing of an insurance business in the
following cases:
(a) To the surviving spouse or court-appointed personal
representative of a licensed agent who dies or becomes mentally
or physically disabled to allow adequate time for the sale of the
insurance business owned by the agent, for the recovery or return
of the agent to the business, or to provide for the training and
licensing of new personnel to operate the agent's business;
(b) To a member or employee of a business entity licensed as an
agent, upon the death or disability of the individual designated
in the business entity application or the license;
(c) To the designee of a licensed agent entering active service
in the Armed Forces of the United States; or
(d) In any other circumstance in which the director determines
that the public interest will best be served by the issuance of
the license.
(2) The director may by order limit the authority of any
temporary licensee in any way that the director determines to be
necessary to protect insureds and the public. The director may
require the temporary licensee to have a suitable sponsor who is
a licensed agent or insurer and who assumes responsibility for
all acts of the temporary licensee and may impose other similar
requirements designed to protect insureds and the public. The
director may revoke a temporary license if the interest of
insureds or the public is endangered. A temporary license may not
continue after the owner or the personal representative disposes
of the business. + }
SECTION 14. { + (1) The Director of the Department of Consumer
and Business Services may place a licensee on probation or
suspend, revoke or refuse to issue or renew an agent license and
may take other actions authorized by the Insurance Code in lieu
thereof or in addition thereto, for any one or more of the
following causes:
(a) Providing incorrect, misleading, incomplete or materially
untrue information in the license application.
(b) Violating any insurance laws, or violating any rule,
subpoena or order of the director or of the insurance
commissioner of another state or Mexico or Canada.
(c) Obtaining or attempting to obtain a license through
misrepresentation or fraud.
(d) Improperly withholding, misappropriating or converting any
moneys or properties received in the course of doing insurance
business.
(e) Intentionally misrepresenting the terms of an actual or
proposed insurance contract or application for insurance.
(f) Having been convicted of a felony, of a misdemeanor
involving dishonesty or breach of trust, or of an offense
punishable by death or imprisonment under the laws of the United
States. The record of the conviction shall be conclusive evidence
of the conviction.
(g) Having admitted or been found to have committed any unfair
trade practice or fraud related to insurance.
(h) Using fraudulent, coercive or dishonest practices, or
demonstrating incompetence, untrustworthiness or financial
irresponsibility in the conduct of business in this state or
elsewhere.
(i) Cancellation, revocation, suspension or refusal to renew by
any state of a license or other evidence of authority to act as
an adjuster or an insurance producer or consultant. The record of
the cancellation, revocation, suspension or refusal to renew
shall be conclusive evidence of the action taken.
(j) Cancellation, revocation, suspension or refusal to renew by
any state or federal agency, by a Canadian province or by the
government of Mexico of the authority to practice law or to
practice under any other regulatory authority if the
cancellation, revocation, suspension or refusal to renew was
related to the business of an adjuster or an insurance producer
or consultant, or if dishonesty, fraud or deception was involved.
The record of the cancellation, revocation, suspension or refusal
to renew shall be conclusive evidence of the action taken.
(k) Forging another person's name to an application for
insurance or to any document related to an insurance transaction.
(L) Improperly using notes or any other reference material to
complete an examination for an insurance license.
(m) Knowingly accepting insurance business from an individual
who is not licensed.
(n) Error by the director in issuing or renewing a license.
(o) Failing to pay a civil penalty assessed by the director
that has become final by operation of law or upon appeal.
(p) Failing to pay any fee or charge to the director.
(q) Failing to comply with continuing education requirements
applicable to the license or any class of insurance authorized
under the license, unless the director has waived the
requirements.
(2) If the director refuses to issue or renew an agent license,
the director shall notify the applicant or licensee and inform
the applicant or licensee in writing of the reason for the
refusal to issue or renew and of the applicant's or licensee's
rights under ORS 183.310 to 183.550.
(3) The director may suspend, revoke or refuse to issue or
renew the agent license of a business entity if the director
determines that an individual licensee's violation was known or
should have been known by one or more of the partners, officers
or managers acting on behalf of the partnership or corporation
but the violation was not reported to the director and corrective
action was not taken. + }
SECTION 15. { + (1) An insurer or agent may not pay a
commission, service fee, brokerage or other valuable
consideration to a person for selling, soliciting or negotiating
insurance in this state if that person is required to be licensed
as an agent and is not so licensed.
(2) A person shall not accept a commission, service fee,
brokerage or other valuable consideration for selling, soliciting
or negotiating insurance in this state if that person is required
to be licensed as an agent and is not so licensed.
(3) Renewal or other deferred commissions may be paid to a
person for selling, soliciting or negotiating insurance in this
state if the person was required to be licensed as an agent at
the time of the sale, solicitation or negotiation and was then so
licensed.
(4) An insurer or agent may pay or assign commissions, service
fees, brokerages or other valuable consideration to an insurance
agency or to persons who do not sell, solicit or negotiate
insurance in this state, except when the payment or assignment
would violate ORS 746.045 or 746.055. + }
SECTION 16. { + (1) An agent shall not act as an agent of an
insurer unless the agent is an appointed agent of that insurer.
(2) To appoint an agent, the appointing insurer shall file, in
a manner approved by the Director of the Department of Consumer
and Business Services, a notice of appointment not later than the
15th day after the date the agency contract is executed or after
the agent submits the first insurance application to the insurer.
An insurer may also choose to appoint an agent to all or some
insurers within the insurer's holding company system or group by
the filing of a single notice of appointment.
(3) An agent may represent as agent under one license as many
insurers as may appoint the agent in accordance with this
section.
(4) Except as provided in a group contract of insurance under
subsection (5) of this section, any person who solicits or
procures an application for insurance shall in all matters
relating to the application for insurance and the policy issued
in consequence of the application be regarded as the agent of the
insurer issuing the policy and not the agent of the insured. Any
provision in the application and policy to the contrary is
invalid and of no effect.
(5) A group contract of insurance and the individual
certificate issued pursuant to the group contract may contain
provisions stating whether the group policyholder acts as the
agent of the individual insured or as the agent of the
insurer. + }
SECTION 17. { + (1) An insurer or authorized representative of
the insurer who terminates the appointment, employment, contract
or other insurance business relationship with an agent shall
notify the Director of the Department of Consumer and Business
Services not later than the 30th day after the effective date of
the termination, in the manner prescribed by the director, if the
reason for termination is one of the reasons set forth in section
14 of this 2001 Act or if the insurer has knowledge that the
agent was found by a court, government body or self-regulatory
organization authorized by law to have engaged in any of the
activities set forth in section 14 of this 2001 Act. Upon the
written request of the director, the insurer shall provide
additional information, documents, records or other data
pertaining to the termination or activity of the agent.
(2) An insurer or authorized representative of the insurer who
terminates the appointment, employment, contract or other
insurance business relationship with an agent for any reason not
set forth in section 14 of this 2001 Act shall notify the
director not later than the 30th day after the effective date of
the termination, in the manner prescribed by the director. Upon
the written request of the director, the insurer shall provide
additional information, documents, records or other data
pertaining to the termination or activity of the agent.
(3) An insurer or the authorized representative of the insurer
shall promptly notify the director in a manner acceptable to the
director if, upon further review or investigation, the insurer
discovers additional information that would have been reportable
to the director in accordance with subsection (1) of this section
if the insurer had then known of its existence.
(4) Not later than the 15th day after making a notification
required by subsection (1), (2) or (3) of this section, the
insurer shall mail a copy of the notification to the agent at the
agent's last known business address. If the agent is terminated
for cause for any of the reasons listed in section 14 of this
2001 Act, the insurer shall provide a copy of the notification to
the agent at the agent's last known business address by certified
mail, return receipt requested, postage prepaid or by overnight
delivery using a nationally recognized carrier.
(5) Not later than the 30th day after the agent has received a
notification under subsection (4) of this section, the agent may
file with the director written comments concerning the substance
of the notification. The agent shall, by the same means,
simultaneously send a copy of the comments to the reporting
insurer. The comments shall become a part of the director's file
and shall accompany every copy of a report distributed or
disclosed for any reason about the agent as allowed under
subsection (6) of this section.
(6) In the absence of actual malice, an insurer, the authorized
representative of the insurer, an agent, the director or an
organization of which the director is a member and that compiles
the information and makes it available to other insurance
regulators or regulatory or law enforcement agencies shall not be
subject to civil liability. In the absence of actual malice, a
civil cause of action shall not arise against any such entity or
its agents or employees as a result of any statement or
information required by or provided pursuant to this section, or
any information relating to any statement that may be requested
in writing by the director from an insurer or agent, or relating
to a statement by a terminating insurer or agent to an insurer or
agent, that is limited exclusively to whether a termination for
cause under subsection (1) of this section was reported to the
director. Immunity under this subsection is available only if the
propriety of any termination for cause under subsection (1) of
this section is certified in writing by an officer or authorized
representative of the insurer terminating the relationship.
(7) In any action brought against a person who may have
immunity under subsection (6) of this section for making any
statement required by this section or providing any information
relating to any statement that may be requested in writing by the
director, the party bringing the action must plead specifically
in any allegation that subsection (6) of this section does not
apply because the person making the statement or providing the
information did so with actual malice.
(8) Subsections (6) and (7) of this section do not abrogate or
modify any existing statutory or common law privileges or
immunities.
(9) The director may take any administrative action authorized
by the Insurance Code, including suspension or revocation of a
license or certificate of authority, against an insurer, the
authorized representative of an insurer or an agent who fails to
file notice as required by this section or who is found by a
court of competent jurisdiction to have filed notice with actual
malice.
(10) Any information, documents, records or other data in the
control or possession of the director that are furnished by an
insurer or an agent, or an employee or agent thereof acting on
behalf of the insurer or agent, or that are obtained by the
director in an investigation pursuant to this section shall be
confidential, shall not be subject to subpoena and shall not be
subject to discovery nor admissible in evidence in any private
civil action. The director, however, may use the confidential
information, documents, records or other data in administering
this section and in the furtherance of any other regulatory or
legal action brought as a part of the director's duties. The
information, documents, records or other data referred to in this
subsection are subject to the public officer privilege described
in ORS 40.270. + }
SECTION 18. { + The Director of the Department of Consumer and
Business Services shall waive any requirement for a nonresident
agent license applicant with a valid resident insurance producer
license from the applicant's home state, except the requirements
imposed by section 7 of this 2001 Act, if the applicant's home
state grants nonresident insurance producer licenses to residents
of this state on the same basis. + }
SECTION 19. { + (1) An agent shall report to the Director of
the Department of Consumer and Business Services any
administrative action taken against the agent in another
jurisdiction or by another governmental agency in this state not
later than the 30th day after the date of the final disposition
of the matter. This report shall include a copy of the order,
consent to order and other relevant legal documents.
(2) Not later than the 30th day after the initial pretrial
hearing date, an agent shall report to the director any criminal
prosecution of the agent taken in any jurisdiction. The report
shall include a copy of the initial complaint filed, the order
resulting from the hearing and any other relevant legal
documents. + }
SECTION 20. ORS 731.062 is amended to read:
731.062. 'Agent' means a person { - authorized by an insurer
to solicit applications for insurance or to negotiate insurance
on its behalf, and, if authorized so to do by the insurer, to
effect and countersign insurance policies. - } { + required to
be licensed under the laws of this state to sell, solicit or
negotiate insurance. For purposes of this definition:
(1) 'Negotiate' means to confer directly with or to offer
advice directly to a purchaser or prospective purchaser of a
particular policy of insurance concerning any of the substantive
benefits, terms or conditions of the policy, if the person
engaged in that act sells insurance.
(2) 'Sell' means to exchange a policy of insurance by any
means, for money or its equivalent, on behalf of an insurer.
(3) 'Solicit' means to attempt to sell a policy of insurance or
to ask or urge a person to apply for a particular kind of
insurance from a particular insurer. + }
SECTION 21. ORS 731.116 is amended to read:
731.116. { - ' Person,' as defined in ORS 174.100, includes
individuals, corporations, associations, firms, partnerships and
joint stock companies. - } { + 'Person' means an individual or
a business entity. For the purpose of this definition, 'business
entity' means a corporation, association, partnership, limited
liability company, limited liability partnership or other legal
entity. + }
SECTION 22. ORS 731.136 is amended to read:
731.136. When used in context signifying a jurisdiction other
than the State of Oregon, 'state' means any state, district,
territory, commonwealth or possession of the United States of
America { - , and the Panama Canal Zone - } .
SECTION 23. ORS 744.039 is amended to read:
744.039. (1) The Director of the Department of Consumer and
Business Services shall establish by rule the conditions under
which a { - licensee - } { + person who is + } licensed
{ - both - } as an agent and { + as + } an insurance
consultant may accept a commission or a fee, or both, in a
transaction or in related transactions. The director may
establish different conditions for such products as employee
benefit plans, insurance for personal, family or household
purposes and insurance for commercial purposes, and for any other
insurance product as determined appropriate by the director. In
developing rules under this subsection, the director shall take
into account the requirements and characteristics of the
different insurance products and the varying degrees of trade
practice regulation needed.
(2) Except as otherwise provided by rule, an agent { + who
is + } not licensed as an insurance consultant may receive only
commission.
SECTION 24. ORS 744.061 is amended to read:
744.061. Nothing in the Insurance Code shall be construed to
limit or prohibit the licensing of a banking institution, as
defined in ORS 706.008, a corporation owned in whole or part by a
banking institution under ORS 708A.120, 716.588 or 716.594, or a
corporation owned in whole or part by a bank holding company, as
defined in ORS 706.008, as an agent to transact one or more of
the classes of insurance described in { - ORS 744.115 - } { +
section 8 of this 2001 Act + }, except for title insurance.
