2007 Oregon Code - Chapter 742 :: Chapter 742 - Insurance Policies Generally - Property and Casualty Policies
Chapter 742 —
Insurance Policies Generally; Property and Casualty Policies
2007 EDITION
PROPERTY AND CASUALTY POLICIES
INSURANCE
GENERAL PROVISIONS
742.001Â Â Â Â Scope
of ORS chapters 742, 743 and 743A
742.003Â Â Â Â Filing
and approval of policy forms; rules
742.005Â Â Â Â Grounds
for disapproval of policy forms
742.007Â Â Â Â DirectorÂ’s
withdrawal of approval
742.009Â Â Â Â Regulation
of sales material; rules
742.011Â Â Â Â Insurable
interest in property
742.013Â Â Â Â Representations
in applications
742.016Â Â Â Â Policy
constitutes entire contract; oral representations by insured
742.018Â Â Â Â Provision
for construction according to foreign law prohibited
742.021Â Â Â Â Standard
provisions in general
742.023Â Â Â Â Contents
of policies in general
742.026Â Â Â Â UnderwritersÂ’
and combination policies
742.028Â Â Â Â Additional
policy contents
742.031Â Â Â Â Bankruptcy
clause required in certain liability policies
742.033Â Â Â Â Charter
and bylaw provisions
742.036Â Â Â Â Assessment
policies, special contents
742.038Â Â Â Â Validity
and construction of noncomplying forms
742.041Â Â Â Â Permissible
classes of insurance in one policy
742.043Â Â Â Â Binders
742.046Â Â Â Â Delivery
of policy
742.048Â Â Â Â Effective
date and time of coverage; applicability
742.051Â Â Â Â Renewal
by certificate
742.053Â Â Â Â Forms
for proof of loss
742.056Â Â Â Â Certain
conduct not deemed waiver
742.058Â Â Â Â Return
of premium on destruction of property
742.061Â Â Â Â Recovery
of attorney fees in action on policy or contractorÂ’s bond
742.063Â Â Â Â Filing
and approval of liability form that includes cost of defense within limits of
liability
742.065Â Â Â Â Insurance
against risk of loss assumed under less than fully insured employee health
benefit plan
ASSUMPTION REINSURANCE AGREEMENTS
742.150Â Â Â Â Approval
by director; limitations on authority of insurer; definition
742.152Â Â Â Â Limitations
on applicability of ORS 742.150
742.154Â Â Â Â Factors
to be considered by director in determining whether to approve assumption
reinsurance agreement
742.156Â Â Â Â Notice
of transfer under assumption reinsurance agreement
742.158Â Â Â Â Rejection
of transfer by policyholder; payment of premium as acceptance of transfer; failure
of policyholder to respond to notice
742.160Â Â Â Â Effect
of novation of policy under assumption reinsurance agreement
742.162Â Â Â Â Transfer
and novation of policy effected by director
FIRE INSURANCE
742.200Â Â Â Â Fire
insurance not to exceed value of property insured
742.202Â Â Â Â Standard
fire insurance policy
742.204Â Â Â Â Exceptions
to standard fire insurance policy requirements
742.206Â Â Â Â Insuring
agreement
742.208Â Â Â Â Concealment;
fraud; representations by insured
742.210Â Â Â Â Uninsurable
and excepted property
742.212Â Â Â Â Perils
not included
742.214Â Â Â Â Other
insurance
742.216Â Â Â Â Conditions
suspending insurance
742.218Â Â Â Â Additional
perils insured
742.220Â Â Â Â Added
provisions
742.222Â Â Â Â Waiver
provisions
742.224Â Â Â Â Cancellation
742.226Â Â Â Â Mortgagee
interest and obligation of mortgagee
742.228Â Â Â Â Pro
rata liability of insurer
742.230Â Â Â Â Requirements
in case loss occurs
742.232Â Â Â Â Appraisal
742.234Â Â Â Â InsurerÂ’s
options
742.236Â Â Â Â Abandonment
742.238Â Â Â Â When
loss payable
742.240Â Â Â Â Suit
on policy
742.242Â Â Â Â Subrogation
742.244Â Â Â Â Coverage
for loss from nuclear reaction or radiation
742.246Â Â Â Â Other
fire insurance policy provisions permitted
742.248Â Â Â Â Mutual
fire insurers policyholdersÂ’ liability; nonassessable policies
742.250Â Â Â Â Mutual
fire insurerÂ’s action to recover assessment
742.252Â Â Â Â Mutual
fire insurers; withdrawal of members
742.254Â Â Â Â Mutual
fire insurance policy cancellation
CHILD CARE FACILITY
742.260Â Â Â Â Cancellation
of homeowner or fire policy; coverage for child care; definition
HOME PROTECTION INSURANCE
742.280Â Â Â Â Home
protection insurance; rules
MORTGAGE INSURANCE
742.282Â Â Â Â Limitations
on issuance of mortgage insurance
742.284Â Â Â Â Insured
obligations as legal investments and securities for deposit
742.286Â Â Â Â Mortgage
insurance; who may write
SURETY INSURANCE
742.350Â Â Â Â Bonds,
undertakings and other obligations required by law may be executed by surety
insurers
742.352Â Â Â Â Reimbursement
of private persons required to give bond, letter of credit or other obligation
742.354Â Â Â Â Reimbursement
of public officials required to give bond or letter of credit
742.356Â Â Â Â Surety
insurer may take measures to reduce risk of loss
742.358Â Â Â Â Release
of surety on official bonds by action of obligee
742.360Â Â Â Â Release
of surety on bond of public official by action of surety
742.362Â Â Â Â Release
of surety on depository bond; provision required in such bonds
742.364Â Â Â Â Fixing
amount of new bond after release from original
742.366Â Â Â Â Cancellation
of bond by surety
742.368Â Â Â Â Surety
insurer may not deny power to execute bond; construction of policies
742.370Â Â Â Â Bond
construed as including omitted statutory provisions
742.372Â Â Â Â Guaranteed
arrest bond certificate
742.374Â Â Â Â Surety
may issue guaranteed arrest bond certificate not to exceed $1,000
742.376Â Â Â Â Requirements
to issue guaranteed arrest bond certificate
REIMBURSEMENT INSURANCE FOR SERVICE CONTRACTS
742.390Â Â Â Â Reimbursement
insurance policy; contents; definitions
742.392Â Â Â Â Termination
of reimbursement insurance policy
MEDICAL MALPRACTICE INSURANCE
742.400Â Â Â Â Duty
to report claim of professional negligence to licensing board; contents of
report; public disclosure and posting of reports
742.405Â Â Â Â Conditions
for issuance of medical malpractice insurance
DISCOUNT MEDICAL PLANS
742.420Â Â Â Â Definitions
for ORS 742.420 to 742.440
742.422Â Â Â Â License
requirement for conducting business as discount medical plan organization
742.424Â Â Â Â Requirement
for contract with provider; contents of contract; retention of record
742.426Â Â Â Â License
application; investigation; issuance; grounds for denial
742.428Â Â Â Â Duties
of licensee
742.430Â Â Â Â License
term; renewal; rules
742.432Â Â Â Â Duties
of discount medical plan organization
742.434Â Â Â Â Prohibited
activities
742.436Â Â Â Â Investigative
powers of director; expenses
742.438Â Â Â Â License
suspension, revocation or failure to renew; grounds; effect
742.440Â Â Â Â Injunction;
damages; venue; time for commencing action
MOTOR VEHICLE LIABILITY INSURANCE
(Issuance of Insurance Card)
742.447Â Â Â Â Insurance
card
(Generally)
742.449Â Â Â Â Prohibition
on assignment to high risk category on certain grounds
742.450Â Â Â Â Contents
of motor vehicle liability policy; permitted exclusions
742.454Â Â Â Â Liabilities
that need not be covered
742.456Â Â Â Â When
insurerÂ’s liability accrues; nonforfeiture provisions
742.458Â Â Â Â General
provisions governing liability policies
742.460Â Â Â Â InsurerÂ’s
right to provide for reimbursement and proration
742.462Â Â Â Â InsurerÂ’s
right to settle claims
742.464Â Â Â Â Excess
coverage permitted; combining policies to meet requirements
742.466Â Â Â Â Disputes
over coverage for physical damage; independent appraisal; rules
742.468Â Â Â Â Certain
policies not considered motor vehicle liability policies
(Age-Based Discount)
742.490Â Â Â Â Premium
reduction; conditions; application
742.492Â Â Â Â Duration
of reduction
742.494Â Â Â Â Certification
of completion of course
742.496Â Â Â Â Limitation
on qualification for discount
(Uninsured Motorist Coverage)
742.500Â Â Â Â Definitions
for ORS 742.500 to 742.506
742.502Â Â Â Â Uninsured
motorist coverage; underinsurance coverage
742.504Â Â Â Â Required
provisions of uninsured motorist coverage
742.506Â Â Â Â Allocation
of responsibility among insurers
742.508Â Â Â Â Definitions
for ORS 742.508 and 742.510
742.510Â Â Â Â Property
damage coverage for damage to vehicle caused by uninsured vehicle
(Personal Injury Protection Benefits)
742.518Â Â Â Â Definitions
for ORS 742.518 to 742.542
742.520Â Â Â Â Personal
injury protection benefits for motor vehicle liability policies; applicability
742.521Â Â Â Â Conditions
applicable to arbitration proceedings
742.522Â Â Â Â Binding
arbitration under ORS 742.520; costs
742.524Â Â Â Â Contents
of personal injury protection benefits; deductibles
742.525Â Â Â Â Provider
charges
742.526Â Â Â Â Primary
nature of benefits
742.528Â Â Â Â Notice
