2007 Oregon Code - Chapter 731 :: TITLE 56
TITLE 56
INSURANCE
Chapter 731. Administration and General Provisions
732. Organization and Corporate Procedures of
Domestic Insurers; Regulation of Insurers Generally
733. Accounting and Investments
734. Rehabilitation, Liquidation and
Conservation of Insurers
735. Alternative Insurance
737. Rates and Rating Organizations
742. Insurance Policies Generally; Property and
Casualty Policies
743. Health and Life Insurance
743A. Health Insurance: Required Reimbursements
744. Insurance Producers; Life Settlement
Providers, Brokers and Contracts; Adjusters; Consultants; Third Party
Administrators; Reinsurance Intermediaries; Rental Company Limited Licenses
746. Trade Practices
748. Fraternal Benefit Societies
750. Health Care Service Contractors; Multiple
Employer Welfare Arrangements; Legal Expense Organizations
752. Professional Liability Funds
_______________
Chapter 731
Administration and General Provisions
2007 EDITION
ADMINISTRATION AND GENERAL PROVISIONS
INSURANCE
SHORT TITLE; PURPOSE AND CONSTRUCTION
731.004 Short
title
731.008 Purpose
of Insurance Code
731.012 Effect
of federal law
731.016 Construction
of Insurance Code
APPLICATION OF INSURANCE CODE
731.022 Compliance
with Insurance Code required
731.026 Application
of Insurance Code to particular insurers
731.028 Applicability
of certain Insurance Code provisions to State Accident Insurance Fund
Corporation
731.036 Persons
completely exempt from application of Insurance Code
731.038 Application
of Insurance Code to charitable organizations that issue charitable gift
annuities
731.039 Requirements
for certain educational institutions or nonprofit corporations issuing
charitable gift annuities
731.042 Certificate
of exemption; application of certain Insurance Code provisions to exempt
insurers
731.046 Exemption
of policies from Securities Law
DEFINITIONS GENERALLY
731.052 Insurance
Code definitions
731.056 Action
731.066 Authorized,
unauthorized insurer
731.069 Certificate,
certificate holder
731.072 Certificate
of authority, license
731.074 Commercial
liability insurance
731.076 Department,
director
731.082 Domestic,
foreign, alien insurer
731.086 Domestic
risk
731.092 Domicile
731.096 Domicile
of alien insurer
731.102 Insurance
731.104 Insurance
producer
731.106 Insurer
731.112 Judgment
731.116 Person
731.122 Policy
731.126 Reinsurance
731.132 Required
capitalization
731.136 State
731.142 Stock,
mutual and reciprocal insurer
731.144 Surplus
lines insurance
731.146 Transact
insurance
CLASSES OF INSURANCE DEFINED
731.150 Definitions
of classes of insurance not mutually exclusive
731.154 Annuity
731.156 Variable
life insurance; variable annuity
731.158 Casualty
insurance
731.162 Health
insurance
731.164 Home
protection insurance, home protection insurer
731.166 Industrial
life insurance
731.170 Life
insurance; includes annuities
731.174 Marine
and transportation insurance
731.178 Mortgage
insurance
731.182 Property
insurance
731.186 Surety
insurance
731.190 Title
insurance
731.194 Wet
marine and transportation insurance
INSURANCE ADMINISTRATION
731.216 Administrative
power of director
731.228 Prohibited
interests and rewards
731.232 Subpoena
power
731.236 General
powers and duties
731.240 Hearings
in general
731.244 Rules
731.248 Orders
731.252 Cease
and desist orders
731.256 Enforcement
generally
731.258 Enforcement
of orders and decisions by Attorney General; filing, enforcement and effect of
foreign decrees
731.260 False
or misleading filings
731.264 Complaints
and investigations confidential; permitted disclosures; rules
731.268 Use
of reproductions and certified copies as evidence; fee
731.272 Directors
annual reports; notice of publication of report
731.276 Recommendations
for changes in Insurance Code
731.280 Publications
authorized
731.282 Authority
to sell publications
731.284 Distribution
of insurance laws
731.288 Recording
complaints; director to consider complaints before issuing licenses
731.292 Disposition
of fees, charges, taxes, penalties and other moneys
731.296 Directors
inquiries
731.300 Examination
of insurers; when required
731.302 Appointment
of examiners; retaining of appraisers, actuaries and others; evidentiary status
of facts and conclusions
731.304 Investigation
of persons transacting insurance
731.308 Procedure
at examination or investigation; production of books and other records
731.312 Report
of examination; review by person examined; hearing; confidentiality of certain
information and documents; permitted disclosures
731.314 Immunity
for director, examiner and others
731.316 Expenses
of examination of insurer
731.324 Service
of process on Secretary of State; notice to unauthorized insurer
731.328 Deposits
by unauthorized insurers in actions or proceedings
AUTHORIZATION OF INSURERS AND GENERAL
REQUIREMENTS
731.354 Certificate
of authority required
731.356 Unauthorized
insurance transaction enforcement
731.358 Requirements
of domestic insurers generally
731.362 Requirements
of foreign or alien insurers generally
731.363 Authorized
foreign insurer becoming domestic insurer
731.364 Domestic
insurer transferring domicile to another state
731.365 Effect
of transfer of domicile by domestic or foreign insurer; notice to director by
transferring insurer
731.367 Transfer
of domicile by unincorporated authorized foreign insurer
731.369 Requirements
of reciprocal insurers generally
731.370 Reciprocal
insurers financial statement; service of process
731.371 Powers
of reciprocal insurer regarding real estate
731.374 Exemptions
to certificate of authority requirement
731.378 Foreign
and alien insurers exempt from laws governing admission of foreign and alien
corporations
731.380 Authority
of foreign and alien insurers to take, acquire, hold and enforce notes secured
by mortgages; statement; fees
731.381 Exemption
from taxes for foreign and alien insurers engaging in activities authorized by
ORS 731.380
731.382 General
eligibility for certificate of authority
731.385 Standards
for determining whether continued operation of insurer is hazardous; rules;
order; hearing
731.386 Management
of insurers
731.390 Government
insurers not to be authorized
731.394 Combinations
of insuring powers in one insurer
731.396 Certificate
of authority and good financial condition required to issue variable life
insurance or variable annuity policies
731.398 Amendment
of certificate of authority
731.402 Issuance
or refusal of certificate of authority
731.406 What
certificate evidences; ownership of certificate
731.410 Continuance,
expiration or reinstatement of certificate of authority
731.414 Suspension
or revocation of certificate of authority; mandatory grounds
731.418 Grounds
for suspension or revocation of certificate of authority
731.422 Order
of suspension, revocation or refusal; effect upon insurance producers
authority
731.426 Duration
of suspension; insurers obligations during suspension period; reinstatement
731.428 Written
consent to engage or participate in business of insurance; rules
731.430 Name
of insurer
731.434 Registered
office and agent
731.438 Title
plant requirement for title insurers; posting of indexes; plant ownership and
maintenance
731.439 Satisfaction
of requirements of ORS 731.438 (1) by certain title plants
731.442 Prohibition
on transacting life insurance business on mutual assessment plan
731.446 Policyholder
deposits
731.450 Unrelated
business prohibited; exceptions; title insurer as escrow agent
731.454 Domestic
insurers not to transact business in jurisdiction where not authorized
731.458 Exchange
of reciprocal or interinsurance contracts
731.462 Nonassessable
policies of reciprocal insurer
731.466 Power
of attorney for reciprocal insurer
731.470 Attorney
for reciprocal insurer
731.475 Records
storage required of workers compensation insurers; examination and audit of
records
731.480 Guaranty
contracts issued by workers compensation insurers
731.482 Withdrawal
from, failure to renew or cancellation of line by commercial liability insurer
731.484 Prohibition
on certain sales related to group health and group life insurance
731.485 Conditions
under which insurer may limit insureds choice of drug outlets and pharmacies
731.486 Exemption
from definition of transact insurance for group life policies; master group
health insurance coverage; rules
731.488 Annual
audit of insurer; rules
LIMIT OF RISK; REINSURANCE
731.504 Limit
of risk
731.508 Approved
reinsurance
731.509 Legislative
intent; criteria for allowing credit for reinsurance
731.510 Criteria
for allowing reduction from liability for reinsurance
731.511 Criteria
to be met by assuming insurer in order to be accredited as reinsurer
731.512 Withdrawal
of insurer; reinsurance
731.516 Mortgage
insurance limitation
CAPITAL AND SURPLUS
731.554 Capital
and surplus requirements
731.562 Title
insurer capital and surplus requirements
731.566 Reciprocal
insurer surplus requirements
731.570 Withdrawing
advancements made to reciprocal insurer
731.574 Annual
financial statement
REPORTS OF CRIMINAL CONDUCT
731.590 Insurer
defined for ORS 731.592 and 731.594
731.592 Reporting
criminal conduct involving insurance
731.594 Immunity
from civil liability
DEPOSITS
731.604 Acceptance
of deposits of insurers
731.608 Purpose
of deposit
731.612 Rights
of insurer regarding deposits
731.616 Valuation
of deposits; deficiencies
731.620 Assignment
of deposited securities
731.624 Special
deposits; foreign and alien insurers
731.628 Deposit
required of workers compensation insurers
731.632 Deposit
required of domestic reciprocal insurers; exception
731.636 Deposit
or trusteed assets of alien insurer required
731.640 Eligible
deposits; rules
731.642 Contracts
for security deposits
731.644 Payment
of losses out of deposits, generally
731.648 Duration
and release of deposit
731.652 Proofs
for release of deposit to insurers; directors responsibility
EXCHANGE OF INFORMATION BY REGULATORS
731.730 Insurer
filings with National Association of Insurance Commissioners
731.731 Immunity
for certain persons dealing with information collected from filings under ORS
731.730
731.735 Certain
information confidential
731.737 Immunity
from liability for certain persons filing reports or furnishing information
about specified activities to specified persons
CONFIDENTIALITY OF REPORTS
731.750 Confidentiality
of report of material acquisitions or dispositions of assets, material
nonrenewals, cancellations and revisions of ceded reinsurance agreements
731.752 Confidentiality
of report used for determination of required amount of capital or surplus;
confidentiality of financial plan of action and report of examination connected
with plan
731.754 Permissible
uses of reports and plans described in ORS 731.752
INSURANCE COMPLIANCE AUDIT REPORTS
731.760 Definitions
for ORS 731.760 to 731.770
731.761 Privileged
information
731.762 Authority
of director
731.764 Waiver
of privilege; permitted disclosures
731.766 Petition
for in camera hearing; hearing; compelled disclosure
731.768 Privilege;
exceptions
731.770 Other
privileges or limitations pertaining to audit document
ASSESSMENTS, FEES AND TAXES
731.804 Assessments;
rules; fees; how determined
731.808 Gross
amount of premiums defined
731.812 Foreign
and alien insurers report of
731.820 Gross
premium tax on fire insurance premiums
731.822 Prepayment
of tax due
731.824 Tax
on underwriting profits of wet marine and transportation insurers
731.828 Computation
of wet marine and transportation insurance tax
731.836 Limitation
on enforcement of insurers tax obligations
731.840 Retaliatory
or corporate excise tax in lieu of certain taxes; certain local taxes
prohibited
731.841 Conditions
under which local authority to tax insurer is preempted
731.842 Adjustment
of amount to be prepaid for taxes; extension of time for payment; interest;
penalty for late payment
731.844 No
personal liability for paying invalid tax
RETALIATORY PROVISIONS
731.854 Retaliatory
tax
731.859 Applicability
of retaliatory provisions
PENALTIES
731.988 Civil
penalties
731.992 Criminal
penalty
SHORT TITLE; PURPOSE AND CONSTRUCTION
731.004
Short title. ORS chapters
731, 732, 733, 734, 735, 737, 742, 743, 743A, 744, 746, 748 and 750 may be
cited as the Insurance Code. [1967 c.359 §1; 1973 c.97 §1; 1975 c.769 §1]
731.008
Purpose of Insurance Code.
The Legislative Assembly declares that the Insurance Code is for the protection
of the insurance-buying public. [Formerly 736.003]
731.010 [Repealed by 1965 c.241 §3]
731.012
Effect of federal law. The
Insurance Code shall regulate the business of insurance and every person
engaged therein in accordance with the intent of Congress as expressed in the
Act of March 9, 1945, as amended (Public Law 15, 79th Congress, 15 U.S.C. 1011
to 1014) which states in part that no Act of Congress shall be construed to
invalidate, impair or supersede any law enacted by any state for the purpose of
regulating the business of insurance, or which imposes a fee or tax upon such
business, unless such Act specifically relates to the business of insurance. [1967
c.359 §3]
731.016
Construction of Insurance Code.
The Insurance Code shall be liberally construed and shall be administered and
enforced by the Director of the Department of Consumer and Business Services to
give effect to the policy stated in ORS 731.008. [1967 c.359 §4]
731.020 [Repealed by 1965 c.241 §3]
APPLICATION
OF INSURANCE CODE
731.022
Compliance with Insurance Code required. No person shall transact insurance in this state or relative to a
domestic risk without complying with the applicable provisions of the Insurance
Code. [1967 c.359 §5]
731.026
Application of Insurance Code to particular insurers. The Insurance Code applies to:
(1) A fraternal benefit society complying
with ORS chapter 748, only as provided in such chapter.
(2) A health care service contractor
complying with ORS 750.005 to 750.095, only as provided in such sections.
(3) A legal expense organization complying
with ORS 750.505 to 750.715, only as provided in such sections.
(4) A multiple employer welfare
arrangement complying with ORS 750.301 to 750.341, only as provided in such
sections. [1967 c.359 §6; 1971 c.425 §1; 1973 c.97 §2; 1975 c.769 §2; 1989
c.331 §23; 1993 c.265 §2; 1993 c.615 §26; 2005 c.31 §6]
731.028
Applicability of certain Insurance Code provisions to State Accident Insurance
Fund Corporation. (1) The
State Accident Insurance Fund Corporation is subject as a domestic insurer to
ORS 731.248, 731.252, 731.256, 731.258, 731.260, 731.296 to 731.316, 731.488,
731.574, 731.592, 731.594, 731.730, 731.731, 731.735, 731.737, 731.988,
731.992, 733.010 to 733.060, 733.140 to 733.170, 733.210, 737.205, 737.215,
737.225, 737.235 to 737.340, 737.505 and 737.560, ORS chapters 742, 743, 743A
and 744 and ORS 746.015, 746.075, 746.110, 746.145 to 746.155, 746.230 and
746.240. However:
(a) The requirements of the Director of
the Department of Consumer and Business Services under ORS 733.010 to 733.060,
733.140 to 733.170 and 733.210 govern in the case of a conflict between those
requirements and the requirements of any accounting system prescribed by the
Oregon Department of Administrative Services.
(b) The filing requirements of ORS 737.205
to 737.340, 737.505 and 737.560 are in lieu of any similar filing requirements
prescribed by any other law of this state.
(c) The requirements of ORS chapters 743
and 743A are applicable only with respect to excess workers compensation
insurance furnished by the corporation.
(d) The provisions of ORS chapter 744
apply only with respect to the regulation of insurance producers.
(e) For each year that the Secretary of
State conducts an audit of the State Accident Insurance Fund Corporation under
ORS 297.210, the director may accept the audit and a copy of the Secretary of
States audit report in lieu of the requirements of ORS 731.488 if the director
determines that the purposes of ORS 731.488 are adequately served by the
Secretary of States audit and report. The Secretary of State shall file a copy
of its audit report of the State Accident Insurance Fund Corporation with the
director.
(2) The provisions of subsection (1) of
this section govern in the case of a conflict between those provisions and the
provisions of ORS chapter 656 that apply only to the State Accident Insurance Fund
Corporation. [1971 c.385 §2; 1977 c.405 §5; 1979 c.815 §7; 1979 c.829 §7; 1987
c.884 §4; 1989 c.701 §69; 1991 c.340 §1; 1991 c.401 §31; 1993 c.447 §116; 1995
c.79 §356; 1999 c.633 §5; 2003 c.364 §63; 2003 c.689 §1]
731.030 [Repealed by 1965 c.241 §3]
731.032 [1967 c.359 §7; 1971 c.69 §1; 1971 c.538 §1;
1979 c.848 §1; 1993 c.265 §3; repealed by 2003 c.802 §173]
731.036
Persons completely exempt from application of Insurance Code. The Insurance Code does not apply to any of
the following to the extent of the subject matter of the exemption:
(1) A bail bondsman, other than a
corporate surety and its agents.
(2) A fraternal benefit society that has
maintained lodges in this state and other states for 50 years prior to January
1, 1961, and for which a certificate of authority was not required on that
date.
(3) A religious organization providing
insurance benefits only to its employees, which organization is in existence
and exempt from taxation under section 501(c)(3) of the federal Internal
Revenue Code on September 13, 1975.
(4) Public bodies, as defined in ORS
30.260, that either individually or jointly establish a self-insurance program
for tort liability in accordance with ORS 30.282.
(5) Public bodies, as defined in ORS
30.260, that either individually or jointly establish a self-insurance program
for property damage in accordance with ORS 30.282.
(6) Cities, counties, school districts,
community college districts, community college service districts or districts,
as defined in ORS 198.010 and 198.180, that either individually or jointly
insure for health insurance coverage, excluding disability insurance, their
employees or retired employees, or their dependents, or students engaged in
school activities, or combination of employees and dependents, with or without
employee or student contributions, if all of the following conditions are met:
(a) The individual or jointly self-insured
program meets the following minimum requirements:
(A) In the case of a school district,
community college district or community college service district, the number of
covered employees and dependents and retired employees and dependents
aggregates at least 500 individuals;
(B) In the case of an individual public
body program other than a school district, community college district or
community college service district, the number of covered employees and
dependents and retired employees and dependents aggregates at least 500
individuals; and
(C) In the case of a joint program of two
or more public bodies, the number of covered employees and dependents and
retired employees and dependents aggregates at least 1,000 individuals;
(b) The individual or jointly self-insured
health insurance program includes all coverages and benefits required of group
health insurance policies under ORS chapters 743 and 743A;
(c) The individual or jointly self-insured
program must have program documents that define program benefits and
administration;
(d) Enrollees must be provided copies of
summary plan descriptions including:
(A) Written general information about
services provided, access to services, charges and scheduling applicable to
each enrollees coverage;
(B) The programs grievance and appeal
process; and
(C) Other group health plan enrollee
rights, disclosure or written procedure requirements established under ORS
chapters 743 and 743A;
(e) The financial administration of an
individual or jointly self-insured program must include the following
requirements:
(A) Program contributions and reserves
must be held in separate accounts and used for the exclusive benefit of the
program;
(B) The program must maintain adequate
reserves. Reserves may be invested in accordance with the provisions of ORS
chapter 293. Reserve adequacy must be calculated annually with proper actuarial
calculations including the following:
(i) Known claims, paid and outstanding;
(ii) A history of incurred but not
reported claims;
(iii) Claims handling expenses;
(iv) Unearned contributions; and
(v) A claims trend factor; and
(C) The program must maintain adequate
reinsurance against the risk of economic loss in accordance with the provisions
of ORS 742.065 unless the program has received written approval for an
alternative arrangement for protection against economic loss from the Director
of the Department of Consumer and Business Services;
(f) The individual or jointly self-insured
program must have sufficient personnel to service the employee benefit program
or must contract with a third party administrator licensed under ORS chapter
744 as a third party administrator to provide such services;
(g) The individual or jointly self-insured
program shall be subject to assessment in accordance with ORS 735.614 and
former enrollees shall be eligible for portability coverage in accordance with
ORS 735.616;
(h) The public body, or the program
administrator in the case of a joint insurance program of two or more public
bodies, files with the Director of the Department of Consumer and Business
Services copies of all documents creating and governing the program, all forms
used to communicate the coverage to beneficiaries, the schedule of payments
established to support the program and, annually, a financial report showing
the total incurred cost of the program for the preceding year. A copy of the
annual audit required by ORS 297.425 may be used to satisfy the financial
report filing requirement; and
(i) Each public body in a joint insurance
program is liable only to its own employees and no others for benefits under
the program in the event, and to the extent, that no further funds, including
funds from insurance policies obtained by the pool, are available in the joint
insurance pool.
(7) All ambulance services.
(8) A person providing any of the services
described in this subsection. The exemption under this subsection does not
apply to an authorized insurer providing such services under an insurance
policy. This subsection applies to the following services:
(a) Towing service.
(b) Emergency road service, which means
adjustment, repair or replacement of the equipment, tires or mechanical parts
of a motor vehicle in order to permit the motor vehicle to be operated under
its own power.
(c) Transportation and arrangements for
the transportation of human remains, including all necessary and appropriate
preparations for and actual transportation provided to return a decedents
remains from the decedents place of death to a location designated by a person
with valid legal authority under ORS 97.130.
(9)(a) A person described in this
subsection who, in an agreement to lease or to finance the purchase of a motor
vehicle, agrees to waive for no additional charge the amount specified in
paragraph (b) of this subsection upon total loss of the motor vehicle because
of physical damage, theft or other occurrence, as specified in the agreement.
The exemption established in this subsection applies to the following persons:
(A) The seller of the motor vehicle, if
the sale is made pursuant to a motor vehicle retail installment contract.
(B) The lessor of the motor vehicle.
(C) The lender who finances the purchase
of the motor vehicle.
(D) The assignee of a person described in
this paragraph.
(b) The amount waived pursuant to the
agreement shall be the difference, or portion thereof, between the amount
received by the seller, lessor, lender or assignee, as applicable, which
represents the actual cash value of the motor vehicle at the date of loss, and
the amount owed under the agreement. [1967 c.359 §8; 1975 c.314 §1; 1977 c.428 §4;
1981 c.891 §1; 1985 c.811 §1; 1987 c.97 §1; 1987 c.288 §1; 1991 c.958 §2; 1993
c.265 §4; 1995 c.79 §357; 1995 c.582 §1; 1995 c.629 §1; 1997 c.795 §3; 1999
c.502 §4; 2003 c.342 §1; 2005 c.175 §1; 2007 c.174 §1; 2007 c.826 §1]
731.038
Application of Insurance Code to charitable organizations that issue charitable
gift annuities. (1) As used
in this section:
(a) Charitable gift annuity has the
meaning given that term in section 501(m)(5) of the Internal Revenue Code, as
amended and in effect on January 1, 2006.
(b) Charitable organization means an
organization to which contributions may be made that are charitable
contributions under section 170(c) of the Internal Revenue Code, as amended and
in effect on January 1, 2006.
(2) The Insurance Code does not apply to a
charitable organization that issues charitable gift annuities if, on the date
that the charitable organization issues the charitable gift annuity, the
charitable organization:
(a) Has a minimum of $300,000 in net
assets as shown by an annual audited financial statement prepared by an
independent certified public accountant and kept on file by the charitable
organization;
(b) Except as provided in subsection (3)
of this section, has been in continuous operation for at least five years or is
a successor to or an affiliate of a charitable organization that has been in
continuous operation for at least five years; and
(c) Maintains a separate and distinct
trust fund as a reserve fund adequate to meet the future payments under all
outstanding annuity agreements. The amount in the reserve fund must be an
amount no less than an amount computed on the basis of the transfers to which
it relates in accordance with the standard of valuation based on current
mortality tables and interest rate recommended by a national organization
organized for the purpose of providing educational and other services to
American charities regarding gift annuities and other forms of planned gifts.
The reserve fund may include one or more single premium annuities that pay the
entire amount of one or more charitable gift annuities issued by the charitable
organization if each single premium annuity is issued by an authorized insurer
that is also authorized to transact insurance in the state in which the
charitable organization has its principal office and in the state in which the
single premium annuity is issued.
(3) The Insurance Code does not apply to
an educational institution or nonprofit corporation that issued a charitable
gift annuity before January 1, 2006, under a certificate of authority issued
under ORS 731.704 (repealed in 2005).
(4) When a charitable organization that is
subject to subsection (2) of this section enters into an agreement for a
charitable gift annuity, the charitable organization shall disclose in writing
to the donor that the charitable gift annuity is not issued by an insurance
company, is not subject to regulation by the State of Oregon and is not
protected by an insurance guaranty association.
(5) A charitable organization that is not
subject to subsection (2) of this section must hold a certificate of authority
to issue charitable gift annuities. [2005 c.31 §2]
Note: 731.038 was added to and made a part of the
Insurance Code by legislative action but was not added to ORS chapter 731 or
any series therein. See Preface to Oregon Revised Statutes for further
explanation.
731.039
Requirements for certain educational institutions or nonprofit corporations
issuing charitable gift annuities. ORS 731.038 (2)(a) and (b) does not apply to an educational
institution or nonprofit corporation that holds a certificate of authority
issued under ORS 731.704 (repealed in 2005) on the day before January 1, 2006.
An educational institution or nonprofit corporation subject to this section
shall keep on file an annual audited financial statement prepared by an
independent certified public accountant. [2005 c.31 §3]
Note: 731.039 was enacted into law by the
Legislative Assembly but was not added to or made a part of ORS chapter 731 or
any series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.
731.040 [Repealed by 1965 c.241 §3]
731.042
Certificate of exemption; application of certain Insurance Code provisions to
exempt insurers. (1) An
exempt insurer who holds a certificate of exemption issued by the Director of
the Department of Consumer and Business Services before January 1, 2003, may
continue transacting insurance.
(2) In order to continue a certificate of
exemption, an exempt insurer to whom subsection (1) of this section applies
must file its annual statement and pay the fees established by the director by
March 1 of each year.
(3) An exempt insurer shall be subject to
ORS 731.296 to 731.316, 731.414, 731.418, 731.574, 731.988, 731.992, 733.010 to
733.115, 733.140 to 733.210, 743A.040, 746.075 and 746.110. [Formerly 736.020;
1979 c.870 §1; 1981 c.752 §15; 1989 c.413 §2; 2003 c.802 §174; 2005 c.22 §485]
731.046
Exemption of policies from Securities Law. Any policy, other than a variable annuity policy, whose form has been
filed with and approved by the Director of the Department of Consumer and
Business Services is exempt from the application of ORS 59.005 to 59.451,
59.710 to 59.830, 59.991 and 59.995, and the marketing of such policy is
likewise exempt. [1967 c.359 §10; 2007 c.393 §2]
731.050 [Repealed by 1965 c.241 §3]
DEFINITIONS
GENERALLY
731.052
Insurance Code definitions.
Except where the context otherwise requires, the definitions given in the
Insurance Code govern its construction. [1967 c.359 §11]
731.056
Action. Action means any
action, suit or legal proceeding. [1967 c.359 §12]
731.060 [Repealed by 1965 c.241 §3]
731.062 [1967 c.359 §13; 1991 c.810 §1; 2001 c.191 §20;
2003 c.364 §1; renumbered 731.104 in 2003]
731.066
Authorized, unauthorized insurer. (1) An authorized insurer is one authorized by a subsisting
certificate of authority to transact insurance in this state.
(2) An unauthorized insurer is one not
so authorized. [1967 c.359 §14]
731.069
Certificate, certificate holder. (1) Certificate means a written statement evidencing the coverage of
a person insured under a group insurance policy.
(2) Certificate holder means an employee
or member of a group insured under a group insurance policy. [1981 c.752 §11]
731.070 [Repealed by 1965 c.241 §3]
731.072
Certificate of authority, license. (1) A certificate of authority is one issued by the Director of the
Department of Consumer and Business Services pursuant to the Insurance Code
evidencing the authority of an insurer to transact insurance in this state.
