Chapter 743 — Health
and Life Insurance
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amended or repealed by the Legislative Assembly during its 2012 regular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 See the table of ORS sections amended or repealed during the 2012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
2011 EDITION
HEALTH AND LIFE INSURANCE
INSURANCE
GENERAL PROVISIONS
743.010 Health
insurance policy and health benefit plan forms; rules
743.013 Disclosure
of differences in replacement health insurance policies; nonduplication for
persons 65 and older; rules
743.015 Filing
and approval of credit life and credit health insurance forms; filing of rates
743.018 Filing
of rates for life and health insurance; rules
743.019 Public
comment on proposed rates for health insurance
743.020 Rate
filing to include statement of administrative expenses; rules
743.024 Personal
insurance, insurable interest and beneficiaries
743.027 Consent
of individual required for life and health insurance; exceptions
743.028 Uniform
health insurance claim forms
743.030 Life
insurance for benefit of charity
743.039 Alteration
of application for life or health insurance
743.041 Payment
discharges insurer
743.043 Assignment
of policies
743.046 Exemption
of proceeds of individual life insurance other than annuities
743.047 Exemption
of proceeds of group life insurance
743.049 Exemption
of proceeds of annuity policies; assignability of rights
743.050 Exemption
of proceeds of health insurance
743.053 Prohibition
on requirement that death or dismemberment occur in less than 180 days after
accident
743.056 Insurer
may not refuse to defend or pay claim based on provider’s disclosure of adverse
event
743.061 Uniform
standards for health care financial and administrative transactions; rules
743.062 Stakeholder
work group to recommend uniform standards
743.064 Coordination
with Oregon Health Authority concerning uniform standards; Department of Human
Services to be subject to standards
743.082 Selling
and leasing of provider panels by contracting entity; definitions
743.083 Registration
of contracting entity
743.085 Third
party contracts for leasing of provider panels; requirements
743.086 Additional
requirements for third party contracts
POLICY LANGUAGE SIMPLIFICATION
743.100 Short
title
743.101 Purpose
743.103 Definitions
for ORS 743.100 to 743.109
743.104 Scope
of ORS 743.100 to 743.109
743.106 Reading
ease standards for life and health insurance policies
743.107 When
director may authorize lower standards
743.109 Approval
of certain policy forms containing specified provisions; conditions for
approval
INDIVIDUAL LIFE INSURANCE AND ANNUITIES
(Generally)
743.150 Scope
of ORS 743.150, 743.153 and 743.156
743.153 Statement
of benefits
743.154 Acceleration
of death benefits; rules
743.156 Statement
of premium
(Individual Life Insurance Policies)
743.159 Scope
of ORS 743.162 to 743.243
743.162 Payment
of premium
743.165 Grace
period
743.168 Incontestability
743.171 Incontestability
and limitation of liability after reinstatement
743.174 Entire
contract
743.177 Statements
of insured
743.180 Misstatement
of age
743.183 Dividends
743.186 Policy
loan
743.187 Maximum
interest rate on policy loan; adjustable interest rate
743.189 Reinstatement
743.192 Payment
of claim; payment of interest upon failure to pay proceeds
743.195 Installment
payments
743.198 Title
743.201 Beneficiary
of industrial policies
743.204 Standard
Nonforfeiture Law for Life Insurance; applicability
743.207 Required
provisions relating to nonforfeiture
743.210 Determination
of cash surrender values; applicability to certain policies
743.213 Determination
of paid-up nonforfeiture benefits
743.215 Calculation
of adjusted premiums
743.216 Adjusted
premiums; applicability
743.218 Requirements
for determination of future premium amounts or minimum values
743.219 Supplemental
rules for calculating nonforfeiture benefits
743.221 Cash
surrender values upon default in premium payment
743.222 Policy
benefits and premiums that shall be disregarded in calculating cash surrender
values and paid-up nonforfeiture benefits
743.225 Prohibited
provisions
743.228 Acts
of corporate insured or beneficiary with respect to policy
743.230 Variable
life policy provisions
743.231 “Profit-sharing
policy” defined
743.234 “Charter
policy” or “founders policy” defined
743.237 “Coupon
policy” defined
743.240 Profit-sharing,
charter or founders policies prohibited
743.243 Restrictions
on form of coupon policy
743.245 Variable
life insurance policy provisions
743.247 Notice
to variable life insurance policyholders
(Individual Annuity and Pure Endowment
Policies)
743.252 Scope
of ORS 743.255 to 743.273
743.255 Grace
period for annuities
743.258 Incontestability
743.261 Entire
contract
743.264 Misstatement
of age or sex
743.267 Dividends
743.268 Advancement
of policy loans
743.269 Periodic
payments for period certain
743.270 Reinstatement
743.271 Periodic
stipulated payments on variable annuities
743.272 Computing
benefits
743.273 Standard
provisions of reversionary annuities
743.275 Standard
Nonforfeiture Law for Individual Deferred Annuities; application
743.278 Required
provisions in annuity policies; exception
743.284 Computation
of benefits
743.287 Commencement
of annuity payments at optional maturity dates; calculation of benefits
743.290 Notice
of nonpayment of certain benefits to be included in annuity policy
743.293 Minimum
forfeiture amounts for annuity policies; rules
743.295 Effect
of certain life insurance and disability benefits on minimum nonforfeiture
amounts
GROUP LIFE INSURANCE
743.303 Requirements
for issuance of group life insurance policies
743.306 Required
provisions in group life insurance policies
743.309 Nonforfeiture
provisions
743.312 Grace
period
743.315 Incontestability
743.318 Application;
representations by policyholders and insureds
743.321 Evidence
of insurability
743.324 Misstatement
of age
743.327 Payments
under policy; payment of interest upon failure to pay proceeds
743.330 Issuance
of certificates
743.333 Termination
of individual coverage
743.336 Termination
of policy or class of insured persons
743.339 Death
during period for conversion to individual policy
743.342 Statement
furnished to insured under credit life insurance policy
743.345 Assignability
of group life policies
743.348 Certain
sales practices prohibited
743.351 Eligibility
of association to be group life policyholder; rules
743.354 Requirements
for certain group life policies issued to trustees of certain funds; rules
743.356 Continuing
coverage upon replacement of group life policy
743.358 Borrowing
by certificate holders under group life policy
743.360 Alternative
group life insurance coverage
CREDIT LIFE AND CREDIT HEALTH INSURANCE
743.371 Definitions
for credit life and credit health insurance provisions
743.372 Applicability
of credit life and credit health insurance provisions
743.373 Forms
of credit life and credit health insurance
743.374 Limits
on amount of credit life insurance
743.375 Limit
on amount of credit health insurance
743.376 Duration
of credit life and credit health insurance
743.377 Credit
life and credit health insurance policy or group certificate; contents;
delivery of policy, certificate or copy of application
743.378 Charges
and refunds to debtor
743.379 Status
of remuneration to creditor
743.380 Claim
report and payment
HEALTH INSURANCE
(Individual)
743.402 Exceptions
to individual health insurance policy requirements
743.405 General
requirements
743.408 Mandatory
provisions
743.411 Entire
contract; changes
743.414 Time
limit on certain defenses; incontestability
743.417 Grace
period
743.420 Reinstatement
743.423 Notice
of claim
743.426 Claim
forms
743.429 Proofs
of loss
743.432 Time
of payment of claims
743.435 Payment
of claims
743.438 Physical
examinations and autopsy
743.441 Legal
actions
743.444 Change
of beneficiary
743.447 Optional
provisions
743.450 Change
of occupation
743.453 Misstatement
of age
743.456 Other
insurance in same insurer
743.459 Insurance
with other insurers; expense incurred benefits
743.462 Insurance
with other insurers; other than expense incurred benefits
743.465 Relation
of earnings to insurance
743.468 Unpaid
premium
743.471 Cancellation
743.472 Permissible
reasons for cancellation or refusal to renew
743.474 Conformity
with state statutes
743.477 Illegal
occupation
743.483 Arrangement
of provisions
743.486 Scope
of term “insured” in statutory policy provisions
743.489 Extension
of coverage beyond policy period; effect of misstatement of age
743.492 Policy
return and premium refund provision
743.495 Use
of terms “noncancelable” or “guaranteed renewable”; synonymous terms
743.498 Statement
in policy of cancelability or renewability
743.499 Notice
to policyholder required for cancellation or nonrenewal of health benefit plan;
effect of failure to give notice
(Group and Blanket)
743.522 “Group
health insurance” described
743.523 Certain
sales practices prohibited
743.524 Eligibility
of association to be group health policyholder; rules
743.526 Determination
of whether trustees are policyholders; consequences; rules
743.527 When
group health insurance policies to continue in effect upon payment of premium
by insured individual
743.528 Required
provisions in group health insurance policies
743.529 Continuation
of benefits after termination of group health insurance policy; rules
743.530 Continuation
of benefits after injury or illness covered by workers’ compensation
743.531 Direct
payment of hospital and medical services; rate limitations
743.533 Leased
workers; offering group health insurance
743.534 “Blanket
health insurance” defined
743.537 Required
provisions for blanket health insurance policies
743.540 Application
and certificates not required for blanket health insurance policies
743.543 Payment
of benefits under blanket health insurance policies
743.546 Exemption
of policy form approval for blanket health insurance policies
743.549 Restriction
on reduction of benefits provisions in group and blanket health insurance
policies
743.550 Student
health insurance
743.552 Guidelines
for application of ORS 743.549; rules
743.560 Minimum
grace period; notice upon termination of policy; effect of failure to notify
743.562 Applicability
of ORS 743.560
743.565 Separate
notice to policyholder required before cancellation of individual or group
health insurance policy for nonpayment of premium
743.566 Rules
for certain notice requirements
(Continuation)
743.600 Availability
of continued coverage under group policy for surviving, divorced or separated
spouse 55 or older
743.601 Procedure
for obtaining continuation of coverage under ORS 743.600
743.602 Premium
for continuation of coverage under ORS 743.600; termination of right to
continuation
743.610 Continuation
of coverage under group policy upon termination of membership in group health
insurance policy; applicability of waiting period to rehired employee
(Long Term Care)
743.650 Long
Term Care Insurance Act; purpose; application
743.652 Definitions
for ORS 743.650 to 743.665
743.653 Prohibition
on certain policies
743.655 Rules;
disclosure; contents of policy
743.656 Eligibility
for benefits; providers required to be covered
743.662 Rescission
of policy and denial of claims
743.664 Offer
of nonforfeiture benefit; rules
743.665 Prompt
pay requirements; rules
(Medicare Supplement)
743.680 Definitions
for ORS 743.680 to 743.689
743.682 Application
of ORS 743.680 to 743.689
743.683 Policy
contents; standards for benefit and claims payments; rules
743.684 Filing
of policy; loss ratio standards; insurance producer compensation
743.685 Outline
of coverage; information brochure; rules
743.686 Right
to return of policy; premium refund
743.687 Advertising
743.688 Rules
743.689 Director’s
authority upon violation of ORS 743.680 to 743.689
(Small Employer, Group, Individual and Portability
Health Insurance, Generally)
743.730 Definitions
for ORS 743.730 to 743.773
743.731 Purposes
743.733 Issuance
of group health benefit plan to affiliated group of employers; determination of
number of employees for purpose of determining eligibility as small employer
743.734 Group
health benefit plans subject to provisions of specified laws; exemptions
743.736 Requirement
to offer basic health benefit plans to small employers; approval of plans and
forms; offering of plan by carriers; exceptions
743.737 Requirements
for small employer health benefit plans
743.745 Requirements
for basic health benefit plans; director’s authority to regulate portability,
small group and individual plans; standard health statement for late enrollees;
allowable preexisting condition exclusions
743.748 Submission
of information by carriers offering health benefit plans
743.749 Certifications
and disclosure of coverage
743.751 Use
of health statements in group health benefit plans
743.752 Coverage
in group health benefit plans; consideration of prospective enrollee health
status restricted; effect of discontinuing offer of plans; exceptions; coverage
by multiple employer welfare arrangements
743.754 Requirements
for group health benefit plans
743.757 Health
benefit coverage for guaranteed association
743.758 Implementation
of federal laws; rules
743.760 Approval
of portability plans; offering of plans by carriers; required provisions;
actuarial certification
743.761 Satisfaction
of requirements of ORS 743.760 by carrier offering individual health benefit
plans; rules
743.764 Preventive
health services; coverage; cost sharing
743.766 Use
of health statements in individual health benefit plans; preexisting condition
exclusions; eligibility to apply for Oregon Medical Insurance Pool; renewal;
discontinuation of coverage
743.767 Premium
rates for individual health benefit plans
743.769 Carrier
marketing of individual health benefit plans; rules; duties of carrier
regarding applications; effect of discontinuing offer of plans
743.773 Rules
for ORS 743.766 to 743.769
743.775 Submission
of information by carriers offering individual health benefit plans
743.777 Electronic
administration; discounted rates; requirements
743.787 Definitions
for ORS 743.788
743.788 Prescription
drug identification card
743.790 Rules
for prescription drug identification cards
MISCELLANEOUS
743.801 Definitions
743.803 Medical
services contract provisions; nonprovider party prohibitions; future contracts
743.804 Required
notices to applicants and enrollees; grievances, internal appeals and external
reviews
743.806 Utilization
review requirements for medical services contracts to which insurer not party
743.807 Utilization
review requirements for insurers offering health benefit plan
743.808 Requirements
for insurers that require designation of participating primary care physician;
exceptions
743.811 Applicability
743.814 Requirements
for insurers offering managed health insurance; quality assessment; rules
743.817 Requirements
for insurers offering managed health or preferred provider organization
insurance; rules; opportunity to participate
743.818 Data
reporting
743.819 Reporting
requirements; rules
743.821 Required
managed health insurance contract provision; enrollee liability
743.822 Requirement
to offer bronze and silver plans; rules
743.823 Enforcement
of Newborns’ and Mothers’ Health Protection Act of 1996
743.824 Cash
dividends for healthy behaviors
743.826 Requirements
for catastrophic plans
743.827 Health
Care Consumer Protection Advisory Committee
743.829 Decisions
regarding health care facility length of stay, level of care and follow-up care
743.831 Consortium
established; managed health care performance
743.834 Insurer
prohibited practices; patient communication and referral
743.837 Prior
authorization requirements
743.839 Disclosure
of information
743.842 Emergency
eye care services without referral from primary care provider
RIGHTS OF ENROLLEES
743.845 Designation
of women’s health care provider as primary care provider; direct access to
women’s health care provider
743.847 Medicaid
not considered in coverage eligibility determination; claims for services paid for
by medical assistance; prohibited ground for denial of enrollment of child;
insurer duties
743.854 Continuity
of care
743.856 Referrals
to specialists
743.857 External
review; rules
743.858 Director
to contract with independent review organizations to provide external review;
rules
743.859 Notice
to enrollee of right to sue if insurer does not follow decision of independent
review organization
743.861 Enrollee
application for external review; when enrollee deemed to have exhausted
internal appeal
743.862 Duties
of independent review organizations; expedited reviews
743.863 Civil
penalty for failure to comply by insurer that agreed to be bound by decision
743.864 Private
right of action
743.871 Definitions
for ORS 743.871 to 743.893
743.874 Estimate
of costs for in-network procedure or service
743.876 Estimate
of costs for out-of-network procedure or service
743.878 Submission
of methodology used to determine insurer’s allowable charges
743.883 Alternative
mechanism for disclosure of costs and charges
743.893 Rules
743.894 Rescinding
coverage; permissible bases; notice; rules
PAYMENT OF CLAIMS
743.911 Payment
or denial of health benefit plan claims; rules
743.912 Refund
of paid claims
743.913 Interest
on unpaid claims
743.917 Underpayment
of claims
743.918 Claims
submitted during credentialing period
ASSESSMENT ON CLAIMS ADMINISTERED BY
PUBLIC EMPLOYEES’ BENEFIT BOARD
743.951 Payment
procedures; right to hearing
ASSESSMENT ON PREMIUMS
743.960 Definitions
for ORS 743.960 and 743.961
743.961 Payment
procedures
743.965 Incorrect
payments; right to hearing
743.990 Penalties
743.003 [1967
c.359 §335; renumbered 742.001 in 1989]
743.006
[Formerly 736.300; renumbered 742.003 in 1989]
743.009 [1967
c.359 §337; 1969 c.336 §11; 1973 c.608 §1; renumbered 742.005 in 1989]
GENERAL PROVISIONS
743.010 Health insurance policy and health
benefit plan forms; rules. In addition to all other powers
of the Director of the Department of Consumer and Business Services with
respect thereto, the director may issue rules with respect to policy forms and
health benefit plan forms described in ORS 742.005 (6)(a) and (b):
(1)
Establishing minimum benefit standards;
(2)
Requiring the ratio of benefits to premiums to be not less than a specified
percentage in order to be considered reasonable, and requiring the periodic
filing of data that will demonstrate the insurer’s compliance; and
(3)
Establishing requirements intended to discourage duplication or overlapping of
coverage and replacement, without regard to the advantage to policyholders, of
existing policies by new policies. [1979 c.857 §2; 1997 c.96 §1; 1999 c.987 §4a]
743.011 [1985
c.827 §2; repealed by 1989 c.255 §15]
743.012 [1967
c.359 §338; 1989 c.700 §13; renumbered 742.007 in 1989]
743.013 Disclosure of differences in
replacement health insurance policies; nonduplication for persons 65 and older;
rules. (1) The Director of the Department of
Consumer and Business Services shall adopt by rule requirements for disclosure
by group and individual health insurers to individual and group health
insurance policyholders the difference between coverage under the existing
policy and coverage being offered to replace that coverage.
(2)
The provisions of this section do not apply to disability income insurance.
(3)
The director shall adopt by rule requirements for nonduplication and
replacement of major medical, Medicare supplement, long term care and special
illness policies for applicants 65 years of age and older. The insurance
producer shall offer to compare for any applicants 65 years of age and older
the applicant’s existing policy or policies and coverage being offered to
replace or supplement the applicant’s existing coverage. [1989 c.474 §2; 2003
c.364 §106]
743.015 Filing and approval of credit life
and credit health insurance forms; filing of rates.
(1) All credit life and credit health insurance policies subject to ORS 743.371
to 743.380, and all certificates of insurance, notices of proposed insurance,
applications for insurance, indorsements and riders used in connection with
such kinds of policies, delivered or issued for delivery in this state and the
schedules of premium rates pertaining thereto shall be filed with the Director
of the Department of Consumer and Business Services. Such forms are subject to
approval, disapproval or withdrawal of approval by the director as provided in
ORS 742.003, 742.005 and 742.007.
(2)
An insurer may revise the schedules of premium rates from time to time and
shall file the revised schedules with the director. An insurer may not issue
any credit life or credit health insurance policy for which the premium rate
exceeds that determined by the schedules of the insurer as then on file with
the director.
(3)
If a group policy of credit life or credit health insurance has been or is
delivered in another state, the insurer shall file only the group certificate,
the individual application and the notice of proposed insurance delivered or
issued for delivery in this state as specified in ORS 743.377 (2) and (4). The
director shall approve the group certificate, the individual application and
the notice of proposed insurance if the forms conform with the requirements
specified in ORS 743.377 (2) and (4) and the schedules of premium rates
applicable to the insurance evidenced by the certificate or notice are not in
excess of the insurer’s schedules of premium rates filed with the director. [Formerly
739.595; 1969 c.336 §12; 1971 c.231 §20; 2005 c.185 §3]
743.018 Filing of rates for life and
health insurance; rules. (1) Except for group life and
health insurance, and except as provided in ORS 743.015, every insurer shall
file with the Director of the Department of Consumer and Business Services all
schedules and tables of premium rates for life and health insurance to be used
on risks in this state, and shall file any amendments to or corrections of such
schedules and tables. Premium rates are subject to approval, disapproval or
withdrawal of approval by the director as provided in ORS 742.003, 742.005 and
742.007.
(2)
Except as provided in ORS 743.737 and 743.760 and subsection (3) of this
section, a rate filing by a carrier for any of the following health benefit
plans subject to ORS 743.730 to 743.773 shall be available for public
inspection immediately upon submission of the filing to the director:
(a)
Health benefit plans for small employers.
(b)
Portability health benefit plans.
(c)
Individual health benefit plans.
(3)
The director may by rule:
(a)
Specify all information a carrier must submit as part of a rate filing under
this section; and
(b)
Identify the information submitted that will be exempt from disclosure under
this section because the information constitutes a trade secret and would, if
disclosed, harm competition.
(4)
The director, after conducting an actuarial review of the rate filing, may
approve a proposed premium rate for a health benefit plan for small employers
or for an individual health benefit plan if, in the director’s discretion, the
proposed rates are:
(a)
Actuarially sound;
(b)
Reasonable and not excessive, inadequate or unfairly discriminatory; and
(c)
Based upon reasonable administrative expenses.
(5)
In order to determine whether the proposed premium rates for a health benefit
plan for small employers or for an individual health benefit plan are
reasonable and not excessive, inadequate or unfairly discriminatory, the
director may consider:
(a)
The insurer’s financial position, including but not limited to profitability,
surplus, reserves and investment savings.
(b)
Historical and projected administrative costs and medical and hospital
expenses.
(c)
Historical and projected loss ratio between the amounts spent on medical
services and earned premiums.
(d)
Any anticipated change in the number of enrollees if the proposed premium rate
is approved.
(e)
Changes to covered benefits or health benefit plan design.
(f)
Changes in the insurer’s health care cost containment and quality improvement
efforts since the insurer’s last rate filing for the same category of health
benefit plan.
(g)
Whether the proposed change in the premium rate is necessary to maintain the
insurer’s solvency or to maintain rate stability and prevent excessive rate
increases in the future.
(h)
Any public comments received under ORS 743.019 pertaining to the standards set
forth in subsection (4) of this section and this subsection.
(6)
With the written consent of the insurer, the director may modify a schedule or
table of premium rates filed in accordance with subsection (1) of this section.
(7)
The requirements of this section do not supersede other provisions of law that
require insurers, health care service contractors or multiple employer welfare
arrangements providing health insurance to file schedules or tables of premium
rates or proposed premium rates with the director or to seek the director’s
approval of rates or changes to rates. [1967 c.359 §340; 2007 c.391 §1; 2009
c.595 §31]
Note:
Additions by chapter 322, Oregon Laws 2011, to the series 743.730 to 743.773,
which become operative January 2, 2014, expand the series to 743.730 to
743.773, 743.822 and 743.826. See sections 1, 2 [743.822 (2)], 3 [743.822 (1)],
4 [743.826] and 6, chapter 322, Oregon Laws 2011. See Preface to Oregon Revised
Statutes for further explanation.
743.019 Public comment on proposed rates
for health insurance. (1) When an insurer files a
schedule or table of premium rates for individual, portability or small
employer health insurance under ORS 743.018, the Director of the Department of
Consumer and Business Services shall open a 30-day public comment period on the
rate filing that begins on the date the insurer files the schedule or table of
premium rates. The director shall post all comments to the website of the
Department of Consumer and Business Services without delay.
(2)
The director shall give written notice to an insurer approving or disapproving
a rate filing or, with the written consent of the insurer, modifying a rate
filing submitted under ORS 743.018 no later than 10 business days after the
close of the public comment period. The notice shall comply with the
requirements of ORS 183.415. [2009 c.595 §28]
Note:
743.019 and 743.020 were added to and made a part of ORS chapter 743 by
legislative action but were not added to any smaller series therein. See
Preface to Oregon Revised Statutes for further explanation.
743.020 Rate filing to include statement
of administrative expenses; rules. An insurer
licensed by the Department of Consumer and Business Services shall include in
any rate filing under ORS 743.018 with respect to individual and small employer
health insurance policies a statement of administrative expenses in the form
and manner prescribed by the department by rule. The statement must include,
but is not limited to:
(1)
A statement of administrative expenses on a per member per month basis; and
(2)
An explanation of the basis for any proposed premium rate increases or
decreases. [2009 c.595 §29]
Note: See
note under 743.019.
743.021 [1967
c.359 §341; 1971 c.231 §21; 1973 c.525 §1; renumbered 742.009 in 1989]
743.024 Personal insurance, insurable interest
and beneficiaries. (1) Any individual of competent
legal capacity may procure or effect an insurance policy on the individual’s
own life or body for the benefit of any person. However, except as provided in
ORS 743.030, no person shall procure or cause to be procured any insurance
policy upon the life or body of another unless the benefits under such policy
are payable to the individual insured or the personal representatives of the
individual, or to a person having, at the time such policy was entered into, an
insurable interest in the individual insured.
(2)
If the beneficiary, assignee or other payee under any policy made in violation
of this section receives from the insurer any benefits thereunder accruing upon
the death, disablement or injury of the individual insured, the individual
insured or the individual’s executor or administrator, as the case may be, may
maintain an action to recover such benefits from the person so receiving them.
(3)
An insurer shall be entitled to rely upon all statements, declarations and
representations made by an applicant for insurance relative to the matter of
insurable interest. No insurer shall incur legal liability, except as set forth
in the policy, by virtue of any untrue statements, declarations or
representations so relied upon in good faith by the insurer.
(4)
This section does not apply to annuity policies. [1967 c.359 §342]
743.027 Consent of individual required for
life and health insurance; exceptions. A life or
health insurance policy upon an individual, except a policy of group life
insurance or of group or blanket health insurance, may not be made or
effectuated unless at the time of the making of the policy the individual
insured, being of competent legal capacity to contract, applies therefor or has
consented thereto in writing, except in the following cases:
(1)
A spouse may effectuate such insurance upon the other spouse.
(2)
Any person having an insurable interest in the life of a minor, or any person
upon whom a minor is dependent for support and maintenance, may effectuate
insurance upon the life of or pertaining to such minor.
(3)
Family policies may be issued insuring any two or more members of a family on
an application signed by either parent, a stepparent, or by a husband or wife.
(4)
A person may effectuate insurance that provides for the funeral expenses of an
adult who is dependent upon the person for support and maintenance.
(5)
A person may effectuate insurance that provides for the funeral expenses of an
adult if the person:
(a)
Is closely related to the adult by blood or by law or has a substantial
interest in the adult engendered by love and affection; and
(b)
Has a lawful and substantial interest in having the life, health and bodily
safety of the adult continue. [1967 c.359 §342a; 1991 c.182 §2; 2009 c.331 §1]
743.028 Uniform health insurance claim
forms. The Director of the Department of
Consumer and Business Services shall prescribe uniform health insurance claim
forms which shall be used by all insurers transacting health insurance in this
state and by all state agencies that require health insurance claim forms for
their records. [1973 c.109 §2]
743.030 Life insurance for benefit of
charity. (1) Life insurance policies may be
effected although the person paying the consideration has no insurable interest
in the life of the person insured if a charitable, benevolent, educational or
religious institution is designated irrevocably as the beneficiary.