SECTION 24a. ORS 744.175 is amended to read:
744.175. (1) An insurer may terminate an agency appointment at
any time as provided in this section. Termination shall be
without prejudice to the contract rights, if any, of the agent so
terminated. The insurer shall give written notice of the
termination and the date thereof to the agent at least 90 days
prior to the effective date of the termination. The notice must
specify the reasons for the termination. The insurer shall
deliver the notice either in person or by mail at the address
last provided by the agent to the insurer. The agent shall not
have a cause of action against the insurer as a result of any
statement in the notice unless the statement is false and the
insurer knew the statement was false when made. { - The insurer
shall also notify the Director of the Department of Consumer and
Business Services of the termination not later than the 30th day
after the effective date of the termination. The director may
require of the insurer reasonable proof that the insurer has
given such notice to the agent. - }
(2) An insurer may terminate an agency appointment without
giving the notice required by subsection (1) of this section on
any of the grounds specified in this subsection. { - The
insurer shall notify the director of any termination under this
subsection and the date thereof not later than the 30th day after
the effective date of the termination and shall notify the agent
when reasonably possible. The director may require the insurer to
give proof that the insurer has notified the agent. - } The
following are grounds for termination under this subsection:
(a) The agent's insurance license is denied, restricted,
revoked, suspended or canceled by any public authority;
(b) The agent's business is sold, transferred or merged and the
insurer has not appointed the successor;
(c) The agent is insolvent or fails to remit balances to the
insurer in accordance with the agreement;
(d) The agent commits fraud or engages in intentional
misconduct;
(e) The insurer amends its certificate of authority in order to
discontinue a { - line - } { + class + } of insurance;
(f) The insurer ceases selling insurance in this state; or
(g) The insurer and agent mutually agree to terminate the
agency appointment.
(3) An agent may terminate an agency appointment at any time,
but the termination shall be without prejudice to the contract
rights, if any, of the appointing insurer. The agent shall give
written notice of the termination and the date thereof to the
director not later than the 30th day after the effective date of
the termination, and to the insurer. The director may require
reasonable proof from the agent that the agent has given such
notice to the insurer.
SECTION 24b. ORS 744.225 is amended to read:
744.225. (1) All premium funds received by { - an - } { + a
resident + } agent shall be accounted for and maintained in a
trust account separate from all other business and personal
funds.
(2) Except as provided in subsection (3) of this section,
{ - an - } { + a resident + } agent shall not commingle or
otherwise combine premiums with any other moneys.
(3) { - An - } { + A resident + } agent may commingle with
premium funds in the trust account required by subsection (1) of
this section any additional funds the agent deems prudent for the
purpose of advancing premiums, establishing reserves for the
paying of return premiums, or for any contingencies that may
arise in the course of receiving and transmitting premium or
return premium funds.
(4) This section does not apply to:
(a) Any financial institution or trust company, as those terms
are defined in ORS 706.008, or any entity licensed under ORS
chapter 725 or 726.
(b) Any class of agents that the Director of the Department of
Consumer and Business Services designates by rule. The director
may exempt a class of agent from this section if the director
determines that the requirements of this section are unduly
burdensome to the agents in relation to the public good served.
SECTION 24c. ORS 744.227 is amended to read:
744.227. (1) In lieu of the trust account required by ORS
744.225, { - an - } { + a resident + } agent may keep a
certificate of deposit from an institution insured by the federal
government or an instrumentality thereof if the { + resident + }
agent has an average monthly balance of premium funds received
and held for the last 12 months of at least $2 million.
{ - An - } { + A resident + } agent who keeps a certificate of
deposit shall have satisfactory evidence of the certificate
available at all times for inspection by the Director of the
Department of Consumer and Business Services.
(2) A certificate of deposit authorized under subsection (1) of
this section shall be for an amount at least equal to the average
monthly balance of premium funds received and held by the { +
resident + } agent for the last 12 months. Nothing in this
subsection requires that the required amount of the certificate
of deposit be calculated, or the amount changed, more often than
once a month.
(3) The director may adopt rules specifying what constitutes
satisfactory evidence for purposes of subsection (1) of this
section.
(4) Authorization to use a certificate of deposit may be
revoked by the director at any time upon a determination that the
{ + resident + } agent has failed to comply with the provisions
of this section or rules adopted under subsection (3) of this
section. Upon revocation, the { + resident + } agent shall
comply immediately with the provisions of ORS 744.225.
SECTION 25. { + ORS 744.039, 744.061, 744.175, 744.225,
744.227, 744.240 and 744.245 are added to and made a part of
sections 2 to 19 of this 2001 Act. + }
{ +
ADJUSTERS AND INSURANCE CONSULTANTS + }
SECTION 26. ORS 744.001 is amended to read:
744.001. { + (1) ORS 744.001 to 744.009, 744.011, 744.013,
744.014, 744.018, 744.022 to 744.033 and 744.037 govern the
licensing of adjusters and insurance consultants. + }
{ - (1) - } { + (2) + } An applicant for a license as
{ - agent, - } { + an + } adjuster or { + an + } insurance
consultant shall apply for the license to the Director of the
Department of Consumer and Business Services. The applicant shall
include the following information:
(a) The applicant's name, business address, residence address,
present occupation, occupation for the last 12 months, the
portion of time to be devoted to the insurance business, previous
insurance experience and the names of employers during the
preceding five years. The applicant shall include the business
address of the principal place of business and the business
address of each additional location at which the applicant will
transact business under the license.
(b) All assumed business names and other names under which the
applicant will engage in business under the license.
(c) Whether the applicant has ever been convicted of or is
under indictment for a crime, whether the applicant has ever had
a judgment entered against the applicant for fraud, whether any
insurer or agent claims the applicant is indebted to it and the
details of any such indebtedness, and whether any license of the
applicant to act in any occupational or professional capacity has
ever been refused, revoked or suspended in this or any other
state.
(d) The applicant's fingerprints { + , if the applicant is
applying for a resident license. An applicant applying for a
nonresident license shall provide the applicant's fingerprints
only if the director so requests + }.
(e) The class or classes of insurance to be transacted under
the license. { - If the application is for a license as an
agent, the application shall also include any subclasses of a
class of insurance to be transacted under the license. - }
(f) Any other information that the director requires by rule.
{ - (2) - } { + (3) + } If the applicant for a license
under this section is a firm or corporation, the application
shall show, in addition, the names of all members, officers and
directors. If the application is a corporation, the application
shall state the names of all stockholders who own, directly or
indirectly, more than 10 percent of any class of any equity
security of the corporation, and shall designate each individual
who is to exercise the powers to be conferred by the license upon
the firm or corporation.
{ - (3) - } { + (4) + } Each application shall be
accompanied by the applicable fees established by the director.
SECTION 27. ORS 744.002 is amended to read:
744.002. (1) The Director of the Department of Consumer and
Business Services may issue a license authorizing a person to act
as an { - insurance agent, an insurance - } adjuster or an
insurance consultant. A person licensed to act in one capacity
may also be licensed to act in { + the + } other
{ - capacities - } { + capacity + } if the person meets the
appropriate qualifications. For purposes of this chapter, the
capacity in which a person is licensed to act constitutes a
'license category' or a 'category of insurance business. '
(2) A license issued under this section shall set forth each
license category in which the licensee may engage. For each
license category, the license shall also set forth the class or
classes of insurance in which the licensee may engage, as
provided in:
{ - (a) ORS 744.115, for the license category of agent. - }
{ - (b) - } { + (a) + } ORS 744.531, for the license
category of adjuster.
{ - (c) - } { + (b) + } ORS 744.626, for the license
category of insurance consultant.
(3) The director may issue resident and nonresident licenses
under this section as follows:
(a) The director may issue a resident license to a person if
the person is a resident of this state or, if not a resident of
this state, the person has a place of transacting insurance in
this state.
(b) The director may issue a nonresident license to a person if
the person is not a resident of this state.
(4) The director shall issue a license under this section:
(a) If the applicant has completed and submitted to the
director an application for the license and has submitted all
applicable fees, including any examination fees, as established
by the director with the application;
(b) If the director determines that no ground for denial of the
license exists under ORS 744.013; and
(c) If the director determines that the applicant has met the
applicable qualifications and requirements for each license
category, and for each class of insurance for which application
is made.
SECTION 28. ORS 744.003 is amended to read:
744.003. (1) The Director of the Department of Consumer and
Business Services may add a category of insurance business to
{ - a - } { + an adjuster or insurance consultant + } license
upon application by the licensee for amendment of the license.
(2) The director may add a class or classes of insurance to a
license upon application by the licensee for amendment of the
license.
(3) The director may require that applications under this
section be made in the same manner as applications for the
initial license, or the director may establish other application
procedures.
SECTION 29. ORS 744.008 is amended to read:
744.008. { - A licensee - } { + An adjuster or insurance
consultant + } may renew a license subject to the following
requirements:
(1) The licensee must pay the applicable fee established by the
Director of the Department of Consumer and Business Services.
(2) The licensee must satisfy all applicable continuing
education requirements and all other applicable conditions and
requirements specified by statute.
(3) If the licensee holds a nonresident license, the licensee
must submit proof to the director, with respect to each category
of insurance business and class of insurance set forth on the
license, that the licensee continues to hold a valid license or
other evidence of authority issued by the state of residence of
the licensee for the same category of insurance business.
(4) If the licensee is an insurance consultant, the licensee
must provide satisfactory evidence that the insurance required
under ORS 744.635 is in effect.
(5) The licensee must satisfy any other requirements
established by the director by rule.
SECTION 30. ORS 744.009 is amended to read:
744.009. (1) The Director of the Department of Consumer and
Business Services may renew an expired license of { - a
person - } { + an adjuster or insurance consultant + } upon
application if the license expired within two years prior to the
application and if:
(a) The license was not suspended or revoked by the director,
or not renewed, on any ground under ORS 744.013;
(b) The director is satisfied, by examination or otherwise,
that the person is knowledgeable about the portions of the
Insurance Code applicable to the license;
(c) The person pays { - twice - } { + double + } the amount
of the regular renewal fee; and
(d) The person satisfies all requirements for renewal.
(2) A person who does not renew an expired license as provided
in this section may obtain a license only if the person applies
and qualifies for and is issued the license in the same manner as
a person who initially applies for the license.
SECTION 31. ORS 744.013 is amended to read:
744.013. (1) If the Director of the Department of Consumer and
Business Services finds with respect to { - a licensee - }
{ + an adjuster or insurance consultant + } or an applicant for
{ - a - } { + an adjuster or insurance consultant + } license
that one or more of the grounds set forth in subsection (2) of
this section exist, the director may take the following
disciplinary actions:
(a) The director may refuse to renew or may suspend or revoke a
license issued under ORS 744.002 or the authority under a license
to engage in any category of insurance business or any class of
insurance.
(b) The director may refuse to issue a license under ORS
744.002 or refuse to grant authority under a license to engage in
any category of insurance business or any class of insurance.
(2) The director may take any disciplinary action under
subsection (1) of this section on one or more of the following
grounds:
(a) Incompetence or untrustworthiness of the applicant or
{ - licensee - } { + adjuster or insurance consultant + }.
(b) Falsification by the applicant or { - licensee - }
{ + adjuster or insurance consultant + } of the application for
the license or an amendment thereto, or engagement in any
dishonest act in relation to the application or examination
therefor.
(c) Violation of or noncompliance with any applicable provision
of the Insurance Code or any rule or order of the director.
(d) Misappropriation or conversion to the { - licensee's - }
{ + adjuster's or insurance consultant's + } own use, or
illegal withholding, of money or property belonging to
policyholders, insurers, beneficiaries or others, and received by
the { - licensee - } { + adjuster or insurance consultant + }
in the conduct of business under the license.
(e) Conviction, by final judgment, in any jurisdiction, of an
offense which if committed in this state, constitutes a { +
felony, a + } misdemeanor involving { - moral turpitude or a
felony, or is - } { + dishonesty or breach of trust, or an
offense + } punishable by death or imprisonment under the laws of
the United States. The record of the conviction shall be
conclusive evidence of the conviction.
(f) Material misrepresentation of the terms of any insurance
policy or proposed insurance policy.
(g) Use of a fraudulent or dishonest practice by the
{ - licensee - } { + adjuster or insurance consultant + } in
the conduct of business under the license, or demonstration
therein that the
{ - licensee - } { + adjuster or insurance consultant + } is
incompetent, untrustworthy or a source of injury and loss to the
public or others.
(h) Error by the director in issuing or renewing a license.
(i) Failure to pay a civil penalty assessed by the director
that has become final by operation of law or upon appeal.
(j) Failure to pay any fee or charge to the director.
(k) Use of the license principally to effect insurance on
property or against liability of the applicant or
{ - licensee - } { + adjuster or insurance consultant + }, or
to evade the provisions of ORS chapter 746.
(L) Cancellation, revocation, suspension or refusal to renew by
any state of a license or other evidence of authority to act as
an agent, adjuster or insurance consultant. The record of the
cancellation, revocation, suspension or refusal to renew shall be
conclusive evidence of the action taken.
(m) Cancellation, revocation, suspension or refusal to renew by
any state or federal agency of the authority to practice law or
to practice under any other regulatory authority if the
cancellation, revocation, suspension or refusal to renew was
related to the business of an agent, adjuster or insurance
consultant or if dishonesty, fraud or deception was involved. The
record of the cancellation, revocation, suspension or refusal to
renew shall be conclusive evidence of the action taken.