(2) A license is authority granted by
the director pursuant to the Insurance Code for the licensee to engage in a
business or operation of insurance in this state other than as an insurer, and
the certificate by which such authority is evidenced. [1967 c.359 §15]
731.074
Commercial liability insurance. (1) Commercial liability insurance means insurance for a business,
professional, nonprofit or governmental entity against legal, contractual or
assumed liability for death, injury or disability of any human, or for damage
to property, arising out of acts or omissions in the course of the conduct of
the entity.
(2) Commercial liability insurance does
not include the following lines of insurance or classes of business:
(a) Marine and transportation insurance;
(b) Wet marine and transportation
insurance;
(c) FAIR plans and automobile assigned
risk insurance;
(d) Workers compensation and employers
liability insurance;
(e) Nuclear liability insurance;
(f) Fidelity and surety insurance;
(g) Hazardous waste and environmental
impairment insurance;
(h) Aviation insurance; or
(i) Commercial automobile insurance.
(3) As used in this section, commercial
automobile means a four wheel passenger or station wagon type of vehicle used
as a public or private conveyance, including a motor vehicle of the utility,
pickup, sedan delivery or panel truck type used for wholesale or retail
delivery, and a farm truck. [1987 c.774 §32]
Note: 731.074 was added to and made a part of the
Insurance Code but was not added to ORS chapter 731 or any series therein by
legislative action. See Preface to Oregon Revised Statutes for further
explanation.
731.076
Department, director.
(1) Department means the Department of Consumer and Business Services.
(2) Director means the Director of the
Department of Consumer and Business Services. [1967 c.359 §16; 1987 c.373 §76;
1993 c.744 §28]
731.080 [Repealed by 1965 c.241 §3]
731.082
Domestic, foreign, alien insurer. (1) Domestic insurer means an insurer formed under the laws of this
state.
(2) Foreign insurer means an insurer
formed under the laws of a state other than this state.
(3) Alien insurer means an insurer
formed under the laws of any country other than the
731.086
Domestic risk. Domestic
risk means a subject of insurance resident, located or to be performed in this
state. [1967 c.359 §18]
731.090 [Repealed by 1965 c.241 §3]
731.092
Domicile. The domicile
of an insurer means:
(1) As to insurers formed under the laws
of
(2) As to other alien insurers, as
provided in ORS 731.096.
(3) As to all other insurers, the state under
the laws of which the insurer was formed or, if the insurer has been
redomesticated to another state, the state to which it has been redomesticated.
[1967 c.359 §19; 1995 c.639 §13]
731.096
Domicile of alien insurer.
(1) The domicile of an alien insurer, other than insurers formed under the laws
of Canada or a province thereof, shall be that state designated by the insurer
in writing filed with the Director of the Department of Consumer and Business
Services at time of admission to this state or before January 1, 1962,
whichever date is the later, and may be any one of the following states:
(a) The state in which the insurer was
first authorized to transact insurance;
(b) The state in which is located the
insurers principal place of business in the
(c) The state in which is held the largest
deposit of assets of the insurer in trust for the protection of its
policyholders and creditors in the
(2) If the insurer makes no such
designation its domicile shall be deemed to be that state in which is located
its principal place of business in the
731.100 [Repealed by 1965 c.241 §3]
731.102
Insurance. (1) Insurance
means a contract whereby one undertakes to indemnify another or pay or allow a
specified or ascertainable amount or benefit upon determinable risk
contingencies.
(2) Insurance so defined includes
annuities.
(3) Insurance so defined includes a
contract under which one other than a manufacturer, builder, seller or lessor
of the subject property undertakes to perform or provide, for a fixed term and
consideration, repair or replacement service or indemnification therefor for
the operational or structural failure of specified real or personal property or
property components.
Insurance
does not include contracts with a telecommunications utility as defined in ORS
759.005, for repair, replacement or maintenance of customer-owned inside
wiring. [1967 c.359 §21; 1981 c.247 §1; 1985 c.633 §5; 1987 c.447 §111]
731.104
Insurance producer. Insurance
producer means a person required to be licensed under the laws of this state
to sell, solicit or negotiate insurance. For purposes of this definition:
(1) Negotiate means to confer directly
with or to offer advice directly to a purchaser or prospective purchaser of a
particular policy of insurance concerning any of the substantive benefits,
terms or conditions of the policy, if the person engaged in that act:
(a) Sells insurance; or
(b) Obtains insurance from insurers for
purchasers.
(2) Sell means to exchange a policy of
insurance by any means, for money or its equivalent, on behalf of an insurer.
(3) Solicit means to attempt to sell a
policy of insurance or to ask or urge a person to apply for a particular kind
of insurance from a particular insurer. [Formerly 731.062]
731.106
Insurer. Insurer
includes every person engaged in the business of entering into policies of
insurance. [1967 c.359 §22]
731.110 [Repealed by 1965 c.241 §3]
731.112
Judgment. Judgment includes
a final order. [1967 c.359 §23; 2003 c.576 §553]
731.116
Person. Person means an
individual or a business entity. For the purpose of this definition, business
entity means a corporation, association, partnership, limited liability
company, limited liability partnership or other legal entity. [1967 c.359 §24;
1983 c.327 §12; 2001 c.191 §21]
731.120 [Repealed by 1965 c.241 §3]
731.122
Policy. Policy means the
written contract or written agreement for or effecting insurance, by whatever
name called, and includes all clauses, riders, indorsements and papers which
are a part thereof and annuities. [1967 c.359 §25]
731.126
Reinsurance. Reinsurance
means a contract under which an originating insurer, called the ceding
insurer, procures insurance for itself in another insurer, called the assuming
insurer or the reinsurer, with respect to part or all of an insurance risk of
the originating insurer. [1967 c.359 §26]
731.130 [Repealed by 1965 c.241 §3]
731.132
Required capitalization. Required
capitalization means the minimum combined paid-up capital and surplus required
by the Insurance Code of a stock insurer, or the minimum surplus so required of
an insurer without capital stock. [1967 c.359 §27]
731.136
State. When used in
context signifying a jurisdiction other than the State of
731.140 [Repealed by 1965 c.241 §3]
731.142
Stock, mutual and reciprocal insurer. (1) Stock insurer means an incorporated insurer whose capital is
divided into shares and owned by its stockholders.
(2) Mutual insurer means an incorporated
insurer without capital stock and the governing body of which is elected by its
policyholders. This definition does not exclude as a mutual insurer a foreign
insurer found by the Director of the Department of Consumer and Business
Services to be organized on the mutual plan under the laws of its domicile, but
having temporary share capital or providing for election of the insurers
governing body on a reasonable basis by policyholders and others.
(3) Reciprocal insurer means an
unincorporated aggregation of persons known as subscribers, operating individually
and collectively through an attorney in fact common to all such persons,
interexchanging among themselves reciprocal agreements of indemnity. [1967
c.359 §29]
731.144
Surplus lines insurance. Surplus
lines insurance means any insurance in this state of risks resident, located
or to be performed in this state, permitted to be placed through a surplus
lines licensee with a nonadmitted insurer eligible to accept such insurance,
other than reinsurance, wet marine and transportation insurance, independently
procured insurance and life and health insurance and annuities. [1987 c.774 §113;
1991 c.810 §24]
Note: 731.144 was added to and made a part of ORS
chapter 731 but was not added to any smaller series therein by legislative
action. See Preface to Oregon Revised Statutes for further explanation.
731.146
Transact insurance. (1) Transact
insurance means one or more of the following acts effected by mail or
otherwise:
(a) Making or proposing to make an
insurance contract.
(b) Taking or receiving any application
for insurance.
(c) Receiving or collecting any premium,
commission, membership fee, assessment, due or other consideration for any
insurance or any part thereof.
(d) Issuing or delivering policies of
insurance.
(e) Directly or indirectly acting as an
insurance producer for, or otherwise representing or aiding on behalf of
another, any person in the solicitation, negotiation, procurement or
effectuation of insurance or renewals thereof, the dissemination of information
as to coverage or rates, the forwarding of applications, the delivering of
policies, the inspection of risks, the fixing of rates, the investigation or
adjustment of claims or losses, the transaction of matters subsequent to
effectuation of the policy and arising out of it, or in any other manner
representing or assisting a person with respect to insurance.
(f) Advertising locally or circularizing
therein without regard for the source of such circularization, whenever such
advertising or circularization is for the purpose of solicitation of insurance
business.
(g) Doing any other kind of business
specifically recognized as constituting the doing of an insurance business
within the meaning of the Insurance Code.
(h) Doing or proposing to do any insurance
business in substance equivalent to any of paragraphs (a) to (g) of this
subsection in a manner designed to evade the provisions of the Insurance Code.
(2) Subsection (1) of this section does
not include, apply to or affect the following:
(a) Making investments within a state by
an insurer not admitted or authorized to do business within such state.
(b) Except as provided in ORS 743.015,
doing or proposing to do any insurance business arising out of a policy of
group life insurance or a policy of blanket health insurance, if the master
policy was validly issued to cover a group organized primarily for purposes
other than the procurement of insurance and was delivered in and pursuant to
the laws of another state in which:
(A) The insurer was authorized to do an
insurance business;
(B) The policyholder is domiciled or
otherwise has a bona fide situs; and
(C) With respect to a policy of blanket
health insurance, the policy was approved by the director of such state.
(c) Except as provided in ORS 743.015,
doing or proposing to do any insurance business arising out of a policy of
group health insurance, if the master policy was validly issued to cover an
employer group other than an association, trust or multiple employer welfare
arrangement and was delivered in and pursuant to the laws of another state in
which:
(A) The insurer was authorized to do an
insurance business; and
(B) The policyholder is domiciled or
otherwise has a bona fide situs.
(d) Investigating, settling, or litigating
claims under policies lawfully written within a state, or liquidating assets
and liabilities, all resulting from the insurers former authorized operations
within such state.
(e) Transactions within a state under a
policy subsequent to its issuance if the policy was lawfully solicited, written
and delivered outside the state and did not cover a subject of insurance
resident, located or to be performed in the state when issued.
(f) The continuation and servicing of life
or health insurance policies remaining in force on residents of a state if the
insurer has withdrawn from such state and is not transacting new insurance
therein.
(3) If mail is used, an act shall be
deemed to take place at the point where the matter transmitted by mail is
delivered and takes effect. [1967 c.359 §30; 1971 c.231 §10; 1989 c.784 §4;
2003 c.364 §64; 2007 c.752 §1]
Note: The amendments to 731.146 by section 6,
chapter 752,
731.146. (1) Transact insurance means one or more
of the following acts effected by mail or otherwise:
(a) Making or proposing to make an
insurance contract.
(b) Taking or receiving any application
for insurance.
(c) Receiving or collecting any premium,
commission, membership fee, assessment, due or other consideration for any
insurance or any part thereof.
(d) Issuing or delivering policies of
insurance.
(e) Directly or indirectly acting as an
insurance producer for, or otherwise representing or aiding on behalf of
another, any person in the solicitation, negotiation, procurement or
effectuation of insurance or renewals thereof, the dissemination of information
as to coverage or rates, the forwarding of applications, the delivering of
policies, the inspection of risks, the fixing of rates, the investigation or
adjustment of claims or losses, the transaction of matters subsequent to
effectuation of the policy and arising out of it, or in any other manner
representing or assisting a person with respect to insurance.
(f) Advertising locally or circularizing
therein without regard for the source of such circularization, whenever such
advertising or circularization is for the purpose of solicitation of insurance
business.
(g) Doing any other kind of business
specifically recognized as constituting the doing of an insurance business
within the meaning of the Insurance Code.
(h) Doing or proposing to do any insurance
business in substance equivalent to any of paragraphs (a) to (g) of this
subsection in a manner designed to evade the provisions of the Insurance Code.
(2) Subsection (1) of this section does
not include, apply to or affect the following:
(a) Making investments within a state by
an insurer not admitted or authorized to do business within such state.
(b) Except as provided in ORS 743.015,
doing or proposing to do any insurance business arising out of a policy of
group life insurance or group health insurance, or both, or a policy of blanket
health insurance, if the master policy was validly issued to cover a group
organized primarily for purposes other than the procurement of insurance and
was delivered in and pursuant to the laws of another state in which:
(A) The insurer was authorized to do an
insurance business;
(B) The policyholder is domiciled or
otherwise has a bona fide situs; and
(C) With respect to a policy of blanket
health insurance, the policy was approved by the director of such state.
(c) Investigating, settling, or litigating
claims under policies lawfully written within a state, or liquidating assets
and liabilities, all resulting from the insurers former authorized operations
within such state.
(d) Transactions within a state under a
policy subsequent to its issuance if the policy was lawfully solicited, written
and delivered outside the state and did not cover a subject of insurance
resident, located or to be performed in the state when issued.
(e) The continuation and servicing of life
or health insurance policies remaining in force on residents of a state if the
insurer has withdrawn from such state and is not transacting new insurance
therein.
(3) If mail is used, an act shall be
deemed to take place at the point where the matter transmitted by mail is
delivered and takes effect.
CLASSES OF
INSURANCE DEFINED
731.150
Definitions of classes of insurance not mutually exclusive. It is intended that certain insurance
coverages may come within the definitions of two or more classes of insurance
as defined in the Insurance Code, and the inclusion of such coverage within one
definition shall not exclude it as to any other class of insurance within the
definition of which such coverage is likewise reasonably includable. [1967
c.359 §32]
731.154
Annuity. (1) Annuity or annuity
policy means any agreement to make periodic payments, whether fixed or
variable in amount, where the making of all or some of such payments, or the
amount of any such payment, is dependent upon the continuance of human life,
except payments made pursuant to the settlement provisions of a life insurance
policy, and includes additional benefits operating to safeguard the policy from
lapse or to provide a special surrender value or special benefit or annuity in
the event of total and permanent disability of the annuitant.
(2) Annuity does not include a
charitable remainder annuity trust or a charitable remainder unitrust as
defined in section 664(d) of the Internal Revenue Code. [1967 c.359 §33; 1993
c.377 §1]
731.156
Variable life insurance; variable annuity. Variable life insurance and variable
annuity mean those forms of life insurance or annuity benefits, respectively,
which vary according to the investment experience of a separate account or
accounts maintained by the insurer with respect to policies providing such
benefits. For convenience, reference to variable life insurance in the
Insurance Code includes variable life insurance and variable annuities as
defined in this section, except if the inclusion of variable annuities
obviously is inapplicable or if the context requires, or the Insurance Code
provides, otherwise. [1973 c.435 §2]
731.158
Casualty insurance. Casualty
insurance means:
(1) Insurance against legal, contractual
or assumed liability for death, injury or disability of any human, or for
damage to property; and provision for medical, hospital, surgical and
disability benefits to injured persons including insurance against the risk of
economic loss assumed under a less than fully insured employee health benefit
plan and funeral and death benefits to dependents, beneficiaries or personal
representatives of persons killed, irrespective of legal liability of the
insured, when issued as coverage for personal injury protection benefits under
a motor vehicle liability policy or as an incidental coverage with or
supplemental to liability insurance;
(2) Motor vehicle physical damage,
burglary and theft, glass, boiler and machinery, credit and livestock
insurance;
(3) Insurance of the obligations accepted
by, imposed upon or assumed by employers under law for death, disablement or
occupational diseases of employees, including issuing guaranty contracts in
connection therewith;
(4) Insurance which undertakes to perform
or provide repair or replacement service or indemnification therefor for the
operational or structural failure of specified real or personal property or
property components; and
(5) Insurance against any other kind of
loss, damage or liability properly a subject of insurance and not within any
other class of insurance otherwise defined, if such insurance is not
disapproved by the Director of the Department of Consumer and Business Services
as being contrary to law or public policy. [1967 c.359 §34; 1981 c.247 §2; 1993
c.649 §5]
Note: The amendments to 731.158 by section 22,
chapter 241, Oregon Laws 2007, become operative July 1, 2009. See section 31,
chapter 241, Oregon Laws 2007. The text that is operative on and after July 1,
2009, is set forth for the users convenience.
731.158. Casualty insurance means:
(1) Insurance against legal, contractual
or assumed liability for death, injury or disability of any human, or for
damage to property; and provision for medical, hospital, surgical and
disability benefits to injured persons including insurance against the risk of
economic loss assumed under a less than fully insured employee health benefit
plan and funeral and death benefits to dependents, beneficiaries or personal
representatives of persons killed, irrespective of legal liability of the insured,
when issued as coverage for personal injury protection benefits under a motor
vehicle liability policy or as an incidental coverage with or supplemental to
liability insurance;
(2) Motor vehicle physical damage,
burglary and theft, glass, boiler and machinery, credit and livestock
insurance;
(3) Insurance of the obligations accepted
by, imposed upon or assumed by employers under law for death, disablement or
occupational diseases of employees;
(4) Insurance which undertakes to perform
or provide repair or replacement service or indemnification therefor for the
operational or structural failure of specified real or personal property or
property components; and
(5) Insurance against any other kind of
loss, damage or liability properly a subject of insurance and not within any
other class of insurance otherwise defined, if such insurance is not
disapproved by the Director of the Department of Consumer and Business Services
as being contrary to law or public policy.
731.162
Health insurance. Health
insurance means insurance of humans against bodily injury, disablement or
death by accident or accidental means, or the expense thereof, or against
disablement or expense resulting from sickness or childbirth, or against
expense incurred in prevention of sickness, in dental care or optometrical
service, and every insurance appertaining thereto, including insurance against
the risk of economic loss assumed under a less than fully insured employee
health benefit plan. Health insurance does not include workers compensation
coverages. [1967 c.359 §35; 1993 c.649 §6]
731.164
Home protection insurance, home protection insurer. (1)(a) Home protection insurance means
that part of casualty insurance that includes only insurance which undertakes
to perform or provide repair or replacement service or indemnification therefor
for the operational or structural failure of the insured home, components of
the home or personal property relating to the home or its components, and does
not include protection against consequential damage from the operational or
structural failure.
(b)(A) Home protection insurance does
not include a home service agreement.
(B) As used in this paragraph, home
service agreement means a contract or agreement for a specific limited duration
to:
(i) Service, repair or replace in an
existing home the mechanical or appliance system or the components that break
down due to normal wear and tear or inherent defects; or
(ii) Provide incidental service, repair or
replacement to cover leaks and failures in roofing systems.
(c) As used in this subsection, home
means a single living unit or multiple living units, including manufactured
dwellings, used primarily as residences.
(2) Home protection insurer means an
insurer under policies of home protection insurance, other than an insurer
transacting other forms of casualty insurance or any form of reinsurance. [1981
c.247 §4; 2003 c.283 §1]
731.166
Industrial life insurance.
Industrial life insurance means that form of life insurance written under
policies of face amount of $2,500 or less, under which premiums are payable
monthly or more often and the policy specifies it is an industrial life
insurance policy. [1967 c.359 §36]
731.170
Life insurance; includes annuities. (1) Life insurance means insurance on human lives and every
insurance appertaining thereto and includes the granting of endowment benefits,
additional benefits in event of death or dismemberment by accident or
accidental means, additional benefits in event of the insureds or premium
payers disability and optional modes of settlement of proceeds of life
insurance including annuity benefits payable under such a settlement provision.
Life insurance does not include workers compensation coverages.
(2) For convenience, reference to life
insurance in the Insurance Code includes life insurance as defined in
subsection (1) of this section and annuities as defined in ORS 731.154, except
if the inclusion of annuities obviously is inapplicable or if the context
requires, or the Insurance Code provides, otherwise. [1967 c.359 §37]
731.174
Marine and transportation insurance. Marine and transportation insurance includes:
(1) Insurance against any and all kinds of
loss of or damage to:
(a) Vessels, craft, aircraft, cars,
automobiles and vehicles of every kind, as well as all goods, freights,
cargoes, merchandise, effects, disbursements, profits, moneys, bullion,
precious stones, securities, choses in action, evidences of debt, valuable
papers, bottomry and respondentia interests and all other kinds of property and
interests therein, in respect to, appertaining to or in connection with any and
all risks or perils of navigation, transit or transportation, including war
risks, on or under any seas or other waters, on land or in the air, or while
being assembled, packed, crated, baled, compressed or similarly prepared for
shipment or while awaiting the same or during any delays, storage,
transshipment, or reshipment incident thereto, including marine builders
risks, and all personal property floater risks including bailees customers
risks;
(b) Person or to property in connection
with or appertaining to a marine, inland marine, transit or transportation
insurance, including liability for loss of or damage to either, arising out of
or in connection with the construction, repair, operation, maintenance or use
of the subject matter of such insurance (but not including life insurance or
surety bonds nor insurance against loss by reason of bodily injury to the
person arising out of the ownership, maintenance or use of automobiles);
(c) Precious stones, jewels, jewelry,
gold, silver and other precious metals, whether used in business or trade or
otherwise and whether the same is in course of transportation or otherwise; and
(d) Bridges, tunnels and other
instrumentalities of transportation and communication (excluding buildings,
their furniture and furnishings, fixed contents and supplies held in storage)
unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and
civil commotion, or any of them, are the only hazards to be covered; piers,
wharves, docks, and slips, excluding the risks of fire, tornado, sprinkler
leakage, hail, explosion, earthquake, riot and civil commotion or any of them;
other aids to navigation and transportation, including dry docks and marine
railways, against all risks.
(2) Marine protection and indemnity
insurance meaning insurance against, or against legal liability of the insured
for, loss, damage or expense arising out of, or incident to, the ownership,
operation, chartering, maintenance, use, repair or construction of any vessel,
craft or instrumentality in use in ocean or inland waterways, including
liability of the insured for personal injury, illness or death or for loss of
or damage to the property of another person. [Formerly 745.005]
731.178
Mortgage insurance. Mortgage
insurance means insurance against financial loss by reason of:
(1) Nonpayment of principal, interest and
other sums agreed to be paid under the terms of an obligation secured by a
mortgage, deed of trust or other instrument constituting a lien or charge on
real or personal property; or
(2) Nonpayment of rent and other sums
agreed to be paid under the terms of a written lease for the possession, use or
occupancy of real property, such insurance also being referred to in the
Insurance Code as lease insurance. [1967 c.359 §39; 1969 c.692 §1]
731.182
Property insurance. Property
insurance means insurance on real or personal property of every kind and of
every interest therein, whether on land, water or in the air, against loss or
damage from any and all hazard or cause, and against consequential loss from
such loss or damage, other than noncontractual legal liability for loss or
damage. Property insurance does not include title insurance. [1967 c.359 §40]
731.186
Surety insurance. Surety
insurance means insurance guaranteeing the fidelity of persons holding places
of trust, the performance of duties, contracts, bonds and undertakings,
including the signing thereof as surety, and insuring the performance of
obligations of employers under workers compensation laws by surety bond. [1967
c.359 §41]
731.190
Title insurance. Title
insurance means insurance of owners of property or others having an interest
therein or liens or encumbrances thereon, against loss by encumbrance,
defective titles, invalidity or adverse claim to title. [1967 c.359 §42]
731.194
Wet marine and transportation insurance. Wet marine and transportation insurance is that part of marine and
transportation insurance that includes only:
(1) Insurance upon vessels, crafts, hulls
and of interests therein or with relation thereto;
(2) Insurance of marine builders risks,
marine war risks and contracts referred to in ORS 731.174 (2) or any
replacement thereof;
(3) Insurance of freights and
disbursements pertaining to a subject of insurance coming within this section;
(4) Insurance of personal property and
interests therein, in course of exportation from or importation into any country,
and in course of transportation coastwise or on inland waters, including
transportation by land, water, or air from point of origin to final
destination, in respect to, appertaining to or in connection with, any and all
risks or perils of navigation, transit or transportation, and while being
prepared for and while awaiting shipment, and during any delays, storage,
transshipment or reshipment incident thereto;
(5) Insurance on operations of railroads
engaged in transportation in interstate commerce and their property used in
such operations; and
(6) Insurance of aircraft operated in
scheduled interstate flight, or cargo of such aircraft, or against this
liability other than workers compensation and employers liability arising out
of the ownership, maintenance or use of such aircraft. [1967 c.359 §43; 1987
c.774 §114]
731.204 [Formerly 736.495; repealed by 1987 c.373 §85]
731.208 [Formerly 736.500; repealed by 1987 c.373 §85]
731.212 [1967 c.359 §46; repealed by 1987 c.373 §85]
INSURANCE
ADMINISTRATION
731.216
Administrative power of director. The Director of the Department of Consumer and Business Services shall
have the power to:
(1) Contract for and procure, on a fee or
part-time basis, or both, such actuarial, technical or other professional
services as may be required for the discharge of duties.
(2) Obtain such other services as the
director considers necessary or desirable, including participation in
organizations of state insurance supervisory officials and appointment of
advisory committees. A member of an advisory committee so appointed shall
receive no compensation for services as a member, but, subject to any other
applicable law regulating travel and other expenses of state officers, shall
receive actual and necessary travel and other expenses incurred in the
performance of official duties.
(3) Establish within the Department of
Consumer and Business Services a workers compensation rating bureau to provide
rating information that is based upon and relevant to activities conducted in
this state, to enable the director to carry out the provisions of ORS chapter
737. In lieu of creating a rating bureau within the department, the director
may contract with any rating organization in other states if the director finds
that such a contract would provide the information required by this section. [Formerly
736.503; 1987 c.373 §77; 1987 c.884 §50; 2003 c.14 §445]
731.220 [Formerly 736.507; repealed by 1987 c.373 §85]
731.224 [1967 c.359 §49; repealed by 1987 c.373 §85]
731.228
Prohibited interests and rewards. (1) No officer or employee of the Department of Consumer and Business
Services delegated responsibilities in the enforcement of the Insurance Code
shall:
(a) Be a director, officer, or employee of
or be financially interested in any person regulated by the department or
office of the department that is delegated responsibility in the enforcement of
the Insurance Code, except as a policyholder or claimant under an insurance
policy or by reason of rights vested in commissions, fees, or retirement
benefits related to services performed prior to affiliation with the
department; or
(b) Be engaged in any other business or
occupation interfering with or inconsistent with the duties of the office or
employment.
(2) No person shall directly or indirectly
give or pay, or offer to give or pay, to the Director of the Department of
Consumer and Business Services, or any officer or employee of the department,
and the director or such officer or employee shall not directly or indirectly
solicit, receive or accept any fee, compensation, loan, gift or other thing of
value in addition to the compensation and expense allowance provided by law,
for:
(a) Any service rendered or to be rendered
as such director, officer or employee, or in connection therewith;
(b) Services rendered or to be rendered in
relation to legislation;
(c) Extra services rendered or to be
rendered; or
(d) Any cause whatsoever related to any
person regulated by the department or office of the department that is
delegated responsibility in the enforcement of the Insurance Code.
(3) This section does not permit any
conduct, affiliation or interest that is otherwise prohibited by public policy.
[1967 c.359 §50; 1987 c.373 §78]
731.232
Subpoena power. (1) For the
purpose of an investigation or proceeding under the Insurance Code, the
Director of the Department of Consumer and Business Services may administer
oaths and affirmations, subpoena witnesses, compel their attendance, take
evidence and require the production of books, papers, correspondence,
memoranda, agreements or other documents or records which the director
considers relevant or material to the inquiry. Each witness who appears before
the director under a subpoena shall receive the fees and mileage provided for
witnesses in ORS 44.415 (2).
(2) If a person fails to comply with a
subpoena so issued or a party or witness refuses to testify on any matters, the
judge of the circuit court for any county, on the application of the director,
shall compel obedience by proceedings for contempt as in the case of
disobedience of the requirements of a subpoena issued from such court or a
refusal to testify therein. [1967 c.359 §51; 1989 c.980 §22]
731.236
General powers and duties.
(1) The Director of the Department of Consumer and Business Services shall
enforce the provisions of the Insurance Code for the public good, and shall
execute the duties imposed by the code.
