TITLE 56
INSURANCE
Chapter 731. Administration and General Provisions
732. Organization and Corporate Procedures of
Domestic Insurers; Regulation of Insurers Generally
733. Accounting and Investments
734. Rehabilitation, Liquidation and
Conservation of Insurers
735. Alternative Insurance
737. Rates and Rating Organizations
741. Oregon Health Insurance Exchange
742. Insurance Policies Generally; Property and
Casualty Policies
743. Health and Life Insurance
743A. Health Insurance: Required Reimbursements
744. Insurance Producers; Life Settlement
Providers, Brokers and Contracts; Adjusters; Consultants; Third Party
Administrators; Reinsurance Intermediaries; Rental Company Limited Licenses
746. Trade Practices
748. Fraternal Benefit Societies
750. Health Care Service Contractors; Multiple
Employer Welfare Arrangements; Legal Expense Organizations
752. Professional Liability Funds
_______________
Chapter 731 — Administration
and General Provisions
ORS sections in this chapter were
amended or repealed by the Legislative Assembly during its 2012 regular
session. See the table of ORS sections amended or repealed during the 2012
regular session: 2012 A&R Tables
New sections of law were adopted by the
Legislative Assembly during its 2012 regular session and are likely to be
compiled in this ORS chapter. See
sections in the following 2012 Oregon Laws chapters: 2012
Session Laws 0084
2011 EDITION
ADMINISTRATION AND GENERAL PROVISIONS
INSURANCE
SHORT TITLE; PURPOSE AND CONSTRUCTION
731.004 Short
title
731.008 Purpose
of Insurance Code
731.012 Effect
of federal law
731.016 Construction
of Insurance Code
APPLICATION OF INSURANCE CODE
731.022 Compliance
with Insurance Code required
731.026 Application
of Insurance Code to particular insurers
731.028 Applicability
of certain Insurance Code provisions to State Accident Insurance Fund
Corporation
731.036 Persons
completely exempt from application of Insurance Code
731.038 Application
of Insurance Code to charitable organizations that issue charitable gift
annuities
731.039 Requirements
for certain educational institutions or nonprofit corporations issuing
charitable gift annuities
731.042 Certificate
of exemption; application of certain Insurance Code provisions to exempt
insurers
731.046 Exemption
of policies from Securities Law
DEFINITIONS GENERALLY
731.052 Insurance
Code definitions
731.056 “Action”
731.066 “Authorized,”
“unauthorized” insurer
731.069 “Certificate,”
“certificate holder”
731.072 “Certificate
of authority,” “license”
731.074 “Commercial
liability insurance”
731.075 “Covered
life”
731.076 “Department,”
“director”
731.082 “Domestic,”
“foreign,” “alien” insurer
731.086 “Domestic
risk”
731.092 “Domicile”
731.096 “Domicile
of alien insurer”
731.099 “Independently
procured insurance”
731.102 “Insurance”
731.104 “Insurance
producer”
731.106 “Insurer”
731.112 “Judgment”
731.116 “Person”
731.122 “Policy”
731.126 “Reinsurance”
731.132 “Required
capitalization”
731.136 “State”
731.142 “Stock,”
“mutual” and “reciprocal” insurer
731.144 “Surplus
lines insurance”
731.146 “Transact
insurance”
CLASSES OF INSURANCE DEFINED
731.150 Definitions
of classes of insurance not mutually exclusive
731.154 “Annuity”
731.156 “Variable
life insurance”; “variable annuity”
731.158 “Casualty
insurance”
731.162 “Health
insurance”
731.164 “Home
protection insurance,” “home protection insurer”
731.166 “Industrial
life insurance”
731.170 “Life
insurance”; includes annuities
731.174 “Marine
and transportation insurance”
731.178 “Mortgage
insurance”
731.182 “Property
insurance”
731.186 “Surety
insurance”
731.190 “Title
insurance”
731.194 “Wet
marine and transportation insurance”
INSURANCE ADMINISTRATION
731.216 Administrative
power of director
731.228 Prohibited
interests and rewards
731.232 Subpoena
power
731.236 General
powers and duties
731.240 Hearings
in general
731.244 Rules
731.248 Orders
731.252 Cease
and desist orders
731.256 Enforcement
generally
731.258 Enforcement
of orders and decisions by Attorney General; filing, enforcement and effect of
foreign decrees
731.260 False
or misleading filings
731.264 Complaints
and investigations confidential; permitted disclosures; rules
731.268 Use
of reproductions and certified copies as evidence; fee
731.272 Director’s
annual reports; notice of publication of report
731.276 Recommendations
for changes in Insurance Code
731.280 Publications
authorized
731.282 Authority
to sell publications
731.284 Distribution
of insurance laws
731.288 Recording
complaints; director to consider complaints before issuing licenses
731.292 Disposition
of fees, charges, taxes, penalties and other moneys
731.296 Director’s
inquiries
731.300 Examination
of insurers; when required
731.302 Appointment
of examiners; retaining of appraisers, actuaries and others; evidentiary status
of facts and conclusions
731.304 Investigation
of persons transacting insurance
731.308 Procedure
at examination or investigation; production of books and other records
731.312 Report
of examination; review by person examined; hearing; confidentiality of certain
information and documents; permitted disclosures
731.314 Immunity
for director, examiner and others
731.316 Expenses
of examination of insurer
731.324 Service
of process on Secretary of State; notice to unauthorized insurer
731.328 Deposits
by unauthorized insurers in actions or proceedings
AUTHORIZATION OF INSURERS AND GENERAL
REQUIREMENTS
731.354 Certificate
of authority required
731.356 Unauthorized
insurance transaction enforcement
731.358 Requirements
of domestic insurers generally
731.362 Requirements
of foreign or alien insurers generally
731.363 Authorized
foreign insurer becoming domestic insurer
731.364 Domestic
insurer transferring domicile to another state
731.365 Effect
of transfer of domicile by domestic or foreign insurer; notice to director by
transferring insurer
731.367 Transfer
of domicile by unincorporated authorized foreign insurer
731.369 Requirements
of reciprocal insurers generally
731.370 Reciprocal
insurer’s financial statement; service of process
731.371 Powers
of reciprocal insurer regarding real estate
731.374 Exemptions
to certificate of authority requirement
731.378 Foreign
and alien insurers exempt from laws governing admission of foreign and alien
corporations
731.380 Authority
of foreign and alien insurers to take, acquire, hold and enforce notes secured
by mortgages; statement; fees
731.381 Exemption
from taxes for foreign and alien insurers engaging in activities authorized by
ORS 731.380
731.382 General
eligibility for certificate of authority
731.385 Standards
for determining whether continued operation of insurer is hazardous; rules;
order; hearing
731.386 Management
of insurers
731.390 Government
insurers not to be authorized
731.394 Combinations
of insuring powers in one insurer
731.396 Certificate
of authority and good financial condition required to issue variable life
insurance or variable annuity policies
731.398 Amendment
of certificate of authority
731.402 Issuance
or refusal of certificate of authority
731.406 What
certificate evidences; ownership of certificate
731.410 Continuance,
expiration or reinstatement of certificate of authority
731.414 Suspension
or revocation of certificate of authority; mandatory grounds
731.418 Grounds
for suspension or revocation of certificate of authority
731.422 Order
of suspension, revocation or refusal; effect upon insurance producers’
authority
731.426 Duration
of suspension; insurer’s obligations during suspension period; reinstatement
731.428 Written
consent to engage or participate in business of insurance; rules
731.430 Name
of insurer
731.434 Registered
office and agent
731.438 Title
plant requirement for title insurers; posting of indexes; plant ownership and
maintenance
731.439 Satisfaction
of requirements of ORS 731.438 (1) by certain title plants
731.442 Prohibition
on transacting life insurance business on mutual assessment plan
731.446 Policyholder
deposits
731.450 Unrelated
business prohibited; exceptions; title insurer as escrow agent
731.454 Domestic
insurers not to transact business in jurisdiction where not authorized
731.458 Exchange
of reciprocal or interinsurance contracts
731.462 Nonassessable
policies of reciprocal insurer
731.466 Power
of attorney for reciprocal insurer
731.470 Attorney
for reciprocal insurer
731.475 Records
storage required of workers’ compensation insurers; examination and audit of
records
731.480 Workers’
compensation policies; conditions for issuing
731.482 Withdrawal
from, failure to renew or cancellation of line by commercial liability insurer
731.484 Prohibition
on certain sales related to group health and group life insurance
731.485 Conditions
under which insurer may limit insured’s choice of drug outlets and pharmacies
731.486 Exemption
from definition of “transact insurance” for group life policies; master group
health insurance coverage; rules
731.488 Annual
audit of insurer; rules
LIMIT OF RISK; REINSURANCE
731.504 Limit
of risk
731.508 Approved
reinsurance
731.509 Legislative
intent; criteria for allowing credit for reinsurance
731.510 Criteria
for allowing reduction from liability for reinsurance
731.511 Criteria
to be met by assuming insurer in order to be accredited as reinsurer
731.512 Withdrawal
of insurer; reinsurance
731.516 Mortgage
insurance limitation; waiver of limitation; rules; fees
CAPITAL AND SURPLUS
731.554 Capital
and surplus requirements
731.562 Title
insurer capital and surplus requirements
731.566 Reciprocal
insurer surplus requirements
731.570 Withdrawing
advancements made to reciprocal insurer
731.574 Annual
financial statement
REPORTS OF CRIMINAL CONDUCT
731.590 “Insurer”
defined for ORS 731.592 and 731.594
731.592 Reporting
criminal conduct involving insurance
731.594 Immunity
from civil liability
DEPOSITS
731.604 Acceptance
of deposits of insurers
731.608 Purpose
of deposit
731.612 Rights
of insurer regarding deposits
731.616 Valuation
of deposits; deficiencies
731.620 Assignment
of deposited securities
731.624 Special
deposits; foreign and alien insurers
731.628 Deposit
required of workers’ compensation insurers
731.632 Deposit
required of domestic reciprocal insurers; exception
731.636 Deposit
or trusteed assets of alien insurer required
731.640 Eligible
deposits; rules
731.642 Contracts
for security deposits
731.644 Payment
of losses out of deposits, generally
731.648 Duration
and release of deposit
731.652 Proofs
for release of deposit to insurers; director’s responsibility
EXCHANGE OF INFORMATION BY REGULATORS
731.730 Insurer
filings with National Association of Insurance Commissioners
731.731 Immunity
for certain persons dealing with information collected from filings under ORS
731.730
731.735 Certain
information confidential
731.737 Immunity
from liability for certain persons filing reports or furnishing information
about specified activities to specified persons
CONFIDENTIALITY OF REPORTS
731.750 Confidentiality
of report of material acquisitions or dispositions of assets, material
nonrenewals, cancellations and revisions of ceded reinsurance agreements
731.752 Confidentiality
of report used for determination of required amount of capital or surplus;
confidentiality of financial plan of action and report of examination connected
with plan
731.754 Permissible
uses of reports and plans described in ORS 731.752
INSURANCE COMPLIANCE AUDIT REPORTS
731.760 Definitions
for ORS 731.760 to 731.770
731.761 Privileged
information
731.762 Authority
of director
731.764 Waiver
of privilege; permitted disclosures
731.766 Petition
for in camera hearing; hearing; compelled disclosure
731.768 Privilege;
exceptions
731.770 Other
privileges or limitations pertaining to audit document
ASSESSMENTS, FEES AND TAXES
731.804 Assessments;
rules; fees; how determined
731.808 “Gross
amount of premiums” defined
731.812 Foreign
and alien insurer’s report of Oregon business
731.820 Gross
premium tax on fire insurance premiums
731.822 Prepayment
of tax due
731.824 Tax
on underwriting profits of wet marine and transportation insurers
731.828 Computation
of wet marine and transportation insurance tax
731.836 Limitation
on enforcement of insurer’s tax obligations
731.840 Retaliatory
or corporate excise tax in lieu of certain taxes; certain local taxes
prohibited
731.841 Conditions
under which local authority to tax insurer is preempted
731.842 Adjustment
of amount to be prepaid for taxes; extension of time for payment; interest;
penalty for late payment
731.844 No
personal liability for paying invalid tax
RETALIATORY PROVISIONS
731.854 Retaliatory
tax
731.859 Applicability
of retaliatory provisions
MISCELLANEOUS
731.870 State
of emergency; effect upon insurance policies; rules
PENALTIES
731.988 Civil
penalties
731.992 Criminal
penalty
SHORT TITLE; PURPOSE AND CONSTRUCTION
731.004 Short title.
ORS chapters 731, 732, 733, 734, 735, 737, 742, 743, 743A, 744, 746, 748 and
750 may be cited as the Insurance Code. [1967 c.359 §1; 1973 c.97 §1; 1975
c.769 §1]
731.008 Purpose of Insurance Code.
The Legislative Assembly declares that the Insurance Code is for the protection
of the insurance-buying public. [Formerly 736.003]
731.010
[Repealed by 1965 c.241 §3]
731.012 Effect of federal law.
The Insurance Code shall regulate the business of insurance and every person
engaged therein in accordance with the intent of Congress as expressed in the
Act of March 9, 1945, as amended (Public Law 15, 79th Congress, 15 U.S.C. 1011
to 1014) which states in part that no Act of Congress shall be construed to
invalidate, impair or supersede any law enacted by any state for the purpose of
regulating the business of insurance, or which imposes a fee or tax upon such
business, unless such Act specifically relates to the business of insurance. [1967
c.359 §3]
731.016 Construction of Insurance Code.
The Insurance Code shall be liberally construed and shall be administered and
enforced by the Director of the Department of Consumer and Business Services to
give effect to the policy stated in ORS 731.008. [1967 c.359 §4]
731.020
[Repealed by 1965 c.241 §3]
APPLICATION OF INSURANCE CODE
731.022 Compliance with Insurance Code
required. No person shall transact insurance in this
state or relative to a domestic risk without complying with the applicable
provisions of the Insurance Code. [1967 c.359 §5]
731.026 Application of Insurance Code to
particular insurers. The Insurance Code applies to:
(1)
A fraternal benefit society complying with ORS chapter 748, only as provided in
such chapter.
(2)
A health care service contractor complying with ORS 750.005 to 750.095, only as
provided in such sections.
(3)
A legal expense organization complying with ORS 750.505 to 750.715, only as
provided in such sections.
(4)
A multiple employer welfare arrangement complying with ORS 750.301 to 750.341,
only as provided in such sections. [1967 c.359 §6; 1971 c.425 §1; 1973 c.97 §2;
1975 c.769 §2; 1989 c.331 §23; 1993 c.265 §2; 1993 c.615 §26; 2005 c.31 §6]
731.028 Applicability of certain Insurance
Code provisions to State Accident Insurance Fund Corporation.
(1) The State Accident Insurance Fund Corporation is subject as a domestic
insurer to ORS 731.248, 731.252, 731.256, 731.258, 731.260, 731.296 to 731.316,
731.488, 731.574, 731.592, 731.594, 731.730, 731.731, 731.735, 731.737,
731.870, 731.988, 731.992, 733.010 to 733.060, 733.140 to 733.170, 733.210,
737.205, 737.215, 737.225, 737.235 to 737.340, 737.505 and 737.560, ORS
chapters 742, 743, 743A and 744 and ORS 746.015, 746.075, 746.110, 746.145 to
746.155, 746.230 and 746.240. However:
(a)
The requirements of the Director of the Department of Consumer and Business
Services under ORS 733.010 to 733.060, 733.140 to 733.170 and 733.210 govern in
the case of a conflict between those requirements and the requirements of any
accounting system prescribed by the Oregon Department of Administrative
Services.
(b)
The filing requirements of ORS 737.205 to 737.340, 737.505 and 737.560 are in
lieu of any similar filing requirements prescribed by any other law of this
state.
(c)
The requirements of ORS chapters 743 and 743A are applicable only with respect
to excess workers’ compensation insurance furnished by the corporation.
(d)
The provisions of ORS chapter 744 apply only with respect to the regulation of
insurance producers.
(e)
For each year that the Secretary of State conducts an audit of the State
Accident Insurance Fund Corporation under ORS 297.210, the director may accept
the audit and a copy of the Secretary of State’s audit report in lieu of the
requirements of ORS 731.488 if the director determines that the purposes of ORS
731.488 are adequately served by the Secretary of State’s audit and report. The
Secretary of State shall file a copy of its audit report of the State Accident
Insurance Fund Corporation with the director.
(2)
The provisions of subsection (1) of this section govern in the case of a
conflict between those provisions and the provisions of ORS chapter 656 that
apply only to the State Accident Insurance Fund Corporation. [1971 c.385 §2;
1977 c.405 §5; 1979 c.815 §7; 1979 c.829 §7; 1987 c.884 §4; 1989 c.701 §69;
1991 c.340 §1; 1991 c.401 §31; 1993 c.447 §116; 1995 c.79 §356; 1999 c.633 §5;
2003 c.364 §63; 2003 c.689 §1; 2008 c.22 §3]
731.030
[Repealed by 1965 c.241 §3]
731.032 [1967
c.359 §7; 1971 c.69 §1; 1971 c.538 §1; 1979 c.848 §1; 1993 c.265 §3; repealed
by 2003 c.802 §173]
731.036 Persons completely exempt from
application of Insurance Code. Except as
provided in ORS 743.061 or as specifically provided by law, the Insurance Code
does not apply to any of the following to the extent of the subject matter of
the exemption:
(1)
A bail bondsman, other than a corporate surety and its agents.
(2)
A fraternal benefit society that has maintained lodges in this state and other
states for 50 years prior to January 1, 1961, and for which a certificate of
authority was not required on that date.
(3)
A religious organization providing insurance benefits only to its employees, if
the organization is in existence and exempt from taxation under section
501(c)(3) of the federal Internal Revenue Code on September 13, 1975.
(4)
Public bodies, as defined in ORS 30.260, that either individually or jointly
establish a self-insurance program for tort liability in accordance with ORS
30.282.
(5)
Public bodies, as defined in ORS 30.260, that either individually or jointly
establish a self-insurance program for property damage in accordance with ORS
30.282.
(6)
Cities, counties, school districts, community college districts, community
college service districts or districts, as defined in ORS 198.010 and 198.180,
that either individually or jointly insure for health insurance coverage,
excluding disability insurance, their employees or retired employees, or their
dependents, or students engaged in school activities, or combination of
employees and dependents, with or without employee or student contributions, if
all of the following conditions are met:
(a)
The individual or jointly self-insured program meets the following minimum
requirements:
(A)
In the case of a school district, community college district or community
college service district, the number of covered employees and dependents and
retired employees and dependents aggregates at least 500 individuals;
(B)
In the case of an individual public body program other than a school district,
community college district or community college service district, the number of
covered employees and dependents and retired employees and dependents
aggregates at least 500 individuals; and
(C)
In the case of a joint program of two or more public bodies, the number of
covered employees and dependents and retired employees and dependents
aggregates at least 1,000 individuals;
(b)
The individual or jointly self-insured health insurance program includes all
coverages and benefits required of group health insurance policies under ORS
chapters 743 and 743A;
(c)
The individual or jointly self-insured program must have program documents that
define program benefits and administration;
(d)
Enrollees must be provided copies of summary plan descriptions including:
(A)
Written general information about services provided, access to services,
charges and scheduling applicable to each enrollee’s coverage;
(B)
The program’s grievance and appeal process; and
(C)
Other group health plan enrollee rights, disclosure or written procedure
requirements established under ORS chapters 743 and 743A;
(e)
The financial administration of an individual or jointly self-insured program
must include the following requirements:
(A)
Program contributions and reserves must be held in separate accounts and used
for the exclusive benefit of the program;
(B)
The program must maintain adequate reserves. Reserves may be invested in accordance
with the provisions of ORS chapter 293. Reserve adequacy must be calculated
annually with proper actuarial calculations including the following:
(i)
Known claims, paid and outstanding;
(ii)
A history of incurred but not reported claims;
(iii)
Claims handling expenses;
(iv)
Unearned contributions; and
(v)
A claims trend factor; and
(C)
The program must maintain adequate reinsurance against the risk of economic
loss in accordance with the provisions of ORS 742.065 unless the program has
received written approval for an alternative arrangement for protection against
economic loss from the Director of the Department of Consumer and Business
Services;
(f)
The individual or jointly self-insured program must have sufficient personnel
to service the employee benefit program or must contract with a third party
administrator licensed under ORS chapter 744 as a third party administrator to
provide such services;
(g)
The individual or jointly self-insured program shall be subject to assessment
in accordance with ORS 735.614 and former enrollees shall be eligible for
portability coverage in accordance with ORS 735.616;
(h)
The public body, or the program administrator in the case of a joint insurance
program of two or more public bodies, files with the Director of the Department
of Consumer and Business Services copies of all documents creating and
governing the program, all forms used to communicate the coverage to
beneficiaries, the schedule of payments established to support the program and,
annually, a financial report showing the total incurred cost of the program for
the preceding year. A copy of the annual audit required by ORS 297.425 may be
used to satisfy the financial report filing requirement; and
(i)
Each public body in a joint insurance program is liable only to its own
employees and no others for benefits under the program in the event, and to the
extent, that no further funds, including funds from insurance policies obtained
by the pool, are available in the joint insurance pool.
(7)
All ambulance services.
(8)
A person providing any of the services described in this subsection. The
exemption under this subsection does not apply to an authorized insurer
providing such services under an insurance policy. This subsection applies to
the following services:
(a)
Towing service.
(b)
Emergency road service, which means adjustment, repair or replacement of the
equipment, tires or mechanical parts of a motor vehicle in order to permit the
motor vehicle to be operated under its own power.
(c)
Transportation and arrangements for the transportation of human remains,
including all necessary and appropriate preparations for and actual
transportation provided to return a decedent’s remains from the decedent’s
place of death to a location designated by a person with valid legal authority
under ORS 97.130.
(9)(a)
A person described in this subsection who, in an agreement to lease or to
finance the purchase of a motor vehicle, agrees to waive for no additional
charge the amount specified in paragraph (b) of this subsection upon total loss
of the motor vehicle because of physical damage, theft or other occurrence, as
specified in the agreement. The exemption established in this subsection
applies to the following persons:
(A)
The seller of the motor vehicle, if the sale is made pursuant to a motor
vehicle retail installment contract.
(B)
The lessor of the motor vehicle.
(C)
The lender who finances the purchase of the motor vehicle.
(D)
The assignee of a person described in this paragraph.
(b)
The amount waived pursuant to the agreement shall be the difference, or portion
thereof, between the amount received by the seller, lessor, lender or assignee,
as applicable, that represents the actual cash value of the motor vehicle at
the date of loss, and the amount owed under the agreement.
(10)
A self-insurance program for tort liability or property damage that is
established by two or more affordable housing entities and that complies with
the same requirements that public bodies must meet under ORS 30.282 (6). As
used in this subsection:
(a)
“Affordable housing” means housing projects in which some of the dwelling units
may be purchased or rented, with or without government assistance, on a basis
that is affordable to individuals of low income.
(b)
“Affordable housing entity” means any of the following:
(A)
A housing authority created under the laws of this state or another
jurisdiction and any agency or instrumentality of a housing authority,
including but not limited to a legal entity created to conduct a self-insurance
program for housing authorities that complies with ORS 30.282 (6).
(B)
A nonprofit corporation that is engaged in providing affordable housing.
(C)
A partnership or limited liability company that is engaged in providing
affordable housing and that is affiliated with a housing authority described in
subparagraph (A) of this paragraph or a nonprofit corporation described in
subparagraph (B) of this paragraph if the housing authority or nonprofit
corporation:
(i)
Has, or has the right to acquire, a financial or ownership interest in the
partnership or limited liability company;
(ii)
Has the power to direct the management or policies of the partnership or
limited liability company;
(iii)
Has entered into a contract to lease, manage or operate the affordable housing
owned by the partnership or limited liability company; or
(iv)
Has any other material relationship with the partnership or limited liability
company.
(11)
A community-based health care initiative approved by the Administrator of the
Office for Oregon Health Policy and Research under ORS 735.723 operating a
community-based health care improvement program approved by the administrator.
(12)
Except as provided in ORS 735.500 and 735.510, a person certified by the
Department of Consumer and Business Services to operate a retainer medical
practice. [1967 c.359 §8; 1975 c.314 §1; 1977 c.428 §4; 1981 c.891 §1; 1985
c.811 §1; 1987 c.97 §1; 1987 c.288 §1; 1991 c.958 §2; 1993 c.265 §4; 1995 c.79 §357;
1995 c.582 §1; 1995 c.629 §1; 1997 c.795 §3; 1999 c.502 §4; 2003 c.342 §1; 2005
c.175 §1; 2007 c.174 §1; 2007 c.826 §1; 2009 c.244 §1; 2009 c.470 §5; 2009
c.867 §48; 2011 c.9 §90; 2011 c.130 §6; 2011 c.499 §4]
731.038 Application of Insurance Code to
charitable organizations that issue charitable gift annuities.
(1) As used in this section:
(a)
“Charitable gift annuity” has the meaning given that term in section 501(m)(5)
of the Internal Revenue Code, as amended and in effect on January 1, 2006.
(b)
“Charitable organization” means an organization to which contributions may be
made that are charitable contributions under section 170(c) of the Internal
Revenue Code, as amended and in effect on January 1, 2006.
(2)
The Insurance Code does not apply to a charitable organization that issues
charitable gift annuities if, on the date that the charitable organization
issues the charitable gift annuity, the charitable organization:
(a)
Has a minimum of $300,000 in net assets as shown by an annual audited financial
statement prepared by an independent certified public accountant and kept on
file by the charitable organization;
(b)
Except as provided in subsection (3) of this section, has been in continuous
operation for at least five years or is a successor to or an affiliate of a
charitable organization that has been in continuous operation for at least five
years; and
(c)
Maintains a separate and distinct trust fund as a reserve fund adequate to meet
the future payments under all outstanding annuity agreements. The amount in the
reserve fund must be an amount no less than an amount computed on the basis of
the transfers to which it relates in accordance with the standard of valuation
based on current mortality tables and interest rate recommended by a national
organization organized for the purpose of providing educational and other
services to American charities regarding gift annuities and other forms of
planned gifts. The reserve fund may include one or more single premium
annuities that pay the entire amount of one or more charitable gift annuities issued
by the charitable organization if each single premium annuity is issued by an
authorized insurer that is also authorized to transact insurance in the state
in which the charitable organization has its principal office and in the state
in which the single premium annuity is issued.
(3)
The Insurance Code does not apply to an educational institution or nonprofit
corporation that issued a charitable gift annuity before January 1, 2006, under
a certificate of authority issued under ORS 731.704 (repealed in 2005).
(4)
When a charitable organization that is subject to subsection (2) of this
section enters into an agreement for a charitable gift annuity, the charitable
organization shall disclose in writing to the donor that the charitable gift
annuity is not issued by an insurance company, is not subject to regulation by
the State of Oregon and is not protected by an insurance guaranty association.
(5)
A charitable organization that is not subject to subsection (2) of this section
must hold a certificate of authority to issue charitable gift annuities. [2005
c.31 §2]
Note:
731.038 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 731 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
731.039 Requirements for certain
educational institutions or nonprofit corporations issuing charitable gift
annuities. ORS 731.038 (2)(a) and (b) does not
apply to an educational institution or nonprofit corporation that holds a certificate
of authority issued under ORS 731.704 (repealed in 2005) on the day before
January 1, 2006. An educational institution or nonprofit corporation subject to
this section shall keep on file an annual audited financial statement prepared
by an independent certified public accountant. [2005 c.31 §3]
Note:
731.039 was enacted into law by the Legislative Assembly but was not added to
or made a part of ORS chapter 731 or any series therein by legislative action.