(n) Failure to comply with continuing education requirements
applicable to the license or any category of insurance authorized
under the license, unless the director has waived the
requirements.
(o) Dishonesty, fraud or misrepresentation not related to the
business of an agent, adjuster or insurance consultant.
(3) The director may refuse to issue or renew or may revoke or
suspend the license of a firm or corporation or may take any such
action with respect to any authority applied for by or granted to
the firm or corporation to engage under the license in any
category of insurance business or class of insurance if the
director finds that any ground set forth in subsection (2) of
this section exists:
(a) With respect to any individual { - licensee - }
{ + adjuster or insurance consultant + } employed by or under
contract with the firm or corporation.
(b) With respect to a director or officer of the firm or
corporation.
(c) With respect to any person who directly or indirectly has
the power to direct or cause to be directed the management,
control or activities of the { - licensee - } { + adjuster or
insurance consultant + }.
SECTION 32. ORS 744.014 is amended to read:
744.014. (1) The Director of the Department of Consumer and
Business Services may place a condition of probation on
{ - a - } { + an adjuster or insurance consultant + } license
or on a category of insurance business authorized by a license or
on a class of insurance if any ground for disciplinary action
under ORS 744.013 exists, as follows:
(a) When the license is initially issued.
(b) When the license is renewed, amended or reinstated, or when
a new license is issued for the purpose of adding a category of
insurance business or class of insurance.
(c) At any time during the effective period of the license.
(2) During a probationary period under this section, the
director may take any action authorized under ORS 744.013.
(3) A license applicant or licensee has the same right to a
hearing on the placing of a condition of probation as the license
applicant or licensee has with respect to any action taken by the
director under ORS 744.013.
SECTION 33. ORS 744.022 is amended to read:
744.022. (1) A firm or corporate { - licensee - }
{ + adjuster or insurance consultant + } may engage in a
category of insurance business or a class of insurance authorized
on its license only through an individual { - licensee - }
{ + adjuster or insurance consultant + } who is authorized to
engage in insurance business in that same category or class.
(2) An individual { - licensee - } { + adjuster or
insurance consultant + } who is employed by or under contract
with a firm or corporate
{ - licensee - } { + adjuster or insurance consultant + } may
engage in insurance business only to the extent authorized by the
license of the individual.
SECTION 34. ORS 744.024 is amended to read:
744.024. (1) Each resident { - licensee - } { + adjuster or
insurance consultant + } shall maintain in this state a place of
business in which the licensee principally engages in insurance
business under the license.
(2) The principal place of business under subsection (1) of
this section of { - an agent and - } an { + adjuster or + }
insurance consultant must be accessible to the public.
(3) { - A licensee - } { + An adjuster or insurance
consultant + } shall keep at the place of business of the
{ - licensee - } { + adjuster or insurance consultant + } the
usual and customary records pertaining to the business under the
license. All such records as to any particular transactions shall
be kept available and open to the inspection of the Director of
the Department of Consumer and Business Services during business
hours. { - An agent shall keep records of insurance transacted
by the agent under the license for three years following
expiration of the policy. - } An { + adjuster or + } insurance
consultant shall keep records of a particular transaction by
the { + adjuster or + } insurance consultant for three years
following the conclusion of the transaction.
(4) This section does not prohibit maintenance of a place of
business under a license in the licensee's place of residence in
this state.
SECTION 35. ORS 744.026 is amended to read:
744.026. (1) A nonresident { - licensee - } { + adjuster or
insurance consultant + } shall keep at the principal place of
business of the licensee the usual and customary records
pertaining to the business under the nonresident license. All
such records as to any particular transaction shall be kept
available and open to the inspection of the Director of the
Department of Consumer and Business Services during business
hours. For the purpose of this subsection, if a nonresident
licensee has a place of transacting insurance in this state, that
place shall be the principal place of business for the licensee.
{ - (2) A nonresident agent shall keep records of insurance
transacted by the agent under the license for three years
following expiration of the policy. - }
{ - (3) - } { + (2) + } A nonresident { + adjuster or + }
insurance consultant shall keep records of a particular
transaction by the nonresident { + adjuster or + } insurance
consultant for three years following conclusion of the
transaction.
SECTION 36. ORS 744.028 is amended to read:
744.028. (1) Not later than the 30th day after { - a change
of - } { + an adjuster or insurance consultant changes the + }
address or telephone number of the principal place of business or
the residence of { - a licensee - } { + the adjuster or
insurance consultant + }, or any other location at which the
licensee transacts business under the license, the licensee shall
notify the Director of the Department of Consumer and Business
Services of the change. The licensee also shall so notify the
director not later than the 30th day after the licensee opens or
closes a location at which the licensee transacts business under
the license.
(2) Not later than the 30th day after a change in or deletion
or addition of an assumed business name under which a licensee
transacts business under a license as an { - agent, - }
adjuster or insurance consultant, the licensee shall notify the
director of the change.
SECTION 37. ORS 744.031 is amended to read:
744.031. (1) Not later than the 30th day after the authority of
an individual { - licensee - } { + adjuster or insurance
consultant + } to act for a firm or corporate { - licensee - }
{ + adjuster or insurance consultant + } has commenced or
terminated, the firm or corporate
{ - licensee - } { + adjuster or insurance consultant + }
shall notify the Director of the Department of Consumer and
Business Services of the commencement or termination.
(2) A firm or corporate { - licensee - } { + adjuster or
insurance consultant + } shall notify the director annually of
all changes in its officers and directors during the immediately
previous calendar year. If the licensee is a corporation, the
licensee shall include in the notice any changes in its
stockholders who own, directly or indirectly, more than 10
percent of any class of any equity security of the licensee.
(3) The director may establish by rule a different period
within which a firm or corporate { - licensee - }
{ + adjuster or insurance consultant + } must notify the
director under subsection (1) or (2) of this section.
SECTION 38. ORS 744.033 is amended to read:
744.033. Any application or notice to the Director of the
Department of Consumer and Business Services { + regarding the
licensing of an adjuster or insurance consultant + } under this
chapter must be made { - on a form provided - } { + in the
manner prescribed + } by the director.
{ +
MANAGING GENERAL AGENTS + }
SECTION 39. ORS 744.300 is amended to read:
744.300. (1) A person shall not act as a managing general agent
with respect to risks located in this state for an authorized
insurer unless the person holds a license issued under
{ - this chapter - } { + section 8 of this 2001 Act + }
authorizing the person to { - transact insurance - }
{ + act + } as an agent and indorsed to authorize the person to
act as a managing general agent.
(2) A person shall not act as a managing general agent
representing a domestic insurer with respect to risks located
outside this state unless the person holds a license issued under
{ - this chapter - } { + section 8 of this 2001 Act + }
authorizing the person to { - transact insurance - }
{ + act + } as an agent and indorsed to authorize the person to
act as a managing general agent.
(3) For purposes of ORS 744.300 to 744.316, a person acts as a
managing general agent when the person:
(a) Negotiates and binds ceding reinsurance contracts on behalf
of an authorized insurer or manages all or part of the insurance
business of an authorized insurer, including the management of a
separate division, department or underwriting office, and acts as
an agent for the insurer, whether the person is known as a
managing general agent, manager or other similar term; and
(b) With or without the authority, either separately or
together with affiliates, produces, directly or indirectly, and
underwrites an amount of gross direct written premium equal to or
more than five percent of the policyholder surplus as reported in
the last annual statement of the insurer in any one quarter or
year, together with either or both of the following activities:
(A) Adjusting or paying claims in excess of an amount
determined by the Director of the Department of Consumer and
Business Services.
(B) Negotiating reinsurance on behalf of the insurer.
(4) The provisions of { - this chapter - } { + section 8 of
this 2001 Act + } governing application for amendment of a
license apply to the indorsement of the license of an agent for
authority to act as a managing general agent, except that an
examination is not required for the indorsement.
(5) The provisions of this section are subject to exemptions
stated in ORS 744.301.
{ +
THIRD PARTY ADMINISTRATORS + }
SECTION 40. ORS 744.704 is amended to read:
744.704. (1) The following persons are exempt from the
licensing requirement for third party administrators in ORS
744.702 and from all other provisions of ORS 744.700 to 744.740
applicable to third party administrators:
(a) A person licensed under ORS 744.002 as an adjuster, whose
activities are limited to adjustment of claims and whose
activities do not include the activities of a third party
administrator.
(b) A person licensed { - under ORS 744.002 - } as an agent
{ + as required by section 3 of this 2001 Act + } and authorized
to transact life or health insurance in this state, whose
activities are limited exclusively to the sale of insurance and
whose activities do not include the activities of a third party
administrator.
(c) An employer acting as a third party administrator on behalf
of:
(A) Its employees;
(B) The employees of one or more subsidiary or affiliated
corporations of the employer; or
(C) The employees of one or more persons with a dealership,
franchise, distributorship or other similar arrangement with the
employers.
(d) A union, or an affiliate thereof, acting as a third party
administrator on behalf of its members.
(e) An insurer that is authorized to transact insurance in this
state with respect to a policy issued and delivered in and
pursuant to the laws of this state or another state.
(f) A creditor acting on behalf of its debtors with respect to
insurance covering a debt between the creditor and its debtors.
(g) A trust and the trustees, agents and employees of the
trust, when acting pursuant to the trust, if the trust is
established in conformity with 29 U.S.C. 186.
(h) A trust exempt from taxation under section 501(a) of the
Internal Revenue Code, its trustees and employees acting pursuant
to the trust, or a voluntary employees beneficiary association
described in section 501(c) of the Internal Revenue Code, its
agents and employees and a custodian and the custodian's agents
and employees acting pursuant to a custodian account meeting the
requirements of section 401(f) of the Internal Revenue Code.
(i) A financial institution that is subject to supervision or
examination by federal or state financial institution regulatory
authorities, or a mortgage lender, to the extent the financial
institution or mortgage lender collects and remits premiums to
licensed agents or authorized insurers in connection with loan
payments.
(j) A company that issues credit cards and advances for and
collects premiums or charges from its credit card holders who
have authorized collection. The exemption under this paragraph
applies only if the company does not adjust or settle claims.
(k) A person who adjusts or settles claims in the normal course
of practice or employment as an attorney at law. The exemption
under this subsection applies only if the person does not collect
charges or premiums in connection with life insurance or health
insurance coverage.
(L) A person who acts solely as an administrator of one or more
bona fide employee benefit plans established by an employer or an
employee organization, or both, for which the Insurance Code is
preempted pursuant to the Employee Retirement Income Security Act
of 1974. A person to whom this paragraph applies must comply with
the requirements of ORS 744.714.
(m) The Oregon Medical Insurance Pool Board, established under
ORS 735.600 to 735.650, and the administering insurer or insurers
for the board, for services provided pursuant to ORS 735.600 to
735.650.
(n) An entity or association owned by or composed of like
employers who administer partially or fully self-insured plans
for employees of the employers or association members.
(o) A trust established by a cooperative body formed between
cities, counties, districts or other political subdivisions of
this state, or between any combination of such entities, and the
trustees, agents and employees acting pursuant to the trust.
(p) Any person designated by the Director of the Department of
Consumer and Business Services by rule.
(2) A third party administrator is not required to be licensed
as a third party administrator in this state if the following
conditions are met:
(a) The third party administrator has its principal place of
business in another state;
(b) The third party administrator is not soliciting business as
a third party administrator in this state; and
(c) In the case of any group policy or plan of insurance
serviced by the third party administrator, the lesser of five
percent or 100 certificate holders reside in this state.
{ +
REINSURANCE INTERMEDIARIES + }
SECTION 41. ORS 744.800 is amended to read:
744.800. (1) For purposes of this section:
(a) An intermediary broker is a person who solicits, negotiates
or places reinsurance cessions or retrocessions on behalf of a
ceding insurer without the authority or power to bind reinsurance
on behalf of the insurer.
(b) An intermediary manager is a person who has authority to
bind a reinsurer or who manages all or part of the assumed
reinsurance business of a reinsurer, including the management of
a separate division, department or underwriting office, and acts
as an agent for the reinsurer, regardless of the title or
designation of the person.
{ + (c) 'Business entity' has the meaning given that term in
ORS 731.116. + }
(2) A person may act as an intermediary broker in this state
only as follows:
(a) If a person maintains an office in this state either in the
person's own name or in the name of { - a firm or corporate
agent - } { + an agent that is a business entity + }, the
person must meet either of the following requirements:
(A) If the person is an individual { - , firm or
corporation - } { + or a business entity + }, the person must
hold a license issued under this chapter authorizing the person
to { - transact insurance - } { + act + } as an agent and
indorsed with the designation of intermediary broker.
(B) If the person is an individual, the person must be
authorized to act as an intermediary broker as provided in
subsection (4) of this section under a license issued under this
chapter to { - a firm or corporate agent who - } { + an agent
that is a business entity and + } holds a license as an
intermediary broker.
(b) If a person maintains an office in another state either in
the person's own name or in the name of { - a firm or corporate
agent - } { + an agent that is a business entity + }, the
person must meet one of the following requirements:
(A) If the person is an individual { - , firm or
corporation - } { + or a business entity + }, the person must
hold a license issued under this chapter authorizing the person
to { - transact insurance - } { + act + } as an agent and
indorsed with the designation of intermediary broker.
(B) If the person is an individual, the person must be
authorized to act as an intermediary broker as provided in
subsection (4) of this section under a license issued under this
chapter to { - a firm or corporate agent who - } { + an agent
that is a business entity and + } holds a license as an
intermediary broker.