(2)
In making such policies the person paying the premium shall make and sign the
application therefor as owner. The application also must be signed by the
person whose life is to be insured. Such a policy shall be valid and binding
between and among all of the parties thereto.
(3)
The person paying the consideration for such insurance shall have all rights
conferred by the policy to loan value at any time during the premium-paying
period, but not at maturity, notwithstanding such person has no insurable
interest in the life of the person insured. [Formerly 739.420]
743.033 [1967
c.359 §344; renumbered 742.011 in 1989]
743.036
[Formerly 736.330; 1973 c.823 §149; repealed by 1973 c.827 §83]
743.037 [1973
c.521 §2; renumbered 743.721 in 1989]
743.039 Alteration of application for life
or health insurance. (1) An application for a life
insurance policy may not provide for alterations by any person other than the
applicant in either the application or the policy to be issued thereon with
respect to the amount of insurance, classification of risk, plan of insurance
or the benefits unless the application contains a statement that no such
changes are effective until approved in writing by the applicant.
(2)
No alteration of any written application for any health insurance policy shall
be made by any person other than the applicant without the written consent of
the applicant, except that insertions may be made by the insurer, for
administrative purposes only, in such manner as to indicate clearly that such
insertions are not to be ascribed to the applicant. [1967 c.359 §346]
743.041 Payment discharges insurer.
Whenever the proceeds of or payments under a life or health insurance policy
become payable in accordance with the terms of such policy, or the exercise of
any right or privilege under such policy, and the insurer makes payment in
accordance with the terms of the policy or in accordance with any written
assignment of the policy, the person so designated as being entitled to the
proceeds or payments shall be entitled to receive them and to give full
acquittance therefor, and such payments shall fully discharge the insurer from
all claims under the policy unless, before payment is made, the insurer has
received at its home office written notice by or on behalf of some other person
that such other person claims to be entitled to such proceeds or payments or
some interest in the policy. [Formerly 743.084]
743.042 [1967
c.359 §347; 1985 c.465 §1; renumbered 742.013 in 1989]
743.043 Assignment of policies.
A policy may be assignable or not assignable, as provided by its terms. Subject
to its terms relating to assignability, any life or health insurance policy,
under the terms of which the beneficiary may be changed upon the sole request
of the insured or owner, may be assigned either by pledge or transfer of title,
by an assignment executed by the insured or owner alone and delivered to the
insurer, whether or not the pledgee or assignee is the insurer. Any such
assignment shall entitle the insurer to deal with the assignee as the owner or
pledgee of the policy in accordance with the terms of the assignment, until the
insurer has received at its home office written notice of termination of the
assignment or pledge, or written notice by or on behalf of some other person
claiming some interest in the policy in conflict with the assignment. [Formerly
743.087]
743.045
[Formerly 736.305; 1971 c.231 §22; 1985 c.465 §2; renumbered 742.016 in 1989]
743.046 Exemption of proceeds of
individual life insurance other than annuities.
(1) When a policy of insurance is effected by any person on any person’s own
life or on another life in favor of some person other than that person having
an insurable interest in the life insured, the lawful beneficiary thereof,
other than that person or that person’s legal representative, is entitled to
its proceeds against the creditors or representatives of the person effecting
the policy.
(2)
The person to whom a policy of life insurance is made payable may maintain an
action thereon in the person’s own name.
(3)
A policy of life insurance payable to a beneficiary other than the estate of
the insured, having by its terms a cash surrender value available to the
insured, is exempt from execution issued from any court in this state and in
the event of bankruptcy of such insured is exempt from all demands in legal
proceeding under such bankruptcy.
(4)
Subject to the statute of limitations, the amount of any premiums paid in fraud
of creditors for such insurance, with interest thereon, shall inure to their benefit
from the proceeds of the policy. The insurer issuing the policy shall be
discharged of all liability thereon by payment of its proceeds in accordance
with its terms unless, before such payment, the insurer has received at its
home office written notice by or in behalf of some creditor, with
specifications of the amount claimed, claiming to recover for certain premiums
paid in fraud of creditors.
(5)
The insured under any policy within this section shall not be denied the right
to change the beneficiary when such right is expressly reserved in the policy.
(6)
This section does not apply to annuity policies. [Formerly 739.405 and then
743.099]
743.047 Exemption of proceeds of group
life insurance. (1) A policy of group life
insurance or the proceeds thereof payable to a person or persons other than the
individual insured or the individual’s estate shall be exempt from debts and
claims of creditors or representatives of the individual insured and, in the
event of bankruptcy of the individual insured, from all demands in legal
proceedings under such bankruptcy.
(2)
The provisions of subsection (1) of this section do not apply to group life
insurance issued to a creditor covering the creditor’s debtors to the extent
that such proceeds are applied to payment of the obligation for the purpose of
which the insurance was so issued. [Formerly 743.102]
743.048
[Formerly 736.315; renumbered 742.018]
743.049 Exemption of proceeds of annuity
policies; assignability of rights. (1) The
benefits, rights, privileges and options which are due or prospectively due an
annuitant under any annuity policy issued before, on or after June 8, 1967,
shall not be subject to execution, nor shall the annuitant be compelled to
exercise any such rights, powers or options, nor shall creditors be allowed to
interfere with or terminate the policy, except:
(a)
As to amounts paid for or as premium on any such annuity with intent to defraud
creditors, with interest thereon, and of which the creditor has given the
insurer written notice at its home office prior to the making of the payments
to the annuitant out of which the creditor seeks to recover. Any such notice
shall specify the amount claimed or such facts as will enable the insurer to
ascertain such amount, and shall set forth such facts as will enable the
insurer to ascertain the annuity policy, the annuitant and the payments sought
to be avoided on the ground of fraud.
(b)
The total exemption of benefits presently due and payable to any annuitant
periodically or at stated times under all annuity policies under which the
person is an annuitant shall not at any time exceed $500 per month for the
length of time represented by such installments. Such periodic payments in
excess of $500 per month shall be subject to garnishee execution to the same
extent as are wages and salaries.
(c)
If the total benefits presently due and payable to any annuitant under all
annuity policies under which the person is an annuitant shall at any time
exceed payment at the rate of $500 per month, the court may order such
annuitant to pay to a judgment creditor or apply on the judgment, in
installments, the portion of such excess benefits as to the court may appear
just and proper, after due regard for the reasonable requirements of the
judgment debtor and family, if dependent upon the judgment debtor, as well as
any payments required to be made by the annuitant to other creditors under
prior court orders.
(2)
If the policy so provides, the benefits, rights, privileges or options accruing
under the policy to a beneficiary or assignee shall not be transferable nor
subject to commutation, and if the benefits are payable periodically or at
stated times, the same exemptions and exceptions contained in this section for
the annuitant shall apply with respect to such beneficiary or assignee. [Formerly
743.105; 1991 c.182 §3]
743.050 Exemption of proceeds of health
insurance. Except as may otherwise be expressly
provided by the policy, the proceeds or avails of all health insurance policies
and of provisions providing benefits on account of the insured’s disability
which are supplemental to life insurance policies, issued before, on or after
June 8, 1967, shall be exempt from all liability for any debt of the insured,
and from any debt of the beneficiary existing at the time the proceeds are made
available for the use of the beneficiary. [Formerly 743.108]
743.051 [1967
c.359 §350; renumbered 742.021 in 1989]
743.052 [1971
c.372 §2; renumbered 743.719 in 1989]
743.053 Prohibition on requirement that
death or dismemberment occur in less than 180 days after accident.
A life insurance policy or health insurance policy, whether group or
individual, that contains provisions providing benefits in case of death or
dismemberment by accident shall not require that the death or dismemberment
occur less than 180 days after the date of the accident in order for benefits
to be paid under the policy. [1991 c.182 §8]
743.054 [1967
c.359 §351; renumbered 742.023 in 1989]
743.055 [1991
c.875 §2; repealed by 1995 c.506 §11]
743.056 Insurer may not refuse to defend
or pay claim based on provider’s disclosure of adverse event.
(1) As used in this section:
(a)
“Adverse event” means a negative consequence of patient care that is
unanticipated, is usually preventable and results in or presents a significant
risk of patient injury.
(b)
“Claim” means a written demand for restitution for an injury alleged to have
been caused by the medical negligence of a health practitioner or licensed
health care facility.
(c)
“Health practitioner” means a person described in ORS 31.740 (1).
(d)
“Patient’s family” includes:
(A)
A parent, sibling or child by marriage, blood, adoption or domestic
partnership.
(B)
A foster parent or foster child.
(2)
An insurer may not decline or refuse to defend or indemnify a health
practitioner or a health care facility with respect to a claim, for any reason
that is based on the disclosure to the patient or the patient’s family by the
health practitioner or facility of an adverse event or information relating to
the cause of an adverse event.
(3)
A policy or contract of insurance or indemnity may not include a provision or
term excluding or limiting coverage based on the disclosure to a patient or the
patient’s family by a health practitioner or facility of an adverse event or
information relating to the cause of an adverse event. [2011 c.30 §2]
Note:
743.056 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.057 [1967
c.359 §352; renumbered 742.026 in 1989]
743.060 [1967
c.359 §353; renumbered 742.028 in 1989]
743.061 Uniform standards for health care
financial and administrative transactions; rules.
(1) The Department of Consumer and Business Services may adopt by rule uniform
standards applicable to persons listed in subsection (2) of this section for
health care financial and administrative transactions, including uniform
standards for:
(a)
Eligibility inquiry and response;
(b)
Claim submission;
(c)
Payment remittance advice;
(d)
Claims payment or electronic funds transfer;
(e)
Claims status inquiry and response;
(f)
Claims attachments;
(g)
Prior authorization;
(h)
Provider credentialing; or
(i)
Health care financial and administrative transactions identified by the
stakeholder work group described in ORS 743.062.
(2)
Any uniform standards adopted under subsection (1) of this section apply to:
(a)
Health insurers.
(b)
Prepaid managed care health services organizations as defined in ORS 414.736.
(c)
Third party administrators.
(d)
Any person or public body that either individually or jointly establishes a
self-insurance plan, program or contract, including but not limited to persons
and public bodies that are otherwise exempt from the Insurance Code under ORS
731.036.
(e)
Health care clearinghouses or other entities that process or facilitate the
processing of health care financial and administrative transactions from a
nonstandard format to a standard format.
(f)
Any other person identified by the department that processes health care
financial and administrative transactions between a health care provider and an
entity described in this subsection.
(3)
In developing or updating any uniform standards adopted under subsection (1) of
this section, the department shall consider recommendations from the Oregon
Health Authority under ORS 743.062. [2011 c.130 §2]
Note:
743.061 was added to and made a part of the Insurance Code by legislative action
but was not added to ORS chapter 743 or any series therein. See Preface to
Oregon Revised Statutes for further explanation.
743.062 Stakeholder work group to recommend
uniform standards. (1) The Oregon Health Authority
shall convene a stakeholder work group to recommend uniform standards for
health care financial and administrative transactions, including, to the extent
allowed by law, standards applicable to commercial health insurance plans,
self-funded plans and state governmental health plans and programs.
(2)
The authority shall report uniform standards recommended under subsection (1)
of this section to the Department of Consumer and Business Services for
consideration in the adoption of uniform standards by the department under ORS
743.061.
(3)
The stakeholder work group, in recommending uniform standards under subsection
(1) of this section, shall consider or incorporate any applicable national
standards for administrative simplification and timelines for implementation of
national standards for administrative simplification that are established
pursuant to federal law. [2011 c.130 §3]
Note:
743.062 and 743.064 were enacted into law by the Legislative Assembly but were
not added to or made a part of ORS chapter 743 or any series therein by legislative
action. See Preface to Oregon Revised Statutes for further explanation.
743.063 [1967
c.359 §354; renumbered 742.033 in 1989]
743.064 Coordination with Oregon Health
Authority concerning uniform standards; Department of Human Services to be subject
to standards. (1) The Department of Consumer and
Business Services and the Oregon Health Authority shall confer before the
department finalizes rules implementing uniform standards under ORS 743.061,
for the purpose of reconciling any differences between the department’s and the
authority’s requirements for health care financial and administrative
transactions described in ORS 743.061. If the Department of Consumer and
Business Services proposes to amend any rule concerning uniform standards for
health care financial and administrative transactions under ORS 743.061 or the
authority proposes to amend any rule in a manner that would be inconsistent
with the uniform standards, the agency proposing to amend the rules shall
notify the other agency. The agencies shall confer before a final rule is
adopted to ensure that the standards remain uniform and consistent to the
extent practicable.
(2)
The Department of Human Services shall be subject to the uniform standards
adopted by the Department of Consumer and Business Services and the authority
under ORS 743.061 that are applicable to the operations of the Department of
Human Services. [2011 c.130 §5]
Note: See
note under 743.062.
743.066 [1967
c.359 §355; 1971 c.231 §23; renumbered 742.036 in 1989]
743.069 [1967
c.359 §356; renumbered 742.038 in 1989]
743.072
[Formerly 736.310; 1971 c.231 §24; 1973 c.149 §1; renumbered 742.041 in 1989]
743.075 [1967
c.359 §358; 1975 c.391 §1; 1977 c.742 §8; renumbered 742.043 in 1989]
743.078 [1967
c.359 §359; renumbered 742.046 in 1989]
743.080 [1971
c.231 §5; 1983 c.249 §1; renumbered 742.048 in 1989]
743.081 [1967
c.359 §360; renumbered 742.051 in 1989]
743.082 Selling and leasing of provider
panels by contracting entity; definitions. As
used in this section and ORS 743.083 to 743.086:
(1)(a)
“Contracting entity” means any person that contracts directly with a provider
for the delivery of health care services or contracts with a third party for
the purpose of selling or making available to the third party the provider’s
health care services or discounted rates or the services or rates of a provider
panel under a provider network contract.
(b)
“Contracting entity” includes a person under common ownership and control of a
contracting entity.
(c)
“Contracting entity” does not include:
(A)
A managed care organization that is certified under ORS 656.260;
(B)
A discount medical plan organization as defined in ORS 742.420;
(C)
The state medical assistance program;
(D)
An independent practice association; or
(E)
A self-funded, employer-sponsored health insurance plan regulated under the
Employee Retirement Income Security Act of 1974, as codified and amended at 29
U.S.C. 1001, et seq., or any person that provides only administrative services
to the self-funded employer-sponsored health insurance plan.
(2)
“Health care services” means the treatment of humans for bodily injury,
disablement or death by accidental means or as a result of sickness or
childbirth, or in prevention of sickness, but does not include treatment for
bodily injury, disablement or occupational diseases incurred as a result of
employment.
(3)
“Independent practice association” has the meaning given that term in ORS
743.801.
(4)
“Person” has the meaning given that term in ORS 731.116.
(5)(a)
“Provider” includes:
(A)
A physician as defined in ORS 677.010.
(B)
A physician group, independent practice association, physician-controlled
organization, hospital organization or other provider organization that
contracts with a provider for the purpose of facilitating the provider’s
participation in a provider network contract.
(C)
A person licensed, certified or otherwise authorized or permitted by the laws
of this state to administer medical services or mental health services in the
ordinary course of business or practice of a profession.
(b)
“Provider” does not include a contracting entity.
(6)
“Provider network contract” means a contract between a provider and a
contracting entity for the provision of health care services to patients other
than Medicare enrollees or medical assistance recipients.
(7)(a)
“Third party” means a person that enters into a contract with a contracting
entity or with another party, other than a provider, for the right to exercise
the rights of the contracting entity under a provider network contract.
(b)
“Third party” includes any of the following:
(A)
A payer that directly reimburses the cost of the delivery of health care
services;
(B)
A third party administrator or other entity that administers or processes claims
on behalf of a payer;
(C)
A preferred provider organization or network;
(D)
A physician-controlled organization or a hospital organization; or
(E)
An entity that is engaged in the electronic transmission of claims between a
contracting entity and a payer and does not provide to another party access to
the health care services and discounted rates of a provider.
(c)
“Third party” does not include:
(A)
Entities offering health care services under the same brand pursuant to a brand
licensing agreement with the same licenser; or
(B)
A self-funded, employer-sponsored health insurance plan regulated under the
Employee Retirement Income Security Act of 1974, as codified and amended at 29
U.S.C. 1001, et seq., or any person that provides only administrative services
to the self-funded employer-sponsored health insurance plan. [2011 c.561 §1]
Note:
743.082, 743.085 and 743.086 were enacted into law by the Legislative Assembly
but were not added to or made a part of ORS chapter 743 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.
743.083 Registration of contracting
entity. (1) A contracting entity that does not
have a certificate of authority shall register with the Department of Consumer
and Business Services as a contracting entity by submitting the following
information to the department in written or electronic form as prescribed by
the department along with any fee prescribed by the department:
(a)
The official name of the entity and any secondary, alternative or substitute
designations.
(b)
The mailing address and telephone number of the headquarters of the entity.
(c)
The name and telephone number of a representative of the entity who shall serve
as the primary contact for the department.
(2)
The requirements of this section do not apply to a contracting entity that is
under common ownership and control of a contracting entity that is licensed by
or has a certificate of authority from the department. [2011 c.561 §3]
Note:
743.083 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.084 [1967
c.359 §361; renumbered 743.041 in 1989]
743.085 Third party contracts for leasing
of provider panels; requirements. (1) A
contracting entity or a third party may not contract with another third party
to provide access to the health care services and discounted rates of a
provider under a provider network contract unless:
(a)
The third party contract is specifically authorized by the provider network
contract; and
(b)
The third party contract obligates the third party to comply with all
applicable terms, limitations and conditions of the provider network contract.
(2)
A contracting entity that provides access to the health care services and
discounted rates of a provider under a provider network contract shall:
(a)
Give to the provider in writing or electronically, at the time a provider
network contract is entered into, a list of all third parties known by the
contracting entity at the time to which the contracting entity has or will
provide access to the health care services and discounted rates of a provider
under the provider network contract;
(b)
Maintain an Internet website, toll-free telephone number or other readily
available mechanism through which a provider may obtain a list, updated at
least every 90 days, of all third parties that have access to the provider’s
health care services and discounted rates under the provider network contract;
(c)
Provide each third party listed under paragraph (a) or (b) of this subsection
with information necessary to enable the third party to comply with all
relevant terms, limitations and conditions of the provider network contract;
(d)
Require a third party to identify on each remittance or explanation of payment
sent to a provider the source of any contractual discount in rates taken by the
third party under the provider network contract; and
(e)(A)
Notify each third party listed under paragraph (a) or (b) of this subsection of
the termination of the provider network contract no later than 30 days prior to
the effective date of the termination; and
(B)
Require third parties to cease claiming entitlement to discounted rates or
other rights under a provider network contract after the termination of the
contract.
(3)
The notice required under subsection (2)(e)(A) of this section can be provided
by any reasonable means, including but not limited to written notice,
electronic communication or an update to an electronic database.
(4)
Subject to any applicable continuity of care requirements, agreements or
contractual provisions:
(a)
A third party’s right to access a provider’s health care services and
discounted rates under a provider network contract shall terminate on the date
the provider network contract is terminated;
(b)
Claims for health care services performed after the termination date of the
provider network contract are not eligible for processing and payment in
accordance with the provider network contract; and
(c)
Claims for health care services performed before the termination date of the
provider network contract, but processed after the termination date, are
eligible for processing and payment in accordance with the provider network
contract.
(5)(a)
All information made available to a provider in accordance with the
requirements of this section and ORS 743.086 shall be confidential and may not
be disclosed to any person not involved in the provider’s practice or the
administration thereof without the prior written consent of the contracting
entity.
(b)
This section and ORS 743.086 may not be construed to prohibit a contracting
entity from requiring a provider to execute a reasonable confidentiality
agreement to ensure that confidential or proprietary information disclosed by
the contracting entity is not used for any purpose other than the provider’s
direct practice management or billing activities. [2011 c.561 §4]
Note: See
note under 743.082.
743.086 Additional requirements for third
party contracts. (1) A contract between a third
party and a contracting entity or between two third parties with respect to a
provider network contract must comply with this section and ORS 743.085.
(2)(a)
A third party shall inform the contracting entity and providers under a
contracting entity’s provider network contract of a website, toll-free number
or other readily available mechanism to identify the names of all third parties
to which the third party provides access to the health care services and
discounted rates of a provider under the provider network contract.
(b)
The third party shall update the website described in paragraph (a) of this
subsection at least every 90 days to reflect all third parties currently
provided access. Upon request, the third party shall make the information
available to a provider via telephone or through direct notification.
(3)
A provider may refuse to accept as payment in full a discounted payment made by
a third party under the terms of a provider network contract if there is no
valid contractual basis for the discount or the discount is taken in violation
of this section or ORS 743.085. [2011 c.561 §5]
Note: See
note under 743.082.
743.087 [1967
c.359 §362; renumbered 743.043 in 1989]
743.090
[Formerly 736.335; repealed by 1973 c.827 §83]
743.093 [1967
c.359 §364; renumbered 742.053 in 1989]
743.096 [1967
c.359 §365; renumbered 742.056 in 1989]
743.099
[Formerly 739.405; renumbered 743.046 in 1989]
POLICY LANGUAGE SIMPLIFICATION
743.100 Short title.
ORS 743.100 to 743.109 may be cited as the Life and Health Insurance Policy
Language Simplification Act. [Formerly 743.350]
743.101 Purpose.
(1) The purpose of the Life and Health Insurance Policy Language Simplification
Act is to establish minimum standards for language used in policies and
certificates of life insurance and health insurance delivered or issued for
delivery in this state in order to facilitate ease of reading.
(2)
ORS 743.100 to 743.109 is not intended to increase the risk assumed by insurers
or to supersede their obligation to comply with the substance of other
Insurance Code provisions applicable to insurance policies. ORS 743.100 to
743.109 is not intended to impede flexibility and innovation in the development
of policy forms or content or to lead to the standardization of policy forms or
content. [Formerly 743.353]
743.102 [1967
c.359 §367; renumbered 743.047 in 1989]
743.103 Definitions for ORS 743.100 to
743.109. As used in ORS 743.100 to 743.109, “policy”
has the meaning given in ORS 731.122 and, in addition, includes a certificate
issued pursuant to a group insurance policy delivered or issued for delivery in
this state. [Formerly 743.357]
743.104 Scope of ORS 743.100 to 743.109.
(1) ORS 743.100 to 743.109 apply to all policies delivered or issued for
delivery in this state, except:
(a)
Any policy that is a security subject to federal jurisdiction.
(b)
Any group policy covering a group of 1,000 or more lives at date of issue,
other than a group credit life insurance policy or a group credit health
insurance policy. However, this paragraph shall not exempt any certificate
issued pursuant to a group policy.
(c)
Any group annuity contract that serves as a funding vehicle for a pension, profit-sharing
or deferred compensation plan.
(d)
Any form used in connection with, as a conversion from, as an addition to, or,
pursuant to a contractual provision, in exchange for, a policy delivered or
issued for delivery on a form approved or permitted to be issued prior to the
date the form must be approved under section 9, chapter 708, Oregon Laws 1979.
(e)
The renewal of a policy delivered or issued for delivery prior to the date the
policy form must be approved under section 9, chapter 708, Oregon Laws 1979.
(f)
Any certificate issued pursuant to a group policy not delivered or issued for
delivery in this state.
(2)
A non-English language policy will be deemed to comply with ORS 743.106 if the
insurer certifies that the policy is translated from an English language policy
that complies with ORS 743.106. [Formerly 743.362]
743.105 [1967
c.359 §368; renumbered 743.049 in 1989]
743.106 Reading ease standards for life
and health insurance policies. (1) No policy
form shall be delivered or issued for delivery in this state unless:
(a)
The policy text achieves a score of 40 or more on the Flesch reading ease test,
or an equivalent score on any comparable test as provided in subsection (3) of
this section;
(b)
The policy, except for specification pages, schedules and tables is printed in
not less than 10-point type, one point leaded;
(c)
The style, arrangement and overall appearance of the policy give no undue
prominence to any portion of the text, including the text of any indorsements
or riders; and
(d)
The policy contains a table of contents or an index of the principal sections
of the policy, if the policy has more than 3,000 words of text printed on three
or less pages, or regardless of the number of words if the policy has more than
three pages.
(2)
For the purposes of this section, a Flesch reading ease test score shall be
calculated as follows:
(a)
For policy forms containing 10,000 words or less of text, the entire form shall
be analyzed. For policy forms containing more than 10,000 words, two 200-word
samples per page may be analyzed instead of the entire form. The samples shall
be separated by at least 20 printed lines.
(b)
The number of words and sentences in the text shall be counted and the total
number of words divided by the total number of sentences. The figure obtained
shall be multiplied by a factor of 1.015.
(c)
The total number of syllables in the text shall be counted and divided by the
total number of words. The figure obtained shall be multiplied by a factor of
84.6.
(d)
The sum of the figures computed under paragraphs (b) and (c) of this subsection
subtracted from 206.835 equals the Flesch reading ease test score for the
policy form.
(e)
For purposes of paragraphs (b) and (c) of this subsection, the following
procedures shall be used:
(A)
A contraction, hyphenated word or numbers and letters, when separated by
spaces, shall be counted as one word.
(B)
A unit of words ending with a period, semicolon or colon shall be counted as a
sentence.
(C)
A “syllable” means a unit of spoken language consisting of one or more letters
of a word as divided by an accepted dictionary. If the dictionary shows two or
more equally acceptable pronunciations of a word, the pronunciation containing
fewer syllables may be used.
(f)
As used in this section, “text” includes all written matter except the
following:
(A)
The name and address of the insurer; the name, number or title of the policy;
the table of contents or index; captions and subcaptions; specification pages;
schedules or tables; and
(B)
Policy language drafted to conform to the requirements of any state or federal
law, regulation or agency interpretation; policy language required by any
collectively bargained agreement; medical terminology; and words that are
defined in the policy. However, the insurer shall identify the language or
terminology excepted by this subparagraph and shall certify in writing that the
language or terminology is entitled to be excepted by this subparagraph.
(3)
Any other reading test may be approved by the Director of the Department of
Consumer and Business Services as an alternative to the Flesch reading ease
test if it is comparable in result to the Flesch reading ease test.
(4)
Each policy filing shall be accompanied by a certificate signed by an officer of
the insurer stating that the policy meets the minimum required reading ease
score on the test used, or stating that the score is lower than the minimum
required but should be authorized in accordance with ORS 743.107. To confirm
the accuracy of a certification, the director may require the submission of
further information.
