71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
SA to SB 269
LC 596/SB 269-2
SENATE AMENDMENTS TO
SENATE BILL 269
By COMMITTEE ON BUSINESS, LABOR, AND ECONOMIC DEVELOPMENT
April 6
On page 1 of the printed bill, line 2, after 'ORS' insert '
59.015,'.
In line 3, after '646.382,' insert '656.268,' and after '
706.008,' insert '706.015,'.
In line 4, after '706.730,' insert '707.262,'.
In line 5, after '731.312,' insert '731.450,'.
In line 6, after '746.182,' insert '746.185,'.
In line 7, delete the second 'and' and before the period insert
'; and declaring an emergency'.
In line 15, delete 'and subject to this section shall not be'
and insert 'or as not subject to disclosure is not'.
In line 16, delete 'shall not be' and insert 'is not' in both
places.
On page 2, line 40, delete 'shall' and insert 'may'.
On page 3, line 1, delete 'shall' and insert 'may' in both
places.
In line 15, delete 'under oath'.
On page 7, line 29, delete 'shall' and insert 'may'.
On page 15, line 28, delete 'pledged in good faith' and insert
'obligated the Department of Consumer and Business Services'.
On page 19, line 17, delete 'pledged in good faith' and insert
'obligated the Department of Consumer and Business Services'.
On page 25, line 34, delete 'means a natural person who'.
After line 34, insert:
' (a) Means, for purposes of ORS 746.600 to 746.690 and
750.055, except as provided in paragraph (b) of this subsection,
a natural person who:'.
In line 35, delete '(a)' and insert '(A)'.
In line 37, delete '(b)' and insert '(B)'.
In line 39, delete '(c)' and insert '(C)'.
In line 40, delete '(d)' and insert '(D)'.
In line 41, delete '(e)' and insert '(E)'.
In line 42, delete '(f)' and insert '(F)'.
After line 43, insert:
' (b) Comprises, for purposes of ORS 746.620, 746.630 and
746.665, and for purposes of terms defined in this section as
those terms are used in ORS 746.620, 746.630 and 746.665, the
following categories of natural persons:
' (A) 'Consumer,' which means an individual, or the
individual's representative, who seeks to obtain, obtains or has
obtained an insurance product or service from a licensee that is
to be used primarily for personal, family or household purposes,
and about whom the licensee has personal information.
' (B) 'Customer,' which means a consumer who has a continuing
relationship with a licensee under which the licensee provides
one or more insurance products or services to the consumer that
are to be used primarily for personal, family or household
purposes.'.
On page 26, after line 26, insert:
' (17) 'Licensee' means an insurer, agent or other person
authorized or required to be authorized, or licensed or required
to be licensed, pursuant to the Insurance Code.'.
In line 27, delete '(17)' and insert '(18)'.
In line 31, delete '(18)' and insert '(19)'.
In line 35, delete '(19)' and insert '(20)' and delete ' which'
and insert 'except age or gender, whether oral or recorded in any
form or medium, created by or derived from a health care provider
or the consumer that relates to'.
Delete lines 36 through 39 and insert:
' (a) The past, present or future physical, mental or
behavioral health or condition of an individual;
' (b) The provision of health care to an individual; or
' (c) Payment for the provision of health care to an
individual.
' (21) 'Nonaffiliated third party' means any person except:
' (a) An affiliate of a licensee;
' (b) A person that is employed jointly by a licensee and by a
person that is not an affiliate of the licensee; and
' (c) As designated by the director by rule.'.
In line 40, delete '(20)' and insert '(22)'.
In line 44, delete the boldfaced material and after ' address'
insert ', an individual's policy number or similar form of access
code for the individual's policy'.
In line 45, delete the boldfaced material.
On page 27, line 2, after the period insert ' ' Personal
information' does not include information that a licensee has a
reasonable basis to believe is lawfully made available to the
general public from federal, state or local government records,
widely distributed media or disclosures to the public that are
required by federal, state or local law.'.
In line 3, delete '(21)' and insert '(23)'.
In line 9, delete '(22)' and insert '(24)'.
In line 15, delete '(23)' and insert '(25)'.
In line 21, delete '(24)' and insert '(26)'.
In line 25, delete '(25)' and insert '(27)'.
Delete lines 28 through 45 and delete pages 28 and 29 and
insert:
' { + SECTION 26. + } ORS 746.620 is amended to read:
' 746.620. (1) { - An insurer or agent - } { + A
licensee + } shall provide a { + clear and conspicuous + }
notice of information practices to { - all applicants or
policyholders - } { + individuals + } in connection with
insurance transactions under the circumstances and at the times
as follows:
' { - (a) In the case of an application for insurance, a
notice shall be provided no later than: - }
' { - (A) At the time of delivery of the insurance policy or
certificate, if personal information is collected only from the
applicant or from public records; or - }
' { - (B) At the time the collection of personal information
is initiated, if personal information is collected from a source
other than the applicant or public records. - }
' { - (b) In the case of a policy renewal, a notice shall be
provided no later than the policy renewal date, except that no
notice shall be required in connection with a policy renewal
if: - }
' { - (A) Personal information is collected only from the
policyholder or from public records; or - }
' { - (B) A notice meeting the requirements of this section
has been given within the previous 24 months. - }
' { - (c) In the case of a policy reinstatement or change in
insurance benefits, a notice shall be provided no later than the
time a request for the policy reinstatement or change in
insurance benefits is received by the insurer, except that no
notice shall be required if personal information is collected
only from the policyholder or from public records. - }
' { - (2) The notice required by subsection (1) of this
section shall be in writing and shall state: - }
' { - (a) Whether personal information may be collected from
persons other than the individual or individuals proposed for
coverage; - }
' { - (b) The types of personal information which may be
collected and the types of sources and investigative techniques
which may be used to collect the information; - }
' { - (c) The types of disclosures identified in ORS 746.665
(1)(b) to (f), (i), (k), (L) and (n) and the circumstances under
which these disclosures may be made without prior authorization.