(C) If the person is an individual { - , firm or
corporation - } { + or a business entity + }, the person must
hold a license as an intermediary broker or intermediary manager
issued by another state having a law substantially similar to the
requirements of this chapter that apply to intermediary brokers
and intermediary managers.
(3) A person may act as an intermediary manager only as
follows:
(a) A person may act as an intermediary manager for a reinsurer
domiciled in this state if the person meets either of the
following requirements:
(A) If the person is an individual { - , firm or
corporation - } { + or a business entity + }, the person must
hold a license issued under this chapter authorizing the person
to { - transact insurance - } { + act + } as an agent and
indorsed with the designation of intermediary manager.
(B) If the person is an individual, the person must be
authorized to act as an intermediary manager as provided in
subsection (4) of this section under a license issued under this
chapter to { - the firm or corporate agent who - } { + an
agent that is a business entity and + } holds a license as an
intermediary manager.
(b) A person may act as an intermediary manager in this state,
when the person maintains an office in this state either in the
person's own name or in the name of { - a firm or corporate
agent - } { + an agent that is a business entity + }, if the
person meets either of the following requirements:
(A) If the person is an individual { - , firm or
corporation - } { + or a business entity + }, the person holds
a license issued under this chapter authorizing the person to
{ - transact insurance - } { + act + } as an agent and
indorsed with the designation of intermediary manager.
(B) If the person is an individual, the person is authorized to
act as an intermediary manager as provided in subsection (4) of
this section under a license issued under this chapter to { - a
firm or corporate agent who - } { + an agent that is a business
entity and + } holds a license as an intermediary manager.
(c) A person may act as an intermediary manager in another
state for an authorized foreign or alien insurer transacting
insurance in this state if the person meets one of the following
requirements:
(A) If the person is an individual { - , firm or
corporation - } { + or a business entity + }, the person must
hold a license issued under this chapter authorizing the person
to { - transact insurance - } { + act + } as an agent and
indorsed with the designation of intermediary manager.
(B) The person, if an individual, is authorized to act as an
intermediary manager as provided in subsection (4) of this
section under a license issued under this chapter to { - a firm
or corporate agent who - } { + an agent that is a business
entity and + } holds a license as an intermediary manager.
(C) If the person is an individual { - , firm or
corporation - } { + or a business entity + }, the person must
hold a license as an intermediary broker or intermediary manager
issued by another state having a law substantially similar to the
requirements of this chapter that apply to intermediary brokers
and intermediary managers.
(4) An individual may act as an intermediary broker or an
intermediary manager under the authority of the license of
{ - a firm or corporate agent - } { + an agent that is a
business entity + }, whether or not the individual holds a
license as an agent, if the license of the { - firm or
corporate agent - } { + agent that is a business entity + } is
indorsed to authorize the { - firm or corporate agent - }
{ + agent that is a business entity + } to act as an
intermediary broker or intermediary manager and if:
(a) The individual is a member { + , + } { - or employee of
the firm or is an - } employee, officer or director of the
{ - corporation - } { + business entity + }; and
(b) The individual is designated by the { - firm or corporate
agent - } { + agent that is a business entity + } on
{ - the - } { + its + } license application { - of the firm
or corporate agent - } or an amendatory form or supplementary
form thereto as authorized to act as an intermediary broker or
intermediary manager under the authority of the license of the
{ - firm or corporate agent - } { + agent that is a business
entity + }.
(5) In order to obtain and maintain the indorsement of
intermediary manager, a person must satisfy the requirements of
ORS 744.818 regarding errors and omissions insurance.
(6) A person may obtain a license to { - transact
insurance - } { + act + } as a nonresident agent authorized to
act in this state as an intermediary broker or intermediary
manager, or both { - , if the person resides in another state or
a province of Canada and holds a currently valid license issued
by that state or province and authorizing the person to act as an
intermediary broker or an intermediary manager - } { + as
provided in section 7 of this 2001 Act + }.
{ - The licensing of such a person is subject to the provisions
of ORS 744.069 that apply to a person who resides in another
state or a province of Canada and is licensed in that state or
province as an agent or insurance broker. - }
(7) For purposes of { - ORS 744.165 - } { + section 16 of
this 2001 Act + }:
(a) An intermediary broker is an agent of the ceding insurer on
whose behalf the intermediary broker acts, and not an agent of
the reinsurer.
(b) An intermediary manager is an agent of the reinsurer.
{ +
GENERALLY APPLICABLE PROVISIONS + }
SECTION 42. ORS 744.011 is amended to read:
744.011. (1) The expiration of a license or the voluntary
surrender of a license by a licensee { + under this chapter + }
shall not deprive the Director of the Department of Consumer and
Business Services of jurisdiction to proceed with any
investigation of, or any action or disciplinary proceedings
against, the licensee or to revise or render void an order
suspending or revoking the license.
(2) As provided in this subsection, a person who has
voluntarily surrendered a license may qualify for a license
conferring the same authority as the surrendered license without
having to take an examination that is otherwise required. In
order to qualify without examination, the person must apply for
the license within two years after the date on which the person
surrendered the prior license. The person must apply and
otherwise qualify for the license in the same manner as a person
who initially applies for the license. If the person is required
to satisfy continuing education requirements for renewal of the
license, the person must show satisfaction of continuing
education requirements for each renewal date occurring during the
period following the surrender in which the person did not hold a
license.
SECTION 43. ORS 744.018 is amended to read:
744.018. { + With regard to any license issued under this
chapter: + }
(1) The Director of the Department of Consumer and Business
Services may reinstate a revoked license, any revoked category of
insurance business or any revoked class of insurance. The
director may grant reinstatement upon fulfillment by the former
holder of the license of conditions set by the director.
(2) The director may modify the suspension of a license, a
category of insurance business or a class of insurance and
reinstate the license, category or class:
(a) At a time certain; or
(b) When the person subject to the suspension fulfills
conditions set by the director for reinstatement.
SECTION 44. ORS 744.037 is amended to read:
744.037. A fee paid { + in connection with a license or a
license application + } under this chapter is not refundable
unless the Director of the Department of Consumer and Business
Services provides otherwise by rule.
{ +
SURPLUS LINES INSURANCE + }
SECTION 44a. ORS 735.405 is amended to read:
735.405. As used in ORS 735.400 to 735.495:
(1) 'Admitted insurer' means an insurer authorized to do an
insurance business in this state.
(2) 'Capital' means funds paid in for stock or other evidence
of ownership.
(3) 'Eligible surplus lines insurer' means a nonadmitted
insurer with which a surplus lines licensee may place surplus
lines insurance.
(4) 'Export' means to place surplus lines insurance with a
nonadmitted insurer.
{ + (5) 'Insurance producer' has the meaning given that term
in section 2 of this 2001 Act. + }
{ - (5) - } { + (6) + } 'Kind of insurance' means one of
the types of insurance required to be reported in the annual
statement which must be filed with the Director of the Department
of Consumer and Business Services by authorized insurers.
{ - (6) - } { + (7) + } 'Nonadmitted insurer' means an
insurer not authorized to do an insurance business in this state.
This definition shall include insurance exchanges as authorized
under the laws of various states.
{ - (7) - } { + (8) + } 'Producing agent' means the
individual agent dealing directly with the party seeking
insurance.
{ - (8) - } { + (9) + } 'Surplus' means funds over and
above liabilities and capital of the insurer for the protection
of policyholders.
{ - (9) - } { + (10) + } 'Surplus lines licensee' means an
agent licensed under ORS chapter 744 to place insurance on risks
resident, located or to be performed in this state with
nonadmitted insurers eligible to accept such insurance.
SECTION 44b. ORS 735.410 is amended to read:
735.410. { + (1) + } Insurance may be procured through a
surplus lines licensee from a nonadmitted insurer if:
{ - (1) - } { + (a) + } The insurer is an eligible surplus
lines insurer;
{ - (2) - } { + (b) + } { + A diligent search has first
been made among the insurers who are authorized to transact and
are actually writing the particular kind and class of insurance
in this state, and it is determined that + } the full amount or
kind of insurance cannot be obtained from { + those + } insurers
{ - who are admitted to do business in this state. Such full
amount or kind of insurance may be procured from eligible surplus
lines insurers, provided that a diligent search is made among the
insurers who are admitted to transact and are actually writing
the particular kind and class of insurance in this state - } ;
and
{ - (3) - } { + (c) + } All other requirements of ORS
735.400 to 735.495 are met.
{ + (2) Subsection (1) of this section does not apply to a
placement of surplus lines insurance outside this state by a
nonresident surplus lines licensee or by a nonresident surplus
lines insurance producer who is not licensed to transact surplus
lines insurance in this state when the insurance covers a risk
with exposures both in this state and outside this state, if both
of the following conditions are met:
(a) If the nonresident surplus lines licensee or insurance
producer is licensed in the state as an insurance producer to
transact surplus lines policies in the state in which the
insurance is placed and is in good standing in that state; and
(b) If the surplus lines policy complies with all of the
requirements for placement of nonadmitted insurance in the state
in which the insurance is placed.
(3) The Director of the Department of Consumer and Business
Services by rule may establish requirements applicable to the
placement of surplus lines insurance outside this state by a
nonresident surplus lines licensee or by a nonresident surplus
lines insurance producer who is not licensed in this state, when
the insurance covers a risk with exposures both in this state and
outside this state. The rules may include such matters as the
procurement of surplus lines insurance, eligibility of the
insurer, the conditions under which surplus lines insurance may
be obtained, the necessary evidence of insurance, filing
requirements and other matters necessary for regulation of
surplus lines insurance transactions that affect risk exposures
in this state. The rules may not interfere with or hinder
implementation of the federal Gramm-Leach-Bliley Act (P.L.
106-102) with respect to licensing reciprocity among the
states. + }
SECTION 44c. ORS 735.415 is amended to read:
735.415. { + (1) + } { - No - } { + A + } surplus lines
licensee { - shall - } { + may not + } place any coverage
with a nonadmitted insurer unless at the time of placement
{ - such - } { + the + } nonadmitted insurer has { + done all
of the following + }:
{ - (1) - } { + (a) + } Established satisfactory evidence
of good repute and financial integrity.
{ - (2) - } { + (b) + } Qualified under one of the
following { - paragraphs - } { + subparagraphs + }:
{ - (a) - } { + (A) + } Has capital and surplus or its
equivalent under the laws of its domiciliary jurisdiction { - ,
which - } { + that + } equals { + either + } { - : - }
{ - (A) - } the minimum capital and surplus requirements
under the laws of this state { - ; - } or
{ - (B) $3 million upon enactment, and $3.5 million three
years after enactment, and $4.5 million five years after
enactment, and - } $5 million { + , + } { - six years after
enactment, whichever is greater. After six years from
enactment, - } { + except that + } the requirements of this
{ - subparagraph - } { + paragraph + } may be satisfied by an
insurer possessing less than $5 million capital and surplus upon
an affirmative finding of acceptability by the Director of the
Department of Consumer and Business Services. The finding shall
be based upon such factors as quality of management, capital and
surplus of any parent company, company underwriting profit and
investment income trends and company record and reputation within
the industry. In no event shall the director make an affirmative
finding of acceptability when the surplus lines insurer's capital
and surplus is less than $3 million { - ; - } { + . + }
{ - (b) - } { + (B) + } Except as otherwise provided in
{ - paragraph (c) of this subsection - } { + subparagraph (C)
of this paragraph, + } an alien insurer qualifies under this
subsection if it maintains in the United States an irrevocable
trust fund in either a national bank or a member of the Federal
Reserve System, in an amount not less than $1.5 million for the
protection of all its policyholders in the United States and such
trust fund consists of cash, securities, irrevocable letters of
credit, or of investments of substantially the same character and
quality as those which are eligible investments for the capital
and statutory reserves of admitted insurers authorized to write
like kinds of insurance in this state. Such trust fund, which
shall be included in any calculation of capital and surplus or
its equivalent, shall have an expiration date which at no time
shall be less than five years { + . + } { - ; - }
{ - (c) - } { + (C) + } In the case of a group of insurers
that includes incorporated and individual unincorporated
underwriters, maintains a trust fund of not less than $50 million
as security to the full amount thereof for all policyholders and
creditors in the United States of each member of the group, and
such trust shall likewise comply with the terms and conditions
established in { - paragraph (b) of this subsection - }
{ + subparagraph (B) of this paragraph + } for alien
insurers { + , + } { - provided, however, - } { + except + }
that the incorporated members of the group shall not be engaged
in any business other than underwriting as a member of the group
and shall be subject to the same level of solvency regulation and
control by the group's domiciliary regulators as are the
unincorporated members { - ; or - } { + . + }
{ - (d) - } { + (D) + } In the case of an insurance
exchange created by the laws of individual states, maintains
capital and surplus, or the substantial equivalent thereof, of
not less than $15 million in the aggregate. For insurance
exchanges { - which - } { + that + } maintain funds for the
protection of all insurance exchange policyholders, each
individual syndicate shall maintain minimum capital and surplus,
or the substantial equivalent thereof, of not less than $1.5
million. In the event the insurance exchange does not maintain
funds for the protection of all insurance exchange policyholders,
each individual syndicate shall meet the minimum capital and
surplus requirements of { - paragraph (a) of this
subsection - } { + subparagraph (A) of this paragraph + }.
{ - (3) - } { + (c) + } Provided to the director no more
than six months after the close of the period reported upon a
certified copy of its current annual statement { - which - }
{ + that + } is:
{ - (a) - } { + (A) + } Filed with and approved by the
regulatory authority in the domicile of the nonadmitted insurer;
{ - (b) - } { + (B) + } Certified by an accounting or
auditing firm licensed in the jurisdiction of the insurer's
domicile; or
{ - (c) - } { + (C) + } In the case of an insurance
exchange, an aggregate combined statement of all underwriting
syndicates operating during the period reported.