See Preface to Oregon Revised Statutes for further explanation.
731.040
[Repealed by 1965 c.241 §3]
731.042 Certificate of exemption;
application of certain Insurance Code provisions to exempt insurers.
(1) An exempt insurer who holds a certificate of exemption issued by the
Director of the Department of Consumer and Business Services before January 1,
2003, may continue transacting insurance.
(2)
In order to continue a certificate of exemption, an exempt insurer to whom
subsection (1) of this section applies must file its annual statement and pay
the fees established by the director by March 1 of each year.
(3)
An exempt insurer shall be subject to ORS 731.296 to 731.316, 731.414, 731.418,
731.574, 731.988, 731.992, 733.010 to 733.115, 733.140 to 733.210, 743A.040,
746.075 and 746.110. [Formerly 736.020; 1979 c.870 §1; 1981 c.752 §15; 1989
c.413 §2; 2003 c.802 §174; 2005 c.22 §485]
731.046 Exemption of policies from
Securities Law. Any policy, other than a
variable annuity policy, whose form has been filed with and approved by the
Director of the Department of Consumer and Business Services is exempt from the
application of ORS 59.005 to 59.451, 59.710 to 59.830, 59.991 and 59.995, and
the marketing of such policy is likewise exempt. [1967 c.359 §10; 2007 c.393 §2]
731.050
[Repealed by 1965 c.241 §3]
DEFINITIONS GENERALLY
731.052 Insurance Code definitions.
Except where the context otherwise requires, the definitions given in the
Insurance Code govern its construction. [1967 c.359 §11]
731.056 “Action.”
“Action” means any action, suit or legal proceeding. [1967 c.359 §12]
731.060
[Repealed by 1965 c.241 §3]
731.062 [1967
c.359 §13; 1991 c.810 §1; 2001 c.191 §20; 2003 c.364 §1; renumbered 731.104 in
2003]
731.066 “Authorized,” “unauthorized”
insurer. (1) An “authorized” insurer is one
authorized by a subsisting certificate of authority to transact insurance in
this state.
(2)
An “unauthorized” insurer is one not so authorized. [1967 c.359 §14]
731.069 “Certificate,” “certificate
holder.” (1) “Certificate” means a written
statement evidencing the coverage of a person insured under a group insurance
policy.
(2)
“Certificate holder” means an employee or member of a group insured under a
group insurance policy. [1981 c.752 §11]
731.070
[Repealed by 1965 c.241 §3]
731.072 “Certificate of authority,” “license.”
(1) A “certificate of authority” is one issued by the Director of the
Department of Consumer and Business Services pursuant to the Insurance Code
evidencing the authority of an insurer to transact insurance in this state.
(2)
A “license” is authority granted by the director pursuant to the Insurance Code
for the licensee to engage in a business or operation of insurance in this
state other than as an insurer, and the certificate by which such authority is
evidenced. [1967 c.359 §15]
731.074 “Commercial liability insurance.”
(1) “Commercial liability insurance” means insurance for a business,
professional, nonprofit or governmental entity against legal, contractual or
assumed liability for death, injury or disability of any human, or for damage
to property, arising out of acts or omissions in the course of the conduct of
the entity.
(2)
“Commercial liability insurance” does not include the following lines of
insurance or classes of business:
(a)
Marine and transportation insurance;
(b)
Wet marine and transportation insurance;
(c)
FAIR plans and automobile assigned risk insurance;
(d)
Workers’ compensation and employers’ liability insurance;
(e)
Nuclear liability insurance;
(f)
Fidelity and surety insurance;
(g)
Hazardous waste and environmental impairment insurance;
(h)
Aviation insurance; or
(i)
Commercial automobile insurance.
(3)
As used in this section, “commercial automobile” means a four wheel passenger
or station wagon type of vehicle used as a public or private conveyance,
including a motor vehicle of the utility, pickup, sedan delivery or panel truck
type used for wholesale or retail delivery, and a farm truck. [1987 c.774 §32]
Note:
731.074 was added to and made a part of the Insurance Code but was not added to
ORS chapter 731 or any series therein by legislative action. See Preface to
Oregon Revised Statutes for further explanation.
731.075 “Covered life.”
“Covered life” means a subscriber, policyholder, certificate holder, spouse,
dependent child or any other individual insured under an insurance policy or
whose benefits are administered by a third party administrator licensed under
ORS 744.702. [2009 c.595 §1194]
Note:
731.075 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 731 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
731.076 “Department,” “director.”
(1) “Department” means the Department of Consumer and Business Services.
(2)
“Director” means the Director of the Department of Consumer and Business
Services. [1967 c.359 §16; 1987 c.373 §76; 1993 c.744 §28]
731.080
[Repealed by 1965 c.241 §3]
731.082 “Domestic,” “foreign,” “alien”
insurer. (1) “Domestic insurer” means an insurer
formed under the laws of this state.
(2)
“Foreign insurer” means an insurer formed under the laws of a state other than
this state.
(3)
“Alien insurer” means an insurer formed under the laws of any country other
than the United States of America or a state thereof. [1967 c.359 §17]
731.086 “Domestic risk.”
“Domestic risk” means a subject of insurance resident, located or to be
performed in this state. [1967 c.359 §18]
731.090
[Repealed by 1965 c.241 §3]
731.092 “Domicile.”
The “domicile” of an insurer means:
(1)
As to insurers formed under the laws of Canada or any province thereof, the
province in which the insurer’s head office is located.
(2)
As to other alien insurers, as provided in ORS 731.096.
(3)
As to all other insurers, the state under the laws of which the insurer was
formed or, if the insurer has been redomesticated to another state, the state
to which it has been redomesticated. [1967 c.359 §19; 1995 c.639 §13]
731.096 “Domicile of alien insurer.”
(1) The domicile of an alien insurer, other than insurers formed under the laws
of Canada or a province thereof, shall be that state designated by the insurer
in writing filed with the Director of the Department of Consumer and Business
Services at time of admission to this state or before January 1, 1962, whichever
date is the later, and may be any one of the following states:
(a)
The state in which the insurer was first authorized to transact insurance;
(b)
The state in which is located the insurer’s principal place of business in the
United States; or
(c)
The state in which is held the largest deposit of assets of the insurer in
trust for the protection of its policyholders and creditors in the United
States.
(2)
If the insurer makes no such designation its domicile shall be deemed to be
that state in which is located its principal place of business in the United
States. [Formerly 736.240]
731.099 “Independently procured insurance.”
“Independently procured insurance” means insurance procured directly by an
insured from a nonadmitted insurer as defined in ORS 735.405. [2011 c.660 §2]
Note:
731.099 was added to and made a part of ORS chapter 731 by legislative action
but was not added to any smaller series therein. See Preface to Oregon Revised
Statutes for further explanation.
731.100
[Repealed by 1965 c.241 §3]
731.102 “Insurance.”
(1) “Insurance” means a contract whereby one undertakes to indemnify another or
pay or allow a specified or ascertainable amount or benefit upon determinable
risk contingencies.
(2)
“Insurance” so defined includes annuities.
(3)
“Insurance” so defined includes a contract under which one other than a
manufacturer, builder, seller or lessor of the subject property undertakes to
perform or provide, for a fixed term and consideration, repair or replacement
service or indemnification therefor for the operational or structural failure
of specified real or personal property or property components.
Insurance does not include contracts
with a telecommunications utility as defined in ORS 759.005, for repair,
replacement or maintenance of customer-owned inside wiring. [1967 c.359 §21;
1981 c.247 §1; 1985 c.633 §5; 1987 c.447 §111]
731.104 “Insurance producer.”
“Insurance producer” means a person 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:
(a)
Sells insurance; or
(b)
Obtains insurance from insurers for purchasers.
(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. [Formerly
731.062]
731.106 “Insurer.”
“Insurer” includes every person engaged in the business of entering into
policies of insurance. [1967 c.359 §22]
731.110
[Repealed by 1965 c.241 §3]
731.112 “Judgment.”
“Judgment” includes a final order. [1967 c.359 §23; 2003 c.576 §553]
731.116 “Person.”
“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.
[1967 c.359 §24; 1983 c.327 §12; 2001 c.191 §21]
731.120
[Repealed by 1965 c.241 §3]
731.122 “Policy.”
“Policy” means the written contract or written agreement for or effecting
insurance, by whatever name called, and includes all clauses, riders,
indorsements and papers which are a part thereof and annuities. [1967 c.359 §25]
731.126 “Reinsurance.”
“Reinsurance” means a contract under which an originating insurer, called the “ceding”
insurer, procures insurance for itself in another insurer, called the “assuming”
insurer or the “reinsurer,” with respect to part or all of an insurance risk of
the originating insurer. [1967 c.359 §26]
731.130
[Repealed by 1965 c.241 §3]
731.132 “Required capitalization.”
“Required capitalization” means the minimum combined paid-up capital and
surplus required by the Insurance Code of a stock insurer, or the minimum
surplus so required of an insurer without capital stock. [1967 c.359 §27]
731.136 “State.”
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. [1967 c.359 §28; 2001 c.191 §22]
731.140
[Repealed by 1965 c.241 §3]
731.142 “Stock,” “mutual” and “reciprocal”
insurer. (1) “Stock insurer” means an
incorporated insurer whose capital is divided into shares and owned by its
stockholders.
(2)
“Mutual insurer” means an incorporated insurer without capital stock and the
governing body of which is elected by its policyholders. This definition does
not exclude as a “mutual insurer” a foreign insurer found by the Director of
the Department of Consumer and Business Services to be organized on the mutual
plan under the laws of its domicile, but having temporary share capital or
providing for election of the insurer’s governing body on a reasonable basis by
policyholders and others.
(3)
“Reciprocal insurer” means an unincorporated aggregation of persons known as “subscribers,”
operating individually and collectively through an attorney in fact common to
all such persons, interexchanging among themselves reciprocal agreements of
indemnity. [1967 c.359 §29]
731.144 “Surplus lines insurance.”
“Surplus lines insurance” means any insurance on an Oregon home state risk,
permitted to be placed through a surplus lines licensee with a nonadmitted
insurer eligible to accept such insurance, other than reinsurance, wet marine
and transportation insurance, independently procured insurance, life insurance
and health insurance and annuities. For purposes of this section, “home state”
has the meaning given that term in ORS 735.405. [1987 c.774 §113; 1991 c.810 §24;
2011 c.660 §20]
Note:
731.144 was added to and made a part of ORS chapter 731 but was not added to
any smaller series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.
731.146 “Transact insurance.”
(1) “Transact insurance” means one or more of the following acts effected by
mail or otherwise:
(a)
Making or proposing to make an insurance contract.
(b)
Taking or receiving any application for insurance.
(c)
Receiving or collecting any premium, commission, membership fee, assessment,
due or other consideration for any insurance or any part thereof.
(d)
Issuing or delivering policies of insurance.
(e)
Directly or indirectly acting as an insurance producer for, or otherwise
representing or aiding on behalf of another, any person in the solicitation,
negotiation, procurement or effectuation of insurance or renewals thereof, the
dissemination of information as to coverage or rates, the forwarding of
applications, the delivering of policies, the inspection of risks, the fixing
of rates, the investigation or adjustment of claims or losses, the transaction
of matters subsequent to effectuation of the policy and arising out of it, or
in any other manner representing or assisting a person with respect to
insurance.
(f)
Advertising locally or circularizing therein without regard for the source of
such circularization, whenever such advertising or circularization is for the
purpose of solicitation of insurance business.
(g)
Doing any other kind of business specifically recognized as constituting the
doing of an insurance business within the meaning of the Insurance Code.
(h)
Doing or proposing to do any insurance business in substance equivalent to any
of paragraphs (a) to (g) of this subsection in a manner designed to evade the
provisions of the Insurance Code.
(2)
Subsection (1) of this section does not include, apply to or affect the
following:
(a)
Making investments within a state by an insurer not admitted or authorized to
do business within such state.
(b)
Except as provided in ORS 743.015, doing or proposing to do any insurance
business arising out of a policy of group life insurance or a policy of blanket
health insurance, if the master policy was validly issued to cover a group
organized primarily for purposes other than the procurement of insurance and
was delivered in and pursuant to the laws of another state in which:
(A)
The insurer was authorized to do an insurance business;
(B)
The policyholder is domiciled or otherwise has a bona fide situs; and
(C)
With respect to a policy of blanket health insurance, the policy was approved
by the director of such state.
(c)
Except as provided in ORS 743.015, doing or proposing to do any insurance
business arising out of a policy of group health insurance, if the master
policy was validly issued to cover an employer group other than an association,
trust or multiple employer welfare arrangement and was delivered in and
pursuant to the laws of another state in which:
(A)
The insurer was authorized to do an insurance business; and
(B)
The policyholder is domiciled or otherwise has a bona fide situs.
(d)
Investigating, settling, or litigating claims under policies lawfully written
within a state, or liquidating assets and liabilities, all resulting from the
insurer’s former authorized operations within such state.
(e)
Transactions within a state under a policy subsequent to its issuance if the
policy was lawfully solicited, written and delivered outside the state and did
not cover a subject of insurance resident, located or to be performed in the
state when issued.
(f)
The continuation and servicing of life or health insurance policies remaining
in force on residents of a state if the insurer has withdrawn from such state
and is not transacting new insurance therein.
(3)
If mail is used, an act shall be deemed to take place at the point where the
matter transmitted by mail is delivered and takes effect. [1967 c.359 §30; 1971
c.231 §10; 1989 c.784 §4; 2003 c.364 §64; 2007 c.752 §1]
Note: The
amendments to 731.146 by section 6, chapter 752, Oregon Laws 2007, become
operative January 2, 2014. See section 13, chapter 752, Oregon Laws 2007, as
amended by section 4, chapter 81, Oregon Laws 2010, and section 10, chapter
500, Oregon Laws 2011. The text that is operative on and after January 2, 2014,
is set forth for the user’s convenience.
731.146. (1) “Transact
insurance” means one or more of the following acts effected by mail or
otherwise:
(a)
Making or proposing to make an insurance contract.
(b)
Taking or receiving any application for insurance.
(c)
Receiving or collecting any premium, commission, membership fee, assessment,
due or other consideration for any insurance or any part thereof.
(d)
Issuing or delivering policies of insurance.
(e)
Directly or indirectly acting as an insurance producer for, or otherwise
representing or aiding on behalf of another, any person in the solicitation,
negotiation, procurement or effectuation of insurance or renewals thereof, the
dissemination of information as to coverage or rates, the forwarding of
applications, the delivering of policies, the inspection of risks, the fixing
of rates, the investigation or adjustment of claims or losses, the transaction
of matters subsequent to effectuation of the policy and arising out of it, or
in any other manner representing or assisting a person with respect to
insurance.
(f)
Advertising locally or circularizing therein without regard for the source of
such circularization, whenever such advertising or circularization is for the
purpose of solicitation of insurance business.
(g)
Doing any other kind of business specifically recognized as constituting the
doing of an insurance business within the meaning of the Insurance Code.
(h)
Doing or proposing to do any insurance business in substance equivalent to any
of paragraphs (a) to (g) of this subsection in a manner designed to evade the
provisions of the Insurance Code.
(2)
Subsection (1) of this section does not include, apply to or affect the
following:
(a)
Making investments within a state by an insurer not admitted or authorized to
do business within such state.
(b)
Except as provided in ORS 743.015, doing or proposing to do any insurance
business arising out of a policy of group life insurance or group health insurance,
or both, or a policy of blanket health insurance, if the master policy was
validly issued to cover a group organized primarily for purposes other than the
procurement of insurance and was delivered in and pursuant to the laws of
another state in which:
(A)
The insurer was authorized to do an insurance business;
(B)
The policyholder is domiciled or otherwise has a bona fide situs; and
(C)
With respect to a policy of blanket health insurance, the policy was approved
by the director of such state.
(c)
Investigating, settling, or litigating claims under policies lawfully written
within a state, or liquidating assets and liabilities, all resulting from the
insurer’s former authorized operations within such state.
(d)
Transactions within a state under a policy subsequent to its issuance if the
policy was lawfully solicited, written and delivered outside the state and did
not cover a subject of insurance resident, located or to be performed in the
state when issued.
(e)
The continuation and servicing of life or health insurance policies remaining
in force on residents of a state if the insurer has withdrawn from such state
and is not transacting new insurance therein.
(3)
If mail is used, an act shall be deemed to take place at the point where the
matter transmitted by mail is delivered and takes effect.
CLASSES OF INSURANCE DEFINED
731.150 Definitions of classes of insurance
not mutually exclusive. It is intended that certain
insurance coverages may come within the definitions of two or more classes of
insurance as defined in the Insurance Code, and the inclusion of such coverage
within one definition shall not exclude it as to any other class of insurance
within the definition of which such coverage is likewise reasonably includable.
[1967 c.359 §32]
731.154 “Annuity.”
(1) “Annuity” or “annuity policy” means any agreement to make periodic
payments, whether fixed or variable in amount, where the making of all or some
of such payments, or the amount of any such payment, is dependent upon the
continuance of human life, except payments made pursuant to the settlement
provisions of a life insurance policy, and includes additional benefits
operating to safeguard the policy from lapse or to provide a special surrender
value or special benefit or annuity in the event of total and permanent
disability of the annuitant.
(2)
“Annuity” does not include a charitable remainder annuity trust or a charitable
remainder unitrust as defined in section 664(d) of the Internal Revenue Code. [1967
c.359 §33; 1993 c.377 §1]
731.156 “Variable life insurance”; “variable
annuity.” “Variable life insurance” and “variable
annuity” mean those forms of life insurance or annuity benefits, respectively,
which vary according to the investment experience of a separate account or accounts
maintained by the insurer with respect to policies providing such benefits. For
convenience, reference to “variable life insurance” in the Insurance Code
includes variable life insurance and variable annuities as defined in this
section, except if the inclusion of variable annuities obviously is
inapplicable or if the context requires, or the Insurance Code provides,
otherwise. [1973 c.435 §2]
731.158 “Casualty insurance.”
“Casualty insurance” means:
(1)
Insurance against legal, contractual or assumed liability for death, injury or
disability of any human, or for damage to property; and provision for medical,
hospital, surgical and disability benefits to injured persons including
insurance against the risk of economic loss assumed under a less than fully
insured employee health benefit plan and funeral and death benefits to
dependents, beneficiaries or personal representatives of persons killed,
irrespective of legal liability of the insured, when issued as coverage for
personal injury protection benefits under a motor vehicle liability policy or
as an incidental coverage with or supplemental to liability insurance;
(2)
Motor vehicle physical damage, burglary and theft, glass, boiler and machinery,
credit and livestock insurance;
(3)
Insurance of the obligations accepted by, imposed upon or assumed by employers
under law for death, disablement or occupational diseases of employees;
(4)
Insurance which undertakes to perform or provide repair or replacement service
or indemnification therefor for the operational or structural failure of
specified real or personal property or property components; and
(5)
Insurance against any other kind of loss, damage or liability properly a
subject of insurance and not within any other class of insurance otherwise defined,
if such insurance is not disapproved by the Director of the Department of
Consumer and Business Services as being contrary to law or public policy. [1967
c.359 §34; 1981 c.247 §2; 1993 c.649 §5; 2007 c.241 §22]
731.162 “Health insurance.”
“Health insurance” means insurance of humans against bodily injury, disablement
or death by accident or accidental means, or the expense thereof, or against
disablement or expense resulting from sickness or childbirth, or against
expense incurred in prevention of sickness, in dental care or optometrical
service, and every insurance appertaining thereto, including insurance against
the risk of economic loss assumed under a less than fully insured employee
health benefit plan. “Health insurance” does not include workers’ compensation
coverages. [1967 c.359 §35; 1993 c.649 §6]
731.164 “Home protection insurance,” “home
protection insurer.” (1)(a) “Home protection
insurance” means that part of casualty insurance that includes only insurance
which undertakes to perform or provide repair or replacement service or
indemnification therefor for the operational or structural failure of the
insured home, components of the home or personal property relating to the home
or its components, and does not include protection against consequential damage
from the operational or structural failure.
(b)(A)
“Home protection insurance” does not include a home service agreement.
(B)
As used in this paragraph, “home service agreement” means a contract or
agreement for a specific limited duration to:
(i)
Service, repair or replace in an existing home the mechanical or appliance
system or the components that break down due to normal wear and tear or
inherent defects; or
(ii)
Provide incidental service, repair or replacement to cover leaks and failures
in roofing systems.
(c)
As used in this subsection, “home” means a single living unit or multiple
living units, including manufactured dwellings, used primarily as residences.
(2)
“Home protection insurer” means an insurer under policies of home protection
insurance, other than an insurer transacting other forms of casualty insurance
or any form of reinsurance. [1981 c.247 §4; 2003 c.283 §1]
731.166 “Industrial life insurance.”
“Industrial life insurance” means that form of life insurance written under
policies of face amount of $2,500 or less, under which premiums are payable
monthly or more often and the policy specifies it is an industrial life
insurance policy. [1967 c.359 §36]
731.170 “Life insurance”; includes
annuities. (1) “Life insurance” means insurance on
human lives and every insurance appertaining thereto and includes the granting
of endowment benefits, additional benefits in event of death or dismemberment
by accident or accidental means, additional benefits in event of the insured’s
or premium payer’s disability and optional modes of settlement of proceeds of
life insurance including annuity benefits payable under such a settlement
provision. “Life insurance” does not include workers’ compensation coverages.
(2)
For convenience, reference to “life insurance” in the Insurance Code includes
life insurance as defined in subsection (1) of this section and annuities as
defined in ORS 731.154, except if the inclusion of annuities obviously is
inapplicable or if the context requires, or the Insurance Code provides,
otherwise. [1967 c.359 §37]
731.174 “Marine and transportation
insurance.” “Marine and transportation insurance”
includes:
(1)
Insurance against any and all kinds of loss of or damage to:
(a)
Vessels, craft, aircraft, cars, automobiles and vehicles of every kind, as well
as all goods, freights, cargoes, merchandise, effects, disbursements, profits,
moneys, bullion, precious stones, securities, choses in action, evidences of
debt, valuable papers, bottomry and respondentia interests and all other kinds
of property and interests therein, in respect to, appertaining to or in
connection with any and all risks or perils of navigation, transit or
transportation, including war risks, on or under any seas or other waters, on land
or in the air, or while being assembled, packed, crated, baled, compressed or
similarly prepared for shipment or while awaiting the same or during any
delays, storage, transshipment, or reshipment incident thereto, including
marine builders’ risks, and all personal property floater risks including
bailees’ customers risks;
(b)
Person or to property in connection with or appertaining to a marine, inland
marine, transit or transportation insurance, including liability for loss of or
damage to either, arising out of or in connection with the construction,
repair, operation, maintenance or use of the subject matter of such insurance
(but not including life insurance or surety bonds nor insurance against loss by
reason of bodily injury to the person arising out of the ownership, maintenance
or use of automobiles);
(c)
Precious stones, jewels, jewelry, gold, silver and other precious metals,
whether used in business or trade or otherwise and whether the same is in
course of transportation or otherwise; and
(d)
Bridges, tunnels and other instrumentalities of transportation and
communication (excluding buildings, their furniture and furnishings, fixed
contents and supplies held in storage) unless fire, tornado, sprinkler leakage,
hail, explosion, earthquake, riot and civil commotion, or any of them, are the
only hazards to be covered; piers, wharves, docks, and slips, excluding the
risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot
and civil commotion or any of them; other aids to navigation and
transportation, including dry docks and marine railways, against all risks.
(2)
Marine protection and indemnity insurance meaning insurance against, or against
legal liability of the insured for, loss, damage or expense arising out of, or
incident to, the ownership, operation, chartering, maintenance, use, repair or
construction of any vessel, craft or instrumentality in use in ocean or inland
waterways, including liability of the insured for personal injury, illness or
death or for loss of or damage to the property of another person. [Formerly
745.005]
731.178 “Mortgage insurance.”
“Mortgage insurance” means insurance against financial loss by reason of:
(1)
Nonpayment of principal, interest and other sums agreed to be paid under the
terms of an obligation secured by a mortgage, deed of trust or other instrument
constituting a lien or charge on real or personal property; or
(2)
Nonpayment of rent and other sums agreed to be paid under the terms of a
written lease for the possession, use or occupancy of real property, such
insurance also being referred to in the Insurance Code as “lease insurance.” [1967
c.359 §39; 1969 c.692 §1]
731.182 “Property insurance.”
“Property insurance” means insurance on real or personal property of every kind
and of every interest therein, whether on land, water or in the air, against
loss or damage from any and all hazard or cause, and against consequential loss
from such loss or damage, other than noncontractual legal liability for loss or
damage. “Property insurance” does not include title insurance. [1967 c.359 §40]
731.186 “Surety insurance.”
“Surety insurance” means insurance guaranteeing the fidelity of persons holding
places of trust, the performance of duties, contracts, bonds and undertakings,
including the signing thereof as surety, and insuring the performance of
obligations of employers under workers’ compensation laws by surety bond. [1967
c.359 §41]
731.190 “Title insurance.”
“Title insurance” means insurance of owners of property or others having an interest
therein or liens or encumbrances thereon, against loss by encumbrance,
defective titles, invalidity or adverse claim to title. [1967 c.359 §42]
731.194 “Wet marine and transportation
insurance.” “Wet marine and transportation
insurance” is that part of marine and transportation insurance that includes
only:
(1)
Insurance upon vessels, crafts, hulls and of interests therein or with relation
thereto;
(2)
Insurance of marine builder’s risks, marine war risks and contracts referred to
in ORS 731.174 (2) or any replacement thereof;
(3)
Insurance of freights and disbursements pertaining to a subject of insurance
coming within this section;
(4)
Insurance of personal property and interests therein, in course of exportation
from or importation into any country, and in course of transportation coastwise
or on inland waters, including transportation by land, water, or air from point
of origin to final destination, in respect to, appertaining to or in connection
with, any and all risks or perils of navigation, transit or transportation, and
while being prepared for and while awaiting shipment, and during any delays,
storage, transshipment or reshipment incident thereto;
(5)
Insurance on operations of railroads engaged in transportation in interstate
commerce and their property used in such operations; and
(6)
Insurance of aircraft operated in scheduled interstate flight, or cargo of such
aircraft, or against this liability other than workers’ compensation and
employers’ liability arising out of the ownership, maintenance or use of such
aircraft. [1967 c.359 §43; 1987 c.774 §114]
731.204
[Formerly 736.495; repealed by 1987 c.373 §85]
731.208
[Formerly 736.500; repealed by 1987 c.373 §85]
731.212 [1967
c.359 §46; repealed by 1987 c.373 §85]
INSURANCE ADMINISTRATION
731.216 Administrative power of director.
The Director of the Department of Consumer and Business Services shall have the
power to:
(1)
Contract for and procure, on a fee or part-time basis, or both, such actuarial,
technical or other professional services as may be required for the discharge
of duties.
(2)
Obtain such other services as the director considers necessary or desirable,
including participation in organizations of state insurance supervisory
officials and appointment of advisory committees. A member of an advisory
committee so appointed shall receive no compensation for services as a member,
but, subject to any other applicable law regulating travel and other expenses
of state officers, shall receive actual and necessary travel and other expenses
incurred in the performance of official duties.