of denial of payment of benefits
742.529Â Â Â Â Payment
based on incorrect determination of responsibility; notice; repayment
742.530Â Â Â Â Exclusions
from coverage
742.532Â Â Â Â Benefits
may be more favorable than those required by ORS 742.520, 742.524 and 742.530
742.534Â Â Â Â Reimbursement
of other insurers paying benefits; arbitrating issues of liability and amount
of reimbursement
742.536Â Â Â Â Notice
of claim or legal action to insurer; insurer to elect manner of recovery of
benefits furnished; lien of insurer
742.538Â Â Â Â Subrogation
rights of insurers to certain amounts received by claimant; recovery actions
against persons causing injury
742.540Â Â Â Â Rules
742.542Â Â Â Â Effect
of personal injury protection benefits paid
742.544Â Â Â Â Reimbursement
for personal injury protection benefits paid
(Cancellation)
742.560Â Â Â Â Definitions
for ORS 742.560 to 742.572
742.562Â Â Â Â Grounds
for cancellation of policies; notice required; applicability
742.564Â Â Â Â Manner
of giving cancellation notice
742.566Â Â Â Â Renewal
of policies; requirements for refusal to renew
742.568Â Â Â Â Proof
of cancellation or nonrenewal notice
742.570Â Â Â Â Notifying
insured under canceled or unrenewed policy of eligibility for participation in
insurance pool
742.572Â Â Â Â Immunity
from liability of persons furnishing information regarding cancellation or
nonrenewal of policies
(Report by Insurer to Department of
Transportation)
742.580Â Â Â Â Report
of cancellation, nonrenewal or issuance of motor vehicle liability policy
CANCELLATION AND NONRENEWAL OF CASUALTY OR COMMERCIAL LIABILITY
POLICIES
(Cancellation Based on Holding Public Office)
742.690Â Â Â Â Limitations
on cancellation; refusal to issue or renew insurance
(Commercial Liability Policies)
742.700Â Â Â Â Definitions
for ORS 742.700 to 742.710
742.702Â Â Â Â Grounds
for cancellation; notice
742.704Â Â Â Â Hearing
742.706Â Â Â Â Renewal;
nonrenewal
742.708Â Â Â Â Proof
of receipt of notice
742.710Â Â Â Â Exemptions
from provisions of ORS 742.700 to 742.708
GENERAL PROVISIONS
     742.001
Scope of ORS chapters 742, 743 and 743A. This chapter and ORS chapters 743 and 743A apply to all insurance
policies delivered or issued for delivery in this state except:
     (1) Reinsurance.
     (2) Wet marine and transportation
insurance policies.
     (3) Surplus lines insurance policies. [Formerly
743.003; 2005 c.185 §14]
     742.003
Filing and approval of policy forms; rules. (1) Except where otherwise provided by law, no basic policy form, or
application form where written application is required and is to be made a part
of the policy, or rider, indorsement or renewal certificate form shall be
delivered or issued for delivery in this state until the form has been filed
with and approved by the Director of the Department of Consumer and Business
Services. This section does not apply to:
     (a) Forms of unique character which are
designed for and used with respect to insurance upon a particular risk or
subject;
     (b) Forms issued at the request of a
particular life or health insurance policy owner or certificate holder and
which relate to the manner of distribution of benefits or to the reservation of
rights and benefits thereunder;
     (c) Forms of group life or health
insurance policies, or both, that have been agreed upon as a result of
negotiations between the policyholder and the insurer; or
     (d) Forms complying with specific
requirements regarding delivery or issuance for delivery in this state
established by the director by rule.
     (2) The director shall within 30 days
after the filing of any such form approve or disapprove the form. The director
shall give written notice of such action to the insurer proposing to deliver
such form and when a form is disapproved the notice shall show wherein such
form does not comply with the law.
     (3) The 30-day period referred to in
subsection (2) of this section may be extended by the director for an
additional period not to exceed 30 days if the director gives written notice
within the first 30-day period to the insurer proposing to deliver the form
that the director needs such additional time for the consideration of such
form.
     (4) The director may at any time request
an insurer to furnish the director a copy of any form exempted under subsection
(1) of this section. [Formerly 736.300 and then 743.006; 2001 c.943 §7]
     Note: Sections 1, 3 and 4, chapter 544, Oregon
Laws 2007, provide:
     Sec.
1. (1) Notwithstanding any
other provision of law, the Director of the Department of Consumer and Business
Services by rule may specify categories of life insurance, annuities or
disability insurance for which the director need not consider or review an
individual policy form that an insurer has filed before approving the form for
delivery or issuance for delivery in this state. Policy forms that the
Interstate Insurance Product Regulation Commission has approved are subject to
approval in the manner specified in this section if the director finds that the
commissionÂ’s approval process, taken as a whole, gives policyholders
substantially the same protection as or better protections than the approval
process available under the laws of this state, when considered in light of:
     (a) The product standards and review
procedures the commission uses;
     (b) The nature of the insurance product
reviewed; and
     (c) The consumer needs that the insurance
product serves.
     (2) Nothing in this section affects the
directorÂ’s power to withdraw approval of any policy form under ORS 742.007 or to
regulate the marketing and use of any approved policy form under the laws of
this state. [2007 c.544 §1]
     Sec.
3. The Director of the
Department of Consumer and Business Services shall report the directorÂ’s
findings under section 1 of this 2007 Act to the Seventy-fifth Legislative
Assembly by January 31, 2009, and to the Seventy-sixth Legislative Assembly by
January 31, 2011, in the manner provided in ORS 192.245. In the report the
director shall evaluate the extent to which the Interstate Insurance Product
Regulation Commission approval process gives policyholders substantially the
same protection as or better protection than would approval under the laws of
this state. [2007 c.544 §3]
     Sec.
4. Section 1 of this 2007
Act is repealed on January 2, 2012. [2007 c.544 §4]
     742.005
Grounds for disapproval of policy forms. The Director of the Department of Consumer and Business Services shall
disapprove any form requiring the directorÂ’s approval:
     (1) If the director finds it does not
comply with the law;
     (2) If the director finds it contains any
provision, including statement of premium, or has any label, description of its
contents, title, heading, backing or other indication of its provisions, which
is unintelligible, uncertain, ambiguous or abstruse, or likely to mislead a
person to whom the policy is offered, delivered or issued;
     (3) If, in the director’s judgment, its
use would be prejudicial to the interests of the insurerÂ’s policyholders;
     (4) If the director finds it contains
provisions which are unjust, unfair or inequitable;
     (5) If the director finds sales
presentation material disapproved by the director pursuant to ORS 742.009 is
being used with respect to the form; or
     (6) If, with respect to any of the
following forms, the director finds the benefits provided therein are not
reasonable in relation to the premium charged:
     (a) Individual health insurance policy
forms, including benefit certificates issued by fraternal benefit societies and
individual policies issued by health care service contractors, but excluding
policies referred to in ORS 743.402 as exempt from the application of ORS
743.405 to 743.498, 743A.160 and 743A.164;
     (b) Small employer group health benefit
plan forms for small employers as that term is defined in ORS 743.730,
including small employer group policies issued by health care service
contractors; or
     (c) Credit life and credit health
insurance forms subject to ORS 743.371 to 743.380. [Formerly 743.009; 1991
c.182 §1; 1999 c.987 §4]
     742.007
DirectorÂ’s withdrawal of approval. (1) The Director of the Department of Consumer and Business Services
may, at any time after a hearing held not less than 20 days after written
notice to the insurer, withdraw the directorÂ’s approval of any form on any
ground set forth in ORS 742.005. The written notice of such hearing shall state
the reason for the proposed withdrawal.