(5)
At the option of the insurer, riders, indorsements, applications and other
forms made a part of the policy may be scored as separate forms or as part of
the policy with which they may be used. [Formerly 743.365]
743.107 When director may authorize lower
standards. The Director of the Department of
Consumer and Business Services may authorize a lower score than the Flesch
reading ease test score required by ORS 743.106 when, in the director’s sole
discretion, the director finds that a lower required score:
(1)
Will provide a more accurate reflection of the readability of a policy form;
(2)
Is warranted by the nature of a particular policy form or type or class of
policy forms; or
(3)
Is caused by certain policy language drafted to conform to the requirements of
any state law, regulation or agency interpretation. [Formerly 743.368]
743.108 [1967
c.359 §369; renumbered 743.050 in 1989]
743.109 Approval of certain policy forms containing
specified provisions; conditions for approval.
A policy form meeting the requirements of ORS 743.106 shall not be disapproved
because of other provisions of the Insurance Code that specify the content of
policies, if the policy form provides the policyholders and claimants
protection not less favorable than they would be entitled to under such
provisions. [Formerly 743.370]
743.111
[Formerly 744.090; renumbered 742.058 in 1989]
743.114
[Formerly 736.325; 1971 c.123 §1; 1981 c.667 §1; renumbered 742.061 in 1989]
743.115 [1987
c.774 §46; 1989 c.376 §1; renumbered 742.063 in 1989]
743.116 [1971
c.603 §2; 1981 c.422 §1; 1981 c.891 §2; renumbered 743.701 in 1989]
743.117 [1967
c.271 §§2,3; renumbered 743.703 in 1989]
743.118 [1987
c.720 §2; renumbered 743.704 in 1989]
743.119 [1981
c.254 §2; renumbered 743.706 in 1989]
743.120 [1975
c.135 §2; renumbered 743.707 in 1989]
743.123 [1975
c.338 §2; renumbered 743.709 in 1989]
743.125 [1979
c.268 §6; renumbered 743.710 in 1989]
743.128 [1979
c.785 §20; renumbered 743.712 in 1989]
743.132 [1979
c.1 §15; renumbered 743.713 in 1989]
743.135 [1981
c.422 §5; 1989 c.721 §54; 1989 c.1080 §1; renumbered 743.714 in 1989]
743.138 [1987
c.739 §§2,4b; renumbered 743.715 in 1989]
743.140 [1985 c.536
§1; renumbered 743.716 in 1989]
743.143 [1985
c.312 §2; renumbered 743.717 in 1989]
743.145 [1985
c.747 §59; renumbered 743.700 in 1989]
743.147 [1987
c.530 §2; renumbered 743.718 in 1989]
INDIVIDUAL LIFE INSURANCE AND ANNUITIES
(Generally)
743.150 Scope of ORS 743.150, 743.153 and
743.156. This section and ORS 743.153 and
743.156 apply only to policies of life insurance, other than group life
insurance. [1967 c.359 §372]
743.153 Statement of benefits.
A life insurance policy shall contain a provision stating the amount of
benefits payable or the method to be used or procedure to be followed in
determining such amount, the manner of payment and the consideration therefor. [Formerly
739.310]
743.154 Acceleration of death benefits;
rules. (1) A life insurance policy or a rider
to a life insurance policy may provide for the acceleration of death benefits
as part of the life insurance coverage. For purposes of this section,
accelerated death benefits are benefits that:
(a)
Are payable to the policy owner or certificate holder during the lifetime of
the insured, in anticipation of death or upon the occurrence of specified
life-threatening or catastrophic conditions as defined by the policy or rider;
(b)
Reduce the death benefit otherwise payable under the life insurance policy; and
(c)
Are payable upon the occurrence of a single qualifying event that results in
the payment of a benefit amount fixed at the time of acceleration.
(2)
For purposes of this section, a qualifying event is one or more of the
following:
(a)
A medical condition that will result in a drastically limited life span, as
specified in the policy or rider, not exceeding 24 months.
(b)
A medical condition that has required or requires extraordinary medical
intervention, such as a major organ transplant or continuous artificial life
support, without which the insured would die.
(c)
Any condition that usually requires continuous confinement in an eligible
institution, as defined in the policy or rider, if the insured is expected to
remain there for the rest of the insured’s life.
(d)
A medical condition that in the absence of extensive or extraordinary medical
treatment will result in a drastically limited life span. Such conditions may
include but are not limited to one or more of the following:
(A)
Coronary artery disease resulting in an acute infarction or requiring surgery;
(B)
Permanent neurological deficit resulting from cerebral vascular accident;
(C)
End-stage renal failure; or
(D)
Acquired Immune Deficiency Syndrome.
(e)
Any other event determined by the Director of the Department of Consumer and
Business Services to be life-threatening.
(3)
A policy or rider that provides for the acceleration of death benefits:
(a)
Must also provide for the continuation of the policy as to the amount of the
death benefit that is not accelerated.
(b)
Must allow the policy owner or the certificate holder to request payment at any
time during the period that the qualifying event continues.
(4)
A policy or rider that provides for the acceleration of death benefits under
this section shall not be described or marketed by an insurer as long term care
insurance or as providing long term care benefits.
(5)
The director shall adopt rules establishing minimum benefits, criteria for the
payment of accelerated benefits, disclosure requirements and actuarial
standards. [1991 c.571 §2; 1993 c.17 §1]
743.156 Statement of premium.
A life insurance policy shall contain a provision separately stating the
premium for each benefit provision of the policy for which such separate
statement is necessary, as determined by the Director of the Department of
Consumer and Business Services, to give adequate disclosure of the terms of the
policy. [1967 c.359 §374]
(Individual Life Insurance Policies)
743.159 Scope of ORS 743.162 to 743.243.
ORS 743.162 to 743.243 apply only to policies of life insurance other than
group life insurance, and do not apply to annuity or pure endowment policies.
Such sections apply to such policies that are policies of variable life
insurance, except to the extent the provisions of such sections are obviously
inapplicable to variable life insurance or are in conflict with other
provisions of such sections that are expressly applicable to variable life
insurance. [1967 c.359 §375; 1973 c.435 §16]
743.162 Payment of premium.
A life insurance policy shall contain a provision relating to the time and
place of payment of premium. [1967 c.359 §376]
743.165 Grace period.
A life insurance policy shall contain a provision that a grace period of 30
days, or, at the option of the insurer, of one month of not less than 30 days,
or of four weeks in the case of industrial life insurance policies the premiums
for which are payable more frequently than monthly, shall be allowed within
which the payment of any premium after the first may be made, during which
period of grace the policy shall continue in full force. The insurer may impose
an interest charge not in excess of six percent per annum for the number of
days of grace elapsing before the payment of the premium. If a claim arises
under the policy during such period of grace the amount of any premium due or
overdue, together with interest and any deferred installment of the annual
premium, may be deducted from the policy proceeds. [1967 c.359 §377]
743.168 Incontestability.
(1) A life insurance policy shall contain a provision that the policy shall be
incontestable after it has been in force for two years from its date of issue
during the lifetime of the insured, except for nonpayment of premiums. At the
option of the insurer the two-year limit within which the policy may be
contested shall not apply to the provisions for benefits in the event of total
and permanent disability and provisions which grant additional insurance
specifically against death by accident.
(2)
A provision in a life insurance policy providing that such policy shall be
incontestable after a specified period shall preclude only a contest of the
validity of the policy, and shall not preclude the assertion at any time of
defenses based upon provisions in the policy which exclude or restrict
coverage, whether or not such restrictions or exclusions are excepted in such
provision. [1967 c.359 §378]
743.171 Incontestability and limitation of
liability after reinstatement. (1) A
reinstated policy of life insurance may be contested on account of fraud or
misrepresentation of facts material to the reinstatement only for the same
period following reinstatement, and with the same conditions and exceptions, as
the policy provides with respect to contestability after original issuance.
(2)
When any policy of life insurance is reinstated, such reinstated policy may
exclude or restrict liability to the same extent that such liability could have
been or was excluded or restricted when the policy was originally issued, and
such exclusion or restriction shall be effective from the date of
reinstatement. [1967 c.359 §379]
743.174 Entire contract.
A life insurance policy shall contain a provision that the policy constitutes
the entire contract between the parties. [1967 c.359 §380]
743.177 Statements of insured.
A life insurance policy shall contain a provision that all statements made by
or on behalf of the insured shall, in the absence of fraud, be deemed
representations and not warranties, and that no such statement shall be used in
defense of a claim under the policy unless contained in a written application
and unless a copy of such application is indorsed upon or attached to the
policy when issued. [1967 c.359 §381]
743.180 Misstatement of age.
A life insurance policy shall contain a provision that if it is found at any
time before final settlement under the policy that the age of the insured or of
any other person whose age is considered in determining the premium or benefit
accruing under the policy has been misstated, the amount payable or benefit
accruing under the policy shall be such as the premium would have purchased at
the correct age or ages, or the premium may be adjusted and credit given to the
insured or to the insurer, according to the insurer’s published rate at date of
issue. [1967 c.359 §382]
743.183 Dividends.
(1) A life insurance policy other than a nonparticipating policy shall contain
a provision that the policy shall participate in the divisible surplus of the
insurer annually, beginning not later than the end of the third policy year.
Any policy containing provision for participation beginning at the end of the
first or the second policy year may provide that dividends for either or both
of such years shall be paid subject to the payment of the premium for the next
ensuing year. The owner of the policy shall have the right each year to have
the dividend arising from such participation paid in cash, and if the policy
provides other dividend options, it shall further provide which dividend option
is effective if the owner does not elect one of such options on or before the
expiration of the period of grace allowed for the payment of the premium.
(2)
In participating industrial life insurance policies, in lieu of the provision
required in subsection (1) of this section, there shall be a provision that,
beginning not later than the end of the fifth policy year, the policy shall
participate annually in the divisible surplus in the manner set forth in the
policy.
(3)
This section does not apply to any form of paid-up insurance or temporary
insurance or endowment insurance issued or granted in exchange for lapsed or
surrendered policies. [1967 c.359 §383]
743.186 Policy loan.
(1) A life insurance policy shall contain a provision that after three full
years’ premiums have been paid and after the policy has a cash surrender value
and while no premium is in default beyond the grace period for payment, the
insurer will advance, on proper assignment or pledge of the policy and on the
sole security thereof, an amount equal to or, at the option of the party
entitled thereto, less than the loan value of the policy, at a rate of interest
not exceeding the maximum rate permitted by the policy loan provision. The
interest rate provision shall comply with ORS 743.187. The loan value of the
policy shall be equal to the cash surrender value at the end of the then
current policy year, less any existing indebtedness not already deducted in
determining such cash surrender value including any interest then accrued but
not due, any unpaid balance of the premium for the current policy year, and
interest on the loan to the end of the current policy year. The policy may also
provide that:
(a)
Interest on any indebtedness that is 90 or more days past due shall be added to
the existing indebtedness and shall bear interest at the rate applicable to the
existing indebtedness; and
(b)
Except as provided in ORS 743.187, if the total indebtedness on the policy,
including interest due or accrued, equals or exceeds the amount of the loan
value of the policy, the policy shall terminate and become void upon 30 days’
notice by the insurer mailed to the last-known address of the insured or other
policy owner and of any assignee of record at the home office of the insurer.
(2)
The policy shall reserve to the insurer the right to defer the granting of a
loan, other than for the payment of any premium to the insurer, for six months
after application therefor.
(3)
The policy, at the insurer’s option, may provide for automatic premium loan.
(4)
This section does not apply to term insurance policies or term insurance
benefits provided by rider or supplemental policy provisions, or to industrial
life insurance policies. [1967 c.359 §384; 1975 c.575 §1; 1981 c.412 §18; 2001
c.318 §12]
743.187 Maximum interest rate on policy
loan; adjustable interest rate. (1) Except as
provided otherwise in this section, the maximum interest rate in the policy
loan provision required by ORS 743.186 shall be eight percent per year. The
insurer may include in the policy loan provision, in lieu of a fixed maximum
interest rate, a provision for an adjustable interest rate. The adjustable
interest rate provision must comply with this section. A limitation on interest
rates under state law, other than a limitation contained in the Insurance Code,
shall not apply to interest rates for life insurance policy loans unless the
limitation specifically applies to life insurance policy loans.
(2)
The adjustable interest rate provision:
(a)
Shall state in substance that in accordance with the policy and the law of the
jurisdiction in which the policy is delivered, the insurer will establish from
time to time the interest rate for an existing or a new policy loan; and
(b)
Shall set forth the dates on which the insurer will determine policy loan
interest rates. These determination dates shall be at regular intervals no
longer than one year and no shorter than three months.
(3)
The maximum interest rate permitted for a policy loan under the adjustable
interest rate provision shall be established by the provision as the higher of:
(a)
The interest rate used to calculate cash surrender values under the policy
during the same period, plus one percent; and
(b)
The Moody’s Corporate Bond Yield Average - Monthly Average
Corporates, as published by Moody’s Investors Service, Inc., for the calendar
month which precedes by two months the month in which the determination date
for the policy loan interest rate falls. However, if the Moody’s Corporate Bond
Yield Average - Monthly Average Corporates is no longer published by
Moody’s Investors Service, Inc., or if the National Association of Insurance
Commissioners determines that the Moody’s Corporate Bond Yield
Average - Monthly Average Corporates is no longer an appropriate rate
for this purpose, the Director of the Department of Consumer and Business
Services by rule may establish the method of determining the rate under this
paragraph. The director’s rule, to the maximum extent reasonable, shall be
consistent with the pertinent actions of the National Association of Insurance
Commissioners.
(4)
On any date specified in the adjustable interest rate provision of the policy
for determining the policy loan interest rate:
(a)
The insurer may increase the existing rate if the maximum rate permitted by the
provision exceeds the existing rate by at least one-half of one percent. The
increase shall not be less than one-half of one percent or more than the amount
by which the permitted maximum rate exceeds the existing rate; and
(b)
The insurer shall decrease the existing rate if the existing rate exceeds the
maximum rate permitted by the provision by at least one-half of one percent.
The decrease shall not be less than the amount by which the existing rate
exceeds the permitted maximum rate.
(5)
The insurer under the adjustable interest rate provision shall give notice of
the policy loan interest rate and related matters to the policy owner and all
other persons entitled to notice by the policy, as follows:
(a)
In the case of a loan other than for payment of a premium to the insurer, the
insurer shall give notice of the initial interest rate on the loan when the
loan is made.
(b)
In the case of a loan for payment of a premium to the insurer, the insurer
shall give notice of the initial interest rate on the loan as soon as
reasonably practicable after the loan is made. However, the insurer need not
give this notice when an additional premium loan is made at the same interest
rate then applicable to an existing premium loan to the borrower.
(c)
In the case of a policy with an outstanding loan, the insurer shall give notice
of each increase in the loan interest rate reasonably in advance of the
increase.
(d)
Notices given under this subsection shall include in substance the information
required by subsection (2) of this section.
(6)
Notwithstanding ORS 743.186, a policy shall not terminate in a particular
policy year solely because a change in the policy loan interest rate during
that year caused the total indebtedness under the policy to reach the policy
loan value. The policy shall remain in force during that year unless and until
it would have terminated in the absence of any policy loan interest rate change
during that year. [1981 c.412 §20]
743.189 Reinstatement.
A life insurance policy shall contain a provision that if in the event of a
default in premium payments the value of the policy has been applied to provide
a paid-up nonforfeiture benefit, and if this benefit is currently in force and
the original policy has not been surrendered to the insurer and canceled, and
if a period of not more than three years has elapsed since the default (or two
years in the case of an industrial life insurance policy), the policy may be
reinstated upon furnishing evidence of insurability satisfactory to the insurer
and payment of arrears of premiums and payment or reinstatement of any other
indebtedness to the insurer under the policy, with interest at a rate not
exceeding the maximum permitted by the policy loan provision. [1967 c.359 §385;
1981 c.412 §21]
743.192 Payment of claim; payment of
interest upon failure to pay proceeds. (1) A life
insurance policy shall contain a provision that when the policy becomes a claim
by the death of the insured, settlement shall be made upon receipt of due proof
of death and of the interest of the claimant.
(2)
If the insurer fails to pay the proceeds of or make payment under the policy
within 30 days after receipt of due proof of death and of the interest of the
claimant, and if the beneficiary elects to receive a lump sum settlement, the
insurer shall pay interest on any money due and unpaid after expiration of the
30-day period. The insurer shall compute the interest from the date of the
insured’s death until the date of payment, at a rate not lower than that paid
by the insurer on other withdrawable policy owner funds. At the end of the
30-day period, the insurer shall notify the named beneficiary or beneficiaries
at their last-known address that interest at the applicable rate will be paid
on the lump sum proceeds from the date of death of the insured.
(3)
Nothing in this section shall be construed to allow an insurer to withhold
payment of money payable under a life insurance policy to any named beneficiary
for a period longer than reasonably necessary to transmit the payment. [1967
c.359 §386; 1983 c.754 §2]
743.195 Installment payments.
A life insurance policy shall contain a table showing the amounts of
installments, if any, by which its proceeds may be payable. [1967 c.359 §387]
743.198 Title.
A life insurance policy shall contain a title briefly and correctly describing
the policy. If an industrial life insurance policy, it shall have the words “industrial
policy” imprinted on the face thereof as part of the descriptive matter. [1967
c.359 §388]
743.201 Beneficiary of industrial
policies. An industrial life insurance policy
shall have the name of the beneficiary designated thereon, or in the
application or other form if attached to the policy, with a reservation of the
right to designate or change the beneficiary after the issuance of the policy
unless such beneficiary has been irrevocably designated. The policy may also
provide that no designation or change of beneficiary shall be binding on the
insurer until indorsed on the policy by the insurer, and that the insurer may
refuse to indorse the name of any proposed beneficiary who does not appear to
the insurer to have an insurable interest in the life of the insured. The
policy may also provide that if the beneficiary designated in the policy does
not make a claim under the policy or does not surrender the policy with due
proof of death within the period stated in the policy, which shall not be less
than 30 days after the death of the insured, or if the beneficiary is the estate
of the insured, or is a minor, or dies before the insured, or is not legally
competent to give a valid release, then the insurer may make any payment
thereunder to the executor or administrator of the insured, or to any relative
of the insured by blood or legal adoption or connection by marriage, or to any
person appearing to the insurer to be equitably entitled thereto by reason of
having been named beneficiary, or by reason of having incurred expense for the
maintenance, medical attention or burial of the insured. The policy may also
include a similar provision applicable to any other payment due under the
policy. [1967 c.359 §389]
743.204 Standard Nonforfeiture Law for
Life Insurance; applicability. (1) ORS
743.204 to 743.222 may be cited as the Standard Nonforfeiture Law for Life
Insurance.
(2)
The operative date of the Standard Nonforfeiture Law for Life Insurance as to
any policy is the earlier of:
(a)
January 1, 1948; or
(b)
The date specified in a written notice, filed with the Director of the Department
of Consumer and Business Services by the insurer, of election to comply with
the Standard Nonforfeiture Law for Life Insurance as to such policy as of the
specified date.
(3)
The Standard Nonforfeiture Law for Life Insurance shall not apply to:
(a)
Any reinsurance, group insurance, pure endowment, annuity or reversionary
annuity policy.
(b)
Any term policy or renewal thereof, of uniform amount, which provides no
guaranteed nonforfeiture or endowment benefits, of 20 years or less expiring
before age 71, for which uniform premiums are payable during the entire term of
the policy. For this purpose, the age at death for a joint term life insurance
policy shall be the age at death of the oldest life.
(c)
Any term policy of decreasing amount, which provides no guaranteed
nonforfeiture or endowment benefits, if each adjusted premium, calculated as
specified in ORS 743.215 and 743.216, is less than the adjusted premium so
calculated on a term policy or renewal thereof of uniform amount, which provides
no guaranteed nonforfeiture benefits or endowment benefits, which is issued at
the same age, for the same initial amount of insurance and for a term of 20
years or less that expires before age 71 and for which uniform premiums are
payable during the entire term of the policy. For this purpose, the age at
death for a joint term life insurance policy shall be the age at death of the
oldest life.
(d)
Any policy which provides no guaranteed nonforfeiture or endowment benefits,
and for which policy the cash surrender value or present value of paid-up
nonforfeiture benefit calculated for the beginning of any policy year as
specified in ORS 743.210, 743.213, 743.215 and 743.216 does not exceed two and
one-half percent of the amount of insurance at the beginning of such year. [Formerly
739.340; 1977 c.320 §13; 1981 c.609 §12]
743.207 Required provisions relating to
nonforfeiture. (1) A life insurance policy shall
contain in substance the following provisions, or corresponding provisions
which in the opinion of the Director of the Department of Consumer and Business
Services are at least as favorable to the defaulting or surrendering
policyholder as are the minimum requirements specified in this section, and
which are essentially in compliance with ORS 743.221:
(a)
That in the event of default in any premium payment the insurer will grant,
upon proper request not later than 60 days after the due date of the premium in
default, a paid-up nonforfeiture benefit on a plan stipulated in the policy,
effective as of such due date, of the amount required by ORS 743.213. In lieu
of this stipulated benefit the insurer may substitute, upon proper request made
not later than 60 days after the due date of the premium in default, another
paid-up nonforfeiture benefit which is actuarially equivalent and provides a
greater amount or longer period of death benefit or, if applicable, a greater
amount or earlier payment of endowment benefit.
(b)
That upon surrender of the policy within 60 days after the due date of any
premium payment in default after premiums have been paid for at least three
full years in the case of ordinary life insurance or five full years in the
case of industrial life insurance, the insurer will pay, in lieu of any paid-up
nonforfeiture benefit, a cash surrender value of the amount required by ORS
743.210.
(c)
That a specified paid-up nonforfeiture benefit will become effective as
specified in the policy unless the person entitled to make such election elects
another available option not later than 60 days after the due date of the
premium in default.
(d)
That, if the policy has become paid up by completion of all premium payments or
if it is continued under any paid-up nonforfeiture benefit which became
effective on or after the third policy anniversary in the case of ordinary life
insurance or the fifth policy anniversary in the case of industrial life
insurance, the insurer will pay, upon surrender of the policy within 30 days
after any policy anniversary, a cash surrender value of the amount required by
ORS 743.210.
(e)(A)
In the case of all policies other than those provided for in subparagraph (B)
of this paragraph, a statement of the mortality table and interest rate used in
calculating the cash surrender values and the paid-up nonforfeiture benefits
available under the policy, together with a table showing the cash surrender
value, if any, and paid-up nonforfeiture benefit, if any, available under the
policy on each policy anniversary either during the first 20 policy years or
during the term of the policy, whichever is shorter. Such values and benefits
shall be calculated on the assumption that there are no dividends or paid-up
additions credited to the policy and that there is no indebtedness to the
insurer on the policy. At the option of the insurer such table may also show
such values and benefits for any year or years beyond the 20th policy year.
(B)
In the case of policies which provide, on a basis guaranteed in the policy, for
unscheduled changes in benefits or premiums, or which provide an option for
changes in benefits or premiums other than by change to a new policy, a
statement of the mortality table, interest rate and method used in calculating
cash surrender values and paid-up nonforfeiture benefits available under the
policy.
(f)(A)
A statement that the cash surrender values and the paid-up nonforfeiture
benefits available under the policy are not less than the minimum values and
benefits required by or pursuant to the insurance law of the state in which the
policy is delivered.
(B)
An explanation of the manner in which the cash surrender values and the paid-up
nonforfeiture benefits are altered by the existence of any paid-up additions
credited to the policy or any indebtedness to the insurer on the policy.
(C)
If a detailed statement of the method of computation of the cash surrender
values and paid-up nonforfeiture benefits shown in the policy is not stated in
the policy, a statement that the method of computation has been filed with the
insurance supervisory official of the state in which the policy is delivered.
(D)
A statement of the method to be used in calculating the cash surrender value
and paid-up nonforfeiture benefit available under the policy on any policy
anniversary beyond the last anniversary for which such values and benefits are
shown for consecutive years in the policy.
(2)
Any of the provisions set forth in subsection (1) of this section, or portions
of the provisions, not applicable by reason of the particular plan of insurance
may, to the extent inapplicable, be omitted from the policy.
(3)
The insurer shall reserve the right to defer the payment of any cash surrender
value for a period of six months after demand therefor with surrender of the
policy. [Formerly 739.345; 1981 c.609 §13]
743.210 Determination of cash surrender
values; applicability to certain policies. (1)
Except as otherwise provided in subsections (2) and (3) of this section, any
cash surrender value available under a life insurance policy in the event of
default in a premium payment due on any policy anniversary, whether or not
required by ORS 743.207, shall be an amount not less than the excess, if any,
of the present value, on such anniversary, of the future guaranteed benefits
which would have been provided for by the policy, including any existing paid-up
additions, if there had been no default, over the sum of:
(a)
The present value on such anniversary of the adjusted premiums, as defined in
ORS 743.215 and 743.216, corresponding to premiums which would have fallen due
on and after such anniversary; and
(b)
The amount of any indebtedness to the insurer on the policy.
(2)
This subsection applies to a life insurance policy issued on or after the
operative date defined in ORS 743.215 which provides supplemental life
insurance or annuity benefits by rider or supplemental policy provision at the
option of the insured and for an identifiable additional premium. For such a
policy, the cash surrender value shall be an amount not less than the cash
surrender value required by subsection (1) of this section for a policy
otherwise similar to the subject policy but without such rider or supplemental
policy provision, plus the cash surrender value required by subsection (1) of
this section for a policy which provides only the benefits provided by such
rider or supplemental policy provision in the subject policy.
(3)
This subsection applies to a family life insurance policy issued on or after
the operative date defined in ORS 743.215 which policy defines a primary
insured and provides term insurance on the life of the spouse of the primary
insured with a term that expires before age 71 of the spouse. For such a
policy, the cash surrender value shall be an amount not less than the cash
surrender value required by subsection (1) of this section for a policy
otherwise similar to the subject policy but without such term insurance on the
life of the spouse, plus the cash surrender value required by subsection (1) of
this section for a policy which provides only the benefits provided by such
term insurance on the life of the spouse in the subject policy.
(4)
Any cash surrender value available within 30 days after any policy anniversary
under any policy which has been paid up by completion of all premium payments
or any policy which has been continued under any paid-up nonforfeiture benefit,
whether or not required by ORS 743.207, shall be an amount not less than the
present value, on such anniversary, of the future guaranteed benefits provided
for by the policy, including any existing paid-up additions, decreased by the amount
of any indebtedness to the insurer on the policy. [Formerly 739.350; 1981 c.609
§14]
743.213 Determination of paid-up
nonforfeiture benefits. Any paid-up nonforfeiture
benefit available under a life insurance policy in the event of default in a
premium payment due on any policy anniversary shall be such that its present
value as of such anniversary shall be at least equal to the cash surrender
value then provided for by the policy or, if none is provided for, that cash
surrender value which would have been required by ORS 743.207 in the absence of
the condition that premiums have been paid for at least a specified period. [Formerly
739.355; 1981 c.609 §15]
743.215 Calculation of adjusted premiums.
(1) This section applies to all life insurance policies issued on or after the
operative date defined in this subsection for the issuing insurer. After
January 1, 1982, any insurer may file with the Director of the Department of
Consumer and Business Services a written notice of its election to comply with
the provisions of this section with regard to any number of plans of insurance
after a specified date before January 1, 1989. The specified date shall be the
operative date of this subsection for the plan or plans, but if an insurer
elects to make this subsection operative before January 1, 1989, for fewer than
all plans, the insurer must comply with rules adopted by the director. There is
no limit to the number of times that an insurer may make the election. If an
insurer makes no such election, the operative date of this section for the
insurer shall be January 1, 1989.