(3)
Establish within the Department of Consumer and Business Services a workers’
compensation rating bureau to provide rating information that is based upon and
relevant to activities conducted in this state, to enable the director to carry
out the provisions of ORS chapter 737. In lieu of creating a rating bureau
within the department, the director may contract with any rating organization
in other states if the director finds that such a contract would provide the
information required by this section. [Formerly 736.503; 1987 c.373 §77; 1987
c.884 §50; 2003 c.14 §445]
731.220
[Formerly 736.507; repealed by 1987 c.373 §85]
731.224 [1967
c.359 §49; repealed by 1987 c.373 §85]
731.228 Prohibited interests and rewards.
(1) No officer or employee of the Department of Consumer and Business Services
delegated responsibilities in the enforcement of the Insurance Code shall:
(a)
Be a director, officer, or employee of or be financially interested in any
person regulated by the department or office of the department that is
delegated responsibility in the enforcement of the Insurance Code, except as a
policyholder or claimant under an insurance policy or by reason of rights
vested in commissions, fees, or retirement benefits related to services
performed prior to affiliation with the department; or
(b)
Be engaged in any other business or occupation interfering with or inconsistent
with the duties of the office or employment.
(2)
No person shall directly or indirectly give or pay, or offer to give or pay, to
the Director of the Department of Consumer and Business Services, or any
officer or employee of the department, and the director or such officer or
employee shall not directly or indirectly solicit, receive or accept any fee,
compensation, loan, gift or other thing of value in addition to the
compensation and expense allowance provided by law, for:
(a)
Any service rendered or to be rendered as such director, officer or employee,
or in connection therewith;
(b)
Services rendered or to be rendered in relation to legislation;
(c)
Extra services rendered or to be rendered; or
(d)
Any cause whatsoever related to any person regulated by the department or
office of the department that is delegated responsibility in the enforcement of
the Insurance Code.
(3)
This section does not permit any conduct, affiliation or interest that is
otherwise prohibited by public policy. [1967 c.359 §50; 1987 c.373 §78]
731.232 Subpoena power.
(1) For the purpose of an investigation or proceeding under the Insurance Code,
the Director of the Department of Consumer and Business Services may administer
oaths and affirmations, subpoena witnesses, compel their attendance, take
evidence and require the production of books, papers, correspondence,
memoranda, agreements or other documents or records which the director
considers relevant or material to the inquiry. Each witness who appears before
the director under a subpoena shall receive the fees and mileage provided for witnesses
in ORS 44.415 (2).
(2)
If a person fails to comply with a subpoena so issued or a party or witness
refuses to testify on any matters, the judge of the circuit court for any
county, on the application of the director, shall compel obedience by proceedings
for contempt as in the case of disobedience of the requirements of a subpoena
issued from such court or a refusal to testify therein. [1967 c.359 §51; 1989
c.980 §22]
731.236 General powers and duties.
(1) The Director of the Department of Consumer and Business Services shall
enforce the provisions of the Insurance Code for the public good, and shall
execute the duties imposed by the code.
(2)
The director has the powers and authority expressly conferred by or reasonably
implied from the provisions of the Insurance Code.
(3)
The director may conduct such examinations and investigations of insurance
matters, in addition to examinations and investigations expressly authorized,
as the director considers proper to determine whether any person has violated
any provision of the Insurance Code or to secure information useful in the
lawful administration of any such provision. The cost of such additional
examinations and investigations shall be borne by the state.
(4)
The director has such additional powers and duties as may be provided by other
laws of this state. [1967 c.359 §52]
731.240 Hearings in general.
(1) The Director of the Department of Consumer and Business Services shall hold
a hearing upon written demand for a hearing by a person aggrieved by any act,
threatened act or failure of the director to act. The demand must state the
grounds therefor.
(2)
To the extent applicable and not inconsistent with subsection (1) of this
section, the provisions of ORS chapter 183 shall govern the hearing procedure
and any judicial review thereof. [1967 c.359 §53; 1991 c.401 §1]
731.244 Rules.
In accordance with the applicable provisions of ORS chapter 183, the Director
of the Department of Consumer and Business Services may make reasonable rules
necessary for or as an aid to the effectuation of the Insurance Code. No such
rule shall extend, modify or conflict with the Insurance Code or the reasonable
implications thereof. [1967 c.359 §54]
731.248 Orders.
(1) Orders of the Director of the Department of Consumer and Business Services
shall be effective only when in writing and signed by the director or by the
authority of the director. Orders shall be filed in the Department of Consumer
and Business Services.
(2)
Every such order shall state:
(a)
Its effective date;
(b)
Its intent or purpose;
(c)
The grounds on which based; and
(d)
The provisions of the Insurance Code pursuant to which action is taken or
proposed to be taken.
(3)
Except as may be provided in the Insurance Code respecting particular procedures,
an order or notice may be given by delivery to the person to be ordered or
notified or by mailing it by certified or registered mail, return receipt
requested, postage prepaid, addressed to the person at the residence or
principal place of business of the person as last of record in the department.
Notice so mailed shall be deemed to have been given when deposited in a letter
depository of a United States post office. [1967 c.359 §55]
731.252 Cease and desist orders.
(1) Whenever the Director of the Department of Consumer and Business Services
has reason to believe that any person has been engaged or is engaging or is
about to engage in any violation of the Insurance Code, the director may issue
an order, directed to such person, to discontinue or desist from such violation
or threatened violation. The copy of the order forwarded to the person involved
shall set forth a statement of the specific charges and the fact that the
person may request a hearing within 20 days of the date of mailing. Where a
hearing is requested, the director shall set a date for the hearing to be held
within 30 days after receipt of the request, and shall give the person involved
written notice of the hearing date at least seven days prior thereto. The
person requesting the hearing must establish to the satisfaction of the
director that such order should not be complied with. The order shall become
final 20 days after the date of mailing unless within such 20-day period the
person to whom it is directed files with the director a written request for a
hearing. To the extent applicable and not inconsistent with the foregoing, the
provisions of ORS chapter 183 shall govern the hearing procedure and any
judicial review thereof. Where the hearing has been requested, the director’s order
shall become final at such time as the right to further hearing or review has
expired or been exhausted.
(2)
No order of the director under this section or order of a court to enforce the
same shall in any way relieve or absolve any person affected by such order from
any liability under any other laws of this state.
(3)
The powers vested in the director pursuant to this section are supplementary
and not in lieu of any other powers to suspend or revoke certificates of
authority or licenses or to enforce any penalties, fines or forfeitures,
authorized by law with respect to any violation for which an order of
discontinuance has been issued. [Formerly 736.835]
731.256 Enforcement generally.
(1) The Director of the Department of Consumer and Business Services may
institute such actions or other lawful proceedings as the director may deem
necessary for the enforcement of any provision of the Insurance Code or any
order or action made or taken by the director in pursuance of law.
(2)
If the director has reason to believe that any person has violated any
provision of the Insurance Code or other law applicable to insurance
operations, for which criminal prosecution is provided and in the opinion of
the director would be in order, the director shall give the information
relative thereto to the Attorney General or district attorney having
jurisdiction of any such violation. The Attorney General or district attorney
promptly shall institute such action or proceedings against such person as the
information requires or justifies. [1967 c.359 §57]
731.258 Enforcement of orders and
decisions by Attorney General; filing, enforcement and effect of foreign
decrees. (1) The Attorney General upon request
of the Director of the Department of Consumer and Business Services may proceed
in the courts of this state or any reciprocal state to enforce an order or
decision in any court proceeding or in any administrative proceeding before the
director.
(2)
As used in this section:
(a)
“Reciprocal state” means any state the laws of which contain procedures
substantially similar to those specified in this section for the enforcement of
decrees or orders in equity issued by courts located in other states, against
any insurer incorporated or authorized to do business in such state.
(b)
“Foreign decree” means any decree or order in equity of a court located in a
reciprocal state, including a court of the United States located therein,
against any insurer incorporated or authorized to do business in this state.
(c)
“Qualified party” means a state regulatory agency acting in its capacity to
enforce the insurance laws of its state.
(3)
The Director of the Department of Consumer and Business Services of this state
shall determine which states qualify as reciprocal states and shall maintain at
all times an up-to-date list of such states.
(4)
A copy of any foreign decree authenticated in accordance with the statutes of
this state may be filed in the office of the clerk of any circuit court of this
state. The clerk, upon verifying with the director that the decree or order
qualifies as a foreign decree shall treat the foreign decree in the same manner
as a judgment of a circuit court of this state. A foreign decree so filed has
the same effect and shall be deemed as a judgment of a circuit court of this
state, and is subject to the same procedures, defenses and proceedings for
reopening, vacating, or staying as a judgment of a circuit court of this state
and may be enforced or satisfied in like manner.
(5)(a)
At the time of the filing of the foreign decree, the Attorney General shall
make and file with the clerk of the court an affidavit setting forth the name
and last-known post-office address of the defendant.
(b)
Promptly upon the filing of the foreign decree and the affidavit, the clerk
shall mail notice of the filing of the foreign decree to the defendant at the
address given and to the director of this state and shall make a note of the
mailing in the register of the court. In addition, the Attorney General may
mail a notice of the filing of the foreign decree to the defendant and to the
director of this state and may file proof of mailing with the clerk. Lack of
mailing notice of filing by the clerk shall not affect the enforcement
proceedings if proof of mailing by the Attorney General has been filed.
(c)
No execution or other process for enforcement of a foreign decree filed under
subsection (4) of this section shall issue until 30 days after the date the
decree is filed.
(6)(a)
If the defendant shows the circuit court that an appeal from the foreign decree
is pending or will be taken, or that a stay of execution has been granted, the
court shall stay enforcement of the foreign decree until the appeal is
concluded, the time for appeal expires, or the stay of execution expires or is
vacated, upon proof that the defendant has furnished the security for the
satisfaction of the decree required by the state in which it was rendered.
(b)
If the defendant shows the circuit court any ground upon which enforcement of a
judgment of any circuit court of this state would be stayed, the court shall
stay enforcement of the foreign decree for an appropriate period, upon
requiring the same security for satisfaction of the decree which is required in
this state for a judgment. [1969 c.336 §5; 2003 c.576 §219]
731.260 False or misleading filings.
No person shall file or cause to be filed with the Director of the Department
of Consumer and Business Services any article, certificate, report, statement,
application or any other information required or permitted to be so filed under
the Insurance Code and known to such person to be false or misleading in any
material respect. [Formerly 736.650]
731.264 Complaints and investigations
confidential; permitted disclosures; rules. (1) A
complaint made to the Director of the Department of Consumer and Business
Services against any person regulated by the Insurance Code, and the record
thereof, shall be confidential and may not be disclosed except as provided in
ORS 705.137. No such complaint, or the record thereof, shall be used in any
action, suit or proceeding except to the extent considered necessary by the
director in the prosecution of apparent violations of the Insurance Code or
other law.
(2)
Data gathered pursuant to an investigation by the director of a complaint shall
be confidential, may not be disclosed except as provided in ORS 705.137 and may
not be used in any action, suit or proceeding except to the extent considered
necessary by the director in the investigation or prosecution of apparent violations
of the Insurance Code or other law.
(3)
Notwithstanding subsections (1) and (2) of this section, the director shall
establish by rule a method for publishing an annual statistical report
containing the insurer’s name and the number, percentage, type and disposition
of complaints received by the Department of Consumer and Business Services
against each insurer transacting insurance within this state. [1967 c.359 §59;
1971 c.231 §11; 1987 c.481 §1; 1987 c.774 §149; 2001 c.377 §4]
731.268 Use of reproductions and certified
copies as evidence; fee. (1) Photographs or
microphotographs in the form of film or prints of documents and records made by
the Director of the Department of Consumer and Business Services for the files
of the director shall have the same force and effect as the originals thereof,
and duly certified or authenticated reproductions of such photographs or
microphotographs shall be as admissible in evidence as are the originals.
(2)
Upon request of any person and payment of the applicable fee, the director
shall furnish a certified copy of any record in the office of the director
which is then subject to public inspection.
(3)
Copies of original records or documents in the office of the director certified
by the director shall have the same force and effect and be received in
evidence in all courts equally and in like manner as if they were originals. [1967
c.359 §60]
731.272 Director’s annual reports; notice
of publication of report. (1) The Director of the
Department of Consumer and Business Services shall prepare annually, as soon
after March 1 as is consistent with full and accurate preparation, a report of
the official transactions of the director under the Insurance Code. The report
shall include:
(a)
In condensed form statements made to the director by every insurer authorized
to do business in this state.
(b)
A statement of all insurers authorized to do business in this state as of the
date of the report.
(c)
A list of insurers whose business in this state was terminated and the reason
for the termination. If the termination was a result of liquidation or
delinquency proceedings brought against the insurer in this or any other state,
the report shall include the amount of the insurer’s assets and liabilities so
far as those amounts are known to the director.
(d)
A statement of the operating expenses of the Department of Consumer and
Business Services under the Insurance Code, including salaries, transportation,
communication, printing, office supplies, fixed charges and miscellaneous
expenses.
(e)
A detailed statement of the moneys, fees and taxes received by the department
under the Insurance Code and from what source.
(f)
Any other pertinent information and matters as the director considers to be in
the public interest.
(2)
The director shall give notice of the publication of the report to:
(a)
The office of the Speaker of the House of Representatives;
(b)
The office of the President of the Senate; and
(c)
The chair or cochairs of the Joint Legislative Committee on Ways and Means if
the Legislative Assembly is in session or of the Emergency Board if during the
interim. [Formerly 736.520; 1987 c.373 §79; 2005 c.185 §8]
731.276 Recommendations for changes in
Insurance Code. The Director of the Department
of Consumer and Business Services shall continuously review the Insurance Code
and shall work with the Director of the Oregon Health Authority to review the
health insurance provisions of the Insurance Code and may, from time to time,
make recommendations for changes therein. [1967 c.359 §62; 2009 c.595 §1117]
731.280 Publications authorized.
The Director of the Department of Consumer and Business Services shall publish:
(1)
Pamphlet or booklet copies of the insurance laws of this state;
(2)
The director’s annual report;
(3)
Such copies of results of investigations or examinations of insurers for public
distribution as the director considers to be in the public interest;
(4)
Such compilations as the director considers advisable from time to time of the
general orders of the director then in force; and
(5)
Such other material as the director may compile and consider relevant and
suitable for the effective administration of the Insurance Code. [1967 c.359 §63]
731.282 Authority to sell publications.
The Director of the Department of Consumer and Business Services may sell, at a
price reasonably calculated to cover the costs of preparation, any of the
copies, compilations or materials described in ORS 731.280. [1971 c.231 §2;
1982 s.s.1 c.17 §3]
731.284 Distribution of insurance laws.
Copies of the insurance laws in pamphlet form may be sold by the Director of
the Department of Consumer and Business Services at a reasonable price. The
director may distribute free of charge one copy of such pamphlet to each of the
following:
(1)
Authorized insurers and licensed rating organizations;
(2)
Insurance departments of other states; and
(3)
Public agencies. However, the director may distribute such quantities to public
agencies as the director determines. [1967 c.359 §64; 2003 c.364 §65]
731.288 Recording complaints; director to
consider complaints before issuing licenses. The
Department of Consumer and Business Services shall record each complaint the
department receives, including the subsequent disposition of the complaint. The
record of a complaint shall be maintained for a period of not less than seven
years. The records of complaints shall be indexed whenever applicable both by
the name of the insurer and by the name of the insurance producer involved. The
Director of the Department of Consumer and Business Services shall consider
such complaints before issuing or continuing any certificate of authority or
license of an insurer or insurance producer named in such complaints. [Formerly
736.580; 2003 c.364 §66; 2003 c.802 §168]
731.292 Disposition of fees, charges,
taxes, penalties and other moneys. (1) Except as
provided in subsections (2), (3) and (4) of this section, all fees, charges and
other moneys received by the Department of Consumer and Business Services or
the Director of the Department of Consumer and Business Services under the
Insurance Code shall be deposited in the fund created by ORS 705.145 and are
continuously appropriated to the department for the payment of the expenses of
the department in carrying out the Insurance Code.
(2)
All taxes and penalties paid pursuant to the Insurance Code shall be paid to
the director and after deductions of refunds shall be paid by the director to
the State Treasurer, at the end of every calendar month or more often in the director’s
discretion, for deposit in the General Fund to become available for general
governmental expenses.
(3)
All premium taxes received by the director pursuant to ORS 731.820 shall be
paid by the director to the State Treasurer for deposit in the State Fire
Marshal Fund.
(4)
Assessments received by the department under ORS 743.951 and 743.961 and
penalties received by the department under ORS 743.990 and section 10, chapter
867, Oregon Laws 2009, shall be paid into the State Treasury and credited to
the Health System Fund established in section 1, chapter 867, Oregon Laws 2009,
after deducting the following amounts:
(a)
Amounts needed to reimburse the department for expenses in administering ORS
743.951 to 743.965 and 743.990; and
(b)
Amounts needed to reimburse the General Fund for reductions in revenue caused
by the effect of ORS 743.961 on the retaliatory tax imposed under ORS 731.854
and 731.859. [Formerly 736.525; 1981 c.652 §3; 1982 s.s.1 c.17 §1; 1987 c.373 §80;
1991 c.67 §193; 2009 c.867 §13; 2011 c.597 §296]
731.296 Director’s inquiries.
The Director of the Department of Consumer and Business Services may address
any proper inquiries to any insurer, licensee or its officers in relation to
its activities or condition or any other matter connected with its
transactions. Any such person so addressed shall promptly and truthfully reply
to such inquiries using the form of communication requested by the director.
The reply shall be verified by an officer of such person, if the director so
requires. A reply is subject to the provisions of ORS 731.260. [Formerly
736.542; 1975 c.298 §1]
731.300 Examination of insurers; when
required. (1) The Director of the Department of
Consumer and Business Services shall examine every authorized insurer, including
an audit of the financial affairs of such insurer, as often as the director
determines an examination to be necessary but at least once each five years. An
examination shall be conducted for the purpose of determining the financial
condition of the insurer, its ability to fulfill its obligations and its manner
of fulfillment, the nature of its operations and its compliance with the
Insurance Code. The director may also make such an examination of any surplus
lines insurance producer or any person holding the capital stock of an
authorized insurer or surplus lines insurance producer for the purpose of
controlling the management thereof as a voting trustee or otherwise, or both.
(2)
Instead of conducting an examination of an authorized foreign or alien insurer,
the director may accept an examination report on the insurer that is prepared
by the insurance department for the state of domicile or state of entry of the
insurer if:
(a)
At the time of the examination the insurance department of the state was accredited
under the Financial Regulation Standards and Accreditation Program or successor
program of the National Association of Insurance Commissioners; or
(b)
The examination was performed under the supervision of an accredited insurance
department or with the participation of one or more examiners who are employed
by such an accredited insurance department and who, after a review of the
examination work papers and report, state under oath that the examination was
performed in a manner consistent with the standards and procedures required by
their insurance department.
(3)
Examination of an alien insurer shall be limited to its insurance transactions,
assets, trust deposits and affairs in the United States except as otherwise
required by the director. [Formerly 736.545; 1979 c.870 §2; 1981 c.874 §18;
1990 c.2 §46; 1993 c.447 §1; 2003 c.364 §67]
731.302 Appointment of examiners;
retaining of appraisers, actuaries and others; evidentiary status of facts and
conclusions. (1) When the Director of the Department
of Consumer and Business Services determines that an examination should be
conducted, the director shall appoint one or more examiners to perform the
examination and instruct them as to the scope of the examination. In conducting
the examination, each examiner shall consider the guidelines and procedures in
the examiner handbook, or its successor publication, adopted by the National
Association of Insurance Commissioners. The director may prescribe the examiner
handbook or its successor publication and employ other guidelines and
procedures that the director determines to be appropriate.
(2)
When making an examination, the director may retain appraisers, independent
actuaries, independent certified public accountants or other professionals and
specialists as needed. The cost of retaining such professionals and specialists
shall be borne by the person that is the subject of the examination.
(3)
At any time during the course of an examination, the director may take other
action pursuant to the Insurance Code.
(4)
Facts determined and conclusions made pursuant to an examination shall be
presumptive evidence of the relevant facts and conclusions in any judicial or
administrative action. [1993 c.447 §2]
731.304 Investigation of persons
transacting insurance. The Director of the Department
of Consumer and Business Services, whenever the director deems it advisable in
the interest of policyholders or for the public good, shall investigate into
the affairs of any person engaged in, proposing to engage in or claiming or
advertising to engage in:
(1)
Transacting insurance in this state;
(2)
Organizing or receiving subscriptions for or disposing of the stock of or in
any manner taking part in the formation or business of an insurer; or
(3)
Holding capital stock of one or more insurers for the purpose of controlling
the management thereof as voting trustee or otherwise. [1967 c.359 §69]
731.308 Procedure at examination or
investigation; production of books and other records.
(1) Upon an examination or investigation the Director of the Department of
Consumer and Business Services may examine under oath all persons who may have
material information regarding the property or business of the person being
examined or investigated.
(2)
Every person being examined or investigated shall produce all books, records,
accounts, papers, documents and computer and other recordings in its possession
or control relating to the matter under examination or investigation,
including, in the case of an examination, the property, assets, business and
affairs of the person.
(3)
With regard to an examination, the officers, directors and agents of the person
being examined shall provide timely, convenient and free access at all
reasonable hours at the offices of the person being examined to all books,
records, accounts, papers, documents and computer and other recordings. The
officers, directors, employees and agents of the person must facilitate the
examination. [Formerly 736.555; 1993 c.447 §3]
731.312 Report of examination; review by
person examined; hearing; confidentiality of certain information and documents;
permitted disclosures. (1) Not later than the 60th day
after completion of an examination, the examiner in charge of the examination
shall submit to the Director of the Department of Consumer and Business
Services a full and true report of the examination, verified by the oath of the
examiner. The report shall comprise only facts appearing upon the books,
papers, records, accounts, documents or computer and other recordings of the
person, its agents or other persons being examined or facts ascertained from
testimony of individuals concerning the affairs of such person, together with
such conclusions and recommendations as reasonably may be warranted from such
facts.
(2)
The director shall make a copy of the report submitted under subsection (1) of
this section available to the person who is the subject of the examination and
shall give the person an opportunity to review and comment on the report. The
director may request additional information or meet with the person for the
purpose of resolving questions or obtaining additional information, and may
direct the examiner to consider the additional information for inclusion in the
report.
(3)
Before the director files the examination report as a final examination report
or makes the report or any matters relating thereto public, the person being
examined shall have an opportunity for a hearing. A copy of the report must be
mailed by certified mail to the person being examined. The person may request a
hearing not later than the 30th day after the date on which the report was
mailed. This subsection does not limit the authority of the director to
disclose a preliminary or final examination report as otherwise provided in
this section.
(4)
The director shall consider comments presented at a hearing requested under
subsection (3) of this section and may direct the examiner to consider the
comments or direct that the comments be included in documentation relating to
the report, although not as part of the report itself. The director may file
the report as a final examination report at any time after consideration of the
comments or at any time after the period for requesting a hearing has passed if
a hearing is not requested.
(5)
A report filed as a final examination report is subject to public inspection.
The director, after filing any report, if the director considers it for the
interest of the public to do so, may publish any report or the result of any
examination as contained therein in one or more newspapers of the state without
expense to the person examined.
(6)
All work papers, recorded information, documents and copies thereof that are
produced or obtained by or disclosed to the director or any other person in the
course of an examination or in the course of analysis by the director of the
financial condition or market conduct of an insurer are confidential and are
exempt from public inspection as provided in ORS 705.137. If the director, in
the director’s sole discretion, determines that disclosure is necessary to
protect the public interest, the director may make available work papers,
recorded information, documents and copies thereof produced by, obtained by or
disclosed to the director or any other person in the course of the examination.
(7)
The director may disclose the content of an examination report that has not yet
otherwise been disclosed or may disclose any of the materials described in
subsection (6) of this section as provided in ORS 705.137. [Formerly 736.560;
1993 c.447 §4; 1999 c.364 §1; 2001 c.377 §5]
731.314 Immunity for director, examiner
and others. (1) No cause of action may arise and no
liability may be imposed against the Director of the Department of Consumer and
Business Services, an authorized representative of the director or any examiner
appointed by the director for any statements made or conduct performed in good
faith pursuant to an examination or investigation.
(2)
No cause of action may arise and no liability may be imposed against any person
for communicating or delivering information or data to the director or an
authorized representative of the director or examiner pursuant to an
examination or investigation if the communication or delivery was performed in
good faith and without fraudulent intent or an intent to deceive.
(3)
This section does not abrogate or modify in any way any common law or statutory
privilege or immunity otherwise enjoyed by any person to which subsection (1)
or (2) of this section applies.
(4)
The court may award reasonable attorney fees to the prevailing party in a cause
of action arising out of activities of the director or an examiner in carrying
out an examination or investigation. [1993 c.447 §5; 1995 c.618 §127]
731.316 Expenses of examination of
insurer. Any person examined under ORS 731.300
shall pay to the Director of the Department of Consumer and Business Services
the just and legitimate costs of the examination as determined by the director,
including actual necessary transportation and traveling expenses. [Formerly
736.565; 1969 c.336 §6]
731.324 Service of process on Secretary of
State; notice to unauthorized insurer. (1) Any act
set forth in ORS 731.146 by an unauthorized insurer is equivalent to and shall
constitute an irrevocable appointment by such insurer, binding upon the
insurer, the executor of the insurer or administrator, or successor in interest
if a corporation, of the Secretary of State or the successor in office, to be
the true and lawful attorney of such insurer. All lawful process in any action
in any court by the Director of the Department of Consumer and Business
Services or by the state and any notice, order, pleading or process in any
proceeding before the director which arises out of transacting insurance in
this state by such insurer may be served upon the Secretary of State or the
successor in office. Transacting insurance in this state by an unauthorized
insurer shall be signification of its agreement that lawful process in a court
action and any notice, order, pleading, or process in an administrative
proceeding before the director so served shall be of the same legal force and
validity as personal service of process in this state upon such insurer.
(2)
Service of process in such action shall be made by delivering to and leaving
with the Secretary of State, or one of the assistants, two copies of the
document served and by payment to the Secretary of State of the fee prescribed
by law. Service upon the Secretary of State shall be service upon the
principal.
(3)
The Secretary of State shall forward by certified mail one of the copies of
such process or such notice, order, pleading, or process in proceedings before
the director to the defendant in such court proceeding or to whom the notice,
order, pleading, or process in such administrative proceeding is addressed or
directed at its last-known principal place of business and shall keep a record
of all process so served on the defendant. Such record shall show the day and
hour of service. Service is sufficient, provided:
(a)
Notice of service and a copy of the court process or the notice, order,
pleading, or process in the administrative proceeding are sent within 10 days
thereafter by certified mail by the plaintiff or the plaintiff’s attorney in
the court proceeding or by the director in the administrative proceeding to the
defendant at the last-known principal place of business of the defendant.
(b)
The defendant’s receipt or receipts issued by the post office with which the
letter is certified or registered, showing the name of the sender of the letter
and the name and address of the person or insurer to whom the letter is
addressed, and an affidavit of the plaintiff or the plaintiff’s attorney in
court proceeding or of the director in administrative proceeding, showing
compliance therewith are filed with the clerk of the court in which such action
is pending or with the director in administrative proceedings, on or before the
date the defendant in the court or administrative proceeding is required to
appear or respond thereto, or within such further time as the court or director
may allow.
(4)
No plaintiff shall be entitled to a judgment or a determination by default in
any court or administrative proceeding in which court process or notice, order,
pleading, or process in proceedings before the director is served under this
section until the expiration of 45 days after the date of filing of the
affidavit of compliance.