     (2) When the director notifies an insurer
of a hearing on a form under subsection (1) of this section, if the director in
the directorÂ’s own discretion determines that the public may suffer serious
injury because of continued use of the form, the director also may order the
insurer to suspend delivery of the form in this state until the director has
decided whether to withdraw approval of the form.
     (3) No insurer shall deliver in this
state:
     (a) A form subject to an order of
suspension under subsection (2) of this section, after the effective date of
the order and until the director withdraws the order.
     (b) A form for which the director has
withdrawn approval, after the effective date of such withdrawal. The effective
date of withdrawal shall be as the director may prescribe but not less than 30
days after the giving of notice of withdrawal. [Formerly 743.012]
     742.009
Regulation of sales material; rules. (1) The Director of the Department of Consumer and Business Services,
if the director considers it necessary, may require the filing by an insurer or
insurance producer of any sales presentation material for use in the sale or
the presentation for sale of any policy. The director, within 60 days after the
filing of the sales presentation material, shall disapprove any such sales
presentation material if the director finds that, in whole or in part, it is
false, deceptive or misleading. Upon disapproval, such sales presentation
material shall not be made, issued, circulated, displayed or given other use by
the insurer or by insurance producers.
     (2) The director, by rule, shall require
any insurance producer who sells or attempts to sell insurance to provide to
each prospective insured such information as the director considers necessary
to adequately inform the prospective insured regarding the insurance
transaction. [Formerly 743.021; 2003 c.364 §100]
     742.010 [Amended by 1953 c.718 §3; 1959 c.281 §1;
1965 c.611 §2; 1967 c.359 §654; renumbered 750.005]
     742.011
Insurable interest in property.
No policy of insurance of property or of any interest in property or arising
from property shall be enforceable as to the insurance except for the benefit
of persons having an insurable interest in the things insured as at the time of
the loss. [Formerly 743.033]
     742.013
Representations in applications. (1) All statements and descriptions in any application for an
insurance policy by or in behalf of the insured, shall be deemed to be representations
and not warranties. Misrepresentations, omissions, concealments of facts and
incorrect statements shall not prevent a recovery under the policy unless the
misrepresentations, omissions, concealments of fact and incorrect statements:
     (a) Are contained in a written application
for the insurance policy, and a copy of the application is indorsed upon or
attached to the insurance policy when issued;
     (b) Are shown by the insurer to be
material, and the insurer also shows reliance thereon; and
     (c) Are either:
     (A) Fraudulent; or
     (B) Material either to the acceptance of
the risk or to the hazard assumed by the insurer.
     (2) This section does not apply to surety
insurance. [Formerly 743.042]
     742.015 [1965 c.611 §3; 1967 c.359 §655; renumbered
750.015]
     742.016
Policy constitutes entire contract; oral representations by insured. (1) Except as provided in ORS 742.043, every
contract of insurance shall be construed according to the terms and conditions
of the policy. When the contract is made pursuant to a written application
therefor, if the insurer delivers a copy of such application with the policy to
the insured, thereupon such application shall become a part of the insurance
policy. Any application that is not so delivered to the insured shall not be a
part of the insurance policy and the insurer shall be precluded from
introducing such application as evidence in any action based upon or involving
the policy. Any oral representations by the insured that are not included in an
application shall not be a part of the insurance policy and the insurer shall
be precluded from introducing such representations as evidence in any action
based upon or involving the policy.
     (2) If any life or health insurance policy
is reinstated or renewed, and the insured or assignee or beneficiary with a
vested interest under such policy shall make written request to the insurer for
a copy of the application, if any, for such reinstatement or renewal, the
insurer shall, within 30 days after the receipt at its home or branch office of
such request and of satisfactory evidence of such requesting beneficiaryÂ’s
vested interest, deliver or mail to the person making such request a copy of
such application. If such copy shall not be so delivered or mailed, the insurer
shall be precluded from introducing such application as evidence in any action
based upon or involving such policy or its reinstatement or renewal.
     (3) This section does not apply to surety
insurance. [Formerly 736.305 and then 743.045]
     742.018
Provision for construction according to foreign law prohibited. No policy of insurance shall contain any
condition, stipulation or agreement requiring such policy to be construed
according to the laws of any other state or country. Any such condition,
stipulation or agreement shall be invalid. [Formerly 736.315 and then 743.048]
     742.020 [Amended by 1965 c.611 §4; repealed by 1967
c.359 §704]
     742.021
Standard provisions in general.
(1) Insurance policies shall contain such standard or uniform provisions as are
required by the applicable provisions of the Insurance Code. However, the
insurer may at its option substitute for one or more of such provisions
corresponding provisions of different wording approved by the Director of the
Department of Consumer and Business Services which are in each instance not
less favorable in any respect to the insured or the beneficiary.
     (2) If any standard or uniform provision
is in whole or in part inapplicable to or inconsistent with the coverage
provided by a particular form of policy the insurer, with the approval of the
director, shall omit from such policy any inapplicable provision or part of a
provision, and shall modify any inconsistent provision or part of a provision
in such manner as to make the provision as contained in the policy consistent
with the coverage provided by the policy.
     (3) Except as provided in subsection (2)
of this section, no policy shall contain any provision inconsistent with or
contradictory to any standard or uniform provision used or required to be used.
[Formerly 743.051]
     742.023
Contents of policies in general. (1) Every policy shall specify:
     (a) The names of the parties to the
contract.
     (b) The subject of the insurance.
     (c) The hazards or perils insured against.
     (d) The time when the insurance thereunder
takes effect and the period during which the insurance is to continue.
     (e) The premium.
     (f) The conditions and provisions
pertaining to the insurance.
     (2) If under the policy the exact amount
of premium is determinable only at stated intervals or termination of the
contract, a statement of the basis and rates upon which the premium is to be
determined and paid shall be included.
     (3) This section does not apply to surety
insurance policies, or to group life or health insurance policies. [Formerly 743.054]
     742.025 [1965 c.611 §5; 1967 c.359 §656; renumbered
750.025]
     742.026
UnderwritersÂ’ and combination policies. (1) Two or more authorized insurers may jointly issue, and shall be
jointly and severally liable on, an underwritersÂ’ policy bearing their names.
Any one insurer may issue policies in the name of an underwriterÂ’s department
and such policy shall plainly show the true name of the insurer.
     (2) Two or more insurers may, with the
approval of the Director of the Department of Consumer and Business Services,
issue a combination policy which shall contain provisions substantially as
follows:
     (a) That the insurers executing the policy
shall be severally liable for the full amount of any loss or damage, according
to the terms of the policy, or for specified percentages or amounts thereof,
aggregating the full amount of insurance under the policy, and
     (b) That service of process, or of any
notice or proof of loss required by such policy, upon any of the insurers
executing the policy, shall constitute service upon all such insurers.
     (3) This section does not apply to
co-surety obligations. [Formerly 743.057]
     742.028
Additional policy contents.