{ + (2) When a nonresident surplus lines licensee or
nonresident surplus lines insurance producer who is not licensed
to transact surplus lines insurance in this state places surplus
lines insurance outside this state that covers a risk with
exposures both in this state and outside this state, the licensee
or insurance producer is not subject to the requirements of
subsection (1) of this section if the nonadmitted insurer with
which the coverage is placed:
(a) Meets the requirements for nonadmitted placement of
insurance in the state in which the insurance is placed; or
(b) Is an authorized or admitted insurer in the state in which
the insurance is placed. + }
SECTION 44d. ORS 735.420 is amended to read:
735.420. (1) The Director of the Department of Consumer and
Business Services may declare a surplus lines insurer
{ + described in ORS 735.415 (1) + } ineligible if the director
has reason to believe that the surplus lines insurer:
(a) Is in unsound financial condition;
(b) Is no longer eligible under ORS 735.415;
(c) Has willfully violated the laws of this state; or
(d) Does not make reasonably prompt payment of just losses and
claims in this state or elsewhere.
(2) The director shall promptly mail notice of all such
declarations to each surplus lines licensee.
SECTION 45. ORS 735.425 is amended to read:
735.425. (1) Within 90 days after the placing of any surplus
lines insurance { + in this state + }, each surplus lines
licensee shall file with the Director of the Department of
Consumer and Business Services:
(a) An affidavit { + signed by the licensee + }, which shall
be kept confidential, regarding the insurance, including the
following:
(A) The name and address of the insured;
(B) The identity of the insurer or insurers;
(C) A description of the subject and location of the risk;
(D) The amount of premium charged for the insurance; and
(E) Such other pertinent information as the director may
reasonably require.
(b) A statement on a standardized form furnished by the
director, as to the diligent efforts by the producing agent to
place the coverage with admitted insurers and the results
thereof. The statement shall { + be signed by the producing
agent and shall + } affirm that the insured was expressly advised
prior to placement of the insurance that:
(A) The surplus lines insurer with whom the insurance was to be
placed is not licensed in this state and is not subject to its
supervision; and
(B) In the event of the insolvency of the surplus lines
insurer, losses will not be paid by the state insurance guaranty
fund.
(2) The director may direct that filings required under { +
subsection (1) of + } this section be made to the Surplus Lines
Association of Oregon. { + The director may also require that
such filings be made electronically but may exempt a licensee
from the requirement for good cause shown.
(3) A nonresident surplus lines licensee or nonresident
insurance producer who places a surplus lines policy on a risk
with exposures located both in this state and outside this state
shall satisfy filing requirements established by the director by
rule. The director shall ensure that the rules facilitate
interstate regulation of surplus lines insurance
transactions. + }
SECTION 45a. ORS 735.435 is amended to read:
735.435. (1) Upon placing surplus lines insurance, the surplus
lines licensee shall promptly deliver to the insured or the
producing agent the policy, or if such policy is not then
available, a certificate as described in subsection (4) of this
section, cover note, binder or other evidence of insurance. The
certificate, as described in subsection (4) of this section,
cover note, binder or other evidence of insurance shall be
executed by the surplus lines licensee and shall show the
description and location of the subject of the insurance,
coverages including any material limitations other than those in
standard forms, a general description of the coverages of the
insurance, the premium and rate charged and taxes to be collected
from the insured, and the name and address of the insured and
surplus lines insurer or insurers and proportion of the entire
risk assumed by each, and the name of the surplus lines licensee
and the licensee's license number.
(2) No surplus lines licensee shall issue or deliver any
evidence of insurance or represent that insurance will be or has
been written by any eligible surplus lines insurer, unless the
licensee has authority from the insurer to cause the risk to be
insured, or has received information from the insurer in the
regular course of business that such insurance has been granted.
(3) If, after delivery of any such evidence of insurance, there
is any change in the identity of the insurers, or the proportion
of the risk assumed by any insurer, or any other material change
in coverage as stated in the surplus lines licensee's original
evidence of insurance, or in any other material as to the
insurance coverage so evidenced, the surplus lines licensee shall
promptly issue and deliver to the insured or the original
producing agent an appropriate substitute for, or indorsement of
the original document, accurately showing the current status of
the coverage and the insurers responsible thereunder.
(4) As soon as reasonably possible after the placement of any
such insurance the surplus lines licensee shall deliver a copy of
the policy or, if not available, a certificate of insurance to
the insured or producing agent to replace any evidence of
insurance theretofore issued. Each certificate or policy of
insurance shall contain or have attached thereto a complete
record of all policy insuring agreements, conditions, exclusions,
clauses, indorsements or any other material facts that would
regularly be included in the policy.
(5) Any surplus lines licensee who fails to comply with the
requirements of this section shall be subject to the penalties
provided.
(6) Every evidence of insurance negotiated, placed or procured
under the provisions of ORS 735.400 to 735.495 issued by the
surplus lines licensee shall bear the name of the licensee and
the following legend in bold type: 'This is evidence of insurance
procured and developed under the Oregon surplus lines laws. It is
NOT covered by the provisions of ORS 734.510 to 734.710 relating
to the Oregon Insurance Guaranty Association. If the insurer
issuing this insurance becomes insolvent, the Oregon Insurance
Guaranty Association has no obligation to pay claims under this
evidence of insurance. '
{ + (7) The Director of the Department of Consumer and
Business Services by rule may establish requirements relating to
evidence of insurance and other applicable requirements governing
placement of insurance by a nonresident surplus lines licensee
outside this state that covers a risk with exposures located both
in this state and outside this state. + }
SECTION 46. ORS 735.450 is amended to read:
735.450. (1) { - Except as provided in subsection (5) of this
section, - } A person shall not procure any contract of surplus
lines insurance with any nonadmitted insurer unless the person is
licensed under ORS chapter 744 as { - a resident - }
{ + an + } agent authorized to transact { - general lines
insurance - } { + property insurance, casualty insurance or
both + } and is further authorized under the license to transact
surplus lines insurance. { + The prohibition in this subsection
does not apply to a nonresident surplus lines licensee or to a
nonresident surplus lines producer who is not a licensee in this
state if:
(a) The insurance contract covers a risk with exposures both in
this state and outside this state;
(b) Procurement of the insurance contract described in
paragraph (a) of this subsection did not occur in this state; and
(c) The licensee or producer is licensed to transact surplus
lines insurance in the state in which the insurance contract
described in paragraph (a) of this subsection was procured. + }
(2) The Director of the Department of Consumer and Business
Services may amend the license of { - a resident general
lines - } { + an + } agent { + authorized to transact property
insurance, casualty insurance or both + } to authorize the agent
to transact insurance as a surplus lines agent if the agent
{ - : - }
{ - (a) - } has applied under { - ORS chapter 744 - }
{ + section 7 of this 2001 Act + } to have the class of surplus
lines insurance added to the agent license and has satisfied all
requirements therefor under
{ - ORS chapter 744; - } { + sections 2 to 19 of this 2001
Act. This subsection applies to resident and nonresident
agents. + }
{ - (b) Has filed with the director a bond in favor of this
state in the penal sum of $50,000 aggregate liability, with
corporate sureties approved by the director; and - }
{ - (c) Has been a licensed resident general lines agent, or
the equivalent in another state, for a total of at least five
years immediately preceding the amendment to the license. - }
{ - (3) The bond required by subsection (2) of this section
shall be conditioned that the surplus lines licensee will conduct
business in accordance with the provisions of ORS 735.400 to
735.495 and will promptly remit the taxes as provided by law. The
bond shall be maintained in force and unimpaired during the term
of the license. No bond shall be terminated unless at least 30
days' prior written notice is given to the licensee and
director. - }
{ - (4) Subject to ORS 744.004, corporations, including
foreign corporations, shall be eligible to be resident surplus
lines licensees. - }
{ - (5) The director may amend the license of a nonresident
general lines agent to authorize the agent to transact insurance
as a surplus lines agent solely for the purpose of complying with
the provisions of ORS 735.300 to 735.365, the Oregon Liability
Risk Retention Law. - }
SECTION 47. ORS 735.460 is amended to read:
735.460. (1) Each surplus lines licensee shall keep { - in
this state - } a full and true record of each surplus lines
insurance contract placed by or through the licensee { + on each
risk resident in this state as required by section 11 of this
2001 Act + }, including a copy of the policy, certificate, cover
note or other evidence of insurance showing any of the following
items that are applicable:
(a) Amount of the insurance and perils insured;
(b) Brief description of the property insured and its location;
(c) Gross premium charged;
(d) Any return premium paid;
(e) Rate of premium charged upon the several items of property;
(f) Effective date of the contract and the terms thereof;
(g) Name and address of the insured;
(h) Name and address of the insurer;
(i) Amount of tax and other sums to be collected from the
insured; and
(j) Identity of the producing agent, any confirming
correspondence from the insurer or its representative and the
application.
(2) The record of each contract shall be kept open at all
reasonable times to examination by the Director of the Department
of Consumer and Business Services without notice for a period not
less than five years following termination of the contract.
SECTION 48. ORS 735.465 is amended to read:
735.465. { + (1) + } On or before the end of each month, each
surplus lines licensee shall file with the Director of the
Department of Consumer and Business Services, { - on forms - }
{ + as + } prescribed by the director, a verified report
{ - in duplicate - } of all surplus lines insurance transacted
{ + on risks resident in this state + } during the preceding
{ - month showing - } { + 90 days. The report need not show
transacted surplus lines insurance that was reported in an
earlier report. The report shall show + }:
{ - (1) - } { + (a) + } Aggregate gross premiums written;
{ - (2) - } { + (b) + } Aggregate return premiums; and
{ - (3) - } { + (c) + } Amount of aggregate tax.
{ + (2) The director may direct that reports required under
subsection (1) of this section be made to the Surplus Lines
Association of Oregon and that the Surplus Lines Association of
Oregon file a combined report thereof with the director. The
director may also require that reports required under subsection
(1) of this section be made electronically but may exempt a
licensee from the requirement for good cause shown.
(3) For the purpose of collecting taxes on insurance covering
the Oregon portion of risks when the insurance is placed outside
this state and covers a risk with exposures located both in this
state and outside this state, the director may establish by rule
requirements for filing reports on surplus lines insurance
transacted outside this state on risks with exposures located
both in this state and outside this state. + }
SECTION 48a. ORS 735.470 is amended to read:
735.470. (1) The surplus lines licensee shall pay the Director
of the Department of Consumer and Business Services an amount
equal to the tax which would have been imposed under ORS 731.816
(1993 Edition) if that section were in effect and operative, and
the tax which is imposed by ORS 731.820, on authorized insurers
for the premiums shown in the report required by ORS 735.465. The
tax shall be collected by the surplus lines licensee as specified
by the director, in addition to the full amount of the gross
premium charged by the insurer for the insurance. The tax on any
portion of the premium unearned at termination of insurance
having been credited by the state to the licensee shall be
returned to the policyholder directly by the surplus lines
licensee or through the producing agent, if any. The surplus
lines licensee is prohibited from absorbing such tax and from
rebating for any reason, any part of such tax.
(2) The surplus lines tax is due quarterly on the 45th day
following the calendar quarter in which the premium is collected.
The tax shall be paid to and reported on forms prescribed by the
director or upon the director's order paid to and reported on
forms prescribed by the surplus lines association.
(3) Notwithstanding subsection (2) of this section, if a
surplus lines license is terminated or nonrenewed for any reason,
the taxes described in this section are due on the 30th day after
the termination or nonrenewal.
(4) In applying ORS 731.816 (1993 Edition) for purposes of this
section, the rate shall be two percent rather than two and
one-quarter percent.
{ + (5) The director by rule shall establish procedures for
payment of taxes on the Oregon portion of risks covered by
surplus lines insurance policies transacted outside this state
that cover risks with exposures both in this state and outside
this state. + }
SECTION 48b. ORS 735.475 is amended to read:
735.475. If the tax collectible by a surplus lines licensee
under ORS 735.400 to 735.495 is not paid within the time
prescribed, the same shall be recoverable in a suit brought by
the Director of the Department of Consumer and Business Services
against the surplus lines licensee { - and the surety on the
bond filed under ORS 735.450 - } .
SECTION 49. ORS 735.480 is amended to read:
735.480. The Director of the Department of Consumer and
Business Services may suspend, revoke or refuse to renew the
license of a surplus lines licensee after notice and hearing as
provided under the applicable provision of this state's laws upon
any one or more of the following grounds:
(1) Removal of the surplus lines licensee's office from this
state { + , if the licensee is a resident agent + };
(2) Removal of the surplus lines licensee's office accounts and
records { - from this state - } { + from the principal place
of business of the licensee under section 11 of this 2001 Act + }
during the period during which such accounts and records are
required to be maintained under ORS 735.460;
(3) Closing of the surplus lines licensee's office for a period
of more than 30 business days, unless permission is granted by
the director;
(4) Failure to make and file required reports;
(5) Failure to transmit required tax on surplus lines premiums;
{ - (6) Failure to maintain required bond; - }
{ - (7) - } { + (6) + } Violation of any provision of ORS
735.400 to 735.495; or
{ - (8) - } { + (7) + } For any cause for which an
insurance license could be denied, revoked, suspended or renewal
refused under { - ORS 744.013 - } { + section 14 of this 2001
Act + }.