(5)
Nothing in this section shall limit or affect the right to serve any process,
notice, order, or demand upon any person or insurer in any other manner now or
hereafter permitted by law. [1969 c.336 §3]
731.328 Deposits by unauthorized insurers in
actions or proceedings. (1) Before an unauthorized
insurer files or causes to be filed any pleading in any court action or any
notice, order, pleading, or process in an administrative proceeding before the
Director of the Department of Consumer and Business Services instituted against
such person or insurer, by services made as provided in ORS 731.324, such
insurer shall deposit with the clerk of the court in which such action is
pending, or with the director in administrative proceedings before the
director, cash or securities. The insurer may also file with such clerk or
director a bond with good and sufficient sureties, to be approved by the clerk
or director, or an irrevocable letter of credit issued by an insured
institution, as defined in ORS 706.008, in an amount to be fixed by the court
or director sufficient to secure the payment of any final judgment which may be
rendered in such action or administrative proceeding.
(2)
The director, in any administrative proceeding in which service is made as
provided in ORS 731.324, may order such postponement as may be necessary to
afford the defendant reasonable opportunity to comply with the provisions of
subsection (1) of this section and to defend such action.
(3)
Nothing in subsection (1) of this section shall be construed to prevent an
unauthorized insurer from filing a motion to quash a writ or to set aside
service thereof made in the manner provided in ORS 731.324. [1969 c.336 §4;
1991 c.331 §126; 1997 c.631 §545]
AUTHORIZATION OF INSURERS AND GENERAL
REQUIREMENTS
731.354 Certificate of authority required.
No person shall act as an insurer and no insurer shall directly or indirectly
transact insurance in this state except as authorized by a subsisting
certificate of authority issued to the insurer by the Director of the
Department of Consumer and Business Services. [1967 c.359 §73]
731.356 Unauthorized insurance transaction
enforcement. When the Director of the Department of
Consumer and Business Services believes, from evidence satisfactory to the
director, that any insurer is violating or about to violate the provisions of
ORS 731.354, the director may cause a complaint to be filed in the Circuit
Court of Marion County to enjoin and restrain such insurer from continuing such
violation. The court shall have jurisdiction of the proceeding and shall have
the power to make and enter an order or judgment awarding such preliminary or
final injunctive relief as in its judgment is proper. [1969 c.336 §2]
731.358 Requirements of domestic insurers
generally. Upon application a domestic insurer
shall be granted a certificate of authority to transact any class of insurance
permitted by the Insurance Code and provided for in its articles of
incorporation upon its compliance with all the laws of this state and the rules
of the Department of Consumer and Business Services relating to such insurers. [Formerly
736.085]
731.362 Requirements of foreign or alien
insurers generally. (1) A foreign or alien insurer
may be authorized to transact insurance in this state when it has complied with
the following requirements:
(a)
It shall file with the Director of the Department of Consumer and Business
Services a certified copy of its charter, articles of incorporation or deed of
settlement and a statement of its financial condition and business in all
states in such form and detail as the director may require, signed and sworn to
by at least two of its executive officers or the United States manager.
(b)
It shall satisfy the director that it is fully and legally organized under the
laws of its state or government to do the business it proposes to transact.
(c)
It shall satisfy the director that it is possessed of and will maintain at all
times its required capitalization.
(d)
It shall make such deposits with the Department of Consumer and Business
Services as are required by the provisions of the Insurance Code.
(2)
Upon compliance with the requirements of this section and all other
requirements imposed on such insurer by the Insurance Code, the director shall
issue to it a certificate of authority. [Formerly 736.205; 1999 c.196 §1]
731.363 Authorized foreign insurer becoming
domestic insurer. (1) An authorized foreign
insurer may become a domestic insurer:
(a)
By complying with all of the requirements of law relating to the organization
and authorization of a domestic insurer of the same type;
(b)
By filing articles of incorporation that are amended to comply with all of the
requirements of law relating to the organization and authorization of a
domestic insurer of the same type; and
(c)
By designating its principal place of business at a place in this state.
(2)
If the Director of the Department of Consumer and Business Services determines
that an authorized foreign insurer has complied with the requirements of
subsection (1) of this section, the insurer is entitled to a certificate of
authority to transact insurance in this state and shall be subject as a
domestic insurer to the authority and jurisdiction of this state. [1995 c.639 §9;
1997 c.771 §24]
731.364 Domestic insurer transferring
domicile to another state. A domestic insurer, upon the
approval of the Director of the Department of Consumer and Business Services,
may transfer its domicile to any other state in which it is admitted to
transact the business of insurance. Upon such a transfer the insurer ceases to
be a domestic insurer and may be authorized in this state if qualified as a
foreign insurer. The director shall approve such a proposed transfer unless the
director determines that the transfer is not in the interest of the
policyholders of this state. [1995 c.639 §10]
731.365 Effect of transfer of domicile by
domestic or foreign insurer; notice to director by transferring insurer.
(1) The certificate of authority, insurance producer appointments and licenses,
rates and other items allowed by the Director of the Department of Consumer and
Business Services pursuant to the discretion of the director that are in
existence at the time an authorized insurer transfers its domicile to this or
any other state as provided in ORS 731.363 or 731.367 or by merger,
consolidation or any other lawful method shall continue in full force and
effect upon the transfer if the insurer remains authorized to transact
insurance in this state.
(2)
All outstanding policies of a transferring insurer shall remain in full force
and effect and need not be indorsed as to the new name of the insurer or its
new location unless so ordered by the director. A transferring insurer shall
file new policy forms with the director on or before the effective date of the
transfer but may use existing policy forms with appropriate indorsements if
allowed by the director, according to any conditions established by the
director.
(3)
Each transferring insurer shall notify the director of the details of the
proposed transfer and shall file promptly any resulting amendments to corporate
or other organizational documents filed or required to be filed with the
director.
(4)
This section applies to a domestic insurer that transfers its domicile to
another state and to an authorized foreign insurer that transfers its domicile
either to this state or to another state. [1995 c.639 §11; 1997 c.771 §25; 2003
c.364 §68]
731.366
[Formerly 749.040; 1971 c.231 §42; 1977 c.651 §1; 1993 c.709 §4; renumbered
731.369 in 1995]
731.367 Transfer of domicile by
unincorporated authorized foreign insurer. An
unincorporated authorized foreign insurer transfers its domicile to this state
when the Director of the Department of Consumer and Business Services
determines that it has complied with all of the requirements of law relating to
the organization and authorization of a domestic insurer of the same type as
provided in ORS 731.363. No merger, consolidation or other method shall be
required to effect a transfer of the domicile of the unincorporated insurer to
this state and no vote or approval of the policyholders, members or subscribers
of the unincorporated insurer shall be required. Any agreement of indemnity,
appointment or governance or any similar agreement shall continue in full force
after the transfer if the unincorporated insurer remains an authorized insurer.
The laws of this state, however, shall govern all such agreements regardless of
any other law to the contrary, and such agreements shall be considered to be
modified to reflect that this state is the principal place of business and
domicile of the unincorporated insurer. [1995 c.639 §12]
731.369 Requirements of reciprocal
insurers generally. (1) A reciprocal insurer,
through its attorney, shall file with the Director of the Department of
Consumer and Business Services a declaration, verified by the oath of such
attorney, setting forth:
(a)
The name or title of the reciprocal insurer.
(b)
The location of the principal office of the reciprocal insurer.
(c)
The class or classes of insurance to be effected or exchanged.
(d)
A copy of the form of power of attorney or instrument under which such
insurance is to be effected or exchanged.
(e)
A copy of the policy under or by which such contracts of insurance are effected
or exchanged among the subscribers.
(f)
That applications have been made for insurance in the amounts required by
subsection (2) of this section, and that such applications will be concurrently
effective when the reciprocal insurer is authorized to commence business by the
director.
(g)
If a foreign or alien reciprocal insurer, that there has been deposited and
shall be maintained at all times with the State Treasurer or other proper
official of the state in which the insurer is domiciled $50,000 in cash or
securities, as a general deposit for the benefit of subscribers wherever
located. Where the laws of the home state do not provide for the acceptance of
such a deposit, the deposit may be made with a bank or trust company in escrow
subject to the control of the insurance commissioner of the home state, and
such deposit shall be released only upon the written order of such insurance
commissioner. A certification from the insurance director or other proper state
official of the state in which the reciprocal insurer is domiciled shall be
attached to the application for the certificate of authority.
(2)
The reciprocal insurer must have bona fide applications for insurance
aggregating not less than $3 million upon at least 200 risks, except in the
case of wet marine hull insurance written by a domestic reciprocal insurer for
persons whose earned income, in whole or in part, is derived from taking and
selling food resources living in an ocean, bay or river, the applications must
cover at least 25 hulls and the insurance must aggregate at least $125,000.
(3)
The applicant shall furnish any other relevant information required by the
director, except no reciprocal insurer shall be required to furnish or file the
names or addresses of its policyholders or subscribers. [Formerly 731.366]
731.370 Reciprocal insurer’s financial
statement; service of process. (1) The
application for a certificate of authority shall be accompanied by a sworn
statement of a reciprocal insurer showing the financial condition of the
insurer as of December 31 immediately preceding. The Director of the Department
of Consumer and Business Services may require a supplemental statement to be
furnished as of a later date.
(2)
Concurrently with the filing of the declaration provided for by the terms of
ORS 731.369, the attorney shall file with the director an instrument in writing
executed for the subscribers conditioned that upon the issuance of certificate
of authority, action may be brought in the county in which the property insured
thereunder is situated or where the injured person resides, and service of
process may be had as provided in ORS 731.434 in all actions in this state
arising out of policies issued by the reciprocal insurer, which service shall
be valid and binding upon all subscribers exchanging at any time reciprocal or
interinsurance contracts through such attorney. Actions may be brought against
or defended in the name of the reciprocal insurer adopted by the subscribers. [Formerly
749.050]
731.371 Powers of reciprocal insurer
regarding real estate. Except where inconsistent with
other provisions of the Insurance Code, a reciprocal insurer in its own name,
as in the case of an individual, may purchase, receive, own, hold, lease,
mortgage, pledge or encumber by deed of trust or otherwise, manage and sell
real estate for the purposes and objects of the insurer including, but not
limited to, investment for the production of income or for its accommodation in
the convenient transaction of its business. Any contract, including but not
limited to a deed, lease, mortgage, deed of trust, purchase or sale agreement
or any other contract to be executed in the name of the insurer, may be
executed by the attorney in fact designated by the insurer’s subscribers. [1991
c.401 §35]
Note:
731.371 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 731 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
731.374 Exemptions to certificate of
authority requirement. A certificate of authority is
not required of an insurer with respect to the following:
(1)
Transactions pursuant to surplus lines coverages lawfully written under the
Insurance Code.
(2)
Reinsurance, when transacted by an insurer duly authorized by its state of
domicile to transact the class of insurance involved. [1967 c.359 §78]
731.378 Foreign and alien insurers exempt
from laws governing admission of foreign and alien corporations.
No foreign or alien insurer that has complied with the requirements of the
Insurance Code shall be subject to any other provisions of the laws of this
state relating to admission or licensing of foreign or alien corporations. [Formerly
736.220]
731.380 Authority of foreign and alien
insurers to take, acquire, hold and enforce notes secured by mortgages;
statement; fees. (1) Subject to subsection (2) of
this section, any foreign or alien insurer, without being authorized to
transact business in this state, may take, acquire, hold and enforce notes
secured by real estate mortgages or trust deeds and make commitments to
purchase such notes. A foreign or alien insurer may foreclose the mortgages and
trust deeds in the courts of this state, acquire the mortgaged property, hold,
own and operate the property for a period not exceeding five years and dispose
of the property. The activities authorized under this subsection by such a foreign
or alien insurer shall not constitute transacting business in this state for
the purposes of ORS chapter 60.
(2)
Before a foreign or alien insurer engages in any of the activities described in
subsection (1) of this section, the foreign or alien insurer shall first file
with the Department of Consumer and Business Services a statement signed by its
president, secretary, treasurer or general manager that it constitutes the
Director of the Department of Consumer and Business Services its attorney for service
of process, and shall pay an initial filing fee of $200 and an annual license
fee of $200. The statement shall include the address of the principal place of
business of the foreign or alien insurer.
(3)
The director, upon receiving service of process as authorized by subsection (2)
of this section, immediately shall forward by registered mail or by certified
mail with return receipt all documents served upon the director to the
principal place of business of the foreign or alien insurer.
(4)
A foreign or alien insurer that indirectly engages in the activities described
in subsection (1) of this section because of its beneficial interest in a pool
of notes secured by real estate mortgages or trust deeds need not comply with
subsection (2) of this section. [1987 c.94 §118; 1991 c.249 §70]
731.381 Exemption from taxes for foreign
and alien insurers engaging in activities authorized by ORS 731.380.
Engaging in the activities authorized by ORS 731.380 by a foreign or alien
insurer shall not subject the foreign or alien insurer to any tax, license fee
or charge, except as provided in ORS 731.380, for the privilege of doing
business within the State of Oregon or to any tax measured by net or gross
income. However, if the foreign or alien insurer acquires any property given as
security for such a mortgage or trust deed, all income accruing to the foreign
or alien insurer solely from the ownership, sale or other disposal of such
property is subject to taxation in the same manner and on the same basis as
income of corporations doing business in this state. [1987 c.94 §119]
731.382 General eligibility for
certificate of authority. To qualify for and hold
authority to transact insurance in this state an insurer must be an
incorporated insurer, or a reciprocal insurer or an incorporated fraternal
benefit society. [1967 c.359 §80]
731.385 Standards for determining whether
continued operation of insurer is hazardous; rules; order; hearing.
(1) The Director of the Department of Consumer and Business Services shall establish
standards by rule for determining whether the continued operation of an
authorized insurer may be hazardous to the policyholders or to the
insurance-buying public generally, for the purpose of carrying out ORS chapter
734 and other provisions of the Insurance Code that authorize the director to
take action against such an insurer. If the director makes such a
determination, the director may order the insurer to take one or more of the
following actions:
(a)
Reduce the total amount of present and potential liability for policy benefits
by reinsurance.
(b)
Reduce, suspend or limit the volume of business being accepted or renewed.
(c)
Reduce general insurance and commission expenses by methods specified by the
director.
(d)
Increase the capital and surplus of the insurer.
(e)
Suspend or limit the declaration and payment of dividends by the insurer to its
stockholders or to its policyholders.
(f)
Limit or withdraw from certain investments or discontinue certain investment
practices to the extent the director determines such action to be necessary.
(2)
The director may exercise authority under subsection (1) of this section in
addition to or instead of any other authority that the director may exercise
under the Insurance Code.
(3)
The director may issue an order under this section with or without a hearing.
An insurer subject to an order issued without a hearing may file a written
request for a hearing to review the order. Such a request shall not stay the
effect of the order. The hearing shall be held within 30 days after the filing
of the request. The director shall complete the review within 30 days after the
record for the hearing is closed, and shall discontinue the action taken under
subsection (1) of this section if the director determines that none of the
conditions giving rise to the action exists. [1993 c.447 §14]
731.386 Management of insurers.
The Director of the Department of Consumer and Business Services shall not
grant or continue authority to transact insurance in this state for any
insurer:
(1)
The management of which is found by the director to be untrustworthy or so
lacking in insurance experience as to make the proposed operation or the
continued operation hazardous to the insurance-buying public; or
(2)
That the director has good reason to believe is affiliated directly or
indirectly through ownership, control, reinsurance transactions or other
insurance or business relations, with any person whose business operations are
or have been marked to the detriment of policyholders, stockholders, investors,
creditors or the public, by manipulation or dissipation of assets, manipulation
of accounts or reinsurance, or by similar injurious actions. [1967 c.359 §81;
1993 c.447 §15]
731.390 Government insurers not to be
authorized. No certificate of authority may be
issued to any state, province or foreign government nor to any instrumentality,
political subdivision or agency thereof. [Formerly 736.080]
731.394 Combinations of insuring powers in
one insurer. An insurer that otherwise qualifies
therefor may be authorized to transact any one class or combination of classes
of insurance, except:
(1)
A reciprocal insurer shall not transact life insurance or title insurance.
(2)
A title insurer shall be a stock insurer, and shall not transact any other
class of insurance.
(3)
A mortgage insurer shall be a stock insurer, and shall not transact any other
class of insurance. [1967 c.359 §83; 1969 c.692 §2]
731.396 Certificate of authority and good
financial condition required to issue variable life insurance or variable
annuity policies. No domestic, foreign or alien
insurer shall deliver or issue for delivery in this state variable life
insurance or variable annuity policies unless the insurer is authorized to
transact life insurance in this state and the Director of the Department of
Consumer and Business Services is satisfied that its condition and method of
operation in connection with the issuance of such policies will not render its
operation hazardous to its policyholders or the public in this state. In making
the determination the director shall consider, among other things:
(1)
The history and financial condition of the insurer;
(2)
The character, responsibility and fitness of the officers and directors of the
insurer; and
(3)
The laws and rules under which the insurer is authorized by its domicile to
issue such policies. [1973 c.435 §4]
731.398 Amendment of certificate of
authority. The Director of the Department of
Consumer and Business Services at any time may amend an insurer’s certificate
of authority to accord with lawful changes in the insurer’s charter or insuring
powers. [1967 c.359 §84]
731.402 Issuance or refusal of certificate
of authority. (1) The Director of the Department of
Consumer and Business Services shall issue to an insurer a certificate of
authority if upon completion of the application for a certificate of authority
by the insurer the director finds, from the application and such other
investigation and information the director may acquire, that the insurer is
fully qualified and entitled thereto under the Insurance Code.
(2)
The director shall take all necessary action and shall either issue or refuse
to issue a certificate of authority within a reasonable time after the
completion of the application for such authority.
(3)
The certificate of authority, if issued, shall specify the class or classes of
insurance the insurer is authorized to transact in this state. The director may
issue authority limited to particular subclasses of insurance or types of insurance
coverages within the scope of a class of insurance. [1967 c.359 §85]
731.406 What certificate evidences;
ownership of certificate. (1) An insurer’s subsisting
certificate of authority is evidence of its authority to transact in this state
the class or classes of insurance specified therein, either as direct insurer
or as reinsurer or as both.
(2)
Although issued to the insurer the certificate of authority is at all times the
property of this state. Upon any suspension, revocation or termination thereof
the insurer promptly shall deliver the certificate of authority to the Director
of the Department of Consumer and Business Services. [1967 c.359 §86]
731.410 Continuance, expiration or
reinstatement of certificate of authority. (1) A
certificate of authority shall continue in force as long as the insurer is
entitled thereto under the Insurance Code and until suspended or revoked by the
Director of the Department of Consumer and Business Services, or terminated at
the request of the insurer; subject, however, to continuance of the certificate
by the insurer each year by:
(a)
Payment prior to April 1 of the continuation fee established by the director;
(b)
Due filing by the insurer of its annual statement for the calendar year
preceding;
(c)
Due filing by the insurer of each annual statement supplement; and
(d)
Payment by the insurer of premium taxes with respect to the preceding calendar
year as required by ORS 731.808 to 731.828.
(2)
A certificate of authority that is not continued by the insurer under
subsection (1) of this section expires on the 60th day after the date on which
the payment or filing is due.
(3)
The director promptly shall notify the insurer of impending expiration of its
certificate of authority.
(4)
The director, in the discretion of the director, upon the insurer’s request
made not later than the 90th day after expiration, may reinstate a certificate
of authority which the insurer has permitted to expire, after the insurer has
cured all its failures which resulted in the expiration and has paid the fee
for reinstatement established by the director. Otherwise the insurer shall be
granted another certificate of authority only after filing application therefor
and meeting all other requirements as for an original certificate of authority
in this state. [1967 c.359 §87; 1989 c.413 §3; 1995 c.639 §1]
731.414 Suspension or revocation of
certificate of authority; mandatory grounds. (1)
The Director of the Department of Consumer and Business Services shall refuse
to continue, or shall suspend or revoke, an insurer’s certificate of authority
if:
(a)
As a foreign insurer, it no longer meets the requirements for the authority; or
as a domestic insurer, it has failed to cure an impairment of required
capitalization within the time allowed therefor by the director under ORS
732.230;
(b)
The insurer knowingly exceeds its charter powers or powers granted under its
certificate of authority; or
(c)
As a foreign or alien insurer, its certificate of authority to transact
insurance is suspended or revoked by its domicile.
(2)
Except in cases of impairment of required capitalization or suspension or
revocation by another domicile as referred to in subsection (1)(c) of this
section, the director shall refuse, suspend or revoke the certificate of authority
only after a hearing granted to the insurer, unless the insurer waives such
hearing in writing. [1967 c.359 §88]
731.418 Grounds for suspension or
revocation of certificate of authority. (1) The
Director of the Department of Consumer and Business Services may refuse to
continue or may suspend or revoke an insurer’s certificate of authority if the
director finds after a hearing that:
(a)
The insurer has violated or failed to comply with any lawful order of the
director, or any provision of the Insurance Code other than those for which
suspension or revocation is mandatory.
(b)
The insurer is in unsound condition, or in such condition or using such methods
and practices in the conduct of its business, as to render its further
transaction of insurance in this state hazardous or injurious to its
policyholders or to the public.
(c)
The insurer has failed, after written request by the director, to remove or
discharge an officer or director who has been convicted in any jurisdiction of
an offense which, if committed in this state, constitutes a misdemeanor
involving moral turpitude or a felony, or is punishable by death or
imprisonment under the laws of the United States, in any of which cases the
record of the conviction shall be conclusive evidence.
(d)
The insurer is affiliated with and under the same general management,
interlocking directorate or ownership as another insurer that transacts direct
insurance in this state without having a certificate of authority therefor,
except as permitted under the Insurance Code.
(e)
The insurer or an affiliate or holding company of the insurer refuses to be
examined or any director, officer, employee or representative of the insurer,
affiliate or holding company refuses to submit to examination relative to the affairs
of the insurer, or to produce its accounts, records, and files for examination
when required by the director or an examiner of the Department of Consumer and
Business Services, or refuse to perform any legal obligation relative to the
examination.
(f)
The insurer has failed to pay any final judgment rendered against it in this
state upon any policy, bond, recognizance or undertaking issued or guaranteed
by it, within 30 days after the judgment became final, or within 30 days after
time for taking an appeal has expired, or within 30 days after dismissal of an
appeal before final determination, whichever date is the later.
(g)
The insurer fails to comply with ORS 742.534 (1).
(h)
The insurer has failed to comply with ORS 476.270 (1), (2) or (3) or 654.097
(1).
(2)
Without advance notice or a hearing thereon, the director may suspend
immediately the certificate of authority of any insurer as to which proceedings
for receivership, conservatorship, rehabilitation, or other delinquency
proceedings, have been commenced in any state by the public insurance
supervisory official of such state. [1967 c.359 §89; 1971 c.321 §17; 1971 c.523
§10; 1975 c.585 §4; 1981 c.701 §3; 1993 c.447 §7]
731.422 Order of suspension, revocation or
refusal; effect upon insurance producers’ authority.
(1) All suspensions or revocations of, or refusals to continue, an insurer’s
certificate of authority shall be by order of the Director of the Department of
Consumer and Business Services order.
(2)
Upon suspending, revoking or refusing to continue the insurer’s certificate of
authority, the director forthwith shall give notice thereof to the insurer’s
insurance producers in this state of record in the Department of Consumer and
Business Services, and likewise shall suspend or revoke the authority of such
insurance producers to represent the insurer. The director also shall give
notice to the insurance supervisory authority in jurisdictions in which the
insurer is authorized, if a domestic insurer, or in its domicile if a foreign or
alien insurer.
(3)
In the discretion of the director, the director may publish notice of such
suspension, revocation or refusal in one or more newspapers of general
circulation in this state. [1967 c.359 §90; 2003 c.364 §69]
731.426 Duration of suspension; insurer’s
obligations during suspension period; reinstatement.
(1) In an order suspending the certificate of authority of an insurer, the
Director of the Department of Consumer and Business Services may provide that
the suspension expires at the end of a specified period or when the director
determines that the cause or causes of the suspension have terminated. During
the suspension the director may rescind or shorten the suspension by further
order.
(2)
During the suspension period the insurer shall not solicit or write any new
business in this state, but shall file its annual statement and pay fees,
licenses and taxes as required under the Insurance Code, and may service its
business already in force in this state, as if the certificate of authority had
continued in full force.
(3)
Upon expiration of a specific suspension period, if within such period the
certificate of authority has not terminated, the insurer’s certificate of
authority automatically shall reinstate unless the director finds that the
cause or causes of the suspension have not terminated, or that the insurer is
otherwise not in compliance with the requirements of the Insurance Code, and of
which the director shall give the insurer notice not less than 30 days in
advance of the expiration of the suspension period.
(4)
When the director determines that a suspension should expire because the cause
or causes have terminated, the director shall reinstate the certificate of
authority of the insurer unless the certificate of authority has expired within
the suspension period.
(5)
Upon reinstatement of the insurer’s certificate of authority, the authority of
its insurance producers in this state to represent the insurer shall likewise
reinstate. The director promptly shall notify the insurer and its insurance
producers in this state of record in the Department of Consumer and Business
Services, of such reinstatement. If pursuant to ORS 731.422 the director has
published notice of suspension, in like manner the director shall publish
notice of the reinstatement. [1967 c.359 §91; 1989 c.700 §1; 2003 c.364 §70]
731.428 Written consent to engage or
participate in business of insurance; rules. (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. [2001 c.191 §59]
Note:
731.428 was added to and made a part of ORS chapter 731 by legislative action
but was not added to any smaller series therein. See Preface to Oregon Revised
Statutes for further explanation.
731.430 Name of insurer.
(1) No insurer shall be formed or authorized to transact insurance in this
state which has or will have, or which uses or will use as an assumed business
name, a name or principal identifying name factor:
(a)
That is the same as or deceptively similar to:
(A)
Any other insurer so formed or authorized;
(B)
Any name reserved or registered as authorized by this section;
(C)
Any name on file with the Secretary of State pursuant to ORS chapter 60, 65 or
648; or
(D)
The name of any insurer that was authorized to transact insurance in this state
within the preceding 10 years if insurance policies issued by such other
insurer still are outstanding in this state. With the consent of the insurer
issuing such policies, the Director of the Department of Consumer and Business
Services may waive this provision if the director finds that the waiver will
not be detrimental to the public; or
(b)
That is deceptive or misleading as to the type of organization of the insurer
or that does not indicate the insurer is transacting insurance.
(2)
Any insurer doing business in this state may file and register with the
director in writing, in its articles of incorporation or otherwise, an assumed
name that it will use in transacting insurance in this state. Such name may not
be a name prohibited by subsection (1) of this section.
(3)
Any person may reserve a name for use as a corporate name or an assumed
business name in transacting insurance in this state by filing in writing with
the director a reservation of such name. Such name may not be a name prohibited
by subsection (1) of this section. Such reservation shall expire six months
after the date of filing unless:
(a)
If filed by an insurer, it is using such name as an authorized insurer; or
(b)
If filed by a noninsurer, it has filed with the director a formal application
for a permit to form an insurer in this state. If a valid reservation is on
file, the director may accept the filing of a same or deceptively similar name
by another person which filing shall become effective, in the order of filing,
at the expiration of the six-month provision unless the original reservation
does not expire pursuant to this subsection.
(4)
When an insurer is merged as provided in the Insurance Code, the surviving
insurer may retain the use of the name for a period of five years after the
effective date of merger. If such name is retained, use of the same or
deceptively similar name by other insurers shall be prohibited as specified
under this section during the five-year period. [1967 c.359 §92; 1987 c.414 §161a;
1987 c.846 §2; 1993 c.447 §104]
731.434 Registered office and agent.
(1) The provisions, procedures and requirements of ORS chapter 60 relating to a
registered office, registered agent and to service of process, notice and
demand shall govern all insurers transacting insurance in this state, whether
authorized or unauthorized, except that the Director of the Department of
Consumer and Business Services shall be substituted for the Secretary of State
as the person with whom all filings shall be made and upon whom, in the
circumstances specified by statute, such service may be effected.