A policy may contain additional provisions not inconsistent with the Insurance
Code and which are:
     (1) Required to be inserted by the laws of
the insurerÂ’s domicile;
     (2) Necessary, on account of the manner in
which the insurer is constituted or operated, in order to state the rights and
obligations of the parties to the contract; or
     (3) Desired by the insurer and neither
prohibited by law nor in conflict with any provisions required to be included
therein. [Formerly 743.060]
     742.030 [Repealed by 1967 c.359 §704]
     742.031
Bankruptcy clause required in certain liability policies. A policy of insurance against loss or damage
resulting from accident to or injury suffered by an employee or other person
and for which the person insured is liable, or against loss or damage to
property caused by horses or by any vehicle drawn, propelled or operated by any
motive power, and for which loss or damage the person insured is liable, shall
contain within such policy a provision substantially as follows: “Bankruptcy or
insolvency of the insured shall not relieve the insurer of any of its
obligations hereunder. If any person or legal representative of the person
shall obtain final judgment against the insured because of any such injuries,
and execution thereon is returned unsatisfied by reason of bankruptcy,
insolvency or any other cause, or if such judgment is not satisfied within 30
days after it is rendered, then such person or legal representatives of the
person may proceed against the insurer to recover the amount of such judgment,
either at law or in equity, but not exceeding the limit of this policy
applicable thereto.” [Formerly 743.783 and then 743.772]
     742.033
Charter and bylaw provisions.
No policy shall contain any provision purporting to make any portion of the
charter, bylaws or other constituent document of the insurer (other than the
subscriberÂ’s agreement or power of attorney of a reciprocal insurer) a part of
the contract unless such portion is set forth in full in the policy. Any policy
provision in violation of this section shall be invalid. [Formerly 743.063]
     742.035 [1965 c.611 §19; 1967 c.359 §657; renumbered
750.035]
     742.036
Assessment policies, special contents. Every policy issued on the assessment plan, and the form of any
application for such a policy to be signed by the applicant, shall have
conspicuously printed near the top of the face thereof in boldfaced type of a
size not smaller than used for any caption in the policy or application, as
applicable, the words “The policyholder is subject to assessment by the company”
or such other words as the Director of the Department of Consumer and Business
Services may require. [Formerly 743.066]
     742.038
Validity and construction of noncomplying forms. (1) A policy in violation of the Insurance
Code, but otherwise binding on the insurer, shall be held valid, but shall be
construed as provided in the Insurance Code.
     (2) Any insurance policy issued and
otherwise valid which contains any condition, omission or provision not in
compliance with the Insurance Code, shall not be thereby rendered invalid but
shall be construed and applied in accordance with such conditions and
provisions as would have applied had such policy been in full compliance with
the Insurance Code. [Formerly 743.069]
     742.040 [Amended by 1965 c.611 §6; repealed by 1967
c.359 §704]
     742.041
Permissible classes of insurance in one policy. (1) Except as provided in this section, when
more than one class of insurance as defined in ORS 731.150 to 731.194 is
effected by an insurer each class shall be written in a separate and distinct
policy. Any such policy may be canceled, surrendered or otherwise terminated
without affecting other premiums paid or policies held by the same insured.
     (2) Except as provided in this section,
the same policy shall not include insurance coverages as to which the liability
of the insurer for unearned premiums or the reserve for unpaid, deferred or
undetermined loss claims is estimated in a different manner.
     (3) Insurance in one policy may be
effected upon automobiles and vehicles, and the accessories and other property
transported upon and used in connection therewith, against loss or damage by
fire, collision and explosion, and against loss by legal liability for damage
to persons or property, or both, resulting from the maintenance, use or
operation of such automobiles or vehicles, and against loss by burglary,
embezzlement or theft, or any one or more of them. Premiums and losses for such
insurance are to be reported to the Director of the Department of Consumer and
Business Services under the title “automobile insurance.” For this purpose an
insurer need not use the standard fire insurance policy required by ORS
742.202.
     (4) Insurance in one policy may be
effected against loss or damage of property and against personal injury and
death, and liability therefor, from explosion of steam boilers, tanks and engines,
pipes and machinery connected therewith, and breakage of flywheels and
machinery. Premiums and losses for such insurance are to be reported to the
director under the title “steam boiler insurance.”
     (5) Insurance under the classes of life
and health insurance may be effected in one policy.
     (6) Insurance in one policy effected
against any physical loss or damage occurring to properties may include
coverage as to other perils, either on an unspecified basis as to coverage or
for a single premium.
     (7) Insurance in one policy effected
against loss or destruction of baggage while traveling which is written on a
single premium nonrenewable basis may include travel ticket health insurance
benefits.
     (8) Insurance under more than one class of
insurance may be effected in one policy if the director finds that the issuance
of the policy is in the best interest of the public. [Formerly 736.310 and then
743.072; 2005 c.185 §2]
     742.043
Binders. (1) Binders or
other contracts for temporary insurance may be made orally or in writing, and
shall be deemed to include all the usual terms of the policy as to which the
binder was given together with such applicable indorsements as are designated
in the binder, except as superseded by the clear and express terms of the binder.
     (2) Except as provided in subsection (3)
of this section and ORS 746.195, within 90 days after issue of a binder a
policy shall be issued in lieu thereof, including within its terms the
identical insurance bound under the binder and the premium therefor.
     (3) If the policy has not been issued a
binder may be extended or renewed beyond such 90 days with the written approval
of the Director of the Department of Consumer and Business Services, or in
accordance with such rules relative thereto as the director may promulgate.
     (4) This section does not apply to life or
health insurance. [Formerly 743.075]
     742.045 [1953 c.605 §3; 1965 c.611 §7; repealed by
1967 c.359 §704]
     742.046
Delivery of policy. (1)
Subject to the insurerÂ’s requirements as to payment of premium, every policy
shall be mailed or delivered to the insured or to the person entitled thereto
within a reasonable period of time after its issuance except where a condition
required by the insurer has not been met by the insured.
     (2) In the event the original policy is
delivered or is so required to be delivered to or for deposit with any vendor,
mortgagee, or pledgee of any motor vehicle, and in which policy any interest of
the vendee, mortgagor, or pledgor in or with reference to such vehicle is
insured, a duplicate of such policy setting forth the name and address of the
insurer, insurance classification of vehicle, type of coverage, limits of
liability, premiums for the respective coverages, and duration of the policy,
or memorandum thereof containing the same such information, shall be delivered
by the vendor, mortgagee, or pledgee to each such vendee, mortgagor, or pledgor
named in the policy or coming within the group of persons designated in the
policy to be so included. If the policy does not provide coverage of legal
liability for injury to persons or damage to the property of third parties, a
statement of such fact shall be printed, written, or stamped conspicuously on
the face of such duplicate policy or memorandum. This subsection does not apply
to inland marine floater policies. [Formerly 743.078]
     742.048
Effective date and time of coverage; applicability. (1) Except as provided in subsections (2),
(4) and (5) of this section, every policy of insurance shall contain a
provision stating that coverage commences at 12:01 a.m. of the date upon which
the insurance takes effect.
     (2) A policy of insurance may provide that
the time at which coverage commences shall not be prior to the time at which
the policy of insurance is applied for.
     (3) Any statement of time in a policy
shall mean time according to the legal standard of time in effect:
     (a) If the policy insures real property,
at the location of such property; or
     (b) If the policy does not insure real
property, at the principal place of business within
     (4) A binder or other contract for
temporary insurance may commence coverage at an hour different from 12:01 a.m.
in order to provide coverage from the agreed hour of commencement of coverage
to 12:01 a.m. of the date on which the written policy as to which such binder
or other contract was issued takes effect.
     (5) This section does not apply to life,
health, mortgage, title, surety or wet marine and transportation insurance. [Formerly
743.080]
     742.050 [Amended by 1955 c.372 §1; 1957 c.4 §1; 1965
c.611 §8; 1967 c.359 §658; renumbered 750.045]
     742.051
Renewal by certificate. Any
insurance policy terminating by its terms at a specified expiration date and
not otherwise renewable, may be renewed or extended at the option of the
insurer, if renewed or extended upon a currently authorized policy form at the
premium rate then required therefor, for a specific additional period or
periods by certificate or by indorsement of the policy, without requiring the
issuance of a new policy. [Formerly 743.081]
     742.053
Forms for proof of loss. (1)
An insurer shall furnish, upon written request of any person claiming to have a
loss under an insurance policy issued by such insurer, forms of proof of loss
for completion by such person, but such insurer shall not, by reason of the
requirement so to furnish forms, have any responsibility for or with reference
to the completion of such proof or the manner of any such completion or
attempted completion.