(2) The director has the powers and
authority expressly conferred by or reasonably implied from the provisions of
the Insurance Code.
(3) The director may conduct such
examinations and investigations of insurance matters, in addition to
examinations and investigations expressly authorized, as the director considers
proper to determine whether any person has violated any provision of the
Insurance Code or to secure information useful in the lawful administration of
any such provision. The cost of such additional examinations and investigations
shall be borne by the state.
(4) The director has such additional
powers and duties as may be provided by other laws of this state. [1967 c.359 §52]
731.240
Hearings in general. (1) The
Director of the Department of Consumer and Business Services shall hold a
hearing upon written demand for a hearing by a person aggrieved by any act,
threatened act or failure of the director to act. The demand must state the
grounds therefor.
(2) To the extent applicable and not
inconsistent with subsection (1) of this section, the provisions of ORS chapter
183 shall govern the hearing procedure and any judicial review thereof. [1967
c.359 §53; 1991 c.401 §1]
731.244
Rules. In accordance with
the applicable provisions of ORS chapter 183, the Director of the Department of
Consumer and Business Services may make reasonable rules necessary for or as an
aid to the effectuation of the Insurance Code. No such rule shall extend,
modify or conflict with the Insurance Code or the reasonable implications
thereof. [1967 c.359 §54]
731.248
Orders. (1) Orders of the
Director of the Department of Consumer and Business Services shall be effective
only when in writing and signed by the director or by the authority of the
director. Orders shall be filed in the Department of Consumer and Business
Services.
(2) Every such order shall state:
(a) Its effective date;
(b) Its intent or purpose;
(c) The grounds on which based; and
(d) The provisions of the Insurance Code
pursuant to which action is taken or proposed to be taken.
(3) Except as may be provided in the
Insurance Code respecting particular procedures, an order or notice may be
given by delivery to the person to be ordered or notified or by mailing it by
certified or registered mail, return receipt requested, postage prepaid,
addressed to the person at the residence or principal place of business of the
person as last of record in the department. Notice so mailed shall be deemed to
have been given when deposited in a letter depository of a
731.252
Cease and desist orders. (1)
Whenever the Director of the Department of Consumer and Business Services has
reason to believe that any person has been engaged or is engaging or is about
to engage in any violation of the Insurance Code, the director may issue an
order, directed to such person, to discontinue or desist from such violation or
threatened violation. The copy of the order forwarded to the person involved
shall set forth a statement of the specific charges and the fact that the
person may request a hearing within 20 days of the date of mailing. Where a hearing
is requested, the director shall set a date for the hearing to be held within
30 days after receipt of the request, and shall give the person involved
written notice of the hearing date at least seven days prior thereto. The
person requesting the hearing must establish to the satisfaction of the
director that such order should not be complied with. The order shall become
final 20 days after the date of mailing unless within such 20-day period the
person to whom it is directed files with the director a written request for a
hearing. To the extent applicable and not inconsistent with the foregoing, the
provisions of ORS chapter 183 shall govern the hearing procedure and any
judicial review thereof. Where the hearing has been requested, the directors
order shall become final at such time as the right to further hearing or review
has expired or been exhausted.
(2) No order of the director under this
section or order of a court to enforce the same shall in any way relieve or
absolve any person affected by such order from any liability under any other
laws of this state.
(3) The powers vested in the director
pursuant to this section are supplementary and not in lieu of any other powers
to suspend or revoke certificates of authority or licenses or to enforce any
penalties, fines or forfeitures, authorized by law with respect to any
violation for which an order of discontinuance has been issued. [Formerly
736.835]
731.256
Enforcement generally. (1)
The Director of the Department of Consumer and Business Services may institute
such actions or other lawful proceedings as the director may deem necessary for
the enforcement of any provision of the Insurance Code or any order or action
made or taken by the director in pursuance of law.
(2) If the director has reason to believe
that any person has violated any provision of the Insurance Code or other law
applicable to insurance operations, for which criminal prosecution is provided
and in the opinion of the director would be in order, the director shall give
the information relative thereto to the Attorney General or district attorney
having jurisdiction of any such violation. The Attorney General or district
attorney promptly shall institute such action or proceedings against such
person as the information requires or justifies. [1967 c.359 §57]
731.258
Enforcement of orders and decisions by Attorney General; filing, enforcement
and effect of foreign decrees.
(1) The Attorney General upon request of the Director of the Department of
Consumer and Business Services may proceed in the courts of this state or any
reciprocal state to enforce an order or decision in any court proceeding or in
any administrative proceeding before the director.
(2) As used in this section:
(a) Reciprocal state means any state the
laws of which contain procedures substantially similar to those specified in
this section for the enforcement of decrees or orders in equity issued by
courts located in other states, against any insurer incorporated or authorized
to do business in such state.
(b) Foreign decree means any decree or
order in equity of a court located in a reciprocal state, including a court of
the United States located therein, against any insurer incorporated or
authorized to do business in this state.
(c) Qualified party means a state
regulatory agency acting in its capacity to enforce the insurance laws of its
state.
(3) The Director of the Department of
Consumer and Business Services of this state shall determine which states
qualify as reciprocal states and shall maintain at all times an up-to-date list
of such states.
(4) A copy of any foreign decree
authenticated in accordance with the statutes of this state may be filed in the
office of the clerk of any circuit court of this state. The clerk, upon
verifying with the director that the decree or order qualifies as a foreign
decree shall treat the foreign decree in the same manner as a judgment of a
circuit court of this state. A foreign decree so filed has the same effect and
shall be deemed as a judgment of a circuit court of this state, and is subject
to the same procedures, defenses and proceedings for reopening, vacating, or
staying as a judgment of a circuit court of this state and may be enforced or
satisfied in like manner.
(5)(a) At the time of the filing of the foreign
decree, the Attorney General shall make and file with the clerk of the court an
affidavit setting forth the name and last-known post-office address of the
defendant.
(b) Promptly upon the filing of the
foreign decree and the affidavit, the clerk shall mail notice of the filing of
the foreign decree to the defendant at the address given and to the director of
this state and shall make a note of the mailing in the register of the court.
In addition, the Attorney General may mail a notice of the filing of the
foreign decree to the defendant and to the director of this state and may file
proof of mailing with the clerk. Lack of mailing notice of filing by the clerk
shall not affect the enforcement proceedings if proof of mailing by the
Attorney General has been filed.
(c) No execution or other process for
enforcement of a foreign decree filed under subsection (4) of this section
shall issue until 30 days after the date the decree is filed.
(6)(a) If the defendant shows the circuit
court that an appeal from the foreign decree is pending or will be taken, or
that a stay of execution has been granted, the court shall stay enforcement of
the foreign decree until the appeal is concluded, the time for appeal expires,
or the stay of execution expires or is vacated, upon proof that the defendant
has furnished the security for the satisfaction of the decree required by the
state in which it was rendered.
(b) If the defendant shows the circuit
court any ground upon which enforcement of a judgment of any circuit court of
this state would be stayed, the court shall stay enforcement of the foreign
decree for an appropriate period, upon requiring the same security for
satisfaction of the decree which is required in this state for a judgment. [1969
c.336 §5; 2003 c.576 §219]
731.260
False or misleading filings.
No person shall file or cause to be filed with the Director of the Department
of Consumer and Business Services any article, certificate, report, statement,
application or any other information required or permitted to be so filed under
the Insurance Code and known to such person to be false or misleading in any
material respect. [Formerly 736.650]
731.264
Complaints and investigations confidential; permitted disclosures; rules. (1) A complaint made to the Director of the
Department of Consumer and Business Services against any person regulated by
the Insurance Code, and the record thereof, shall be confidential and may not
be disclosed except as provided in ORS 705.137. No such complaint, or the
record thereof, shall be used in any action, suit or proceeding except to the
extent considered necessary by the director in the prosecution of apparent
violations of the Insurance Code or other law.
(2) Data gathered pursuant to an
investigation by the director of a complaint shall be confidential, may not be
disclosed except as provided in ORS 705.137 and may not be used in any action,
suit or proceeding except to the extent considered necessary by the director in
the investigation or prosecution of apparent violations of the Insurance Code
or other law.
(3) Notwithstanding subsections (1) and
(2) of this section, the director shall establish by rule a method for
publishing an annual statistical report containing the insurers name and the
number, percentage, type and disposition of complaints received by the
Department of Consumer and Business Services against each insurer transacting
insurance within this state. [1967 c.359 §59; 1971 c.231 §11; 1987 c.481 §1;
1987 c.774 §149; 2001 c.377 §4]
731.268
Use of reproductions and certified copies as evidence; fee. (1) Photographs or microphotographs in the
form of film or prints of documents and records made by the Director of the
Department of Consumer and Business Services for the files of the director
shall have the same force and effect as the originals thereof, and duly
certified or authenticated reproductions of such photographs or
microphotographs shall be as admissible in evidence as are the originals.
(2) Upon request of any person and payment
of the applicable fee, the director shall furnish a certified copy of any
record in the office of the director which is then subject to public
inspection.
(3) Copies of original records or
documents in the office of the director certified by the director shall have
the same force and effect and be received in evidence in all courts equally and
in like manner as if they were originals. [1967 c.359 §60]
731.272
Directors annual reports; notice of publication of report. (1) The Director of the Department of
Consumer and Business Services shall prepare annually, as soon after March 1 as
is consistent with full and accurate preparation, a report of the official
transactions of the director under the Insurance Code. The report shall
include:
(a) In condensed form statements made to
the director by every insurer authorized to do business in this state.
(b) A statement of all insurers authorized
to do business in this state as of the date of the report.
(c) A list of insurers whose business in
this state was terminated and the reason for the termination. If the
termination was a result of liquidation or delinquency proceedings brought
against the insurer in this or any other state, the report shall include the
amount of the insurers assets and liabilities so far as those amounts are
known to the director.
(d) A statement of the operating expenses
of the Department of Consumer and Business Services under the Insurance Code,
including salaries, transportation, communication, printing, office supplies,
fixed charges and miscellaneous expenses.
(e) A detailed statement of the moneys,
fees and taxes received by the department under the Insurance Code and from
what source.
(f) Any other pertinent information and
matters as the director considers to be in the public interest.
(2) The director shall give notice of the
publication of the report to:
(a) The office of the Speaker of the House
of Representatives;
(b) The office of the President of the
Senate; and
(c) The chair or cochairs of the Joint
Legislative Committee on Ways and Means if the Legislative Assembly is in
session or of the Emergency Board if during the interim. [Formerly 736.520;
1987 c.373 §79; 2005 c.185 §8]
731.276
Recommendations for changes in Insurance Code. The Director of the Department of Consumer
and Business Services shall continuously review the Insurance Code and may,
from time to time, make recommendations for changes therein. [1967 c.359 §62]
731.280
Publications authorized. The
Director of the Department of Consumer and Business Services shall publish:
(1) Pamphlet or booklet copies of the
insurance laws of this state;
(2) The directors annual report;
(3) Such copies of results of
investigations or examinations of insurers for public distribution as the
director considers to be in the public interest;
(4) Such compilations as the director
considers advisable from time to time of the general orders of the director
then in force; and
(5) Such other material as the director
may compile and consider relevant and suitable for the effective administration
of the Insurance Code. [1967 c.359 §63]
731.282
Authority to sell publications.
The Director of the Department of Consumer and Business Services may sell, at a
price reasonably calculated to cover the costs of preparation, any of the
copies, compilations or materials described in ORS 731.280. [1971 c.231 §2;
1982 s.s.1 c.17 §3]
731.284
Distribution of insurance laws.
Copies of the insurance laws in pamphlet form may be sold by the Director of
the Department of Consumer and Business Services at a reasonable price. The
director may distribute free of charge one copy of such pamphlet to each of the
following:
(1) Authorized insurers and licensed
rating organizations;
(2) Insurance departments of other states;
and
(3) Public agencies. However, the director
may distribute such quantities to public agencies as the director determines. [1967
c.359 §64; 2003 c.364 §65]
731.288
Recording complaints; director to consider complaints before issuing licenses. The Department of Consumer and Business
Services shall record each complaint the department receives, including the
subsequent disposition of the complaint. The record of a complaint shall be
maintained for a period of not less than seven years. The records of complaints
shall be indexed whenever applicable both by the name of the insurer and by the
name of the insurance producer involved. The Director of the Department of
Consumer and Business Services shall consider such complaints before issuing or
continuing any certificate of authority or license of an insurer or insurance
producer named in such complaints. [Formerly 736.580; 2003 c.364 §66; 2003
c.802 §168]
731.292
Disposition of fees, charges, taxes, penalties and other moneys. (1) Except as provided in subsections (2)
and (3) of this section, all fees, charges and other moneys received by the
Department of Consumer and Business Services or the Director of the Department
of Consumer and Business Services under the Insurance Code shall be deposited
in the fund created by ORS 705.145 and are continuously appropriated to the
department for the payment of the expenses of the department in carrying out
the Insurance Code.
(2) All taxes, fines and penalties paid
pursuant to the Insurance Code shall be paid to the director and after
deductions of refunds shall be paid by the director to the State Treasurer, at
the end of every calendar month or more often in the directors discretion, for
deposit in the General Fund to become available for general governmental
expenses.
(3) All premium taxes received by the
director pursuant to ORS 731.820 shall be paid by the director to the State
Treasurer for deposit in the State Fire Marshal Fund. [Formerly 736.525; 1981
c.652 §3; 1982 s.s.1 c.17 §1; 1987 c.373 §80; 1991 c.67 §193]
731.296
Directors inquiries. The
Director of the Department of Consumer and Business Services may address any
proper inquiries to any insurer, licensee or its officers in relation to its
activities or condition or any other matter connected with its transactions.
Any such person so addressed shall promptly and truthfully reply to such
inquiries using the form of communication requested by the director. The reply
shall be verified by an officer of such person, if the director so requires. A
reply is subject to the provisions of ORS 731.260. [Formerly 736.542; 1975
c.298 §1]
731.300
Examination of insurers; when required. (1) The Director of the Department of Consumer and Business Services
shall examine every authorized insurer, including an audit of the financial
affairs of such insurer, as often as the director determines an examination to
be necessary but at least once each five years. An examination shall be
conducted for the purpose of determining the financial condition of the
insurer, its ability to fulfill its obligations and its manner of fulfillment,
the nature of its operations and its compliance with the Insurance Code. The
director may also make such an examination of any surplus lines insurance
producer or any person holding the capital stock of an authorized insurer or
surplus lines insurance producer for the purpose of controlling the management
thereof as a voting trustee or otherwise, or both.
(2) Instead of conducting an examination
of an authorized foreign or alien insurer, the director may accept an
examination report on the insurer that is prepared by the insurance department
for the state of domicile or state of entry of the insurer if:
(a) At the time of the examination the
insurance department of the state was accredited under the Financial Regulation
Standards and Accreditation Program or successor program of the National
Association of Insurance Commissioners; or
(b) The examination was performed under
the supervision of an accredited insurance department or with the participation
of one or more examiners who are employed by such an accredited insurance
department and who, after a review of the examination work papers and report,
state under oath that the examination was performed in a manner consistent with
the standards and procedures required by their insurance department.
(3) Examination of an alien insurer shall
be limited to its insurance transactions, assets, trust deposits and affairs in
the
731.302
Appointment of examiners; retaining of appraisers, actuaries and others;
evidentiary status of facts and conclusions. (1) When the Director of the Department of Consumer and Business
Services determines that an examination should be conducted, the director shall
appoint one or more examiners to perform the examination and instruct them as
to the scope of the examination. In conducting the examination, each examiner
shall consider the guidelines and procedures in the examiner handbook, or its
successor publication, adopted by the National Association of Insurance
Commissioners. The director may prescribe the examiner handbook or its
successor publication and employ other guidelines and procedures that the
director determines to be appropriate.
(2) When making an examination, the
director may retain appraisers, independent actuaries, independent certified
public accountants or other professionals and specialists as needed. The cost
of retaining such professionals and specialists shall be borne by the person
that is the subject of the examination.
(3) At any time during the course of an
examination, the director may take other action pursuant to the Insurance Code.
(4) Facts determined and conclusions made
pursuant to an examination shall be presumptive evidence of the relevant facts
and conclusions in any judicial or administrative action. [1993 c.447 §2]
731.304
Investigation of persons transacting insurance. The Director of the Department of Consumer
and Business Services, whenever the director deems it advisable in the interest
of policyholders or for the public good, shall investigate into the affairs of
any person engaged in, proposing to engage in or claiming or advertising to
engage in:
(1) Transacting insurance in this state;
(2) Organizing or receiving subscriptions
for or disposing of the stock of or in any manner taking part in the formation
or business of an insurer; or
(3) Holding capital stock of one or more
insurers for the purpose of controlling the management thereof as voting
trustee or otherwise. [1967 c.359 §69]
731.308
Procedure at examination or investigation; production of books and other
records. (1) Upon an
examination or investigation the Director of the Department of Consumer and
Business Services may examine under oath all persons who may have material
information regarding the property or business of the person being examined or
investigated.
(2) Every person being examined or
investigated shall produce all books, records, accounts, papers, documents and
computer and other recordings in its possession or control relating to the
matter under examination or investigation, including, in the case of an
examination, the property, assets, business and affairs of the person.
(3) With regard to an examination, the
officers, directors and agents of the person being examined shall provide
timely, convenient and free access at all reasonable hours at the offices of
the person being examined to all books, records, accounts, papers, documents
and computer and other recordings. The officers, directors, employees and
agents of the person must facilitate the examination. [Formerly 736.555; 1993
c.447 §3]
731.312
Report of examination; review by person examined; hearing; confidentiality of
certain information and documents; permitted disclosures. (1) Not later than the 60th day after
completion of an examination, the examiner in charge of the examination shall
submit to the Director of the Department of Consumer and Business Services a
full and true report of the examination, verified by the oath of the examiner.
The report shall comprise only facts appearing upon the books, papers, records,
accounts, documents or computer and other recordings of the person, its agents
or other persons being examined or facts ascertained from testimony of
individuals concerning the affairs of such person, together with such
conclusions and recommendations as reasonably may be warranted from such facts.
(2) The director shall make a copy of the
report submitted under subsection (1) of this section available to the person
who is the subject of the examination and shall give the person an opportunity
to review and comment on the report. The director may request additional
information or meet with the person for the purpose of resolving questions or
obtaining additional information, and may direct the examiner to consider the
additional information for inclusion in the report.
(3) Before the director files the
examination report as a final examination report or makes the report or any
matters relating thereto public, the person being examined shall have an
opportunity for a hearing. A copy of the report must be mailed by certified
mail to the person being examined. The person may request a hearing not later
than the 30th day after the date on which the report was mailed. This
subsection does not limit the authority of the director to disclose a
preliminary or final examination report as otherwise provided in this section.
(4) The director shall consider comments
presented at a hearing requested under subsection (3) of this section and may
direct the examiner to consider the comments or direct that the comments be
included in documentation relating to the report, although not as part of the
report itself. The director may file the report as a final examination report
at any time after consideration of the comments or at any time after the period
for requesting a hearing has passed if a hearing is not requested.
(5) A report filed as a final examination
report is subject to public inspection. The director, after filing any report,
if the director considers it for the interest of the public to do so, may
publish any report or the result of any examination as contained therein in one
or more newspapers of the state without expense to the person examined.
(6) All work papers, recorded information,
documents and copies thereof that are produced or obtained by or disclosed to
the director or any other person in the course of an examination or in the
course of analysis by the director of the financial condition or market conduct
of an insurer are confidential and are exempt from public inspection as
provided in ORS 705.137. If the director, in the directors sole discretion,
determines that disclosure is necessary to protect the public interest, the
director may make available work papers, recorded information, documents and
copies thereof produced by, obtained by or disclosed to the director or any
other person in the course of the examination.
(7) The director may disclose the content of
an examination report that has not yet otherwise been disclosed or may disclose
any of the materials described in subsection (6) of this section as provided in
ORS 705.137. [Formerly 736.560; 1993 c.447 §4; 1999 c.364 §1; 2001 c.377 §5]
731.314
Immunity for director, examiner and others. (1) No cause of action may arise and no liability may be imposed
against the Director of the Department of Consumer and Business Services, an
authorized representative of the director or any examiner appointed by the director
for any statements made or conduct performed in good faith pursuant to an
examination or investigation.
(2) No cause of action may arise and no
liability may be imposed against any person for communicating or delivering
information or data to the director or an authorized representative of the
director or examiner pursuant to an examination or investigation if the
communication or delivery was performed in good faith and without fraudulent
intent or an intent to deceive.
(3) This section does not abrogate or
modify in any way any common law or statutory privilege or immunity otherwise
enjoyed by any person to which subsection (1) or (2) of this section applies.
(4) The court may award reasonable
attorney fees to the prevailing party in a cause of action arising out of
activities of the director or an examiner in carrying out an examination or
investigation. [1993 c.447 §5; 1995 c.618 §127]
731.316
Expenses of examination of insurer. Any person examined under ORS 731.300 shall pay to the Director of the
Department of Consumer and Business Services the just and legitimate costs of
the examination as determined by the director, including actual necessary
transportation and traveling expenses. [Formerly 736.565; 1969 c.336 §6]
731.324
Service of process on Secretary of State; notice to unauthorized insurer. (1) Any act set forth in ORS 731.146 by an
unauthorized insurer is equivalent to and shall constitute an irrevocable
appointment by such insurer, binding upon the insurer, the executor of the insurer
or administrator, or successor in interest if a corporation, of the Secretary
of State or the successor in office, to be the true and lawful attorney of such
insurer. All lawful process in any action in any court by the Director of the
Department of Consumer and Business Services or by the state and any notice,
order, pleading or process in any proceeding before the director which arises
out of transacting insurance in this state by such insurer may be served upon
the Secretary of State or the successor in office. Transacting insurance in
this state by an unauthorized insurer shall be signification of its agreement
that lawful process in a court action and any notice, order, pleading, or
process in an administrative proceeding before the director so served shall be
of the same legal force and validity as personal service of process in this
state upon such insurer.
(2) Service of process in such action
shall be made by delivering to and leaving with the Secretary of State, or one
of the assistants, two copies of the document served and by payment to the
Secretary of State of the fee prescribed by law. Service upon the Secretary of
State shall be service upon the principal.
(3) The Secretary of State shall forward
by certified mail one of the copies of such process or such notice, order,
pleading, or process in proceedings before the director to the defendant in
such court proceeding or to whom the notice, order, pleading, or process in
such administrative proceeding is addressed or directed at its last-known
principal place of business and shall keep a record of all process so served on
the defendant. Such record shall show the day and hour of service. Service is
sufficient, provided:
(a) Notice of service and a copy of the
court process or the notice, order, pleading, or process in the administrative
proceeding are sent within 10 days thereafter by certified mail by the
plaintiff or the plaintiffs attorney in the court proceeding or by the
director in the administrative proceeding to the defendant at the last-known
principal place of business of the defendant.
(b) The defendants receipt or receipts
issued by the post office with which the letter is certified or registered,
showing the name of the sender of the letter and the name and address of the
person or insurer to whom the letter is addressed, and an affidavit of the
plaintiff or the plaintiffs attorney in court proceeding or of the director in
administrative proceeding, showing compliance therewith are filed with the
clerk of the court in which such action is pending or with the director in
administrative proceedings, on or before the date the defendant in the court or
administrative proceeding is required to appear or respond thereto, or within
such further time as the court or director may allow.
(4) No plaintiff shall be entitled to a
judgment or a determination by default in any court or administrative
proceeding in which court process or notice, order, pleading, or process in
proceedings before the director is served under this section until the
expiration of 45 days after the date of filing of the affidavit of compliance.
(5) Nothing in this section shall limit or
affect the right to serve any process, notice, order, or demand upon any person
or insurer in any other manner now or hereafter permitted by law. [1969 c.336 §3]
731.328
Deposits by unauthorized insurers in actions or proceedings. (1) Before an unauthorized insurer files or
causes to be filed any pleading in any court action or any notice, order,
pleading, or process in an administrative proceeding before the Director of the
Department of Consumer and Business Services instituted against such person or
insurer, by services made as provided in ORS 731.324, such insurer shall
deposit with the clerk of the court in which such action is pending, or with
the director in administrative proceedings before the director, cash or
securities. The insurer may also file with such clerk or director a bond with
good and sufficient sureties, to be approved by the clerk or director, or an
irrevocable letter of credit issued by an insured institution, as defined in
ORS 706.008, in an amount to be fixed by the court or director sufficient to
secure the payment of any final judgment which may be rendered in such action
or administrative proceeding.
(2) The director, in any administrative
proceeding in which service is made as provided in ORS 731.324, may order such
postponement as may be necessary to afford the defendant reasonable opportunity
to comply with the provisions of subsection (1) of this section and to defend
such action.
(3) Nothing in subsection (1) of this
section shall be construed to prevent an unauthorized insurer from filing a
motion to quash a writ or to set aside service thereof made in the manner
provided in ORS 731.324. [1969 c.336 §4; 1991 c.331 §126; 1997 c.631 §545]
AUTHORIZATION
OF INSURERS AND GENERAL REQUIREMENTS
731.354
Certificate of authority required. No person shall act as an insurer and no insurer shall directly or
indirectly transact insurance in this state except as authorized by a
subsisting certificate of authority issued to the insurer by the Director of
the Department of Consumer and Business Services. [1967 c.359 §73]
731.356
Unauthorized insurance transaction enforcement. When the Director of the Department of Consumer
and Business Services believes, from evidence satisfactory to the director,
that any insurer is violating or about to violate the provisions of ORS
731.354, the director may cause a complaint to be filed in the
731.358
Requirements of domestic insurers generally. Upon application a domestic insurer shall be granted a certificate of
authority to transact any class of insurance permitted by the Insurance Code
and provided for in its articles of incorporation upon its compliance with all
the laws of this state and the rules of the Department of Consumer and Business
Services relating to such insurers. [Formerly 736.085]
731.362
Requirements of foreign or alien insurers generally. (1) A foreign or alien insurer may be
authorized to transact insurance in this state when it has complied with the
following requirements:
(a) It shall file with the Director of the
Department of Consumer and Business Services a certified copy of its charter,
articles of incorporation or deed of settlement and a statement of its
financial condition and business in all states in such form and detail as the
director may require, signed and sworn to by at least two of its executive
officers or the United States manager.
(b) It shall satisfy the director that it
is fully and legally organized under the laws of its state or government to do
the business it proposes to transact.
(c) It shall satisfy the director that it
is possessed of and will maintain at all times its required capitalization.
(d) It shall make such deposits with the
Department of Consumer and Business Services as are required by the provisions
of the Insurance Code.
(2) Upon compliance with the requirements
of this section and all other requirements imposed on such insurer by the
Insurance Code, the director shall issue to it a certificate of authority. [Formerly
736.205; 1999 c.196 §1]
731.363
Authorized foreign insurer becoming domestic insurer. (1) An authorized foreign insurer may become
a domestic insurer:
(a) By complying with all of the
requirements of law relating to the organization and authorization of a
domestic insurer of the same type;
(b) By filing articles of incorporation
that are amended to comply with all of the requirements of law relating to the
organization and authorization of a domestic insurer of the same type; and
(c) By designating its principal place of
business at a place in this state.