SECTION 49a. ORS 735.485 is amended to read:
735.485. (1) A surplus lines insurer may be sued upon any cause
of action arising in this state under any surplus lines insurance
contract made by it or evidence of insurance issued or delivered
by the surplus lines licensee pursuant to the procedure provided
in ORS 735.490. Any surplus lines policy issued by the surplus
lines licensee shall contain a provision stating the substance of
this section and designating the person to whom process shall be
delivered.
(2) Each surplus lines insurer assuming surplus lines insurance
shall be considered thereby to have subjected itself to ORS
735.400 to 735.495.
(3) The remedies provided in this section are in addition to
any other methods provided by law for service of process upon
insurers. { +
(4) A surplus lines insurance contract covering risks with
exposures both in this state and outside this state that is
placed outside this state by a nonresident surplus lines
licensee, and the surplus lines insurer of the contract, are not
subject to the provisions of subsection (2) of this section or
ORS 735.490:
(a) If the nonresident surplus lines licensee is currently
licensed as an insurance producer authorized to transact surplus
lines insurance contracts in the state in which the surplus lines
insurance contract is placed and is in good standing in that
state; and
(b) If the surplus lines insurance contract complies with all
of the requirements for placement of nonadmitted insurance in the
state in which the surplus lines insurance contract is placed.
(5) When a nonresident surplus lines insurance producer who is
not a surplus lines licensee in this state transacts outside this
state a surplus lines insurance contract covering risks with
exposures both in this state and outside this state, the producer
and the surplus lines insurer of the contract are subject to this
section and to ORS 735.490 or to rules adopted by the director in
lieu thereof unless:
(a) The producer is currently licensed to transact surplus
lines policies in the state in which the surplus lines insurance
contract is placed and is in good standing in that state; and
(b) The surplus lines insurance contract complies with all of
the requirements for placement of nonadmitted insurance in the
state in which the surplus lines insurance contract is
placed. + }
SECTION 49b. ORS 735.490 is amended to read:
735.490. (1) An insurer transacting insurance under the
provisions of ORS 735.400 to 735.495 may be sued upon any cause
of action, arising under any policy of insurance so issued and
delivered by it, in the courts for the county where the agent who
registered or delivered such policy resides or transacts
business, by the service of summons and complaint made upon such
agent for such insurer.
(2) Any such agent served with summons and complaint in any
such cause shall forthwith mail the summons and complaint, or a
true and complete copy thereof, by registered or certified mail
with proper postage affixed and properly addressed, to the
insurer being sued.
(3) The insurer shall have 40 days from the date of the service
of the summons and complaint upon such agent in which to plead,
answer or defend any such cause.
(4) Upon service of summons and complaint upon such agent for
such insurer, the court in which the action is begun shall be
deemed to have duly acquired personal jurisdiction of the
defendant insurer so served.
{ + (5) An insurer and policyholder may agree to waive the
provisions of subsections (1) to (4) of this section governing
service and venue with respect to a surplus lines insurance
contract for commercial property and casualty risk if the waiver
is specifically referred to in the contract or in an indorsement
attached to the contract. + }
{ +
DEFINITION OF AGENT + }
SECTION 50. ORS 746.600 is amended to read:
746.600. As used in ORS 746.600 to 746.690 and 750.055:
(1) 'Adverse underwriting decision' means, except as provided
in subsection (2) of this section, any of the following actions
with respect to insurance transactions involving insurance
coverage which is individually underwritten:
(a) A declination of insurance coverage.
(b) A termination of insurance coverage.
(c) Failure of an agent to apply for insurance coverage with a
specific insurer which the agent represents and which is
requested by an applicant.
(d) In the case of life or health insurance coverage, an offer
to insure at higher than standard rates.
(e) In the case of other kinds of insurance coverage:
(A) Placement by an insurer or agent of a risk with a residual
market mechanism, an unauthorized insurer or an insurer which
specializes in substandard risks.
(B) The charging of a higher rate on the basis of information
which differs from that which the applicant or policyholder
furnished.
(2) 'Adverse underwriting decision' does not include the
following actions, but the insurer or agent responsible for the
occurrence of the action shall nevertheless provide the applicant
or policyholder with the specific reason or reasons for the
occurrence:
(a) The termination of an individual policy form on a class or
statewide basis.
(b) A declination of insurance coverage solely because the
coverage is not available on a class or statewide basis.
(c) The rescission of a policy.
(3) 'Affiliate of' a specified person or 'person affiliated
with' a specified person means a person who directly, or
indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person
specified.
(4) 'Agent' means a person licensed by the Director of the
Department of Consumer and Business Services as { - an - }
{ + a resident or nonresident + } insurance agent { - , or a
person to whom the director has issued a nonresident broker's
permit - } .
(5) 'Applicant' means a person who seeks to contract for
insurance coverage, other than a person seeking group insurance
coverage which is not individually underwritten.
(6) 'Consumer report' means any written, oral or other
communication of information bearing on a natural person's
creditworthiness, credit standing, credit capacity, character,
general reputation, personal characteristics or mode of living
which is used or expected to be used in connection with an
insurance transaction.
(7) 'Consumer reporting agency' means a person who:
(a) Regularly engages, in whole or in part, in assembling or
preparing consumer reports for a monetary fee;
(b) Obtains information primarily from sources other than
insurers; and
(c) Furnishes consumer reports to other persons.
(8) 'Control' means, and the terms 'controlled by' or ' under
common control with' refer to, the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the
ownership of voting securities, by contract other than a
commercial contract for goods or nonmanagement services, or
otherwise, unless the power of the person is the result of a
corporate office held in, or an official position held with, the
controlled person.
(9) 'Declination of insurance coverage' means a denial, in
whole or in part, by an insurer or agent of requested insurance
coverage.
(10) 'Individual' means a natural person who:
(a) In the case of life or health insurance, is a past, present
or proposed principal insured or certificate holder;
(b) In the case of other kinds of insurance, is a past, present
or proposed named insured or certificate holder;
(c) Is a past, present or proposed policyowner;
(d) Is a past or present applicant;
(e) Is a past or present claimant; or
(f) Derived, derives or is proposed to derive insurance
coverage under an insurance policy or certificate which is
subject to ORS 746.600 to 746.690 and 750.055.
(11) 'Institutional source' means a person or governmental
entity which provides information about an individual to an
insurer, agent or insurance-support organization, other than:
(a) An agent;
(b) The individual who is the subject of the information; or
(c) A natural person acting in a personal capacity rather than
in a business or professional capacity.
(12) 'Insurance-support organization' means, except as provided
in subsection (13) of this section, a person who regularly
engages, in whole or in part, in assembling or collecting
information about natural persons for the primary purpose of
providing the information to an insurer or agent for insurance
transactions, including:
(a) The furnishing of consumer reports to an insurer or agent
for use in connection with insurance transactions; and
(b) The collection of personal information from insurers,
agents or other insurance-support organizations for the purpose
of detecting or preventing fraud, material misrepresentation or
material nondisclosure in connection with insurance underwriting
or insurance claim activity.
(13) 'Insurance-support organization' does not include
insurers, agents, governmental institutions, medical care
institutions or medical professionals.
(14) 'Insurance transaction' means any transaction involving
insurance primarily for personal, family or household needs
rather than business or professional needs and which entails:
(a) The determination of an individual's eligibility for an
insurance coverage, benefit or payment; or
(b) The servicing of an insurance application, policy or
certificate.
(15) 'Insurer,' as defined in ORS 731.106, includes every
person engaged in the business of entering into policies of
insurance.
(16) 'Investigative consumer report' means a consumer report,
or portion of a consumer report, for which information about a
natural person's character, general reputation, personal
characteristics or mode of living is obtained through personal
interviews with the person's neighbors, friends, associates,
acquaintances or others who may have knowledge concerning such
items of information.
(17) 'Medical care institution' means a facility or institution
which is licensed to provide health care services to natural
persons, and includes but is not limited to health maintenance
organizations, home health agencies, hospitals, medical clinics,
public health agencies, rehabilitation agencies and skilled
nursing facilities.
(18) 'Medical professional' means a person licensed or
certified to provide health care services to natural persons, and
includes but is not limited to chiropractors, clinical
dieticians, clinical psychologists, dentists, naturopaths,
nurses, occupational therapists, optometrists, pharmacists,
physical therapists, physicians, podiatrists, psychiatric social
workers and speech therapists.
(19) 'Medical record information' means personal information
which:
(a) Relates to an individual's physical or mental condition,
medical history or medical treatment; and
(b) Is obtained from a medical professional, a medical care
institution, the individual, or the individual's spouse, parent
or legal guardian.
(20) 'Personal information' means information which is
identifiable with an individual, which is gathered in connection
with an insurance transaction and from which information
judgments can be made about the individual's character, habits,
avocations, finances, occupations, general reputation, credit,
health or any other personal characteristics. 'Personal
information' includes an individual's name and address and
'medical record information' but does not include 'privileged
information ' except for privileged information which has been
disclosed in violation of ORS 746.665.
(21) 'Policyholder' means a person who:
(a) In the case of individual policies of life or health
insurance, is a current policyowner;
(b) In the case of individual policies of other kinds of
insurance, is currently a named insured; or
(c) In the case of group policies of insurance under which
coverage is individually underwritten, is a current certificate
holder.
(22) 'Pretext interview' means an interview wherein the
interviewer, in an attempt to obtain information about a natural
person, does one or more of the following:
(a) Pretends to be someone the interviewer is not.
(b) Pretends to represent a person the interviewer is not in
fact representing.
(c) Misrepresents the true purpose of the interview.
(d) Refuses upon request to identify the interviewer.
(23) 'Privileged information' means information which is
identifiable with an individual and which:
(a) Relates to a claim for insurance benefits or a civil or
criminal proceeding involving the individual; and
(b) Is collected in connection with or in reasonable
anticipation of a claim for insurance benefits or a civil or
criminal proceeding involving the individual.
(24) 'Residual market mechanism' means an association,
organization or other entity involved in the insuring of risks
under ORS 735.005 to 735.145, 737.312 or other provisions of the
Insurance Code relating to insurance applicants who are unable to
procure insurance through normal insurance markets.
(25) 'Termination of insurance coverage' or 'termination of an
insurance policy' means either a cancellation or a nonrenewal of
an insurance policy, in whole or in part, for any reason other
than the failure of a premium to be paid as required by the
policy.
{ +
CONFORMING AMENDMENTS + }
SECTION 51. ORS 708A.005 is amended to read:
708A.005. (1) Except as otherwise limited in the Bank Act or
the articles of incorporation of an institution, an institution
shall have:
(a) Perpetual duration and succession in its corporate name,
unless a limited period of duration is stated in its articles of
incorporation;
(b) The power to do all things necessary or convenient to carry
out its business and affairs including, without limitation, the
power to:
(A) Sue and be sued and complain and defend in its corporate
name;
(B) Have a corporate seal, which may be altered at will, and
use it or a facsimile thereof by impressing, affixing or
reproducing it in any other manner;
(C) Make contracts, incur liabilities, borrow money, issue its
notes, bonds and other obligations that may be convertible into
other securities of the institution or include the option to
purchase other securities of the institution;
(D) Conduct its business, locate offices and exercise the
powers granted by the Bank Act within or without this state;
(E) Elect or appoint directors, officers, employees and agents
of the institution;
(F) Make and amend bylaws not inconsistent with its articles of
incorporation or with the laws of this state for managing the
business and regulating the affairs of the institution;
(G) Make donations for the public welfare or for charitable,
scientific or educational purposes;
(H) Transact any business permitted by the Bank Act; and
(I) Pay pensions and establish pension plans, and share option
plans and benefit or incentive plans for any or all of its
current or former directors, officers, employees and agents;
(c) The powers granted to institutions by the Bank Act;
(d) The power to be licensed { - under ORS 744.002 - } as an
agent { + as required by section 3 of this 2001 Act + } to
transact one or more of the classes of insurance described in
{ - ORS 744.115 - } { + section 8 of this 2001 Act + } except
for title insurance; and
(e) All powers necessary or convenient to effect any or all of
the purposes for which the institution is organized or to perform
any or all of the acts expressly or impliedly authorized or
required under the Bank Act.
(2) With respect to any exercise of the power granted under
subsection (1)(d) of this section, other than the licensing of
the institution to transact { - livestock insurance, mortgage
insurance, motor vehicle physical damage insurance, credit life
insurance, credit health insurance, credit involuntary
unemployment insurance, credit insurance or lender's property
insurance, as these classes of insurance are described in ORS
744.115 - } { + types of limited class insurance, as that term
is defined in section 2 of this 2001 Act, designated by the
Director of the Department of Consumer and Business Services + }:
(a) The conduct by the institution of insurance agency
activities shall be subject to the approval of the director
{ - of the Department of Consumer and Business Services - } .
The director shall base consideration for approval on the
condition of the institution, the adequacy of a formal business
plan for the insurance activities and the existence of
satisfactory management for the insurance activity.
(b) The director may revoke or restrict the ongoing authority
of the institution to engage in the insurance agency activity if
the condition of the institution substantially deteriorates or if
the insurance activities are adversely affecting the institution.
(c) If the insurance agency activity is conducted in a branch
or office in which the institution carries on its banking
business, the insurance agency activity shall be physically
separated from those parts of the premises in which the
institution carries on the banking business.