     (2) With respect to fire insurance, an
insured shall have 90 days after receipt of proof of loss forms to furnish
proof of loss, notwithstanding anything more restrictive contained in the
policy. [Formerly 743.093]
     742.055 [1955 c.236 §1; 1965 c.611 §9; repealed by
1967 c.359 §704]
     742.056
Certain conduct not deemed waiver. Without limitation of any right or defense of an insurer otherwise,
none of the following acts by or on behalf of an insurer shall be deemed to
constitute a waiver of or estoppel to assert any provision of a policy or of
any defense of the insurer thereunder:
     (1) Acknowledgment of the receipt of
notice of loss or claim under the policy.
     (2) Furnishing forms for reporting a loss
or claim, for giving information relative thereto, or for making proof of loss,
or receiving or acknowledging receipt of any such forms or proofs completed or
uncompleted.
     (3) Investigating any loss or claim under
the policy or engaging in negotiations looking toward a possible settlement of
any such loss or claim. [Formerly 743.096]
     742.058
Return of premium on destruction of property. (1) In the event of the total destruction of any insured property, if
the total amount of loss or agreed loss is less than the total amount insured
thereon, the insurer or insurers shall return to the insured the portion of
insurance premium paid for the excess of the insurance over the loss. This
amount shall be paid at the same time and in the same manner as the loss.
     (2) This section does not apply to
insurance on stocks of merchandise or property of fluctuating values where the
reduced rate percentage clause is made a part of the policy. [Formerly 744.090
and then 743.111]
     742.060 [Amended by 1965 c.611 §10; repealed by 1967
c.359 §704]
     742.061
Recovery of attorney fees in action on policy or contractorÂ’s bond. (1) Except as otherwise provided in
subsections (2) and (3) of this section, if settlement is not made within six
months from the date proof of loss is filed with an insurer and an action is
brought in any court of this state upon any policy of insurance of any kind or
nature, and the plaintiffÂ’s recovery exceeds the amount of any tender made by
the defendant in such action, a reasonable amount to be fixed by the court as
attorney fees shall be taxed as part of the costs of the action and any appeal
thereon. If the action is brought upon the bond of a contractor or
subcontractor executed and delivered as provided in ORS 279B.055, 279B.060, 279C.380
or 701.430 and the plaintiffÂ’s recovery does not exceed the amount of any
tender made by the defendant in such action, a reasonable amount to be fixed by
the court as attorney fees shall be taxed and allowed to the defendant as part
of the costs of the action and any appeal thereon. If in an action brought upon
such a bond the surety is allowed attorney fees and costs and the contractor or
subcontractor has incurred expenses for attorney fees and costs in defending
the action, the attorney fees and costs allowed the surety shall be applied
first to reimbursing the contractor or subcontractor for such expenses.
     (2) Subsection (1) of this section does
not apply to actions to recover personal injury protection benefits if, in
writing, not later than six months from the date proof of loss is filed with
the insurer:
     (a) The insurer has accepted coverage and
the only issue is the amount of benefits due the insured; and
     (b) The insurer has consented to submit
the case to binding arbitration.
     (3) Subsection (1) of this section does
not apply to actions to recover uninsured or underinsured motorist benefits if,
in writing, not later than six months from the date proof of loss is filed with
the insurer:
     (a) The insurer has accepted coverage and
the only issues are the liability of the uninsured or underinsured motorist and
the damages due the insured; and
     (b) The insurer has consented to submit
the case to binding arbitration. [Formerly 736.325 and then 743.114; 1999 c.790
§1; 2003 c.794 §328]
     742.063
Filing and approval of liability form that includes cost of defense within
limits of liability. (1) A
liability insurance form that provides that the cost of defending a claim is
included within the stated limits of liability may not be delivered or issued
for delivery in this state until the form has been filed with and approved by
the Director of the Department of Consumer and Business Services. In
determining whether to approve or disapprove a form filed under this section,
the director shall consider, in addition to the factors specified in ORS
742.005, the circumstances and insurance needs of the proposed insureds.
     (2) A liability insurance form filed under
this section may not be approved unless the form contains a statement approved
by the director disclosing that the costs of defending a claim under the policy
are included in the policy limits. [Formerly 743.115]
     742.065
Insurance against risk of loss assumed under less than fully insured employee
health benefit plan. (1)
Insurance against the risk of economic loss assumed under a less than fully
insured employee health benefit plan, whether issued or delivered as health or
casualty insurance, is subject to the following:
     (a) The policy must be issued to and
insure the employer, the trustee or other sponsor of the plan, or the plan
itself, but not the employees, members or participants;
     (b) Payment by the insurer must be made to
the employer, to the trustee or other sponsor of the plan, or to the plan
itself, but not to the employees, members, participants or health care
providers;
     (c) If the policy establishes an aggregate
attaching point or retention, the point or retention must not be less than 120
percent of the expected claims; and
     (d) If the policy establishes an attaching
point or retention applicable to each individual covered by the plan, the point
or retention must not be less than $10,000.
     (2) Insurance against the risk of economic
loss assumed under a less than fully insured employee health benefit plan,
whether issued or delivered as health or casualty insurance, is subject to this
section and to ORS 743.523, 743.524 and 743.526, but is otherwise not subject
to provisions of ORS chapters 743 and 743A.
     (3) An insurer shall not issue or deliver
to a small employer, as defined in ORS 743.730, a policy of insurance against
the risk of economic loss assumed under a less than fully insured employee
health benefit plan. [1993 c.649 §2; 1995 c.506 §13]
     742.070 [Amended by 1955 c.372 §2; 1965 c.611 §11;
repealed by 1967 c.359 §704]
     742.080 [1953 c.605 §3; 1965 c.611 §12; repealed by
1967 c.359 §704]
     742.090 [1965 c.611 §13; repealed by 1967 c.359 §704]
     742.100 [1965 c.611 §7a; repealed by 1967 c.359 §704]
     742.110 [1965 c.35 §4; repealed by 1967 c.359 §704]
     742.120 [1965 c.573 §5; repealed by 1967 c.359 §704]
ASSUMPTION
REINSURANCE AGREEMENTS
     742.150
Approval by director; limitations on authority of insurer; definition. (1) A domestic insurer shall not enter a
transaction in which the domestic insurer assumes or transfers obligations or risks
on policies under an assumption reinsurance agreement as defined in this
section, unless the Director of the Department of Consumer and Business
Services first approves the transaction. A domestic insurer must submit with
its request for approval a proposed notice of transfer required in ORS 742.156.
     (2) A domestic insurer shall not assume
obligations or risks on policies issued to or owned by policyholders residing
in any other state unless it is authorized or licensed in the other state to
transact insurance or unless the insurance regulatory official of that state
has approved the assumption.
     (3) An authorized insurer shall not
transfer obligations or risks on policies issued to or owned by residents of
this state to any unauthorized insurer.
     (4) If each authorized foreign insurer
entering an assumption reinsurance agreement that transfers the obligations or
risks on policies issued to or owned by residents of this state is domiciled in
a state that imposes requirements on an assumption reinsurance agreement that
are substantially similar to requirements of this state, then when each such
insurer enters the agreement, the insurer shall file or cause to be filed with
the director the following:
     (a) The assumption certificate.
     (b) A copy of the notice of transfer
required to be sent to policyholders.
     (c) An affidavit that the transaction is
subject to substantially similar requirements in the state or states of
domicile of both the transferring and assuming insurers.
     (5) If any authorized foreign insurer
entering an assumption reinsurance agreement that transfers the obligations or
risks on policies issued to or owned by residents of this state is domiciled in
a state that does not impose requirements on an assumption reinsurance
agreement that are substantially similar to requirements of this state, each
insurer entering into the agreement shall obtain prior approval of the director
and is otherwise subject to all other requirements of ORS 742.156 and 742.158
with respect to residents of this state.