However, only those circumstances need be described which occur
with such frequency as to indicate a general business
practice; - }
' { - (d) A description of the rights established under ORS
746.640 and 746.645 and the manner in which such rights may be
exercised; and - }
' { - (e) That information obtained from a report prepared by
an insurance-support organization may be retained by the
insurance-support organization and disclosed to other
persons. - }
' { + (a) Except as provided in this paragraph, to a consumer
who becomes a customer of the licensee, not later than the date
that the licensee establishes a continuing relationship under
which the licensee provides one or more insurance products or
services to the consumer that are to be used primarily for
personal, family or household purposes. A licensee may provide
the notice within a reasonable time after the date the licensee
establishes a customer relationship if:
' (A) Establishing the customer relationship is not at the
customer's election; or
' (B) Providing notice not later than the date that the
licensee establishes a customer relationship would substantially
delay the customer's transaction and the customer agrees to
receive the notice at a later time.
' (b) To a consumer other than as described in paragraph (a) of
this subsection, before the licensee discloses any personal
information about the consumer pursuant to the requirements of
ORS 746.665, unless the disclosure meets one or more of the
conditions specified in ORS 746.665.
' (2) A licensee shall provide a clear and conspicuous notice
to a customer that accurately reflects the privacy policies and
practices not less than annually during the continuation of the
relationship described in subsection (1)(a) of this section. For
the purpose of this subsection, a notice is given annually if it
is given at least once in any period of 12 consecutive months
during which the relationship exists. A licensee may define the
period of 12 consecutive months, but the licensee must apply the
period to the customer on a consistent basis.
' (3) The privacy notice required by subsections (1) and (2) of
this section shall be in writing and clear and conspicuous. The
notice may be provided in electronic form if the recipient
agrees. In addition to any other information the licensee wishes
to provide, the notice shall include the following items of
information that apply to the licensee and to the individuals to
whom the licensee sends the notice:
' (a) The categories of personal information that the licensee
collects.
' (b) The categories of personal information that the licensee
discloses.
' (c) The categories of affiliates and nonaffiliated third
parties to whom the licensee discloses personal information other
than persons to whom the licensee discloses information under ORS
746.665.
' (d) The categories of personal information about former
customers of the licensee that the licensee discloses and the
categories of affiliates and nonaffiliated third parties to whom
the licensee discloses personal information about the licensee's
former customers, other than persons to whom the licensee
discloses information under ORS 746.665.
' (e) If a licensee discloses personal information to a
nonaffiliated third party under ORS 746.665, a separate
description of the categories of information the licensee
discloses and the categories of nonaffiliated third parties with
whom the licensee has contracted.
' (f) An explanation of the individual's right under ORS
746.630 to authorize disclosure of personal information,
including the methods by which the individual may exercise that
right.
' (g) Any disclosure that the licensee makes under section
603(d)(2)(A)(iii) of the federal Fair Credit Reporting Act (15
U.S.C. 1681a(d)(2)(A)(iii)) regarding the ability to opt out of
disclosures of information among affiliates.
' (h) The policies and practices of the licensee with respect
to protecting the confidentiality and security of personal
information.
' (i) Any disclosure that the licensee makes under subsection
(4) of this section.
' (j) A description of the rights established under ORS 746.640
and 746.645 and the manner in which such rights may be exercised.
' (4) If a licensee discloses personal information as
authorized under ORS 746.665, the licensee need not list those
exceptions in the privacy notices required by this section. When
describing the categories of parties to whom disclosure is made,
the licensee must state only that the licensee makes disclosures
to other affiliated parties or nonaffiliated third parties, as
applicable, as authorized by law. + }
' { - (3) - } { + (5) + } In lieu of the notice prescribed
in subsection
{ - (2) - } { + (3) + } of this section, the { - insurer or
agent - } { + licensee + } may provide { + to a consumer + }
an abbreviated notice { + , in writing or in electronic form if
the consumer agrees, + } informing the { - applicant or
policyholder - } { + consumer + } that:
' (a) Personal information may be collected from persons other
than the { - individual or individuals - } { + consumer + }
proposed for coverage;
' (b) Such information as well as other personal or privileged
information subsequently collected by the { - insurer or
agent - } { + licensee + } may in certain circumstances be
disclosed to third parties without authorization;
' (c) A right of access and correction exists with respect to
all personal information collected; and
' (d) The notice prescribed in subsection { - (2) - }
{ + (3) + } of this section will be furnished to the
{ - applicant or policyholder - } { + consumer + } upon
request.
' { + (6) The Director of the Department of Consumer and
Business Services by rule may apply the categories of consumer
and customer as described in ORS 746.600 for the purpose of
establishing specific requirements for notice of information
practices, authorization for disclosure of personal information,
conditions for disclosure of personal information under this
section and ORS 746.630 and 746.665, and exceptions. The director
shall consider applicable definitions and terms used in the
federal Gramm-Leach-Bliley Act (P.L. 106-102), applicable
definitions and requirements used in the model 'Privacy of
Consumer Financial and Health Information Regulation' adopted by
the National Association of Insurance Commissioners and other
sources as may be needed so that the terms defined in ORS 746.600
and applicable to this section and ORS 746.630 and 746.665:
' (a) Facilitate compliance with requirements in federal law
and the laws of other states that establish protections of
nonpublic personal information; and
' (b) Establish separate and discrete requirements relating to
the privacy notice and its contents and delivery for customers
and consumers, so that the requirements provide reasonable notice
and facilitate compliance with requirements in federal law and in
the laws of other states.
' (7) The director shall determine by rule:
' (a) When a privacy notice must be provided to a certificate
holder or beneficiary of a group policy and to a third-party
claimant.
' (b) When the obligation to provide annual notice ceases.
' (c) Requirements for revision of the notice by a licensee.
' (8) An agent is not subject to the requirements of this
section when the insurer on whose behalf the agent acts otherwise
complies with the requirements of this section and the agent does
not disclose any personal information to any person other than
the insurer or its affiliate, or as otherwise authorized by law.
' (9) A licensee may provide a joint notice from the licensee
and one or more of its affiliates or other financial
institutions, as identified in the notice, as long as the notice
is accurate with respect to the licensee and the other
institutions. A licensee may also provide a notice on behalf of a
financial institution. + }
' { - (4) - } { + (10) + } The obligations imposed by this
section upon { - an insurer or agent - } { + a licensee + }
may be satisfied by another { - insurer or agent - }
{ + licensee + } authorized to act on behalf of the first
{ - insurer or agent - } { + licensee + }.