(2)
Except as provided in subsection (8) of this section, the adjusted premiums
referred to in ORS 743.210 for any life insurance policy to which this section
applies shall be calculated as provided in this subsection, on an annual basis,
as a uniform percentage of the respective premiums specified in the policy for
each policy year, excluding amounts payable as extra premiums to cover
impairments or special hazards and excluding any uniform annual contract charge
or policy fee specified in the policy statement of the method to be used in
calculating the cash surrender values and paid-up nonforfeiture benefits. This
percentage shall be such that the present value, at the date of issue of the policy,
of all such adjusted premiums shall equal the sum of:
(a)
The present value at the policy issue date of the future guaranteed benefits
provided for by the policy;
(b)
One percent of either the amount of insurance, if the insurance is uniform in amount,
or the average of the amounts of insurance at the beginning of each of the
first 10 policy years; and
(c)
One hundred twenty-five percent of the nonforfeiture net level premium as
defined in subsection (3) of this section. For this purpose, any excess of the
nonforfeiture net level premium over four percent of such uniform or average
amount of insurance shall be disregarded.
(3)
The nonforfeiture net level premium referred to in subsection (2) of this
section shall equal the present value, at the date of issue of the policy, of
the guaranteed benefits provided for by the policy divided by the present
value, at the date of issue of the policy, of an annuity of one per annum
payable on the date of issue and on each anniversary of the policy on which a
premium falls due.
(4)
In the case of policies which provide, on a basis guaranteed in the policy, for
unscheduled changes in benefits or premiums, or which provide an option for
changes in benefits or premiums other than by change to a new policy, the adjusted
premiums and present values shall initially be calculated on the assumption
that future benefits and premiums do not change from those stipulated by the
policy at the date of issue. At the time of any such change in the benefits or
premiums the future adjusted premiums, nonforfeiture net level premiums and
present values shall be recalculated as provided in subsection (5) of this
section on the assumption that future benefits and premiums do not change from
those stipulated by the policy immediately after the change.
(5)
Except as otherwise provided in subsection (8) of this section, the
recalculated future adjusted premiums referred to in subsection (4) of this
section shall be calculated as provided in this subsection, on an annual basis,
as a uniform percentage of the respective future premiums specified in the
policy for each policy year, excluding amounts payable as extra premiums to
cover impairments and special hazards and excluding any uniform annual contract
charge or policy fee specified in the policy statement of the method to be used
in calculating the cash surrender values and paid-up nonforfeiture benefits.
This percentage shall be such that the present value, at the date of change to
the newly defined benefits or premiums, of all such future adjusted premiums
shall equal A plus B minus C, where these amounts are defined as follows:
(a)
“A” equals the present value, as of the date of change, of the future
guaranteed benefits provided for by the policy.
(b)
“B” equals the additional expense allowance, if any, for the policy, as defined
in subsection (6) of this section.
(c)
“C” equals the cash surrender value under the policy, if any, or present value
of any paid-up nonforfeiture benefit under the policy, as of the date of
change.
(6)
The additional expense allowance at the date of the change to the newly defined
benefits or premiums, as referred to in subsection (5) of this section, shall
equal the sum of:
(a)
One percent of the excess, if positive, of the average of the amounts of insurance
at the beginning of each of the first 10 policy years subsequent to the change,
over the average of the amounts of insurance, as defined before the change, at
the beginning of each of the first 10 policy years subsequent to the last
previous change or the policy issue date if there has been no change.
(b)
One hundred twenty-five percent of the change, if positive, in the amount of
the nonforfeiture net level premium from the amount applicable prior to the
change in policy benefits or premiums to the amount of the recalculated
nonforfeiture net level premium determined from subsection (7) of this section
as of the date of the change in policy benefits or premiums.
(7)
The recalculated nonforfeiture net level premium referred to in subsection (6)
of this section shall equal Y divided by Z, where these amounts are defined as
follows:
(a)
“Y” equals the sum of:
(A)
The nonforfeiture net level premium applicable prior to the change times the
present value at the date of change of an annuity of one per annum payable on
each anniversary of the policy, on or subsequent to the date of the change, on
which a premium would have fallen due had the change not occurred; and
(B)
The present value at the date of change of the increase in future guaranteed
benefits provided for by the policy.
(b)
“Z” equals the present value at the date of change of an annuity of one per
annum payable on each anniversary of the policy, on or subsequent to the date
of change, on which a premium falls due.
(8)
Notwithstanding any other provisions of this section, the provisions of this
subsection shall apply in the case of a policy issued on a substandard basis
which provides reduced graded amounts of insurance determined so that, in each
policy year, the policy has the same tabular mortality cost as for an otherwise
similar policy of a higher nongraded amount or amounts of insurance issued on
the standard basis. Adjusted premiums and present values for a policy on such a
substandard basis may be calculated as if the policy were issued to provide
such a higher nongraded amount or amounts of insurance on the standard basis.
(9)
Except as provided in subsection (10) of this section, all adjusted premiums
and present values referred to in the Standard Nonforfeiture Law for Life
Insurance shall, for all policies of life insurance to which this section
applies, be calculated on the mortality and interest bases as follows:
(a)
For ordinary life insurance mortality:
(A)
The Commissioners 1980 Standard Ordinary Mortality Table shall be used; or
(B)
At the option of the insurer for any one or more specified plans of life
insurance, the Commissioners 1980 Standard Ordinary Mortality Table with
Ten-Year Select Mortality Factors may be used instead of such table without
Ten-Year Select Mortality Factors.
(b)
For industrial life insurance mortality, the Commissioners 1961 Standard
Industrial Mortality Table shall be used.
(c)
For all policies issued in a particular calendar year, an interest rate shall
be used which does not exceed the nonforfeiture interest rate, as defined in
subsection (11) of this section, for policies issued in that year.
(10)
The following provisions shall also apply, for policies to which this section
applies, to the calculation of premiums and values referred to in the Standard
Nonforfeiture Law for Life Insurance:
(a)
At the option of the insurer, such calculations for all policies issued in a
particular calendar year may be made on the basis of an interest rate which
does not exceed the nonforfeiture interest rate, as defined in subsection (11)
of this section, for policies issued in the last preceding calendar year.
(b)
Under any paid-up nonforfeiture benefit, including any paid-up dividend
additions, any cash surrender value available, whether or not required by ORS 743.207,
shall be calculated on the basis of the mortality table and interest rate used
in determining the amount of such paid-up nonforfeiture benefit and paid-up
dividend additions.
(c)
An insurer shall calculate the amount of any guaranteed paid-up nonforfeiture
benefit, including any paid-up additions, on the basis of an interest rate no
lower than that specified in the policy for calculating cash surrender values.
(d)
In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed may be not more than those shown in the
Commissioners 1980 Extended Term Insurance Table for policies of ordinary life
insurance, and not more than those shown in the Commissioners 1961 Industrial
Extended Term Insurance Table for policies of industrial life insurance.
(e)
For insurance issued on a substandard basis, the calculation of premiums and
values may be based on appropriate modifications of the mortality tables
referred to in subsection (9) of this section and in this subsection.
(f)
Any ordinary life mortality tables adopted after 1980 by the National
Association of Insurance Commissioners that are approved under rules issued by
the director for use in determining the minimum nonforfeiture standard may be
substituted for the Commissioners 1980 Standard Ordinary Mortality Table with
or without Ten-Year Select Mortality Factors, or for the Commissioners 1980
Extended Term Insurance Table.
(g)
Any industrial life mortality tables adopted after 1980 by the National
Association of Insurance Commissioners that are approved under rules issued by
the director for use in determining the minimum nonforfeiture standard may be
substituted for the Commissioners 1961 Standard Industrial Mortality Table or
the Commissioners 1961 Industrial Extended Term Insurance Table.
(11)
The nonforfeiture interest rate for any policy issued in a particular calendar
year shall equal 125 percent of the calendar year statutory valuation interest
rate for such policy as defined in the Standard Valuation Law, rounded to the
nearer one-quarter of one percent.
(12)
Notwithstanding any other provision in this chapter or ORS chapter 743A, for
any previously approved policy form, any refiling of nonforfeiture values or
their methods of computation which involves only a change in the interest rate
or mortality table used to compute nonforfeiture values shall not of itself
require refiling of any other provisions of that policy form. [1981 c.609 §17;
1983 c.282 §1]
743.216 Adjusted premiums; applicability.
This section applies only to life insurance policies issued before the
operative date defined in ORS 743.215. For such policies:
(1)
Except as provided in subsection (3) of this section, the adjusted premiums
referred to in ORS 743.210 shall be calculated on an annual basis and shall be
such uniform percentage of the respective premiums specified in the policy for
each policy year, excluding any extra premiums charged because of impairments
or special hazards, that the present value, at the date of issue of the policy,
of all such adjusted premiums shall be equal to the sum of:
(a)
The present value at the policy issue date of the future guaranteed benefits
provided for by the policy.
(b)
Two percent of the amount of insurance if the insurance is uniform in amount,
or of the equivalent uniform amount as defined in subsection (2) of this
section if the amount of insurance varies with duration of the policy.
(c)
Forty percent of the adjusted premium for the first policy year. For this
purpose, any excess of the adjusted premium over four percent of the amount of
insurance or equivalent uniform amount shall be disregarded.
(d)
Twenty-five percent of either the adjusted premium for the first policy year or
the adjusted premium for a whole life policy for the same uniform or the same
equivalent uniform amount of insurance with uniform premiums for the whole of
life issued at the same age, whichever is less. For this purpose, any excess of
the adjusted premium over four percent of the amount of insurance or equivalent
uniform amount shall be disregarded.
(2)
In the case of a policy providing an amount of insurance varying with duration
of the policy, the equivalent uniform amount of the subject policy for the
purpose of this section shall be the uniform amount of insurance provided by an
otherwise similar policy, containing the same endowment benefit or benefits, if
any, issued at the same age and for the same term, the amount of which does not
vary with duration and the benefits under which have the same present value at
the date of issue as the benefits under the subject policy. However, in the
case of a policy providing a varying amount of insurance issued on the life of
a child under age 10, the equivalent uniform amount may be computed as though
the amount of insurance provided by the subject policy prior to the attainment
of age 10 were the amount provided by the subject policy at age 10.
(3)
The adjusted premiums for any policy providing term insurance benefits by rider
or supplemental policy provision shall be calculated in accordance with this
subsection. The amounts specified in paragraphs (a) and (b) of this subsection
shall be calculated separately. Each such amount shall be calculated as specified
in subsections (1) and (2) of this section. However, for the purposes of
subsection (1)(b), (c) and (d) of this section, the amount of insurance or
equivalent uniform amount of insurance used in the calculation of the adjusted
premiums referred to in paragraph (b) of this subsection shall be equal to the
excess of the uniform or equivalent uniform amount determined for the entire
policy over the amount used in the calculation of the adjusted premiums in
paragraph (a) of this subsection. The adjusted premiums for the entire policy
shall equal the sum of:
(a)
The adjusted premiums for an otherwise similar policy issued at the same age
without such term insurance benefits; and
(b)
During the period for which premiums for such term insurance benefits are payable,
the adjusted premiums for such term insurance benefits.
(4)
Except as provided in paragraphs (a) and (b) of this subsection and subsection
(5) of this section, all adjusted premiums and present values referred to in
the Standard Nonforfeiture Law for Life Insurance shall for all policies of
ordinary life insurance to which this section applies be calculated on the
basis of the Commissioners 1941 Standard Ordinary Mortality Table. Such
calculations for any category of ordinary life insurance issued on female lives
may, however, be based on an age not more than six years younger than the
actual age of the insured. Except as provided in paragraphs (a) and (b) of this
subsection and subsection (7) of this section, such calculations of adjusted
premiums and present values for all policies of industrial life insurance shall
be made on the basis of the 1941 Standard Industrial Mortality Table. All
calculations shall be made on the basis of the rate of interest, not exceeding
three and one-half percent per annum, specified in the policy for calculating
cash surrender values and paid-up nonforfeiture benefits. The following
exceptions pertain:
(a)
In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed may be not more than 130 percent of the rates of
mortality according to the respective table.
(b)
For insurance issued on a substandard basis, the calculation of adjusted
premiums and present values may be based on such other table of mortality as
may be specified by the insurer and approved by the Director of the Department
of Consumer and Business Services.
(5)
This subsection applies only to policies of ordinary life insurance to which
this section applies and which are issued on or after the operative date of
this subsection as defined in subsection (6) of this section. For such
policies, all adjusted premiums and present values referred to in the Standard
Nonforfeiture Law for Life Insurance shall, except as provided in paragraphs
(a) and (b) of this subsection, be calculated on the basis of the Commissioners
1958 Standard Ordinary Mortality Table and the rate of interest specified in
the policy for calculating cash surrender values and paid-up nonforfeiture
benefits. Such calculations for any category of ordinary life insurance issued
on female lives may, however, be based on an age not more than six years
younger than the actual age of the insured. Such rate of interest shall not
exceed three and one-half percent, except that a rate of interest not exceeding
four percent may be used for policies issued from January 1, 1974, to December
31, 1977, and a rate of interest not exceeding five and one-half percent may be
used for policies issued on or after January 1, 1978, and with the further
exception that for any single premium whole life or endowment insurance policy
a rate of interest not exceeding six and one-half percent may be used. The
following exceptions pertain:
(a)
In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed may be not more than those shown in the
Commissioners 1958 Extended Term Insurance Table.
(b)
For insurance issued on a substandard basis, the calculation of adjusted
premiums and present values may be based on such other table of mortality as
may be specified by the insurer and approved by the director.
(6)
After August 9, 1961, any insurer may file with the director a written notice
of its election to comply with the provisions of subsection (5) of this section
after a specified date before January 1, 1966. After the filing of such notice,
such specified date shall be the operative date of subsection (5) of this
section for the insurer with respect to the ordinary life policies it
thereafter issues. If an insurer makes no such election, such operative date
for the insurer shall be January 1, 1966.
(7)
This subsection applies only to policies of industrial life insurance to which
this section applies and which are issued on or after the operative date of
this subsection as defined in subsection (8) of this section. For such
policies, all adjusted premiums and present values referred to in the Standard
Nonforfeiture Law for Life Insurance shall, except as provided in paragraphs
(a) and (b) of this subsection, be calculated on the basis of the Commissioners
1961 Standard Industrial Mortality Table and the rate of interest specified in
the policy for calculating cash surrender values and paid-up nonforfeiture
benefits. Such rate of interest shall not exceed three and one-half percent,
except that a rate of interest not exceeding four percent may be used for
policies issued from January 1, 1974, to December 31, 1977, and a rate of
interest not exceeding five and one-half percent may be used for policies
issued on or after January 1, 1978, and with the further exception that for any
single premium whole life or endowment insurance policy a rate of interest not
exceeding six and one-half percent may be used. The following exceptions
pertain:
(a)
In calculating the present value of any paid-up term insurance with
accompanying pure endowment, if any, offered as a nonforfeiture benefit, the
rates of mortality assumed may be not more than those shown in the
Commissioners 1961 Industrial Extended Term Insurance Table.
(b)
For insurance issued on a substandard basis, the calculation of adjusted
premiums and present values may be based on such other table of mortality as may
be specified by the insurer and approved by the director.
(8)
After September 2, 1963, any insurer may file with the director a written
notice of its election to comply with the provisions of subsection (7) of this
section after a specified date before January 1, 1968. After the filing of such
notice, such specified date shall be the operative date of subsection (7) of
this section for the insurer with respect to the industrial life insurance
policies it thereafter issues. If an insurer makes no such election, such
operative date for the insurer shall be January 1, 1968. [Formerly 739.360;
1973 c.636 §6; 1977 c.320 §14; 1981 c.609 §16]
743.218 Requirements for determination of
future premium amounts or minimum values. In the
case of policies of life insurance which provide for determination of future
premium amounts by the insurer on the basis of current estimates of future
experience, or policies of life insurance which are of such a nature that
minimum values cannot in the judgment of the Director of the Department of
Consumer and Business Services be determined by the methods otherwise described
in the Standard Nonforfeiture Law for Life Insurance, the following
requirements shall apply:
(1)
The director must be satisfied that the policy benefits are substantially as
favorable to policyholders and insureds as the minimum benefits otherwise
required by the Standard Nonforfeiture Law for Life Insurance;
(2)
The director must be satisfied that the benefits and the pattern of premiums of
the policy are not misleading to prospective policyholders or insureds; and
(3)
The cash surrender values and paid-up nonforfeiture benefits provided by the
policy must not be less than the minimum values and benefits required for the
policy as calculated by a method consistent with the principles of the Standard
Nonforfeiture Law for Life Insurance, as determined under rules issued by the
director. [1981 c.609 §18]
743.219 Supplemental rules for calculating
nonforfeiture benefits. (1) Any cash surrender value and
any paid-up nonforfeiture benefit available under a life insurance policy in
the event of default in a premium payment due at any time other than on the
policy anniversary date shall be calculated with allowance for the lapse of
time and the payment of fractional premiums beyond the last preceding policy
anniversary.
(2)
All values referred to in the Standard Nonforfeiture Law for Life Insurance may
be calculated on the assumption that any death benefit is payable at the end of
the policy year of death.
(3)
The net value of any paid-up additions, other than paid-up term additions,
shall not be less than the amounts used to provide the additions. [Formerly
739.365; 1981 c.609 §19]
743.221 Cash surrender values upon default
in premium payment. (1) This section shall apply to
all life insurance policies issued on or after January 1, 1986.
(2)
Any cash surrender value available in the event of default in a premium payment
due on any policy anniversary under a life insurance policy to which this
section applies shall be in an amount which does not differ, by more than
two-tenths of one percent of the amount of insurance, if uniform, or the
average of the amounts of insurance at the beginning of each of the first 10
policy years, from A plus B minus C, where these amounts are defined as
follows:
(a)
“A” equals the basic cash value on such anniversary as defined in subsection
(3) of this section.
(b)
“B” equals the present value on such anniversary of any existing paid-up
additions.
(c)
“C” equals the amount of any indebtedness to the insurer under the policy on
such anniversary.
(3)(a)
The basic cash value referred to in subsection (2) of this section shall equal
the present value, on a particular subject policy anniversary, of the future
guaranteed benefits which would have been provided for by the policy if there
had been no premium default, excluding any existing paid-up additions and
before deduction of any indebtedness to the insurer, less the present value on
such anniversary of the nonforfeiture factors, as defined in subsection (4) of
this section, corresponding to premiums which would have fallen due on and
after such anniversary. The basic cash value shall be taken as zero if this
calculation produces a negative result.
(b)
Supplemental life insurance or annuity benefits and family coverage, as
described in ORS 743.210 or 743.216, whichever is applicable to the policy,
shall affect the basic cash value in the same manner as is provided in ORS
743.210 or 743.216 for their effect on the cash surrender values.
(4)(a)
Except as provided in paragraph (b) of this subsection, the nonforfeiture
factor referred to in subsection (3) of this section shall for each policy year
equal a percentage of the adjusted premium for that policy year as defined in
ORS 743.215 or 743.216, whichever is applicable to the policy. This percentage
must:
(A)
Be uniform for each policy year between the second policy anniversary and the
later of:
(i)
The fifth policy anniversary; and
(ii)
The first policy anniversary at which there is available under the policy a
cash surrender value in an amount, before including any paid-up additions and
before deducting any indebtedness, at least equal to two-tenths of one percent
of the amount of insurance, if uniform, or of the average of the amounts of
insurance at the beginning of each of the first 10 policy years; and
(B)
Be such that no percentage after the later policy anniversary defined in
subparagraph (A) of this paragraph applies to fewer than five consecutive
policy years.
(b)
No basic cash value may be less than the value which would be obtained if the
adjusted premiums for the policy as defined in ORS 743.215 or 743.216,
whichever is applicable to the policy, were substituted for the nonforfeiture
factors defined in this subsection in the calculation of the basic cash value.
(5)
All adjusted premiums and present values referred to in this section shall for
a particular policy be calculated on the same mortality and interest bases as
are used in demonstrating the compliance of the policy with the Standard
Nonforfeiture Law for Life Insurance. The cash surrender values referred to in
this section shall include any endowment benefits provided for by the policy.
(6)(a)
Any cash surrender value available other than in the event of default in a
premium payment due on a policy anniversary, and the amount of any paid-up
nonforfeiture benefit available under the policy in the event of default in a
premium payment, shall be determined in a manner consistent with the manner
specified for determining the analogous minimum amounts under the Standard
Nonforfeiture Law for Life Insurance.
(b)
The amounts of any cash surrender values and any paid-up nonforfeiture benefits
granted in connection with additional benefits such as those described in ORS
743.222 shall conform with the principles of this section. [1981 c.609 §21]
743.222 Policy benefits and premiums that
shall be disregarded in calculating cash surrender values and paid-up
nonforfeiture benefits. (1) Notwithstanding ORS 743.210,
in ascertaining minimum cash surrender values and paid-up nonforfeiture
benefits required by the Standard Nonforfeiture Law for Life Insurance,
benefits and their respective premiums provided for in a life insurance policy
shall be disregarded where the benefits are payable:
(a)
In the event of death or dismemberment by accident or accidental means;
(b)
In the event of total and permanent disability;
(c)
As reversionary annuity or deferred reversionary annuity benefits;
(d)
As term insurance benefits provided by a rider or supplemental policy provision
to which, if issued as a separate policy, the Standard Nonforfeiture Law for
Life Insurance would not apply;
(e)
As term insurance on the life of a child or on the lives of children provided
in a policy on the life of a parent of the child, if such term insurance
expires before the child’s age is 26, is uniform in amount after the child’s
age is one, and has not become paid up by reason of the death of a parent of
the child; or
(f)
As other policy benefits additional to life insurance and endowment benefits.
(2)
No benefits such as are described in subsection (1) of this section are
required to be included in any paid-up nonforfeiture benefits. [Formerly
739.370; 1981 c.609 §20]
743.225 Prohibited provisions.
No life insurance policy shall contain any of the following provisions:
(1)
A provision limiting the time within which any action at law or suit in equity
may be commenced to less than three years after the cause of action or suit
accrues.
(2)
A provision by which the policy purports to be issued or to take effect more
than six months before the original application for the insurance was made.
(3)
A provision for forfeiture of the policy for failure to repay any loan on the
policy or any interest on such loan while the total indebtedness on the policy
is less than the loan value thereof. [Formerly 739.315]
743.228 Acts of corporate insured or
beneficiary with respect to policy. (1) Whenever
a corporation organized under the laws of this state or qualified to do
business in this state has caused to be insured the life of any director,
officer, agent or employee, or whenever such corporation is named as a
beneficiary in or assignee of any life insurance policy, due authority to
effect, assign, release, relinquish, convert, surrender, change the beneficiary
or take any other or different action with reference to such insurance shall be
sufficiently evidenced to the insurer by a written statement under oath showing
that such action has been approved by a majority of the board of directors.
Such a statement shall be signed by the president and secretary of the
corporation and bear the corporate seal.
(2)
Such a statement shall be binding upon the corporation and shall protect the
insurer concerned in any act done or suffered by it upon the faith thereof
without further inquiry into the validity of the corporate authority or the
regularity of the corporate proceedings.
(3)
No person shall be disqualified by reason of interest in the subject matter
from acting as a director or as a member of the executive committee of such a
corporation on any corporate act touching such insurance. [Formerly 739.415]
743.230 Variable life policy provisions.
A variable life insurance policy shall contain in substance the following provisions:
(1)
A provision that there will be a period of grace of 30 days within which
payment of any premium after the first may be made, during which period of
grace the policy will continue in full force. If a claim arises under the
policy during such period of grace, the amount of any premiums due or overdue,
together with interest not in excess of six percent per annum and any deferred
installment of the annual premium, may be deducted from the policy proceeds.
The policy may contain a statement of the basis for determining any variation
in benefits that may occur as a result of the payment of premium during the
period of grace.
(2)
A provision that the policy will be reinstated at any time within three years
from the date of a default in premium payments, unless the cash surrender value
has been paid or the period of extended insurance has expired, upon the
production of evidence of insurability satisfactory to the insurer and the
payment of an amount not exceeding the greater of:
(a)
All overdue premiums and any other indebtedness to the insurer upon said policy
with interest at a rate not exceeding six percent per annum; and
(b)
One hundred ten percent of the increase in cash surrender value resulting from
reinstatement.
(3)
A provision for cash surrender values and paid-up insurance benefits available
as nonforfeiture options in the event of default in a premium payment after
premiums have been paid for a specified period. If the policy does not include
a table of figures for the options so available, the policy shall provide that
the insurer will furnish, at least once in each policy year, a statement
showing the cash value as of a date no earlier than the next preceding policy
anniversary.
(a)
The method of computation of cash values and other nonforfeiture benefits shall
be as described either in the policy or in a statement filed with the Director
of the Department of Consumer and Business Services, and shall be actuarially
appropriate to the variable nature of the policy.
(b)
The method of computation must result, if the net investment return credited to
the policy at all times from the date of issue equals the specified investment
increment factor, with premiums and benefits determined accordingly under the
terms of the policy, in cash values and other nonforfeiture benefits at least
equal to the minimum values required by the Standard Nonforfeiture Law for a
policy with such premiums and benefits. The method of computation may disregard
incidental minimum guarantees as to the dollar amounts payable. Incidental
minimum guarantees include, but are not limited to, a guarantee which provides
that the amount payable at death or maturity shall be at least equal to the
amount that would be payable if the net investment return credited to the
policy at all times from the date of issue is equal to the specified investment
increment factor.
(4)
A provision specifying the investment increment factor to be used in computing
the dollar amount of variable benefits or other variable payments or values
under the policy, and guaranteeing that expense and mortality results will not
adversely affect such dollar amounts. [1973 c.435 §18]
743.231 “Profit-sharing policy” defined.