     (6) For purposes of this section, “assumption
reinsurance agreement” means a contract that both:
     (a) Transfers insurance obligations or
risks of existing or in-force policies from a transferring insurer to an
assuming insurer that acquires the obligations or risks from the transferring
insurer; and
     (b) Is intended to effect a novation of
the transferred policies with the result that the assuming insurer becomes
directly liable to the policyholders of the transferring insurer and the
insurance obligations and risks of the transferring insurer under the policies
are extinguished. [1995 c.30 §2]
     742.152
Limitations on applicability of ORS 742.150. ORS 742.150 does not apply to any of the following:
     (1) A reinsurance agreement or transaction
in which the ceding insurer remains directly liable for its insurance
obligations or risks under the policies that are subject to the reinsurance
agreement.
     (2) The substitution of one insurer for
another upon the expiration of insurance coverage pursuant to statutory or
contractual requirements and the issuance of a new policy by another insurer.
     (3) The transfer of policies pursuant to a
merger or consolidation of two or more insurers to the extent that the merger
or consolidation is regulated by statute.
     (4) An insurer that is subject to a
judicial order of liquidation or rehabilitation.
     (5) Any reinsurance agreement or
transaction to which a state insurance guaranty association is a party, but
only if policyholders do not lose any rights or claims afforded under their
original policies pursuant to ORS 734.510 to 734.710 or 734.750 to 734.890.
     (6) The transfer of liabilities from one
insurer to another under a single group policy upon the request of the group
policyholder.
     (7) A plan of conversion or reorganization
to which ORS 732.600 to 732.630 apply. [1995 c.30 §3; 1997 c.771 §23]
     742.154
Factors to be considered by director in determining whether to approve assumption
reinsurance agreement. The
Director of the Department of Consumer and Business Services shall consider the
following factors, along with other factors that the director determines to be
appropriate, in reviewing a request for approval of an assumption reinsurance
agreement to which ORS 742.150 applies:
     (1) The financial condition of the transferring
and assuming insurers and the effect the transaction will have on the financial
condition of each insurer.
     (2) The competence, experience and
integrity of the persons controlling the operation of the assuming insurer.
     (3) The plans or proposals of the assuming
party with respect to the administration of the policies subject to the
proposed transfer.
     (4) Whether the transfer is fair and
reasonable to the policyholders of both insurers.
     (5) Whether the notice of transfer to be
provided by the insurer under ORS 742.156 is fair, adequate and not misleading.
[1995 c.30 §4]
     742.156
Notice of transfer under assumption reinsurance agreement. (1) The transferring insurer in an
assumption reinsurance agreement to which ORS 742.150 applies shall provide or
cause to be provided a notice of transfer meeting the requirements established
under this section to the following persons:
     (a) Each policyholder who has the right to
terminate or otherwise alter the terms of a policy.
     (b) Each certificate holder whose certificate
is in force on the proposed effective date of the assumption if the certificate
holder has the right to keep the certificate in force without change in benefit
following termination of the group policy. The right to keep the certificate in
force does not include the right to elect individual coverage under the
Consolidated Omnibus Budget Reconciliation Act, section 601 et seq., of the
Employee Retirement Income Security Act of 1974, as amended (29 U.S.C. 1161 et
seq.).
     (c) The transferring insurer’s agents of
record on the affected policies.
     (2) The Director of the Department of
Consumer and Business Services shall prescribe the contents of the notice of
transfer, methods by which insurers must give notice of the transfer and notice
of opportunity to accept or reject the assumption and methods of response by
the policyholders and certificate holders. [1995 c.30 §5]
     742.158
Rejection of transfer by policyholder; payment of premium as acceptance of
transfer; failure of policyholder to respond to notice. (1) A policyholder or certificate holder
described in ORS 742.156 may reject the transfer and novation of the policy
under an assumption reinsurance agreement to which ORS 742.150 applies. A
policyholder or certificate holder electing to reject the assumption
transaction must give notice of rejection according to the manner of response
established by rule.
     (2) If the premium notice sent by an
assuming insurer to a policyholder or a certificate holder described in ORS
742.156 satisfies the requirements of this subsection, payment of any premium
to the assuming insurer during the 12-month period after the notice is received
constitutes the policyholderÂ’s acceptance of the transfer to the assuming
insurer. Upon such a payment, a novation is effected. The premium notice must
state that payment of the premium to the assuming insurer constitutes
acceptance of the transfer and must provide a method for the policyholder to
pay the premium while reserving the right to reject the transfer. This
subsection does not apply to a policy for which premiums are collected on a
weekly or monthly basis by an insurance producer who is an agent of the insurer
nor to any other insurance not using premium notices.
     (3) After not less than 12 months from the
mailing of the first notice of transfer required under ORS 742.156, if the
transferring insurer has not received the consent to or rejection of the
transfer and assumption from a policyholder or consent by the policyholder has
not occurred under subsection (2) of this section, the transferring insurer
shall send to the policyholder a second and final notice of transfer. The
notice must conform to the requirements established under ORS 742.156 and must
also state that the policyholder must accept or reject the transfer not later
than the 30th day after the postmark date. Failure by the policyholder to
accept or reject the transfer during that period constitutes consent by the
policyholder and novation of the contract will be effected. For a policy for
which premiums are collected on a weekly or monthly basis by an insurance
producer who is an agent of the insurer or for any other insurance not using
premium notices, the 12-month period and the 30-day period shall be measured
from the date of delivery of the notice of transfer provided under ORS 742.156.
     (4) If a policyholder responds to the
notice of transfer by mail, receipt of the response by the transferring insurer
occurs on the date the response is postmarked. If a policyholder responds to
the notice of transfer by facsimile or other electronic transmission or by
registered mail, express delivery or courier service, receipt of the response
by the transferring insurer occurs on the date of actual receipt by the
transferring insurer.
     (5) If the notice of transfer for a policy
for which premiums are collected on a weekly or monthly basis by an insurance
producer who is an agent of the insurer or for any other insurance not using
premium notices satisfies the requirements of this subsection, payment of any
premium to the assuming insurer during the 12-month period after the notice is
received constitutes the policyholderÂ’s acceptance of the transfer to the
assuming insurer. Upon such a payment, a novation is effected. The notice of
transfer must state that payment of the premium to the assuming insurer
constitutes acceptance of the transfer and must provide a method for the
policyholder to pay the premium while reserving the right to reject the
transfer. [1995 c.30 §6; 2003 c.364 §101]
     742.160
Effect of novation of policy under assumption reinsurance agreement. If a policyholder consents to a transfer as
provided in ORS 742.158, or if a transfer is effected under ORS 742.162, the
effect of the novation of the policy subject to the assumption reinsurance
agreement is that the transferring insurer is relieved of all insurance
obligations or risks transferred under the assumption reinsurance agreement and
the assuming insurer becomes directly and solely liable to the policyholder for
those insurance obligations and risks. [1995 c.30 §7]
     742.162
Transfer and novation of policy effected by director. (1) A transfer and novation effected as
provided in this section is not an assumption reinsurance agreement to which
ORS 742.150 applies.
     (2) The Director of the Department of
Consumer and Business Services may effect a transfer and novation of the
policies issued by a domestic insurer if the director determines that the
insurer is in hazardous financial condition according to standards established
under ORS 731.385, if a rehabilitation or liquidation proceeding has been
instituted against the insurer or if an administrative supervision proceeding
has been instituted against the insurer, and if the director determines that
the transfer of the policies is in the best interest of the policyholders. The
director may give notice of such a transfer to policyholders that the director
determines to be adequate under the circumstances.
     (3) The director may accept a transfer and
novation of policies issued by a foreign insurer that insure residents of this
state when the transfer and novation are effected by the insurance regulatory
official of the domiciliary state of the foreign insurer if the director
determines that the domiciliary state has a substantially similar law and if
the official has determined that the transfer of the policies is in the best
interest of the policyholders and:
     (a) The official has determined that the
insurer is in hazardous financial condition;
     (b) A rehabilitation or liquidation
proceeding has been instituted against the insurer; or
     (c) An administrative proceeding has been
instituted against the insurer for the purpose of supervising, reorganizing or
conserving the insurer. [1995 c.30 §8]
FIRE
INSURANCE
     742.200
Fire insurance not to exceed value of property insured. (1) No insurer, insurance producer or
insured shall knowingly issue or procure any fire insurance policy upon
property within this state for an amount which with any existing insurance
exceeds the fair value of the risk insured or of the interest of the insured
therein.