' { + (11) For purposes of this section and ORS 746.630 and
746.665, an individual is not the consumer of a licensee solely
because the individual is covered under a group life or health
insurance policy issued by the licensee or is a participant or
beneficiary of an employee benefit plan that the licensee
administers or sponsors or for which the licensee acts as a
trustee, insurer or fiduciary, if:
' (a) The licensee provides to the policyholder the initial,
annual and revised notices under this section; and
' (b) The licensee does not disclose to a nonaffiliated third
party personal information about the individual other than as
permitted by ORS 746.665.
' (12) When an individual becomes a consumer of a licensee
under subsection (11) of this section, this section and ORS
746.630 and 746.665 apply to the licensee with respect to the
individual. + }
' { + SECTION 27. + } ORS 746.630 is amended to read:
' 746.630. (1) Notwithstanding any other law of this state,
{ - no insurer, agent - } { + a licensee + } or
insurance-support organization may { + not + } utilize as its
disclosure authorization form in connection with insurance
transactions a form or statement which authorizes the disclosure
of personal or privileged information about an individual to the
{ - insurer, agent - } { + licensee + } or insurance-support
organization unless the form or statement { + is clear and
conspicuous and dated, and contains all of the following + }:
' { - (a) Is written in plain language; - }
' { - (b) Is dated; - }
' { - (c) Specifies the types of persons authorized to
disclose information about the individual; - }
' { - (d) Specifies the nature of the information authorized
to be disclosed; - }
' { - (e) Names the insurer or agent and identifies by generic
reference the representatives of the insurer to whom the
individual is authorizing information to be disclosed; - }
' { - (f) Specifies the purposes for which the information is
collected; - }
' { - (g) Specifies the length of time such authorization will
remain valid, which shall be no longer than: - }
' { - (A) In the case of authorizations signed for the purpose
of collecting information in connection with an application for
an insurance policy, a policy reinstatement or a request for
change in policy benefits: - }
' { - (i) Thirty months from the date the authorization is
signed if the application or request involves life or health
insurance; or - }
' { - (ii) Twelve months from the date the authorization is
signed if the application or request involves other kinds of
insurance. - }
' { - (B) In the case of authorizations signed for the purpose
of collecting information in connection with a claim for benefits
under an insurance policy: - }
' { - (i) The term of coverage of the policy and the duration
of any claim extending after the term of coverage if the claim is
for a health insurance benefit; or - }
' { - (ii) The duration of the claim if the claim is not for a
health insurance benefit; and - }
' { - (h) Advises the individual or a person authorized to act
on behalf of the individual that the individual or the
individual's authorized representative is entitled to receive a
copy of the authorization form. - }
' { + (a) The identity of the individual who is the subject
of the personal information.
' (b) A general description of the categories of personal
information to be disclosed.
' (c) General descriptions of the parties to whom the licensee
discloses personal information, the purpose of the disclosure and
how the information will be used.
' (d) The signature of the individual who is the subject of the
personal information or the individual who is legally empowered
to grant authority and the date signed.
' (e) Notice of the length of time for which the authorization
is valid, that the individual may revoke the authorization at any
time and the procedure for making a revocation.
' (2) An authorization may not remain valid for more than 24
months.
' (3) An individual who is the subject of personal information
may revoke an authorization provided pursuant to this section at
any time, subject to the rights of any individual who acted in
reliance on the authorization prior to notice of the revocation.
' (4) A licensee shall retain the authorization of an
individual or a copy thereof in the record of the individual who
is the subject of the personal information. + }
' { - (2) - } { + (5) + } A disclosure authorization
obtained by an insurer, agent or insurance-support organization
from an individual prior to January 1, 1983, shall be considered
to be in compliance with this section.
' { + SECTION 27a. + } { + (1) The amendments to ORS 746.620
and 746.630 by sections 26 and 27 of this 2001 Act apply on and
after July 1, 2003, to an insurer with respect to health
insurance policies issued by the insurer to which the federal
Health Insurance Portability and Accountability Act of 1996 (P.L.
104-191) applies. The Director of the Department of Consumer and
Business Services may adopt rules that take effect on or after
July 1, 2003, with respect to such policies. The rules may:
' (a) Apply the requirements of federal regulations governing
privacy adopted under the authority of the federal Health
Insurance Portability and Accountability Act of 1996 if the
requirements of the federal regulations are more stringent than
the requirements of ORS 746.620 and 746.630 as amended by
sections 26 and 27 of this 2001 Act; or
' (b) Apply the requirements of ORS 746.620 and 746.630 as
amended by sections 26 and 27 of this 2001 Act.
' (2) Nothing in this section may be construed to exempt an
insurer transacting health insurance from other applicable
requirements in state or federal law concerning the use of
personal information in insurance transactions.
' (3) The director shall determine under subsection (1) of this
section whether the requirements of the federal regulations are
more stringent than the requirements of ORS 746.620 and 746.630
as amended by sections 26 and 27 of this 2001 Act on the basis of
the federal regulations as a whole. If the director determines
that the federal regulations with respect to a particular matter
are less stringent than the requirements of ORS 746.620 and
746.630 as amended by sections 26 and 27 of this 2001 Act, the
director may require compliance with the state law on that
matter. + } ' .
On page 30, delete lines 1 through 9.
In line 11, delete 'An insurer, agent' and insert 'A licensee'.
In line 15, delete 'insurer, agent' and insert ' licensee'.
In line 17, delete 'an insurer, agent' and insert 'a licensee'.
In line 18, delete the boldfaced material.
In line 23, delete 'an insurer, agent' and insert 'a licensee'.
In line 25, delete 'insurer, agent' and insert ' licensee'.
In line 28, delete 'an insurer, agent,' and insert 'a
licensee'.
In line 30, delete 'insurer,'.
In line 31, delete 'agent' and insert 'licensee'.
In line 32, delete 'insurer, agent' and insert ' licensee'.