(2) If the Director of the Department of
Consumer and Business Services determines that an authorized foreign insurer
has complied with the requirements of subsection (1) of this section, the
insurer is entitled to a certificate of authority to transact insurance in this
state and shall be subject as a domestic insurer to the authority and jurisdiction
of this state. [1995 c.639 §9; 1997 c.771 §24]
731.364
Domestic insurer transferring domicile to another state. A domestic insurer, upon the approval of the
Director of the Department of Consumer and Business Services, may transfer its
domicile to any other state in which it is admitted to transact the business of
insurance. Upon such a transfer the insurer ceases to be a domestic insurer and
may be authorized in this state if qualified as a foreign insurer. The director
shall approve such a proposed transfer unless the director determines that the
transfer is not in the interest of the policyholders of this state. [1995 c.639
§10]
731.365
Effect of transfer of domicile by domestic or foreign insurer; notice to
director by transferring insurer. (1) The certificate of authority, insurance producer appointments and
licenses, rates and other items allowed by the Director of the Department of
Consumer and Business Services pursuant to the discretion of the director that
are in existence at the time an authorized insurer transfers its domicile to
this or any other state as provided in ORS 731.363 or 731.367 or by merger,
consolidation or any other lawful method shall continue in full force and
effect upon the transfer if the insurer remains authorized to transact
insurance in this state.
(2) All outstanding policies of a
transferring insurer shall remain in full force and effect and need not be
indorsed as to the new name of the insurer or its new location unless so
ordered by the director. A transferring insurer shall file new policy forms
with the director on or before the effective date of the transfer but may use
existing policy forms with appropriate indorsements if allowed by the director,
according to any conditions established by the director.
(3) Each transferring insurer shall notify
the director of the details of the proposed transfer and shall file promptly
any resulting amendments to corporate or other organizational documents filed
or required to be filed with the director.
(4) This section applies to a domestic
insurer that transfers its domicile to another state and to an authorized
foreign insurer that transfers its domicile either to this state or to another
state. [1995 c.639 §11; 1997 c.771 §25; 2003 c.364 §68]
731.366 [Formerly 749.040; 1971 c.231 §42; 1977
c.651 §1; 1993 c.709 §4; renumbered 731.369 in 1995]
731.367
Transfer of domicile by unincorporated authorized foreign insurer. An unincorporated authorized foreign insurer
transfers its domicile to this state when the Director of the Department of
Consumer and Business Services determines that it has complied with all of the
requirements of law relating to the organization and authorization of a
domestic insurer of the same type as provided in ORS 731.363. No merger, consolidation
or other method shall be required to effect a transfer of the domicile of the
unincorporated insurer to this state and no vote or approval of the
policyholders, members or subscribers of the unincorporated insurer shall be
required. Any agreement of indemnity, appointment or governance or any similar
agreement shall continue in full force after the transfer if the unincorporated
insurer remains an authorized insurer. The laws of this state, however, shall
govern all such agreements regardless of any other law to the contrary, and
such agreements shall be considered to be modified to reflect that this state
is the principal place of business and domicile of the unincorporated insurer. [1995
c.639 §12]
731.369
Requirements of reciprocal insurers generally. (1) A reciprocal insurer, through its
attorney, shall file with the Director of the Department of Consumer and
Business Services a declaration, verified by the oath of such attorney, setting
forth:
(a) The name or title of the reciprocal
insurer.
(b) The location of the principal office
of the reciprocal insurer.
(c) The class or classes of insurance to
be effected or exchanged.
(d) A copy of the form of power of
attorney or instrument under which such insurance is to be effected or
exchanged.
(e) A copy of the policy under or by which
such contracts of insurance are effected or exchanged among the subscribers.
(f) That applications have been made for
insurance in the amounts required by subsection (2) of this section, and that
such applications will be concurrently effective when the reciprocal insurer is
authorized to commence business by the director.
(g) If a foreign or alien reciprocal
insurer, that there has been deposited and shall be maintained at all times
with the State Treasurer or other proper official of the state in which the
insurer is domiciled $50,000 in cash or securities, as a general deposit for
the benefit of subscribers wherever located. Where the laws of the home state
do not provide for the acceptance of such a deposit, the deposit may be made
with a bank or trust company in escrow subject to the control of the insurance
commissioner of the home state, and such deposit shall be released only upon
the written order of such insurance commissioner. A certification from the insurance
director or other proper state official of the state in which the reciprocal
insurer is domiciled shall be attached to the application for the certificate
of authority.
(2) The reciprocal insurer must have bona
fide applications for insurance aggregating not less than $3 million upon at
least 200 risks, except in the case of wet marine hull insurance written by a
domestic reciprocal insurer for persons whose earned income, in whole or in
part, is derived from taking and selling food resources living in an ocean, bay
or river, the applications must cover at least 25 hulls and the insurance must
aggregate at least $125,000.
(3) The applicant shall furnish any other
relevant information required by the director, except no reciprocal insurer
shall be required to furnish or file the names or addresses of its
policyholders or subscribers. [Formerly 731.366]
731.370
Reciprocal insurers financial statement; service of process. (1) The application for a certificate of
authority shall be accompanied by a sworn statement of a reciprocal insurer
showing the financial condition of the insurer as of December 31 immediately
preceding. The Director of the Department of Consumer and Business Services may
require a supplemental statement to be furnished as of a later date.
(2) Concurrently with the filing of the
declaration provided for by the terms of ORS 731.369, the attorney shall file
with the director an instrument in writing executed for the subscribers
conditioned that upon the issuance of certificate of authority, action may be
brought in the county in which the property insured thereunder is situated or
where the injured person resides, and service of process may be had as provided
in ORS 731.434 in all actions in this state arising out of policies issued by
the reciprocal insurer, which service shall be valid and binding upon all
subscribers exchanging at any time reciprocal or interinsurance contracts
through such attorney. Actions may be brought against or defended in the name
of the reciprocal insurer adopted by the subscribers. [Formerly 749.050]
731.371
Powers of reciprocal insurer regarding real estate. Except where inconsistent with other
provisions of the Insurance Code, a reciprocal insurer in its own name, as in
the case of an individual, may purchase, receive, own, hold, lease, mortgage,
pledge or encumber by deed of trust or otherwise, manage and sell real estate
for the purposes and objects of the insurer including, but not limited to,
investment for the production of income or for its accommodation in the
convenient transaction of its business. Any contract, including but not limited
to a deed, lease, mortgage, deed of trust, purchase or sale agreement or any
other contract to be executed in the name of the insurer, may be executed by
the attorney in fact designated by the insurers subscribers. [1991 c.401 §35]
Note: 731.371 was added to and made a part of the
Insurance Code by legislative action but was not added to ORS chapter 731 or
any series therein. See Preface to Oregon Revised Statutes for further
explanation.
731.374
Exemptions to certificate of authority requirement. A certificate of authority is not required
of an insurer with respect to the following:
(1) Transactions pursuant to surplus lines
coverages lawfully written under the Insurance Code.
(2) Reinsurance, when transacted by an
insurer duly authorized by its state of domicile to transact the class of
insurance involved. [1967 c.359 §78]
731.378
Foreign and alien insurers exempt from laws governing admission of foreign and
alien corporations. No
foreign or alien insurer that has complied with the requirements of the
Insurance Code shall be subject to any other provisions of the laws of this
state relating to admission or licensing of foreign or alien corporations. [Formerly
736.220]
731.380
Authority of foreign and alien insurers to take, acquire, hold and enforce
notes secured by mortgages; statement; fees. (1) Subject to subsection (2) of this section, any foreign or alien
insurer, without being authorized to transact business in this state, may take,
acquire, hold and enforce notes secured by real estate mortgages or trust deeds
and make commitments to purchase such notes. A foreign or alien insurer may
foreclose the mortgages and trust deeds in the courts of this state, acquire
the mortgaged property, hold, own and operate the property for a period not
exceeding five years and dispose of the property. The activities authorized
under this subsection by such a foreign or alien insurer shall not constitute
transacting business in this state for the purposes of ORS chapter 60.
(2) Before a foreign or alien insurer
engages in any of the activities described in subsection (1) of this section,
the foreign or alien insurer shall first file with the Department of Consumer
and Business Services a statement signed by its president, secretary, treasurer
or general manager that it constitutes the Director of the Department of
Consumer and Business Services its attorney for service of process, and shall
pay an initial filing fee of $200 and an annual license fee of $200. The
statement shall include the address of the principal place of business of the
foreign or alien insurer.
(3) The director, upon receiving service
of process as authorized by subsection (2) of this section, immediately shall
forward by registered mail or by certified mail with return receipt all
documents served upon the director to the principal place of business of the
foreign or alien insurer.
(4) A foreign or alien insurer that
indirectly engages in the activities described in subsection (1) of this
section because of its beneficial interest in a pool of notes secured by real
estate mortgages or trust deeds need not comply with subsection (2) of this
section. [1987 c.94 §118; 1991 c.249 §70]
731.381
Exemption from taxes for foreign and alien insurers engaging in activities authorized
by ORS 731.380. Engaging in
the activities authorized by ORS 731.380 by a foreign or alien insurer shall
not subject the foreign or alien insurer to any tax, license fee or charge, except
as provided in ORS 731.380, for the privilege of doing business within the
State of
731.382
General eligibility for certificate of authority. To qualify for and hold authority to
transact insurance in this state an insurer must be an incorporated insurer, or
a reciprocal insurer or an incorporated fraternal benefit society. [1967 c.359 §80]
731.385
Standards for determining whether continued operation of insurer is hazardous;
rules; order; hearing. (1)
The Director of the Department of Consumer and Business Services shall
establish standards by rule for determining whether the continued operation of
an authorized insurer may be hazardous to the policyholders or to the
insurance-buying public generally, for the purpose of carrying out ORS chapter
734 and other provisions of the Insurance Code that authorize the director to
take action against such an insurer. If the director makes such a
determination, the director may order the insurer to take one or more of the
following actions:
(a) Reduce the total amount of present and
potential liability for policy benefits by reinsurance.
(b) Reduce, suspend or limit the volume of
business being accepted or renewed.
(c) Reduce general insurance and
commission expenses by methods specified by the director.
(d) Increase the capital and surplus of
the insurer.
(e) Suspend or limit the declaration and
payment of dividends by the insurer to its stockholders or to its
policyholders.
(f) Limit or withdraw from certain
investments or discontinue certain investment practices to the extent the
director determines such action to be necessary.
(2) The director may exercise authority
under subsection (1) of this section in addition to or instead of any other
authority that the director may exercise under the Insurance Code.
(3) The director may issue an order under
this section with or without a hearing. An insurer subject to an order issued
without a hearing may file a written request for a hearing to review the order.
Such a request shall not stay the effect of the order. The hearing shall be
held within 30 days after the filing of the request. The director shall
complete the review within 30 days after the record for the hearing is closed,
and shall discontinue the action taken under subsection (1) of this section if
the director determines that none of the conditions giving rise to the action
exists. [1993 c.447 §14]
731.386
Management of insurers. The
Director of the Department of Consumer and Business Services shall not grant or
continue authority to transact insurance in this state for any insurer:
(1) The management of which is found by
the director to be untrustworthy or so lacking in insurance experience as to
make the proposed operation or the continued operation hazardous to the
insurance-buying public; or
(2) That the director has good reason to
believe is affiliated directly or indirectly through ownership, control,
reinsurance transactions or other insurance or business relations, with any
person whose business operations are or have been marked to the detriment of
policyholders, stockholders, investors, creditors or the public, by manipulation
or dissipation of assets, manipulation of accounts or reinsurance, or by
similar injurious actions. [1967 c.359 §81; 1993 c.447 §15]
731.390
Government insurers not to be authorized. No certificate of authority may be issued to any state, province or
foreign government nor to any instrumentality, political subdivision or agency
thereof. [Formerly 736.080]
731.394
Combinations of insuring powers in one insurer. An insurer that otherwise qualifies therefor
may be authorized to transact any one class or combination of classes of
insurance, except:
(1) A reciprocal insurer shall not
transact life insurance or title insurance.
(2) A title insurer shall be a stock
insurer, and shall not transact any other class of insurance.
(3) A mortgage insurer shall be a stock
insurer, and shall not transact any other class of insurance. [1967 c.359 §83;
1969 c.692 §2]
731.396
Certificate of authority and good financial condition required to issue
variable life insurance or variable annuity policies. No domestic, foreign or alien insurer shall
deliver or issue for delivery in this state variable life insurance or variable
annuity policies unless the insurer is authorized to transact life insurance in
this state and the Director of the Department of Consumer and Business Services
is satisfied that its condition and method of operation in connection with the
issuance of such policies will not render its operation hazardous to its
policyholders or the public in this state. In making the determination the
director shall consider, among other things:
(1) The history and financial condition of
the insurer;
(2) The character, responsibility and
fitness of the officers and directors of the insurer; and
(3) The laws and rules under which the
insurer is authorized by its domicile to issue such policies. [1973 c.435 §4]
731.398
Amendment of certificate of authority. The Director of the Department of Consumer and Business Services at
any time may amend an insurers certificate of authority to accord with lawful
changes in the insurers charter or insuring powers. [1967 c.359 §84]
731.402
Issuance or refusal of certificate of authority. (1) The Director of the Department of
Consumer and Business Services shall issue to an insurer a certificate of
authority if upon completion of the application for a certificate of authority
by the insurer the director finds, from the application and such other
investigation and information the director may acquire, that the insurer is
fully qualified and entitled thereto under the Insurance Code.
(2) The director shall take all necessary
action and shall either issue or refuse to issue a certificate of authority
within a reasonable time after the completion of the application for such
authority.
(3) The certificate of authority, if
issued, shall specify the class or classes of insurance the insurer is
authorized to transact in this state. The director may issue authority limited
to particular subclasses of insurance or types of insurance coverages within
the scope of a class of insurance. [1967 c.359 §85]
731.406
What certificate evidences; ownership of certificate. (1) An insurers subsisting certificate of
authority is evidence of its authority to transact in this state the class or
classes of insurance specified therein, either as direct insurer or as
reinsurer or as both.
(2) Although issued to the insurer the
certificate of authority is at all times the property of this state. Upon any
suspension, revocation or termination thereof the insurer promptly shall
deliver the certificate of authority to the Director of the Department of
Consumer and Business Services. [1967 c.359 §86]
731.410
Continuance, expiration or reinstatement of certificate of authority. (1) A certificate of authority shall
continue in force as long as the insurer is entitled thereto under the
Insurance Code and until suspended or revoked by the Director of the Department
of Consumer and Business Services, or terminated at the request of the insurer;
subject, however, to continuance of the certificate by the insurer each year
by:
(a) Payment prior to April 1 of the
continuation fee established by the director;
(b) Due filing by the insurer of its
annual statement for the calendar year preceding;
(c) Due filing by the insurer of each
annual statement supplement; and
(d) Payment by the insurer of premium
taxes with respect to the preceding calendar year as required by ORS 731.808 to
731.828.
(2) A certificate of authority that is not
continued by the insurer under subsection (1) of this section expires on the
60th day after the date on which the payment or filing is due.
(3) The director promptly shall notify the
insurer of impending expiration of its certificate of authority.
(4) The director, in the discretion of the
director, upon the insurers request made not later than the 90th day after
expiration, may reinstate a certificate of authority which the insurer has
permitted to expire, after the insurer has cured all its failures which
resulted in the expiration and has paid the fee for reinstatement established by
the director. Otherwise the insurer shall be granted another certificate of
authority only after filing application therefor and meeting all other
requirements as for an original certificate of authority in this state. [1967
c.359 §87; 1989 c.413 §3; 1995 c.639 §1]
731.414
Suspension or revocation of certificate of authority; mandatory grounds. (1) The Director of the Department of
Consumer and Business Services shall refuse to continue, or shall suspend or
revoke, an insurers certificate of authority if:
(a) As a foreign insurer, it no longer
meets the requirements for the authority; or as a domestic insurer, it has
failed to cure an impairment of required capitalization within the time allowed
therefor by the director under ORS 732.230;
(b) The insurer knowingly exceeds its
charter powers or powers granted under its certificate of authority; or
(c) As a foreign or alien insurer, its
certificate of authority to transact insurance is suspended or revoked by its
domicile.
(2) Except in cases of impairment of
required capitalization or suspension or revocation by another domicile as
referred to in subsection (1)(c) of this section, the director shall refuse,
suspend or revoke the certificate of authority only after a hearing granted to
the insurer, unless the insurer waives such hearing in writing. [1967 c.359 §88]
731.418
Grounds for suspension or revocation of certificate of authority. (1) The Director of the Department of
Consumer and Business Services may refuse to continue or may suspend or revoke
an insurers certificate of authority if the director finds after a hearing
that:
(a) The insurer has violated or failed to
comply with any lawful order of the director, or any provision of the Insurance
Code other than those for which suspension or revocation is mandatory.
(b) The insurer is in unsound condition,
or in such condition or using such methods and practices in the conduct of its
business, as to render its further transaction of insurance in this state
hazardous or injurious to its policyholders or to the public.
(c) The insurer has failed, after written
request by the director, to remove or discharge an officer or director who has
been convicted in any jurisdiction of an offense which, if committed in this
state, constitutes a misdemeanor involving moral turpitude or a felony, or is
punishable by death or imprisonment under the laws of the United States, in any
of which cases the record of the conviction shall be conclusive evidence.
(d) The insurer is affiliated with and
under the same general management, interlocking directorate or ownership as
another insurer that transacts direct insurance in this state without having a
certificate of authority therefor, except as permitted under the Insurance
Code.
(e) The insurer or an affiliate or holding
company of the insurer refuses to be examined or any director, officer,
employee or representative of the insurer, affiliate or holding company refuses
to submit to examination relative to the affairs of the insurer, or to produce
its accounts, records, and files for examination when required by the director
or an examiner of the Department of Consumer and Business Services, or refuse
to perform any legal obligation relative to the examination.
(f) The insurer has failed to pay any
final judgment rendered against it in this state upon any policy, bond,
recognizance or undertaking issued or guaranteed by it, within 30 days after
the judgment became final, or within 30 days after time for taking an appeal
has expired, or within 30 days after dismissal of an appeal before final
determination, whichever date is the later.
(g) The insurer fails to comply with ORS
742.534 (1).
(h) The insurer has failed to comply with
ORS 476.270 (1), (2) or (3) or 654.097 (1).
(2) Without advance notice or a hearing
thereon, the director may suspend immediately the certificate of authority of
any insurer as to which proceedings for receivership, conservatorship,
rehabilitation, or other delinquency proceedings, have been commenced in any
state by the public insurance supervisory official of such state. [1967 c.359 §89;
1971 c.321 §17; 1971 c.523 §10; 1975 c.585 §4; 1981 c.701 §3; 1993 c.447 §7]
731.422
Order of suspension, revocation or refusal; effect upon insurance producers
authority. (1) All
suspensions or revocations of, or refusals to continue, an insurers
certificate of authority shall be by order of the Director of the Department of
Consumer and Business Services order.
(2) Upon suspending, revoking or refusing
to continue the insurers certificate of authority, the director forthwith
shall give notice thereof to the insurers insurance producers in this state of
record in the Department of Consumer and Business Services, and likewise shall
suspend or revoke the authority of such insurance producers to represent the
insurer. The director also shall give notice to the insurance supervisory
authority in jurisdictions in which the insurer is authorized, if a domestic
insurer, or in its domicile if a foreign or alien insurer.
(3) In the discretion of the director, the
director may publish notice of such suspension, revocation or refusal in one or
more newspapers of general circulation in this state. [1967 c.359 §90; 2003
c.364 §69]
731.426
Duration of suspension; insurers obligations during suspension period; reinstatement. (1) In an order suspending the certificate
of authority of an insurer, the Director of the Department of Consumer and
Business Services may provide that the suspension expires at the end of a
specified period or when the director determines that the cause or causes of
the suspension have terminated. During the suspension the director may rescind
or shorten the suspension by further order.
(2) During the suspension period the
insurer shall not solicit or write any new business in this state, but shall
file its annual statement and pay fees, licenses and taxes as required under
the Insurance Code, and may service its business already in force in this
state, as if the certificate of authority had continued in full force.
(3) Upon expiration of a specific
suspension period, if within such period the certificate of authority has not
terminated, the insurers certificate of authority automatically shall
reinstate unless the director finds that the cause or causes of the suspension
have not terminated, or that the insurer is otherwise not in compliance with
the requirements of the Insurance Code, and of which the director shall give
the insurer notice not less than 30 days in advance of the expiration of the
suspension period.
(4) When the director determines that a
suspension should expire because the cause or causes have terminated, the
director shall reinstate the certificate of authority of the insurer unless the
certificate of authority has expired within the suspension period.
(5) Upon reinstatement of the insurers
certificate of authority, the authority of its insurance producers in this
state to represent the insurer shall likewise reinstate. The director promptly
shall notify the insurer and its insurance producers in this state of record in
the Department of Consumer and Business Services, of such reinstatement. If
pursuant to ORS 731.422 the director has published notice of suspension, in
like manner the director shall publish notice of the reinstatement. [1967 c.359
§91; 1989 c.700 §1; 2003 c.364 §70]
731.428
Written consent to engage or participate in business of insurance; rules. (1) A person who is prohibited by 18 U.S.C.
1033 from engaging or participating in the business of insurance because of a
conviction of a felony involving dishonesty or a breach of trust or conviction
of a crime under 18 U.S.C. 1033 may apply to the Director of the Department of
Consumer and Business Services for a written consent to engage or participate
in the business of insurance.
(2) The director shall establish by rule a
procedure and standards by which the director may issue a written consent to
engage or participate in the business of insurance to a person convicted of a
crime described in subsection (1) of this section.
(3) The director shall not issue a license
under the Insurance Code to an applicant who has been convicted of a crime
referred to in subsection (1) of this section unless the director also issues a
written consent.
(4) If a person issued a license under the
Insurance Code has been convicted of a crime referred to in subsection (1) of
this section or is subsequently the subject of such a conviction, the director
shall revoke, suspend or refuse to renew the license. The person may apply to
the director for a written consent as provided in subsection (1) of this
section. [2001 c.191 §59]
Note: 731.428 was added to and made a part of ORS
chapter 731 by legislative action but was not added to any smaller series
therein. See Preface to Oregon Revised Statutes for further explanation.
731.430
Name of insurer. (1) No
insurer shall be formed or authorized to transact insurance in this state which
has or will have, or which uses or will use as an assumed business name, a name
or principal identifying name factor:
(a) That is the same as or deceptively
similar to:
(A) Any other insurer so formed or
authorized;
(B) Any name reserved or registered as
authorized by this section;
(C) Any name on file with the Secretary of
State pursuant to ORS chapter 60, 65 or 648; or
(D) The name of any insurer that was
authorized to transact insurance in this state within the preceding 10 years if
insurance policies issued by such other insurer still are outstanding in this
state. With the consent of the insurer issuing such policies, the Director of
the Department of Consumer and Business Services may waive this provision if
the director finds that the waiver will not be detrimental to the public; or
(b) That is deceptive or misleading as to
the type of organization of the insurer or that does not indicate the insurer
is transacting insurance.
(2) Any insurer doing business in this
state may file and register with the director in writing, in its articles of
incorporation or otherwise, an assumed name that it will use in transacting
insurance in this state. Such name may not be a name prohibited by subsection
(1) of this section.
(3) Any person may reserve a name for use
as a corporate name or an assumed business name in transacting insurance in
this state by filing in writing with the director a reservation of such name.
Such name may not be a name prohibited by subsection (1) of this section. Such
reservation shall expire six months after the date of filing unless:
(a) If filed by an insurer, it is using
such name as an authorized insurer; or
(b) If filed by a noninsurer, it has filed
with the director a formal application for a permit to form an insurer in this
state. If a valid reservation is on file, the director may accept the filing of
a same or deceptively similar name by another person which filing shall become
effective, in the order of filing, at the expiration of the six-month provision
unless the original reservation does not expire pursuant to this subsection.
(4) When an insurer is merged as provided
in the Insurance Code, the surviving insurer may retain the use of the name for
a period of five years after the effective date of merger. If such name is
retained, use of the same or deceptively similar name by other insurers shall
be prohibited as specified under this section during the five-year period. [1967
c.359 §92; 1987 c.414 §161a; 1987 c.846 §2; 1993 c.447 §104]
731.434
Registered office and agent.
(1) The provisions, procedures and requirements of ORS chapter 60 relating to a
registered office, registered agent and to service of process, notice and
demand shall govern all insurers transacting insurance in this state, whether
authorized or unauthorized, except that the Director of the Department of
Consumer and Business Services shall be substituted for the Secretary of State
as the person with whom all filings shall be made and upon whom, in the
circumstances specified by statute, such service may be effected.
(2) This section shall not apply to
insurers for whom a certificate of authority is not required under ORS 731.374.
[1967 c.359 §93; 1987 c.846 §3; 1995 c.79 §358]
731.438
Title plant requirement for title insurers; posting of indexes; plant ownership
and maintenance. (1) A title
insurer, in order to receive and maintain a certificate of authority, shall own
and maintain at all times a title plant covering a period of at least the
immediately preceding 50 years except years before 1960 and consisting of a
general index, adequate maps and currently posted tract or geographic indexes
for all the lands in the county in which title insurance policies or other
title services are to be issued or provided. Either directly or through its
insurance producer, a title insurer also shall own and maintain for each
additional county in which it shall be authorized to transact a title insurance
business a comparable title plant or obtain from a person having a comparable
title plant for such additional county or counties title insurance showing the
status of the title.
(2) The means by which tract or geographic
indexes may be currently posted for purposes of subsection (1) of this section
include but are not limited to maintenance of the information on ledger sheets,
separate cards or sheets of film, whether bound in books or contained in
envelopes or storage files, or maintenance of the information on punch cards,
computer tape, disc or similar machine compatible form. All title services by a
title insurer must be provided in this state. The information upon which the
title services are based must be maintained and must be capable of reproduction
in this state at all times.
(3) Every title insurance transaction by a
title insurer or insurance producer involving the status of title of an
(a) Cover the location of the risk;
(b) Meet the requirements of this section;
and
(c) Are owned and maintained by one or
more title insurers or insurance producers as provided in subsections (4), (5)
and (6) of this section.
(4) For any county with a population of
500,000 or more, or any county with a population of 200,000 or more that is
contiguous to a county with a population of 500,000 or more, ownership and
maintenance of a title plant shall be as provided in this subsection:
(a) The title plant referred to in
subsection (1) of this section may be owned and maintained on an exclusive
basis or on a joint basis as provided in paragraph (b) of this subsection.
(b) A title plant is owned and maintained
on a joint basis under this subsection if two or more persons own and maintain
a portion of the title plant as joint venturers, partners, shareholders or
participants in another form of joint, several or common property ownership
recognized under the laws of this state. If ownership of a title plant is held
by fewer than four title insurers or insurance producers, each share of
ownership shall be at least 25 percent. If ownership of a title plant is held
by four or more insurers or insurance producers, all shares shall be equal.
(5) A title insurer authorized to transact
title insurance in this state and every insurance producer of such an
authorized title insurer shall own and maintain a title plant.