“Profit-sharing policy” means:
(1)
A life insurance policy which by its terms expressly provides that the
policyholder will participate in the distribution of earnings or surplus other
than earnings or surplus attributable, by reasonable and nondiscriminatory
standards, to the participating policies of the insurer and allocated to the
policyholder on reasonable and nondiscriminatory standards; or
(2)
A life insurance policy the provisions of which, through sales material or oral
presentations, are interpreted by the insurer to prospective policyholders as
entitling the policyholder to the benefits described in subsection (1) of this
section. [Formerly 739.705]
743.234 “Charter policy” or “founders
policy” defined. “Charter policy” or “founders
policy” means:
(1)
A life insurance policy which by its terms expressly provides that the policyholder
will receive some preferential or discriminatory advantage or benefit not
available to persons who purchase insurance from the insurer at future dates or
under other circumstances; or
(2)
A life insurance policy the provisions of which, through sales material or oral
presentations, are interpreted by the insurer to prospective policyholders as
entitling the policyholder to the benefits described in subsection (1) of this
section. [Formerly 739.710]
743.237 “Coupon policy” defined.
“Coupon policy” means a life insurance policy which provides a series of pure
endowments maturing periodically in amounts not exceeding the gross annual
policy premiums. The term “pure endowment” or “endowment” is used in its
accepted actuarial sense, meaning a benefit becoming payable at a specific
future date if the insured person is then living. [Formerly 739.715]
743.240 Profit-sharing, charter or founders
policies prohibited. No profit-sharing, charter or
founders policy shall be issued or delivered in this state. [Formerly 739.720]
743.243 Restrictions on form of coupon
policy. Coupon policies issued or delivered in
this state shall be subject to the following provisions:
(1)
No detachable coupons or certificates or passbooks may be used. No other device
may be used which tends to emphasize the periodic endowment benefits or which
tends to create the impression that the endowments represent interest earnings
or anything other than benefits which have been purchased by part of the
policyholder’s premium payments.
(2)
Each endowment benefit must have a fixed maturity date and payment of the
endowment benefit shall not be contingent upon the payment of any premium
becoming due on or after such maturity date.
(3)
The endowment benefits must be expressed in dollar amounts rather than as
percentages of other quantities or in other ways, both in the policy itself and
in the sale thereof.
(4)
A separate premium for the periodic endowment benefits must be shown in the
policy adjacent to the rest of the policy premium information and must be given
the same emphasis in the policy and in the sale thereof as that given the rest
of the policy premium information. This premium shall be calculated with
mortality, interest and expense factors which are consistent with those for the
basic policy premium. [1967 c.359 §403]
743.245 Variable life insurance policy
provisions. A variable life insurance policy shall
contain a provision stating the essential features of the procedures to be
followed by the insurer in determining benefits thereunder. Such a policy, and
any certificate evidencing such a policy, shall contain on its first page a
clear and prominent statement to the effect that benefits thereunder are
variable. [1973 c.435 §14]
743.247 Notice to variable life insurance
policyholders. An insurer issuing individual variable
life insurance policies shall mail to each policyholder at least once in each
policy year after the first, at the last address of the policyholder known to
the insurer:
(1)
A statement reporting the investments held in the applicable separate account.
(2)
A statement reporting as of a date not more than four months preceding the date
of mailing:
(a)
In the case of an annuity policy under which payments have not yet commenced,
the number of accumulation units credited to such policy and the dollar value
of a unit, or the value of the policyholder’s account; and
(b)
In the case of a life insurance policy, the dollar amount of the death benefit.
[1973 c.435 §15]
(Individual Annuity and Pure Endowment
Policies)
743.252 Scope of ORS 743.255 to 743.273.
ORS 743.255 to 743.273 apply only to annuity and pure endowment policies, other
than reversionary annuity policies except as provided in ORS 743.273, and other
than group annuity policies, and shall not apply to reversionary or deferred
annuity benefits included in life insurance policies. Such sections apply to
such policies that are variable annuity policies, except to the extent the
provisions of such sections are obviously inapplicable to variable annuities or
are in conflict with other provisions of such sections that are expressly
applicable to variable annuities. [1967 c.359 §404; 1973 c.435 §19]
743.255 Grace period for annuities.
An annuity or pure endowment policy shall contain a provision that there shall
be a period of grace of one month, but not less than 30 days, within which any
stipulated payment to the insurer falling due after the first such payment may
be made, subject at the option of the insurer to an interest charge thereon at
the rate specified in the policy but not exceeding six percent per annum for
the number of days of grace elapsing before such payment, during which period
of grace the policy shall continue in full force. In case a claim arises under
the policy on account of death prior to expiration of the period of grace
before the overdue payment to the insurer or the deferred payments of the
current policy year, if any, are made, the amount of such payments, with
interest on any overdue payments, may be deducted from any amount payable under
the policy in settlement. [1967 c.359 §405]
743.258 Incontestability.
If any statement other than those relating to age, sex and identity are
required as a condition to issuing an annuity or pure endowment policy, the
policy shall contain a provision that the policy shall be incontestable after
it has been in force during the lifetime of the person or of each of the
persons as to whom such statements are required, for a period of two years from
its date of issue, except for nonpayment of stipulated payments to the insurer.
At the option of the insurer the two year limit within which the policy may be
contested shall not apply to any provisions relative to benefits in the event
of disability and any provisions which grant insurance specifically against
death by accident or accidental means. [1967 c.359 §406]
743.261 Entire contract.
An annuity or pure endowment policy shall contain a provision that the policy,
including a copy of the application if indorsed upon or attached to the policy
when issued, shall constitute the entire contract between the parties. [1967
c.359 §407]
743.264 Misstatement of age or sex.
An annuity or pure endowment policy shall contain a provision that if the age
or sex of the person or persons upon whose life or lives the policy is made, or
of any of them, has been misstated, the amount payable or benefits accruing
under the policy shall be such as the stipulated payment or payments to the
insurer would have purchased according to the correct age or sex, and that if
the insurer has made any overpayment or overpayments on account of any such
misstatement, the amount thereof with interest at the rate specified in the
policy but not exceeding six percent per annum may be charged against the
current or next succeeding payment or payments to be made by the insurer under
the policy. [1967 c.359 §408]
743.267 Dividends.
If an annuity or pure endowment policy is participating, it shall contain a
provision that the insurer shall annually ascertain and apportion any divisible
surplus accruing on the policy. [1967 c.359 §409]
743.268 Advancement of policy loans.
(1) An insurer may advance a policy loan equal to or less than the loan value
of an annuity policy or a pure endowment policy if:
(a)
The policy premium is not in default beyond the grace period for payment;
(b)
The insured has properly assigned or pledged the policy on the sole security
thereof; and
(c)
The interest rate provision complies with ORS 743.187 and does not exceed the
maximum interest rate permitted by the policy loan provision.
(2)
An insurer may establish a minimum loan amount that may not exceed $1,000.
(3)
Except as provided in subsection (4) of this section, the loan value of the
policy shall be equal to the cash surrender value of the policy, less any
existing indebtedness and interest due that is not already deducted in
determining the cash surrender value, plus any interest then accrued but not
credited.
(4)
Subsection (3) of this section does not apply to a policy for which the loan
value is established by federal law. When the loan value is established by
federal law, the policy shall indicate the loan value as a dollar amount, a
percentage of the cash surrender value or a combination of both.
(5)
Except as provided in ORS 743.187, if the total indebtedness on the policy,
including interest due or accrued, equals or exceeds the amount of the loan
value of the policy, the policy shall terminate and become void upon 30 days’
notice by the insurer mailed to the last-known address of the insured or other
policy owner and of any assignee of record at the home office of the insurer.
However, if there is any remaining cash surrender value under the policy after
deducting the total indebtedness on the policy, an insurer may not terminate
the policy.
(6)
A insurer may provide for automatic premium loans in an annuity policy or a
pure endowment policy.
(7)
An annuity policy or a pure endowment policy may reserve to the insurer the
right to defer the granting of a loan, other than for payment of any premium to
the insurer, for six months after application for the loan if the insurer makes
a written request to and receives written approval from the chief insurance
regulator of the state of domicile of the insurer prior to exercising a
deferral. [2005 c.185 §5]
743.269 Periodic payments for period
certain. An annuity policy meeting the
requirements of this section may provide that periodic payments shall be made
under the policy for a period certain. Payments under such a policy shall begin
on a date less than 13 months after the date on which the insurer issues the
policy. The policy shall provide that payments will be made for a period of
five years or more. The periodic payments may be fixed or variable in amount.
If such policy offers commuted values on the annuity, such values must be based
on an interest rate not more than one percent in excess of the interest rates
that were used in determining the payments when the annuity was purchased. [1995
c.632 §2]
743.270 Reinstatement.
An annuity or pure endowment policy shall contain a provision that the policy
may be reinstated at any time within one year from a default in making
stipulated payments to the insurer, unless the cash surrender value has been
paid, but all overdue stipulated payments and any indebtedness to the insurer
on the policy shall be paid or reinstated with interest at the rate specified
in the policy but not exceeding six percent per annum, and in cases where
applicable the insurer may also include a requirement of evidence of
insurability satisfactory to the insurer. [1967 c.359 §410]
743.271 Periodic stipulated payments on
variable annuities. A variable annuity policy
requiring periodic stipulated payments to the insurer shall contain in
substance the following provisions:
(1)
A provision that there will be a period of grace of 30 days within which any
stipulated payment to the insurer after the first may be made, during which
period of grace the policy will continue in full force. The policy may include
a statement of the basis for determining the date as of which any such payment
received during the period of grace will be applied.
(2)
A provision that, at any time within one year from the date of a default in
making periodic stipulated payments to the insurer during the life of the annuitant,
and unless the cash surrender value has been paid, the policy may be reinstated
upon payment to the insurer of the overdue payments and all indebtedness to the
insurer on the policy, with interest. The policy may include a statement of the
basis for determining the date as of which the amount to cover such overdue
payments and indebtedness will be applied.
(3)
A provision specifying the options available in the event of a default in a
periodic stipulated payment. Such options may include an option to surrender
the policy for a cash value as determined by the policy, and shall include an
option to receive a paid-up annuity if the policy is not surrendered for cash,
the amount of the paid-up annuity being determined by applying the value of the
policy at the annuity commencement date in accordance with the terms of the
policy. [1973 c.435 §21]
743.272 Computing benefits.
(1) A variable annuity policy shall specify the investment increment factors to
be used in computing the dollar amount of variable benefits or other variable
payments or values under the policy, and may guarantee that expense or
mortality results or both will not adversely affect such dollar amounts. In the
case of an individual variable annuity policy under which the expense or mortality
results may adversely affect the dollar amount of benefits, the expense and
mortality factors shall be correspondingly specified in the policy. “Expense”
as used in this subsection may exclude some or all taxes, as specified in the
policy.
(2)
In computing the dollar amount of variable benefits or other policy payments or
values:
(a)
The annual net investment increment assumption shall not exceed five percent,
except with the approval of the Director of the Department of Consumer and
Business Services; and
(b)
To the extent that the level of benefits may be affected by future mortality
results, the mortality factor shall be determined from the Annuity Mortality
Table for 1949, Ultimate, or any modification of that table not having a lower
life expectancy at any age or, if approved by the director, from another table.
[1973 c.435 §22]
743.273 Standard provisions of
reversionary annuities. A policy of reversionary annuity
shall contain in substance the following provisions:
(1)
The provisions specified in ORS 743.255 to 743.267, except that under ORS
743.255 the insurer may at its option provide for an equitable reduction of the
amount of the annuity payments in settlement of an overdue payment in lieu of
providing for deduction of the overdue payment from an amount payable upon
settlement under the policy.
(2)
A provision that the policy may be reinstated at any time within three years
from the date of default in making stipulated payments to the insurer, upon
production of evidence of insurability satisfactory to the insurer, and upon
the condition that all overdue payments and any indebtedness to the insurer on
account of the policy be paid or reinstated with interest at the rate specified
in the policy but not exceeding six percent per annum. [1967 c.359 §411]
743.275 Standard Nonforfeiture Law for
Individual Deferred Annuities; application. (1)
ORS 743.275 to 743.295 may be cited as the Standard Nonforfeiture Law for
Individual Deferred Annuities.
(2)
The Standard Nonforfeiture Law for Individual Deferred Annuities does not apply
to:
(a)
Reinsurance.
(b)
A group annuity policy purchased under a retirement or deferred compensation
plan established or maintained by an employer, including a partnership or sole
proprietorship, or by an employee organization, or by both. This exclusion does
not apply, however, to a plan providing individual retirement accounts or
individual retirement annuities under section 408 of the federal Internal
Revenue Code.
(c)
A premium deposit fund.
(d)
A variable annuity policy.
(e)
An investment annuity policy.
(f)
An immediate annuity policy.
(g)
A deferred annuity policy after annuity payments have commenced.
(h)
A reversionary annuity.
(i)
A policy delivered outside this state through an agent or other representative
of the insurer issuing the policy. [1977 c.320 §2; 2003 c.370 §1]
743.278 Required provisions in annuity
policies; exception. (1) An annuity policy shall
contain in substance the following provisions, or corresponding provisions that
in the opinion of the Director of the Department of Consumer and Business
Services are at least as favorable to the policyholder:
(a)
That upon the termination of considerations under the policy, or upon the
written request of the policyholder, the insurer shall grant a paid-up annuity
benefit on a plan stipulated in the policy, of the value specified in ORS
743.284 and 743.287.
(b)
That, if the policy provides for a lump sum settlement at maturity or any other
time, the insurer shall pay upon surrender of the policy on or before the start
of annuity payments, in lieu of a paid-up annuity benefit, a cash surrender
benefit of the amount specified in ORS 743.284 and 743.287. The insurer may
reserve the right to defer the payment of the cash surrender benefit for a
period not to exceed six months after demand therefor with surrender of the
policy, if the insurer makes a written request and receives written approval
from the director. The request shall address the necessity and equitability to
all policyholders of the deferral.
(c)
A statement of the mortality table, if any, and interest rates used in
calculating any minimum guaranteed paid-up annuity, cash surrender or death
benefits that are guaranteed under the policy, together with sufficient
information to determine the amount of the benefits.
(d)
A statement that any paid-up annuity, cash surrender or death benefits
available under the policy are not less than the minimum benefits required by
any statute of the state in which the policy is delivered and an explanation of
the manner in which the benefits are altered by the existence of any additional
amounts credited by the insurer to the policy, any indebtedness to the insurer
on the policy or any prior withdrawals from or partial surrenders of the
policy.
(2)
Notwithstanding subsection (1) of this section, a deferred annuity policy may
provide that if no considerations have been received for two full years and the
portion of the paid-up annuity benefit at maturity on the plan stipulated in
the policy arising from prior considerations paid would be less than $20
monthly, the insurer at its option may terminate the policy by payment in cash
of the then present value of the portion of the paid-up annuity benefit. The
value shall be calculated on the basis of the mortality table, if any, and the
interest rate specified in the policy for determining the paid-up annuity
benefit. By this payment the insurer shall be relieved of further obligations
under the policy. [1977 c.320 §3; 2003 c.370 §2]
743.281 [1977
c.320 §4; repealed by 2003 c.370 §9]
743.284 Computation of benefits.
(1) Any paid-up annuity benefit available under an annuity policy shall be such
that its present value on the date annuity payments are to commence is at least
equal to the minimum nonforfeiture amount on that date. The present value shall
be computed using the mortality table, if any, and the interest rate specified
in the policy for determining the minimum paid-up annuity benefits guaranteed
in the policy.
(2)
For annuity policies that provide cash surrender benefits, the cash surrender
benefits available prior to maturity shall not be less than the present value
as of the date of surrender of the portion of the policy maturity value of the
paid-up annuity benefit that would be provided under the policy at maturity
arising from considerations paid prior to the time of cash surrender, reduced
by appropriate amounts reflecting any previous withdrawals from or partial
surrenders of the policy. The present value shall be calculated using an
interest rate not more than one percent higher than the interest rate specified
in the policy for accumulating the net considerations to determine maturity
value, shall be decreased by the amount of any indebtedness to the insurer on
the policy, including interest due and accrued, and shall be increased by any
existing additional amounts credited by the insurer to the policy. In no event
shall the cash surrender benefit be less than the minimum nonforfeiture amount
on the date of surrender. The death benefit under an annuity policy that
provides cash surrender benefits shall be at least equal to the cash surrender
benefit.
(3)
For annuity policies that do not provide cash surrender benefits, the present
value of the paid-up annuity benefit available as a nonforfeiture option at any
time prior to maturity may not be less than the present value of the portion of
the maturity value of the paid-up annuity benefits provided under the policy
arising from considerations paid before the policy is surrendered in exchange
for, or changed to, a deferred paid-up annuity. The present value shall be
calculated for the period prior to the maturity date on the basis of the
interest rate specified in the policy for accumulating the net considerations
to determine the value, and shall be increased by any additional amounts
credited by the insurer to the policy. For annuity policies that do not provide
any death benefits before annuity payments start, present values shall be
calculated on the basis of such interest rate and the mortality table specified
in the policy for determining the maturity value of paid-up annuity benefit. In
no event, however, shall the present value of a paid-up annuity benefit be less
than the minimum nonforfeiture amount at that time. [1977 c.320 §5; 2003 c.370 §5]
743.287 Commencement of annuity payments
at optional maturity dates; calculation of benefits.
(1) For the purpose of determining the benefits calculated under ORS 743.284
(2) and (3) in the case of annuity policies under which an election may be made
to have annuity payments commence at optional maturity dates, the maturity date
shall be considered to be the latest date for which such election is permitted
by the policy, but not later than the policy anniversary next following the
annuitant’s 70th birthday or the 10th anniversary of the policy, whichever is
later.
(2)
Any paid-up annuity, cash surrender or death benefits available at any time,
other than on the policy anniversary of a policy with fixed scheduled
considerations, shall be calculated with allowance for the lapse of time and
the payment of any scheduled considerations beyond the start of the policy year
in which termination of considerations occurs. [1977 c.320 §6; 2003 c.370 §6]
743.290 Notice of nonpayment of certain
benefits to be included in annuity policy. An
annuity policy that does not provide cash surrender benefits or does not
provide death benefits at least equal to the minimum nonforfeiture amount prior
to the start of annuity payments shall include a statement in a prominent place
in the policy that the benefits are not provided. [1977 c.320 §7; 2003 c.370 §7]
743.293 Minimum forfeiture amounts for
annuity policies; rules. (1) The minimum values as
specified in ORS 743.284 and 743.287 of any paid-up annuity, cash surrender or
death benefits available under an annuity policy shall be based on minimum
nonforfeiture amounts as described in this section.
(2)
The minimum nonforfeiture amount at or prior to the commencement of any annuity
payments shall be equal to an accumulation up to that time at rates of interest
as indicated in subsection (4) of this section of the net considerations
previously paid, decreased by the sum of the following:
(a)
Any prior withdrawals from or partial surrenders of the contract accumulated at
rates of interest as indicated in subsection (4) of this section;
(b)
An annual contract charge of $50, accumulated at rates of interest as indicated
in subsection (4) of this section;
(c)
Any premium tax paid by the insurer for the policy, accumulated at rates of
interest as indicated in subsection (4) of this section; and
(d)
The amount of any indebtedness to the insurer on the policy, including interest
due and accrued.
(3)
For purposes of subsection (2) of this section, the net considerations for a
given policy year used to define the minimum nonforfeiture amount shall be an
amount equal to 87.5 percent of the gross considerations credited to the policy
during that policy year.
(4)(a)
The interest rate used in determining minimum nonforfeiture amounts shall be an
annual rate of interest determined as the lesser of three percent per annum and
the rate established under paragraph (b) of this subsection. The rates
established shall be specified in the policy if the interest rate is reset.
(b)
The following provisions apply to the rate:
(A)
The rate shall be the five-year constant maturity treasury rate reported by the
Federal Reserve as of a date certain or an average over a period, rounded to
the nearest one-twentieth of one percent, that is specified in the policy and
that is no longer than 15 months prior to the policy issue date or
redetermination date under paragraph (c) of this subsection, reduced by 125
basis points.
(B)
The resulting interest rate under subparagraph (A) of this paragraph may not be
less than one percent.
(c)
The interest rate shall apply to an initial period and may be redetermined for
additional periods. The redetermination date, basis and period, if any, shall
be stated in the policy. The basis is the date certain or an average over a specified
period that produces the value of the five-year constant maturity treasury rate
to be used at each redetermination date.
(5)
During the period or term that a policy provides substantive participation in
an equity indexed benefit, it may increase the reduction described in
subsection (4)(b) of this section by up to an additional 100 basis points to
reflect the value of the equity index benefit. The present value on the policy
issue date and at each redetermination date thereafter, may not exceed the
market value of the benefit. The Director of the Department of Consumer and
Business Services may require a demonstration that the present value of the
additional reduction does not exceed the market value of the benefit. If a
demonstration is not acceptable to the director, the director may disallow or
limit the additional reduction.
(6)
The director may adopt rules to implement subsection (5) of this section and to
provide for further adjustments to the calculation of minimum nonforfeiture
amounts for policies that provide substantive participation in an equity index
benefit and for other policies that the director determines justify an
adjustment. [2003 c.370 §4]
743.295 Effect of certain life insurance
and disability benefits on minimum nonforfeiture amounts.
(1) For an annuity policy that includes, by rider or supplemental contract
provision, both annuity benefits and life insurance benefits that exceed the
greater of cash surrender benefits or a return of the gross considerations with
interest, the minimum nonforfeiture benefits shall equal the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum nonforfeiture
benefits, if any, for the life insurance portion, computed as if each portion
were a separate policy.
(2)
Notwithstanding ORS 743.284 and 743.287, additional benefits payable in the
event of total and permanent disability, as reversionary annuity or deferred
reversionary annuity benefits, or as other policy benefits additional to life
insurance, endowment and annuity benefits, and considerations for all such
additional benefits, shall be disregarded in ascertaining the minimum
nonforfeiture amounts and paid-up annuity, cash surrender and death benefits
required by the Standard Nonforfeiture Law for Individual Deferred Annuities.
The inclusion of such benefits may not be required in any paid-up benefits
unless the additional benefits would separately require minimum nonforfeiture
amounts and paid-up annuity, cash surrender and death benefits. [1977 c.320 §8;
2003 c.370 §8]
GROUP LIFE INSURANCE
743.303 Requirements for issuance of group
life insurance policies. Policies of group life insurance
are subject to the following requirements:
(1)
The policy shall be issued upon the lives of persons who are associated in a
common group formed for purposes other than the obtaining of insurance, except
that either of the following kinds of policies may be issued to persons other
than those in a common group:
(a)
Group policies of credit life insurance; or
(b)
Group policies of mortgage life insurance on first and second mortgages secured
by real estate.
(2)
No fewer than two lives are insured at the date of issue of the policy.
(3)
The amounts of insurance under the policy shall be based on some plan
precluding individual selection, except that optional supplemental insurance
may be available to persons insured under the policy, if the amounts of such
supplemental insurance are based upon age, salary, rank or similar objective
standards.
(4)
The premium for the policy must be paid from the funds of the group
policyholder or from funds contributed by persons insured under the policy, or
from both sources.
(5)
For the purposes of this section, the term “mortgage” includes trust deeds.
(6)
As used in this section, “trust deed” has the meaning given in ORS 86.705. [1967
c.359 §412; 1971 c.231 §44; 1991 c.182 §4; 1993 c.426 §1; 2007 c.560 §2]
743.306 Required provisions in group life
insurance policies. (1) Except as provided in
subsection (2) of this section a group life insurance policy shall contain in
substance the provisions described in ORS 743.309 to 743.342.
(2)
The provisions described in ORS 743.327 to 743.339 shall not apply to policies
of group credit life insurance. [1967 c.359 §413]
743.309 Nonforfeiture provisions.
If a group life insurance policy is on a plan of insurance other than the term
plan, it shall contain nonforfeiture provision or provisions which in the
opinion of the Director of the Department of Consumer and Business Services are
equitable to the insured persons and to the policyholder, but nothing in this
section shall be construed to require that group life insurance policies
contain the same nonforfeiture provisions as are required for individual life
insurance policies. [1967 c.359 §414]
743.312 Grace period.
A group life insurance policy shall contain a provision that the policyholder
is entitled to a grace period of 31 days for the payment of any premium due
except the first, during which grace period the death benefit coverage shall
continue in force, unless the policyholder shall have given the insurer written
notice of discontinuance in advance of the date of discontinuance and in
accordance with the terms of the policy. The policy may provide that the
policyholder shall be liable to the insurer for the payment of a pro rata
premium for the time the policy was in force during such grace period. [1967
c.359 §415]
743.315 Incontestability.
A group life insurance policy shall contain a provision that the validity of
the policy shall not be contested, except for nonpayment of premiums, after it
has been in force for two years from its date of issue; and that no statement
made by any person insured under the policy relating to the insurability of the
person shall be used in contesting the validity of the insurance with respect
to which such statement was made after such insurance has been in force prior
to the contest for a period of two years during such person’s lifetime nor
unless it is contained in a written instrument signed by the person. [1967
c.359 §416]
743.318 Application; representations by policyholders
and insureds. A group life insurance policy shall
contain a provision that a copy of the application, if any, of the policyholder
shall be attached to the policy when issued, that all statements made by the
policyholder or by the persons insured shall be deemed representations and not
warranties, and that no statement made by any person insured shall be used in
any contest unless a copy of the instrument containing the statement is or has
been furnished to such person or the beneficiary of the person. [1967 c.359 §417]
743.321 Evidence of insurability.
A group life insurance policy shall contain a provision setting forth the
conditions, if any, under which the insurer reserves the right to require a
person eligible for insurance to furnish evidence of individual insurability
satisfactory to the insurer as a condition to part or all of the coverage. [1967
c.359 §418]
743.324 Misstatement of age.
A group life insurance policy shall contain a provision specifying an equitable
adjustment of premiums or of benefits or of both to be made in the event the
age of a person insured has been misstated, such provision to contain a clear
statement of the method of adjustment to be used. [1967 c.359 §419]
743.327 Payments under policy; payment of
interest upon failure to pay proceeds. (1) A group
life insurance policy shall contain a provision that any sum becoming due by
reason of the death of a person insured shall be payable to the beneficiary
designated by the person insured, subject to the provisions of the policy in
the event there is no designated beneficiary, as to all or any part of such
sum, living at the death of the person insured, and subject to any right
reserved by the insurer in the policy and set forth in the certificate to pay
at its option a part of such sum not exceeding $500 to any person appearing to
the insurer to be equitably entitled thereto by reason of having incurred
funeral or other expenses incident to the last illness or death of the person
insured.
(2)
If the insurer fails to pay the proceeds of or make payment under the policy
within 30 days after receipt of due proof of death and of the interest of the
claimant, and if the beneficiary elects to receive a lump sum settlement, the
insurer shall pay interest on any money due and unpaid after expiration of the
30-day period. The insurer shall compute the interest from the date of the
insured’s death until the date of payment, at a rate not lower than that paid
by the insurer on other withdrawable policy owner funds. At the end of the
30-day period, the insurer shall notify the designated beneficiary or
beneficiaries at their last-known address that interest at the applicable rate
will be paid on the lump sum proceeds from the date of death of the insured.