In line 37, delete 'an insurer, agent' and insert 'a licensee'.
In line 41, delete 'insurer, agent' and insert ' licensee'.
On page 31, line 5, delete 'insurer, agent' and insert '
licensee'.
In line 7, delete 'insurer, agent' and insert 'licensee'.
In line 17, delete 'an insurer, agent' and insert 'a licensee'.
In line 20, delete 'insurer, agent' and insert ' licensee'.
In line 26, delete 'an insurer, agent' and insert 'a licensee'.
In line 27, delete 'person' and insert 'nonaffiliated third
party'.
In line 28, after 'if' insert 'all of the following conditions
are met'.
In line 31, delete 'is disclosed;' and insert 'may be
disclosed.'.
In line 32, delete 'has' and insert 'must have' and after '
given' insert 'the notice described in ORS 746.620 and'.
In line 33, delete 'has' and insert 'must have'.
In line 34, delete '; and' and insert '. The individual need
not have been given the opportunity described in this
subparagraph if the disclosure is made pursuant to a joint
marketing agreement. As used in this subparagraph, 'joint
marketing agreement' means a formal written contract pursuant to
which an insurer jointly offers, endorses or sponsors a financial
product or service with a financial institution. When the
opportunity is required, the statement that offers the
opportunity must state that the insurer may disclose personal
information to nonaffiliates and that the individual has a right
to indicate that the individual does not want personal
information disclosed for marketing purposes, and must describe
the method for exercising that right. The statement must be in
writing but may be in an electronic form if the individual
agrees. The individual who is given the opportunity must be
provided a reasonable time to exercise the opportunity. An
individual may exercise the opportunity at any time. A statement
by an individual barring disclosure of personal information
remains effective until the individual who made the statement
revokes the statement in writing or, if the individual agrees, in
electronic form.'.
In line 35, delete 'agrees' and insert 'must agree'.
In line 38, delete 'insurer or agent' and insert ' licensee'
and delete 'an insurance' and insert 'a financial'.
Delete lines 40 through 45 and insert 'does not apply to the
disclosure of medical record information for the purpose of
marketing an insurance product or service.'.
On page 32, delete lines 1 and 2.
In line 3, delete 'an insurer'.
In line 4, delete 'or agent' and insert 'a licensee'.
In line 6, delete 'insurer's or agent's' and insert '
licensee's'.
After line 18, insert:
' { + SECTION 28a. + } { + Section 28b of this 2001 Act is
added to and made a part of ORS 746.600 to 746.690. + }
' { + SECTION 28b. + } { + Nothing in ORS 746.620, 746.630
or 746.665 may be construed to modify, limit or supersede the
operation of the federal Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) and no inference may be drawn on the basis of ORS
746.620, 746.630 or 746.665 regarding whether information is
transaction information or experience information under section
603 of the federal Fair Credit Reporting Act (15 U.S.C. 1681 et
seq.). + } ' .
On page 39, after line 39, insert:
' { + SECTION 39a. + } ORS 59.015 is amended to read:
' 59.015. As used in the Oregon Securities Law, unless the
context otherwise requires:
' (1) 'Broker-dealer' means a person who engages, all or part
of the time, in effecting transactions in securities for the
account of others or for the person's own account. 'Broker-dealer
' does not include:
' (a) An issuer effecting sales in its own securities;
' (b) The following institutions:
' (A) A financial institution or trust company, as defined in
ORS 706.008; or
' (B) A { + financial holding company or a + } bank holding
company, as defined in ORS 706.008, holding an institution
described in subparagraph (A) of this paragraph; a savings and
loan holding company as defined in section 408 of the National
Housing Act, 12 U.S.C. section 1730a, holding an association
described in subparagraph (A) of this paragraph; the subsidiaries
and affiliates of the { + financial holding company, + } bank
holding company or savings and loan holding company; or
subsidiaries and affiliates of institutions described in
subparagraph (A) of this paragraph, if the appropriate statutory
regulatory authority is exercising control over, or is regulating
or supervising the person in the sale of securities in accord
with the purposes of the Oregon Securities Law;
' (c) A person who has no place of business in this state
effecting transactions in this state exclusively with
broker-dealers;
' (d) A person effecting sales exempted by ORS 59.035;
' (e) A salesperson, as defined in this section;
' (f) A person effecting sales of securities owned by the
person registered for sale pursuant to ORS 59.065;
' (g) A person effecting sales of securities exempted by ORS
59.025 (7);
' (h) A person licensed as a mortgage banker or a mortgage
broker under ORS 59.840 to 59.965 when effecting sales of
securities involving real estate paper registered for sale
pursuant to ORS 59.065; or
' (i) A person designated by rule or order by the director.
' (2) 'Control' means 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, or otherwise.
' (3) 'Director' means the Director of the Department of
Consumer and Business Services.
' (4) 'Federal covered investment adviser' means a person who
is registered as an investment adviser pursuant to section 203 of
the Investment Advisers Act of 1940, as amended.
' (5) 'Federal covered security' means any security that is a
covered security under section 18 of the Securities Act of 1933,
as amended, and for which such Act provides that the director may
require filing of a notice and payment of a fee.
' (6) 'Fraud,' 'deceit' and 'defraud' are not limited to
common-law deceit.
' (7) 'Guaranteed' means guaranteed as to payment of principal,
interest or dividends.
' (8)(a) 'Investment adviser representative' means any partner,
officer, director or person occupying a similar status or
performing a similar function, or other individual, except
clerical or ministerial personnel, who is employed by or
associated with:
' (A) A state investment adviser that is licensed or required
to be licensed in this state and who does any of the following:
' (i) Makes any recommendations or otherwise renders advice
regarding securities;
' (ii) Manages accounts or portfolios of clients;
' (iii) Determines which recommendation or advice regarding
securities should be given;
' (iv) Solicits, offers or negotiates for the sale of or sells
investment advisory services; or
' (v) Supervises employees acting under this subparagraph; or
' (B) A federal covered investment adviser, subject to the
limitations of section 203A of the Investment Advisers Act of
1940, as amended, as the director may designate by rule or order.
' (b) 'Investment adviser representative' does not include a
person designated by rule or order of the director.