(6) In any county not described in
subsection (4) of this section, a title insurer or its insurance producers
transacting title insurance business shall solely own a title plant for that
county in conformance with subsections (1) and (2) of this section and shall
maintain a title plant for that county on an exclusive basis or a joint basis
in conformance with subsections (1) and (2) of this section. A title plant for
a county is maintained on a joint basis under this subsection if a title
insurer or insurance producer obtains current posting information for its tract
or geographic indexes from one or more other title insurers or insurance
producers or from a provider that is wholly owned in equal shares by the title
insurers or insurance producers utilizing the providers services. [Formerly
748.084; 1983 c.322 §1; 1999 c.183 §1; 2003 c.364 §71]
731.439
Satisfaction of requirements of ORS 731.438 (1) by certain title plants. A title plant that conforms on December 31,
1999, with ORS 731.438 (1) and (2) (1997 Edition) satisfies the requirements of
ORS 731.438 (1) as amended by section 1, chapter 183, Oregon Laws 1999, if it
also contains after that date a general index, adequate maps and currently
posted tract or geographic indexes for all lands in the county. [1999 c.183 §3]
731.442
Prohibition on transacting life insurance business on mutual assessment plan. An insurer may not transact a life insurance
business upon a mutual assessment plan within this state. [Formerly 739.105;
2005 c.185 §1]
731.446
Policyholder deposits. An
insurer may accept, from a holder of a life insurance policy, deposits in
addition to current premium payments to provide a fund for payment of future
premiums or to make possible the future acquisition of additional insurance,
annuities or other benefits, whether the interest to be paid on such deposits
be fixed or variable. Such deposits, or any portion thereof, not used for the
purposes described in this section shall be refunded to the policyholder or,
upon the death of the policyholder, to designated beneficiaries. [1967 c.359 §96]
731.450
Unrelated business prohibited; exceptions; title insurer as escrow agent. Except as authorized by the federal
Gramm-Leach-Bliley Act (P.L. 106-102), an insurer may not engage in any
business except the making of insurance or a kind of business related to the
insurance business. However, a foreign or alien insurer may engage, outside
this state, in any business permitted by its articles of incorporation and the
laws of the state of its domicile; and a title insurer also may engage in
business as an escrow agent; provided, however, that a title insurer engaging
in business as an escrow agent shall be subject to the provisions of ORS
696.505 to 696.590 in respect to its escrow activities. [1967 c.359 §97; 1971
c.398 §5; 1977 c.351 §13; 2001 c.377 §57]
731.454
Domestic insurers not to transact business in jurisdiction where not
authorized. No domestic
insurer, or any of the representatives thereof, shall transact insurance in any
jurisdiction in which such insurer is not authorized in accordance with the
laws of such jurisdiction. [Formerly 736.645]
731.458
Exchange of reciprocal or interinsurance contracts. (1) Individuals, partnerships and
corporations of this state, hereby designated as subscribers, may exchange
reciprocal or interinsurance contracts with each other, or with individuals,
partnerships and corporations of other states and countries, providing
indemnity among themselves from any loss which may be insured against under the
Insurance Code, except life insurance and title insurance. Such contracts may
be executed by an attorney, agent or other representative, hereby designated as
attorney, duly authorized and acting for such subscribers. The attorney may be
an individual, firm or corporation organized under the laws of this state or
any other state or territory and having a principal office at the place
designated by the subscribers in the power of attorney.
(2) Any corporation now or hereafter
organized under the laws of the state, in addition to the rights, powers and
franchises specified in its articles of incorporation, may exchange insurance
contracts of the kind and character described in subsection (1) of this
section. The right to exchange such contracts is declared to be incidental to
the purpose for which such corporations are organized and as much granted as
the rights and powers expressly conferred. [Formerly 749.010]
731.462
Nonassessable policies of reciprocal insurer. A reciprocal insurer having a surplus of not less than $500,000 may
issue nonassessable policies. [1967 c.359 §100]
731.466
Power of attorney for reciprocal insurer. (1) The rights and power of the attorney of a reciprocal insurer shall
be as provided in the power of attorney given it by the subscribers.
(2) The power of attorney must set forth:
(a) The powers of the attorney.
(b) That the attorney may accept service
of process on behalf of the insurer.
(c) The services to be performed by the
attorney in general.
(d) The maximum amount to be deducted from
advance premiums or deposits to be paid to the attorney.
(e) Except as to nonassessable policies, a
provision for a contingent several liability of each subscriber in a specified
amount not less than one nor more than 10 times the premium or premium deposit
stated in the policy.
(3) The power of attorney may:
(a) Provide for the right of substitution
of the attorney and revocation of the power of attorney and rights thereunder;
(b) Impose such restrictions upon the
exercise of the power as are agreed upon by the subscribers;
(c) Provide for the exercise of any right
reserved to the subscribers directly or through their advisory committee; and
(d) Contain other lawful provisions.
(4) The terms of any power of attorney or
agreement collateral thereto shall be reasonable and equitable, and no such
power or agreement or any amendment thereof, shall be used or be effective in
this state until approved by the Director of the Department of Consumer and
Business Services. [1967 c.359 §101; 1997 c.249 §217]
731.470
Attorney for reciprocal insurer. (1) Any instrument required to be verified by the oath of the attorney
for a reciprocal insurer may, in case of an incorporated attorney, be verified
by the oath of the president, vice president, secretary or other executive
officer of such corporation.
(2) The certificate of authority of a
reciprocal insurer shall be issued to its attorney in the name of the insurer.
(3) The Director of the Department of
Consumer and Business Services may refuse, suspend or revoke the certificate of
authority, in addition to other grounds therefor, for failure of a reciprocal
insurers attorney to comply with any provision of the Insurance Code.
(4) The attorney for an authorized foreign
or alien reciprocal insurer shall not, by virtue of discharge of its duties as
such attorney with respect to the insurers transactions in this state, be
thereby deemed to be doing business in this state within the meaning of any
laws of this state applying to foreign persons. [Formerly 749.140]
731.475
Records storage required of workers compensation insurers; examination and
audit of records. (1) Every
insurer authorized to issue workers compensation coverage to subject employers
as required by ORS chapter 656 shall maintain a place of business in this state
where the insurer shall:
(a) Process, and keep complete records of,
claims for compensation made to the insurer under ORS chapter 656.
(b) Make available upon request complete
records, including all records submitted electronically, of all guaranty
contracts issued as required by ORS chapter 656.
(c) Keep records identifying the specific
persons covered by an employer electing coverage pursuant to ORS 656.039.
(2) Claims records must be retained in,
and may be removed from, this state or disposed of, in accordance with the
rules of the Director of the Department of Consumer and Business Services. The
records must be available to the Department of Consumer and Business Services
for examination and audit at all reasonable times upon notice by the department
to the insurer.
(3) In lieu of establishing a place of
business in this state for the purpose required by this section, an insurer may
keep such records in this state at places of business operated by service
companies, if:
(a) Each service company is incorporated
in or authorized to do business in this state;
(b) The agreement entered into between the
insurer and the service company grants each service company a power of attorney
to act for the insurer in workers compensation coverage and claims proceedings
under ORS chapter 656; and
(c) The agreement entered into between the
insurer and each service company is approved by the director.
(4) Notwithstanding subsection (3) of this
section, an insurer may not:
(a) Enter into a service agreement
contract with one of its insureds unless the insured has service contracts with
other insurers; or
(b) Have more than eight locations at any one
time where claims are processed or records are maintained. [1975 c.585 §2; 1981
c.874 §8; 1987 c.373 §80a; 1989 c.630 §1; 1991 c.67 §194; 2003 c.170 §10]
Note: The amendments to 731.475 by section 23,
chapter 241, Oregon Laws 2007, become operative July 1, 2009. See section 31,
chapter 241, Oregon Laws 2007. The text that is operative on and after July 1,
2009, is set forth for the users convenience.
731.475. (1) Every insurer authorized to issue
workers compensation coverage to subject employers as required by ORS chapter
656 shall maintain a place of business in this state where the insurer shall:
(a) Process, and keep complete records of,
claims for compensation made to the insurer under ORS chapter 656.
(b) Make available upon request complete
records, including all records submitted electronically, of all workers
compensation insurance policies issued as required by ORS chapter 656.
(c) Keep records identifying the specific
persons covered by an employer electing coverage pursuant to ORS 656.039.
(2) Claims records must be retained in,
and may be removed from, this state or disposed of, in accordance with the
rules of the Director of the Department of Consumer and Business Services. The
records must be available to the Department of Consumer and Business Services
for examination and audit at all reasonable times upon notice by the department
to the insurer.
(3) In lieu of establishing a place of
business in this state for the purpose required by this section, an insurer may
keep such records in this state at places of business operated by service
companies, if:
(a) Each service company is incorporated
in or authorized to do business in this state;
(b) The agreement entered into between the
insurer and the service company grants each service company a power of attorney
to act for the insurer in workers compensation coverage and claims proceedings
under ORS chapter 656; and
(c) The agreement entered into between the
insurer and each service company is approved by the director.
(4) Notwithstanding subsection (3) of this
section, an insurer may not:
(a) Enter into a service agreement
contract with one of its insureds unless the insured has service contracts with
other insurers; or
(b) Have more than eight locations at any
one time where claims are processed or records are maintained.
731.480
Guaranty contracts issued by workers compensation insurers. An insurer shall not issue guaranty
contracts pursuant to ORS chapter 656 unless it furnishes occupational safety
and health loss control consultative services to its insured employers
consistent with the requirements of ORS 654.097. [1975 c.585 §3; 1981 c.874 §9;
1987 c.373 §80b; 1987 c.884 §61]
Note: The amendments to 731.480 by section 24,
chapter 241, Oregon Laws 2007, become operative July 1, 2009. See section 31,
chapter 241, Oregon Laws 2007. The text that is operative on and after July 1,
2009, is set forth for the users convenience.
731.480. An insurer shall not issue workers
compensation insurance policies pursuant to ORS chapter 656 unless it furnishes
occupational safety and health loss control consultative services to its
insured employers consistent with the requirements of ORS 654.097.
731.482
Withdrawal from, failure to renew or cancellation of line by commercial
liability insurer. (1)
Except as provided in subsection (5) of this section, an insurance company
selling commercial liability insurance and authorized to do business in Oregon
may not withdraw from, fail to renew or cancel any line of insurance or class
of business without supplying appropriate written justification to the Director
of the Department of Consumer and Business Services.
(2) Justification for withdrawal, failure
to renew or cancellation may include, but need not be limited to:
(a) Insufficient premium income;
(b) Loss experience or expectation of
future loss in the particular line of insurance or class of business;
(c) Necessity for uncompetitive or
uneconomic rate increases;
(d) Increased hazard in the risks assumed
or material change in the line of insurance or class of business that could not
have been reasonably contemplated by the insurance company at the time the
company began selling the line of insurance or class of business in Oregon; or
(e) Change in the availability or costs of
reinsurance.
(3) The director shall issue an order
approving or disapproving the withdrawal from, failure to renew or cancellation
of a line of insurance or class of business.
(4) An order issued under this section
shall include a provision requiring the insurer to notify affected insureds at
least 60 days before the effective date of any withdrawal, failure to renew or
cancellation approved by the director.
(5) This section does not apply to a
surplus lines insurer. [1987 c.774 §34]
731.484
Prohibition on certain sales related to group health and group life insurance. (1) No insurer or insurance producer selling
a policy of group life insurance or group health insurance subject to an
exemption in ORS 731.146 (2)(b) or (c) is authorized to sell membership in a group
for the purpose of qualifying an applicant who is an individual for the
insurance.
(2) No insurer or insurance producer
selling membership in a group is authorized to offer a policy of group life
insurance or group health insurance subject to an exemption in ORS 731.146
(2)(b) or (c) for the purpose of selling membership in the group. [1989 c.784 §2;
2003 c.364 §72; 2007 c.752 §2]
Note: The amendments to 731.484 by section 7,
chapter 752,
731.484. (1) No insurer or insurance producer selling
a policy of group life insurance or group health insurance subject to the
exemption in ORS 731.146 (2)(b) is authorized to sell membership in a group for
the purpose of qualifying an applicant who is an individual for the insurance.
(2) No insurer or insurance producer
selling membership in a group is authorized to offer a policy of group life
insurance or group health insurance subject to the exemption in ORS 731.146
(2)(b) for the purpose of selling membership in the group.
731.485
Conditions under which insurer may limit insureds choice of drug outlets and
pharmacies. (1) An insurer
may limit the drug outlets or pharmacists from which a person covered under a
health insurance policy issued by the insurer is authorized by the insurer to
obtain services only if the insurer first provides an opportunity to drug
outlets and pharmacists to offer to participate as a provider of services as
provided in this section. An insurer to which this section applies must provide
notice of the opportunity by mailing a notice to the professional organization
representing drug outlets and pharmacists in the service area of the insurer.
The notice must be given at least 10 days before the deadline for receiving
offers. The notice shall state the following:
(a) The date after which offers will not
be considered.
(b) The services to be provided under the
policy.
(c) That each offer must contain a
statement that the drug outlet or pharmacist is in compliance with the
requirements of the State Board of Pharmacy.
(d) The name and address of the person or
office designated for receipt of the offers.
(2) The services to which this section
applies are the services normally provided by drug outlets and pharmacists,
including but not limited to prescription drugs.
(3) A professional organization that has
received notice pursuant to subsection (1) of this section shall take
reasonable steps to relay the notice to each drug outlet registered with the
State Board of Pharmacy that is in the relevant service area.
(4) The following apply to an offer
submitted by a drug outlet or pharmacist in response to a notice given under
subsection (1) of this section:
(a) The offer must be in writing.
(b) The offer must be submitted to the
person or office designated in the notice.
(c) The drug outlet or pharmacist must
agree to provide services specified by the insurer.
(5) An insurer to which this section
applies may select any drug outlet or pharmacist of its choice on whatever
basis the insurer alone determines to be appropriate. Nothing in this section
prohibits an insurer from contracting with one or more drug outlets or
pharmacists exclusively for services to be provided to its insureds. [1993
c.391 §2]
731.486
Exemption from definition of transact insurance for group life policies;
master group health insurance coverage; rules. (1) The exemption in ORS 731.146 (2)(b) does
not apply to an insurer that offers coverage under a group life insurance
policy in this state unless the Director of the Department of Consumer and
Business Services determines that the exemption applies.
(2) The insurer shall submit evidence to
the director that the exemption applies. When a master policy for a policy of
group life insurance is delivered or issued for delivery outside this state to
trustees of a fund for two or more employers, for one or more labor unions, for
one or more employers and one or more labor unions or for an association, the
insurer shall also submit evidence showing compliance with ORS 743.354.
(3) The director shall review the evidence
submitted and may request additional evidence as needed.
(4) An insurer shall submit to the
director any changes in the evidence submitted under subsection (2) of this
section.
(5) The director may order an insurer to
cease offering a policy or coverage under a policy if the director determines
that the exemption under ORS 731.146 (2)(b) is no longer satisfied.
(6) Coverage under a master group life
insurance policy delivered or issued for delivery outside this state that does
not qualify for the exemption in ORS 731.146 (2)(b) may be offered in this
state if the director determines that the state in which the policy was
delivered or issued for delivery has requirements that are substantially
similar to those established under ORS 743.360 and that the policy satisfies
those requirements.
(7) Coverage under a master group health
insurance policy that is delivered or issued for delivery outside this state to
an association or trust may be offered in this state if the director determines
that the association or trust meets applicable standards under ORS 743.522
(1)(b) or (c) or (2).
(8) This section does not apply to any
master policy issued to a multistate employer or labor union.
(9) The director may adopt rules to carry
out this section. [1989 c.784 §3; 2001 c.943 §1; 2005 c.22 §486; 2007 c.752 §3]
Note: The amendments to 731.486 by section 8,
chapter 752,
731.486. (1) The exemption in ORS 731.146 (2)(b) does
not apply to an insurer that offers coverage under a group health insurance
policy or a group life insurance policy in this state unless the Director of
the Department of Consumer and Business Services determines that the exemption
applies.
(2) The insurer shall submit evidence to
the director that the exemption applies. When a master policy is delivered or
issued for delivery outside this state to trustees of a fund for two or more
employers, for one or more labor unions, for one or more employers and one or
more labor unions or for an association, the insurer shall also submit evidence
showing compliance with:
(a) ORS 743.526, for a policy of group
health insurance; or
(b) ORS 743.354, for a policy of group
life insurance.
(3) The director shall review the evidence
submitted and may request additional evidence as needed.
(4) An insurer shall submit to the
director any changes in the evidence submitted under subsection (2) of this
section.
(5) The director may order an insurer to
cease offering a policy or coverage under a policy if the director determines
that the exemption under ORS 731.146 (2)(b) is no longer satisfied.
(6) Coverage under a master group life or
health insurance policy delivered or issued for delivery outside this state
that does not qualify for the exemption in ORS 731.146 (2)(b) may be offered in
this state if the director determines that the state in which the policy was
delivered or issued for delivery has requirements that are substantially similar
to those established under ORS 743.360 or 743.522 (2) and that the policy
satisfies those requirements.
(7) This section does not apply to any
master policy issued to a multistate employer or labor union.
(8) The director may adopt rules to carry
out this section.
731.488
Annual audit of insurer; rules.
(1) Each insurer shall have an annual audit conducted by an independent
certified public accountant and shall file an audited financial report annually
with the Director of the Department of Consumer and Business Services. The
annual audited financial report shall disclose:
(a) The financial position of the insurer
as of the end of the most recent calendar year; and
(b) The results of the insurers
operations, cash flows and changes in capital and surplus for the year then
ended.
(2) The director shall adopt rules with
respect to the following matters as needed for carrying out the requirements of
this section:
(a) Required contents and format of the
audited financial report.
(b) Requirements for filing the report.
(c) Requirements applicable to
qualifications and designation of certified public accountants for purposes of
audits under this section. The requirements may include limitations on length
of service for certified public accountants and may permit recognition of
accountants comparably qualified under the laws of another country.
(d) Requirements applicable to evaluation
of the accounting procedures of an insurer and its system of internal control
by a certified public accountant.
(e) Standards governing the scope and
preparation of the audit.
(f) Requirements and procedures relating
to the reporting of the adverse financial condition of an insurer by a
certified public accountant.
(g) Requirements and procedures relating
to the reporting of significant deficiencies for internal controls of an
insurer.
(h) Exemptions.
(i) Any other matter that the director
determines to be needed for preparation of or inclusion in the financial
report. [1991 c.401 §15]
731.490 [1987 c.774 §52; repealed by 1997 c.131 §1]
731.493 [1987 c.774 §53; repealed by 1997 c.131 §1]
731.496 [1987 c.774 §54; repealed by 1997 c.131 §1]
731.498 [1987 c.774 §58; repealed by 1997 c.131 §1]
731.500 [1987 c.774 §59; repealed by 1997 c.131 §1]
LIMIT OF
RISK; REINSURANCE
731.504
Limit of risk. (1) No
insurer shall retain any risk on any one subject of insurance, whether a
domestic risk or not, in an amount exceeding 10 percent of its surplus to
policyholders, or in the case of title insurance, more than 50 percent of such
surplus, except that an insurance company, including a reciprocal insurance
company, comprised solely of 1,000 or more licensed Oregon physicians organized
for the purpose of insuring for professional liability may consider aggregate
insurance as surplus to policyholders for purposes of this section and shall
not be allowed to retain the risk on any one subject of insurance in excess of
two and one-half percent of such aggregate insurance.
(2) For purposes of this section,
aggregate insurance is insurance which provides coverage in the event that the
total fund of an insurance company, including a reciprocal insurance company,
which is available to pay claims for occurrences of any one year, is exhausted.
Aggregate insurance shall be in an amount equal to at least five times the
annual premium collected by the insurance company.
(3) A subject of insurance for the
purposes of this section:
(a) As to insurance against fire and
hazards other than windstorm, earthquake and other catastrophic hazards,
includes all properties insured by the same insurer that customarily are
considered by underwriters to be subject to loss or damage from the same fire
or the same occurrence of any other hazard insured against;
(b) As to group life and health insurance,
refers individually to each person benefited under the group policy as a
separate subject; and
(c) As to mortgage insurance, includes all
obligations secured by real property in a single tract, or in multiple tracts
not separated by at least one-half mile.
(4) Reinsurance ceded as authorized by ORS
731.508 shall be deducted in determining risk retained. As to surety risks,
deduction also shall be made of the amount assumed by any established
incorporated cosurety and the value of any security deposited, pledged, or held
subject to the suretys consent and for the suretys protection.
(5) As to alien insurers, this section
relates only to risks and surplus to policyholders of the insurers
(6) As used in this section, surplus to
policyholders, in addition to the insurers capital and surplus, includes any
voluntary reserves that are not required pursuant to law, includes the
contingency reserve held for mortgage insurance as required by ORS 733.100, and
shall be determined from the last sworn statement of the insurer on file with
the Director of the Department of Consumer and Business Services, or by the
last report of examination of the insurer, whichever is the more recent at time
of assumption of risk.
(7) This section does not apply to wet
marine and transportation insurance or to any policy or type of coverage as to
which the maximum possible loss to the insurer is not readily ascertainable on
issuance of the policy. [1967 c.359 §103; 1969 c.692 §3; 1975 c.796 §12]
731.508
Approved reinsurance. (1) An
insurer may accept reinsurance only of such risks, and retain risk thereon
within such limits, as it is otherwise authorized to insure.
(2) Except as provided in ORS 731.512,
732.517 to 732.546 or 742.150 to 742.162, an insurer may reinsure risks with an
insurer authorized to transact such insurance in this state, or in any other
solvent insurer approved or accepted by the Director of the Department of
Consumer and Business Services for the purpose of such reinsurance. The director
shall not approve or accept any such reinsurance by a ceding domestic insurer
in an unauthorized insurer which the director finds for good cause would be
contrary to the interests of the policyholders or stockholders of such domestic
insurer.
(3) Credit shall not be allowed, as an
asset or as a deduction from liability, to any ceding insurer for reinsurance
unless the reinsurance contract provides, in substance, that in the event of
the insolvency of the ceding insurer, the reinsurance shall be payable under a
contract or contracts reinsured by the assuming insurer on the basis of
reported claims allowed by the court hearing the liquidation proceeding,
without diminution because of the insolvency of the ceding insurer. Such
payments shall be made directly to the ceding insurer or to its domiciliary
liquidator except:
(a) When the contract or other written
agreement specifically provides another payee of the reinsurance in the event
of the insolvency of the ceding insurer; or
(b) When the assuming insurer, with the
consent of the direct insured or insureds, has assumed the policy obligations
of the ceding insurer as direct obligations of the assuming insurer to the
payees under such policies and in substitution for the obligations of the
ceding insurer to such payees.
(4) For the purposes of subsection (3) of
this section, the reinsurance agreement may provide that the domiciliary
liquidator of an insolvent ceding insurer shall, within a reasonable time after
the claim is filed in the liquidation proceeding, give written notice to the
assuming insurer of the pendency of a claim against the ceding insurer on the
contract reinsured. During the pendency of the claim, an assuming insurer may
investigate the claim and interpose, at its own expense, in the proceeding in
which the claim is to be adjudicated any defenses that the assuming insurer
determines to be available to the ceding insurer or its liquidator. The expense
may be filed as a claim against the insolvent ceding insurer to the extent of a
proportionate share of the benefit that may accrue to the ceding insurer solely
as a result of the defense undertaken by the assuming insurer. When two or more
assuming insurers are involved in the same claim and a majority in interest
elect to interpose one or more defenses to the claim, the expense shall be
apportioned in accordance with the terms of the reinsurance agreement as though
the expense had been incurred by the ceding insurer.
(5) The director may disallow credit that
would otherwise be allowed if the director determines that allowing credit
would be contrary to accurate financial reporting or proper financial
management, or may be hazardous to policyholders of the insurer or the
insurance-buying public generally. The director may make such a determination
only according to standards established by the director by rule. This
subsection applies only to insurers who transact life insurance or health
insurance, or both.
(6) Upon request of the director, a ceding
insurer promptly shall inform the director in writing of the cancellation or
any other material change of any of its reinsurance treaties or arrangements.
(7) This section does not apply to wet
marine and transportation insurance. [1967 c.359 §104; 1993 c.447 §68; 1995
c.30 §9; 1995 c.638 §1; 2001 c.318 §14]
731.509
Legislative intent; criteria for allowing credit for reinsurance. (1) The purpose of ORS 731.509, 731.510,
731.511, 731.512 and 731.516 is to protect the interests of insureds,
claimants, ceding insurers, assuming insurers and the public generally. The
Legislative Assembly declares that its intent is to ensure adequate regulation
of insurers and reinsurers and adequate protection for those to whom they owe
obligations. In furtherance of that state interest, the Legislative Assembly mandates
that upon the insolvency of an alien insurer or reinsurer that provides
security to fund its United States obligations in accordance with ORS 731.509,
731.510, 731.511, 731.512 and 731.516, the assets representing the security
shall be maintained in the United States and claims shall be filed with and
valued by the state insurance commissioner with regulatory oversight, and the
assets shall be distributed in accordance with the insurance laws of the state
in which the trust is domiciled that are applicable to the liquidation of
domestic United States insurers. The Legislative Assembly declares that the
laws contained in ORS 731.509, 731.510, 731.511, 731.512 and 731.516 are
fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and
1012.
(2) The Director of the Department of
Consumer and Business Services shall not allow credit for reinsurance to a
domestic ceding insurer as either an asset or a reduction from liability on
account of reinsurance ceded unless credit is allowed as provided under ORS
731.508 and unless the reinsurer meets the requirements of:
(a) Subsection (3) of this section;
(b) Subsection (4) of this section;
(c) Subsections (5) and (8) of this
section;
(d) Subsections (6) and (8) of this
section; or
(e) Subsection (7) of this section.
(3) Credit shall be allowed when the
reinsurance is ceded to an authorized assuming insurer that accepts reinsurance
of risks, and retains risk thereon within such limits, as the assuming insurer
is otherwise authorized to insure in this state as provided in ORS 731.508.
(4) Credit shall be allowed when the
reinsurance is ceded to an assuming insurer that is accredited as a reinsurer
in this state as provided in ORS 731.511. The director shall not allow credit
to a domestic ceding insurer if the accreditation of the assuming insurer has
been revoked by the director after notice and opportunity for hearing.
(5) Credit shall be allowed when the
reinsurance is ceded to a foreign assuming insurer or a
(a) The foreign assuming insurer must be
domiciled in a state employing standards regarding credit for reinsurance that
equal or exceed the standards applicable under this section. The
(b) The foreign assuming insurer or
(c) The foreign assuming insurer or
(6) Credit shall be allowed when the
reinsurance is ceded to an assuming insurer that maintains a trust fund meeting
the requirements of this subsection and additionally complies with other
requirements of this subsection. The trust fund must be maintained in a
qualified
(a) In the case of a single assuming
insurer, the trust fund must consist of funds in trust in an amount not less
than the assuming insurers liabilities attributable to reinsurance ceded by
(b) In the case of a group including
incorporated and individual unincorporated underwriters:
(A) For reinsurance ceded under
reinsurance agreements with an inception, amendment or renewal date on or after
August 1, 1995, the trust shall consist of a trusteed account in an amount not
less than the groups several liabilities attributable to business ceded by
(B) For reinsurance ceded under
reinsurance agreements with an inception date on or before July 31, 1995, and
not amended or renewed after that date, notwithstanding the other provisions of
ORS 731.509, 731.510, 731.511, 731.512 and 731.516, the trust shall consist of
a trusteed account in an amount not less than the groups several insurance and
reinsurance liabilities attributable to business written in the United States.
(C) In addition to the trusts described in
subparagraphs (A) and (B) of this paragraph, the group shall maintain in trust
a trusteed surplus of which $100,000,000 shall be held jointly for the benefit
of the United States domiciled ceding insurers of any member of the group for
all years of account.
(D) The incorporated members of the group
shall not be engaged in any business other than underwriting as a member of the
group and shall be subject to the same level of regulation and solvency control
by the groups domiciliary regulator as are the unincorporated members.
(E) Within 90 days after the groups
financial statements are due to be filed with the groups domiciliary
regulator, the group shall provide to the director an annual certification by
the groups domiciliary regulator of the solvency of each underwriter member
or, if certification is unavailable, financial statements of each underwriter
member of the group prepared by independent certified public accountants.