(2)
This section shall not apply to insurers for whom a certificate of authority is
not required under ORS 731.374. [1967 c.359 §93; 1987 c.846 §3; 1995 c.79 §358]
731.438 Title plant requirement for title
insurers; posting of indexes; plant ownership and maintenance.
(1) A title insurer, in order to receive and maintain a certificate of
authority, shall own and maintain at all times a title plant covering a period
of at least the immediately preceding 50 years except years before 1960 and
consisting of a general index, adequate maps and currently posted tract or
geographic indexes for all the lands in the county in which title insurance
policies or other title services are to be issued or provided. Either directly
or through its insurance producer, a title insurer also shall own and maintain
for each additional county in which it shall be authorized to transact a title
insurance business a comparable title plant or obtain from a person having a
comparable title plant for such additional county or counties title insurance
showing the status of the title.
(2)
The means by which tract or geographic indexes may be currently posted for
purposes of subsection (1) of this section include but are not limited to
maintenance of the information on ledger sheets, separate cards or sheets of
film, whether bound in books or contained in envelopes or storage files, or
maintenance of the information on punch cards, computer tape, disc or similar
machine compatible form. All title services by a title insurer must be provided
in this state. The information upon which the title services are based must be
maintained and must be capable of reproduction in this state at all times.
(3)
Every title insurance transaction by a title insurer or insurance producer
involving the status of title of an Oregon title risk shall be based on one or
more title plants which:
(a)
Cover the location of the risk;
(b)
Meet the requirements of this section; and
(c)
Are owned and maintained by one or more title insurers or insurance producers
as provided in subsections (4), (5) and (6) of this section.
(4)
For any county with a population of 500,000 or more, or any county with a
population of 200,000 or more that is contiguous to a county with a population
of 500,000 or more, ownership and maintenance of a title plant shall be as
provided in this subsection:
(a)
The title plant referred to in subsection (1) of this section may be owned and
maintained on an exclusive basis or on a joint basis as provided in paragraph
(b) of this subsection.
(b)
A title plant is owned and maintained on a joint basis under this subsection if
two or more persons own and maintain a portion of the title plant as joint
venturers, partners, shareholders or participants in another form of joint,
several or common property ownership recognized under the laws of this state.
If ownership of a title plant is held by fewer than four title insurers or
insurance producers, each share of ownership shall be at least 25 percent. If
ownership of a title plant is held by four or more insurers or insurance
producers, all shares shall be equal.
(5)
A title insurer authorized to transact title insurance in this state and every
insurance producer of such an authorized title insurer shall own and maintain a
title plant.
(6)
In any county not described in subsection (4) of this section, a title insurer
or its insurance producers transacting title insurance business shall solely
own a title plant for that county in conformance with subsections (1) and (2)
of this section and shall maintain a title plant for that county on an
exclusive basis or a joint basis in conformance with subsections (1) and (2) of
this section. A title plant for a county is maintained on a joint basis under
this subsection if a title insurer or insurance producer obtains current
posting information for its tract or geographic indexes from one or more other
title insurers or insurance producers or from a provider that is wholly owned
in equal shares by the title insurers or insurance producers utilizing the
provider’s services. [Formerly 748.084; 1983 c.322 §1; 1999 c.183 §1; 2003
c.364 §71]
731.439 Satisfaction of requirements of
ORS 731.438 (1) by certain title plants. A title plant
that conforms on December 31, 1999, with ORS 731.438 (1) and (2) (1997 Edition)
satisfies the requirements of ORS 731.438 (1) as amended by section 1, chapter
183, Oregon Laws 1999, if it also contains after that date a general index,
adequate maps and currently posted tract or geographic indexes for all lands in
the county. [1999 c.183 §3]
731.442 Prohibition on transacting life
insurance business on mutual assessment plan. An
insurer may not transact a life insurance business upon a mutual assessment
plan within this state. [Formerly 739.105; 2005 c.185 §1]
731.446 Policyholder deposits.
An insurer may accept, from a holder of a life insurance policy, deposits in addition
to current premium payments to provide a fund for payment of future premiums or
to make possible the future acquisition of additional insurance, annuities or
other benefits, whether the interest to be paid on such deposits be fixed or
variable. Such deposits, or any portion thereof, not used for the purposes
described in this section shall be refunded to the policyholder or, upon the
death of the policyholder, to designated beneficiaries. [1967 c.359 §96]
731.450 Unrelated business prohibited; exceptions;
title insurer as escrow agent. Except as
authorized by the federal Gramm-Leach-Bliley Act (P.L. 106-102), an insurer 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. [1967
c.359 §97; 1971 c.398 §5; 1977 c.351 §13; 2001 c.377 §57]
731.454 Domestic insurers not to transact
business in jurisdiction where not authorized.
No domestic insurer, or any of the representatives thereof, shall transact
insurance in any jurisdiction in which such insurer is not authorized in
accordance with the laws of such jurisdiction. [Formerly 736.645]
731.458 Exchange of reciprocal or
interinsurance contracts. (1) Individuals, partnerships
and corporations of this state, hereby designated as subscribers, may exchange
reciprocal or interinsurance contracts with each other, or with individuals, partnerships
and corporations of other states and countries, providing indemnity among
themselves from any loss which may be insured against under the Insurance Code,
except life insurance and title insurance. Such contracts may be executed by an
attorney, agent or other representative, hereby designated as attorney, duly
authorized and acting for such subscribers. The attorney may be an individual,
firm or corporation organized under the laws of this state or any other state
or territory and having a principal office at the place designated by the
subscribers in the power of attorney.
(2)
Any corporation now or hereafter organized under the laws of the state, in
addition to the rights, powers and franchises specified in its articles of
incorporation, may exchange insurance contracts of the kind and character
described in subsection (1) of this section. The right to exchange such
contracts is declared to be incidental to the purpose for which such
corporations are organized and as much granted as the rights and powers
expressly conferred. [Formerly 749.010]
731.462 Nonassessable policies of
reciprocal insurer. A reciprocal insurer having a
surplus of not less than $500,000 may issue nonassessable policies. [1967 c.359
§100]
731.466 Power of attorney for reciprocal
insurer. (1) The rights and power of the
attorney of a reciprocal insurer shall be as provided in the power of attorney
given it by the subscribers.
(2)
The power of attorney must set forth:
(a)
The powers of the attorney.
(b)
That the attorney may accept service of process on behalf of the insurer.
(c)
The services to be performed by the attorney in general.
(d)
The maximum amount to be deducted from advance premiums or deposits to be paid
to the attorney.
(e)
Except as to nonassessable policies, a provision for a contingent several
liability of each subscriber in a specified amount not less than one nor more
than 10 times the premium or premium deposit stated in the policy.
(3)
The power of attorney may:
(a)
Provide for the right of substitution of the attorney and revocation of the
power of attorney and rights thereunder;
(b)
Impose such restrictions upon the exercise of the power as are agreed upon by
the subscribers;
(c)
Provide for the exercise of any right reserved to the subscribers directly or
through their advisory committee; and
(d)
Contain other lawful provisions.
(4)
The terms of any power of attorney or agreement collateral thereto shall be
reasonable and equitable, and no such power or agreement or any amendment
thereof, shall be used or be effective in this state until approved by the
Director of the Department of Consumer and Business Services. [1967 c.359 §101;
1997 c.249 §217]
731.470 Attorney for reciprocal insurer.
(1) Any instrument required to be verified by the oath of the attorney for a
reciprocal insurer may, in case of an incorporated attorney, be verified by the
oath of the president, vice president, secretary or other executive officer of
such corporation.
(2)
The certificate of authority of a reciprocal insurer shall be issued to its
attorney in the name of the insurer.
(3)
The Director of the Department of Consumer and Business Services may refuse,
suspend or revoke the certificate of authority, in addition to other grounds
therefor, for failure of a reciprocal insurer’s attorney to comply with any
provision of the Insurance Code.
(4)
The attorney for an authorized foreign or alien reciprocal insurer shall not,
by virtue of discharge of its duties as such attorney with respect to the
insurer’s transactions in this state, be thereby deemed to be doing business in
this state within the meaning of any laws of this state applying to foreign
persons. [Formerly 749.140]
731.475 Records storage required of
workers’ compensation insurers; examination and audit of records.
(1) Every insurer authorized to issue workers’ compensation coverage to subject
employers as required by ORS chapter 656 shall maintain a place of business in
this state where the insurer shall:
(a)
Process, and keep complete records of, claims for compensation made to the
insurer under ORS chapter 656.
(b)
Make available upon request complete records, including all records submitted
electronically, of all workers’ compensation insurance policies issued as
required by ORS chapter 656.
(c)
Keep records identifying the specific persons covered by an employer electing
coverage pursuant to ORS 656.039.
(2)
Claims records must be retained in, and may be removed from, this state or
disposed of, in accordance with the rules of the Director of the Department of
Consumer and Business Services. The records must be available to the Department
of Consumer and Business Services for examination and audit at all reasonable
times upon notice by the department to the insurer.
(3)
In lieu of establishing a place of business in this state for the purpose
required by this section, an insurer may keep such records in this state at
places of business operated by service companies, if:
(a)
Each service company is incorporated in or authorized to do business in this
state;
(b)
The agreement entered into between the insurer and the service company grants
each service company a power of attorney to act for the insurer in workers’
compensation coverage and claims proceedings under ORS chapter 656; and
(c)
The agreement entered into between the insurer and each service company is
approved by the director.
(4)
Notwithstanding subsection (3) of this section, an insurer may not:
(a)
Enter into a service agreement contract with one of its insureds unless the
insured has service contracts with other insurers; or
(b)
Have more than eight locations at any one time where claims are processed or
records are maintained. [1975 c.585 §2; 1981 c.874 §8; 1987 c.373 §80a; 1989
c.630 §1; 1991 c.67 §194; 2003 c.170 §10; 2007 c.241 §23]
731.480 Workers’ compensation policies;
conditions for issuing. An insurer shall not issue
workers’ compensation insurance policies pursuant to ORS chapter 656 unless it
furnishes occupational safety and health loss control consultative services to
its insured employers consistent with the requirements of ORS 654.097. [1975
c.585 §3; 1981 c.874 §9; 1987 c.373 §80b; 1987 c.884 §61; 2007 c.241 §24]
731.482 Withdrawal from, failure to renew
or cancellation of line by commercial liability insurer.
(1) Except as provided in subsection (5) of this section, an insurance company
selling commercial liability insurance and authorized to do business in Oregon
may not withdraw from, fail to renew or cancel any line of insurance or class
of business without supplying appropriate written justification to the Director
of the Department of Consumer and Business Services.
(2)
Justification for withdrawal, failure to renew or cancellation may include, but
need not be limited to:
(a)
Insufficient premium income;
(b)
Loss experience or expectation of future loss in the particular line of
insurance or class of business;
(c)
Necessity for uncompetitive or uneconomic rate increases;
(d)
Increased hazard in the risks assumed or material change in the line of
insurance or class of business that could not have been reasonably contemplated
by the insurance company at the time the company began selling the line of
insurance or class of business in Oregon; or
(e)
Change in the availability or costs of reinsurance.
(3)
The director shall issue an order approving or disapproving the withdrawal
from, failure to renew or cancellation of a line of insurance or class of
business.
(4)
An order issued under this section shall include a provision requiring the
insurer to notify affected insureds at least 60 days before the effective date
of any withdrawal, failure to renew or cancellation approved by the director.
(5)
This section does not apply to a surplus lines insurer. [1987 c.774 §34]
731.484 Prohibition on certain sales
related to group health and group life insurance.
(1) No insurer or insurance producer selling a policy of group life insurance
or group health insurance subject to an exemption in ORS 731.146 (2)(b) or (c)
is authorized to sell membership in a group for the purpose of qualifying an
applicant who is an individual for the insurance.
(2)
No insurer or insurance producer selling membership in a group is authorized to
offer a policy of group life insurance or group health insurance subject to an
exemption in ORS 731.146 (2)(b) or (c) for the purpose of selling membership in
the group. [1989 c.784 §2; 2003 c.364 §72; 2007 c.752 §2]
Note: The
amendments to 731.484 by section 7, chapter 752, Oregon Laws 2007, become
operative January 2, 2014. See section 13, chapter 752, Oregon Laws 2007, as
amended by section 4, chapter 81, Oregon Laws 2010, and section 10, chapter
500, Oregon Laws 2011. The text that is operative on and after January 2, 2014,
is set forth for the user’s convenience.
731.484. (1) No
insurer or insurance producer selling a policy of group life insurance or group
health insurance subject to the exemption in ORS 731.146 (2)(b) is authorized
to sell membership in a group for the purpose of qualifying an applicant who is
an individual for the insurance.
(2)
No insurer or insurance producer selling membership in a group is authorized to
offer a policy of group life insurance or group health insurance subject to the
exemption in ORS 731.146 (2)(b) for the purpose of selling membership in the
group.
731.485 Conditions under which insurer may
limit insured’s choice of drug outlets and pharmacies.
(1) An insurer may limit the drug outlets or pharmacists from which a person
covered under a health insurance policy issued by the insurer is authorized by
the insurer to obtain services only if the insurer first provides an
opportunity to drug outlets and pharmacists to offer to participate as a
provider of services as provided in this section. An insurer to which this
section applies must provide notice of the opportunity by mailing a notice to
the professional organization representing drug outlets and pharmacists in the
service area of the insurer. The notice must be given at least 10 days before
the deadline for receiving offers. The notice shall state the following:
(a)
The date after which offers will not be considered.
(b)
The services to be provided under the policy.
(c)
That each offer must contain a statement that the drug outlet or pharmacist is
in compliance with the requirements of the State Board of Pharmacy.
(d)
The name and address of the person or office designated for receipt of the
offers.
(2)
The services to which this section applies are the services normally provided
by drug outlets and pharmacists, including but not limited to prescription
drugs.
(3)
A professional organization that has received notice pursuant to subsection (1)
of this section shall take reasonable steps to relay the notice to each drug
outlet registered with the State Board of Pharmacy that is in the relevant
service area.
(4)
The following apply to an offer submitted by a drug outlet or pharmacist in
response to a notice given under subsection (1) of this section:
(a)
The offer must be in writing.
(b)
The offer must be submitted to the person or office designated in the notice.
(c)
The drug outlet or pharmacist must agree to provide services specified by the
insurer.
(5)
An insurer to which this section applies may select any drug outlet or
pharmacist of its choice on whatever basis the insurer alone determines to be
appropriate. Nothing in this section prohibits an insurer from contracting with
one or more drug outlets or pharmacists exclusively for services to be provided
to its insureds. [1993 c.391 §2]
731.486 Exemption from definition of “transact
insurance” for group life policies; master group health insurance coverage;
rules. (1) The exemption in ORS 731.146 (2)(b)
does not apply to an insurer that offers coverage under a group life insurance
policy in this state unless the Director of the Department of Consumer and Business
Services determines that the exemption applies.
(2)
The insurer shall submit evidence to the director that the exemption applies.
When a master policy for a policy of group life insurance is delivered or
issued for delivery outside this state to trustees of a fund for two or more
employers, for one or more labor unions, for one or more employers and one or
more labor unions or for an association, the insurer shall also submit evidence
showing compliance with ORS 743.354.
(3)
The director shall review the evidence submitted and may request additional
evidence as needed.
(4)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (2) of this section.
(5)
The director may order an insurer to cease offering a policy or coverage under
a policy if the director determines that the exemption under ORS 731.146 (2)(b)
is no longer satisfied.
(6)
Coverage under a master group life insurance policy delivered or issued for
delivery outside this state that does not qualify for the exemption in ORS
731.146 (2)(b) may be offered in this state if the director determines that the
state in which the policy was delivered or issued for delivery has requirements
that are substantially similar to those established under ORS 743.360 and that
the policy satisfies those requirements.
(7)
Coverage under a master group health insurance policy that is delivered or
issued for delivery outside this state to an association or trust may be
offered in this state if the director determines that the association or trust
meets applicable standards under ORS 743.522 (1)(b) or (c) or (2).
(8)
This section does not apply to any master policy issued to a multistate
employer or labor union.
(9)
The director may adopt rules to carry out this section. [1989 c.784 §3; 2001
c.943 §1; 2005 c.22 §486; 2007 c.752 §3]
Note: The
amendments to 731.486 by section 8, chapter 752, Oregon Laws 2007, become
operative January 2, 2014. See section 13, chapter 752, Oregon Laws 2007, as
amended by section 4, chapter 81, Oregon Laws 2010, and section 10, chapter
500, Oregon Laws 2011. The text that is operative on and after January 2, 2014,
is set forth for the user’s convenience.
731.486. (1)
The exemption in ORS 731.146 (2)(b) does not apply to an insurer that offers
coverage under a group health insurance policy or a group life insurance policy
in this state unless the Director of the Department of Consumer and Business
Services determines that the exemption applies.
(2)
The insurer shall submit evidence to the director that the exemption applies.
When a master policy is delivered or issued for delivery outside this state to
trustees of a fund for two or more employers, for one or more labor unions, for
one or more employers and one or more labor unions or for an association, the
insurer shall also submit evidence showing compliance with:
(a)
ORS 743.526, for a policy of group health insurance; or
(b)
ORS 743.354, for a policy of group life insurance.
(3)
The director shall review the evidence submitted and may request additional
evidence as needed.
(4)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (2) of this section.
(5)
The director may order an insurer to cease offering a policy or coverage under
a policy if the director determines that the exemption under ORS 731.146 (2)(b)
is no longer satisfied.
(6)
Coverage under a master group life or health insurance policy delivered or
issued for delivery outside this state that does not qualify for the exemption
in ORS 731.146 (2)(b) may be offered in this state if the director determines
that the state in which the policy was delivered or issued for delivery has
requirements that are substantially similar to those established under ORS
743.360 or 743.522 (2) and that the policy satisfies those requirements.
(7)
This section does not apply to any master policy issued to a multistate
employer or labor union.
(8)
The director may adopt rules to carry out this section.
731.488 Annual audit of insurer; rules.
(1) Each insurer shall have an annual audit conducted by an independent
certified public accountant and shall file an audited financial report annually
with the Director of the Department of Consumer and Business Services. The
annual audited financial report shall disclose:
(a)
The financial position of the insurer as of the end of the most recent calendar
year; and
(b)
The results of the insurer’s operations, cash flows and changes in capital and
surplus for the year then ended.
(2)
The director shall adopt rules with respect to the following matters as needed
for carrying out the requirements of this section:
(a)
Required contents and format of the audited financial report.
(b)
Requirements for filing the report.
(c)
Requirements applicable to qualifications and designation of certified public
accountants for purposes of audits under this section. The requirements may
include limitations on length of service for certified public accountants and
may permit recognition of accountants comparably qualified under the laws of
another country.
(d)
Requirements applicable to evaluation of the accounting procedures of an
insurer and its system of internal control by a certified public accountant.
(e)
Standards governing the scope and preparation of the audit.
(f)
Requirements and procedures relating to the reporting of the adverse financial
condition of an insurer by a certified public accountant.
(g)
Requirements and procedures relating to the reporting of significant
deficiencies for internal controls of an insurer.
(h)
Exemptions.
(i)
Any other matter that the director determines to be needed for preparation of
or inclusion in the financial report. [1991 c.401 §15]
731.490 [1987
c.774 §52; repealed by 1997 c.131 §1]
731.493 [1987
c.774 §53; repealed by 1997 c.131 §1]
731.496 [1987
c.774 §54; repealed by 1997 c.131 §1]
731.498 [1987
c.774 §58; repealed by 1997 c.131 §1]
731.500 [1987
c.774 §59; repealed by 1997 c.131 §1]
LIMIT OF RISK; REINSURANCE
731.504 Limit of risk.
(1) No insurer shall retain any risk on any one subject of insurance, whether a
domestic risk or not, in an amount exceeding 10 percent of its surplus to
policyholders, or in the case of title insurance, more than 50 percent of such
surplus, except that an insurance company, including a reciprocal insurance
company, comprised solely of 1,000 or more licensed Oregon physicians organized
for the purpose of insuring for professional liability may consider aggregate
insurance as surplus to policyholders for purposes of this section and shall not
be allowed to retain the risk on any one subject of insurance in excess of two
and one-half percent of such aggregate insurance.
(2)
For purposes of this section, aggregate insurance is insurance which provides
coverage in the event that the total fund of an insurance company, including a
reciprocal insurance company, which is available to pay claims for occurrences
of any one year, is exhausted. Aggregate insurance shall be in an amount equal
to at least five times the annual premium collected by the insurance company.
(3)
A “subject of insurance” for the purposes of this section:
(a)
As to insurance against fire and hazards other than windstorm, earthquake and
other catastrophic hazards, includes all properties insured by the same insurer
that customarily are considered by underwriters to be subject to loss or damage
from the same fire or the same occurrence of any other hazard insured against;
(b)
As to group life and health insurance, refers individually to each person
benefited under the group policy as a separate subject; and
(c)
As to mortgage insurance, includes all obligations secured by real property in
a single tract, or in multiple tracts not separated by at least one-half mile.
(4)
Reinsurance ceded as authorized by ORS 731.508 shall be deducted in determining
risk retained. As to surety risks, deduction also shall be made of the amount
assumed by any established incorporated cosurety and the value of any security
deposited, pledged, or held subject to the surety’s consent and for the surety’s
protection.
(5)
As to alien insurers, this section relates only to risks and surplus to
policyholders of the insurer’s United States branch.
(6)
As used in this section, “surplus to policyholders,” in addition to the insurer’s
capital and surplus, includes any voluntary reserves that are not required
pursuant to law, includes the contingency reserve held for mortgage insurance
as required by ORS 733.100, and shall be determined from the last sworn
statement of the insurer on file with the Director of the Department of
Consumer and Business Services, or by the last report of examination of the
insurer, whichever is the more recent at time of assumption of risk.
(7)
This section does not apply to wet marine and transportation insurance or to
any policy or type of coverage as to which the maximum possible loss to the
insurer is not readily ascertainable on issuance of the policy. [1967 c.359 §103;
1969 c.692 §3; 1975 c.796 §12]
731.508 Approved reinsurance.
(1) An insurer may accept reinsurance only of such risks, and retain risk
thereon within such limits, as it is otherwise authorized to insure.
(2)
Except as provided in ORS 731.512, 732.517 to 732.546 or 742.150 to 742.162, an
insurer may reinsure risks with an insurer authorized to transact such insurance
in this state, or in any other solvent insurer approved or accepted by the
Director of the Department of Consumer and Business Services for the purpose of
such reinsurance. The director shall not approve or accept any such reinsurance
by a ceding domestic insurer in an unauthorized insurer which the director
finds for good cause would be contrary to the interests of the policyholders or
stockholders of such domestic insurer.
(3)
Credit shall not be allowed, as an asset or as a deduction from liability, to
any ceding insurer for reinsurance unless the reinsurance contract provides, in
substance, that in the event of the insolvency of the ceding insurer, the
reinsurance shall be payable under a contract or contracts reinsured by the
assuming insurer on the basis of reported claims allowed by the court hearing
the liquidation proceeding, without diminution because of the insolvency of the
ceding insurer. Such payments shall be made directly to the ceding insurer or
to its domiciliary liquidator except:
(a)
When the contract or other written agreement specifically provides another
payee of the reinsurance in the event of the insolvency of the ceding insurer;
or
(b)
When the assuming insurer, with the consent of the direct insured or insureds,
has assumed the policy obligations of the ceding insurer as direct obligations
of the assuming insurer to the payees under such policies and in substitution
for the obligations of the ceding insurer to such payees.
(4)
For the purposes of subsection (3) of this section, the reinsurance agreement
may provide that the domiciliary liquidator of an insolvent ceding insurer
shall, within a reasonable time after the claim is filed in the liquidation
proceeding, give written notice to the assuming insurer of the pendency of a
claim against the ceding insurer on the contract reinsured. During the pendency
of the claim, an assuming insurer may investigate the claim and interpose, at
its own expense, in the proceeding in which the claim is to be adjudicated any
defenses that the assuming insurer determines to be available to the ceding
insurer or its liquidator. The expense may be filed as a claim against the
insolvent ceding insurer to the extent of a proportionate share of the benefit
that may accrue to the ceding insurer solely as a result of the defense
undertaken by the assuming insurer. When two or more assuming insurers are
involved in the same claim and a majority in interest elect to interpose one or
more defenses to the claim, the expense shall be apportioned in accordance with
the terms of the reinsurance agreement as though the expense had been incurred
by the ceding insurer.
(5)
The director may disallow credit that would otherwise be allowed if the
director determines that allowing credit would be contrary to accurate
financial reporting or proper financial management, or may be hazardous to
policyholders of the insurer or the insurance-buying public generally. The
director may make such a determination only according to standards established
by the director by rule. This subsection applies only to insurers who transact
life insurance or health insurance, or both.
(6)
Upon request of the director, a ceding insurer promptly shall inform the
director in writing of the cancellation or any other material change of any of
its reinsurance treaties or arrangements.
(7)
This section does not apply to wet marine and transportation insurance. [1967
c.359 §104; 1993 c.447 §68; 1995 c.30 §9; 1995 c.638 §1; 2001 c.318 §14]
731.509 Legislative intent; criteria for
allowing credit for reinsurance. (1) The
purpose of ORS 731.509, 731.510, 731.511, 731.512 and 731.516 is to protect the
interests of insureds, claimants, ceding insurers, assuming insurers and the
public generally. The Legislative Assembly declares that its intent is to
ensure adequate regulation of insurers and reinsurers and adequate protection
for those to whom they owe obligations. In furtherance of that state interest,
the Legislative Assembly mandates that upon the insolvency of an alien insurer
or reinsurer that provides security to fund its United States obligations in
accordance with ORS 731.509, 731.510, 731.511, 731.512 and 731.516, the assets
representing the security shall be maintained in the United States and claims
shall be filed with and valued by the state insurance commissioner with
regulatory oversight, and the assets shall be distributed in accordance with
the insurance laws of the state in which the trust is domiciled that are
applicable to the liquidation of domestic United States insurers. The Legislative
Assembly declares that the laws contained in ORS 731.509, 731.510, 731.511,
731.512 and 731.516 are fundamental to the business of insurance in accordance
with 15 U.S.C. 1011 and 1012.
(2)
The Director of the Department of Consumer and Business Services shall not
allow credit for reinsurance to a domestic ceding insurer as either an asset or
a reduction from liability on account of reinsurance ceded unless credit is
allowed as provided under ORS 731.508 and unless the reinsurer meets the
requirements of:
(a)
Subsection (3) of this section;
(b)
Subsection (4) of this section;
(c)
Subsections (5) and (8) of this section;
(d)
Subsections (6) and (8) of this section; or
(e)
Subsection (7) of this section.
(3)
Credit shall be allowed when the reinsurance is ceded to an authorized assuming
insurer that accepts reinsurance of risks, and retains risk thereon within such
limits, as the assuming insurer is otherwise authorized to insure in this state
as provided in ORS 731.508.
(4)
Credit shall be allowed when the reinsurance is ceded to an assuming insurer
that is accredited as a reinsurer in this state as provided in ORS 731.511. The
director shall not allow credit to a domestic ceding insurer if the
accreditation of the assuming insurer has been revoked by the director after
notice and opportunity for hearing.
(5)
Credit shall be allowed when the reinsurance is ceded to a foreign assuming
insurer or a United States branch of an alien assuming insurer meeting all of
the following requirements:
(a)
The foreign assuming insurer must be domiciled in a state employing standards
regarding credit for reinsurance that equal or exceed the standards applicable
under this section. The United States branch of an alien assuming insurer must
be entered through a state employing such standards.