' (9) 'Issuer' means a person who issues, proposes to issue or
has issued a security and includes an issuer to be formed. With
respect to certificates of deposit, voting-trust certificates or
collateral-trust certificates, or with respect to certificates of
interest or shares in an unincorporated investment trust not
having a board of directors or persons performing similar
functions or of the fixed, restricted management or unit type,
the ' issuer' is the person or persons performing the acts and
assuming the duties of depositor or manager pursuant to the
provisions of the trust or other instrument or agreement under
which the security is issued.
' (10) 'License' means a license as provided under the Oregon
Securities Law.
' (11) 'Mortgage banker' means a mortgage banker as defined in
ORS 59.840.
' (12) 'Mortgage broker' means a mortgage broker as defined in
ORS 59.840.
' (13) 'Offer' or 'offer to sell' includes every attempt or
offer to dispose of, or solicitation of an offer to buy, a
security or interest in a security for value. Every sale or offer
of a warrant or right to purchase or subscribe to another
security of the same or another issuer, as well as every sale or
offer of a security which gives the holder a present or future
right or privilege to convert into another security of the same
or another issuer, is considered to include an offer of the other
security.
' (14) 'Person' includes an individual, a joint venture, a
partnership, a cooperative, a limited liability company, an
association, a joint stock company, a corporation, a trust, an
unincorporated organization or a government or political
subdivision of a government.
' (15) 'Real estate paper' means any obligation secured or
purportedly secured by an interest in real property. Real estate
paper includes, but is not limited to, mortgage-backed
securities, collateralized mortgage obligations, and real estate
mortgage investment conduits.
' (16) 'Registered' means registered as provided in the Oregon
Securities Law.
' (17)(a) 'Sale' or 'sell' includes every contract of sale of,
contract to sell, or disposition of, a security or interest in a
security for value. Any security given or delivered with, or as a
bonus on account of, a purchase of securities or any other thing
shall constitute a part of the subject of the purchase and shall
have been offered and sold for value. A gift of assessable stock
by or for any issuer or promoter shall constitute a sale.
' (b) For purposes of the authority of the director under ORS
59.245 and 59.255, the terms 'sale' and 'sell' include the terms
' offer' and 'offer to sell' as defined in this section.
' (c) 'Sale' and 'sell' do not include:
' (A) A bona fide pledge or loan of securities;
' (B) A bona fide security dividend, whether the corporation
distributing the dividend is the issuer of the security or not,
if nothing of value is given by the recipients for the dividend
other than payments in connection with the elimination of
fractional shares; or
' (C) An act incident to a judicially approved reorganization
in which a security is issued in exchange for one or more
outstanding securities, claims or property interests, or partly
in such exchange and partly for cash.
' (18)(a) 'Salesperson' means:
' (A) A person, other than a broker-dealer, who represents or
purports to represent a broker-dealer, issuer or owner of
securities in effecting or attempting to effect in any manner
transactions in securities.
' (B) A person, other than a person licensed as a mortgage
banker or mortgage broker under ORS 59.840 to 59.965, who
represents or purports to represent the issuer, owner, or
mortgage banker or mortgage broker licensed under ORS 59.840 to
59.965 in effecting sales of securities or involving real estate
paper registered for sale pursuant to ORS 59.065.
' (b) 'Salesperson' does not include:
' (A) A person who represents an issuer in effecting sales in a
security exempted by ORS 59.025;
' (B) A person who represents an issuer in effecting sales
exempted by ORS 59.035;
' (C) A person who represents an issuer in effecting sales with
existing partners or directors of the issuer, if no commission or
other remuneration is paid or given directly or indirectly for
soliciting any person in this state;
' (D) An employee of an institution or organization described
in subsection (1)(b) of this section to the extent the employee
is not a dual employee of the institution and a broker-dealer;
' (E) A person effecting transactions in this state limited to
those transactions described in section 15(h)(2) and (3) of the
Securities Exchange Act of 1934, as amended; or
' (F) A person designated by rule or order by the director.
' (c) A person who is a partner, director or officer of a
broker-dealer, issuer or owner of securities, or a person who
occupies a similar status or performing similar functions, is a '
salesperson' only if the person otherwise comes within this
definition.
' (19)(a) 'Security' means a note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or
participation in a pension plan or profit-sharing agreement,
collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security,
certificate of interest or participation in an oil, gas, or
mining title or lease or in payments out of production under such
title or lease, real estate paper sold by a broker-dealer,
mortgage banker, mortgage broker or a person described in
subsection (1)(b) of this section to persons other than persons
enumerated in ORS 59.035 (4), or, in general, any interest or
instrument commonly known as a 'security,' or any certificate of
interest or participation in, temporary or interim certificates
for, receipt for, guarantee of, or warrant or right to subscribe
to or purchase any of the foregoing.
' (b) 'Security' does not include:
' (A) An insurance or endowment policy or annuity contract
under which an insurance company promises to pay a fixed or
variable sum of money either in a lump sum or periodically for
life or some other specified period;
' (B) A beneficial interest in a voluntary inter vivos trust
unless the trust is created solely for the purpose of voting or
is part of an attempt to evade the provisions of ORS 59.005 to
59.370; or
' (C) A beneficial interest in a testamentary trust.
' (20)(a) 'State investment adviser' means a person who, for
compensation:
' (A) Engages all or part of the time of the person, in this
state, in the business of advising others, either directly or by
mail or through publication or writing, as to the value of
securities or as to the advisability of investing in, purchasing
or selling securities;
' (B) Engages all or part of the time of the person, in this
state, in the business of managing an investment or trading
account in securities for other persons; or
' (C) Issues or promulgates, as part of a regular business in
this state, analyses or reports concerning securities.