(c) In the case of a group of incorporated
insurers described in this paragraph, the trust must be in an amount equal to
the groups several liabilities attributable to business ceded by
(d) The form of the trust and any
amendment to the trust shall have been approved by the insurance commissioner
of the state in which the trust is domiciled or by the insurance commissioner
of another state who, pursuant to the terms of the trust instrument, has accepted
principal regulatory oversight of the trust.
(e) The form of the trust and any trust
amendments also shall be filed with the insurance commissioner of every state
in which the ceding insurer beneficiaries of the trust are domiciled. The trust
instrument must provide that contested claims shall be valid and enforceable
upon the final order of any court of competent jurisdiction in the
(f) Not later than March 1 of each year,
the trustees of each trust shall report to the director in writing the balance
of the trust and listing the trusts investments at the preceding year end, and
shall certify the date of termination of the trust, if so planned, or certify
that the trust will not expire prior to the following December 31.
(7) Credit shall be allowed when the
reinsurance is ceded to an assuming insurer not meeting the requirements of
subsection (3), (4), (5) or (6) of this section, but only as to the insurance
of risks located in jurisdictions in which the reinsurance is required by
applicable law or regulation of that jurisdiction.
(8) If the assuming insurer is not
authorized to transact insurance in this state or accredited as a reinsurer in
this state, the director shall not allow the credit permitted by subsections
(5) and (6) of this section unless the assuming insurer agrees in the
reinsurance agreement to the provisions stated in this subsection. This
subsection is not intended to conflict with or override the obligation of the
parties to a reinsurance agreement to arbitrate their disputes, if such an
obligation is created in the agreement. The assuming insurer must agree in the
reinsurance agreement:
(a) That in the event of the failure of
the assuming insurer to perform its obligations under the terms of the
reinsurance agreement, the assuming insurer, at the request of the ceding
insurer, shall submit to the jurisdiction of any court of competent
jurisdiction in any state of the United States, will comply with all
requirements necessary to give the court jurisdiction and will abide by the
final decision of the court or of any appellate court in the event of an
appeal; and
(b) To designate the director or a
designated attorney as its true and lawful attorney upon whom any lawful
process in any action, suit or proceeding instituted by or on behalf of the
ceding company may be served.
(9) If the assuming insurer does not meet
the requirements of subsection (3), (4) or (5) of this section, the credit
permitted by subsection (6) of this section shall not be allowed unless the
assuming insurer agrees in the trust agreements to the following conditions:
(a) Notwithstanding any other provisions
in the trust instrument, if the trust fund is inadequate because it contains an
amount less than the applicable amount required by subsection (6)(a), (b) or
(c) of this section, or if the grantor of the trust has been declared insolvent
or placed into receivership, rehabilitation, liquidation or similar proceedings
under the laws of the grantors state or country of domicile, the trustee shall
comply with an order of the insurance commissioner with regulatory oversight
over the trust or with an order of a court of competent jurisdiction directing
the trustee to transfer to the insurance commissioner with regulatory oversight
all the assets of the trust fund.
(b) The assets shall be distributed by and
claims shall be filed with and valued by the insurance commissioner with
regulatory oversight in accordance with the laws of the state in which the
trust is domiciled that are applicable to the liquidation of domestic insurance
companies.
(c) If the insurance commissioner with
regulatory oversight determines that the assets of the trust fund or any part
thereof are not necessary to satisfy the claims of the United States ceding
insurers of the grantor of the trust, the assets or part thereof shall be
returned by the insurance commissioner according to the laws of that state and
according to the terms of the trust agreement not inconsistent with the laws of
that state.
(d) The grantor shall waive any right
otherwise available to it under
731.510
Criteria for allowing reduction from liability for reinsurance. (1) Subject to the provisions of ORS 731.508
relating to allowance of credit for reinsurance, the Director of the Department
of Consumer and Business Services shall allow a reduction from liability for
the reinsurance ceded by a domestic insurer to a reinsurer not meeting the
requirements of ORS 731.509 in an amount not exceeding the liabilities carried
by the ceding insurer, as provided in this section. The reduction shall be in
the amount of funds held by or on behalf of the ceding insurer, including funds
held in trust for the ceding insurer, under a reinsurance contract with the
reinsurer as security for the payment of obligations thereunder, if the
security:
(a) Is held in the
(b) In the case of a trust, is held in a
qualified
(A) Is organized, or, in the case of a
United States branch or agency office of a foreign banking organization, is
licensed, under the laws of the United States or any state thereof and has been
granted authority to operate with fiduciary powers; and
(B) Is regulated, supervised and examined
by federal or state authorities having regulatory authority over banks and
trust companies.
(2) The security for purposes of
subsection (1) of this section may be in any of the following forms:
(a) Cash.
(b) Securities listed by the Securities
Valuation Office of the National Association of Insurance Commissioners and
qualifying as allowed assets.
(c) Clean, irrevocable, unconditional
letters of credit, issued or confirmed by a qualified
(A) Is organized or, in the case of a
(B) Is regulated, supervised and examined
by United States federal or state authorities having regulatory authority over
banks and trust companies; and
(C) Has been determined by the director to
meet such standards of financial condition and standing as are considered
necessary and appropriate to regulate the quality of financial institutions
whose letters of credit will be acceptable to the director. For the purpose of
making a determination under this subparagraph, the director shall consider and
may accept determinations made by the Securities Valuation Office of the
National Association of Insurance Commissioners as to whether a financial
institution meets its standards of financial conditions and standing.
(d) Any other form of security acceptable
to the director. [1993 c.447 §66; 2001 c.318 §16]
731.511
Criteria to be met by assuming insurer in order to be accredited as reinsurer. (1) For purposes of allowing credit to a
ceding domestic insurer under ORS 731.509 when the reinsurance is ceded to an
assuming insurer that is accredited as a reinsurer in this state, an insurer
may be accredited as a reinsurer in this state if the insurer:
(a) Files and maintains with the Director
of the Department of Consumer and Business Services evidence of its submission
to the jurisdiction of this state;
(b) Submits to the authority of the
director to examine its books and records;
(c) Is authorized or licensed to transact
insurance or reinsurance in at least one state or, in the case of a United
States branch of an alien assuming insurer, is entered through and authorized
or licensed to transact insurance or reinsurance in at least one state;
(d) Files annually with the director a
copy of its annual statement filed with the insurance department of its state
of domicile and a copy of its most recent audited financial statement; and
(e) Satisfies either of the following
requirements:
(A) Maintains combined capital and surplus
in an amount that is not less than $20,000,000. An application for
accreditation by an insurer who maintains the amount of combined capital and
surplus specified in this subparagraph is considered to be approved if the
application is not disapproved on or before the 90th day after the application
is complete and is filed with the director.
(B) Maintains combined capital and surplus
in an amount less than $20,000,000. An insurer applying for accreditation who
maintains the amount of combined capital and surplus specified in this
subparagraph is not accredited until the application for accreditation is approved
by the director.
(2) An insurer that is accredited as a
reinsurer in this state may accept reinsurance only of those risks and retain
the risk thereon within such limits as the accredited reinsurer is otherwise
authorized to insure directly in a state in which the accredited reinsurer is
authorized or licensed to transact insurance.
(3) The director may revoke the
accreditation of an assuming insurer if the director determines that the
assuming insurer has failed to continue to meet any of the requirements of
subsection (1) of this section. [1993 c.447 §67]
731.512
Withdrawal of insurer; reinsurance. (1) No insurer shall withdraw from this state until its direct
liability to its policyholders and obligees under all its insurance policies
then in force in this state has been assumed by another authorized insurer
under an agreement approved by the Director of the Department of Consumer and
Business Services. In the case of a life insurer, its liability pursuant to
policies issued in this state in settlement of proceeds under its policies
shall likewise be so assumed.
(2) The director may waive this
requirement if the director finds upon examination that a withdrawing insurer
then is fully solvent and that the protection to be given its policyholders in this
state will not be impaired by the waiver.
(3) The assuming insurer within a
reasonable time shall replace the assumed insurance policies with its own, or
by indorsement thereon acknowledge its liability thereunder.
(4) This section is in addition to the
requirements of ORS 732.517 to 732.546 and 742.150 to 742.162. [1967 c.359 §105;
1995 c.30 §10]
731.516
Mortgage insurance limitation.
A mortgage insurer shall not have outstanding at any time mortgage insurance
policies covering amounts of insured obligations and amounts of insured future
lease payments aggregating more than 25 times the insurers surplus to
policyholders as defined in ORS 731.504 (6). [1969 c.692 §5; 1977 c.600 §1]
CAPITAL AND
SURPLUS
731.554
Capital and surplus requirements. (1) Except as provided in subsections (2) to (6) of this section and
ORS 731.562 and 731.566, to qualify for authority to transact insurance in this
state an insurer shall possess and thereafter maintain capital or surplus, or
any combination thereof, of not less than $2.5 million.
(2) An insurer transacting any workers
compensation insurance business shall possess and thereafter maintain capital
or surplus, or any combination thereof, of not less than $5 million.
(3) An insurer transacting mortgage insurance
shall possess and thereafter maintain capital or surplus, or any combination
thereof, of not less than $4 million.
(4) A home protection insurer shall
possess and thereafter maintain capital or surplus, or any combination thereof,
of not less than 10 percent of the aggregate of premiums charged on its
policies currently in force, but the required amount shall not be less than
$250,000 or more than $1 million.
(5) A domestic insurer applying for its
original certificate of authority in this state shall possess, when first so
authorized, additional capital or surplus, or any combination thereof, of not
less than $500,000. However, the additional amount in the case of a home
protection insurer shall be not less than $10,000.
(6) For the protection of the public, the
Director of the Department of Consumer and Business Services may require an
insurer to possess and maintain capital or surplus, or any combination thereof,
in excess of the amount otherwise required under this section, ORS 731.562 or
731.566, owing to the type, volume and nature of insurance business transacted
by the insurer, if the director determines that the greater amount is necessary
for maintaining the insurers solvency according to standards established by
rule. In developing such standards, the director shall consider model standards
adopted by the National Association of Insurance Commissioners. For the purpose
of determining the reasonableness and adequacy of an insurers capital and
surplus, the director must consider at least the following factors, as
applicable:
(a) The size of the insurer, as measured
by its assets, capital and surplus, reserves, premium writings, insurance in
force and other appropriate criteria.
(b) The extent to which the business of
the insurer is diversified among the several lines of insurance.
(c) The number and size of risks insured
in each line of business.
(d) The extent of the geographical
dispersion of the insured risks of the insurer.
(e) The nature and extent of the
reinsurance program of the insurer.
(f) The quality, diversification and
liquidity of the investment portfolio of the insurer.
(g) The recent past and projected future
trend in the size of the investment portfolio of the insurer.
(h) The combined capital and surplus
maintained by other comparable insurers.
(i) The adequacy of the reserves of the
insurer.
(j) The quality and liquidity of
investments in affiliates. The director may treat any such investment as a
disallowed asset for purposes of determining the adequacy of combined capital
and surplus whenever in the judgment of the director the investment so
warrants.
(k) The quality of the earnings of the
insurer and the extent to which the reported earnings include extraordinary
items. [1967 c.359 §106; 1969 c.335 §1; 1969 c.692 §6; 1981 c.247 §5; 1987
c.483 §1; 1993 c.447 §9; 2001 c.318 §1]
731.558 [1967 c.359 §107; repealed by 1993 c.447 §122]
731.562
Title insurer capital and surplus requirements. To qualify for authority to transact title
insurance in this state, an insurer shall possess and thereafter maintain
capital or surplus, or any combination thereof, of not less than $2.5 million. [Formerly
748.010; 1987 c.483 §2; 2001 c.318 §2]
731.566
Reciprocal insurer surplus requirements. To qualify for authority to transact insurance in this state, a
reciprocal insurer shall possess and thereafter maintain a surplus of not less
than $2.5 million, and any reciprocal insurer that exchanges policies of
insurance covering workers compensation insurance shall possess and thereafter
maintain a surplus of not less than $5 million. [1967 c.359 §109; 1975 c.274 §1;
1977 c.651 §2; 1987 c.483 §3; 1993 c.709 §3; 2001 c.318 §3]
Note: Section 5, chapter 318, Oregon Laws 2001,
provides:
Sec.
5. (1) To qualify for
authority to transact insurance in this state on and after January 1, 2002, an
insurer that is not authorized to transact insurance in this state on the day
before January 1, 2002, must possess and thereafter maintain the applicable
capital and surplus required by ORS 731.554, 731.562 and 731.566, as amended by
sections 1 to 3, chapter 318, Oregon Laws 2001.
(2) To qualify for authority to transact
health care services in this state on and after January 1, 2002, a health care
service contractor that is not authorized to transact health care services in
this state on the day before January 1, 2002, must possess and thereafter
maintain the applicable capital and surplus required by ORS 750.045, as amended
by section 6, chapter 318, Oregon Laws 2001.
(3) An insurer that is authorized to
transact insurance in this state on the day before January 1, 2002, and that
possesses on that date the applicable capital and surplus required under ORS
731.554, 731.562 and 731.566, as amended by sections 1 to 3, chapter 318,
Oregon Laws 2001, must thereafter maintain that capital and surplus.
(4) A health care service contractor that
is authorized to transact health care services in this state on the day before
January 1, 2002, and that possesses on that date the applicable capital and
surplus required under ORS 750.045, as amended by section 6, chapter 318,
Oregon Laws 2001, must thereafter maintain that capital and surplus.
(5) Notwithstanding the effective date of
chapter 318, Oregon Laws 2001 [January 1, 2002], an insurer that is authorized
to transact insurance in this state on the day before January 1, 2002, and that
does not possess on January 1, 2002, the applicable capital and surplus
required under ORS 731.554 (1) and (2), 731.562 and 731.566, as amended by
sections 1 to 3, chapter 318, Oregon Laws 2001, must possess and maintain at
least the amounts of capital and surplus as follows:
(a) For insurers other than insurers
transacting workers compensation insurance:
(A) $1,300,000, not later than December
31, 2002.
(B) $1,600,000, not later than December
31, 2003.
(C) $1,900,000, not later than December
31, 2004.
(D) $2,200,000, not later than December
31, 2005.
(E) $2,500,000, not later than December
31, 2006.
(b) For insurers transacting workers
compensation insurance:
(A) $3,400,000, not later than December
31, 2002.
(B) $3,800,000, not later than December
31, 2003.
(C) $4,200,000, not later than December
31, 2004.
(D) $4,600,000, not later than December
31, 2005.
(E) $5,000,000, not later than December
31, 2006.
(6) Notwithstanding the effective date of
chapter 318, Oregon Laws 2001, a health care service contractor that is
authorized to transact health care services in this state on the day before
January 1, 2002, and that does not possess on January 1, 2002, the applicable capital
and surplus required under ORS 750.045, as amended by section 6, chapter 318,
Oregon Laws 2001, must possess and maintain at least the amounts of capital and
surplus as follows:
(a) As of each date specified in this
paragraph, a health care service contractor other than one to which ORS 750.045
(3) applies shall possess and maintain capital or surplus, or any combination
thereof, of not less than the minimum amount specified in connection with the
date or an amount equal to 50 percent of the average claims as defined in ORS
750.005 for the preceding 12-month period, whichever is greater. The required
amount of capital and surplus for each date, however, shall not be more than
the maximum amount specified in connection with that date. The dates and minimum
and maximum required amounts of capital and surplus are as follows:
(A) As of December 31, 2002, not less than
$650,000 and not more than $1,300,000.
(B) As of December 31, 2003, not less than
$800,000 and not more than $1,600,000.
(C) As of December 31, 2004, not less than
$950,000 and not more than $1,900,000.
(D) As of December 31, 2005, not less than
$1,100,000 and not more than $2,200,000.
(E) As of December 31, 2006, not less than
$2,500,000.
(b) As of each date specified in this
paragraph, a health care service contractor to which ORS 750.045 (3) applies
shall possess and maintain capital or surplus, or any combination thereof, of
not less than the minimum amount specified in connection with the date or an
amount equal to 50 percent of the average claims as defined in ORS 750.005 for
the preceding 12-month period, whichever is greater. The required amount of
capital and surplus for each date, however, shall not be more than the maximum
amount specified in connection with that date. The dates and minimum and
maximum required amounts of capital and surplus are as follows:
(A) As of December 31, 2002, not less than
$300,000 and not more than $600,000.
(B) As of December 31, 2003, not less than
$350,000 and not more than $700,000.
(C) As of December 31, 2004, not less than
$400,000 and not more than $800,000.
(D) As of December 31, 2005, not less than
$450,000 and not more than $900,000.
(E) As of December 31, 2006, not less than
$1 million.
(7) An insurer authorized to transact
insurance in this state on the day before January 1, 2002, shall not be granted
authority to transact any other or additional class of insurance until the
insurer complies with the applicable provisions of ORS 731.554, 731.562 or
731.566, as amended by sections 1 to 3, chapter 318, Oregon Laws 2001.
(8) An insurer or health care service
contractor authorized to transact insurance or health care services in this
state on the day before January 1, 2002, that reapplies for a certificate of
authority after having a certificate of authority revoked for any cause shall
not be granted authority to transact any insurance or health care services
until the insurer or health care service contractor complies with the
applicable provisions of ORS 731.554, 731.562, 731.566 or 750.045, as amended
by sections 1 to 3 and 6, chapter 318, Oregon Laws 2001.
(9) If an insurer to which subsection (5)
of this section applies or a health care service contractor to which subsection
(6) of this section applies does not possess and maintain the minimum amount of
capital and surplus required by ORS 731.554 (1) and (2), 731.562, 731.566 and
750.045, as amended by sections 1 to 3 and 6, chapter 318, Oregon Laws 2001, on
or before December 31, 2006, the insurer or health care service contractor may apply
to the Director of the Department of Consumer and Business Services for an
extension of time within which to attain the amount. The application must state
the reasons for the failure to attain the required minimum amount, the date by
which the amount is expected to be attained and the means and likelihood of
attaining the amount by that date. The director may grant the extension if the
director determines that the extension is reasonable and appropriate in the
circumstances, taking into account factors that include but are not limited to
the following:
(a) Whether the insurer or health care
service contractor has made reasonable progress toward attaining the required
minimum amount during the time periods specified in this section; and
(b) Whether the insurer or health care
service contractor is likely to attain the required minimum amount by the date
proposed by the insurer or health care service contractor. [2001 c.318 §5; 2003
c.33 §3]
731.568 [1993 c.709 §2; repealed by 2001 c.318 §4]
731.570
Withdrawing advancements made to reciprocal insurer. No advancement made by the subscribers or
the attorney of a reciprocal insurer shall be withdrawn or refunded except out
of the surplus of the insurer in excess of its required capitalization, and
then only upon the written consent of the Director of the Department of
Consumer and Business Services. [1967 c.359 §110]
731.574
Annual financial statement.
(1) Except as provided in subsection (4) of this section, every authorized
insurer shall file with the Director of the Department of Consumer and Business
Services, on or before March 1 of each year, a financial statement for the year
ending December 31 immediately preceding. This statement shall be on a form
prescribed by the director. The statement shall contain such detailed exhibit
of the condition and transactions of the insurer, in such form and otherwise,
as the director prescribes. The director shall consider and may prescribe the
annual statement blank or other form established by the National Association of
Insurance Commissioners, including instructions prepared by the National
Association of Insurance Commissioners for completing the blank or other form.
If the director prescribes the blank or other form established by the National
Association of Insurance Commissioners, including the instructions, an insurer
submitting the annual statement blank or form established by the National
Association of Insurance Commissioners must complete the blank or form
according to the instructions. The director may require the filing of
information in addition to the information required in the annual statement.
The director may also require additional filings as the director determines
necessary.
(2) The financial statement filed by an
insurer under subsection (1) of this section shall be verified by the oaths of
the president and secretary of the insurer or, in their absence, by two other
principal officers. The statement of an alien company shall embrace only its
condition and transactions in the
(3) The director may grant an extension of
time for filing the annual statement.
(4) A home protection insurer may adopt a
fiscal year other than the calendar year for its financial statements filed
with the director under subsection (1) of this section by declaring the fiscal
year in its application for a certificate of authority. An adopted fiscal year
may not be changed without the consent of the insurance supervisory official of
the insurers domicile. The financial statement of a home protection insurer on
other than the calendar year basis shall be filed with the director on or
before the first day of the third month which follows the end of the fiscal
year.
(5) An insurer, subject to requirements
set forth in rules made by the director, may publish financial statements, or
information based on financial statements, prepared on a basis that is in
accordance with requirements of a competent authority and differs from the
basis of the statements required to be filed with the director.
(6) It is the intention of the Legislative
Assembly that the director consider and follow the accounting, reporting and
other standards, practices and procedures established by the National
Association of Insurance Commissioners in order to:
(a) Strengthen and improve regulation of
insurer solvency by the Department of Consumer and Business Services;
(b) Promote uniform and consistent
regulation of insurance by this state and the other states;
(c) Reduce regulatory costs owing to
unnecessary differences in the laws of the various states; and
(d) Obtain and maintain accreditation of
this states insurance regulatory program by the National Association of
Insurance Commissioners. [Formerly 736.120; 1975 c.231 §1; 1981 c.247 §6; 1993
c.447 §12]
REPORTS OF
CRIMINAL CONDUCT
731.590
Insurer defined for ORS 731.592 and 731.594. As used in ORS 731.592 and 731.594, insurer
includes, but is not limited to:
(1) An insurer, as defined in ORS 731.106.
(2) A health care service contractor, as
defined in ORS 750.005, including, but not limited to, a health maintenance
organization.
(3) A multiple employer welfare
arrangement, as defined in ORS 750.301.
(4) A legal entity that is self-insured
and provides insurance services to its employees.
(5) A guaranty contract insurer, as
defined in ORS 656.005.
(6) An employer authorized under ORS
chapter 656 to self-insure its workers compensation risk.
(7) A fraternal benefit society, as
described in ORS 748.106.
(8) An insurance producer, as defined in
ORS 731.104. [1999 c.633 §2; 2003 c.364 §73]
Note: The amendments to 731.590 by section 25,
chapter 241, Oregon Laws 2007, become operative July 1, 2009. See section 31,
chapter 241, Oregon Laws 2007. The text that is operative on and after July 1,
2009, is set forth for the users convenience.
731.590. As used in ORS 731.592 and 731.594, insurer
includes, but is not limited to:
(1) An insurer, as defined in ORS 731.106.
(2) A health care service contractor, as
defined in ORS 750.005, including, but not limited to, a health maintenance
organization.
(3) A multiple employer welfare
arrangement, as defined in ORS 750.301.
(4) A legal entity that is self-insured
and provides insurance services to its employees.
(5) An insurer, as defined in ORS 656.005.
(6) An employer authorized under ORS chapter
656 to self-insure its workers compensation risk.
(7) A fraternal benefit society, as
described in ORS 748.106.
(8) An insurance producer, as defined in
ORS 731.104.
Note: 731.590 to 731.594 were added to and made a
part of the Insurance Code by legislative action but were not added to ORS
chapter 731 or any series therein. See Preface to Oregon Revised Statutes for
further explanation.
731.592
Reporting criminal conduct involving insurance. (1) Notwithstanding ORS 746.665, an insurer
shall cooperate with any law enforcement agency or other state or federal
agency that is investigating or prosecuting suspected criminal conduct
involving insurance. The insurer shall provide any information requested by the
agency unless the information is subject to a legal privilege that would
prohibit disclosure.
(2) If an insurer has reason to believe
that criminal conduct involving insurance has been, is being or is about to be
committed, the insurer shall notify the appropriate agency of that fact. The
insurer is not required to notify the agency if the information or any part of
the information upon which the belief is based is protected from disclosure by
legal privilege.
(3) An insurer providing information under
this section may request information relating to the investigation that is in
the possession or control of the agency. The agency may not provide an insurer
with information that is privileged or confidential. Otherwise, the agency
shall disclose requested information unless disclosure would jeopardize an
ongoing investigation or prosecution. The agency may require that the insurer
not disclose the information to any other person.
(4) A person who has reason to believe
criminal conduct involving insurance has been, is being or is about to be
committed, or who collects, reviews or analyzes information concerning
suspected criminal conduct involving insurance, may furnish any unprivileged
information in the persons possession concerning the suspected criminal
conduct to an insurer who requests the information for the purpose of
detecting, prosecuting or preventing criminal conduct involving insurance.
(5) If an insurer or agency does not
provide information as required by this section and the suspected criminal
conduct results in a conviction, the insurer or agency is not eligible for any
compensation to which the insurer or agency might otherwise be entitled from
any award under ORS 137.106. [1999 c.633 §3]
Note: See second note under 731.590.
731.594
Immunity from civil liability.
Unless it is shown that the person, including an insurer, acted with actual
malice, a person who discloses or provides information under ORS 731.592 has
immunity from any civil liability that might otherwise be incurred or imposed
with respect to the disclosure or provision of the information. A person has
the same immunity with respect to participating in any judicial proceeding
resulting from the disclosure or provision of information. [1999 c.633 §4]
Note: See second note under 731.590.
DEPOSITS
731.604
Acceptance of deposits of insurers. The following deposits of insurers shall be accepted and held by the
Department of Consumer and Business Services for the purposes for which such
deposits are made and are subject to the applicable provisions of the Insurance
Code:
(1) Deposits required or permitted under
the Insurance Code.
(2) Deposits of domestic insurers made
pursuant to the laws of other jurisdictions. [1967 c.359 §112; 1999 c.196 §2]
731.608
Purpose of deposit. (1)
Except as provided in subsection (2) of this section, deposits made in this
state under ORS 731.624 shall be held for the faithful performance by the
insurer of all insurance obligations, including claims for unearned premiums,
with respect to domestic risks pertaining to the particular class of insurance
for which the deposit was made. However, there shall be excluded from each such
obligation the same amount as is excluded in determining the obligation of the
Oregon Insurance Guaranty Association under ORS 734.510 to 734.710.
(2) If at any time a deposit made under
ORS 731.624 by a particular insurer is insufficient to perform the insurance
obligations upon the faithful performance of which the deposit was conditioned,
then any other deposit made under ORS 731.624 by that insurer shall be so used
to the extent that such other deposit is not used to perform the insurance
obligations upon the faithful performance of which such other deposit was
conditioned.
(3) Deposits made by insurers and
reinsurers in this state under ORS 731.628 shall be held for the payment of
compensation benefits to workers employed by insured employers other than those
insured with the State Accident Insurance Fund Corporation to whom the insurer
has issued a guaranty contract under ORS chapter 656. Deposits made by insurers
and reinsurers under ORS 731.628 also shall be held to reimburse the Department
of Consumer and Business Services, subject to approval by the Director of the
Department of Consumer and Business Services, for costs incurred by the
department in processing workers compensation claims of insurers which have
been placed in liquidation, receivership, rehabilitation or other such status
for the orderly conservation or distribution of assets, pursuant to the laws of
this state or any other state.
(4) A deposit made in this state by a
domestic insurer transacting insurance in another jurisdiction, and as required
by the laws of such jurisdiction, shall be held for the purpose or purposes
required by such laws.
(5) Deposits of foreign and alien insurers
required pursuant to ORS 731.854 shall be held for such purposes as are
required by such law, and as specified by the directors order by which the
deposit is required.
(6) Deposits of domestic reciprocal
insurers required pursuant to ORS 731.632 shall be held for the benefit of
subscribers wherever located. [1967 c.359 §113; 1971 c.231 §12; 1977 c.793 §6;
1981 c.854 §57; 1987 c.236 §1; 1989 c.700 §2]
Note: The amendments to 731.608 by section 26,
chapter 241, Oregon Laws 2007, become operative July 1, 2009. See section 31,
chapter 241, Oregon Laws 2007. The text that is operative on and after July 1,
2009, is set forth for the users convenience.