(b)
The foreign assuming insurer or United States branch of an alien assuming
insurer must maintain a combined capital and surplus in an amount not less than
$20,000,000. The requirement of this paragraph does not apply to reinsurance
ceded and assumed pursuant to pooling arrangements among insurers in the same
holding company system.
(c)
The foreign assuming insurer or United States branch of an alien assuming
insurer must submit to the authority of the director to examine its books and
records.
(6)
Credit shall be allowed when the reinsurance is ceded to an assuming insurer
that maintains a trust fund meeting the requirements of this subsection and
additionally complies with other requirements of this subsection. The trust fund
must be maintained in a qualified United States financial institution, as
defined in ORS 731.510 (1), for the payment of the valid claims of its United
States policyholders and ceding insurers and their assigns and successors in
interest. The assuming insurer must report annually to the director information
substantially the same as that required to be reported on the annual statement
form by ORS 731.574 by authorized insurers, in order to enable the director to
determine the sufficiency of the trust fund. The following requirements apply
to such a trust fund:
(a)
In the case of a single assuming insurer, the trust fund must consist of funds
in trust in an amount not less than the assuming insurer’s liabilities
attributable to reinsurance ceded by United States ceding insurers. In
addition, the assuming insurer must maintain a trusteed surplus of not less
than $20,000,000.
(b)
In the case of a group including incorporated and individual unincorporated
underwriters:
(A)
For reinsurance ceded under reinsurance agreements with an inception, amendment
or renewal date on or after August 1, 1995, the trust shall consist of a
trusteed account in an amount not less than the group’s several liabilities
attributable to business ceded by United States domiciled ceding insurers to
any member of the group.
(B)
For reinsurance ceded under reinsurance agreements with an inception date on or
before July 31, 1995, and not amended or renewed after that date,
notwithstanding the other provisions of ORS 731.509, 731.510, 731.511, 731.512
and 731.516, the trust shall consist of a trusteed account in an amount not
less than the group’s several insurance and reinsurance liabilities
attributable to business written in the United States.
(C)
In addition to the trusts described in subparagraphs (A) and (B) of this
paragraph, the group shall maintain in trust a trusteed surplus of which
$100,000,000 shall be held jointly for the benefit of the United States
domiciled ceding insurers of any member of the group for all years of account.
(D)
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 regulation and solvency control by the group’s domiciliary
regulator as are the unincorporated members.
(E)
Within 90 days after the group’s financial statements are due to be filed with
the group’s domiciliary regulator, the group shall provide to the director an
annual certification by the group’s domiciliary regulator of the solvency of
each underwriter member or, if certification is unavailable, financial
statements of each underwriter member of the group prepared by independent
certified public accountants.
(c)
In the case of a group of incorporated insurers described in this paragraph,
the trust must be in an amount equal to the group’s several liabilities
attributable to business ceded by United States ceding insurers to any member
of the group pursuant to reinsurance contracts issued in the name of the group.
This paragraph applies to a group of incorporated insurers under common
administration that complies with the annual reporting requirements contained
in this subsection and that has continuously transacted an insurance business
outside the United States for at least three years immediately prior to making
application for accreditation. Such a group must have an aggregate
policyholders’ surplus of $10,000,000,000 and must submit to the authority of
this state to examine its books and records and bear the expense of the examination.
The group shall also maintain a joint trusteed surplus of which $100,000,000
must be held jointly for the benefit of United States ceding insurers of any
member of the group as additional security for any such liabilities. Each
member of the group shall make available to the director an annual
certification of the member’s solvency by the member’s domiciliary regulator
and its independent certified public accountant.
(d)
The form of the trust and any amendment to the trust shall have been approved
by the insurance commissioner of the state in which the trust is domiciled or
by the insurance commissioner of another state who, pursuant to the terms of
the trust instrument, has accepted principal regulatory oversight of the trust.
(e)
The form of the trust and any trust amendments also shall be filed with the
insurance commissioner of every state in which the ceding insurer beneficiaries
of the trust are domiciled. The trust instrument must provide that contested
claims shall be valid and enforceable upon the final order of any court of
competent jurisdiction in the United States. The trust must vest legal title to
its assets in its trustees for the benefit of the assuming insurer’s United
States ceding insurers and their assigns and successors in interest. The trust
and the assuming insurer are subject to examination as determined by the
director. The trust must remain in effect for as long as the assuming insurer
has outstanding obligations due under the reinsurance agreements subject to the
trust.
(f)
Not later than March 1 of each year, the trustees of each trust shall report to
the director in writing the balance of the trust and listing the trust’s
investments at the preceding year end, and shall certify the date of
termination of the trust, if so planned, or certify that the trust will not
expire prior to the following December 31.
(7)
Credit shall be allowed when the reinsurance is ceded to an assuming insurer
not meeting the requirements of subsection (3), (4), (5) or (6) of this
section, but only as to the insurance of risks located in jurisdictions in
which the reinsurance is required by applicable law or regulation of that
jurisdiction.
(8)
If the assuming insurer is not authorized to transact insurance in this state
or accredited as a reinsurer in this state, the director shall not allow the
credit permitted by subsections (5) and (6) of this section unless the assuming
insurer agrees in the reinsurance agreement to the provisions stated in this
subsection. This subsection is not intended to conflict with or override the
obligation of the parties to a reinsurance agreement to arbitrate their
disputes, if such an obligation is created in the agreement. The assuming
insurer must agree in the reinsurance agreement:
(a)
That in the event of the failure of the assuming insurer to perform its
obligations under the terms of the reinsurance agreement, the assuming insurer,
at the request of the ceding insurer, shall submit to the jurisdiction of any
court of competent jurisdiction in any state of the United States, will comply
with all requirements necessary to give the court jurisdiction and will abide
by the final decision of the court or of any appellate court in the event of an
appeal; and
(b)
To designate the director or a designated attorney as its true and lawful
attorney upon whom any lawful process in any action, suit or proceeding
instituted by or on behalf of the ceding company may be served.
(9)
If the assuming insurer does not meet the requirements of subsection (3), (4)
or (5) of this section, the credit permitted by subsection (6) of this section
shall not be allowed unless the assuming insurer agrees in the trust agreements
to the following conditions:
(a)
Notwithstanding any other provisions in the trust instrument, if the trust fund
is inadequate because it contains an amount less than the applicable amount
required by subsection (6)(a), (b) or (c) of this section, or if the grantor of
the trust has been declared insolvent or placed into receivership,
rehabilitation, liquidation or similar proceedings under the laws of the
grantor’s state or country of domicile, the trustee shall comply with an order
of the insurance commissioner with regulatory oversight over the trust or with
an order of a court of competent jurisdiction directing the trustee to transfer
to the insurance commissioner with regulatory oversight all the assets of the
trust fund.
(b)
The assets shall be distributed by and claims shall be filed with and valued by
the insurance commissioner with regulatory oversight in accordance with the
laws of the state in which the trust is domiciled that are applicable to the
liquidation of domestic insurance companies.
(c)
If the insurance commissioner with regulatory oversight determines that the
assets of the trust fund or any part thereof are not necessary to satisfy the
claims of the United States ceding insurers of the grantor of the trust, the
assets or part thereof shall be returned by the insurance commissioner
according to the laws of that state and according to the terms of the trust
agreement not inconsistent with the laws of that state.
(d)
The grantor shall waive any right otherwise available to it under United States
law that is inconsistent with this subsection. [1993 c.447 §65; 1995 c.99 §1;
2001 c.318 §15]
731.510 Criteria for allowing reduction
from liability for reinsurance. (1) Subject
to the provisions of ORS 731.508 relating to allowance of credit for
reinsurance, the Director of the Department of Consumer and Business Services
shall allow a reduction from liability for the reinsurance ceded by a domestic
insurer to a reinsurer not meeting the requirements of ORS 731.509 in an amount
not exceeding the liabilities carried by the ceding insurer, as provided in
this section. The reduction shall be in the amount of funds held by or on
behalf of the ceding insurer, including funds held in trust for the ceding
insurer, under a reinsurance contract with the reinsurer as security for the
payment of obligations thereunder, if the security:
(a)
Is held in the United States subject to withdrawal solely by and under the
exclusive control of the ceding insurer; or
(b)
In the case of a trust, is held in a qualified United States financial
institution. For purposes of this paragraph, a qualified United States
financial institution is an institution that:
(A)
Is organized, or, in the case of a United States branch or agency office of a
foreign banking organization, is licensed, under the laws of the United States
or any state thereof and has been granted authority to operate with fiduciary
powers; and
(B)
Is regulated, supervised and examined by federal or state authorities having
regulatory authority over banks and trust companies.
(2)
The security for purposes of subsection (1) of this section may be in any of
the following forms:
(a)
Cash.
(b)
Securities listed by the Securities Valuation Office of the National
Association of Insurance Commissioners and qualifying as allowed assets.
(c)
Clean, irrevocable, unconditional letters of credit, issued or confirmed by a
qualified United States financial institution, effective not later than
December 31 of the year for which filing is being made, and in the possession
of, or in trust for, the ceding company on or before the filing date of its
annual statement. Letters of credit issued or confirmed by an institution
meeting applicable standards of issuer acceptability as of the dates of their
issuance or confirmation shall continue to be acceptable as security,
notwithstanding the subsequent failure of the issuing or confirming institution
to meet applicable standards of issuer acceptability, until their expiration,
extension, renewal, modification or amendment, whichever occurs first. For
purposes of this paragraph, a qualified United States financial institution is
an institution that:
(A)
Is organized or, in the case of a United States office of a foreign banking
organization, is licensed, under the laws of the United States or any state
thereof;
(B)
Is regulated, supervised and examined by United States federal or state
authorities having regulatory authority over banks and trust companies; and
(C)
Has been determined by the director to meet such standards of financial
condition and standing as are considered necessary and appropriate to regulate
the quality of financial institutions whose letters of credit will be
acceptable to the director. For the purpose of making a determination under
this subparagraph, the director shall consider and may accept determinations
made by the Securities Valuation Office of the National Association of
Insurance Commissioners as to whether a financial institution meets its
standards of financial conditions and standing.
(d)
Any other form of security acceptable to the director. [1993 c.447 §66; 2001
c.318 §16]
731.511 Criteria to be met by assuming
insurer in order to be accredited as reinsurer.
(1) For purposes of allowing credit to a ceding domestic insurer under ORS
731.509 when the reinsurance is ceded to an assuming insurer that is accredited
as a reinsurer in this state, an insurer may be accredited as a reinsurer in
this state if the insurer:
(a)
Files and maintains with the Director of the Department of Consumer and
Business Services evidence of its submission to the jurisdiction of this state;
(b)
Submits to the authority of the director to examine its books and records;
(c)
Is authorized or licensed to transact insurance or reinsurance in at least one
state or, in the case of a United States branch of an alien assuming insurer,
is entered through and authorized or licensed to transact insurance or
reinsurance in at least one state;
(d)
Files annually with the director a copy of its annual statement filed with the
insurance department of its state of domicile and a copy of its most recent
audited financial statement; and
(e)
Satisfies either of the following requirements:
(A)
Maintains combined capital and surplus in an amount that is not less than
$20,000,000. An application for accreditation by an insurer who maintains the
amount of combined capital and surplus specified in this subparagraph is
considered to be approved if the application is not disapproved on or before
the 90th day after the application is complete and is filed with the director.
(B)
Maintains combined capital and surplus in an amount less than $20,000,000. An
insurer applying for accreditation who maintains the amount of combined capital
and surplus specified in this subparagraph is not accredited until the
application for accreditation is approved by the director.
(2)
An insurer that is accredited as a reinsurer in this state may accept
reinsurance only of those risks and retain the risk thereon within such limits
as the accredited reinsurer is otherwise authorized to insure directly in a
state in which the accredited reinsurer is authorized or licensed to transact
insurance.
(3)
The director may revoke the accreditation of an assuming insurer if the
director determines that the assuming insurer has failed to continue to meet
any of the requirements of subsection (1) of this section. [1993 c.447 §67]
731.512 Withdrawal of insurer;
reinsurance. (1) No insurer shall withdraw from this
state until its direct liability to its policyholders and obligees under all
its insurance policies then in force in this state has been assumed by another
authorized insurer under an agreement approved by the Director of the
Department of Consumer and Business Services. In the case of a life insurer,
its liability pursuant to policies issued in this state in settlement of
proceeds under its policies shall likewise be so assumed.
(2)
The director may waive this requirement if the director finds upon examination
that a withdrawing insurer then is fully solvent and that the protection to be
given its policyholders in this state will not be impaired by the waiver.
(3)
The assuming insurer within a reasonable time shall replace the assumed
insurance policies with its own, or by indorsement thereon acknowledge its
liability thereunder.
(4)
This section is in addition to the requirements of ORS 732.517 to 732.546 and
742.150 to 742.162. [1967 c.359 §105; 1995 c.30 §10]
731.516 Mortgage insurance limitation;
waiver of limitation; rules; fees. (1) As used
in this section, “policyholders’ position” means the aggregate amount of
mortgage insurance policies covering amounts of insured obligations, divided by
the insurer’s surplus to policyholders as defined in ORS 731.504 (6).
(2)
Except as provided in subsection (3) of this section, a mortgage insurer shall
not have outstanding at any time a policyholders’ position greater than 25.
(3)(a)
The Director of the Department of Consumer and Business Services may waive the
requirement in subsection (2) of this section in response to the request of a
mortgage insurer if the director finds that the mortgage insurer’s
policyholders’ position is reasonable in relation to the mortgage insurer’s
aggregate insured risk and adequate to the mortgage insurer’s financial needs.
(b)
The request of the mortgage insurer must be made in writing at least 60 days
prior to the date the mortgage insurer expects to exceed the policyholders’
position allowed by subsection (2) of this section, and shall at a minimum
address the factors set forth in subsection (4) of this section that the
director may use in making a decision on the waiver request.
(4)
In determining whether a mortgage insurer’s requested policyholders’ position
is reasonable in relation to the mortgage insurer’s aggregate insured risk and
adequate to the mortgage insurer’s financial needs, the director may consider
the following factors:
(a)
The size of the mortgage insurer as measured by its assets, capital and
surplus, reserves, premium writings, insurance in force and other appropriate
criteria.
(b)
The extent to which the mortgage insurer’s business is diversified across time,
geography, credit quality, origination and distribution channels.
(c)
The nature and extent of the mortgage insurer’s reinsurance program.
(d)
The quality, diversification and liquidity of the mortgage insurer’s assets and
investment portfolio.
(e)
The historical and projected trends in the magnitude of the mortgage insurer’s
policyholders’ position.
(f)
The policyholders’ position maintained by other comparable mortgage insurers.
(g)
The adequacy of the mortgage insurer’s reserves.
(h)
The quality and liquidity of investments in affiliates of the mortgage insurer.
The director may treat any such investment as a nonadmitted asset for purposes
of determining the adequacy of the mortgage insurer’s policyholders’ position.
(i)
The quality of the mortgage insurer’s earnings and the extent to which the
reported earnings of the mortgage insurer include extraordinary items.
(j)
An independent actuary’s opinion as to the reasonableness and adequacy of the
mortgage insurer’s historical and projected policyholders’ position.
(k)
The capital contributions that have been invested or are available for future
investment in the mortgage insurer.
(L)
The historical and projected trends in the components of the mortgage insurer’s
aggregate insured risk including, but not limited to, the quality and type of
the risks included in the aggregate insured risk.
(m)
Any other factors the director believes are relevant in making a decision on
the request.
(5)
The director may retain accountants, actuaries or other experts to assist the
director in the review of the mortgage insurer’s request submitted under
subsection (3) of this section.
(6)
Any waiver granted by the director under subsection (3) of this section is:
(a)
In effect for a specified period of time, not to exceed two years. The mortgage
insurer may request an extension of the waiver for a period not exceeding two
additional years, and the director shall review the extension request based
upon the factors set forth in subsection (4) of this section.
(b)
Subject to any terms and conditions that the director considers necessary to
restore the mortgage insurer’s policyholders’ position to 25 or lower as
required by subsection (2) of this section.
(7)
The director may adopt rules to carry out the provisions of this section.
(8)
The director shall charge a fee for a waiver request under this section
designed to reimburse the Department of Consumer and Business Services for all
costs incurred by the department in reviewing the waiver request. [1969 c.692 §5;
1977 c.600 §1; 2010 c.46 §1]
CAPITAL AND SURPLUS
731.554 Capital and surplus requirements.
(1) Except as provided in subsections (2) to (6) of this section and ORS
731.562 and 731.566, to qualify for authority to transact insurance in this
state an insurer shall possess and thereafter maintain capital or surplus, or
any combination thereof, of not less than $2.5 million.
(2)
An insurer transacting any workers’ compensation insurance business shall
possess and thereafter maintain capital or surplus, or any combination thereof,
of not less than $5 million.
(3)
An insurer transacting mortgage insurance shall possess and thereafter maintain
capital or surplus, or any combination thereof, of not less than $4 million.
(4)
A home protection insurer shall possess and thereafter maintain capital or
surplus, or any combination thereof, of not less than 10 percent of the
aggregate of premiums charged on its policies currently in force, but the
required amount shall not be less than $250,000 or more than $1 million.
(5)
A domestic insurer applying for its original certificate of authority in this
state shall possess, when first so authorized, additional capital or surplus,
or any combination thereof, of not less than $500,000. However, the additional
amount in the case of a home protection insurer shall be not less than $10,000.
(6)
For the protection of the public, the Director of the Department of Consumer
and Business Services may require an insurer to possess and maintain capital or
surplus, or any combination thereof, in excess of the amount otherwise required
under this section, ORS 731.562 or 731.566, owing to the type, volume and
nature of insurance business transacted by the insurer, if the director
determines that the greater amount is necessary for maintaining the insurer’s
solvency according to standards established by rule. In developing such
standards, the director shall consider model standards adopted by the National
Association of Insurance Commissioners. For the purpose of determining the
reasonableness and adequacy of an insurer’s capital and surplus, the director
must consider at least the following factors, as applicable:
(a)
The size of the insurer, as measured by its assets, capital and surplus,
reserves, premium writings, insurance in force and other appropriate criteria.
(b)
The extent to which the business of the insurer is diversified among the
several lines of insurance.
(c)
The number and size of risks insured in each line of business.
(d)
The extent of the geographical dispersion of the insured risks of the insurer.
(e)
The nature and extent of the reinsurance program of the insurer.
(f)
The quality, diversification and liquidity of the investment portfolio of the
insurer.
(g)
The recent past and projected future trend in the size of the investment
portfolio of the insurer.
(h)
The combined capital and surplus maintained by other comparable insurers.
(i)
The adequacy of the reserves of the insurer.
(j)
The quality and liquidity of investments in affiliates. The director may treat
any such investment as a disallowed asset for purposes of determining the
adequacy of combined capital and surplus whenever in the judgment of the
director the investment so warrants.
(k)
The quality of the earnings of the insurer and the extent to which the reported
earnings include extraordinary items. [1967 c.359 §106; 1969 c.335 §1; 1969
c.692 §6; 1981 c.247 §5; 1987 c.483 §1; 1993 c.447 §9; 2001 c.318 §1]
731.558 [1967
c.359 §107; repealed by 1993 c.447 §122]
731.562 Title insurer capital and surplus
requirements. To qualify for authority to transact
title insurance in this state, an insurer shall possess and thereafter maintain
capital or surplus, or any combination thereof, of not less than $2.5 million. [Formerly
748.010; 1987 c.483 §2; 2001 c.318 §2]
731.566 Reciprocal insurer surplus
requirements. To qualify for authority to transact
insurance in this state, a reciprocal insurer shall possess and thereafter
maintain a surplus of not less than $2.5 million, and any reciprocal insurer
that exchanges policies of insurance covering workers’ compensation insurance
shall possess and thereafter maintain a surplus of not less than $5 million. [1967
c.359 §109; 1975 c.274 §1; 1977 c.651 §2; 1987 c.483 §3; 1993 c.709 §3; 2001
c.318 §3]
731.568 [1993
c.709 §2; repealed by 2001 c.318 §4]
731.570 Withdrawing advancements made to
reciprocal insurer. No advancement made by the
subscribers or the attorney of a reciprocal insurer shall be withdrawn or
refunded except out of the surplus of the insurer in excess of its required
capitalization, and then only upon the written consent of the Director of the
Department of Consumer and Business Services. [1967 c.359 §110]
731.574 Annual financial statement.
(1) Except as provided in subsection (4) of this section, every authorized
insurer shall file with the Director of the Department of Consumer and Business
Services, on or before March 1 of each year, a financial statement for the year
ending December 31 immediately preceding. This statement shall be on a form
prescribed by the director. The statement shall contain such detailed exhibit
of the condition and transactions of the insurer, in such form and otherwise,
as the director prescribes. The director shall consider and may prescribe the
annual statement blank or other form established by the National Association of
Insurance Commissioners, including instructions prepared by the National
Association of Insurance Commissioners for completing the blank or other form.
If the director prescribes the blank or other form established by the National Association
of Insurance Commissioners, including the instructions, an insurer submitting
the annual statement blank or form established by the National Association of
Insurance Commissioners must complete the blank or form according to the
instructions. The director may require the filing of information in addition to
the information required in the annual statement. The director may also require
additional filings as the director determines necessary.
(2)
The financial statement filed by an insurer under subsection (1) of this
section shall be verified by the oaths of the president and secretary of the
insurer or, in their absence, by two other principal officers. The statement of
an alien company shall embrace only its condition and transactions in the United
States, unless the director requires otherwise, and shall be verified by the
oath of its resident manager or principal representatives in the United States.
Facsimile signatures are acceptable and shall have the same force as original
signatures.
(3)
The director may grant an extension of time for filing the annual statement.
(4)
A home protection insurer may adopt a fiscal year other than the calendar year
for its financial statements filed with the director under subsection (1) of
this section by declaring the fiscal year in its application for a certificate
of authority. An adopted fiscal year may not be changed without the consent of
the insurance supervisory official of the insurer’s domicile. The financial
statement of a home protection insurer on other than the calendar year basis
shall be filed with the director on or before the first day of the third month
which follows the end of the fiscal year.
(5)
An insurer, subject to requirements set forth in rules made by the director,
may publish financial statements, or information based on financial statements,
prepared on a basis that is in accordance with requirements of a competent
authority and differs from the basis of the statements required to be filed
with the director.
(6)
It is the intention of the Legislative Assembly that the director consider and
follow the accounting, reporting and other standards, practices and procedures
established by the National Association of Insurance Commissioners in order to:
(a)
Strengthen and improve regulation of insurer solvency by the Department of
Consumer and Business Services;
(b)
Promote uniform and consistent regulation of insurance by this state and the
other states;
(c)
Reduce regulatory costs owing to unnecessary differences in the laws of the various
states; and
(d)
Obtain and maintain accreditation of this state’s insurance regulatory program
by the National Association of Insurance Commissioners. [Formerly 736.120; 1975
c.231 §1; 1981 c.247 §6; 1993 c.447 §12]
REPORTS OF CRIMINAL CONDUCT
731.590 “Insurer” defined for ORS 731.592
and 731.594. As used in ORS 731.592 and 731.594, “insurer”
includes, but is not limited to:
(1)
An insurer, as defined in ORS 731.106.
(2)
A health care service contractor, as defined in ORS 750.005, including, but not
limited to, a health maintenance organization.
(3)
A multiple employer welfare arrangement, as defined in ORS 750.301.
(4)
A legal entity that is self-insured and provides insurance services to its
employees.
(5)
An insurer, as defined in ORS 656.005.
(6)
An employer authorized under ORS chapter 656 to self-insure its workers’
compensation risk.
(7)
A fraternal benefit society, as described in ORS 748.106.
(8)
An insurance producer, as defined in ORS 731.104. [1999 c.633 §2; 2003 c.364 §73;
2007 c.241 §25]
Note:
731.590 to 731.594 were added to and made a part of the Insurance Code by
legislative action but were not added to ORS chapter 731 or any series therein.
See Preface to Oregon Revised Statutes for further explanation.
731.592 Reporting criminal conduct
involving insurance. (1) Notwithstanding ORS 746.665,
an insurer shall cooperate with any law enforcement agency or other state or
federal agency that is investigating or prosecuting suspected criminal conduct
involving insurance. The insurer shall provide any information requested by the
agency unless the information is subject to a legal privilege that would
prohibit disclosure.
(2)
If an insurer has reason to believe that criminal conduct involving insurance
has been, is being or is about to be committed, the insurer shall notify the
appropriate agency of that fact. The insurer is not required to notify the
agency if the information or any part of the information upon which the belief
is based is protected from disclosure by legal privilege.
(3)
An insurer providing information under this section may request information
relating to the investigation that is in the possession or control of the
agency. The agency may not provide an insurer with information that is
privileged or confidential. Otherwise, the agency shall disclose requested
information unless disclosure would jeopardize an ongoing investigation or
prosecution. The agency may require that the insurer not disclose the
information to any other person.
(4)
A person who has reason to believe criminal conduct involving insurance has
been, is being or is about to be committed, or who collects, reviews or
analyzes information concerning suspected criminal conduct involving insurance,
may furnish any unprivileged information in the person’s possession concerning
the suspected criminal conduct to an insurer who requests the information for
the purpose of detecting, prosecuting or preventing criminal conduct involving
insurance.
(5)
If an insurer or agency does not provide information as required by this
section and the suspected criminal conduct results in a conviction, the insurer
or agency is not eligible for any compensation to which the insurer or agency
might otherwise be entitled from any award under ORS 137.106. [1999 c.633 §3]
Note: See
note under 731.590.
731.594 Immunity from civil liability.
Unless it is shown that the person, including an insurer, acted with actual
malice, a person who discloses or provides information under ORS 731.592 has
immunity from any civil liability that might otherwise be incurred or imposed
with respect to the disclosure or provision of the information. A person has
the same immunity with respect to participating in any judicial proceeding
resulting from the disclosure or provision of information. [1999 c.633 §4]
Note: See
note under 731.590.
DEPOSITS
731.604 Acceptance of deposits of
insurers. The following deposits of insurers
shall be accepted and held by the Department of Consumer and Business Services
for the purposes for which such deposits are made and are subject to the
applicable provisions of the Insurance Code:
(1)
Deposits required or permitted under the Insurance Code.
(2)
Deposits of domestic insurers made pursuant to the laws of other jurisdictions.
[1967 c.359 §112; 1999 c.196 §2]
731.608 Purpose of deposit.
(1) Except as provided in subsection (2) of this section, deposits made in this
state under ORS 731.624 shall be held for the faithful performance by the
insurer of all insurance obligations, including claims for unearned premiums,
with respect to domestic risks pertaining to the particular class of insurance
for which the deposit was made. However, there shall be excluded from each such
obligation the same amount as is excluded in determining the obligation of the
Oregon Insurance Guaranty Association under ORS 734.510 to 734.710.
(2)
If at any time a deposit made under ORS 731.624 by a particular insurer is
insufficient to perform the insurance obligations upon the faithful performance
of which the deposit was conditioned, then any other deposit made under ORS
731.624 by that insurer shall be so used to the extent that such other deposit
is not used to perform the insurance obligations upon the faithful performance
of which such other deposit was conditioned.
(3)
Deposits made by insurers and reinsurers in this state under ORS 731.628 shall
be held for the payment of compensation benefits to workers employed by insured
employers other than those insured with the State Accident Insurance Fund
Corporation to whom the insurer has issued a workers’ compensation insurance
policy under ORS chapter 656. Deposits made by insurers and reinsurers under
ORS 731.628 also shall be held to reimburse the Department of Consumer and
Business Services, subject to approval by the Director of the Department of
Consumer and Business Services, for costs incurred by the department in
processing workers’ compensation claims of insurers which have been placed in
liquidation, receivership, rehabilitation or other such status for the orderly
conservation or distribution of assets, pursuant to the laws of this state or
any other state.