' (b) 'State investment adviser' does not include:
' (A) An investment adviser representative;
' (B) An institution or organization described in subsection
(1)(b) of this section;
' (C) A licensed broker-dealer whose performance of investment
advisory services is solely incidental to the conduct of business
as a broker-dealer and who receives no special compensation for
such services;
' (D) A salesperson licensed to a broker-dealer whose
performance of investment advisory services is solely incidental
to that person's activities as a salesperson and who receives no
special compensation for such services;
' (E) A publisher of or contributor to a bona fide newspaper,
newsmagazine, investment manual or service, or business or
financial publication of general, regular and paid circulation;
' (F) A person whose only clients are federal covered
investment advisers, state investment advisers, broker-dealers,
mortgage bankers, mortgage brokers, banks, savings institutions
or trust companies, insurance companies, investment companies as
defined in the Investment Company Act of 1940, as amended,
pension or profit-sharing trusts, or other financial institutions
or institutional buyers, whether acting for themselves or as
trustees;
' (G) A duly licensed lawyer, engineer or accountant whose
performance of investment advisory services is solely incidental
to the practice of the profession;
' (H) A person whose advice, analyses or reports relate only to
securities exempted by ORS 59.025 (1);
' (I) A federal covered investment adviser in compliance with
ORS 59.165 (7);
' (J) A person, advising others, that has no place of business
in this state and during the preceding 12-month period has had
fewer than six clients, other than those persons included in
subparagraph (F) of this paragraph, who are residents of this
state; or
' (K) Such other persons as the director may by rule or order
designate.'.
On page 57, after line 13, insert:
' { + SECTION 52a. + } ORS 746.185 is amended to read:
' 746.185. As used in ORS 746.185 to 746.211, 'lending
institution' means a financial institution { + , financial
holding company + } or bank holding company as those terms are
defined in ORS 706.008.'.
On page 60, after line 26, insert:
' { + SECTION 56. + } ORS 706.015 is amended to read:
' 706.015. References in the Bank Act to federal statutes and
regulations shall, except as otherwise provided in the Bank Act,
be construed to refer to the statutes or regulations as they are
in effect on { - October 23, 1999 - } { + January 1,
2002 + }. The Director of the Department of Consumer and Business
Services may adopt rules providing that one or more of the
federal statutes and regulations shall be construed to refer to
the statutes and regulations as they are in effect on a later
date.
' { + SECTION 57. + } ORS 731.450 is amended to read:
' 731.450. { + Except as authorized by the federal
Gramm-Leach-Bliley Act (P.L. 106-102), + } { - no - }
{ + an + } insurer { - shall - } { + may not + } engage in
any business except the making of insurance or a kind of business
related to the insurance business. However, a foreign or alien
insurer may engage, outside this state, in any business permitted
by its articles of incorporation and the laws of the state of its
domicile; and a title insurer also may engage in business as an
escrow agent; provided, however, that a title insurer engaging in
business as an escrow agent shall be subject to the provisions of
ORS 696.505 to 696.590 in respect to its escrow activities.
' { + SECTION 58. + } ORS 707.262 is amended to read:
' 707.262. { + (1) + } Subject to any provisions set forth in
its articles of incorporation and subject to preemptive rights,
if any, of existing shareholders, an institution or Oregon stock
savings bank may create and issue, whether or not in connection
with the issuance and sale of any of its shares or other
securities, rights or options entitling the holders thereof to
purchase from the institution or Oregon stock savings bank shares
of any class or classes. Such rights or options shall be
evidenced in such manner as the board of directors shall approve
and, subject to the provisions of the articles of incorporation,
shall set forth the terms upon which, the time or times within
which and the price or prices at which such shares may be
purchased from the institution or Oregon stock savings bank on
the exercise of any such right or option.
' { + (2) + } { - No such - } { + The + } rights or
options { - shall - } { + described in subsection (1) of this
section may not + } be issued to a director, officer or employee
of the institution or Oregon stock savings bank or of any
subsidiary thereof unless the issuance { + :
' (a) Is to all shareholders of the institution, Oregon stock
savings bank or subsidiary thereof;
' (b) + } Is approved at the annual meeting or a special
meeting by the holders of at least two-thirds of the outstanding
shares entitled to vote thereon { - , or unless such
issuance - } { + ; or
' (c) + } Is pursuant to a plan previously so approved.
' { + (3) + } In the absence of fraud in the transaction, the
judgment of the board of directors as to the adequacy of the
consideration received for { - such - } { + the + } rights or
options { + described in subsection (1) of this section + }
shall be conclusive.'.
In line 27, delete '56' and insert '59'.
After line 27, insert:
' { + SECTION 60. + } { + Sections 61 and 62 of this 2001
Act are added to and made a part of ORS chapter 656. + }
' { + SECTION 61. + } { + Insurers and their assigned claims
agents shall maintain the confidentiality of worker medical and
vocational claim records. Worker medical and vocational claim
records may not be disclosed to persons other than the worker
unless the disclosure is:
' (1) Made with the consent of the worker or the worker's
beneficiary;
' (2) Reasonably necessary for the insurer or its assigned
claims agent to manage, defend or adjust claims, suits or actions
or to perform any other function required by or arising out of
ORS chapter 654, 655 or 656 or the insurance contract;
' (3) To detect or prevent criminal activity, fraud, material
misrepresentation or nondisclosure;
' (4) Pursuant to a written agreement that requires the
receiving party to maintain the confidentiality of the records;
or
' (5) Otherwise required or permitted by law. + }
' { + SECTION 62. + } { + (1) A cause of action in the
nature of defamation, invasion of privacy or negligence may not
arise against:
' (a) Any insurer or assigned claims agent for disclosing
worker medical and vocational claim records in accordance with
section 61 of this 2001 Act; or
' (b) Any person for furnishing worker medical and vocational
claim records to an insurer or assigned claims agent in
accordance with section 61 of this 2001 Act.
' (2) Subsection (1) of this section does not apply to the
disclosure or furnishing of false information with malice or
willful intent to injure any person. + }
' { + SECTION 63. + } ORS 656.268 is amended to read:
' 656.268. (1) One purpose of this chapter is to restore the
injured worker as soon as possible and as near as possible to a
condition of self support and maintenance as an able-bodied
worker. The insurer or self-insured employer shall close the
worker's claim, as prescribed by the Director of the Department
of Consumer and Business Services, and determine the extent of
the worker's permanent disability, provided the worker is not
enrolled and actively engaged in training according to rules
adopted by the director pursuant to ORS 656.340 and 656.726,
when:
' (a) The worker has become medically stationary and there is
sufficient information to determine permanent impairment;
' (b) The accepted injury is no longer the major contributing
cause of the worker's combined or consequential condition or
conditions pursuant to ORS 656.005 (7). When the claim is closed
because the accepted injury is no longer the major contributing
cause of the worker's combined or consequential condition or
conditions, and there is sufficient information to determine
permanent impairment, the likely impairment and adaptability that
would have been due to the current accepted condition shall be
estimated; or
' (c) Without the approval of the attending physician, the
worker fails to seek medical treatment for a period of 30 days or
the worker fails to attend a closing examination, unless the
worker affirmatively establishes that such failure is
attributable to reasons beyond the worker's control.