(3)
Nothing in this section shall be construed to allow an insurer to withhold
payment of money payable under a group life insurance policy to any designated
beneficiary for a period longer than reasonably necessary to transmit the
payment. [1967 c.359 §420; 1983 c.754 §3]
743.330 Issuance of certificates.
A group life insurance policy shall contain a provision that the insurer will
issue to the policyholder for delivery to each person insured an individual
certificate setting forth a statement as to the insurance protection to which
the person is entitled, to whom the insurance benefits are payable, and the
rights and conditions set forth in ORS 743.333, 743.336 and 743.339. [1967
c.359 §421]
743.333 Termination of individual
coverage. A group life insurance policy shall
contain a provision that if the insurance, or any portion of it, on a person
covered under the policy ceases because of termination of employment or of
membership in the class or classes eligible for coverage under the policy, such
person shall be entitled to have issued by the insurer, without evidence of
insurability, an individual policy of life insurance without disability or
other supplementary benefits, provided application for the individual policy
shall be made, and the first premium paid to the insurer, within 31 days after
such termination, and provided further that:
(1)
The individual policy shall, at the option of such person, be on any one of the
forms, except term insurance, then customarily issued by the insurer at the age
and for the amount applied for;
(2)
The individual policy shall be in an amount not in excess of the amount of life
insurance which ceases because of such termination, less the amount of any life
insurance for which such person is or becomes eligible under the same or any
other group policy within 31 days after such termination, provided that any
amount of insurance which shall have matured on or before the date of such
termination as an endowment payable to the person insured, whether in one sum
or in installments or in the form of an annuity, shall not, for the purposes of
this provision, be included in the amount which is considered to cease because
of such termination; and
(3)
The premium on the individual policy shall be at the insurer’s then customary
rate applicable to the form and amount of the individual policy, to the class
of risk to which such person then belongs, and to the age attained on the
effective date of the individual policy. [1967 c.359 §422]
743.336 Termination of policy or class of
insured persons. A group life insurance policy
shall contain a provision that if the group policy terminates or is amended so
as to terminate the insurance of any class of insured persons, every person
insured thereunder at the date of such termination whose insurance terminates
and who has been so insured for at least five years prior to such termination
date shall be entitled to have issued by the insurer an individual policy of
life insurance, subject to the same conditions and limitations as are provided
by ORS 743.333, except that the group policy may provide that the amount of
such individual policy shall not exceed the smaller of:
(1)
The amount of the person’s life insurance protection ceasing because of the termination
or amendment of the group policy, less the amount of any life insurance for
which the person is or becomes eligible under any group policy issued or
reinstated by the same or another insurer within 31 days after such
termination; and
(2)
$10,000. [1967 c.359 §423; 1989 c.784 §16]
743.339 Death during period for conversion
to individual policy. A group life insurance policy
shall contain a provision that if a person insured under the group policy dies
during the period within which the person would have been entitled to have an
individual policy issued in accordance with ORS 743.333 or 743.336 and before
such an individual policy shall have become effective, the amount of life
insurance which the person would have been entitled to have issued under such
individual policy shall be payable as a claim under the group policy, whether
or not application for the individual policy or the payment of the first
premium therefor has been made. [1967 c.359 §424]
743.342 Statement furnished to insured
under credit life insurance policy. A group
credit life insurance policy shall contain a provision that the insurer will
furnish to the policyholder for delivery to each debtor insured under the
policy a form which will contain a statement that the life of the debtor is
insured under the policy and that any death benefit paid thereunder by reason
of death shall be applied to reduce or extinguish the indebtedness. [1967 c.359
§425]
743.345 Assignability of group life
policies. Nothing in the Insurance Code or in any
other law shall be construed to prohibit any person insured under a group life
insurance policy from making an assignment of all or any part of the incidents
of ownership under such policy, including but not limited to the privilege to
have issued an individual policy of life insurance pursuant to the provisions
of ORS 743.333 to 743.339 and the right to name a beneficiary. Subject to the
terms of the policy or an agreement between the insured, the group policyholder
and the insurer relating to assignment of incidents of ownership under the
policy, such an assignment by an insured is valid for the purpose of vesting in
the assignee, in accordance with any provisions included in the assignment as
to the time at which it is to be effective, all of such incidents of ownership
so assigned, but without prejudice to the insurer on account of any payment it
may make, or individual policy it may issue in accordance with ORS 743.333 to
743.339, prior to receipt of notice of the assignment. [1971 c.231 §6; 2005 c.22
§491]
743.348 Certain sales practices
prohibited. (1) No person selling group life
insurance is authorized to sell membership in a common group for the purpose of
qualifying an applicant who is an individual for group life insurance.
(2)
No person selling membership in a common group is authorized to offer group
life insurance for the purpose of selling membership in the common group. [1989
c.784 §6]
743.350 [1979
c.708 §2; renumbered 743.100 in 1989]
743.351 Eligibility of association to be
group life policyholder; rules. (1) An
insurer shall not offer a policy of group life insurance in this state to an
association as the policyholder or offer coverage under such a policy, whether
the policy is issued in this or another state, unless the Director of the
Department of Consumer and Business Services determines that the association
satisfies the following requirements:
(a)
The association must have had an active existence for at least one year;
(b)
The association must insure under the policy the employees or members of the
association, or employees of members of the association, for the benefit of
persons other than the association or its officers or trustees; and
(c)
The association must be maintained primarily for purposes other than the
procurement of insurance.
(2)
An insurer shall submit evidence to the director that the association satisfies
the requirements of subsection (1) of this section. The director shall review
the evidence and may request additional evidence as needed.
(3)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (2) of this section.
(4)
The director may order an insurer to cease offering group life insurance to an
association if the director determines that the association does not meet the
requirements under subsection (1) of this section.
(5)
For purposes of this section:
(a)
An association includes a labor union.
(b)
“Employees” may include retired employees.
(6)
The director may adopt rules to carry out this section. [1989 c.784 §7]
743.353 [1979
c.708 §3; renumbered 743.101 in 1989]
743.354 Requirements for certain group
life policies issued to trustees of certain funds; rules.
(1) An insurer shall not offer in this state a policy of group life insurance
that is described in this section and insures persons in this state, or shall
not offer coverage under such a policy, whether the policy is to be issued in
this or another state, unless the Director of the Department of Consumer and
Business Services determines that the requirements of subsections (2) and (3)
of this section are satisfied. This section applies to a policy to be issued to
the trustees of a fund established for:
(a)
Two or more employers in the same or related industry;
(b)
One or more labor unions;
(c)
One or more employers and one or more labor unions; or
(d)
An association determined by the director to satisfy the requirements of ORS
743.351 (1).
(2)
A policy of group life insurance shall provide coverage for the benefit of
employees of the employers, members of the unions or members of the
association. The policy may include as employees the officers and managers of
the employer, and the individual proprietor or partners if the employer is an
individual proprietor or a partnership. In addition to such employees, the
policy may also insure retired employees and the trustees or their employees,
or both, if their duties are principally connected with the trust.
(3)
The director shall determine with respect to a policy whether the trustees are
the policyholder. If the director determines that the trustees are the
policyholder and if the policy is issued or proposed to be issued in this
state, the policy is subject to the Insurance Code. If the director determines
that the trustees are not the policyholder, the evidence of coverage that is
issued or proposed to be issued in this state to a participating employer,
labor union or association shall be deemed to be a group life insurance policy
subject to the Insurance Code. For purposes of this section, the director may
determine that the trustees are not the policyholder if:
(a)
The evidence of coverage issued or proposed to be issued to a participating
employer, labor union or association is in fact the primary statement of
coverage for the employer, labor union or association; and
(b)
The trust arrangement is under the actual control of the insurer.
(4)
An insurer shall submit evidence to the director showing that the requirements
of subsections (2) and (3) of this section are satisfied. The director shall
review the evidence and may request additional evidence as needed.
(5)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (4) of this section.
(6)
The director may adopt rules to carry out this section. [1989 c.784 §8]
743.356 Continuing coverage upon replacement
of group life policy. When coverage under a group life
insurance policy is replaced by coverage under another group life insurance
policy, the insurer offering the policy that is replaced shall continue to
provide coverage for each certificate holder under the replaced policy whose
premium payments are suspended because the certificate holder is disabled. [1989
c.784 §9]
Note:
743.356 was enacted into law by the Legislative Assembly but was not added to
or made a part of ORS chapter 743 or any series therein by legislative action.
See Preface to Oregon Revised Statutes for further explanation.
743.357 [1979
c.708 §4; renumbered 743.103 in 1989]
743.358 Borrowing by certificate holders
under group life policy. (1) An insurer of a group life
insurance policy may authorize certificate holders under the policy to borrow
upon the policy, subject to the following provisions:
(a)
The insurer may require a certificate holder, in order to borrow on the policy,
to have been a certificate holder under the policy for a minimum period
specified by the insurer.
(b)
The insurer may require that no premium on the policy be in default beyond the
grace period for payment.
(2)
An insurer authorizing a certificate holder under a group life insurance policy
may establish a minimum loan amount, but the amount may not exceed $1,000.
(3)
An insurer may charge a fixed interest rate not exceeding eight percent per
year, or an adjustable interest rate. The policy provision establishing an
adjustable interest rate must comply with ORS 743.187. The exemption from a
limitation on interest rates under state law established in ORS 743.187 for
individual life insurance policies also applies to interest rates established
pursuant to this section.
(4)
The loan value of a certificate shall be equal to 90 percent of the cash
surrender value of the certificate at the time of the loan, less any existing
indebtedness not already deducted, including any unpaid interest. This
subsection does not apply to certificates issued under a group policy for which
the loan value is established by federal law. [1991 c.182 §9]
743.360 Alternative group life insurance
coverage. (1) Group life insurance coverage
offered to a resident in this state under a group life insurance policy issued
to a group other than one described in ORS 743.351 or 743.354 may be delivered
if:
(a)
The Director of the Department of Consumer and Business Services finds that:
(A)
The issuance of the policy is in the best interest of the public;
(B)
The issuance of the policy would result in economies of acquisition or
administration; and
(C)
The benefits are reasonable in relation to the premiums charged;
(b)
The premium for the policy is paid either from funds of a policyholder, from
funds contributed by a covered person or from both; and
(c)
An insurer has the discretion to exclude or limit coverage for a voluntary plan
on any person for whom evidence of individual insurability is not satisfactory
to the insurer.
(2)
The requirements of ORS 743.303 do not apply to a policy authorized under
subsection (1) of this section. [2001 c.943 §3]
743.362 [1979
c.708 §5; renumbered 743.104 in 1989]
743.365 [1979
c.708 §6; renumbered 743.106 in 1989]
743.368 [1979
c.708 §7; renumbered 743.107 in 1989]
743.370 [1979
c.708 §8; renumbered 743.109 in 1989]
CREDIT LIFE AND CREDIT HEALTH INSURANCE
743.371 Definitions for credit life and
credit health insurance provisions. (1) “Credit
life insurance” means insurance on the life of a debtor pursuant to or in
connection with a specific loan or other credit transaction.
(2)
“Credit health insurance” means insurance on a debtor to provide indemnity for
payments becoming due on a specific loan or other credit transaction while the
debtor is disabled as defined in the policy.
(3)
“Creditor” means the lender of money or vendor or lessor of goods, services,
property, rights or privileges for which payment is arranged through a credit
transaction, or any successor to the right, title or interest of any such
lender, vendor or lessor, and an affiliate, associate or subsidiary of any of
them or any director, officer or employee of any of them or any other person in
any way associated with any of them.
(4)
“Debtor” means a borrower of money or a purchaser or lessee of goods, services,
property, rights or privileges for which payment is arranged through a credit
transaction.
(5)
“Indebtedness” means the total amount payable by a debtor to a creditor in
connection with a loan or other credit transaction. [Formerly 739.565 and then
743.561]
743.372 Applicability of credit life and
credit health insurance provisions. (1) All life
or health insurance in connection with loans or other credit transactions shall
be subject to ORS 743.371 to 743.380, except:
(a)
Insurance in connection with a loan or other credit transaction of more than 10
years’ duration; or
(b)
Insurance, the issuance of which is an isolated transaction on the part of the
insurer not related to an agreement or a plan for insuring debtors of the
creditor.
(2)
Notwithstanding subsection (1) of this section, credit life and credit health
insurance may be issued for up to 10 years in connection with a loan or other
credit transaction of any duration. [Formerly 739.570 and then 743.564]
743.373 Forms of credit life and credit
health insurance. Credit life and credit health
insurance shall be issued only in the following forms:
(1)
Individual policies of life insurance issued to debtors on the term plan.
(2)
Individual policies of health insurance issued to debtors on a term plan, or
disability benefit provisions in individual policies of credit life insurance.
(3)
Group policies of life insurance issued to creditors providing insurance upon
the lives of debtors on the term plan.
(4)
Group policies of health insurance issued to creditors on a term plan insuring
debtors, or disability benefit provisions in group credit life insurance
policies. [Formerly 739.575 and then 743.567]
743.374 Limits on amount of credit life
insurance. (1) The initial amount of credit life
insurance shall not exceed the total amount repayable under the contract of
indebtedness and, where an indebtedness is repayable in substantially equal
installments, the amount of insurance shall at no time exceed the scheduled or
actual amount of unpaid indebtedness, whichever is greater.
(2)
Notwithstanding the provisions of subsection (1) of this section, insurance on
agricultural credit transaction commitments not exceeding 18 months in duration
may be written up to the amount of the loan commitment, on a nondecreasing or
level term plan.
(3)
Notwithstanding the provisions of subsection (1) of this section, insurance on
educational credit transaction commitments may include the portion of such
commitment that has not been advanced by the creditor. [Formerly 743.570]
743.375 Limit on amount of credit health
insurance. The total amount of periodic indemnity
payable by credit health insurance in the event of disability, as defined in
the policy, shall not exceed the aggregate of the periodic scheduled unpaid
installments of the indebtedness; and the amount of each periodic indemnity
payment shall not exceed the original indebtedness divided by the number of
periodic installments. [Formerly 741.425 and then 743.573]
743.376 Duration of credit life and credit
health insurance. (1) The term of any credit life
or credit health insurance shall, subject to acceptance by the insurer,
commence on the date when the debtor becomes obligated to the creditor, except
that, where a group policy provides coverage with respect to existing
obligations, the insurance on a debtor with respect to such indebtedness shall
commence on the effective date of the policy. Where evidence of insurability is
required and such evidence is furnished more than 30 days after the date when
the debtor becomes obligated to the creditor, the term of the insurance may
commence on the date on which the insurer determines the evidence to be
satisfactory, and in such event there shall be an appropriate refund or
adjustment of any charge to the debtor for insurance.
(2)
The term of the insurance shall not extend more than 15 days beyond the
scheduled maturity date of the indebtedness except when extended without
additional cost to the debtor.
(3)
If the indebtedness is discharged because of renewal or refinancing prior to
the scheduled maturity date, the insurance in force shall be terminated before
any new insurance may be issued in connection with the renewed or refinanced
indebtedness.
(4)
In all cases of termination of the insurance prior to the scheduled maturity
date of the indebtedness, a refund shall be paid or credited as provided in ORS
743.378. [Formerly 739.585 and then 743.576]
743.377 Credit life and credit health
insurance policy or group certificate; contents; delivery of policy, certificate
or copy of application. (1) All credit life or credit
health insurance shall be evidenced by an individual policy or, in the case of
group insurance, by a certificate of insurance, which individual policy or
group certificate of insurance shall be delivered to the debtor.
(2)
Each individual policy or group certificate of credit life or credit health
insurance, or both shall, in addition to other requirements of law, set forth:
(a)
The name and home-office address of the insurer;
(b)
The name or names of the debtor, or in the case of a certificate under a group
policy, the identity by name or otherwise of the debtor;
(c)
The premium or amount of payment by the debtor separately for credit life
insurance and for credit health insurance;
(d)
A description of the coverage including the amount and term thereof, and any
exceptions, limitations and restrictions; and
(e)
A statement that the benefits shall be paid to the creditor to reduce or
extinguish the unpaid indebtedness and, wherever the amount of insurance may
exceed the unpaid indebtedness, that any such excess shall be payable to a
beneficiary, other than the creditor, named by the debtor or to the estate of
the debtor.
(3)
Such individual policy or group certificate of insurance shall be delivered to
the insured debtor at the time the indebtedness is incurred except as provided
in subsection (4) of this section.
(4)
If such individual policy or group certificate of insurance is not delivered to
the debtor at the time the indebtedness is incurred, a copy of the application
for insurance or a notice of proposed insurance, signed by the debtor and
setting forth the name and home-office address of the insurer, the name or
names of the debtor, the premium or amount of payment by the debtor separately
for credit life insurance and for credit health insurance, and the amount, term
and a brief description of the coverage provided, shall be delivered to the
debtor at the time the indebtedness is incurred. The copy of the application
for insurance or notice of proposed insurance shall also refer exclusively to
insurance coverage, and shall be separate and apart from the loan, sale or
other credit statement of account, instrument or agreement, unless the information
required by this subsection is prominently set forth therein. Upon acceptance
of the insurance by the insurer and within 30 days of the date upon which the
indebtedness is incurred, the insurer shall cause the individual policy or
group certificate of insurance to be delivered to the debtor. The application
for insurance or notice of proposed insurance shall state that upon acceptance
by the insurer, the insurance shall become effective as provided in ORS
743.376.
(5)
If an insurer other than the named insurer accepts the risk, then the debtor
shall receive a policy or certificate of insurance setting forth the name and
home-office address of the substituted insurer and the amount of the premium to
be charged, and if the amount of premium is less than that set forth in the
notice of proposed insurance an appropriate refund shall be made. [Formerly
739.590 and then 743.579]
743.378 Charges and refunds to debtor.
(1) Each individual policy or group certificate of credit life or credit health
insurance, or both, shall provide that in the event of termination of the
insurance prior to the scheduled maturity date of the indebtedness, any refund
of an amount paid by the debtor for insurance shall be paid or credited
promptly to the person entitled thereto. However, the Director of the
Department of Consumer and Business Services shall prescribe a minimum refund
and no refund which would be less than such minimum need be made. The formula
to be used in computing such refund shall be filed with and approved by the
director.
(2)
If a creditor requires a debtor to make any payment for credit life insurance
or credit health insurance and an individual policy or group certificate of
insurance is not issued, the creditor shall immediately give written notice to
such debtor and shall promptly make an appropriate credit to the account.
(3)
The amount charged to a debtor for credit life insurance and for credit health
insurance shall not exceed the respective premiums charged by the insurer, as
computed at the time the charge to the debtor is determined. [Formerly 739.600
and then 743.582]
743.379 Status of remuneration to
creditor. Notwithstanding the provisions of any
other law of this state which may expressly or by construction provide
otherwise, any commission or service fee or other benefit or return to any
creditor arising out of the sale or provision of credit life and credit health
insurance shall not be deemed interest or charges in connection with loans or
credit transactions. [Formerly 739.603 and then 743.585]
743.380 Claim report and payment.
(1) All claims under policies of credit life or credit health insurance, or
both, shall be promptly reported to the insurer or its designated claim
representative and the insurer shall maintain adequate claim files. All claims
shall be settled as soon as possible and in accordance with the terms of the
policy.
(2)
All claims shall be paid either by draft drawn upon the insurer or by check of
the insurer to the order of the claimant to whom payment is due pursuant to the
policy provisions or, upon direction of such claimant, to the one specified. [Formerly
739.610 and then 743.588]
HEALTH INSURANCE
(Individual)
743.402 Exceptions to individual health
insurance policy requirements. Nothing in
ORS 743.405 to 743.498, 743A.160 and 743A.164 shall apply to or affect:
(1)
Any workers’ compensation insurance policy or any liability insurance policy
with or without supplementary expense coverage therein;
(2)
Any policy of reinsurance;
(3)
Any blanket or group policy of insurance; or
(4)
Any life insurance policy, or policy supplemental thereto which contains only
such provisions relating to health insurance as:
(a)
Provide additional benefits in case of death or dismemberment or loss of sight
by accident; or
(b)
Operate to safeguard such policy against lapse, or to give a special surrender
value or special benefit or an annuity in the event the insured shall become
totally and permanently disabled, as defined by the policy or supplemental
policy.
(5)
Coverage under ORS 735.600 to 735.650. [Formerly 741.022; 2001 c.356 §5]
743.405 General requirements.
An individual health insurance policy must meet the following requirements:
(1)
The entire money and other considerations therefor shall be expressed therein.
(2)
The time at which the insurance takes effect and terminates shall be expressed
therein.
(3)
It shall purport to insure only one person, except that a policy may insure,
originally or by subsequent amendment, upon the application of an adult member
of a family who shall be deemed the policyholder, any two or more eligible
members of that family, including husband, wife, dependent children or any
children under a specified age and any other person dependent upon the
policyholder.
(4)
The policy may not be issued individually to an individual in a group of
persons as described in ORS 743.522 for the purpose of separating the
individual from health insurance benefits offered or provided in connection
with a group health benefit plan.
(5)
Except as provided in ORS 743.498, the style, arrangement and overall
appearance of the policy may not give undue prominence to any portion of the
text, and every printed portion of the text of the policy and of any
indorsements or attached papers shall be plainly printed in lightfaced type of
a style in general use, the size of which shall be uniform and not less than 10
point with a lower case unspaced alphabet length not less than 120 point.
Captions shall be printed in not less than 12-point type. As used in this
subsection, “text” includes all printed matter except the name and address of
the insurer, name or title of the policy, the brief description if any, and
captions and subcaptions.
(6)
The exceptions and reductions of indemnity must be set forth in the policy.
Except those required by ORS 743.411 to 743.477, exceptions and reductions
shall be printed at the insurer’s option either included with the applicable
benefit provision or under an appropriate caption such as EXCEPTIONS, or
EXCEPTIONS AND REDUCTIONS. However, if an exception or reduction specifically
applies only to a particular benefit of the policy, a statement of the
exception or reduction must be included with the applicable benefit provision.
(7)
Each form constituting the policy, including riders and indorsements, must be
identified by a form number in the lower left-hand corner of the first page of
the policy.
(8)
The policy may not contain provisions purporting to make any portion of the
charter, rules, constitution or bylaws of the insurer a part of the policy
unless such portion is set forth in full in the policy, except in the case of
the incorporation of or reference to a statement of rates or classification of
risks, or short rate table filed with the Director of the Department of
Consumer and Business Services. [Formerly 741.120; 1999 c.987 §5; 2009 c.11 §94;
2011 c.9 §91; 2011 c.500 §6]
743.408 Mandatory provisions.
Except as provided in ORS 742.021, a health insurance policy shall contain the
provisions set forth in ORS 743.411 to 743.444. The provisions shall be
preceded individually by the caption appearing in the sections or, at the
option of the insurer, by the appropriate individual or group captions or
subcaptions as the Director of the Department of Consumer and Business Services
may approve. [1967 c.359 §428; 2011 c.9 §92]
743.411 Entire contract; changes.
A health insurance policy shall contain a provision as follows: “ENTIRE
CONTRACT; CHANGES: This policy, including the indorsements and the attached
papers, if any, constitutes the entire contract of insurance. No change in this
policy shall be valid until approved by an executive officer of the insurer and
unless such approval be indorsed hereon or attached hereto. No insurance
producer has authority to change this policy or to waive any of its provisions.”
[1967 c.359 §429; 2003 c.364 §107]
743.412 [1977
c.632 §2; 1981 c.319 §1; 2001 c.900 §230; renumbered 743A.160 in 2007]
743.414 Time limit on certain defenses;
incontestability. (1) A health insurance policy
shall contain a provision as follows: “TIME LIMIT ON CERTAIN DEFENSES: After
two years from the date of issue of this policy no misstatements, except
fraudulent misstatements, made by the applicant in the application for such
policy shall be used to void the policy or to deny a claim for loss incurred or
disability, as defined in the policy, commencing after the expiration of that
period.”
(2)
The policy provision set forth in subsection (1) of this section shall not be
so construed as to affect any legal requirement for avoidance of a policy or
denial of a claim during such initial two-year period, or to limit the
application of ORS 743.450 to 743.462 in the event of misstatement with respect
to age or occupation or other insurance.
(3)
A policy which the insured has the right to continue in force subject to its
terms by the timely payment of premium until at least age 50 or, in the case of
a policy issued after age 44, for at least five years from its date of issue,
may contain in lieu of the provision set forth in subsection (1) of this
section the following provision, from which the clause in parentheses may be
omitted at the insurer’s option: “INCONTESTABLE: After this policy has been in
force for a period of two years during the lifetime of the insured (excluding
any period during which the insured is disabled), it shall become incontestable
as to the statements contained in the application.”
(4)
The policy shall contain a provision as follows, which shall be a separate
paragraph under the same caption as, and immediately following, the provision
set forth in subsection (1) or (3) of this section: “No claim for loss incurred
or disability, as defined in the policy, commencing after two years from the
date of issue of this policy shall be reduced or denied on the ground that a disease
or physical condition not excluded from coverage by name or specific
description effective on the date of loss had existed prior to the effective
date of coverage of this policy.” [1967 c.359 §430; 1969 c.159 §1]
743.417 Grace period.
(1) An individual health insurance policy shall contain a provision as follows:
“GRACE PERIOD: A minimum grace period of 10 days after the premium due date
will be granted for the payment of each premium falling due after the first
premium, during which grace period the policy shall continue in force.”
(2)
A policy that contains a cancellation provision may add the following clause at
the end of the provision set forth in subsection (1) of this section: “subject
to the right of the insurer to cancel in accordance with the cancellation
provision hereof.”
(3)
A policy in which the insurer reserves the right to refuse renewal shall have
the following clause at the beginning of the provision set forth in subsection
(1) of this section: “Unless not less than 30 days prior to the premium due
date the insurer has delivered to the insured or has mailed to the last address
of the insured as shown by the records of the insurer written notice of its
intention not to renew this policy beyond the period for which the premium has
been accepted. The insurer shall state in the notice the reason for its refusal
to renew this policy.” [1967 c.359 §431; 1989 c.784 §19; 2001 c.943 §9]
743.420 Reinstatement.
(1) A health insurance policy shall contain a provision as follows: “REINSTATEMENT:
If any renewal premium is not paid within the grace period, a subsequent
acceptance of premium by the insurer or by any insurance producer duly
authorized by the insurer to accept such premium, without requiring in
connection therewith an application for reinstatement, shall reinstate the
policy; provided, however, that if the insurer or such insurance producer
requires an application for reinstatement and issues a conditional receipt for
the premium tendered, the policy will be reinstated upon approval of such
application by the insurer or, lacking such approval, upon the 45th day
following the date of such conditional receipt unless the insurer has
previously notified the insured in writing of its disapproval of such
application. The reinstated policy shall cover only loss resulting from such
accidental injury as may be sustained after the date of reinstatement and loss
due to such sickness as may begin more than 10 days after such date. In all
other respects the insured and insurer shall have the same rights thereunder as
they had under the policy immediately before the due date of the defaulted
premium, subject to any provisions indorsed hereon or attached hereto in
connection with the reinstatement. Any premium accepted in connection with a
reinstatement shall be applied to a period for which premium has not been
previously paid, but not to any period more than 60 days prior to the date of
reinstatement.”