     (2) This section does not apply to
insurance on stocks of merchandise or property of fluctuating values where the
reduced rate percentage value clause is made a part of the policy. [Formerly
744.070 and then 743.603; 2003 c.364 §102]
     742.202
Standard fire insurance policy.
Except as provided in ORS 742.204, no fire insurer, its officers or agents,
shall use any fire insurance policy or renew any fire insurance policy on
property in this state unless it contains the provisions set forth in ORS
742.206 to 742.242, which shall form a portion of the contract between the
insurer and the insured. [Formerly 743.606]
     742.204
Exceptions to standard fire insurance policy requirements. Any insurance policy that includes, either
on an unspecified basis as to coverage or for a single premium, coverage
against the peril of fire and substantial coverage against other perils need
not comply with the provisions of ORS 742.202 and 742.246, if such policy:
     (1) Affords coverage with respect to the
peril of fire, not less than the substantial equivalent of the coverage
afforded by the provisions of the standard fire insurance policy as required by
ORS 742.202;
     (2) After a review under ORS 742.005 by
the Director of the Department of Consumer and Business Services, is found by
the director not to violate ORS 742.005 (2); and
     (3) Is complete as to all its terms
without reference to the standard fire insurance policy or any other policy. [Formerly
743.607; 2001 c.85 §1]
     742.206
Insuring agreement. A fire insurance
policy shall contain provisions as follows: “In consideration of the provisions
and stipulations herein or added hereto and of _____ dollars ($_____) premium
this company, for the term of _____ from the _____ day of _____, 2___, to the ___
day of _____, 2___, at 12:01 a.m., at location of property involved, to an
amount not exceeding _____ dollars ($_____), does insure _____ and legal
representatives, to the extent of the actual cash value of the property at the
time of loss, but not exceeding the amount which it would cost to repair or
replace the property with material of like kind and quality within a reasonable
time after such loss, without allowance for any increased cost of repair or
reconstruction by reason of any ordinance or law regulating construction or
repair, and without compensation for loss resulting from interruption of
business or manufacture, nor in any event for more than the interest of the
insured, against all direct loss by fire, lightning and by removal from
premises endangered by the perils insured against in this policy, except as
hereinafter provided, to the property described hereinafter while located or
contained as described in this policy, or pro rata for five days at each proper
place to which any of the property shall necessarily be removed for
preservation from the perils insured against in this policy, but not elsewhere.
     “Assignment of this policy shall not be
valid except with the written consent of this company.
     “This policy is made and accepted subject
to the foregoing provisions and stipulations and those hereinafter stated,
which hereby are made a part of this policy, together with such other
provisions, stipulations and agreements as may be added hereto, as provided in
this policy.
     “In witness whereof, this company has
executed and attested these presents.
__________________
Secretary.
__________________
President.”
[Formerly
743.609]
     742.208
Concealment; fraud; representations by insured. A fire insurance policy shall contain the
following provisions:
     (1) Subject to subsections (2) and (3) of
this section, this entire policy shall be void if, whether before or after a
loss, the insured has willfully concealed or misrepresented any material fact
or circumstance concerning this insurance or the subject thereof, or the
interest of the insured therein, or in case of any fraud or false swearing by
the insured relating thereto.
     (2) All statements made by or on behalf of
the insured, in the absence of fraud, shall be deemed representations and not
warranties. No such statements that arise from an error in the application
shall be used in defense of a claim under the policy unless:
     (a) The statements are contained in a
written application; and
     (b) A copy of the application is indorsed
upon or attached to the policy when issued.
     (3) In order to use any representation by
or on behalf of the insured in defense of a claim under the policy, the insurer
must show that the representations are material and that the insurer relied on
them. [Formerly 743.612]
     742.210
Uninsurable and excepted property. A fire insurance policy shall contain a provision as follows: “This
policy shall not cover accounts, bills, currency, deeds, evidences of debt,
money or securities; nor, unless specifically named hereon in writing, bullion
or manuscripts.” [Formerly 743.615]
     742.212
Perils not included. A fire
insurance policy shall contain a provision as follows: “This company shall not
be liable for loss by fire or other perils insured against in this policy
caused, directly or indirectly, by: (a) Enemy attack by armed forces, including
action taken by military, naval or air forces in resisting an actual or an
immediately impending enemy attack; (b) invasion; (c) insurrection; (d)
rebellion; (e) revolution; (f) civil war; (g) usurped power; (h) order of any
civil authority except acts of destruction at the time of and for the purpose
of preventing the spread of fire, provided that such fire did not originate
from any of the perils excluded by this policy; (i) neglect of the insured to
use all reasonable means to save and preserve the property at and after a loss,
or when the property is endangered by fire in neighboring premises; (j) nor
shall this company be liable for loss by theft.” [Formerly 743.618]
     742.214
Other insurance. A fire
insurance policy shall contain a provision as follows: “Other insurance may be
prohibited or the amount of insurance may be limited by indorsement attached
hereto.” [Formerly 743.621]
     742.216
Conditions suspending insurance. A fire insurance policy shall contain a provision as follows: “Unless
otherwise provided in writing added hereto this company shall not be liable for
loss occurring:
     “(1) While the hazard is increased by any
means within the control or knowledge of the insured; or
     “(2) While a described building, whether
intended for occupancy by owner or tenant, is vacated or unoccupied beyond a
period of 60 consecutive days; or
     “(3) As a result of explosion or riot,
unless fire ensues, and in that event for loss by fire only.” [Formerly
743.624]
     742.218
Additional perils insured. A
fire insurance policy shall contain a provision as follows: “Any other peril to
be insured against or subject of insurance to be covered in this policy shall
be by indorsement in writing hereon or added hereto.” [Formerly 743.627]
     742.220
Added provisions. A fire
insurance policy shall contain a provision as follows: “The extent of the
application of insurance under this policy and of the contribution to be made
by this company in case of loss, and any other provision or agreement not
inconsistent with the provisions of this policy, may be provided for in writing
added hereto, but no provision may be waived except such as by the terms of
this policy is subject to change.” [Formerly 743.630]
     742.222
Waiver provisions. A fire
insurance policy shall contain a provision as follows: “No permission affecting
this insurance shall exist, or waiver of any provision be valid, unless granted
herein or expressed in writing added hereto. No provision, stipulation or
forfeiture shall be held to be waived by any requirement or proceeding on the
part of this company relating to appraisal or to any examination provided for
herein.” [Formerly 743.633]
     742.224
Cancellation. (1) A fire
insurance policy shall contain a provision as follows: “This policy shall be
canceled at any time at the request of the insured, in which case this company
shall, upon demand and surrender of this policy, refund the excess of paid
premium above the customary short rates for the expired time.”
     (2) The policy also shall provide:
     (a) That the insurer may cancel the policy
at any time by giving 10 daysÂ’ written notice of cancellation to the insured in
the event of nonpayment of premium or 30 daysÂ’ written notice for any other
reason. However, when fire insurance coverage is part of a package policy
including commercial liability insurance, cancellation of the policy is
governed by the provisions of ORS 742.702.
     (b) That cancellation by the insurer may
be made with or without tender of the excess of paid premium above the pro rata
premium for the expired time, and that the excess, if not tendered with the
cancellation, will be refunded on demand.
     (3) When an insurer gives notice of
cancellation, the notice shall state that the excess of paid premium above the
pro rata premium for the expired time, if not tendered with the notice, will be
refunded on demand. [Formerly 743.636; 1991 c.768 §2]
     742.226
Mortgagee interest and obligation of mortgagee. A fire insurance policy shall contain
provisions as follows:
     (1) “If loss hereunder is made payable, in
whole or in part, to a designated mortgagee not named herein as the insured,
such interest in this policy may be canceled by giving to such mortgagee a 10
days’ written notice of cancellation.”
     (2) “If the insured fails to render proof
of loss such mortgagee, upon notice, shall render proof of loss in the form
herein specified within 60 days thereafter and shall be subject to the
provisions hereof relating to appraisal and time of payment and of bringing
suit. If this company shall claim that no liability existed as to the mortgagor
or owner, it shall, to the extent of payment of loss to the mortgagee, be
subrogated to all the mortgageeÂ’s rights of recovery, but without impairing
mortgageeÂ’s right to sue; or it may pay off the mortgage debt and require an
assignment thereof and of the mortgage. Other provisions relating to the
interests and obligations of such mortgagee may be added hereto by agreement in
writing.” [Formerly 743.639]
     742.228
Pro rata liability of insurer.