' (2) If the worker is enrolled and actively engaged in
training according to rules adopted pursuant to ORS 656.340 and
656.726, the temporary disability compensation shall be
proportionately reduced by any sums earned during the training.
' (3) A copy of all medical reports and reports of vocational
rehabilitation agencies or counselors shall be furnished to the
worker { - and to the employer - } , if requested by the worker
{ - or employer - } .
' (4) Temporary total disability benefits shall continue until
whichever of the following events first occurs:
' (a) The worker returns to regular or modified employment;
' (b) The attending physician advises the worker and documents
in writing that the worker is released to return to regular
employment;
' (c) The attending physician advises the worker and documents
in writing that the worker is released to return to modified
employment, such employment is offered in writing to the worker
and the worker fails to begin such employment; or
' (d) Any other event that causes temporary disability benefits
to be lawfully suspended, withheld or terminated under ORS
656.262 (4) or other provisions of this chapter.
' (5)(a) Findings by the insurer or self-insured employer
regarding the extent of the worker's disability in closure of the
claim shall be pursuant to the standards prescribed by the
Director of the Department of Consumer and Business Services. The
insurer or self-insured employer shall issue a notice of closure
of such a claim to the worker, to the worker's attorney if the
worker is represented, and to the director. The notice must
inform:
' (A) The parties, in boldfaced type, of the proper manner in
which to proceed if they are dissatisfied with the terms of the
notice;
' (B) The worker of the amount of any further compensation,
including permanent disability compensation to be awarded; of the
duration of temporary total or temporary partial disability
compensation; of the right of the worker to request
reconsideration by the director under this section within 60 days
of the date of the notice of claim closure; of the aggravation
rights; and of such other information as the director may
require; and
' (C) Any beneficiaries of death benefits to which they may be
entitled pursuant to ORS 656.204 and 656.208.
' (b) If the worker has returned to work but the insurer or
self-insured employer has not issued a notice of closure, the
worker may request closure. Within 10 days of receipt of a
written request from the worker, the insurer or self-insured
employer shall issue a notice of closure if the requirements of
this section have been met or a notice of refusal to close if the
requirements of this section have not been met. A notice of
refusal to close shall advise the worker of the decision not to
close; of the right of the worker to request a hearing pursuant
to ORS 656.283 within 60 days of the date of the notice of
refusal to close the claim; of the right to be represented by an
attorney; and of such other information as the director may
require.
' (c) If a worker objects to the notice of closure, the worker
first must request reconsideration by the director under this
section. The request for reconsideration must be made within 60
days of the date of the notice of closure.
' (d) If an insurer or self-insured employer has closed a claim
or refused to close a claim pursuant to this section, if the
correctness of that notice of closure or refusal to close is at
issue in a hearing on the claim and if a finding is made at the
hearing that the notice of closure or refusal to close was not
reasonable, a penalty shall be assessed against the insurer or
self-insured employer and paid to the worker in an amount equal
to 25 percent of all compensation determined to be then due the
claimant.
' (e) If, upon reconsideration of a claim closed by an insurer
or self-insured employer, the director orders an increase by 25
percent or more of the amount of compensation to be paid to the
worker for either a scheduled or unscheduled permanent disability
and the worker is found upon reconsideration to be at least 20
percent permanently disabled, a penalty shall be assessed against
the insurer or self-insured employer and paid to the worker in an
amount equal to 25 percent of all compensation determined to be
then due the claimant. If the increase in compensation results
from new information obtained through a medical arbiter
examination or from the adoption of a temporary emergency rule,
the penalty shall not be assessed.
' (6)(a) Notwithstanding any other provision of law, only one
reconsideration proceeding may be held on each notice of closure.
At the reconsideration proceeding, the worker or the insurer or
self-insured employer may correct information in the record that
is erroneous and may submit any medical evidence that should have
been but was not submitted by the attending physician at the time
of claim closure. If the director determines that a claim was not
closed in accordance with subsection (1) of this section, the
director may rescind the closure.
' (b) If necessary, the director may require additional medical
or other information with respect to the claims and may postpone
the reconsideration for not more than 60 additional calendar
days.
' (c) In any reconsideration proceeding under this section in
which the worker was represented by an attorney, the director
shall order the insurer or self-insured employer to pay to the
attorney, out of the additional compensation awarded, an amount
equal to 10 percent of any additional compensation awarded to the
worker.
' (d) The reconsideration proceeding shall be completed within
18 working days from the date the reconsideration proceeding
begins, and shall be performed by a special evaluation appellate
unit within the department. The deadline of 18 working days may
be postponed by an additional 60 calendar days if within the 18
working days the department mails notice of review by a medical
arbiter. If an order on reconsideration has not been mailed on or
before 18 working days from the date the reconsideration
proceeding begins, or within 18 working days plus the additional
60 calendar days where a notice for medical arbiter review was
timely mailed or the director postponed the reconsideration
pursuant to paragraph (b) of this subsection, or within such
additional time as provided in subsection (7) of this section
when reconsideration is postponed further because the worker has
failed to cooperate in the medical arbiter examination,
reconsideration shall be deemed denied and any further
proceedings shall occur as though an order on reconsideration
affirming the notice of closure was mailed on the date the order
was due to issue.
' (e) The period for completing the reconsideration proceeding
described in paragraph (d) of this subsection begins upon receipt
by the director of a worker's request for reconsideration
pursuant to subsection (5)(c) of this section. The insurer may
fully participate in the reconsideration proceeding.