(2)
The last sentence of the provision set forth in subsection (1) of this section
may be omitted from any policy which the insured has the right to continue in
force subject to its terms by the timely payment of premiums until at least age
50 or, in the case of a policy issued after age 44, for at least five years
from its date of issue. [1967 c.359 §432; 2001 c.943 §10; 2003 c.364 §108]
743.423 Notice of claim.
(1) A health insurance policy shall contain a provision as follows: “NOTICE OF
CLAIM: Written notice of claim must be given to the insurer within 20 days
after the occurrence or commencement of any loss covered by the policy, or as
soon thereafter as is reasonably possible. Notice given by or on behalf of the
insured or the beneficiary to the insurer at ___ (insert the location of
such office as the insurer may designate for the purpose), or to any authorized
agent of the insurer, with information sufficient to identify the insured,
shall be deemed notice to the insurer.”
(2)
In a policy providing a loss-of-time benefit which may be payable for at least
two years, an insurer may at its option insert the following between the first
and second sentences of the provision set forth in subsection (1) of this
section: “Subject to the qualifications set forth below, if the insured suffers
loss of time on account of disability for which indemnity may be payable for at
least two years, the insured shall, at least once in every six months after
having given notice of claim, give to the insurer notice of continuance of such
disability, except in the event of legal incapacity. The period of six months
following any filing of proof by the insured or any payment by the insurer on
account of such claim or any denial of liability in whole or in part by the
insurer shall be excluded in applying this provision. Delay in the giving of
such notice shall not impair the insured’s right to any indemnity which would
otherwise have accrued during the period of six months preceding the date on
which such notice is actually given.” [1967 c.359 §433]
743.426 Claim forms.
A health insurance policy shall contain a provision as follows: “CLAIM FORMS:
The insurer, upon receipt of a notice of claim, will furnish to the claimant
such forms as are usually furnished by it for filing proof of loss. If such
forms are not furnished within 15 days after the giving of such notice, the claimant
shall be deemed to have complied with the requirements of this policy as to
proof of loss upon submitting, within the time fixed in the policy for filing
proofs of loss, written proof covering the occurrence, the character and the
extent of the loss for which claim is made.” [1967 c.359 §434]
743.429 Proofs of loss.
A health insurance policy shall contain a provision as follows: “PROOFS OF
LOSS: Written proof of loss must be furnished to the insurer at its office in
case of claim for loss for which this policy provides any periodic payment
contingent upon continuing loss within 90 days after the termination of the
period for which the insurer is liable and in case of claim for any other loss
within 90 days after the date of such loss. Failure to furnish such proof
within the time required shall not invalidate or reduce any claim if it was not
reasonably possible to give proof within such time, provided such proof is
furnished as soon as reasonably possible and in no event, except in the absence
of legal capacity, later than one year from the time proof is otherwise
required.” [1967 c.359 §435]
743.432 Time of payment of claims.
A health insurance policy shall contain a provision as follows: “TIME OF
PAYMENT OF CLAIMS: Indemnities payable under this policy for any loss other
than loss for which this policy provides any periodic payment will be paid
immediately upon receipt of due written proof of such loss. Subject to due
written proof of loss, all accrued indemnities for loss for which this policy provides
periodic payment will be paid ______ (insert period for payment which must not
be less frequently than monthly) and any balance remaining unpaid upon the
termination of liability will be paid immediately upon receipt of due written
proof.” [1967 c.359 §436]
743.435 Payment of claims.
(1) A health insurance policy shall contain a provision as follows: “PAYMENT OF
CLAIMS: Indemnity for loss of life will be payable in accordance with the
beneficiary designation and the provisions respecting such payment which may be
prescribed herein and effective at the time of payment. If no such designation
or provision is then effective, such indemnity shall be payable to the estate
of the insured. Any other accrued indemnities unpaid at the insured’s death
may, at the option of the insurer, be paid either to such beneficiary or to
such estate. All other indemnities will be payable to the insured.”
(2)
The following provisions, or either of them, may be included with the provision
set forth in subsection (1) of this section at the option of the insurer:
(a)
“If any indemnity of this policy shall be payable to the estate of the insured,
or to an insured or beneficiary who is a minor or otherwise not competent to
give a valid release, the insurer may pay such indemnity, up to an amount not
exceeding $___ (insert an amount which shall not exceed $1,000), to any
relative by blood or connection by marriage of the insured or beneficiary who
is deemed by the insurer to be equitably entitled thereto. Any payment made by
the insurer in good faith pursuant to this provision shall fully discharge the
insurer to the extent of such payment.”
(b)
“Subject to any written direction of the insured in the application or
otherwise all or a portion of any indemnities provided by this policy on
account of hospital, nursing, medical or surgical services may, at the insurer’s
option and unless the insured requests otherwise in writing not later than the
time of filing proofs of such loss, be paid directly to the hospital or person
rendering such services; but it is not required that the service be rendered by
a particular hospital or person.” [1967 c.359 §437]
743.438 Physical examinations and autopsy.
A health insurance policy shall contain a provision as follows: “PHYSICAL
EXAMINATIONS AND AUTOPSY: The insurer at its own expense shall have the right
and opportunity to examine the person of the insured when and as often as it
may reasonably require during the pendency of a claim hereunder and to make an
autopsy in case of death where it is not forbidden by law.” [1967 c.359 §438]
743.441 Legal actions.
A health insurance policy shall contain a provision as follows: “LEGAL ACTIONS:
No action at law or in equity shall be brought to recover on this policy prior
to the expiration of 60 days after written proof of loss has been furnished in
accordance with the requirements of this policy. No such action shall be
brought after the expiration of three years after the time written proof of
loss is required to be furnished.” [1967 c.359 §439]
743.444 Change of beneficiary.
(1) A health insurance policy shall contain a provision as follows: “CHANGE OF
BENEFICIARY: Unless the insured makes an irrevocable designation of
beneficiary, the right to change of beneficiary is reserved to the insured and
the consent of the beneficiary or beneficiaries shall not be requisite to
surrender or assignment of this policy or to any change of beneficiary or
beneficiaries or to any other changes in this policy.”
(2)
The first clause of the provision set forth in subsection (1) of this section,
relating to the irrevocable designation of beneficiary, may be omitted at the
insurer’s option. [1967 c.359 §440]
743.447 Optional provisions.
Except as provided in ORS 742.021, provisions in a health insurance policy
respecting the matters set forth in ORS 743.450 to 743.477 shall be in the
words that appear in such sections. Any such provision contained in the policy
shall be preceded individually by the appropriate caption appearing in such
sections or, at the option of the insurer, by such appropriate individual or
group captions or subcaptions as the Director of the Department of Consumer and
Business Services may approve. [1967 c.359 §441; 2011 c.9 §93]
743.450 Change of occupation.
A health insurance policy may contain a provision as follows: “CHANGE OF
OCCUPATION: If the insured be injured or contract sickness after having changed
occupation to one classified by the insurer as more hazardous than that stated
in this policy or while doing for compensation anything pertaining to an
occupation so classified, the insurer will pay only such portion of the
indemnities provided in this policy as the premium paid would have purchased at
the rates and within the limits fixed by the insurer for such more hazardous
occupation. If the insured changes occupation to one classified by the insurer
as less hazardous than that stated in this policy, the insurer, upon receipt of
proof of such change of occupation, will reduce the premium rate accordingly,
and will return the excess pro rata unearned premium from the date of change of
occupation or from the policy anniversary date immediately preceding receipt of
such proof, whichever is the more recent. In applying this provision, the
classification of occupational risk and the premium rates shall be such as have
been last filed by the insurer prior to the occurrence of the loss for which
the insurer is liable or prior to date of proof of change in occupation with
the state official having supervision of insurance in the state where the insured
resided at the time this policy was issued; but if such filing was not
required, then the classification of occupational risk and the premium rates
shall be those last made effective by the insurer in such state prior to the
occurrence of the loss or prior to the date of proof of change in occupation.” [1967
c.359 §442]
743.453 Misstatement of age.
A health insurance policy may contain a provision as follows: “MISSTATEMENT OF
AGE: If the age of the insured has been misstated, all amounts payable under
this policy shall be such as the premium paid would have purchased at the
correct age.” [1967 c.359 §443]
743.456 Other insurance in same insurer.
(1) A health insurance policy may contain a provision as follows: “OTHER
INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness
policy or policies previously issued by the insurer to the insured be in force
concurrently herewith, making the aggregate indemnity for _____ (insert type of
coverage or coverages) in excess of $___ (insert maximum limit of indemnity or
indemnities), the excess insurance shall be void and all premiums paid for such
excess shall be returned to the insured or to the estate of the insured.”
(2)
In lieu of the provisions set forth in subsection (1) of this section, the
policy may contain a provision as follows: “OTHER INSURANCE IN THIS INSURER:
Insurance effective at any one time on the insured under a like policy or
policies in this company is limited to the one such policy elected by the
insured, the beneficiary or the estate of the insured, as the case may be, and
the insurer will return all premiums paid for all other such policies.” [1967
c.359 §444]
743.459 Insurance with other insurers; expense
incurred benefits. (1) A health insurance policy
may contain a provision as follows: “INSURANCE WITH OTHER INSURERS: If there be
other valid coverage, not with this insurer, providing benefits for the same
loss on a provision of service basis or on an expense incurred basis and of
which this insurer has not been given written notice prior to the occurrence or
commencement of loss, the only liability under any expense incurred coverage of
this policy shall be for such proportion of the loss as the amount which would
otherwise have been payable hereunder plus the total of the like amounts under
all such other valid coverages for the same loss of which this insurer had
notice bears to the total like amounts under all valid coverages for such loss,
and for the return of such portion of the premiums paid as shall exceed the pro
rata portion for the amount so determined. For the purpose of applying this
provision when other coverage is on a provision of service basis, the ‘like
amount’ of such other coverage shall be taken as the amount which the services
rendered would have cost in the absence of such coverage.”
(2)
If the policy provision set forth in subsection (1) of this section is included
in a policy which also contains the policy provision set forth in ORS 743.462,
there shall be added to the caption of the provision set forth in subsection
(1) of this section the phrase “EXPENSE INCURRED BENE- FITS.” The insurer may,
at its option, include in this provision a definition of “other valid coverage,”
approved as to form by the Director of the Department of Consumer and Business
Services, which definition shall be limited in subject matter to coverage
provided by organizations subject to regulation by insurance law or by
insurance authorities of this or any other state of the United States or any
province of Canada, and by hospital or medical service organizations, and to
any other coverage the inclusion of which may be approved by the director. In
the absence of such definition such term shall not include group insurance,
automobile medical payments insurance or coverage provided by hospital or
medical service organizations or by union welfare plans or employer or employee
benefit organizations. For the purpose of applying the policy provision set
forth in this section with respect to any insured, any amount of benefit provided
for such insured pursuant to any compulsory benefit statute (including any
workers’ compensation or employer’s liability statute), whether provided by a
governmental agency or otherwise, shall in all cases be deemed to be “other
valid coverage” of which the insurer has had notice. In applying the policy
provision set forth in this section no third party liability coverage shall be
included as “other valid coverage.” [1967 c.359 §445]
743.462 Insurance with other insurers;
other than expense incurred benefits. (1) A health
insurance policy may contain a provision as follows: “INSURANCE WITH OTHER
INSURERS: If there be other valid coverage, not with this insurer, providing
benefits for the same loss on other than an expense incurred basis and of which
this insurer has not been given written notice prior to the occurrence or
commencement of loss, the only liability for such benefits under this policy
shall be for such proportion of the indemnities otherwise provided hereunder
for such loss as the like indemnities of which the insurer had notice
(including the indemnities under this policy) bear to the total amount of all
like indemnities for such loss, and for the return of such portion of the
premium paid as shall exceed the pro rata portion for the indemnities thus
determined.”
(2)
If the policy provision set forth in subsection (1) of this section is included
in a policy which also contains the policy provision set forth in ORS 743.459,
there shall be added to the caption of the provision set forth in subsection
(1) of this section the phrase “OTHER BENEFITS.” The insurer may, at its
option, include in this provision a definition of “other valid coverage,”
approved as to form by the Director of the Department of Consumer and Business
Services, which definition shall be limited in subject matter to coverage
provided by organizations subject to regulation by insurance law or by
insurance authorities of this or any other state of the United States or any
province of Canada, and to any other coverage the inclusion of which may be
approved by the director. In the absence of such definition such term shall not
include group insurance, or benefits provided by union welfare plans or by
employer or employee benefit organizations. For the purpose of applying the policy
provision set forth in this section with respect to any insured, any amount of
benefit provided for such insured pursuant to any compulsory benefit statute
(including any workers’ compensation or employer’s liability statute), whether
provided by a governmental agency or otherwise, shall in all cases be deemed to
be “other valid coverage” of which the insurer has had notice. In applying the
policy provision set forth in this section no third party liability coverage
shall be included as “other valid coverage.” [1967 c.359 §446]
743.465 Relation of earnings to insurance.
(1) A health insurance policy may contain a provision as follows: “RELATION OF
EARNINGS TO INSURANCE: If the total monthly amount of loss of time benefits
promised for the same loss under all valid loss of time coverage upon the
insured, whether payable on a weekly or monthly basis, shall exceed the monthly
earnings of the insured at the time disability commenced or the average monthly
earnings of the insured for the period of two years immediately preceding a
disability for which claim is made, whichever is the greater, the insurer will
be liable only for such proportionate amount of such benefits under this policy
as the amount of such monthly earnings or such average monthly earnings of the
insured bears to the total amount of monthly benefits for the same loss under
all such coverage upon the insured at the time such disability commences and
for the return of such part of the premiums paid during such two years as shall
exceed the pro rata amount of the premiums for the benefits actually paid
hereunder; but this shall not operate to reduce the total monthly amount of
benefits payable under all such coverage upon the insured below the sum of $200
or the sum of the monthly benefits specified in such coverages, whichever is
the lesser, nor shall it operate to reduce benefits other than those payable
for loss of time.”
(2)
The policy provision set forth in subsection (1) of this section may be
inserted only in a policy which the insured has the right to continue in force
subject to its terms by the timely payment of premiums until at least age 50
or, in the case of a policy issued after age 44, for at least five years from
its date of issue. The insurer may, at its option, include in this provision a
definition of “valid loss of time coverage,” approved as to form by the
Director of the Department of Consumer and Business Services, which definition
shall be limited in subject matter to coverage provided by governmental
agencies or by organizations subject to regulation by insurance law or by
insurance authorities of this or any other state of the United States or any
province of Canada, or to any other coverage the inclusion of which may be
approved by the director or any combination of such coverages. In the absence
of such definition such term shall not include any coverage provided for such
insured pursuant to any compulsory benefit statute (including any workers’
compensation or employer’s liability statute), or benefits provided by union welfare
plans or by employer or employee benefit organizations. [1967 c.359 §447]
743.468 Unpaid premium.
A health insurance policy may contain a provision as follows: “UNPAID PREMIUM:
Upon the payment of a claim under this policy, any premium then due and unpaid
or covered by any note or written order may be deducted therefrom.” [1967 c.359
§448]
743.471 Cancellation.
A health insurance policy may contain a provision as follows: “CANCELLATION:
The insurer may cancel this policy by written notice delivered to the insured,
or mailed to the last address of the insured as shown by the records of the
insurer. The notice must state the reason for cancellation and the date on
which the cancellation shall be effective. Except as provided under the ‘GRACE
PERIOD’ provision of this policy for nonpayment of premium, cancellation shall
not become effective earlier than the 30th day after the date of the notice.
After the policy has been continued beyond its original term, the insured may
cancel this policy at any time by written notice delivered or mailed to the
insurer, effective upon receipt or on such later date as may be specified in
such notice. In the event of cancellation, the insurer will return promptly the
unearned portion of any premium paid. If the insured cancels, the earned
premium shall be computed by the use of the short rate table last filed with
the state official having supervision of insurance in the state where the
insured resided when the policy was issued. If the insurer cancels, the earned
premium shall be computed pro rata. Cancellation shall be without prejudice to
any claim originating prior to the effective date of cancellation.” [1967 c.359
§449; 1989 c.784 §20]
743.472 Permissible reasons for cancellation
or refusal to renew. An insurer selling individual
health insurance policies may cancel or refuse to renew an individual health
insurance policy only if the insurer makes a determination to cancel or not to
renew all policies of the same type and form as the individual policy, or if
the ground for cancellation or nonrenewal is any of the following and is stated
as a provision of the policy:
(1)
A fraudulent or material misstatement made by the applicant in an application
for the health policy. A material misstatement is subject to any time limit, as
specified by law and included in the policy, for voiding the policy on the
basis of a misstatement. For purposes of this subsection, a misstatement may
include an incorrect statement or a misrepresentation, omission or concealment
of fact;
(2)
Excess or other insurance in the same insurer, as described in ORS 743.456;
(3)
Nonpayment of premium; or
(4)
Any other reason specified by the Director of the Department of Consumer and
Business Services by rule. [1989 c.784 §18; 1991 c.182 §5]
Note: 743.472
was added to and made a part of 743.405 to 743.498 by legislative action but
was not added to any smaller series therein. See Preface to Oregon Revised
Statutes for further explanation.
743.474 Conformity with state statutes.
A health insurance policy may contain a provision as follows: “CONFORMITY WITH
STATE STATUTES: Any provision of this policy which, on its effective date, is
in conflict with the statutes of the state in which the insured resides on such
date hereby is amended to conform to the minimum requirements of such statutes.”
[1967 c.359 §450]
743.477 Illegal occupation.
A health insurance policy may contain a provision as follows: “ILLEGAL
OCCUPATION: The insurer shall not be liable for any loss to which a
contributing cause was the insured’s commission of or attempt to commit a
felony or to which a contributing cause was the insured’s being engaged in an
illegal occupation.” [1967 c.359 §451]
743.480 [1967
c.359 §452; 1979 c.744 §64; 2007 c.128 §1; renumbered 743A.164 in 2007]
743.483 Arrangement of provisions.
The provisions of a health insurance policy that are the subject of ORS 743.408
to 743.477, or any corresponding provisions that are used in lieu thereof in
accordance with the Insurance Code, shall be printed in the consecutive order
of such sections or, at the option of the insurer, any such provision may
appear as a unit in any part of the policy, with other provisions to which it
may be logically related, provided the resulting policy shall not be in whole
or in part unintelligible, uncertain, ambiguous, abstruse or likely to mislead
a person to whom the policy is offered, delivered or issued. [1967 c.359 §453;
2009 c.11 §95; 2011 c.9 §94]
743.486 Scope of term “insured” in statutory
policy provisions. As used in ORS 743.402 to
743.498, the word “insured” shall not be construed as preventing a person other
than the insured with a proper insurable interest from making application for
and owning a policy covering the insured or from being entitled under such a
policy to any indemnities, benefits and rights provided therein. [1967 c.359 §454;
2011 c.9 §95]
743.489 Extension of coverage beyond
policy period; effect of misstatement of age. If any
health insurance policy contains a provision establishing, as an age limit or otherwise,
a date after which the coverage provided by the policy will not be effective,
and if such date falls within a period for which premium is accepted by the
insurer or if the insurer accepts a premium after such date, the coverage
provided by the policy shall continue in force subject to any right of
cancellation until the end of the period for which premium has been accepted.
In the event the age of the insured has been misstated and if, according to the
correct age of the insured, the coverage provided by the policy would not have
become effective, or would have ceased prior to the acceptance of such premium
or premiums, then the liability of the insurer shall be limited to the refund,
upon request, of all premiums paid for the period not covered by the policy. [Formerly
741.170]
743.492 Policy return and premium refund
provision. Every health insurance policy except
single premium nonrenewable policies shall have printed on its face or attached
thereto a notice stating in substance that the person to whom the policy is
issued shall be permitted to return the policy within 10 days of its delivery
to the purchaser and to have the premium paid refunded if, after examination of
the policy, the purchaser is not satisfied with it for any reason. If a policyholder
or purchaser pursuant to such notice returns the policy to the insurer at its
home or branch office or to the insurance producer through whom it was
purchased, it shall be void from the beginning and the parties shall be in the
same position as if no policy had been issued. [Formerly 741.180; 2003 c.364 §109]
743.495 Use of terms “noncancelable” or “guaranteed
renewable”; synonymous terms. (1) No health
insurance policy shall contain the following unqualified terms except as
provided in this subsection:
(a)
The unqualified terms “noncancelable” or “noncancelable and guaranteed
renewable” may be used only in a policy which the insured has the right to
continue in force for life by the timely payment of premiums set forth in the
policy, during which period the insurer has no right to make unilaterally any
change in any provision of the policy while the policy is in force.
(b)
The unqualified term “guaranteed renewable,” except as provided in paragraph
(a) of this subsection, may be used only in a policy which the insured has the
right to continue in force for life by the timely payment of premiums, during
which period the insurer has no right to make unilaterally any change in any
provision of the policy while the policy is in force, except that the insurer
may make changes in premium rates by classes.
(2)
The limitations prescribed in subsection (1) of this section on the use of the
term “noncancelable” shall also apply to any synonymous term such as “not
cancelable” and such limitations on the use of the term “guaranteed renewable”
shall also apply to any synonymous term such as “guaranteed continuable.” [Formerly
741.190]
743.498 Statement in policy of cancelability
or renewability. (1) A health insurance policy
which is noncancelable or guaranteed renewable as those terms are used in ORS
743.495, except that the insured’s right is for a limited period of more than
one year rather than for life, shall contain the applicable one of the
following statements, or such other statement which, in the opinion of the
Director of the Department of Consumer and Business Services, is equally clear
or more definite as to the subject matter:
(a)
“THIS POLICY IS NONCANCELABLE______” (designating the applicable period such
as, for example, “to age ___ (specify),” or “for the period of ___ (specify)
years from date of issuance”) if the policy is noncancelable for such period.
(b)
“THIS POLICY IS GUARANTEED RENEWABLE______” (designating the applicable period
such as, for example, “to age ___ (specify),” or “for the period of ___
(specify) years from date of issuance”) if the policy is guaranteed renewable
for such period.
(2)
Except for policies meeting the conditions specified in ORS 743.495 or
subsection (1) of this section, and except as provided in subsection (3) of
this section, a health insurance policy shall contain the applicable one of the
following statements, or such other statement which, in the opinion of the
director, is equally clear or more definite as to the subject matter:
(a)
“THIS POLICY MAY BE CANCELED BY THE INSURER ONLY FOR A REASON PERMITTED BY LAW”
if the policy contains a provision for cancellation by the insurer.
(b)
“THE INSURER MAY REFUSE TO RENEW THIS POLICY ONLY FOR A REASON PERMITTED BY LAW”
if the policy is not guaranteed renewable.
(3)
The limitations and requirements as to the use of terms contained in ORS
743.495 and this section shall not prohibit the use of other terms for policies
having other guarantees of renewability, provided such terms, in the opinion of
the director are accurate, clear and not likely to be confused with the terms
contained in ORS 743.495 and this section, and are incorporated in a concise
statement relating to the guarantees of renewability.
(4)
The statement required by this section shall be printed in a type not smaller
than the type used for captions. It shall appear prominently on the first page
of the policy and shall be a part of the brief description if the policy has a
brief description on its first page. [Formerly 741.200; 1989 c.784 §20a]
743.499 Notice to policyholder required
for cancellation or nonrenewal of health benefit plan; effect of failure to
give notice. (1) As used in this section, “health
benefit plan” has the meaning given that term in ORS 743.730.
(2)
An insurer shall notify a policyholder in writing if the insurer cancels or
does not renew the policyholder’s individual health benefit plan. The notice
shall be sent to the policyholder’s last-known mailing address by first class
mail in a specially marked envelope or, if the policyholder has elected to
receive communications from the insurer electronically, to the policyholder’s
last-known electronic mail address using a mechanism that will confirm delivery
to the address.
(3)
If the cancellation or nonrenewal results in a refund to the policyholder of
all or part of a premium, the insurer must mail with the refund a written
explanation that includes:
(a)
The effective date of the cancellation;
(b)
The reason for the cancellation; and
(c)
The time period to which the refund is applicable.
(4)
For any cancellation or nonrenewal due to a reported death of the policyholder,
the insurer must:
(a)
Confirm the accuracy of the reported death.
(b)
If the death is confirmed:
(A)
Provide any dependents covered by the plan with information about how to
continue coverage or obtain alternative coverage; and
(B)
Issue any refund that is due to the estate of the deceased in accordance with
subsection (3) of this section.
(5)
If an insurer cancels or does not renew an individual health benefit plan and
fails to comply with the requirements of this section, the insurer shall
continue the coverage under the plan for the policyholder and any dependents
covered by the plan until the date that the insurer has complied with the
requirements of this section. The insurer shall waive any premiums owed for the
period during which the coverage was continued under this subsection and shall
process all claims incurred by the policyholder or any covered dependents
according to the terms of the plan.
(6)
This section does not apply:
(a)
To a cancellation requested by the policyholder if the insurer documents the
request and confirms the request with the policyholder; or
(b)
To a cancellation or nonrenewal that results from a policyholder making a
change in coverage with the same insurer. [2011 c.500 §4a]
Note:
743.499 was added to and made a part of the Insurance Code by legislative
action but was not added to ORS chapter 743 or any series therein. See Preface
to Oregon Revised Statutes for further explanation.
743.516 [1967
c.359 §459; repealed by 1999 c.987 §28]
743.519 [1967
c.359 §460; 1971 c.231 §25; repealed by 1999 c.987 §28]
743.520 [1971
c.231 §4; repealed by 1999 c.987 §28]
(Group and Blanket)
743.522 “Group health insurance” described.
(1) “Group health insurance” means that form of health insurance covering
groups of persons described in this section, with or without one or more
members of their families or one or more of their dependents, or covering one
or more members of the families or one or more dependents of such groups of
persons, and issued upon one of the following bases:
(a)
Under a policy issued to an employer or trustees of a fund established by an
employer, who shall be deemed the policyholder, insuring employees of such
employer for the benefit of persons other than the employer. As used in this
paragraph, “employees” includes:
(A)
The officers, managers and employees of the employer;
(B)
The individual proprietor or partners if the employer is an individual
proprietor or partnership;
(C)
The officers, managers and employees of subsidiary or affiliated corporations;
(D)
The individual proprietors, partners and employees of individuals and firms, if
the business of the employer and such individual or firm is under common
control through stock ownership, contract or otherwise;
(E)
The trustees or their employees, or both, if their duties are principally
connected with such trusteeship;
(F)
The leased workers of a client employer; and
(G)
Elected or appointed officials if a policy issued to insure employees of a
public body provides that the term “employees” includes elected or appointed
officials.