(4)
A deposit made in this state by a domestic insurer transacting insurance in
another jurisdiction, and as required by the laws of such jurisdiction, shall
be held for the purpose or purposes required by such laws.
(5)
Deposits of foreign and alien insurers required pursuant to ORS 731.854 shall
be held for such purposes as are required by such law, and as specified by the
director’s order by which the deposit is required.
(6)
Deposits of domestic reciprocal insurers required pursuant to ORS 731.632 shall
be held for the benefit of subscribers wherever located. [1967 c.359 §113; 1971
c.231 §12; 1977 c.793 §6; 1981 c.854 §57; 1987 c.236 §1; 1989 c.700 §2; 2007
c.241 §26]
731.612 Rights of insurer regarding deposits.
While the insurer remains unimpaired and is in compliance with the Insurance
Code it may:
(1)
Demand, receive, sue for and recover the income from the assets deposited;
(2)
Exchange and substitute for the deposited assets, or any part thereof, other
eligible assets of equivalent or greater value; and
(3)
At any reasonable time inspect such deposit. [1967 c.359 §114]
731.616 Valuation of deposits;
deficiencies. (1) For the purpose of determining the
sufficiency of its deposit in this state the assets of the insurer on deposit
shall be valued at current market value.
(2)
If assets deposited by an insurer are subject to material fluctuations in
market value, the Director of the Department of Consumer and Business Services,
in the discretion of the director, may require the insurer to deposit and
maintain on deposit additional assets in such amount as reasonably is necessary
to assure that the deposit at all times will have a market value of not less
than the amount specified under or pursuant to the law by which the deposit is
required.
(3)
If for any reason the current market value of such assets falls below the
amount of deposit required of the insurer, the insurer shall promptly deposit
other or additional assets eligible for deposit in an amount sufficient to cure
the deficiency. The insurer has 30 days in which to cure the deficiency after
notice thereof from the director. [1967 c.359 §115]
731.620 Assignment of deposited
securities. (1) The insurer shall assign in trust
to the Director of the Department of Consumer and Business Services and
successors in office all securities being deposited through the director under
the Insurance Code that are not negotiable by delivery; or, in lieu of such
assignment, the insurer may give the director an irrevocable power of attorney
authorizing the director to transfer the securities or any part thereof for any
purpose within the scope of the Insurance Code.
(2)
Upon release to the insurer, or other person entitled thereto, of any such
security the director shall reassign the security to such insurer or person;
or, in the case of power of attorney given pursuant to subsection (1) of this
section, the director shall deliver the power of attorney, together with the
securities covered thereby, to the insurer or person entitled thereto. [1967
c.359 §116; 1979 c.870 §3; 1987 c.158 §154]
731.624 Special deposits; foreign and
alien insurers. Every insurer, before
transacting insurance in this state, shall make the following deposits with the
Department of Consumer and Business Services:
(1)
Foreign or alien insurers transacting surety insurance in this state, $250,000.
(2)
Foreign or alien insurers transacting title insurance in this state, $100,000.
(3)
Foreign or alien insurers transacting home protection insurance in this state,
$100,000.
(4)
Foreign or alien insurers transacting mortgage guaranty insurance in this
state, $500,000. [1967 c.359 §117; 1981 c.247 §7; 1987 c.483 §4; 1999 c.196 §3]
731.628 Deposit required of workers’
compensation insurers. (1) In addition to any other
requirement therefor under the Insurance Code, each insurer other than the
State Accident Insurance Fund Corporation that issues workers’ compensation
insurance policies to employers under ORS chapter 656 shall deposit with the
Department of Consumer and Business Services an amount that is the greater of
the following amounts:
(a)
$100,000.
(b)
An amount equal to the sum described in this paragraph less credits for
approved reinsurance that the insurer may take under subsection (2) of this
section. The sum under this paragraph is the sum of the following, computed as
of December 31 next preceding in respect to workers’ compensation insurance
policies written subject to ORS chapter 656:
(A)
The aggregate of the present values at four percent interest of the determined
and estimated future loss and loss-expense payments upon claims incurred more
than three years next preceding the date of computation.
(B)
The aggregate of the amounts computed under this subparagraph for each of the
three years next preceding the date of computation. The amount for each year
shall be 65 percent of the earned premiums for the year less all loss and
loss-expense payments made upon claims incurred in the corresponding year,
except that the amount for any year shall not be less than the present value at
four percent interest of the determined and estimated future loss and
loss-expense payments upon claims incurred in that year.
(2)
Before an insurer may take a credit for reinsurance under subsection (1)(b) of
this section, the reinsurer must deposit with the department an amount equal to
the credit to be taken.
(3)
An insurer may be allowed the credit referred to in subsection (1)(b) of this
section only when the reinsurer has deposited with the department an amount
equal to the credit. [1967 c.359 §118; 1971 c.231 §13; 1979 c.870 §4; 1981
c.854 §58; 1987 c.483 §5; 1989 c.700 §3; 1999 c.196 §4; 2007 c.241 §27]
731.632 Deposit required of domestic reciprocal
insurers; exception. Every domestic reciprocal
insurer shall deposit with the Department of Consumer and Business Services
$50,000, except such an insurer which exchanges policies of insurance covering
only wet marine hull insurance for persons whose earned income, in whole or in
part, is derived from taking and selling food resources living in an ocean, bay
or river. [1967 c.359 §119; 1977 c.651 §3; 1993 c.709 §5; 1999 c.196 §5]
731.636 Deposit or trusteed assets of
alien insurer required. (1) Except as provided in
subsection (3) of this section, every alien insurer, before transacting
insurance in this state as an authorized insurer, shall deposit with the
Department of Consumer and Business Services the sum of the following amounts:
(a)
The amount of its outstanding liabilities arising out of its insurance
transactions in the United States; and
(b)
Its required capitalization.
(2)
ORS 731.640 (1)(d) does not apply with respect to such deposit.
(3)
In lieu of such deposit, the insurer may furnish evidence satisfactory to the
Director of the Department of Consumer and Business Services that it maintains
in the United States, by way of trust deposits with public depositories or with
trust institutions acceptable to the director, assets at least equal to the
deposit otherwise required by this section. [1967 c.359 §120; 1999 c.196 §6]
731.640 Eligible deposits; rules.
(1) Deposits which are required or permitted under the Insurance Code shall
consist only of the following:
(a)
Cash.
(b)
Amply secured obligations of the United States, a state or a political
subdivision thereof.
(c)
Certificates of deposit or other investments described in ORS 733.650 (4). The
Director of the Department of Consumer and Business Services may promulgate
rules to limit such investments.
(d)
A surety bond, approved by the director, executed by an authorized surety
insurer that is not under common ownership, management or control with the
person making the deposit. This paragraph does not apply to deposits made by
surety insurers or to workers’ compensation deposits made under ORS 731.628.
(e)
Amply secured obligations of a corporation rated by the National Association of
Insurance Commissioners as Class 1. This paragraph applies only to that portion
of the total deposit that exceeds $50 million. The director may adopt rules to
require periodic review of the secured obligations of a corporation allowed
under this paragraph.
(2)
Deposits of domestic insurers made pursuant to the laws of other jurisdictions
shall consist of cash or securities as required or permitted by the laws of
such jurisdictions. [1967 c.359 §121; 1973 c.450 §1; 1981 c.854 §61; 1999 c.196
§6a; 2003 c.123 §1]
731.642 Contracts for security deposits.
The Director of the Department of Consumer and Business Services, in performing
duties under ORS 731.604 to 731.652 and after consultation with the State
Treasurer, may enter into contracts with banks qualified to act as trust
companies and as depositories of state funds to hold and service securities
deposited by insurers with the Department of Consumer and Business Services.
The insurers whose securities are held and serviced by the banks shall pay for
the cost of such contracts. [1969 c.143 §2; 1999 c.196 §7; 2001 c.104 §288]
731.644 Payment of losses out of deposits,
generally. (1) Except as otherwise provided in the
Insurance Code, no judgment creditor or other claimant of an insurer shall have
the right to levy upon any of the assets or securities of the insurer held on
deposit in this state.
(2)
As to deposits made in this state pursuant to ORS 731.854, levy thereupon shall
be permitted only if expressly so provided in the order of the Director of the
Department of Consumer and Business Services under which the deposit is
required. [1967 c.359 §122]
731.648 Duration and release of deposit.
(1) Every deposit made in this state by an insurer pursuant to the Insurance
Code shall be so held as long as there is outstanding any liability of the
insurer as to which the deposit was required, except as follows:
(a)
If the deposit was required under ORS 731.854, the deposit shall be held for so
long as the basis of such retaliation exists.
(b)
If the deposit was required of a reinsurer under ORS 731.628, the deposit shall
be held as long as there is outstanding any liability of the reinsurer with
respect to which the deposit was made.
(2)
No surety insurer shall be permitted to withdraw its deposit for a period of
three years after discontinuing business within this state.
(3)
The Director of the Department of Consumer and Business Services shall release
a deposit:
(a)
To the insurer upon extinguishment by reinsurance or otherwise of all liability
of the insurer for the security of which the deposit is held. If extinguishment
is by reinsurance, the assuming insurer shall be one authorized to transact
such insurance in this state.
(b)
To the insurer, while unimpaired, to the extent such deposit is in excess of
the amount required.
(c)
To the surviving corporation or to such person as it may designate for the
purpose, upon effectuation of a merger of the depositing insurer, if the
surviving insurer is authorized to transact insurance in this state.
(4)
The director shall release a deposit by an insurer upon order of a court of
competent jurisdiction, to the receiver, conservator, rehabilitator, or
liquidator of the insurer, or to any other properly designated official or
officials who succeed to the management and control of the insurer’s assets
pursuant to delinquency proceedings brought against the insurer. The director
shall release a deposit by a reinsurer under ORS 731.628 upon order of a court
of competent jurisdiction, to the receiver, conservator, rehabilitator, or
liquidator of the ceding insurer, or to any other properly designated official
or officials who succeed to the management and control of the insurer’s assets
pursuant to delinquency proceedings brought against the ceding insurer. [1967
c.359 §123; 1989 c.700 §4; 1993 c.447 §106; 1999 c.196 §8]
731.652 Proofs for release of deposit to
insurers; director’s responsibility. (1) Before
releasing any deposit or portion thereof to the insurer, as provided in ORS
731.648, the Director of the Department of Consumer and Business Services shall
require the insurer to file with the director a written statement in such form
and with such verification as the director deems advisable setting forth the
facts upon which it bases its entitlement to such release.
(2)
If release of the deposit is claimed by the insurer upon the ground that all
its liabilities, as to which the deposit was held, have been assumed by another
insurer authorized to transact insurance in this state, the insurer shall file
with the director a copy of the contract or agreement of such reinsurance duly
attested under the oath of an officer of each of the insurers that are parties
thereto.
(3)
If release of the deposit is claimed by a domestic insurer upon the ground that
all its liabilities, as to which the deposit was held, have been terminated
other than by reinsurance, the director shall make an examination of the
affairs of the insurer for determination of the actuality of such termination.
(4)
Upon being satisfied by such statement and reinsurance contract, or examination
of the insurer if required under subsection (3) of this section, or by such
other examination of the affairs of the insurer as the director deems advisable
to make, that the insurer is entitled to the release of its deposit or portion
thereof as provided in ORS 731.648, the director shall release the deposit or
excess portion thereof to the insurer or its authorized representative.
(5)
If the director willfully fails faithfully to keep, deposit, account for or
surrender any such assets or securities deposited through the director in the
manner as authorized or required under the Insurance Code, the director shall
be liable therefor upon the director’s official bond, and suit may be brought
upon the bond by any person injured by such failure. The director shall not,
however, have any liability as to any assets or securities of an insurer
released by the director in good faith pursuant to the authority vested in the
director under the Insurance Code. [1967 c.359 §124; 1999 c.196 §9]
731.704
[Formerly 128.820; 1971 c.425 §2; 1975 c.699 §1; 1983 c.740 §253; 1989 c.326 §1;
1989 c.413 §4; 1991 c.189 §1; 1991 c.190 §1; 1993 c.53 §1; 1997 c.735 §1;
repealed by 2005 c.31 §4]
731.708
[Formerly 128.830; 1995 c.639 §2a; repealed by 2005 c.31 §4]
731.712 [1967
c.359 §127; 1971 c.425 §3; 1989 c.784 §15; repealed by 2005 c.31 §4]
731.716
[Formerly 128.850; 1971 c.425 §4; repealed by 2005 c.31 §4]
731.720
[Formerly 128.860; 1971 c.425 §5; 1993 c.377 §2; 1995 c.639 §2; 1997 c.131 §2;
repealed by 2005 c.31 §4]
731.724
[Formerly 128.880; 1971 c.425 §6; repealed by 2005 c.31 §4]
EXCHANGE OF INFORMATION BY REGULATORS
731.730 Insurer filings with National
Association of Insurance Commissioners. (1) Every
authorized insurer shall file with the National Association of Insurance
Commissioners, on or before March 1 of each year, a copy of its annual
statement blank, along with additional filings required by the Director of the
Department of Consumer and Business Services for the preceding year. The
information filed with the National Association of Insurance Commissioners must
be in the same format and scope as that required by the director and must
include the signed jurat page and the actuarial certification. Each amendment
and each addendum to the annual statement filing subsequently filed with the
director must also be filed with the National Association of Insurance
Commissioners.
(2)
A foreign insurer that is domiciled in a state having a law substantially
similar to the provisions of subsection (1) of this section is considered to be
in compliance with this section.
(3)
An insurer making a filing under subsection (1) of this section must pay the
National Association of Insurance Commissioners the fee established by the
National Association of Insurance Commissioners for filing, reviewing or
processing the information. [1993 c.447 §100]
731.731 Immunity for certain persons
dealing with information collected from filings under ORS 731.730.
Except in the case of malfeasance in office or willful or wanton neglect of
duty or authority, there shall be no liability on the part of, and no cause of
action of any nature shall arise against, any of the following persons by
virtue of their collection, review, analysis or dissemination of the data and
information collected from the filings required by ORS 731.730:
(1)
Members of the National Association of Insurance Commissioners and the
delegates and authorized committees, subcommittees and task forces of the
National Association of Insurance Commissioners.
(2)
Employees of the National Association of Insurance Commissioners.
(3)
The Director of the Department of Consumer and Business Services or any
representative of the director.
(4)
The insurance regulatory official of another state or any representative of
such an official. [1993 c.447 §101]
731.735 Certain information confidential.
All financial analysis ratios and examination synopses concerning insurers that
are submitted to the Director of the Department of Consumer and Business
Services by the Insurance Regulatory Information System of the National
Association of Insurance Commissioners are confidential as provided in ORS
705.137. [1993 c.447 §102; 2001 c.377 §6]
731.737 Immunity from liability for
certain persons filing reports or furnishing information about specified activities
to specified persons. (1) A person or other entity described
in this subsection acting without malice, fraudulent intent or bad faith is not
subject to civil liability, and no cause of action of any nature may exist
against such a person or entity, when the person is performing authorized
functions, including publication or dissemination of information, regarding any
activity described in subsection (3) of this section. This subsection applies
to the following persons and entities:
(a)
Law enforcement officials and their agents and employees.
(b)
The National Association of Insurance Commissioners, the Department of Consumer
and Business Services, a federal or state governmental agency established to
detect and prevent activities described in subsection (3) of this section and
any other organization established for the same purpose, and agents, employees
or designees of any such person or entity.
(2)
A person acting without malice, fraudulent intent or bad faith is not subject
to liability by virtue of filing reports or furnishing information regarding
any activity described in subsection (3) of this section with or to any person
or other entity described in subsection (1) of this section.
(3)
The activities referred to in subsections (1) and (2) of this section include
but are not limited to the following, whether any activity is suspected or
anticipated or has occurred:
(a)
Acts or omissions by a person who presents a statement described in this
paragraph to or by an insurer or an insurance producer, causes such a statement
to be presented to or by an insurer or an insurance producer, or prepares such
a statement with knowledge or belief that it will be presented to or by an
insurer or an insurance producer. This paragraph applies to any statement that
the person knows to contain false information as part of, in support of or
concerning any fact relating to the following, or conceals relevant information
relating to the following:
(A)
An application for the issuance of insurance.
(B)
The rating of insurance.
(C)
A claim for payment or benefit pursuant to any insurance.
(D)
Premiums paid on insurance.
(E)
Payments made in accordance with the terms of insurance coverage.
(F)
An application for a certificate of authority.
(G)
The financial condition of an insurer.
(H)
The acquisition of any insurer.
(b)
Solicitation or an attempt to solicit new or renewal insurance by or for an
insolvent insurer or other person subject to regulation under the Insurance
Code.
(c)
Removal or an attempt to remove assets or any record of assets, transactions
and affairs from the home office or other place of business of the insurer or
other person subject to regulation under the Insurance Code, or from the place
of safekeeping of such a person, or who conceals or attempts to conceal the
assets or record from the Director of the Department of Consumer and Business
Services.
(d)
Diversion, an attempt to divert or a conspiracy to divert funds of an insurer
or other person subject to regulation under the Insurance Code, or of any other
person, in connection with:
(A)
The transaction of insurance.
(B)
The conduct of business activities by an insurer or other person subject to
regulation under the Insurance Code.
(C)
The formation, acquisition or dissolution of an insurer or other person subject
to regulation under the Insurance Code.
(4)
This section does not abrogate or modify in any way any common law or statutory
privilege or immunity otherwise enjoyed by a person or entity made immune from
liability under this section.
(5)
The court may award reasonable attorney fees to the prevailing party in any
tort action against a person who claims immunity under the provisions of this
section. [1993 c.447 §103; 1995 c.618 §128; 2003 c.364 §74]
731.740 [1995
c.638 §5a; repealed by 2001 c.377 §59]
CONFIDENTIALITY OF REPORTS
731.750 Confidentiality of report of
material acquisitions or dispositions of assets, material nonrenewals,
cancellations and revisions of ceded reinsurance agreements.
(1) A report filed with the Director of the Department of Consumer and Business
Services according to requirements established by rule for disclosure of
material acquisitions or dispositions of assets and disclosure of material
nonrenewals, cancellations and revisions of ceded reinsurance agreements shall
be confidential as provided in ORS 705.137.
(2)
The director may direct the insurer to furnish copies of a report described in
subsection (1) of this section to the National Association of Insurance
Commissioners.
(3)
The director may disclose or use a report as considered necessary by the director
in the administration of the Insurance Code or other law.
(4)
Information contained in documents described in subsections (1) to (3) of this
section that is also contained in financial statements of insurers filed under
ORS 731.574 or in final examination reports filed under ORS 731.312 is not
confidential under this section. [1995 c.638 §3; 2001 c.377 §7]
731.752 Confidentiality of report used for
determination of required amount of capital or surplus; confidentiality of
financial plan of action and report of examination connected with plan.
(1) A report filed with the Director of the Department of Consumer and Business
Services according to requirements established by rule for the purpose of
determining the amount of capital or surplus, or any combination thereof, that
should be possessed and maintained by an insurer under ORS 731.554 or by a
health care service contractor under ORS 750.045, or under the laws of another
state establishing similar requirements, shall be confidential and shall not be
disclosed except as provided in ORS 705.137.
(2)
A financial plan of action stating corrective actions to be taken by an insurer
or health care service contractor in response to a determination of inadequate
capital or surplus, or any combination thereof, that is filed by the insurer or
health care service contractor with the director according to requirements
established by rule shall be confidential and shall not be disclosed except as
provided in ORS 705.137.
(3)
The results or report of any examination or analysis of an insurer or health
care service contractor performed by the director in connection with a
financial plan described in subsection (2) of this section and any corrective
order issued by the director pursuant to such an examination or analysis shall
be confidential and shall not be disclosed except as provided in ORS 705.137.
(4)
Information contained in documents described in subsections (1) to (3) of this
section that is also contained in financial statements of insurers or health
care service contractors filed under ORS 731.574 or in final examination
reports filed under ORS 731.312 is not confidential under this section. [1995
c.638 §4; 2001 c.318 §19; 2001 c.377 §8]
731.754 Permissible uses of reports and
plans described in ORS 731.752. (1) The
Director of the Department of Consumer and Business Services may use the
following only for the purpose of monitoring the solvency of insurers and
health care service contractors and the need for possible corrective action
with respect to insurers and health care service contractors:
(a)
Reports and financial plans of action that are made confidential under ORS
731.752; and
(b)
Instructions adopted and amended by the National Association of Insurance
Commissioners for use by insurers and health care service contractors in
preparing reports and financial plans of action referred to in paragraph (a) of
this subsection.
(2)
The director may not use reports, financial plans of action and instructions
referred to in subsection (1) of this section for ratemaking, for reviewing
rate filings or in a rate proceeding related thereto, or to calculate or derive
any elements of an appropriate premium level or rate of return for any line of
insurance that an insurer, a health care service contractor or an affiliate is
authorized to transact. Such reports and financial plans of action also shall
not be introduced as evidence in a rate proceeding.
(3)
This section does not restrict the authority of the director to use information
included in reports, financial plans or instructions referred to in subsection
(1) of this section that is available from other sources. [1995 c.638 §5; 2001
c.318 §20]
INSURANCE COMPLIANCE AUDIT REPORTS
731.760 Definitions for ORS 731.760 to
731.770. As used in ORS 731.760 to 731.770:
(1)
“Insurance compliance audit” means a voluntary internal evaluation, review,
assessment, audit or investigation that is undertaken to identify or prevent
noncompliance with, or promote compliance with, laws, regulations, orders or
industry or professional standards, and that is conducted by or on behalf of an
insurer regulated under the Insurance Code.
(2)
“Insurance compliance self-evaluative audit document” means a document prepared
as a result of or in connection with an insurance compliance audit. “Insurance
compliance self-evaluative audit document” includes, but is not limited to:
(a)
A written response to the findings of an insurance compliance audit.
(b)
Field notes and records of observations, findings, opinions, suggestions,
conclusions, drafts, memoranda, drawings, photographs, exhibits,
computer-generated or electronically recorded information, phone records, maps,
charts, graphs and surveys, provided this supporting information is collected
or developed solely for the purpose of an insurance compliance audit.
(c)
An insurance compliance audit report prepared by an auditor, who may be an
employee of the insurer or an independent contractor, which may include the
scope of the audit, the information gained in the audit and conclusions and recommendations,
with exhibits and appendices.
(d)
Memoranda and documents analyzing portions or all of the insurance compliance
audit report and discussing potential implementation issues.
(e)
An implementation plan that addresses correcting past noncompliance, improving
current compliance and preventing future noncompliance.
(f)
Analytic data generated in the course of conducting the insurance compliance
audit, not including any analytic data that exists independently of the audit
or existed before the audit was conducted. [2001 c.329 §2]
731.761 Privileged information.
(1) Except as provided in ORS 731.760 to 731.770, an insurance compliance
self-evaluative audit document is privileged information and is not
discoverable, or admissible as evidence, in any civil, criminal or
administrative proceeding.
(2)
Except as provided in ORS 731.760 to 731.770, any person who performs or
directs the performance of an insurance compliance audit, any officer, employee
or agent of an insurer who is involved with an insurance compliance audit and
any consultant who is hired for the purpose of performing an insurance
compliance audit may not be examined in any civil, criminal or administrative
proceeding about the insurance compliance audit or any insurance compliance self-evaluative
audit document. [2001 c.329 §3]
731.762 Authority of director.
(1) ORS 731.761 does not limit the authority of the Director of the Department
of Consumer and Business Services to acquire any insurance compliance
self-evaluative audit document or to examine any person in connection with the
document. If the director determines that the actions of an insurer are
egregious, the director may introduce and use the document in any
administrative proceeding or civil action under the Insurance Code. The
director may require that an insurer submit an insurance compliance
self-evaluative audit document for the purpose of an examination or
investigation conducted under this chapter. An insurer may also voluntarily
submit an insurance compliance self-evaluative audit document to the director.
(2)
Any insurance compliance self-evaluative audit document submitted to the
director under this section and in the possession of the director remains the
property of the insurer and is not subject to disclosure or production under
ORS 192.410 to 192.505.
(3)(a)
The director shall consider the corrective action taken by an insurer to
eliminate problems identified in the insurance compliance self-evaluative audit
document as a mitigating factor when determining a civil penalty or other
action against the insurer.
(b)
The director may, in the director’s sole discretion, decline to impose a civil
penalty or take other action against an insurer based on information obtained
from an insurance compliance self-evaluative audit document if the insurer has
taken reasonable corrective action to eliminate the problems identified in the
document.
(4)
Disclosure of an insurance compliance self-evaluative audit document to a
governmental agency, whether voluntarily or pursuant to compulsion of law, does
not constitute a waiver of the privilege set forth in ORS 731.761 for any other
purpose.
(5)
The director may not be compelled to produce an insurance compliance
self-evaluative audit document. [2001 c.329 §4]
731.764 Waiver of privilege; permitted
disclosures. (1) The privilege set forth in ORS
731.761 does not apply to the extent that the privilege is expressly waived by
the insurer that prepared or caused to be prepared the insurance compliance
self-evaluative audit document.
(2)
The privilege set forth in ORS 731.761 does not apply in any civil, criminal or
administrative proceeding commenced by the Attorney General relating to
Medicaid fraud, without regard to whether the proceeding is brought on behalf
of the state, a state agency or a federal agency. An insurer may request an in
camera review of any document or other evidence to be released or used under
this subsection and may request that appropriate protective orders be entered
governing release and use of the material.
(3)
In any civil proceeding a court of record may, after an in camera review,
require disclosure of material for which the privilege set forth in ORS 731.761
is asserted if the court determines that the material is not subject to the
privilege, or that the privilege is asserted for a fraudulent purpose,
including but not limited to an assertion of the privilege for an insurance
compliance audit that was conducted for the purpose of concealing a violation
of any federal, state or local law or rule. Nothing in this subsection shall be
construed to limit the authority of the Director of the Department of Consumer
and Business Services to acquire, examine and use insurance compliance
self-evaluative audit documents under ORS 731.762.
(4)
In a criminal proceeding, a court of record may, after an in camera review,
require disclosure of material for which the privilege set forth in ORS 731.761
is asserted if the court determines that:
(a)
The privilege is asserted for a fraudulent purpose, including but not limited
to an assertion of the privilege for an insurance compliance audit that was
conducted for the purpose of concealing a violation of any federal, state or
local law or rule;
(b)
The material is not subject to the privilege; or
(c)
The material contains evidence relevant to commission of a criminal offense,
and:
(A)
A district attorney or the Attorney General has a compelling need for the
information;
(B)
The information is not otherwise available; or
(C)
The district attorney or Attorney General is unable to obtain the substantial
equivalent of the information by any other means without incurring unreasonable
cost and delay. [2001 c.329 §5]
731.766 Petition for in camera hearing;
hearing; compelled disclosure. (1) Within 30
days after a district attorney or the Attorney General serves on an insurer a
written request by certified mail for disclosure of an insurance compliance
self-evaluative audit document, the insurer that prepared or caused the
document to be prepared may file in circuit court a petition requesting an in
camera hearing on whether the insurance compliance self-evaluative audit
document or portions of the document are privileged under ORS 731.761 or
subject to disclosure. Failure by the insurer to file a petition waives the
privilege only with respect to the specific request.
(2)
A petition filed by an insurer under this section must contain the following
information:
(a)
The date of the insurance compliance self-evaluative audit document.
(b)
The identity of the person that conducted the audit.
(c)
The general nature of the activities covered by the insurance compliance audit.