(d) No person who acts on behalf of the institution { - to
transact insurance, as that term is defined in ORS 731.146 - }
{ + as an agent, as that term is defined in ORS 731.062 + },
other than to transact { - livestock insurance, mortgage
insurance, motor vehicle physical damage insurance, credit life
insurance, credit health insurance, credit involuntary
unemployment insurance, credit insurance or lender's property
insurance, as these classes of insurance are described in ORS
744.115 - } { + such types of limited class insurance + },
shall in any manner engage on behalf of the institution in any
activities relating to the making of loans or to the granting of
other credits to the customers of the institution, including but
not limited to serving as a loan officer or as a member of a loan
committee or other group charged with approval of loans and other
credits.
(e) Prior to selling any policy of insurance, the institution
shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
_________________________________________________________________
NOTICE
______ (Name of institution) is a licensed insurance agent
under Oregon law. You are not required to purchase any insurance
from it as a condition of obtaining any service from or engaging
in any other transaction with it. Before committing to purchase
any policy of insurance, you should shop for the coverage by
carefully comparing information obtained from two or more agents
on prices, benefits, services, terms of renewal and other policy
features. You hereby acknowledge receipt of a copy of this
notice.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
________
____
Customer's signatureDate
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(f) The institution shall file a written report with the
director no later than March 31 of each year disclosing the
insurance activities of the institution. The required contents of
the report shall be established by the director by rule. Reports
filed with the director under this paragraph shall be available
for public inspection in the office of the director.
(3) An institution licensed { - to transact insurance - }
{ + as an agent, as that term is defined in ORS 731.062, + }
shall not in any manner use customer information obtained from
another insurance agent to promote, develop or solicit insurance
business for the institution unless the other insurance agent
consents to such use of the customer information.
SECTION 52. ORS 708A.120 is amended to read:
708A.120. (1) An institution shall not invest any of its assets
in the capital stock of any other corporation, except:
(a) In the capital stock of the Federal Reserve Bank.
(b) In stock acquired or purchased to save a loss on a
preexisting debt. The stock shall be sold within two years of the
date acquired or purchased. The Director of the Department of
Consumer and Business Services may extend the time if the
director finds that an extension will not be detrimental to the
public interest and will not contravene any other law.
(c) In the capital stock of any safe deposit company doing an
exclusive safe deposit business on premises owned or leased by
the institution upon 30 days' advance notice to the director
subject to the same limitations applicable to a national bank.
(d) In the capital stock of agricultural and livestock finance
companies, subject to the same limitations applicable to national
banks and to the approval of the director.
(e) In the capital stock, eligible for purchase by national
banks, of small business investment companies, but the aggregate
investment in the stock shall not exceed two percent of the
capital of the institution.
(f) In the common stock of any federally chartered corporation
that is chartered for the purpose of providing secondary markets
for the sale of mortgages by institutions.
(g) In the stock of the Federal Home Loan Bank.
(h) In the capital stock of a corporation exclusively engaged
in a trust business or a banker's bank, subject to the same
limitations applicable to national banks.
(i) In the capital stock of bank service corporations as
provided in ORS 708A.130 to 708A.145.
(j) In the capital stock of a community development corporation
as provided in ORS 708A.150.
(k) If a trust company is not engaged in a banking business and
if the investment is first approved by the director, the trust
company may invest an amount not to exceed 20 percent of the
capital of the trust company:
(A) In the capital stock of a subsidiary investment company
defined in the Investment Company Act of 1940, as amended; or
(B) In a company one of the purposes of which is to act as a
federal covered investment adviser or a state investment adviser,
as defined in ORS 59.015, with all the powers customarily
exercised by a federal covered investment adviser or a state
investment adviser.
(L) In adjustable rate preferred stock of the Student Loan
Marketing Association established in 20 U.S.C. 1087-2, but the
aggregate investment in the stock shall not exceed 15 percent of
the capital of the institution.
(m) In the capital stock of a company acquired for the purpose
of strengthening the institution's capital structure or the
elimination of undesirable assets as provided in ORS 708A.125.
(n) In the capital stock of banks and corporations engaged in
international or foreign banking or foreign banking in a
dependency or insular possession of the United States, as
provided in ORS 708A.155.
(o) In the capital stock of a corporation created to establish
ATMs as provided in ORS 708A.160.
(2) An institution may invest its assets in shares of any
mutual fund, the assets of which are invested solely in
obligations of the type described in and limited under ORS
708A.115.
(3) An institution may, subject to the approval of the
director, acquire or continue to hold the fully paid stock of a
corporation, one of the purposes of which is to assist the
institution in handling real estate, claims, judgments or other
assets or in holding title to the assets.
(4) An institution may acquire or continue to hold the fully
paid stock of a corporation the purpose of which is to permit the
institution to engage in any business in which a bank holding
company or a nonbank subsidiary of a bank holding company is
authorized to engage. This subsection does not apply unless the
institution is the owner of at least 80 percent of the common
stock of the subsidiary corporation, except qualifying shares of
directors.
(5) An institution may, subject to the approval of the director
and to rules promulgated by the director, acquire and continue to
hold at least 80 percent of the fully paid stock of a corporation
engaged in any business in which an institution is authorized to
engage. Except as otherwise permitted by statute or rule, the
investment limitations applicable to the institution apply to the
subsidiary.
(6) An institution may, subject to the approval of the director
and under rules promulgated by the director, acquire and continue
to hold all the fully paid stock of a subsidiary corporation
engaged in the business of purchasing the stock of the
institution for purposes of holding that stock and making a
market for that stock, if not more than 20 percent of the net
profit of the banking institution is disbursed to the subsidiary
in any one fiscal year. Except as otherwise permitted by statute
or rule, the investment limitations applicable to the institution
apply to the subsidiary. Acquisitions under this subsection shall
not exceed 15 percent of the capital of the institution.
(7) An institution may acquire and hold all or part of the
stock of a corporation that is or may thereafter be licensed
{ - under ORS 744.002 - } as an agent { + as required by
section 3 of this 2001 Act + } to transact one or more of the
classes of insurance described in { - ORS 744.115 - } { +
section 8 of this 2001 Act + }, except for title insurance,
subject to the following requirements:
(a) The acquisition and holding of such stock shall be subject
to the approval of the director. The director shall base
consideration for approval on the condition of the institution,
the adequacy of a formal business plan for the insurance
activities, and the existence of satisfactory management for the
corporation.
(b) The director may revoke or restrict the ongoing authority
of the institution to hold stock in the corporation if the
condition of the institution substantially deteriorates or if the
insurance activities are adversely affecting the institution.
(c) If the corporation conducts the insurance agency activity
in a branch or office in which the institution carries on its
banking business, the insurance agency activity shall be
physically separated from those parts of the premises in which
the institution carries on the banking business.
(d) No person who acts on behalf of the corporation { - to
transact insurance, as that term is defined in ORS 731.146 - }
{ + as an agent, as that term is defined in ORS 731.062 + },
shall while employed by the corporation engage on behalf of the
corporation in any activities relating to the making of loans or
to the granting of other credits to the customers of the
corporation, including but not limited to serving as a loan
officer or as a member of a loan committee or other group charged
with approval of loans and other credits.
(e) The name of the corporation and any assumed business name
used by it shall not be identical to that of the institution.
(f) Prior to selling any policy of insurance, the corporation
shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
_________________________________________________________________
NOTICE
______ (Name of corporation licensed as an agent) is owned by
______ (Name of institution). You are not required to purchase
any insurance from it as a condition of obtaining any service
from or engaging in any transaction with the institution. Before
committing to purchase any policy of insurance, you should shop
for the coverage by carefully comparing information obtained from
two or more agents on prices, benefits, services, terms of
renewal and other policy features. You hereby acknowledge receipt
of a copy of this notice.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
________
____
Customer's signatureDate
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(g) For each calendar year during which an institution owns all
or part of any corporation licensed { - under ORS 744.002 - }
as an agent { + as required by section 3 of this 2001 Act + },
the institution shall file a written report with the director.
The report shall be filed no later than March 31 of the following
year and shall disclose the insurance activities of the
corporation. The required contents of the report shall be
established by the director by rule. The reports filed with the
director under this paragraph shall be available for public
inspection in the office of the director.
(h) The corporation shall not in any manner use customer
information obtained by the institution from another insurance
agent to promote, develop or solicit insurance business for the
corporation unless the other insurance agent consents to such use
of the customer information.
(i) The corporation shall be subject to the limitations
applicable to lending institutions under ORS 746.180 and 746.185
to 746.211. For the purpose of this paragraph, the term 'lending
institution' has the meaning set forth in ORS 746.185.
(8) An institution may invest up to 15 percent of its capital
in the stock of the Oregon Capital Corporation authorized to be
created under ORS 284.750 to 284.795, 315.504, 317.084, 317.267
and 318.031.
SECTION 53. ORS 708A.200 is amended to read:
708A.200. Nothing in ORS 708A.005, 708A.010, 715.075, 716.594,
716.610, { - 744.066, 744.115, - } 746.195 and 746.211 { +
and sections 5 and 6 of this 2001 Act + } shall be construed to
permit a banking institution, a bank holding company or any
subsidiary of a banking institution or bank holding company to
act as insurer, as defined in ORS 731.106.
SECTION 54. ORS 715.075 is amended to read:
715.075. A bank holding company may acquire and hold all or
part of the stock of a corporation { - which - } { + that + }
is or may thereafter be licensed { - under ORS 744.002 - } as
an agent { + as required by section 3 of this 2001 Act + } to
transact one or more of the classes of insurance described in
{ - ORS 744.115 - } { + section 8 of this 2001 Act, + } except
for title insurance, subject to the following requirements:
(1) The acquisition and holding of such stock shall be subject
to the approval of the Director of the Department of Consumer and
Business Services. The director shall base consideration for
approval on the condition of the bank holding company, the
adequacy of a formal business plan for the insurance activities
and the existence of satisfactory management for the corporation.
(2) The director may revoke or restrict the ongoing authority
of the bank holding company to hold stock in the corporation if
the condition of the bank holding company or of any bank owned by
it substantially deteriorates or if the insurance activities are
adversely affecting the bank holding company or any bank owned by
it.
(3) If the corporation conducts the insurance agency activity
in any branch or office in which any bank owned by the bank
holding company carries on its banking business, the insurance
agency activity shall be physically separated from those parts of
the premises in which the bank carries on the banking business.
(4) No person who acts on behalf of the corporation { - to
transact insurance, as that term is defined in ORS 731.146, - }
{ + as an agent, as that term is defined in ORS 731.062, + }
shall while employed by the corporation engage on behalf of the
holding company or any bank owned by it in any activities
relating to the making of loans or the granting of other credits
to the customers of any bank owned by the holding company,
including but not limited to serving as a loan officer or as a
member of a loan committee or any other group charged with
approval of loans and other credits.
(5) The name of the corporation and any assumed business name
used by it shall not be identical to that of any bank owned by
the bank holding company.
(6) Prior to selling any policy of insurance, the corporation
shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
_________________________________________________________________
NOTICE
______ (Name of corporation licensed as an agent) is owned by
______ (Name of bank holding company) which also owns ________
(Name of institution or savings bank). You are not required to
purchase any insurance from it as a condition of obtaining any
service from or engaging in any transaction with the institution,
savings bank or bank holding company. Before committing to
purchase any policy of insurance, you should shop for the
coverage by carefully comparing information obtained from two or
more agents on prices, benefits, services, terms of renewal and
other policy features. You hereby acknowledge receipt of a copy
of this notice.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
________
____
Customer's signatureDate
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(7) For each calendar year during which a bank holding company
owns all or part of any corporation licensed { - under ORS
744.002 - } as an agent { + as required by section 3 of this
2001 Act + }, the bank holding company shall file a written
report with the director. The report shall be filed no later than
March 31 of the following year and shall disclose the insurance
activities of the corporation. The required contents of the
report shall be established by the director by rule. The reports
filed with the director under this paragraph shall be available
for public inspection in the office of the director.
(8) The corporation shall not in any manner use customer
information obtained by the institution from another insurance
agent to promote, develop or solicit insurance business for the
corporation unless the other insurance agent consents to such use
of the customer information.
(9) The corporation shall be subject to the limitations
applicable to lending institutions under ORS 746.180 and 746.185
to 746.211. For the purpose of this subsection, the term 'lending
institution' has the meaning set forth in ORS 746.185.
SECTION 55. ORS 716.594 is amended to read:
716.594. An Oregon savings bank may acquire and hold all or
part of the stock of a corporation that is or may thereafter be
licensed { - under ORS 744.002 - } as an agent { + as
required by section 3 of this 2001 Act + } to transact one or
more of the classes of insurance described in { - ORS
744.115 - } { + section 8 of this 2001 Act + } except for title
insurance, subject to the following requirements:
(1) The acquisition and holding of such stock shall be subject
to the approval of the Director of the Department of Consumer and
Business Services. The director shall base consideration for
approval on the condition of the Oregon savings bank, the
adequacy of a formal business plan for the insurance activities
and the existence of satisfactory management for the corporation.
(2) The director may revoke or restrict the ongoing authority
of the Oregon savings bank to hold stock in the corporation if
the condition of the Oregon savings bank substantially
deteriorates or if the insurance activities are adversely
affecting the Oregon savings bank.
(3) If the corporation conducts the insurance agency activity
in a branch or office in which the Oregon savings bank carries on
its banking business, the insurance agency activity shall be
physically separated from those parts of the premises in which
the Oregon savings bank carries on the banking business.
(4) No person who acts on behalf of the corporation { - to
transact insurance, as that term is defined in ORS 731.146 - }
{ + as an agent, as that term is defined in ORS 731.062 + },
shall while employed by the corporation engage on behalf of the
corporation in any activities relating to the making of loans or
to the granting of other credits to the customers of the
corporation, including but not limited to serving as a loan
officer or as a member of a loan committee or other group charged
with approval of loans and other credits.
