72nd OREGON LEGISLATIVE ASSEMBLY--2003 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 433
 
                         House Bill 2056
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Joint Interim Committee on
  Judiciary for Oregon Collectors Association)
 
 
                             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 as
introduced.
 
  Grants authority to Director of Department of Consumer and
Business Services to waive diligent search requirements for
surplus lines licensees under certain circumstances.
 
                        A BILL FOR AN ACT
Relating to surplus lines licensees; amending ORS 735.410 and
  735.425.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 735.410 is amended to read:
  735.410. (1) Insurance may be procured through a surplus lines
licensee from a nonadmitted insurer if:
  (a) The insurer is an eligible surplus lines insurer;
  (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; and
  (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.
   { +  (4) Notwithstanding subsection (1)(b) of this section,
the director may waive by rule the diligent search requirement
for certain coverages or classes of insurance that are difficult
to place and eligible to be placed in the surplus market. + }
  SECTION 2. 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 - }   { + A
report + } regarding the insurance  { - , - }  { + . The report,
which the licensee shall submit on a form approved by the
director and + } which shall be kept confidential as provided in
ORS 705.137,   { - including - }   { + must include + } 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 - }  { + :
  (A) Describing + } the diligent efforts by the producing agent
to place the coverage with admitted insurers and the results
thereof  { - . - }  { + ; or
  (B) Indicating that a diligent search is waived under ORS
735.410 (4).
  (2) + } The statement  { + required under subsection (1)(b) of
this section + } shall be signed by the producing agent and shall
affirm that the insured was expressly advised prior to placement
of the insurance that:
    { - (A) - }   { + (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) - }   { + (b) + } In the event of the insolvency of
the surplus lines insurer, losses will not be paid by the state
insurance guaranty fund.
    { - (2) - }   { + (3) + } 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) - }   { + (4) + } 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.
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