731.608. (1) Except as provided in subsection (2) of
this section, deposits made in this state under ORS 731.624 shall be held for
the faithful performance by the insurer of all insurance obligations, including
claims for unearned premiums, with respect to domestic risks pertaining to the
particular class of insurance for which the deposit was made. However, there shall
be excluded from each such obligation the same amount as is excluded in
determining the obligation of the Oregon Insurance Guaranty Association under
ORS 734.510 to 734.710.
(2) If at any time a deposit made under
ORS 731.624 by a particular insurer is insufficient to perform the insurance
obligations upon the faithful performance of which the deposit was conditioned,
then any other deposit made under ORS 731.624 by that insurer shall be so used
to the extent that such other deposit is not used to perform the insurance
obligations upon the faithful performance of which such other deposit was
conditioned.
(3) Deposits made by insurers and
reinsurers in this state under ORS 731.628 shall be held for the payment of
compensation benefits to workers employed by insured employers other than those
insured with the State Accident Insurance Fund Corporation to whom the insurer
has issued a workers compensation insurance policy under ORS chapter 656.
Deposits made by insurers and reinsurers under ORS 731.628 also shall be held
to reimburse the Department of Consumer and Business Services, subject to
approval by the Director of the Department of Consumer and Business Services,
for costs incurred by the department in processing workers compensation claims
of insurers which have been placed in liquidation, receivership, rehabilitation
or other such status for the orderly conservation or distribution of assets,
pursuant to the laws of this state or any other state.
(4) A deposit made in this state by a
domestic insurer transacting insurance in another jurisdiction, and as required
by the laws of such jurisdiction, shall be held for the purpose or purposes
required by such laws.
(5) Deposits of foreign and alien insurers
required pursuant to ORS 731.854 shall be held for such purposes as are
required by such law, and as specified by the directors order by which the
deposit is required.
(6) Deposits of domestic reciprocal
insurers required pursuant to ORS 731.632 shall be held for the benefit of
subscribers wherever located.
731.612
Rights of insurer regarding deposits. While the insurer remains unimpaired and is in compliance with the
Insurance Code it may:
(1) Demand, receive, sue for and recover
the income from the assets deposited;
(2) Exchange and substitute for the
deposited assets, or any part thereof, other eligible assets of equivalent or
greater value; and
(3) At any reasonable time inspect such
deposit. [1967 c.359 §114]
731.616
Valuation of deposits; deficiencies. (1) For the purpose of determining the sufficiency of its deposit in
this state the assets of the insurer on deposit shall be valued at current
market value.
(2) If assets deposited by an insurer are
subject to material fluctuations in market value, the Director of the
Department of Consumer and Business Services, in the discretion of the
director, may require the insurer to deposit and maintain on deposit additional
assets in such amount as reasonably is necessary to assure that the deposit at
all times will have a market value of not less than the amount specified under
or pursuant to the law by which the deposit is required.
(3) If for any reason the current market
value of such assets falls below the amount of deposit required of the insurer,
the insurer shall promptly deposit other or additional assets eligible for
deposit in an amount sufficient to cure the deficiency. The insurer has 30 days
in which to cure the deficiency after notice thereof from the director. [1967
c.359 §115]
731.620
Assignment of deposited securities. (1) The insurer shall assign in trust to the Director of the
Department of Consumer and Business Services and successors in office all
securities being deposited through the director under the Insurance Code that
are not negotiable by delivery; or, in lieu of such assignment, the insurer may
give the director an irrevocable power of attorney authorizing the director to
transfer the securities or any part thereof for any purpose within the scope of
the Insurance Code.
(2) Upon release to the insurer, or other
person entitled thereto, of any such security the director shall reassign the
security to such insurer or person; or, in the case of power of attorney given
pursuant to subsection (1) of this section, the director shall deliver the
power of attorney, together with the securities covered thereby, to the insurer
or person entitled thereto. [1967 c.359 §116; 1979 c.870 §3; 1987 c.158 §154]
731.624
Special deposits; foreign and alien insurers. Every insurer, before transacting insurance in this state, shall make
the following deposits with the Department of Consumer and Business Services:
(1) Foreign or alien insurers transacting
surety insurance in this state, $250,000.
(2) Foreign or alien insurers transacting
title insurance in this state, $100,000.
(3) Foreign or alien insurers transacting
home protection insurance in this state, $100,000.
(4) Foreign or alien insurers transacting
mortgage guaranty insurance in this state, $500,000. [1967 c.359 §117; 1981
c.247 §7; 1987 c.483 §4; 1999 c.196 §3]
731.628
Deposit required of workers compensation insurers. (1) In addition to any other requirement
therefor under the Insurance Code, each insurer other than the State Accident
Insurance Fund Corporation that issues guaranty contracts to employers under
ORS chapter 656 shall deposit with the Department of Consumer and Business
Services an amount that is the greater of the following amounts:
(a) $100,000.
(b) An amount equal to the sum described
in this paragraph less credits for approved reinsurance that the insurer may
take under subsection (2) of this section. The sum under this paragraph is the
sum of the following, computed as of December 31 next preceding in respect to
guaranty contracts written subject to ORS chapter 656:
(A) The aggregate of the present values at
four percent interest of the determined and estimated future loss and
loss-expense payments upon claims incurred more than three years next preceding
the date of computation.
(B) The aggregate of the amounts computed
under this subparagraph for each of the three years next preceding the date of
computation. The amount for each year shall be 65 percent of the earned
premiums for the year less all loss and loss-expense payments made upon claims
incurred in the corresponding year, except that the amount for any year shall
not be less than the present value at four percent interest of the determined
and estimated future loss and loss-expense payments upon claims incurred in
that year.
(2) Before an insurer may take a credit
for reinsurance under subsection (1)(b) of this section, the reinsurer must
deposit with the department an amount equal to the credit to be taken.
(3) An insurer may be allowed the credit
referred to in subsection (1)(b) of this section only when the reinsurer has
deposited with the department an amount equal to the credit. [1967 c.359 §118;
1971 c.231 §13; 1979 c.870 §4; 1981 c.854 §58; 1987 c.483 §5; 1989 c.700 §3;
1999 c.196 §4]
Note: The amendments to 731.628 by section 27,
chapter 241, Oregon Laws 2007, become operative July 1, 2009. See section 31,
chapter 241, Oregon Laws 2007. The text that is operative on and after July 1,
2009, is set forth for the users convenience.
731.628. (1) In addition to any other requirement
therefor under the Insurance Code, each insurer other than the State Accident
Insurance Fund Corporation that issues workers compensation insurance policies
to employers under ORS chapter 656 shall deposit with the Department of
Consumer and Business Services an amount that is the greater of the following
amounts:
(a) $100,000.
(b) An amount equal to the sum described
in this paragraph less credits for approved reinsurance that the insurer may
take under subsection (2) of this section. The sum under this paragraph is the
sum of the following, computed as of December 31 next preceding in respect to
workers compensation insurance policies written subject to ORS chapter 656:
(A) The aggregate of the present values at
four percent interest of the determined and estimated future loss and
loss-expense payments upon claims incurred more than three years next preceding
the date of computation.
(B) The aggregate of the amounts computed
under this subparagraph for each of the three years next preceding the date of
computation. The amount for each year shall be 65 percent of the earned
premiums for the year less all loss and loss-expense payments made upon claims
incurred in the corresponding year, except that the amount for any year shall
not be less than the present value at four percent interest of the determined
and estimated future loss and loss-expense payments upon claims incurred in
that year.
(2) Before an insurer may take a credit
for reinsurance under subsection (1)(b) of this section, the reinsurer must
deposit with the department an amount equal to the credit to be taken.
(3) An insurer may be allowed the credit
referred to in subsection (1)(b) of this section only when the reinsurer has
deposited with the department an amount equal to the credit.
731.632
Deposit required of domestic reciprocal insurers; exception. Every domestic reciprocal insurer shall
deposit with the Department of Consumer and Business Services $50,000, except
such an insurer which exchanges policies of insurance covering only wet marine
hull insurance for persons whose earned income, in whole or in part, is derived
from taking and selling food resources living in an ocean, bay or river. [1967
c.359 §119; 1977 c.651 §3; 1993 c.709 §5; 1999 c.196 §5]
731.636
Deposit or trusteed assets of alien insurer required. (1) Except as provided in subsection (3) of
this section, every alien insurer, before transacting insurance in this state
as an authorized insurer, shall deposit with the Department of Consumer and
Business Services the sum of the following amounts:
(a) The amount of its outstanding
liabilities arising out of its insurance transactions in the
(b) Its required capitalization.
(2) ORS 731.640 (1)(d) does not apply with
respect to such deposit.
(3) In lieu of such deposit, the insurer
may furnish evidence satisfactory to the Director of the Department of Consumer
and Business Services that it maintains in the
731.640
Eligible deposits; rules.
(1) Deposits which are required or permitted under the Insurance Code shall
consist only of the following:
(a) Cash.
(b) Amply secured obligations of the
(c) Certificates of deposit or other
investments described in ORS 733.650 (4). The Director of the Department of
Consumer and Business Services may promulgate rules to limit such investments.
(d) A surety bond, approved by the
director, executed by an authorized surety insurer that is not under common
ownership, management or control with the person making the deposit. This
paragraph does not apply to deposits made by surety insurers or to workers
compensation deposits made under ORS 731.628.
(e) Amply secured obligations of a
corporation rated by the National Association of Insurance Commissioners as
Class 1. This paragraph applies only to that portion of the total deposit that
exceeds $50 million. The director may adopt rules to require periodic review of
the secured obligations of a corporation allowed under this paragraph.
(2) Deposits of domestic insurers made
pursuant to the laws of other jurisdictions shall consist of cash or securities
as required or permitted by the laws of such jurisdictions. [1967 c.359 §121;
1973 c.450 §1; 1981 c.854 §61; 1999 c.196 §6a; 2003 c.123 §1]
731.642
Contracts for security deposits. The Director of the Department of Consumer and Business Services, in
performing duties under ORS 731.604 to 731.652 and after consultation with the
State Treasurer, may enter into contracts with banks qualified to act as trust
companies and as depositories of state funds to hold and service securities
deposited by insurers with the Department of Consumer and Business Services.
The insurers whose securities are held and serviced by the banks shall pay for
the cost of such contracts. [1969 c.143 §2; 1999 c.196 §7; 2001 c.104 §288]
731.644
Payment of losses out of deposits, generally. (1) Except as otherwise provided in the Insurance Code, no judgment
creditor or other claimant of an insurer shall have the right to levy upon any
of the assets or securities of the insurer held on deposit in this state.
(2) As to deposits made in this state
pursuant to ORS 731.854, levy thereupon shall be permitted only if expressly so
provided in the order of the Director of the Department of Consumer and
Business Services under which the deposit is required. [1967 c.359 §122]
731.648
Duration and release of deposit. (1) Every deposit made in this state by an insurer pursuant to the
Insurance Code shall be so held as long as there is outstanding any liability
of the insurer as to which the deposit was required, except as follows:
(a) If the deposit was required under ORS
731.854, the deposit shall be held for so long as the basis of such retaliation
exists.
(b) If the deposit was required of a
reinsurer under ORS 731.628, the deposit shall be held as long as there is
outstanding any liability of the reinsurer with respect to which the deposit
was made.
(2) No surety insurer shall be permitted
to withdraw its deposit for a period of three years after discontinuing
business within this state.
(3) The Director of the Department of
Consumer and Business Services shall release a deposit:
(a) To the insurer upon extinguishment by
reinsurance or otherwise of all liability of the insurer for the security of
which the deposit is held. If extinguishment is by reinsurance, the assuming
insurer shall be one authorized to transact such insurance in this state.
(b) To the insurer, while unimpaired, to
the extent such deposit is in excess of the amount required.
(c) To the surviving corporation or to
such person as it may designate for the purpose, upon effectuation of a merger
of the depositing insurer, if the surviving insurer is authorized to transact
insurance in this state.
(4) The director shall release a deposit
by an insurer upon order of a court of competent jurisdiction, to the receiver,
conservator, rehabilitator, or liquidator of the insurer, or to any other
properly designated official or officials who succeed to the management and
control of the insurers assets pursuant to delinquency proceedings brought
against the insurer. The director shall release a deposit by a reinsurer under
ORS 731.628 upon order of a court of competent jurisdiction, to the receiver,
conservator, rehabilitator, or liquidator of the ceding insurer, or to any
other properly designated official or officials who succeed to the management
and control of the insurers assets pursuant to delinquency proceedings brought
against the ceding insurer. [1967 c.359 §123; 1989 c.700 §4; 1993 c.447 §106;
1999 c.196 §8]
731.652
Proofs for release of deposit to insurers; directors responsibility. (1) Before releasing any deposit or portion
thereof to the insurer, as provided in ORS 731.648, the Director of the
Department of Consumer and Business Services shall require the insurer to file
with the director a written statement in such form and with such verification
as the director deems advisable setting forth the facts upon which it bases its
entitlement to such release.
(2) If release of the deposit is claimed
by the insurer upon the ground that all its liabilities, as to which the deposit
was held, have been assumed by another insurer authorized to transact insurance
in this state, the insurer shall file with the director a copy of the contract
or agreement of such reinsurance duly attested under the oath of an officer of
each of the insurers that are parties thereto.
(3) If release of the deposit is claimed
by a domestic insurer upon the ground that all its liabilities, as to which the
deposit was held, have been terminated other than by reinsurance, the director
shall make an examination of the affairs of the insurer for determination of
the actuality of such termination.
(4) Upon being satisfied by such statement
and reinsurance contract, or examination of the insurer if required under
subsection (3) of this section, or by such other examination of the affairs of
the insurer as the director deems advisable to make, that the insurer is
entitled to the release of its deposit or portion thereof as provided in ORS
731.648, the director shall release the deposit or excess portion thereof to
the insurer or its authorized representative.
(5) If the director willfully fails
faithfully to keep, deposit, account for or surrender any such assets or
securities deposited through the director in the manner as authorized or
required under the Insurance Code, the director shall be liable therefor upon
the directors official bond, and suit may be brought upon the bond by any
person injured by such failure. The director shall not, however, have any
liability as to any assets or securities of an insurer released by the director
in good faith pursuant to the authority vested in the director under the
Insurance Code. [1967 c.359 §124; 1999 c.196 §9]
731.704 [Formerly 128.820; 1971 c.425 §2; 1975 c.699
§1; 1983 c.740 §253; 1989 c.326 §1; 1989 c.413 §4; 1991 c.189 §1; 1991 c.190 §1;
1993 c.53 §1; 1997 c.735 §1; repealed by 2005 c.31 §4]
731.708 [Formerly 128.830; 1995 c.639 §2a; repealed
by 2005 c.31 §4]
731.712 [1967 c.359 §127; 1971 c.425 §3; 1989 c.784 §15;
repealed by 2005 c.31 §4]
731.716 [Formerly 128.850; 1971 c.425 §4; repealed
by 2005 c.31 §4]
731.720 [Formerly 128.860; 1971 c.425 §5; 1993 c.377
§2; 1995 c.639 §2; 1997 c.131 §2; repealed by 2005 c.31 §4]
731.724 [Formerly 128.880; 1971 c.425 §6; repealed
by 2005 c.31 §4]
EXCHANGE OF
INFORMATION BY REGULATORS
731.730
Insurer filings with National Association of Insurance Commissioners. (1) Every authorized insurer shall file with
the National Association of Insurance Commissioners, on or before March 1 of
each year, a copy of its annual statement blank, along with additional filings
required by the Director of the Department of Consumer and Business Services
for the preceding year. The information filed with the National Association of
Insurance Commissioners must be in the same format and scope as that required
by the director and must include the signed jurat page and the actuarial
certification. Each amendment and each addendum to the annual statement filing
subsequently filed with the director must also be filed with the National Association
of Insurance Commissioners.
(2) A foreign insurer that is domiciled in
a state having a law substantially similar to the provisions of subsection (1)
of this section is considered to be in compliance with this section.
(3) An insurer making a filing under
subsection (1) of this section must pay the National Association of Insurance
Commissioners the fee established by the National Association of Insurance
Commissioners for filing, reviewing or processing the information. [1993 c.447 §100]
731.731
Immunity for certain persons dealing with information collected from filings
under ORS 731.730. Except in
the case of malfeasance in office or willful or wanton neglect of duty or
authority, there shall be no liability on the part of, and no cause of action
of any nature shall arise against, any of the following persons by virtue of
their collection, review, analysis or dissemination of the data and information
collected from the filings required by ORS 731.730:
(1) Members of the National Association of
Insurance Commissioners and the delegates and authorized committees,
subcommittees and task forces of the National Association of Insurance
Commissioners.
(2) Employees of the National Association
of Insurance Commissioners.
(3) The Director of the Department of
Consumer and Business Services or any representative of the director.
(4) The insurance regulatory official of
another state or any representative of such an official. [1993 c.447 §101]
731.735
Certain information confidential. All financial analysis ratios and examination synopses concerning
insurers that are submitted to the Director of the Department of Consumer and
Business Services by the Insurance Regulatory Information System of the
National Association of Insurance Commissioners are confidential as provided in
ORS 705.137. [1993 c.447 §102; 2001 c.377 §6]
731.737
Immunity from liability for certain persons filing reports or furnishing
information about specified activities to specified persons. (1) A person or other entity described in this
subsection acting without malice, fraudulent intent or bad faith is not subject
to civil liability, and no cause of action of any nature may exist against such
a person or entity, when the person is performing authorized functions,
including publication or dissemination of information, regarding any activity
described in subsection (3) of this section. This subsection applies to the
following persons and entities:
(a) Law enforcement officials and their
agents and employees.
(b) The National Association of Insurance
Commissioners, the Department of Consumer and Business Services, a federal or
state governmental agency established to detect and prevent activities
described in subsection (3) of this section and any other organization
established for the same purpose, and agents, employees or designees of any
such person or entity.
(2) A person acting without malice,
fraudulent intent or bad faith is not subject to liability by virtue of filing
reports or furnishing information regarding any activity described in
subsection (3) of this section with or to any person or other entity described
in subsection (1) of this section.
(3) The activities referred to in
subsections (1) and (2) of this section include but are not limited to the
following, whether any activity is suspected or anticipated or has occurred:
(a) Acts or omissions by a person who
presents a statement described in this paragraph to or by an insurer or an
insurance producer, causes such a statement to be presented to or by an insurer
or an insurance producer, or prepares such a statement with knowledge or belief
that it will be presented to or by an insurer or an insurance producer. This
paragraph applies to any statement that the person knows to contain false
information as part of, in support of or concerning any fact relating to the
following, or conceals relevant information relating to the following:
(A) An application for the issuance of
insurance.
(B) The rating of insurance.
(C) A claim for payment or benefit
pursuant to any insurance.
(D) Premiums paid on insurance.
(E) Payments made in accordance with the
terms of insurance coverage.
(F) An application for a certificate of
authority.
(G) The financial condition of an insurer.
(H) The acquisition of any insurer.
(b) Solicitation or an attempt to solicit
new or renewal insurance by or for an insolvent insurer or other person subject
to regulation under the Insurance Code.
(c) Removal or an attempt to remove assets
or any record of assets, transactions and affairs from the home office or other
place of business of the insurer or other person subject to regulation under
the Insurance Code, or from the place of safekeeping of such a person, or who
conceals or attempts to conceal the assets or record from the Director of the
Department of Consumer and Business Services.
(d) Diversion, an attempt to divert or a
conspiracy to divert funds of an insurer or other person subject to regulation
under the Insurance Code, or of any other person, in connection with:
(A) The transaction of insurance.
(B) The conduct of business activities by
an insurer or other person subject to regulation under the Insurance Code.
(C) The formation, acquisition or
dissolution of an insurer or other person subject to regulation under the
Insurance Code.
(4) This section does not abrogate or
modify in any way any common law or statutory privilege or immunity otherwise
enjoyed by a person or entity made immune from liability under this section.
(5) The court may award reasonable
attorney fees to the prevailing party in any tort action against a person who
claims immunity under the provisions of this section. [1993 c.447 §103; 1995
c.618 §128; 2003 c.364 §74]
731.740 [1995 c.638 §5a; repealed by 2001 c.377 §59]
CONFIDENTIALITY
OF REPORTS
731.750
Confidentiality of report of material acquisitions or dispositions of assets,
material nonrenewals, cancellations and revisions of ceded reinsurance
agreements. (1) A report
filed with the Director of the Department of Consumer and Business Services
according to requirements established by rule for disclosure of material
acquisitions or dispositions of assets and disclosure of material nonrenewals,
cancellations and revisions of ceded reinsurance agreements shall be
confidential as provided in ORS 705.137.
(2) The director may direct the insurer to
furnish copies of a report described in subsection (1) of this section to the
National Association of Insurance Commissioners.
(3) The director may disclose or use a
report as considered necessary by the director in the administration of the
Insurance Code or other law.
(4) Information contained in documents
described in subsections (1) to (3) of this section that is also contained in
financial statements of insurers filed under ORS 731.574 or in final
examination reports filed under ORS 731.312 is not confidential under this
section. [1995 c.638 §3; 2001 c.377 §7]
731.752
Confidentiality of report used for determination of required amount of capital
or surplus; confidentiality of financial plan of action and report of examination
connected with plan. (1) A
report filed with the Director of the Department of Consumer and Business
Services according to requirements established by rule for the purpose of
determining the amount of capital or surplus, or any combination thereof, that
should be possessed and maintained by an insurer under ORS 731.554 or by a
health care service contractor under ORS 750.045, or under the laws of another
state establishing similar requirements, shall be confidential and shall not be
disclosed except as provided in ORS 705.137.
(2) A financial plan of action stating
corrective actions to be taken by an insurer or health care service contractor
in response to a determination of inadequate capital or surplus, or any
combination thereof, that is filed by the insurer or health care service
contractor with the director according to requirements established by rule
shall be confidential and shall not be disclosed except as provided in ORS
705.137.
(3) The results or report of any
examination or analysis of an insurer or health care service contractor
performed by the director in connection with a financial plan described in
subsection (2) of this section and any corrective order issued by the director
pursuant to such an examination or analysis shall be confidential and shall not
be disclosed except as provided in ORS 705.137.
(4) Information contained in documents
described in subsections (1) to (3) of this section that is also contained in
financial statements of insurers or health care service contractors filed under
ORS 731.574 or in final examination reports filed under ORS 731.312 is not
confidential under this section. [1995 c.638 §4; 2001 c.318 §19; 2001 c.377 §8]
731.754
Permissible uses of reports and plans described in ORS 731.752. (1) The Director of the Department of
Consumer and Business Services may use the following only for the purpose of
monitoring the solvency of insurers and health care service contractors and the
need for possible corrective action with respect to insurers and health care
service contractors:
(a) Reports and financial plans of action
that are made confidential under ORS 731.752; and
(b) Instructions adopted and amended by
the National Association of Insurance Commissioners for use by insurers and
health care service contractors in preparing reports and financial plans of
action referred to in paragraph (a) of this subsection.
(2) The director may not use reports,
financial plans of action and instructions referred to in subsection (1) of
this section for ratemaking, for reviewing rate filings or in a rate proceeding
related thereto, or to calculate or derive any elements of an appropriate
premium level or rate of return for any line of insurance that an insurer, a
health care service contractor or an affiliate is authorized to transact. Such
reports and financial plans of action also shall not be introduced as evidence
in a rate proceeding.
(3) This section does not restrict the
authority of the director to use information included in reports, financial
plans or instructions referred to in subsection (1) of this section that is
available from other sources. [1995 c.638 §5; 2001 c.318 §20]
INSURANCE
COMPLIANCE AUDIT REPORTS
731.760
Definitions for ORS 731.760 to 731.770. As used in ORS 731.760 to 731.770:
(1) Insurance compliance audit means a
voluntary internal evaluation, review, assessment, audit or investigation that
is undertaken to identify or prevent noncompliance with, or promote compliance
with, laws, regulations, orders or industry or professional standards, and that
is conducted by or on behalf of an insurer regulated under the Insurance Code.
(2) Insurance compliance self-evaluative
audit document means a document prepared as a result of or in connection with
an insurance compliance audit. Insurance compliance self-evaluative audit
document includes, but is not limited to:
(a) A written response to the findings of
an insurance compliance audit.
(b) Field notes and records of
observations, findings, opinions, suggestions, conclusions, drafts, memoranda,
drawings, photographs, exhibits, computer-generated or electronically recorded
information, phone records, maps, charts, graphs and surveys, provided this
supporting information is collected or developed solely for the purpose of an
insurance compliance audit.
(c) An insurance compliance audit report
prepared by an auditor, who may be an employee of the insurer or an independent
contractor, which may include the scope of the audit, the information gained in
the audit and conclusions and recommendations, with exhibits and appendices.
(d) Memoranda and documents analyzing
portions or all of the insurance compliance audit report and discussing
potential implementation issues.
(e) An implementation plan that addresses
correcting past noncompliance, improving current compliance and preventing
future noncompliance.
(f) Analytic data generated in the course
of conducting the insurance compliance audit, not including any analytic data
that exists independently of the audit or existed before the audit was conducted.
[2001 c.329 §2]
731.761
Privileged information. (1)
Except as provided in ORS 731.760 to 731.770, an insurance compliance
self-evaluative audit document is privileged information and is not
discoverable, or admissible as evidence, in any civil, criminal or
administrative proceeding.
(2) Except as provided in ORS 731.760 to
731.770, any person who performs or directs the performance of an insurance
compliance audit, any officer, employee or agent of an insurer who is involved
with an insurance compliance audit and any consultant who is hired for the
purpose of performing an insurance compliance audit may not be examined in any
civil, criminal or administrative proceeding about the insurance compliance
audit or any insurance compliance self-evaluative audit document. [2001 c.329 §3]
731.762
Authority of director. (1)
ORS 731.761 does not limit the authority of the Director of the Department of
Consumer and Business Services to acquire any insurance compliance
self-evaluative audit document or to examine any person in connection with the
document. If the director determines that the actions of an insurer are
egregious, the director may introduce and use the document in any
administrative proceeding or civil action under the Insurance Code. The director
may require that an insurer submit an insurance compliance self-evaluative
audit document for the purpose of an examination or investigation conducted
under this chapter. An insurer may also voluntarily submit an insurance
compliance self-evaluative audit document to the director.
(2) Any insurance compliance
self-evaluative audit document submitted to the director under this section and
in the possession of the director remains the property of the insurer and is
not subject to disclosure or production under ORS 192.410 to 192.505.
(3)(a) The director shall consider the
corrective action taken by an insurer to eliminate problems identified in the
insurance compliance self-evaluative audit document as a mitigating factor when
determining a civil penalty or other action against the insurer.
(b) The director may, in the directors
sole discretion, decline to impose a civil penalty or take other action against
an insurer based on information obtained from an insurance compliance
self-evaluative audit document if the insurer has taken reasonable corrective
action to eliminate the problems identified in the document.
(4) Disclosure of an insurance compliance
self-evaluative audit document to a governmental agency, whether voluntarily or
pursuant to compulsion of law, does not constitute a waiver of the privilege
set forth in ORS 731.761 for any other purpose.
(5) The director may not be compelled to
produce an insurance compliance self-evaluative audit document. [2001 c.329 §4]
731.764
Waiver of privilege; permitted disclosures. (1) The privilege set forth in ORS 731.761 does not apply to the
extent that the privilege is expressly waived by the insurer that prepared or
caused to be prepared the insurance compliance self-evaluative audit document.