(5) The name of the corporation and any assumed business name
used by it shall not be identical to that of the Oregon savings
bank.
(6) Prior to selling any policy of insurance, the corporation
shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
_________________________________________________________________
NOTICE
______ (Name of corporation licensed as an agent) is owned by
______ (Name of Oregon savings bank). You are not required to
purchase any insurance from it as a condition of obtaining any
service from or engaging in any transaction with the Oregon
savings bank. Before committing to purchase any policy of
insurance, you should shop for the coverage by carefully
comparing information obtained from two or more agents on prices,
benefits, services, terms of renewal and other policy features.
You hereby acknowledge receipt of a copy of this notice.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
________
____
Customer's signatureDate
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(7) For each calendar year during which an Oregon savings bank
owns all or part of any corporation licensed { - under ORS
744.002 - } as an agent { + as required by section 3 of this
2001 Act + }, the Oregon savings bank shall file a written report
with the director. The report shall be filed no later than March
31 of the following year and shall disclose the insurance
activities of the corporation. The required contents of the
report shall be established by the director by rule. The reports
filed with the director under this subsection shall be available
for public inspection in the office of the director.
(8) The corporation shall not in any manner use customer
information obtained by the Oregon savings bank from another
insurance agent to promote, develop or solicit insurance business
for the corporation unless the other insurance agent consents to
such use of the customer information.
(9) The corporation shall be subject to the limitations
applicable to lending institutions under ORS 746.180 and 746.185
to 746.211. For the purpose of this subsection, the term 'lending
institution' has the meaning set forth in ORS 746.185.
SECTION 56. ORS 716.610 is amended to read:
716.610. A savings bank, subject to the restrictions and
limitations contained in this chapter, may:
(1) Receive time deposits and demand deposits of money without
restriction.
(2) Offer time and savings accounts and other kinds of deposit
accounts, including but not limited to automatic savings to
checking transfer accounts and negotiable order of withdrawal
accounts, to individuals and nonprofit corporations.
(3) Exercise by its board of directors or authorized officers
or agents, subject to law, all powers necessary to carry on the
business of savings banks.
(4) Pay depositors when requested by them, by drafts upon
deposits to the credit of the savings bank in any city in the
United States, and charge current rates of exchange for the
drafts.
(5) Borrow money, and pledge securities to secure the money
borrowed, but any amount borrowed in excess of 20 percent of
deposits shall first be approved in writing by the Director of
the Department of Consumer and Business Services. The failure to
obtain the approval of the director shall not make an excess loan
invalid as to the lender.
(6) Collect or protest promissory notes or bills of exchange
owned by the savings bank or held by it as collateral, and charge
the usual fees for the collection or protest.
(7) Sell gold or silver received in payment of interest or
principal of obligations owned by the savings bank, or from
depositors in the ordinary course of business.
(8) Become a member of the Federal Reserve Bank or the Federal
Home Loan Bank of the district in which the savings bank is
located.
(9) Conduct a trust business and exercise all the powers of a
trust company as defined by ORS 709.150 upon compliance with the
laws of this state relating to the regulations of a trust
business.
(10) Be licensed { - under ORS 744.002 - } as an agent
{ + as required by section 3 of this 2001 Act + } to transact
one or more of the classes of insurance described in { - ORS
744.115 - } { + section 8 of this 2001 Act + } except for title
insurance. With respect to the exercise of the power granted
under this subsection, other than the maintenance of any
insurance license granted to a savings bank prior to September
27, 1987, or the licensing of the savings bank to transact
{ - livestock insurance, mortgage insurance, motor vehicle
physical damage insurance, credit life insurance, credit health
insurance, credit involuntary unemployment insurance, credit
insurance or lender's property insurance, as these classes of
insurance are described in ORS 744.115 - } { + types of limited
class insurance, as that term is defined in section 2 of this
2001 Act, designated by the Director of the Department of
Consumer and Business Services + }:
(a) The conduct by the savings bank of insurance agency
activities shall be subject to the approval of the director. The
director shall base consideration for approval on the condition
of the savings bank, the adequacy of a formal business plan for
the insurance activities and the existence of satisfactory
management for the insurance activity.
(b) The director may revoke or restrict the ongoing authority
of the savings bank to engage in the insurance agency activity if
the condition of the savings bank substantially deteriorates or
if the insurance activities are adversely affecting the savings
bank.
(c) If the insurance agency activity is conducted in a branch
or office in which the savings bank carries on its banking
business, the insurance agency activity shall be physically
separated from those parts of the premises in which the savings
bank carries on the banking business.
(d) No person who acts on behalf of the savings bank { - to
transact insurance, as that term is defined in ORS 731.146 - }
{ + as an agent, as that term is defined in ORS 731.062 + },
other than to transact { - livestock insurance, mortgage
insurance, motor vehicle physical damage insurance, credit life
insurance, credit health insurance, credit involuntary
unemployment insurance, credit insurance or lender's property
insurance, as these classes of insurance are described in ORS
744.115 - } { + such types of limited class insurance + }, or
under a license granted to the savings bank prior to September
27, 1987, shall in any manner engage on behalf of the savings
bank in any activities relating to the making of loans or to the
granting of other credits to the customers of the savings bank,
including but not limited to serving as a loan officer or as a
member of a loan committee or other group charged with approval
of loans and other credits.
(e) Prior to selling any policy of insurance, the savings bank
shall give substantially the following notice in writing to the
purchaser in at least 10-point boldfaced type:
_________________________________________________________________
NOTICE
______ (Name of savings bank) is a licensed insurance agent
under Oregon law. You are not required to purchase any insurance
from it as a condition of obtaining any service from or engaging
in any other transaction with it. Before committing to purchase
any policy of insurance, you should shop for the coverage by
carefully comparing information obtained from two or more agents
on prices, benefits, services, terms of renewal and other policy
features. You hereby acknowledge receipt of a copy of this
notice.
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
________
____
Customer's signatureDate
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(f) The savings bank shall file a written report with the
director no later than March 31 each year disclosing the
insurance activities of the savings bank. The required contents
of the report shall be established by the director by rule. The
reports filed with the director under this paragraph shall be
available for public inspection in the office of the director.
(g) The savings bank shall not in any manner use customer
information obtained from another insurance agent to promote,
develop or solicit insurance business for the savings bank unless
the other insurance agent consents to such use of the customer
information.
SECTION 57. ORS 746.182 is amended to read:
746.182. (1) Prior to selling any policy of insurance, other
than a policy for a class of insurance referred to in subsection
(2) of this section:
(a) Any agent that is an institution as defined in ORS 706.008,
shall give the purchaser the notice required under ORS 708A.005
(2)(e);
(b) Any agent that is a corporation, all or part of the stock
of which is held by an institution, shall give the purchaser the
notice required under ORS 708A.120 (7)(f);
(c) Any agent that is a corporation, all or part of the stock
of which is held by a bank holding company as defined in ORS
706.008, shall give the purchaser the notice required under ORS
715.075 (6);
(d) Any agent that is a corporation, all or part of the stock
of which is held by a savings bank, as defined by ORS 706.008,
shall give the purchaser the notice required under ORS 716.594
(6); and
(e) Any agent that is a savings bank, as defined in ORS
706.008, shall give the purchaser the notice required under ORS
716.610 (10)(e).
(2) The requirement under subsection (1) of this section does
not apply to any policy for { - livestock insurance, mortgage
insurance, motor vehicle physical damage insurance, credit life
insurance, credit health insurance, credit involuntary
unemployment insurance, credit insurance or lender's property
insurance, as these classes of insurance are described in ORS
744.115 - } { + types of limited class insurance, as that term
is defined in section 2 of this 2001 Act, designated by the
Director of the Department of Consumer and Business Services + }.
{ +
FELONY WAIVER + }
SECTION 58. { + Section 59 of this 2001 Act is added to and
made a part of ORS chapter 731. + }
SECTION 59. { + (1) A person who is prohibited by 18 U.S.C.
1033 from engaging or participating in the business of insurance
because of a conviction of a felony involving dishonesty or a
breach of trust or conviction of a crime under 18 U.S.C. 1033 may
apply to the Director of the Department of Consumer and Business
Services for a written consent to engage or participate in the
business of insurance.
(2) The director shall establish by rule a procedure and
standards by which the director may issue a written consent to
engage or participate in the business of insurance to a person
convicted of a crime described in subsection (1) of this section.
(3) The director shall not issue a license under the Insurance
Code to an applicant who has been convicted of a crime referred
to in subsection (1) of this section unless the director also
issues a written consent.
(4) If a person issued a license under the Insurance Code has
been convicted of a crime referred to in subsection (1) of this
section or is subsequently the subject of such a conviction, the
director shall revoke, suspend or refuse to renew the license.
The person may apply to the director for a written consent as
provided in subsection (1) of this section. + }
{ +
APPLICABILITY; REPEALED STATUTES; + }
{ +
OPERATIVE AND EFFECTIVE DATES + }
SECTION 60. ORS 750.055 is amended to read:
750.055. (1) The following provisions of the Insurance Code
shall apply to health care service contractors to the extent so
applicable and not inconsistent with the express provisions of
ORS 750.005 to 750.095:
(a) ORS 731.004 to 731.150, 731.162, 731.216 to 731.362,
731.382, 731.385, 731.386, 731.390, 731.398 to 731.430, 731.450,
731.454, 731.488, 731.504, 731.508, 731.509, 731.510, 731.511,
731.512, 731.574 to 731.620, 731.592, 731.594, 731.640 to
731.652, 731.730, 731.731, 731.735, 731.737, 731.740, 731.750,
731.804 and 731.844 to 731.992 { + and section 59 of this 2001
Act + }.
(b) ORS 732.215, 732.220, 732.230, 732.245, 732.250, 732.320,
732.325 and 732.517 to 732.592, not including ORS 732.549 and
732.574 to 732.592.
(c)(A) ORS 733.010 to 733.050, 733.080, 733.140 to 733.170,
733.210, 733.510 to 733.620, 733.635 to 733.680 and 733.695 to
733.780 apply to not-for-profit health care service contractors.
(B) ORS chapter 733, not including ORS 733.630, applies to
for-profit health care service contractors.
(d) ORS chapter 734.
(e) ORS 742.001 to 742.009, 742.013, 742.061, 742.065, 742.150
to 742.162, 742.400, 742.520 to 742.540, 743.010, 743.013,
743.018 to 743.030, 743.050, 743.100 to 743.109, 743.402,
743.412, 743.472, 743.492, 743.495, 743.498, 743.522, 743.523,
743.524, 743.526, 743.527, 743.528, 743.529, 743.549 to 743.555,
743.556, 743.560, 743.600 to 743.610, 743.650 to 743.656,
743.693, 743.697, 743.699, 743.701, 743.704, 743.706 to 743.712,
743.721, 743.722, 743.726, 743.727, 743.728, 743.729, 743.804,
743.807, 743.808, 743.809, 743.814 to 743.839, 743.842, 743.845
and 743.847.
(f) The provisions of ORS chapter 744 relating to the
regulation of agents.
(g) ORS 746.005 to 746.140, 746.160, 746.180, 746.220 to
746.370 and 746.600 to 746.690.
(h) ORS 743.714, except in the case of group practice health
maintenance organizations that are federally qualified pursuant
to Title XIII of the Public Health Service Act unless the patient
is referred by a physician associated with a group practice
health maintenance organization.
(i) ORS 735.600 to 735.650.
(j) ORS 743.680 to 743.689.
(k) ORS 744.700 to 744.740.
(L) ORS 743.730 to 743.773.
(m) ORS 731.485, except in the case of a group practice health
maintenance organization that is federally qualified pursuant to
Title XIII of the Public Health Service Act and that wholly owns
and operates an in-house drug outlet.
(2) For the purposes of this section only, health care service
contractors shall be deemed insurers.
(3) Any for-profit health care service contractor organized
under the laws of any other state which is not governed by the
insurance laws of such state, will be subject to all requirements
of ORS chapter 732.
(4) The Director of the Department of Consumer and Business
Services may, after notice and hearing, adopt reasonable rules
not inconsistent with this section and ORS 750.003, 750.005,
750.025 and 750.045 that are deemed necessary for the proper
administration of these provisions.
SECTION 61. { + ORS 744.016, 744.051, 744.054, 744.057,
744.066, 744.069, 744.071, 744.075, 744.085, 744.115, 744.119,
744.123, 744.127, 744.145, 744.155, 744.165, 744.182 and 744.231
are repealed. + }
SECTION 62. { + (1) Sections 2 to 19 and 59 of this 2001 Act
and the amendments to and repeal of statutes by sections 20 to
24c, 26 to 57, 60 and 61 of this 2001 Act become operative on
January 1, 2002.
(2) The Director of the Department of Consumer and Business
Services may take any action before the operative date of
sections 2 to 19 and 59 of this 2001 Act and the amendments to
and repeal of statutes by sections 20 to 24c, 26 to 57, 60 and 61
of this 2001 Act that is necessary to enable the director to
exercise, on and after the operative date of sections 2 to 19 and
59 of this 2001 Act and the amendments to and repeal of statutes
by sections 20 to 24c, 26 to 57, 60 and 61 of this 2001 Act, all
the duties, functions and powers conferred on the director by
sections 2 to 19 and 59 of this 2001 Act and the amendments to
and repeal of statutes by sections 20 to 24c, 26 to 57, 60 and 61
of this 2001 Act. + }
SECTION 63. { + The unit captions used in this 2001 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2001 Act. + }
SECTION 64. { + This 2001 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2001 Act takes effect
July 1, 2001. + }
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