' (f) Any medical arbiter report may be received as evidence at
a hearing even if the report is not prepared in time for use in
the reconsideration proceeding.
' (g) If any party objects to the reconsideration order, the
party may request a hearing under ORS 656.283 within 30 days from
the date of the reconsideration order.
' (7)(a) If the basis for objection to a notice of closure
issued under this section is disagreement with the impairment
used in rating of the worker's disability, the director shall
refer the claim to a medical arbiter appointed by the director.
' (b) If neither party requests a medical arbiter and the
director determines that insufficient medical information is
available to determine disability, the director may refer the
claim to a medical arbiter appointed by the director.
' (c) At the request of either of the parties, a panel of three
medical arbiters shall be appointed.
' (d) The arbiter, or panel of medical arbiters, shall be
chosen from among a list of physicians qualified to be attending
physicians referred to in ORS 656.005 (12)(b)(A) who were
selected by the director in consultation with the Board of
Medical Examiners for the State of Oregon and the committee
referred to in ORS 656.790.
' (e)(A) The medical arbiter or panel of medical arbiters may
examine the worker and perform such tests as may be reasonable
and necessary to establish the worker's impairment.
' (B) If the director determines that the worker failed to
attend the examination without good cause or failed to cooperate
with the medical arbiter, or panel of medical arbiters, the
director shall postpone the reconsideration proceedings for up to
60 days from the date of the determination that the worker failed
to attend or cooperate, and shall suspend all disability benefits
resulting from this or any prior opening of the claim until such
time as the worker attends and cooperates with the examination or
the request for reconsideration is withdrawn. Any additional
evidence regarding good cause must be submitted prior to the
conclusion of the 60-day postponement period.
' (C) At the conclusion of the 60-day postponement period, if
the worker has not attended and cooperated with a medical arbiter
examination or established good cause, there shall be no further
opportunity for the worker to attend a medical arbiter
examination for this claim closure. The reconsideration record
shall be closed, and the director shall issue an order on
reconsideration based upon the existing record.
' (D) All disability benefits suspended pursuant to this
subsection, including all disability benefits awarded in the
order on reconsideration, or by an Administrative Law Judge, the
Workers' Compensation Board or upon court review, shall not be
due and payable to the worker.
' (f) The costs of examination and review by the medical
arbiter or panel of medical arbiters shall be paid by the insurer
or self-insured employer.
' (g) The findings of the medical arbiter or panel of medical
arbiters shall be submitted to the director for reconsideration
of the notice of closure.
' (h) After reconsideration, no subsequent medical evidence of
the worker's impairment is admissible before the director, the
Workers' Compensation Board or the courts for purposes of making
findings of impairment on the claim closure.
' (i)(A) When the basis for objection to a notice of closure
issued under this section is a disagreement with the impairment
used in rating the worker's disability, and the director
determines that the closure was not made pursuant to this
section, the director is not required to appoint a medical
arbiter prior to the completion of the reconsideration
proceeding.
' (B) If the worker's condition has substantially changed since
the notice of closure, upon the consent of all the parties to the
claim, the director shall postpone the proceeding until the
worker's condition is appropriate for claim closure under
subsection (1) of this section.
' (8) No hearing shall be held on any issue that was not raised
and preserved before the director at reconsideration. However,
issues arising out of the reconsideration order may be addressed
and resolved at hearing.
' (9) If, after the notice of closure issued pursuant to this
section, the worker becomes enrolled and actively engaged in
training according to rules adopted pursuant to ORS 656.340 and
656.726, any permanent disability payments due under the closure
shall be suspended, and the worker shall receive temporary
disability compensation while the worker is enrolled and actively
engaged in the training. When the worker ceases to be enrolled
and actively engaged in the training, the insurer or self-insured
employer shall again close the claim pursuant to this section if
the worker is medically stationary or if the worker's accepted
injury is no longer the major contributing cause of the worker's
combined or consequential condition or conditions pursuant to ORS
656.005 (7). The closure shall include the duration of temporary
total or temporary partial disability compensation. Permanent
disability compensation shall be redetermined for unscheduled
disability only. If the worker has returned to work or the
worker's attending physician has released the worker to return to
regular or modified employment, the insurer or self-insured
employer shall again close the claim. This notice of closure may
be appealed only in the same manner as are other notices of
closure under this section.
' (10) If the attending physician has approved the worker's
return to work and there is a labor dispute in progress at the
place of employment, the worker may refuse to return to that
employment without loss of reemployment rights or any vocational
assistance provided by this chapter.
' (11) Any notice of closure made under this section may
include necessary adjustments in compensation paid or payable
prior to the notice of closure, including disallowance of
permanent disability payments prematurely made, crediting
temporary disability payments against current or future permanent
or temporary disability awards or payments and requiring the
payment of temporary disability payments which were payable but
not paid.
' (12) An insurer or self-insured employer may take a credit or
offset of previously paid workers' compensation benefits or
payments against any further workers' compensation benefits or
payments due a worker from that insurer or self-insured employer
when the worker admits to having obtained the previously paid
benefits or payments through fraud, or a civil judgment or
criminal conviction is entered against the worker for having
obtained the previously paid benefits through fraud. Benefits or
payments obtained through fraud by a worker shall not be included
in any data used for ratemaking or individual employer rating or
dividend calculations by a guaranty contract insurer, a rating
organization licensed pursuant to ORS chapter 737, the State
Accident Insurance Fund Corporation or the director.
' (13)(a) An insurer or self-insured employer may offset any
compensation payable to the worker to recover an overpayment from
a claim with the same insurer or self-insured employer. When
overpayments are recovered from temporary disability or permanent
total disability benefits, the amount recovered from each payment
shall not exceed 25 percent of the payment, without prior
authorization from the worker.
' (b) An insurer or self-insured employer may suspend and
offset any compensation payable to the beneficiary of the worker,
and recover an overpayment of permanent total disability benefits
caused by the failure of the worker's beneficiaries to notify the
insurer or self-insured employer about the death of the worker.
' (14) Conditions that are direct medical sequelae to the
original accepted condition shall be included in rating permanent
disability of the claim unless they have been specifically
denied.
' { + 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 on its passage. + } ' .
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