(2) The privilege set forth in ORS 731.761
does not apply in any civil, criminal or administrative proceeding commenced by
the Attorney General relating to Medicaid fraud, without regard to whether the
proceeding is brought on behalf of the state, a state agency or a federal
agency. An insurer may request an in camera review of any document or other
evidence to be released or used under this subsection and may request that
appropriate protective orders be entered governing release and use of the
material.
(3) In any civil proceeding a court of
record may, after an in camera review, require disclosure of material for which
the privilege set forth in ORS 731.761 is asserted if the court determines that
the material is not subject to the privilege, or that the privilege is asserted
for a fraudulent purpose, including but not limited to an assertion of the
privilege for an insurance compliance audit that was conducted for the purpose
of concealing a violation of any federal, state or local law or rule. Nothing
in this subsection shall be construed to limit the authority of the Director of
the Department of Consumer and Business Services to acquire, examine and use
insurance compliance self-evaluative audit documents under ORS 731.762.
(4) In a criminal proceeding, a court of
record may, after an in camera review, require disclosure of material for which
the privilege set forth in ORS 731.761 is asserted if the court determines
that:
(a) The privilege is asserted for a
fraudulent purpose, including but not limited to an assertion of the privilege
for an insurance compliance audit that was conducted for the purpose of
concealing a violation of any federal, state or local law or rule;
(b) The material is not subject to the
privilege; or
(c) The material contains evidence relevant
to commission of a criminal offense, and:
(A) A district attorney or the Attorney
General has a compelling need for the information;
(B) The information is not otherwise
available; or
(C) The district attorney or Attorney
General is unable to obtain the substantial equivalent of the information by
any other means without incurring unreasonable cost and delay. [2001 c.329 §5]
731.766
Petition for in camera hearing; hearing; compelled disclosure. (1) Within 30 days after a district attorney
or the Attorney General serves on an insurer a written request by certified
mail for disclosure of an insurance compliance self-evaluative audit document,
the insurer that prepared or caused the document to be prepared may file in
circuit court a petition requesting an in camera hearing on whether the
insurance compliance self-evaluative audit document or portions of the document
are privileged under ORS 731.761 or subject to disclosure. Failure by the
insurer to file a petition waives the privilege only with respect to the
specific request.
(2) A petition filed by an insurer under
this section must contain the following information:
(a) The date of the insurance compliance
self-evaluative audit document.
(b) The identity of the person that
conducted the audit.
(c) The general nature of the activities
covered by the insurance compliance audit.
(d) An identification of the portions of
the insurance compliance self-evaluative audit document for which the privilege
is being asserted.
(3) Within 45 days after the filing of a
petition by an insurer under this section, the court shall schedule an in
camera hearing to determine whether the insurance compliance self-evaluative
audit document or portions of the document are privileged under ORS 731.761.
(4) The court, after an in camera review
pursuant to this section, may require disclosure of material for which the
privilege established by ORS 731.761 is asserted if the court determines that
any of the conditions set forth in ORS 731.764 are met. Upon making such a determination,
the court may compel the disclosure of only those portions of an insurance
compliance self-evaluative audit document relevant to issues in dispute in the
underlying proceeding. Any disclosure that is compelled by the court will not
be considered to be a public document or be deemed to be a waiver of the
privilege for any other civil, criminal or administrative proceeding. A party
unsuccessfully opposing disclosure may apply to the court for an appropriate
order protecting the document from further disclosure.
(5) An insurer asserting the privilege
established under ORS 731.761 has the burden of establishing that the privilege
applies. If the insurer establishes that the privilege applies, a party seeking
disclosure under ORS 731.764 has the burden of proving the elements set forth
in ORS 731.764. [2001 c.329 §6]
731.768
Privilege; exceptions. The
privilege established under ORS 731.761 does not apply to any of the following:
(1) Documents, communications, data,
reports or other information expressly required to be collected, developed,
maintained or reported to a regulatory agency under the Insurance Code or other
state or federal law;
(2) Information obtained by observation or
monitoring by any regulatory agency; or
(3) Information obtained from a source
other than the insurance compliance audit. [2001 c.329 §7]
731.770
Other privileges or limitations pertaining to audit document. Nothing in ORS 731.760 to 731.770, or in the
release of any insurance compliance self-evaluative audit document under ORS
731.760 to 731.770, shall limit, waive or abrogate the scope or nature of any
statutory or common law privilege or other limitation on admissibility of
evidence including, but not limited to, the work product doctrine, the
lawyer-client privilege under ORS 40.225 or the subsequent remedial measures
exclusion provided by ORS 40.185. [2001 c.329 §8]
ASSESSMENTS,
FEES AND TAXES
731.804
Assessments; rules; fees; how determined. (1) Except as otherwise provided in this section, each authorized insurer
doing business in this state shall pay assessments that the Director of the
Department of Consumer and Business Services determines are necessary to
support the legislatively authorized budget of the Department of Consumer and
Business Services with respect to functions of the department under the
Insurance Code. The director shall determine the assessments according to one
or more percentage rates established by the director by rule. The director
shall specify in the rule when assessments shall be made and payments shall be
due. The premium-weighted average of the percentage rates may not exceed
nine-hundredths of one percent of the gross amount of premiums received by an
insurer or the insurers insurance producers from and under the insurers
policies covering direct domestic risks, after deducting the amount of return
premiums paid and the amount of dividend payments made to policyholders with
respect to such policies. In the case of reciprocal insurers, the amount of
savings paid or credited to the accounts of subscribers shall be deducted from
the gross amount of premiums. In establishing the percentage rate or rates, the
director shall use the most recent premium data approved by the director. In
establishing the amounts to be collected under this subsection, the director
shall take into consideration the expenses of the department for administering
the Insurance Code and the fees collected under subsection (2) of this section.
When the director establishes two or more percentage rates:
(a) Each rate shall be based on such
expenses of the department ascribed by the director to the line of insurance
for which the rate is established.
(b) Each rate shall be applied to the
gross amount of premium received by an insurer or its insurance producers for the
applicable line of insurance as provided in this subsection.
(2) The director may collect fees for
specific services provided by the department under the Insurance Code according
to a schedule of fees established by the director by rule. The director may
collect such fees in advance. In establishing the schedule for fees, the
director shall take into consideration the cost of each service for which a fee
is imposed.
(3) Establishment and amendment of the
schedule of fees under subsection (2) of this section are subject to prior
approval of the Oregon Department of Administrative Services and a report to
the Emergency Board prior to adopting the fees and shall be within the budget
authorized by the Legislative Assembly as that budget may be modified by the
Emergency Board.
(4) The director may not collect an
assessment under subsection (1) of this section from any of the following
persons:
(a) A fraternal benefit society complying
with ORS chapter 748.
(b) Any person or class of persons
designated by the director by rule.
(5) The director may not collect an
assessment under subsection (1) of this section with respect to premiums
received from any of the following policies:
(a) Workers compensation insurance
policies.
(b) Wet marine and transportation
insurance policies.
(c) Any category of policies designated by
the director by rule. [1967 c.359 §131; 1971 c.231 §14; 1971 c.425 §7; 1983
c.94 §1; 1985 c.697 §17; 1987 c.373 §81; 1989 c.331 §24; 1989 c.413 §1; 1991
c.371 §1; 1991 c.703 §40; 1991 c.958 §5; 1993 c.265 §5; 2003 c.364 §75; 2005
c.31 §7; 2007 c.560 §1]
731.808
Gross amount of premiums defined. As used in ORS 731.804, 731.812 and 731.820, gross amount of premiums
means the consideration paid by insureds to an insurer for policies of insurance,
and includes all premiums, assessments, dues and fees received or derived, or
obligations taken therefor, by whatever term known. [1967 c.359 §132; 1989
c.413 §5]
731.812
Foreign and alien insurers report of
731.816 [1967 c.359 §134; 1971 c.560 §1; 1989 c.700 §5;
repealed by 1995 c.786 §1]
731.820
Gross premium tax on fire insurance premiums. (1)(a) For the purpose of maintaining the office of State Fire Marshal
and paying the expenses incident thereto, every insurer transacting insurance
covering the peril of fire shall pay a tax to the Director of the Department of
Consumer and Business Services, on or before April 1 of each year, equal to one
percent of the gross amount of premiums received by it or its insurance
producers from such business, from and under its policies covering direct
domestic risks in the preceding calendar year after deducting the amount of
return premiums paid and the amount of dividend payments made to policyholders
or, in the case of a reciprocal insurer, the amount of savings paid or credited
to the accounts of subscribers, with respect to such policies.
(b) For the purpose of paragraph (a) of
this subsection the following portions of the amounts required to be reported
by line of business in the annual financial statement required by ORS 731.574
shall be considered premiums for insurance covering the peril of fire:
(A) Fire, 100 percent.
(B) Homeowners and farm owners multiple
peril, 65 percent.
(C) Commercial multiple peril, 50 percent.
(D) Inland marine, 20 percent.
(E) Automobile physical damage, eight
percent.
(F) Aircraft physical damage, eight
percent.
(2) If an insurer ceases to do business or
collect premiums on direct domestic risks, it thereupon shall make a report to
the director of its premiums subject to taxation as provided in subsection (1)
of this section and collected or due as of the date when it ceased to do
business or collect premiums on direct domestic risks, and not theretofore
reported, and shall forthwith pay to the director the tax thereon.
(3) If the director, during the period in
which the director under ORS 731.836 may collect taxes owing under this
section, finds the amount of such taxes paid by an insurer to have been
incorrect, the director shall charge or credit the insurer with the difference
between the correct amount of tax and the amount actually paid. [1967 c.359 §135;
1967 c.453 §4; 1971 c.231 §15; 1975 c.275 §1; 1983 c.130 §1; 1989 c.700 §6;
2003 c.364 §77]
731.822
Prepayment of tax due. (1)
Every insurer with a tax obligation under section 2, chapter 786, Oregon Laws
1995, ORS 731.820 or ORS 731.854 and 731.859 shall make prepayment of the tax
obligations under section 2, chapter 786, Oregon Laws 1995, ORS 731.820,
731.854 and 731.859 for the current calendar years business, if the sum of the
tax obligations under section 2, chapter 786, Oregon Laws 1995, ORS 731.820,
731.854 and 731.859 for the preceding calendar years business is $400 or more.
(2) The Director of the Department of
Consumer and Business Services shall credit the prepayment toward the
appropriate tax obligations of the insurer for the current calendar year under
section 2, chapter 786, Oregon Laws 1995, or ORS 731.820 or ORS 731.854 and
731.859.
(3) The amounts of the prepayments shall
be percentages of the insurers tax obligation based on the preceding calendar
years business adjusted, if necessary, to reflect the declining percentages
set forth in section 2 (3), chapter 786, Oregon Laws 1995, applicable for the
current year, and shall be paid to the director by the due dates and in the
following amounts:
(a) On or before June 15, 45 percent;
(b) On or before September 15, 25 percent;
and
(c) On or before December 15, 25 percent.
(4) The effect of transferring policies of
insurance from one insurer to another insurer is to transfer the tax prepayment
obligation with respect to such policies.
(5) On or before June 1 of each year, the
director shall notify each insurer required to make prepayments in that year of
the amount of each prepayment, and shall provide remittance forms to be used by
the insurer. However, an insurers responsibility to make prepayments is not
affected by failure of the director to send, or the insurer to receive, the
notice or forms. [1980 c.10 §2; 1995 c.786 §5]
731.824
Tax on underwriting profits of wet marine and transportation insurers. (1) Wet marine and transportation insurance
written by foreign or alien insurers within this state shall be taxed only on
that proportion of the total underwriting profit of such insurer from such
insurance written within the United States that the gross premiums of the
insurer from such insurance written within this state bear to the gross
premiums of such insurer from such insurance written within the United States.
(2) The underwriting profit, for
purposes of this section, is arrived at by deducting from the net earned
premiums on such insurance policies written within the
(a) The losses incurred, and
(b) Expenses incurred, including all
taxes, state and federal, in connection with such net earned premiums.
(3) The amount of net earned premiums on
such insurance policies written during the calendar year is the sum of
paragraphs (a) and (b) less paragraph (c) of this subsection.
(a) Gross premiums on such insurance
policies written during the calendar year, less any and all return premiums,
any and all premiums on policies not taken and any and all premiums paid for
such reinsurance.
(b) Unearned premiums on such outstanding
marine business at the end of the preceding calendar year.
(c) Unearned premiums on such outstanding
marine business at the end of the current calendar year.
(4) Losses incurred, as used in this
section, means gross losses incurred during the calendar year under such
policies written within the United States, less reinsurance claims collected or
collectible and salvages or recoveries collectible from any source applicable
to the such losses.
(5) Expenses incurred includes:
(a) Specific expenses incurred on such
earned wet marine and transportation insurance premiums, consisting of all
commissions, agency expenses, taxes, licenses, fees, loss-adjustment expenses,
and all other expenses incurred directly and specifically in connection with
such premiums, less recoveries or reimbursements on account of or in connection
with such commissions or other expenses collected or collectible because of
reinsurance or from any other source.
(b) General expenses incurred on such earned
premiums, consisting of that proportion of general or overhead expenses, such
as salaries of officers and employees, printing and stationery, all taxes of
this state and of the United States, except as otherwise provided herein, and
all other expenses not chargeable specifically to a particular class of
insurance, which the net premiums of such insurance written bear to the total
net premiums written by such insurer from all classes of insurance written by
it during the current calendar year. However, in arriving at the underwriting
profit for purposes of taxation under this section there shall not be deducted
in respect to expenses incurred, as defined and specified in paragraphs (a) and
(b) of this subsection, amounts which, in the aggregate, exceed 40 percent of
the gross premiums on such insurance policies. [Formerly 745.145]
731.828
Computation of wet marine and transportation insurance tax. (1) Each insurer transacting wet marine and
transportation insurance in this state shall file annually on or before June 15
with the Director of the Department of Consumer and Business Services and in
the form prescribed by the director, a report of all the items pertaining to
its insurance business as enumerated and prescribed in ORS 731.824.
(2) Each insurer that has been writing
such insurance in this state for three years shall furnish the director a
statement of all of the items referred to in subsection (1) of this section, in
the form prescribed by the director, for each of the preceding three calendar years.
An insurer that has not been writing such insurance for three years shall
furnish to the director a statement of all such items for each of the calendar
years during which it has written such insurance.
(3) On or before June 15 of each year, if
the insurer has transacted such insurance for three years, the insurer shall:
(a) Ascertain the average annual
underwriting profit, as provided in ORS 731.824, derived by the insurer from
such insurance business written within the
(b) Ascertain the proportion which the
average annual premiums of the insurer from such insurance written by it in
this state during the last preceding three calendar years bears to the average
total of such wet marine and transportation insurance premiums of the insurer
during the same three years.
(c) Pay five percent on this proportion of
the average annual underwriting profit of the insurer from such insurance to
the director as a tax upon such insurance written by it in this state during
the current calendar year.
(4) The insurer each year shall compute
the tax, according to the method described in this section, upon the average
annual underwriting profit of such insurer from such insurance during the
preceding three years, including the current calendar year. At the expiration
of each current calendar year, the profit or loss on such insurance business of
that year is to be added or deducted, and the profit or loss upon such
insurance business of the first calendar year of the preceding three-year
period is to be dropped so that the computation of underwriting profit for
purposes of taxation under this section will always be on a three-year average.
(5) An insurer that has not been writing
wet marine and transportation insurance in this state for three years shall,
until it has transacted such business in this state for that number of years,
be taxed on the basis of its annual underwriting profit on such insurance
written within the United States for the current calendar year, subject,
however, to an adjustment in the tax as soon as the insurer, in accordance with
the provisions of this section, is enabled to compute the tax on the three-year
basis.
(6) In the case of mutual insurers the
insurer shall not include in the underwriting profit, when computing the tax
prescribed by this section, the amounts refunded by such insurers on account of
premiums previously paid by their policyholders.
(7) If the director, during the period in
which the director under ORS 731.836 may collect taxes owing under this
section, finds the amount of such taxes paid by an insurer to have been
incorrect, the director shall charge or credit the insurer with the difference
between the correct amount of tax and the amount actually paid.
(8) If an insurer ceases to transact wet
marine and transportation insurance in the state, it shall thereupon make
report to the director of the items pertaining to such insurance business, as
enumerated and described in this section, to the date of its ceasing to
transact such insurance and not theretofore reported, and forthwith pay to the
director the taxes computed according to this section and the annual
authorization fees thereon. [Formerly 745.150; 1969 c.158 §1; 1975 c.250 §1;
1989 c.700 §7]
731.832 [Formerly 736.175; 1987 c.373 §82; repealed
by 1995 c.786 §4]
731.836
Limitation on enforcement of insurers tax obligations. The Director of the Department of Consumer
and Business Services shall commence an action for the recovery of taxes
payable under ORS 731.820, 731.824, 731.828 and 731.859 not later than the
later of the following:
(1) Five years after the date such taxes
were payable to the director under such sections; or
(2) Three years after the date on which
the report of examination by the domiciliary state of the insurer, disclosing
that such taxes were owing by the insurer under such sections, was filed with
the director. [1967 c.359 §139; 1969 c.158 §4; 1989 c.700 §8]
731.840
Retaliatory or corporate excise tax in lieu of certain taxes; certain local
taxes prohibited. (1) The
retaliatory tax imposed upon a foreign or alien insurer under ORS 731.854 and
731.859, or the corporate excise tax imposed upon a foreign or alien insurer
under ORS chapter 317, is in lieu of all other state taxes upon premiums, taxes
upon income, franchise or other taxes measured by income that might otherwise
be imposed upon the foreign or alien insurer except the fire insurance premiums
tax imposed under ORS 731.820 and the tax imposed upon wet marine and transportation
insurers under ORS 731.824 and 731.828. However, all real and personal
property, if any, of the insurer shall be listed, assessed and taxed the same
as real and personal property of like character of noninsurers. Nothing in this
subsection shall be construed to preclude the imposition of the assessments
imposed under ORS 656.612 upon a foreign or alien insurer.
(2) Subsection (1) of this section applies
to a reciprocal insurer and its attorney in its capacity as such.
(3) Subsection (1) of this section applies
to foreign or alien title insurers and to foreign or alien wet marine and
transportation insurers issuing policies and subject to taxes referred to in
ORS 731.824 and 731.828.
(4) The State of Oregon hereby preempts
the field of regulating or of imposing excise, privilege, franchise, income,
license, permit, registration, and similar taxes, licenses and fees upon
insurers and their insurance producers and other representatives as such, and:
(a) No county, city, district, or other
political subdivision or agency in this state shall so regulate, or shall levy
upon insurers, or upon their insurance producers and representatives as such,
any such tax, license or fee; except that whenever a county, city, district or
other political subdivision levies or imposes generally on a nondiscriminatory
basis throughout the jurisdiction of the taxing authority a payroll, excise or
income tax, as otherwise provided by law, such tax may be levied or imposed
upon domestic insurers; and
(b) No county, city, district, political
subdivision or agency in this state shall require of any insurer, insurance
producer or representative, duly authorized or licensed as such under the
Insurance Code, any additional authorization, license, or permit of any kind
for conducting therein transactions otherwise lawful under the authority or
license granted under this code. [1967 c.359 §140; 1969 c.600 §12; 1973 c.515 §1;
1973 c.583 §2; 1995 c.786 §6; 2003 c.364 §78]
731.841
Conditions under which local authority to tax insurer is preempted. If, on account of the provisions of section
2, chapter 786, Oregon Laws 1995, and the amendments to ORS 731.840 by section
6, chapter 786, Oregon Laws 1995, the amendments to ORS 750.329 by section 11,
chapter 786, Oregon Laws 1995, the amendments to ORS 317.010 by section 12,
chapter 786, Oregon Laws 1995, and the amendments to ORS 317.080 by section 13,
chapter 786, Oregon Laws 1995, any insurer authorized to transact business in
Oregon on January 1, 1997, is subject to the local taxes, licenses and fees
described in ORS 731.840 (4)(a) as of January 1, 1997, and was not so subject
before January 1, 1997, the authority of the local government to impose those
taxes is preempted by the State of Oregon and no county, city, district or
other political subdivision or agency in this state shall levy or impose upon
such insurer, or upon its insurance producers or representatives, any excise,
privilege, franchise, income, license, permit, registration or similar tax,
license or fee. [1995 c.786 §20; 2003 c.364 §79]
Note: 731.841 was added to and made a part of ORS
chapter 731 by legislative action but was not added to any smaller series
therein. See Preface to Oregon Revised Statutes for further explanation.
731.842
Adjustment of amount to be prepaid for taxes; extension of time for payment;
interest; penalty for late payment. (1) The Director of the Department of Consumer and Business Services
may grant, for good cause shown, a request for an adjustment of the amount of
the prepayment due under ORS 731.822 or an extension of time for payment of
taxes under ORS 731.808 to 731.828 and 731.859. The extension shall be
requested no later than the due date and may not exceed 30 days or one month,
whichever is longer, except that an extension of time for payments under ORS
731.822 may not exceed 10 days.
(2) Interest at the rate of two-thirds of
one percent per month or fraction of a month shall accrue on any such tax
payment not made by the due date (determined without regard to extensions).
(3) A penalty of 10 percent of the tax
amount shall be imposed upon any late payment of any such tax, except for a
payment made within an extension period as provided in subsection (1) of this
section or when the director believes extenuating circumstances justify waiver of
the penalty. [1975 c.230 §2; 1980 c.10 §4; 1995 c.786 §7]
731.844
No personal liability for paying invalid tax. No personal liability shall arise against any director, trustee,
officer or agent of any insurer on account of any taxes or fees paid pursuant
to any statute, law or ordinance, even though such statute, law or ordinance is
subsequently declared or held to be invalid. [1967 c.359 §141]
RETALIATORY
PROVISIONS
731.854
Retaliatory tax. (1) When by
or pursuant to the laws of any other state or foreign country any taxes,
licenses and other fees, in the aggregate, and any fines, penalties, deposit
requirements or other material obligations, prohibitions or restrictions are or
would be imposed upon insurers domiciled in this state, or upon the insurance
producers or representatives of such insurers, which are in excess of such
taxes, licenses and other fees, in the aggregate, or which are in excess of the
fines, penalties, deposit requirements or other obligations, prohibitions, or
restrictions directly imposed upon similar insurers, or upon the insurance
producers or representatives of such insurers, of such other state or country
under the statutes of this state, so long as such laws of such other state or
country continue in force or are so applied, the same taxes, licenses and other
fees, in the aggregate, or fines, penalties or deposit requirements or other
material obligations, prohibitions, or restrictions of whatever kind shall be
imposed by the Director of the Department of Consumer and Business Services
upon the insurers, or upon the insurance producers or representatives of such
insurers, of such other state or country doing business or seeking to do
business in this state. Any tax, license or other fee or other obligation
imposed by any city, county, or other political subdivision or agency of such
other state or country on insurers domiciled in this state or their insurance
producers or representatives shall be deemed to be imposed by such state or
country within the meaning of this subsection.
(2) Foreign reciprocal or interinsurance
exchanges filing a consolidated return for purposes of ORS chapter 317 shall
prepare and file a separate individual retaliatory tax calculation. The excise
tax for the consolidated group shall be allocated for retaliatory tax purposes
among the individual foreign insurers writing
(3) This section does not apply as to
personal income taxes, nor as to local ad valorem taxes on real or personal
property nor as to special purpose obligations or assessments heretofore
imposed by another state in connection with particular classes of insurance,
other than property insurance; except that deductions, from premium taxes or
other taxes otherwise payable, allowed on account of real estate or personal
property taxes paid shall be taken into consideration by the director in
determining the propriety and extent of retaliatory action under this section.
(4) For the purpose of applying this
section to an alien insurer, its domicile shall be determined in accordance
with ORS 731.092 and 731.096.
(5) For the purpose of applying this
section to foreign and alien insurers, the following specifically shall be
treated as taxes imposed by this state:
(a) The corporate excise tax imposed under
ORS chapter 317.
(b) The assessments imposed under ORS
731.804 made to support the legislatively authorized budget of the Department
of Consumer and Business Services with respect to the functions of the
department under the Insurance Code.
(c) The assessments paid by insurers on
behalf of their insureds under ORS 656.612. [Formerly 736.237; 1995 c.786 §7a;
2003 c.364 §80]
731.858 [Formerly 736.245; repealed by 1969 c.158 §2
(731.859 enacted in lieu of 731.858)]
731.859
Applicability of retaliatory provisions. (1) On or before April 1 of each year, each foreign or alien insurer
shall:
(a) Determine and report to the Director
of the Department of Consumer and Business Services whether the provisions of
the laws of any state or country require the imposition of the burdens
specified by ORS 731.854;
(b) Compute the amount owing under ORS
731.854; and
(c) Pay to the director that amount.
(2) If the director, during the period in
which the director under ORS 731.836 may collect taxes owing under this
section, finds the amount of such taxes paid by an insurer to have been
incorrect, the director shall charge or credit the insurer with the difference
between the correct amount of tax and the amount actually paid. [1969 c.158 §3
(enacted in lieu of 731.858); 1989 c.700 §9]
PENALTIES
731.988
Civil penalties. (1) Any
person who violates any provision of the Insurance Code, any lawful rule or
final order of the Director of the Department of Consumer and Business Services
or any judgment made by any court upon application of the director, shall
forfeit and pay to the General Fund of the State Treasury a civil penalty in an
amount determined by the director of not more than $10,000 for each offense. In
the case of individual insurance producers, adjusters or insurance consultants,
the civil penalty shall be not more than $1,000 for each offense. Each
violation shall be deemed a separate offense.
(2) In addition to the civil penalty set
forth in subsection (1) of this section, any person who violates any provision
of the Insurance Code, any lawful rule or final order of the director or any
judgment made by any court upon application of the director, may be required to
forfeit and pay to the General Fund of the State Treasury a civil penalty in an
amount determined by the director but not to exceed the amount by which such
person profited in any transaction which violates any such provision, rule,
order or judgment.
(3) In addition to the civil penalties set
forth in subsections (1) and (2) of this section, any insurer that is required
to make a report under ORS 742.400 and that fails to do so within the specified
time may be required to pay to the General Fund of the State Treasury a civil
penalty in an amount determined by the director but not to exceed $10,000.
(4) A civil penalty imposed under this
section may be recovered either as provided in subsection (5) of this section
or in an action brought in the name of the State of Oregon in any court of
appropriate jurisdiction.
(5) Civil penalties under this section
shall be imposed and enforced in the manner provided by ORS 183.745.
(6) The provisions of this section are in
addition to and not in lieu of any other enforcement provisions contained in
the Insurance Code. [1967 c.359 §144; 1971 c.231 §16; 1987 c.774 §65; 1989
c.701 §70; 1991 c.401 §2; 1991 c.734 §120; 1993 c.265 §6; 1997 c.131 §5; 2003
c.364 §81; 2003 c.576 §220]
731.990 [Repealed by 1965 c.241 §3]
731.992
Criminal penalty. (1)
Violation of ORS 731.260 is punishable upon conviction, in the case of an
individual, by imprisonment in the county jail for not more than one year or by
a fine not exceeding $1,000; or, in the case of a corporation, by a fine not
exceeding $10,000.
(2) Violation of any provision of the
Insurance Code for which a greater penalty is not otherwise provided by the
Insurance Code or by other applicable laws of this state, in addition to any
applicable prescribed denial, suspension or revocation of any certificate or
license or any civil forfeiture, shall be punishable upon conviction as for a
misdemeanor. [1967 c.359 §145; 1987 c.158 §154a]
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