(d)
An identification of the portions of the insurance compliance self-evaluative
audit document for which the privilege is being asserted.
(3)
Within 45 days after the filing of a petition by an insurer under this section,
the court shall schedule an in camera hearing to determine whether the
insurance compliance self-evaluative audit document or portions of the document
are privileged under ORS 731.761.
(4)
The court, after an in camera review pursuant to this section, may require
disclosure of material for which the privilege established by ORS 731.761 is
asserted if the court determines that any of the conditions set forth in ORS
731.764 are met. Upon making such a determination, the court may compel the
disclosure of only those portions of an insurance compliance self-evaluative
audit document relevant to issues in dispute in the underlying proceeding. Any
disclosure that is compelled by the court will not be considered to be a public
document or be deemed to be a waiver of the privilege for any other civil,
criminal or administrative proceeding. A party unsuccessfully opposing
disclosure may apply to the court for an appropriate order protecting the document
from further disclosure.
(5)
An insurer asserting the privilege established under ORS 731.761 has the burden
of establishing that the privilege applies. If the insurer establishes that the
privilege applies, a party seeking disclosure under ORS 731.764 has the burden
of proving the elements set forth in ORS 731.764. [2001 c.329 §6]
731.768 Privilege; exceptions.
The privilege established under ORS 731.761 does not apply to any of the
following:
(1)
Documents, communications, data, reports or other information expressly
required to be collected, developed, maintained or reported to a regulatory
agency under the Insurance Code or other state or federal law;
(2)
Information obtained by observation or monitoring by any regulatory agency; or
(3)
Information obtained from a source other than the insurance compliance audit. [2001
c.329 §7]
731.770 Other privileges or limitations
pertaining to audit document. Nothing in
ORS 731.760 to 731.770, or in the release of any insurance compliance
self-evaluative audit document under ORS 731.760 to 731.770, shall limit, waive
or abrogate the scope or nature of any statutory or common law privilege or
other limitation on admissibility of evidence including, but not limited to,
the work product doctrine, the lawyer-client privilege under ORS 40.225 or the
subsequent remedial measures exclusion provided by ORS 40.185. [2001 c.329 §8]
ASSESSMENTS, FEES AND TAXES
731.804 Assessments; rules; fees; how
determined. (1) Except as otherwise provided in
this section, each authorized insurer doing business in this state shall pay
assessments that the Director of the Department of Consumer and Business
Services determines are necessary to support the legislatively authorized
budget of the Department of Consumer and Business Services with respect to
functions of the department under the Insurance Code. The director shall
determine the assessments according to one or more percentage rates established
by the director by rule. The director shall specify in the rule when assessments
shall be made and payments shall be due. The premium-weighted average of the
percentage rates may not exceed nine-hundredths of one percent of the gross
amount of premiums received by an insurer or the insurer’s insurance producers
from and under the insurer’s policies covering direct domestic risks, after
deducting the amount of return premiums paid and the amount of dividend
payments made to policyholders with respect to such policies. In the case of
reciprocal insurers, the amount of savings paid or credited to the accounts of
subscribers shall be deducted from the gross amount of premiums. In
establishing the percentage rate or rates, the director shall use the most
recent premium data approved by the director. In establishing the amounts to be
collected under this subsection, the director shall take into consideration the
expenses of the department for administering the Insurance Code and the fees
collected under subsection (2) of this section. When the director establishes
two or more percentage rates:
(a)
Each rate shall be based on such expenses of the department ascribed by the
director to the line of insurance for which the rate is established.
(b)
Each rate shall be applied to the gross amount of premium received by an
insurer or its insurance producers for the applicable line of insurance as
provided in this subsection.
(2)
The director may collect fees for specific services provided by the department
under the Insurance Code according to a schedule of fees established by the
director by rule. The director may collect such fees in advance. In
establishing the schedule for fees, the director shall take into consideration
the cost of each service for which a fee is imposed.
(3)
Establishment and amendment of the schedule of fees under subsection (2) of
this section are subject to prior approval of the Oregon Department of
Administrative Services and a report to the Emergency Board prior to adopting
the fees and shall be within the budget authorized by the Legislative Assembly
as that budget may be modified by the Emergency Board.
(4)
The director may not collect an assessment under subsection (1) of this section
from any of the following persons:
(a)
A fraternal benefit society complying with ORS chapter 748.
(b)
Any person or class of persons designated by the director by rule.
(5)
The director may not collect an assessment under subsection (1) of this section
with respect to premiums received from any of the following policies:
(a)
Workers’ compensation insurance policies.
(b)
Wet marine and transportation insurance policies.
(c)
Any category of policies designated by the director by rule. [1967 c.359 §131;
1971 c.231 §14; 1971 c.425 §7; 1983 c.94 §1; 1985 c.697 §17; 1987 c.373 §81;
1989 c.331 §24; 1989 c.413 §1; 1991 c.371 §1; 1991 c.703 §40; 1991 c.958 §5;
1993 c.265 §5; 2003 c.364 §75; 2005 c.31 §7; 2007 c.560 §1]
731.808 “Gross amount of premiums”
defined. As used in ORS 731.804, 731.812 and
731.820, “gross amount of premiums” means the consideration paid by insureds to
an insurer for policies of insurance, and includes all premiums, assessments,
dues and fees received or derived, or obligations taken therefor, by whatever
term known. [1967 c.359 §132; 1989 c.413 §5]
731.812 Foreign and alien insurer’s report
of Oregon business. Every foreign or alien insurer,
in its annual statement to the Director of the Department of Consumer and
Business Services, shall set forth the gross amount of premiums received by it
or its insurance producers, return premiums paid, dividend payments made to policyholders,
savings paid or credited to the accounts of subscribers in the case of a
reciprocal insurer, and insurance benefit payments to policyholders, from and
under its policies covering direct domestic risks in the preceding calendar
year. [1967 c.359 §133; 2003 c.364 §76]
731.816 [1967
c.359 §134; 1971 c.560 §1; 1989 c.700 §5; repealed by 1995 c.786 §1]
731.820 Gross premium tax on fire
insurance premiums. (1)(a) For the purpose of
maintaining the office of State Fire Marshal and paying the expenses incident
thereto, every insurer transacting insurance covering the peril of fire shall
pay a tax to the Director of the Department of Consumer and Business Services,
on or before April 1 of each year, equal to one percent of the gross amount of
premiums received by it or its insurance producers from such business, from and
under its policies covering direct domestic risks in the preceding calendar
year after deducting the amount of return premiums paid and the amount of
dividend payments made to policyholders or, in the case of a reciprocal
insurer, the amount of savings paid or credited to the accounts of subscribers,
with respect to such policies.
(b)
For the purpose of paragraph (a) of this subsection the following portions of
the amounts required to be reported by line of business in the annual financial
statement required by ORS 731.574 shall be considered premiums for insurance
covering the peril of fire:
(A)
Fire, 100 percent.
(B)
Homeowners and farm owners multiple peril, 65 percent.
(C)
Commercial multiple peril, 50 percent.
(D)
Inland marine, 20 percent.
(E)
Automobile physical damage, eight percent.
(F)
Aircraft physical damage, eight percent.
(2)
If an insurer ceases to do business or collect premiums on direct domestic
risks, it thereupon shall make a report to the director of its premiums subject
to taxation as provided in subsection (1) of this section and collected or due
as of the date when it ceased to do business or collect premiums on direct
domestic risks, and not theretofore reported, and shall forthwith pay to the
director the tax thereon.
(3)
If the director, during the period in which the director under ORS 731.836 may
collect taxes owing under this section, finds the amount of such taxes paid by
an insurer to have been incorrect, the director shall charge or credit the
insurer with the difference between the correct amount of tax and the amount
actually paid. [1967 c.359 §135; 1967 c.453 §4; 1971 c.231 §15; 1975 c.275 §1;
1983 c.130 §1; 1989 c.700 §6; 2003 c.364 §77]
731.822 Prepayment of tax due.
(1) Every insurer with a tax obligation under section 2, chapter 786, Oregon
Laws 1995, ORS 731.820 or ORS 731.854 and 731.859 shall make prepayment of the
tax obligations under section 2, chapter 786, Oregon Laws 1995, ORS 731.820,
731.854 and 731.859 for the current calendar year’s business, if the sum of the
tax obligations under section 2, chapter 786, Oregon Laws 1995, ORS 731.820,
731.854 and 731.859 for the preceding calendar year’s business is $400 or more.
(2)
The Director of the Department of Consumer and Business Services shall credit
the prepayment toward the appropriate tax obligations of the insurer for the
current calendar year under section 2, chapter 786, Oregon Laws 1995, or ORS
731.820 or ORS 731.854 and 731.859.
(3)
The amounts of the prepayments shall be percentages of the insurer’s tax
obligation based on the preceding calendar year’s business adjusted, if
necessary, to reflect the declining percentages set forth in section 2 (3),
chapter 786, Oregon Laws 1995, applicable for the current year, and shall be
paid to the director by the due dates and in the following amounts:
(a)
On or before June 15, 45 percent;
(b)
On or before September 15, 25 percent; and
(c)
On or before December 15, 25 percent.
(4)
The effect of transferring policies of insurance from one insurer to another
insurer is to transfer the tax prepayment obligation with respect to such
policies.
(5)
On or before June 1 of each year, the director shall notify each insurer
required to make prepayments in that year of the amount of each prepayment, and
shall provide remittance forms to be used by the insurer. However, an insurer’s
responsibility to make prepayments is not affected by failure of the director
to send, or the insurer to receive, the notice or forms. [1980 c.10 §2; 1995
c.786 §5]
731.824 Tax on underwriting profits of wet
marine and transportation insurers. (1) Wet
marine and transportation insurance written by foreign or alien insurers within
this state shall be taxed only on that proportion of the total underwriting
profit of such insurer from such insurance written within the United States
that the gross premiums of the insurer from such insurance written within this
state bear to the gross premiums of such insurer from such insurance written
within the United States.
(2)
The “underwriting profit,” for purposes of this section, is arrived at by
deducting from the net earned premiums on such insurance policies written
within the United States during the calendar year:
(a)
The losses incurred, and
(b)
Expenses incurred, including all taxes, state and federal, in connection with
such net earned premiums.
(3)
The amount of “net earned premiums” on such insurance policies written during
the calendar year is the sum of paragraphs (a) and (b) less paragraph (c) of
this subsection.
(a)
Gross premiums on such insurance policies written during the calendar year,
less any and all return premiums, any and all premiums on policies not taken
and any and all premiums paid for such reinsurance.
(b)
Unearned premiums on such outstanding marine business at the end of the
preceding calendar year.
(c)
Unearned premiums on such outstanding marine business at the end of the current
calendar year.
(4)
“Losses incurred,” as used in this section, means gross losses incurred during
the calendar year under such policies written within the United States, less
reinsurance claims collected or collectible and salvages or recoveries
collectible from any source applicable to the such losses.
(5)
“Expenses incurred” includes:
(a)
Specific expenses incurred on such earned wet marine and transportation
insurance premiums, consisting of all commissions, agency expenses, taxes,
licenses, fees, loss-adjustment expenses, and all other expenses incurred
directly and specifically in connection with such premiums, less recoveries or
reimbursements on account of or in connection with such commissions or other
expenses collected or collectible because of reinsurance or from any other
source.
(b)
General expenses incurred on such earned premiums, consisting of that
proportion of general or overhead expenses, such as salaries of officers and
employees, printing and stationery, all taxes of this state and of the United
States, except as otherwise provided herein, and all other expenses not
chargeable specifically to a particular class of insurance, which the net
premiums of such insurance written bear to the total net premiums written by
such insurer from all classes of insurance written by it during the current
calendar year. However, in arriving at the “underwriting profit” for purposes
of taxation under this section there shall not be deducted in respect to
expenses incurred, as defined and specified in paragraphs (a) and (b) of this
subsection, amounts which, in the aggregate, exceed 40 percent of the gross
premiums on such insurance policies. [Formerly 745.145]
731.828 Computation of wet marine and transportation
insurance tax. (1) Each insurer transacting wet marine
and transportation insurance in this state shall file annually on or before
June 15 with the Director of the Department of Consumer and Business Services
and in the form prescribed by the director, a report of all the items
pertaining to its insurance business as enumerated and prescribed in ORS
731.824.
(2)
Each insurer that has been writing such insurance in this state for three years
shall furnish the director a statement of all of the items referred to in
subsection (1) of this section, in the form prescribed by the director, for
each of the preceding three calendar years. An insurer that has not been
writing such insurance for three years shall furnish to the director a
statement of all such items for each of the calendar years during which it has
written such insurance.
(3)
On or before June 15 of each year, if the insurer has transacted such insurance
for three years, the insurer shall:
(a)
Ascertain the average annual underwriting profit, as provided in ORS 731.824,
derived by the insurer from such insurance business written within the United
States during the last preceding three calendar years.
(b)
Ascertain the proportion which the average annual premiums of the insurer from
such insurance written by it in this state during the last preceding three
calendar years bears to the average total of such wet marine and transportation
insurance premiums of the insurer during the same three years.
(c)
Pay five percent on this proportion of the average annual underwriting profit
of the insurer from such insurance to the director as a tax upon such insurance
written by it in this state during the current calendar year.
(4)
The insurer each year shall compute the tax, according to the method described
in this section, upon the average annual underwriting profit of such insurer
from such insurance during the preceding three years, including the current
calendar year. At the expiration of each current calendar year, the profit or
loss on such insurance business of that year is to be added or deducted, and
the profit or loss upon such insurance business of the first calendar year of
the preceding three-year period is to be dropped so that the computation of
underwriting profit for purposes of taxation under this section will always be
on a three-year average.
(5)
An insurer that has not been writing wet marine and transportation insurance in
this state for three years shall, until it has transacted such business in this
state for that number of years, be taxed on the basis of its annual
underwriting profit on such insurance written within the United States for the current
calendar year, subject, however, to an adjustment in the tax as soon as the
insurer, in accordance with the provisions of this section, is enabled to
compute the tax on the three-year basis.
(6)
In the case of mutual insurers the insurer shall not include in the
underwriting profit, when computing the tax prescribed by this section, the
amounts refunded by such insurers on account of premiums previously paid by
their policyholders.
(7)
If the director, during the period in which the director under ORS 731.836 may
collect taxes owing under this section, finds the amount of such taxes paid by
an insurer to have been incorrect, the director shall charge or credit the
insurer with the difference between the correct amount of tax and the amount
actually paid.
(8)
If an insurer ceases to transact wet marine and transportation insurance in the
state, it shall thereupon make report to the director of the items pertaining
to such insurance business, as enumerated and described in this section, to the
date of its ceasing to transact such insurance and not theretofore reported,
and forthwith pay to the director the taxes computed according to this section
and the annual authorization fees thereon. [Formerly 745.150; 1969 c.158 §1;
1975 c.250 §1; 1989 c.700 §7]
731.832
[Formerly 736.175; 1987 c.373 §82; repealed by 1995 c.786 §4]
731.836 Limitation on enforcement of
insurer’s tax obligations. The Director of the Department
of Consumer and Business Services shall commence an action for the recovery of
taxes payable under ORS 731.820, 731.824, 731.828 and 731.859 not later than
the later of the following:
(1)
Five years after the date such taxes were payable to the director under such
sections; or
(2)
Three years after the date on which the report of examination by the
domiciliary state of the insurer, disclosing that such taxes were owing by the
insurer under such sections, was filed with the director. [1967 c.359 §139;
1969 c.158 §4; 1989 c.700 §8]
731.840 Retaliatory or corporate excise
tax in lieu of certain taxes; certain local taxes prohibited.
(1) The retaliatory tax imposed upon a foreign or alien insurer under ORS
731.854 and 731.859, or the corporate excise tax imposed upon a foreign or
alien insurer under ORS chapter 317, is in lieu of all other state taxes upon
premiums, taxes upon income, franchise or other taxes measured by income that
might otherwise be imposed upon the foreign or alien insurer except the fire
insurance premiums tax imposed under ORS 731.820, the tax imposed upon wet
marine and transportation insurers under ORS 731.824 and 731.828, and the
assessment imposed under ORS 743.961. However, all real and personal property,
if any, of the insurer shall be listed, assessed and taxed the same as real and
personal property of like character of noninsurers. Nothing in this subsection
shall be construed to preclude the imposition of the assessments imposed under
ORS 656.612 upon a foreign or alien insurer.
(2)
Subsection (1) of this section applies to a reciprocal insurer and its attorney
in its capacity as such.
(3)
Subsection (1) of this section applies to foreign or alien title insurers and
to foreign or alien wet marine and transportation insurers issuing policies and
subject to taxes referred to in ORS 731.824 and 731.828.
(4)
The State of Oregon hereby preempts the field of regulating or of imposing
excise, privilege, franchise, income, license, permit, registration, and
similar taxes, licenses and fees upon insurers and their insurance producers
and other representatives as such, and:
(a)
No county, city, district, or other political subdivision or agency in this
state shall so regulate, or shall levy upon insurers, or upon their insurance
producers and representatives as such, any such tax, license or fee; except
that whenever a county, city, district or other political subdivision levies or
imposes generally on a nondiscriminatory basis throughout the jurisdiction of
the taxing authority a payroll, excise or income tax, as otherwise provided by
law, such tax may be levied or imposed upon domestic insurers; and
(b)
No county, city, district, political subdivision or agency in this state shall
require of any insurer, insurance producer or representative, duly authorized
or licensed as such under the Insurance Code, any additional authorization,
license, or permit of any kind for conducting therein transactions otherwise
lawful under the authority or license granted under this code. [1967 c.359 §140;
1969 c.600 §12; 1973 c.515 §1; 1973 c.583 §2; 1995 c.786 §6; 2003 c.364 §78;
2009 c.867 §25]
731.841 Conditions under which local
authority to tax insurer is preempted. If, on
account of the provisions of section 2, chapter 786, Oregon Laws 1995, and the
amendments to ORS 731.840 by section 6, chapter 786, Oregon Laws 1995, the
amendments to ORS 750.329 by section 11, chapter 786, Oregon Laws 1995, the
amendments to ORS 317.010 by section 12, chapter 786, Oregon Laws 1995, and the
amendments to ORS 317.080 by section 13, chapter 786, Oregon Laws 1995, any
insurer authorized to transact business in Oregon on January 1, 1997, is
subject to the local taxes, licenses and fees described in ORS 731.840 (4)(a)
as of January 1, 1997, and was not so subject before January 1, 1997, the
authority of the local government to impose those taxes is preempted by the
State of Oregon and no county, city, district or other political subdivision or
agency in this state shall levy or impose upon such insurer, or upon its
insurance producers or representatives, any excise, privilege, franchise,
income, license, permit, registration or similar tax, license or fee. [1995
c.786 §20; 2003 c.364 §79]
Note:
731.841 was added to and made a part of ORS chapter 731 by legislative action
but was not added to any smaller series therein. See Preface to Oregon Revised
Statutes for further explanation.
731.842 Adjustment of amount to be prepaid
for taxes; extension of time for payment; interest; penalty for late payment.
(1) The Director of the Department of Consumer and Business Services may grant,
for good cause shown, a request for an adjustment of the amount of the
prepayment due under ORS 731.822 or an extension of time for payment of taxes
under ORS 731.808 to 731.828 and 731.859. The extension shall be requested no
later than the due date and may not exceed 30 days or one month, whichever is
longer, except that an extension of time for payments under ORS 731.822 may not
exceed 10 days.
(2)
Interest at the rate of two-thirds of one percent per month or fraction of a
month shall accrue on any such tax payment not made by the due date (determined
without regard to extensions).
(3)
A penalty of 10 percent of the tax amount shall be imposed upon any late
payment of any such tax, except for a payment made within an extension period
as provided in subsection (1) of this section or when the director believes
extenuating circumstances justify waiver of the penalty. [1975 c.230 §2; 1980
c.10 §4; 1995 c.786 §7]
731.844 No personal liability for paying
invalid tax. No personal liability shall arise
against any director, trustee, officer or agent of any insurer on account of
any taxes or fees paid pursuant to any statute, law or ordinance, even though
such statute, law or ordinance is subsequently declared or held to be invalid. [1967
c.359 §141]
RETALIATORY PROVISIONS
731.854 Retaliatory tax.
(1) When by or pursuant to the laws of any other state or foreign country any
taxes, licenses and other fees, in the aggregate, and any fines, penalties,
deposit requirements or other material obligations, prohibitions or
restrictions are or would be imposed upon insurers domiciled in this state, or
upon the insurance producers or representatives of such insurers, which are in
excess of such taxes, licenses and other fees, in the aggregate, or which are
in excess of the fines, penalties, deposit requirements or other obligations,
prohibitions, or restrictions directly imposed upon similar insurers, or upon
the insurance producers or representatives of such insurers, of such other
state or country under the statutes of this state, so long as such laws of such
other state or country continue in force or are so applied, the same taxes,
licenses and other fees, in the aggregate, or fines, penalties or deposit
requirements or other material obligations, prohibitions, or restrictions of
whatever kind shall be imposed by the Director of the Department of Consumer
and Business Services upon the insurers, or upon the insurance producers or
representatives of such insurers, of such other state or country doing business
or seeking to do business in this state. Any tax, license or other fee or other
obligation imposed by any city, county, or other political subdivision or
agency of such other state or country on insurers domiciled in this state or
their insurance producers or representatives shall be deemed to be imposed by
such state or country within the meaning of this subsection.
(2)
Foreign reciprocal or interinsurance exchanges filing a consolidated return for
purposes of ORS chapter 317 shall prepare and file a separate individual
retaliatory tax calculation. The excise tax for the consolidated group shall be
allocated for retaliatory tax purposes among the individual foreign insurers
writing Oregon premiums. The allocation, after excluding the domestic share as
determined by the Director of the Department of Consumer and Business Services
by rule, shall be in the proportion that the premiums written in Oregon by a
foreign insurer of the group bears to the total premiums written in Oregon by
all foreign insurers in the group writing premiums in Oregon.
(3)
This section does not apply as to personal income taxes, nor as to local ad
valorem taxes on real or personal property nor as to special purpose
obligations or assessments heretofore imposed by another state in connection
with particular classes of insurance, other than property insurance; except
that deductions, from premium taxes or other taxes otherwise payable, allowed
on account of real estate or personal property taxes paid shall be taken into
consideration by the director in determining the propriety and extent of
retaliatory action under this section.
(4)
For the purpose of applying this section to an alien insurer, its domicile
shall be determined in accordance with ORS 731.092 and 731.096.
(5)
For the purpose of applying this section to foreign and alien insurers, the
following specifically shall be treated as taxes imposed by this state:
(a)
The corporate excise tax imposed under ORS chapter 317.
(b)
The assessments imposed under ORS 731.804 made to support the legislatively
authorized budget of the Department of Consumer and Business Services with
respect to the functions of the department under the Insurance Code.
(c)
The assessments paid by insurers on behalf of their insureds under ORS 656.612.
[Formerly 736.237; 1995 c.786 §7a; 2003 c.364 §80]
731.858
[Formerly 736.245; repealed by 1969 c.158 §2 (731.859 enacted in lieu of
731.858)]
731.859 Applicability of retaliatory
provisions. (1) On or before April 1 of each year,
each foreign or alien insurer shall:
(a)
Determine and report to the Director of the Department of Consumer and Business
Services whether the provisions of the laws of any state or country require the
imposition of the burdens specified by ORS 731.854;
(b)
Compute the amount owing under ORS 731.854; and
(c)
Pay to the director that amount.
(2)
If the director, during the period in which the director under ORS 731.836 may
collect taxes owing under this section, finds the amount of such taxes paid by
an insurer to have been incorrect, the director shall charge or credit the
insurer with the difference between the correct amount of tax and the amount
actually paid. [1969 c.158 §3 (enacted in lieu of 731.858); 1989 c.700 §9]
MISCELLANEOUS
731.870 State of emergency; effect upon insurance
policies; rules. (1) When the Governor declares a
state of emergency under ORS 401.165, the Director of the Department of
Consumer and Business Services may issue an order that addresses any or all of
the following matters related to insurance policies issued in this state:
(a)
Reporting requirements for claims;
(b)
Grace periods for payment of insurance premiums and performance of other duties
by insureds; and
(c)
Temporary postponement of cancellations and nonrenewals.
(2)
An order by the director under subsection (1) of this section may remain
effective for not more than 30 days unless the director extends the termination
date for the order for an additional period of not more than 30 days or for
subsequent additional periods of not more than 30 days. The director may extend
the order if, in the director’s judgment, the circumstances warrant an
extension. The order must specify, by line of insurance:
(a)
The geographic areas in which the order applies, which must be within but may
be less extensive than the geographic area specified in the Governor’s
proclamation of a state of emergency and must be specified according to an
appropriate means of delineation, such as United States Postal Service ZIP
codes or other appropriate means; and
(b)
The date on which the order becomes effective and the date on which the order
terminates.
(3)
The director shall adopt rules that establish general criteria for orders
issued under this section and may adopt emergency rules applicable to a
specific proclamation of a state of emergency by the Governor.
(4)
The rulemaking authority set forth in this section does not limit or affect the
rulemaking authority otherwise granted to the director by law. [2008 c.22 §2]
Note:
731.870 was added to and made a part of the Insurance Code by legislative action
but was not added to ORS chapter 731 or any series therein. See Preface to
Oregon Revised Statutes for further explanation.
PENALTIES
731.988 Civil penalties.
(1) Any person who violates any provision of the Insurance Code, any lawful
rule or final order of the Director of the Department of Consumer and Business
Services or any judgment made by any court upon application of the director,
shall forfeit and pay to the General Fund of the State Treasury a civil penalty
in an amount determined by the director of not more than $10,000 for each
offense. In the case of individual insurance producers, adjusters or insurance
consultants, the civil penalty shall be not more than $1,000 for each offense.
Each violation shall be deemed a separate offense.
(2)
In addition to the civil penalty set forth in subsection (1) of this section,
any person who violates any provision of the Insurance Code, any lawful rule or
final order of the director or any judgment made by any court upon application
of the director, may be required to forfeit and pay to the General Fund of the
State Treasury a civil penalty in an amount determined by the director but not
to exceed the amount by which such person profited in any transaction which
violates any such provision, rule, order or judgment.
(3)
In addition to the civil penalties set forth in subsections (1) and (2) of this
section, any insurer that is required to make a report under ORS 742.400 and
that fails to do so within the specified time may be required to pay to the
General Fund of the State Treasury a civil penalty in an amount determined by
the director but not to exceed $10,000.
(4)
A civil penalty imposed under this section may be recovered either as provided
in subsection (5) of this section or in an action brought in the name of the
State of Oregon in any court of appropriate jurisdiction.
(5)
Civil penalties under this section shall be imposed and enforced in the manner
provided by ORS 183.745.
(6)
The provisions of this section are in addition to and not in lieu of any other
enforcement provisions contained in the Insurance Code. [1967 c.359 §144; 1971
c.231 §16; 1987 c.774 §65; 1989 c.701 §70; 1991 c.401 §2; 1991 c.734 §120; 1993
c.265 §6; 1997 c.131 §5; 2003 c.364 §81; 2003 c.576 §220]
731.990
[Repealed by 1965 c.241 §3]
731.992 Criminal penalty.
(1) Violation of ORS 731.260 is a Class A misdemeanor.
(2)
Violation of any provision of the Insurance Code for which a greater penalty is
not otherwise provided by the Insurance Code or by other applicable laws of
this state, in addition to any applicable prescribed denial, suspension or
revocation of any certificate or license or any civil forfeiture, is a Class A
misdemeanor. [1967 c.359 §145; 1987 c.158 §154a; 2011 c.597 §297]
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