(b)
Under a policy issued to an association, including a labor union, that has an
active existence for at least one year, that has a constitution and bylaws and
that has been organized and is maintained in good faith primarily for purposes
other than that of obtaining insurance, which shall be deemed the policyholder,
insuring members, employees or employees of members of the association for the
benefit of persons other than the association or its officers or trustees.
(c)
Under a policy issued to the trustees of a fund established by two or more
employers in the same or related industry or by one or more labor unions or by one
or more employers and one or more labor unions or by an association as
described in paragraph (b) of this subsection, insuring employees of the
employers or members of the unions or of such association, or employees of
members of such association for the benefit of persons other than the employers
or the unions or such association. As used in this paragraph, “employees” may
include the officers, managers and employees of the employer, and the
individual proprietor or partners if the employer is an individual proprietor
or partnership. The policy may provide that the term “employees” includes the
trustees or their employees, or both, if their duties are principally connected
with such trusteeship.
(d)
Under a policy issued to any person or organization to which a policy of group
life insurance may be issued or delivered in this state, to insure any class or
classes of individuals that could be insured under such group life policy.
(2)
Group health insurance offered to a resident of this state under a group health
insurance policy issued to a group other than one described in subsection (1)
of this section may be delivered if:
(a)
The Director of the Department of Consumer and Business Services finds that:
(A)
The issuance of the policy is in the best interest of the public;
(B)
The issuance of the policy would result in economies of acquisition or
administration; and
(C)
The benefits are reasonable in relation to the premiums charged; and
(b)
The premium for the policy is paid either from funds of a policyholder, from
funds contributed by a covered person or from both.
(3)
As used in this section and ORS 743.533:
(a)
“Client employer” means an employer to whom workers are provided under contract
and for a fee on a leased basis by a worker leasing company licensed under ORS
656.850.
(b)
“Employee” may include a retired employee.
(c)
“Leased worker” means a worker provided by a worker leasing company licensed
under ORS 656.850. [1967 c.359 §461; 1975 c.229 §1; 1989 c.784 §13; 2001 c.943 §4;
2005 c.22 §492]
743.523 Certain sales practices prohibited.
(1) No person selling group health insurance is authorized to sell membership
in an association, including a labor union, for the purpose of qualifying an
applicant who is an individual for group health insurance.
(2)
No person selling membership in an association, including a labor union, is
authorized to offer group health insurance for the purpose of selling
membership in the association. [1989 c.784 §10]
743.524 Eligibility of association to be
group health policyholder; rules. (1) An
insurer may not offer a policy of group health insurance to an association as
the policyholder or offer coverage under such a policy, whether issued in this
or another state, unless the Director of the Department of Consumer and
Business Services determines that the association satisfies the requirements of
an association under ORS 743.522 (1)(b).
(2)
An insurer shall submit evidence to the director that the association satisfies
the requirements under ORS 743.522 (1)(b). The director shall review the
evidence and may request additional evidence as needed.
(3)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (2) of this section.
(4)
The director may order an insurer to cease offering health insurance to an
association if the director determines that the association does not meet the
standards under ORS 743.522 (1)(b).
(5)
The director may adopt rules to carry out this section. [1989 c.784 §11; 2005
c.22 §493]
743.525 [1967
c.359 §462; repealed by 1981 c.752 §17]
743.526 Determination of whether trustees
are policyholders; consequences; rules. (1) An
insurer may not offer a policy of group health insurance described in ORS
743.522 (1)(c) that insures persons in this state or offer coverage under such
a policy, whether the policy is to be issued in this or another state, unless
the Director of the Department of Consumer and Business Services determines
that the requirements of this section and ORS 743.522 (1)(c) are satisfied.
(2)
The director shall determine with respect to a policy whether the trustees are
the policyholder. If the director determines that the trustees are the
policyholder and if the policy is issued or proposed to be issued in this
state, the policy is subject to the Insurance Code. If the director determines
that the trustees are not the policyholder, the evidence of coverage that is
issued or proposed to be issued in this state to a participating employer,
labor union or association shall be deemed to be a group health insurance
policy subject to the provisions of the Insurance Code. The director may
determine that the trustees are not the policyholder if:
(a)
The evidence of coverage issued or proposed to be issued to a participating
employer, labor union or association is in fact the primary statement of
coverage for the employer, labor union or association; and
(b)
The trust arrangement is under the actual control of the insurer.
(3)
An insurer shall submit evidence to the director showing that the requirements
of subsection (2) of this section and ORS 743.522 (1)(c) are satisfied. The
director shall review the evidence and may request additional evidence as
needed.
(4)
An insurer shall submit to the director any changes in the evidence submitted
under subsection (3) of this section.
(5)
The director may adopt rules to carry out this section. [1989 c.784 §12; 2005
c.22 §494]
Note:
Sections 11 and 14, chapter 752, Oregon Laws 2007, provide:
Sec. 11. (1)
The Department of Consumer and Business Services shall monitor, on a continuing
basis, association health plans to determine the degree to which the claims
experience of nonretained association groups exceeds the claims experience of
the association’s member groups as a whole.
(2)
The Director of the Department of Consumer and Business Services shall report
to the Legislative Assembly by February 1 of each odd-numbered year on the
findings under subsection (1) of this section and may recommend legislative
changes based upon the findings. [2007 c.752 §11]
Sec. 14.
Sections 11 and 12 of this 2007 Act are repealed on January 2, 2014. [2007
c.752 §14]
743.527 When group health insurance
policies to continue in effect upon payment of premium by insured individual.
(1) Every group health insurance policy delivered or issued for delivery in
this state shall contain in substance the following provisions, applicable to
the coverage for hospital or medical services or expenses provided under the
policy:
(a)
A provision that, when the premium for the policy or any part thereof is paid
by an employer under the terms of a collective bargaining agreement, if there
is a cessation of work by employees insured under the policy due to a strike or
lockout, the policy, upon timely payment of the premium, will continue in
effect with respect to those employees insured by the policy on the date of the
cessation of work who continue to pay their individual contribution and who
assume and pay the contribution due from the employer.
(b)
A provision that, when an employee insured under the policy pays a contribution
pursuant to paragraph (a) of this subsection, if the policyholder is not a
trustee of a fund established or maintained in whole or in part by an employer,
the employee’s individual contribution shall be:
(A)
The rate in the policy, on the date cessation of work occurs, applicable to an
individual in the class to which the employee belongs as set forth in the
policy; or
(B)
If the policy does not provide for a rate applicable to individuals, an amount
equal to the amount determined by dividing the total monthly premium in effect
under the policy at the date of cessation of work by the total number of
persons insured under the policy on such date.
(c)
A provision that, when an employee insured under the policy pays a contribution
pursuant to paragraph (a) of this subsection, if the policyholder is a trustee
of a fund established or maintained in whole or in part by an employer, the
employee’s individual contribution shall be the amount which the employee and
employer would have been required to contribute if the cessation of work had
not occurred.
(2)
Every group health insurance policy delivered or issued for delivery in this
state may contain in substance the following provisions applicable to the
coverage for hospital or medical services or expenses provided under the
policy:
(a)
A provision that, when employees insured under the policy pay contributions
pursuant to subsection (1)(a) of this section, the continuation of insurance
under the policy is contingent upon the collection of individual contributions
by the union representing the employees when the policyholder is not a trustee
and by the policyholder or the policyholder’s agent when the policyholder is a
trustee.
(b)
A provision that, when employees insured under the policy pay contributions
pursuant to subsection (1)(a) of this section, the continuation of insurance
under the policy on each employee is contingent upon timely payment of
contributions by the employees and timely payment of the premium by the entity
responsible for collecting the individual contributions.
(c)
A provision that, when employees insured under the policy pay contributions
pursuant to subsection (1)(a) of this section, each individual premium rate
under the policy may be increased by not more than 20 percent, or by any higher
percentage approved by the Director of the Department of Consumer and Business
Services, during the period of cessation of work in order to provide sufficient
compensation to the insurer for increased administrative costs and increased
mortality and morbidity. If the policy contains the provision allowed under
this paragraph, an employee’s contribution paid under subsection (1)(a) of this
section shall be increased by the same percentage.
(d)
A provision that, when the policy is a policy insuring employees and which may
continue in effect as provided in subsection (1)(a) of this section, if the
premium is unpaid at the date of cessation of work and the premium became due
prior to such cessation of work, the continuation of insurance is contingent
upon payment of the premium prior to the date the next premium becomes due
under the terms of the policy.
(e)
Any provision with respect to the continuation of the policy as provided in
subsection (1)(a) of this section that the director may approve.
(3)
Nothing in this section shall be deemed to limit any right which the insurer
may have in accordance with the terms of a policy to increase or decrease the
premium rates before, during or after a cessation of work by employees insured
under the policy when the insurer had the right to increase the premium rates
even if the cessation of work did not occur. If such a premium rate change is
made, it shall be effective on such date as the insurer shall determine in
accordance with the terms of the policy.
(4)
Nothing in this section shall be deemed to require continuation of any coverage
in a group health insurance policy insuring employees and which may continue in
effect as provided in subsection (1)(a) of this section for longer than:
(a)
The time that 75 percent of insured employees continue such coverage;
(b)
For an individual employee, the time at which the employee takes full-time
employment with another employer; or
(c)
Six months after cessation of work by the insured employees. [1979 c.797 §2;
1981 c.395 §1]
743.528 Required provisions in group health
insurance policies. A group health insurance policy
shall contain in substance the following provisions:
(1)
A provision that, in the absence of fraud, all statements made by applicants,
the policyholder or an insured person shall be deemed representations and not
warranties, and that no statement made for the purpose of effecting insurance
shall avoid the insurance or reduce benefits unless contained in a written instrument
signed by the policyholder or the insured person, a copy of which has been
furnished to the policyholder or to the person or the beneficiary of the
person.
(2)
A provision that the insurer will furnish to the policyholder for delivery to
each employee or member of the insured group a statement in summary form of the
essential features of the insurance coverage of the employee or member, to whom
the insurance benefits are payable, and the applicable rights and conditions
set forth in ORS 743.527, 743.529, 743.600 to 743.610 and 743.760. If
dependents are included in the coverage, only one statement need be issued for
each family unit.
(3)
A provision that to the group originally insured may be added from time to time
eligible new employees or members or dependents, as the case may be, in
accordance with the terms of the policy. [1967 c.359 §463; 1981 c.752 §13; 1997
c.716 §23]
743.529 Continuation of benefits after
termination of group health insurance policy; rules.
(1) Every group health insurance policy that provides coverage for hospital or
medical services or expenses shall provide that the insurer shall continue its
obligation for benefits under the policy for any person insured under the
policy who is hospitalized on the date of termination if the policy is
terminated and immediately replaced by a group health insurance policy issued
by another insurer. Any payment required under this section is subject to all
terms, limitations and conditions of the policy except those relating to termination
of benefits. Any obligation by an insurer under this section continues until
the hospital confinement ends or hospital benefits under the policy are
exhausted, whichever is earlier.
(2)
The Director of the Department of Consumer and Business Services may adopt
rules providing for uninterrupted coverage for individuals insured under a
group health insurance policy providing coverage for hospital or medical
expenses, when such a policy is replaced by a policy of similar benefits,
whether issued by the same insurer or another. [1977 c.402 §5; 1991 c.182 §6]
743.530 Continuation of benefits after
injury or illness covered by workers’ compensation.
Every policy of group health insurance delivered or issued for delivery in this
state shall contain a provision applicable to the coverage for hospital or
medical services or expenses provided under the policy that if an employee
incurs an injury or illness for which a workers’ compensation claim is filed,
that policy will continue in effect with respect to that employee upon timely
payment by the employee of the premium that includes the individual
contribution and the contribution due from the employer under the applicable
benefit plan. The employee may maintain such coverage until whichever of the
following events first occurs:
(1)
The employee takes full-time employment with another employer; or
(2)
Six months from the date that the employee first makes payment under this
section. [1985 c.634 §2]
743.531 Direct payment of hospital and
medical services; rate limitations. (1) A group
health insurance policy may on request by the group policyholder provide that
all or any portion of any indemnities provided by such policy on account of
hospital, nursing, medical or surgical services may, at the insurer’s option,
be paid directly to the hospital or person rendering such services. However,
the amount of any such payment shall not exceed the amount of benefit provided
by the policy with respect to the service or billing of the provider of aid.
The amount of such payments pursuant to one or more assignments shall not
exceed the amount of expenses incurred on account of such hospitalization or
medical or surgical aid.
(2)
Nothing in this section is intended to authorize an insurer to:
(a)
Furnish or provide directly services of hospitals or physicians and surgeons;
or
(b)
Direct, participate in or control the selection of the specific hospital or
physician and surgeon from whom the insured secures services or who exercises
medical or dental professional judgment.
(3)
Nothing in subsection (2) of this section prevents an insurer from negotiating
and entering into contracts for alternative rates of payment with providers and
offering the benefit of such alternative rates to insureds who select such
providers. An insurer may utilize such contracts by offering a choice of plans
at the time an insured enrolls, one of which provides benefits only for
services by members of a particular provider organization with whom the insurer
has an agreement. If an insured chooses such a plan, benefits are payable only
for services rendered by a member of that provider organization, unless such
services were requested by a member of such organization or are rendered as the
result of an emergency.
(4)
Payment so made shall discharge the insurer’s obligation with respect to the
amount of insurance so paid.
(5)
Insurers shall provide group policyholders with a current roster of
institutional and professional providers under contract to provide services at
alternative rates under their group policy and shall also make such lists
available for public inspection during regular business hours at the insurer’s
principal office within this state. [1967 c.359 §464; 1985 c.747 §71; 1989
c.784 §23]
743.532 [1987
c.782 §2; repealed by 1989 c.1044 §7]
743.533 Leased workers; offering group
health insurance. (1) A leasing company may offer
group health insurance to its leased workers. If the leasing company does not
offer group health insurance to its leased workers, the client employer may
offer group health insurance to the leased workers.
(2)
If a leasing company offers group health insurance to its leased workers, the
leasing company shall offer group health insurance to all its leased workers in
the same manner. [2001 c.943 §5]
743.534 “Blanket health insurance”
defined. “Blanket health insurance” means that
form of a health insurance covering groups of persons defined in this section
and issued on one of the following bases:
(1)
Under a policy issued to a common carrier or to an operator, owner or lessee of
a means of transportation, who shall be deemed the policyholder, insuring a
group of persons who may become passengers and which group is defined by
reference to their travel status on such common carrier or means of
transportation.
(2)
Under a policy issued to an employer, who shall be deemed the policyholder,
insuring any group of employees, dependents or guests, defined by reference to
specified hazards incident to an activity or activities or operations of the
policyholder.
(3)
Under a policy issued to a college, school or other institution of learning, a
school district or districts, or school jurisdictional unit, or to the head,
principal or governing board of any such educational unit, who or which shall
be deemed the policyholder, insuring students, teachers or employees.
(4)
Under a policy issued to a religious, charitable, recreational, educational, or
civic organization, or branch thereof, which shall be deemed the policyholder,
insuring any group of members or participants defined by reference to specified
hazards incident to an activity or activities or operations sponsored or
supervised by such policyholder.
(5)
Under a policy issued to a sports team, camp or sponsor thereof, who shall be
deemed the policyholder, insuring members, campers, employees, officials or
supervisors.
(6)
Under a policy issued to a volunteer fire department, first aid, civil defense,
or other such volunteer organization, which shall be deemed the policyholder,
insuring any group of members or participants defined by reference to specified
hazards incident to an activity or activities or operations sponsored or
supervised by such policyholder.
(7)
Under a policy issued to a newspaper or other publisher, which shall be deemed
the policyholder, insuring its carriers.
(8)
Under a policy issued to an association, including a labor union, which has a
constitution and bylaws and which has been organized and is maintained in good
faith for purposes other than that of obtaining insurance, which shall be deemed
the policyholder, insuring any group of members or participants defined by
reference to specified hazards incident to an activity or activities or
operations sponsored or supervised by such policyholder.
(9)
Under a policy issued to cover any other risk or class of risks which, in the
discretion of the Director of the Department of Consumer and Business Services,
may be properly eligible for blanket health insurance. The discretion of the
director may be exercised on an individual risk basis or class of risks basis,
or both. [1967 c.359 §465]
743.537 Required provisions for blanket health
insurance policies. A blanket health insurance
policy shall contain provisions which in the opinion of the Director of the
Department of Consumer and Business Services are not less favorable to the
policyholder and the individual insureds than the provisions described in ORS
743.411, 743.423, 743.426, 743.429, 743.432, 743.438 and 743.441. [1967 c.359 §466]
743.540 Application and certificates not
required for blanket health insurance policies.
An individual application need not be required from a person insured under a
blanket health insurance policy, nor shall it be necessary for the insurer to
furnish each person a certificate. [1967 c.359 §467]
743.543 Payment of benefits under blanket health
insurance policies. All benefits under a blanket
health insurance policy shall be payable to the person insured, or to the
designated beneficiary or beneficiaries of the person, or to the estate of the
person, except that if the person insured is a minor or otherwise not competent
to give a valid release, such benefits may be made payable to the parent,
guardian or other person actually supporting the person. However, the policy
may provide that all or a portion of any indemnities provided by such policy on
account of hospital, nursing, medical or surgical services may, at the option
of the insurer and unless the insured requests otherwise in writing not later
than the time of filing proofs of such loss, be paid directly to the hospital
or person rendering such services; but the policy may not require that the
services be rendered by a particular hospital or person. Payment so made shall
discharge the obligation of the insurer with respect to the amount of insurance
so paid. [1967 c.359 §468]
743.546 Exemption of policy form approval
for blanket health insurance policies. The Director
of the Department of Consumer and Business Services may exempt from the policy
form filing and approval requirements of ORS 742.003, for so long as the
director deems proper, any blanket health insurance policy to which in the
opinion of the director such requirements may not practicably be applied, or
may dispense with such filing and approval whenever, in the opinion of the
director, it is not desirable or necessary for the protection of the public. [1967
c.359 §469]
743.549 Restriction on reduction of
benefits provisions in group and blanket health insurance policies.
No group or blanket health insurance policy providing hospital, medical or surgical
expense benefits, and which contains a provision for the reduction of benefits
otherwise payable thereunder on the basis of other existing coverages, shall
provide that such reduction operates to reduce total benefits payable below an
amount equal to 100 percent of total allowable expenses, except as provided for
in a collective bargaining agreement. [1973 c.143 §2; 1989 c.1080 §2]
743.550 Student health insurance.
(1) Student health insurance is subject to ORS 743.537, 743.540, 743.543,
743.546 and 743.549, except as provided in this section.
(2)
Coverage under a student health insurance policy may be mandatory for all
students at the institution, voluntary for all students at the institution, or
mandatory for defined classes of students and voluntary for other classes of
students. As used in this subsection, “classes” refers to undergraduates,
graduate students, domestic students, international students or other like
classifications. Any differences based on a student’s nationality may be
established only for the purpose of complying with federal law in effect when
the policy is issued.
(3)
When coverage under a student health insurance policy is mandatory, the
policyholder may allow any student subject to the policy to decline coverage if
the student provides evidence acceptable to the policyholder that the student
has similar health coverage.
(4)
A student health insurance policy may provide for any student to purchase
optional supplemental coverage.
(5)
Student health insurance coverage for athletic injuries may:
(a)
Exclude coverage for injuries of students who have not obtained medical release
for a similar injury; and
(b)
Be provided in excess of or in addition to any other coverage under any other
health insurance policy, including a student health insurance policy.
(6)
A student health insurance policy may provide that coverage under the policy is
secondary to any other health insurance for purposes of guidelines established
under ORS 743.552.
(7)
A student health insurance policy may provide, on request by the policyholder,
that all or any portion of any indemnities provided by such policy on account
of hospital, nursing, medical or surgical services may, at the insurer’s
option, be paid directly to the hospital or person rendering such services.
However, the amount of any such payment shall not exceed the amount of benefit
provided by the policy with respect to the service or billing of the provider
of aid. The amount of such payments pursuant to one or more assignments shall
not exceed the amount of expenses incurred on account of such hospitalization
or medical or surgical aid.
(8)
An insurer providing student health insurance as primary coverage may negotiate
and enter into contracts for alternative rates of payment with providers and
offer the benefit of such alternative rates to insureds who select such
providers. An insurer may utilize such contracts by offering a choice of plans
at the time an insured enrolls, one of which provides benefits only for
services by members of a particular provider organization with whom the insurer
has an agreement. If an insured chooses such a plan, benefits are payable only
for services rendered by a member of that provider organization, unless such
services were requested by a member of such organization or are rendered as the
result of an emergency.
(9)
Payments made under subsection (8) of this section shall discharge the insurer’s
obligation with respect to the amount of insurance paid.
(10)
An insurer shall provide each student health insurance policyholder with a
current roster of institutional and professional providers under contract to
provide services at alternative rates under the group policy and shall also
make such lists available for public inspection during regular business hours
at the insurer’s principal office within this state.
(11)
As used in this section, “student health insurance” means that form of health
insurance under a policy issued to a college, school or other institution of
learning, a school district or districts, or school jurisdictional unit, or
recognized student government at a public university listed in ORS 352.002, or
to the head, principal or governing board of any such educational unit, who or
which shall be deemed the policyholder, that is available exclusively to
students at the college, school or other institution. [1995 c.623 §2; 2011
c.637 §289]
743.552 Guidelines for application of ORS
743.549; rules. The Director of the Department
of Consumer and Business Services shall by rule establish guidelines for the
application of ORS 743.549, including:
(1)
The procedures by which persons insured under such policies are to be made
aware of the existence of such a provision;
(2)
The benefits which may be subject to such a provision;
(3)
The effect of such a provision on the benefits provided;
(4)
Establishment of the order of benefit determination; and
(5)
Reasonable claim administration procedures to expedite claim payments under
such a provision which shall include a time limit of 14 days beyond which the
insurer shall not delay payment of a claim by reason of the application of
coordination of benefits provision. [1973 c.143 §3]
743.555 [1973
c.143 §4; repealed by 2005 c.22 §495]
743.556 [1987
c.411 §2; 1989 c.721 §55; 1991 c.67 §198; 1991 c.470 §19; 1991 c.654 §2; 1999
c.1086 §1; 2001 c.900 §217; 2003 c.33 §5; 2005 c.705 §1; 2007 c.71 §240;
renumbered 743A.168 in 2007]
743.557 [1975
c.698 §2; 1977 c.632 §3; 1981 c.319 §2; 1983 c.601 §5; repealed by 1987 c.411 §9]
743.558 [1973
c.613 §2; 1983 c.601 §6; repealed by 1987 c.411 §9]
743.559 [1983
c.601 §12; repealed by 1991 c.182 §20]
743.560 Minimum grace period; notice upon
termination of policy; effect of failure to notify.
(1) A group health insurance policy shall contain a provision allowing a minimum
grace period of 10 days after the premium due date for payment of premium.
(2)
An insurer of a group health insurance policy providing coverage for hospital
or medical expenses, other than coverage limited to expenses from accidents or
specific diseases, that seeks to terminate a policy for nonpayment of premium
shall notify the policyholder as described in ORS 743.565.
(3)
An insurer of a group health insurance policy providing coverage for hospital
or medical expenses, other than coverage limited to expenses from accidents or
specific diseases, shall notify the group policyholder when the policy is
terminated and the coverage is not replaced by the group policyholder. The
notice required under this subsection:
(a)
Must be given on a form prescribed by the Department of Consumer and Business
Services;
(b)
Must explain the rights of the certificate holders regarding continuation of
coverage provided by federal and state law and portability coverage in
accordance with ORS 743.760; and
(c)
Must be given by mail and must be mailed not later than 10 working days after
the date on which the group policy terminates according to the terms of the
policy.
(4)
A group health insurance policy to which subsection (3) of this section applies
shall contain a provision requiring the insurer to notify the group
policyholder when the policy is terminated and the coverage is not replaced by
the group policyholder. Each certificate issued under the policy shall also
contain a statement of the provision required under this subsection.
(5)
If an insurer fails to give notice as required by this section, the insurer
shall continue the group health insurance policy of the group policyholder in
full force from the date notice should have been provided until the date that
the notice is received by the policyholder and shall waive the premiums owing
for the period for which the coverage is continued under this subsection. The
time period within which the certificate holder may exercise any right to
continuation or portability shall commence on the date that the policyholder
receives the notice.
(6)
The insurer shall supply the employer holding the terminated policy with the
necessary information for the employer to be able to notify properly the
employee of the employee’s right to continuation of coverage under state and
federal law and portability coverage in accordance with ORS 743.760. [1991
c.673 §§3,4; 1993 c.454 §1; 1997 c.716 §24; 2001 c.943 §11]
743.561
[Formerly 739.565; renumbered 743.371 in 1989]
743.562 Applicability of ORS 743.560.
ORS 743.560 applies to multiple employer trusts when an employer ceases to
participate therein. [1991 c.673 §5]
743.564
[Formerly 739.570; 1969 c.336 §13; 1989 c.1073 §1; renumbered 743.372 in 1989]
743.565 Separate notice to policyholder
required before cancellation of individual or group health insurance policy for
nonpayment of premium. Before a health insurer selling
an individual policy or group health benefit plan, as defined in ORS 743.730,
may cancel a policy for nonpayment of premium, the insurer must mail a separate
notice to the policyholder at least 10 days prior to the end of the grace
period informing the policyholder that the premium was not received and that
the policy will be terminated as of the premium due date if the premium is not
received by the end of the applicable grace period required by ORS 743.417 and
743.560. The notice shall be in writing and mailed by first class mail to the
last-known address of the policyholder. [2001 c.943 §8]
743.566 Rules for certain notice
requirements. The Director of the Department of
Consumer and Business Services shall adopt rules necessary for the
implementation and administration of ORS 743.565 and the amendments to ORS
743.417, 743.420, 743.560, 743.737, 743.754 and 743.766 by sections 9 to 14,
chapter 943, Oregon Laws 2001. [2001 c.943 §16]
Note:
743.566 was enacted into law by the Legislative Assembly but was not added to
or made a part of ORS chapter 743 or any series therein by legislative action.
See Preface to Oregon Revised Statutes for further explanation.
743.567
[Formerly 739.575; renumbered 743.373 in 1989]
743.570 [1967
c.359 §473; renumbered 743.374 in 1989]