A fire insurance policy shall contain a provision as follows: “This company
shall not be liable for a greater proportion of any loss than the amount hereby
insured shall bear to the whole insurance covering the property against the
peril involved, whether collectible or not.” [Formerly 743.642]
     742.230
Requirements in case loss occurs. A fire insurance policy shall contain a provision as follows: “The
insured shall give immediate written notice to this company of any loss,
protect the property from further damage, forthwith separate the damaged and
undamaged personal property, put it in the best possible order, furnish a
complete inventory of the destroyed, damaged and undamaged property, showing in
detail quantities, costs, actual cash value and amount of loss claimed; and
within 90 days after receipt of proof of loss forms from the company, unless
such time is extended in writing by this company, the insured shall render to
this company a proof of loss, signed and sworn to by the insured, stating the knowledge
and belief of the insured as to the following: The time and origin of the loss,
the interest of the insured and of all others in the property, the actual cash
value of each item thereof and the amount of loss thereto, all encumbrances
thereon, all other contracts of insurance, whether valid or not, covering any
of said property, any changes in the title, use, occupation, location,
possession or exposures of said property since the issuing of this policy, by
whom and for what purpose any building herein described and the several parts
thereof were occupied at the time of loss and whether or not it then stood on
leased ground, and shall furnish a copy of all the descriptions and schedules
in all policies and, if required, verified plans and specifications of any
building, fixtures or machinery destroyed or damaged. The insured, as often as
may be reasonably required, shall exhibit to any person designated by this
company all that remains of any property herein described, and submit to
examinations under oath by any person named by this company, and subscribe the
same; and, as often as may be reasonably required, shall produce for
examination all books of account, bills, invoices, and other vouchers, or
certified copies thereof if originals be lost, at such reasonable time and
place as may be designated by this company or its representative, and shall
permit extracts and copies thereof to be made.” [Formerly 743.645]
     742.232
Appraisal. A fire insurance
policy shall contain a provision as follows: “In case the insured and this
company shall fail to agree as to the actual cash value or the amount of loss,
then, on the written demand of either, each shall select a competent and
disinterested appraiser and notify the other of the appraiser selected within 20
days of such demand. The appraisers shall first select a competent and
disinterested umpire; and failing for 15 days to agree upon such umpire, then,
on request of the insured or this company, such umpire shall be selected by a
judge of a court of record in the state in which the property covered is
located. The appraisers shall then appraise the loss, stating separately actual
cash value and loss to each item; and, failing to agree, shall submit their
differences, only, to the umpire. An award in writing, so itemized, of any two
when filed with this company shall determine the amount of actual cash value
and loss. Each appraiser shall be paid by the party selecting the appraiser and
the expenses of appraisal and umpire shall be paid by the parties equally.” [Formerly
743.648]
     742.234
InsurerÂ’s options. A fire
insurance policy shall contain a provision as follows: “It shall be optional
with this company to take all, or any part, of the property at the agreed or
appraised value, and also to repair, rebuild or replace the property destroyed
or damaged with other of like kind and quality within a reasonable time, on
giving notice of its intention so to do within 30 days after the receipt of the
proof of loss herein required.” [Formerly 743.651]
     742.236
Abandonment. A fire
insurance policy shall contain a provision as follows: “There can be no
abandonment to this company of any property.” [Formerly 743.654]
     742.238
When loss payable. A fire
insurance policy shall contain a provision as follows: “The amount of loss for
which this company may be liable shall be payable 60 days after proof of loss,
as herein provided, is received by this company and ascertainment of the loss
is made either by agreement between the insured and this company expressed in
writing or by the filing with this company of an award as herein provided.” [Formerly
743.657]
     742.240
Suit on policy. A fire
insurance policy shall contain a provision as follows:
     “No suit or action on this policy for the
recovery of any claim shall be sustainable in any court of law or equity unless
all the requirements of this policy shall have been complied with, and unless
commenced within 24 months next after inception of the loss.” [Formerly
743.660; 1991 c.437 §1]
     742.242
Subrogation. A fire
insurance policy shall contain a provision as follows: “This company may
require from the insured an assignment of all right of recovery against any
party for loss to the extent that payment therefor is made by this company.” [Formerly
743.663]
     742.244
Coverage for loss from nuclear reaction or radiation. Insurers issuing the standard fire insurance
policy pursuant to ORS 742.202 are authorized to affix thereto or include
therein a written statement that the policy does not cover loss or damage
caused by nuclear reaction or nuclear radiation or radioactive contamination,
all whether directly or indirectly resulting from an insured peril under said
policy. However, nothing contained in this section shall be construed to
prohibit the attachment to any such policy of an indorsement or indorsements
specifically assuming coverage for loss or damage caused by nuclear reaction or
nuclear radiation or radioactive contamination. [Formerly 744.125 and then
743.666]
     742.246
Other fire insurance policy provisions permitted. (1) A fire insurer may add to the provisions
required by ORS 742.202 other conditions, provisions and agreements not in
conflict with law or contrary to public policy.
     (2) Any provision restricting or abridging
the rights of the insured under the policy must be preceded by a sufficiently
explanatory title printed or written in type not smaller than eight-point
capital letters.
     (3) This section applies only to standard
fire insurance policies as described in ORS 742.202 and does not apply to any
other insurance policies. [Formerly 744.130 and then 743.669; 2001 c.85 §2]
     742.248
Mutual fire insurers policyholdersÂ’ liability; nonassessable policies. (1) Each person accepting a policy in a
mutual fire insurer thereby becomes a member of the insurer and liable for a
proportionate share of losses and operating expenses.
     (2) Any person or persons holding property
in trust may insure the same in a mutual fire insurer, and as such trustee
assume the liabilities and be entitled to the rights of a member, but shall not
be personally liable upon such insurance policy.
     (3) A mutual fire insurer may fix the
contingent and mutual liability of its members for payment of losses and
expenses by a uniform rule set forth in its bylaws and policies. Such mutual
liability shall not be less than twice the amount of the usual advance
assessment written in the policy.
     (4) A mutual fire insurer that received a
certificate of authority prior to September 2, 1963, and has accumulated in the
regular course of business assets of not less than $200,000, of which not less
than $100,000 is surplus determined as provided in the Insurance Code, may
while in that condition and subject to the approval of the Director of the
Department of Consumer and Business Services adopt bylaws limiting the liability
of its policyholders to the premium specified in its policies. The power to
issue policies with such limitation of liability continues only during the time
the insurer is in such financial condition.
     (5) A mutual fire insurer that received a
certificate of authority after September 2, 1963, and has $500,000 in surplus
determined as provided in the Insurance Code, may while in that condition and
subject to the approval of the director adopt bylaws limiting the liability of
its policyholders to the premium specified in its policies. The power to issue
policies with such limitation of liability continues only during the time the
insurer is in such financial condition.
     (6) Every mutual fire insurer which has
not limited the liability of its policyholders in accordance with subsections
(4) and (5) of this section must print upon its policies such bylaws as will
define the liability of a policyholder in addition to the statement required by
ORS 742.036. [Formerly 744.430 and then 743.672]
     742.250
Mutual fire insurerÂ’s action to recover assessment. An action may be brought against any member
of a mutual fire insurer who neglects or refuses to pay any assessment levied
by the insurer to recover the whole amount of contingent liability with costs
of the action. Execution shall issue on a judgment recovered in such an action
for assessments and costs only as they accrue. [Formerly 744.440 and then
743.675]
     742.252
Mutual fire insurers; withdrawal of members. Any member of a mutual fire insurer may withdraw at any time by
surrendering the memberÂ’s policy to the insurer, giving written notice to the
secretary of intention to withdraw and paying the memberÂ’s share of all losses
which have accrued and all assessments then due, accrued or pending. [Formerly
744.450 and then 743.678]
     742.254
Mutual fire insurance policy cancellation. (1) A mutual fire insurer may cancel or terminate any fire insurance
policy by giving the insured five daysÂ’ written notice and returning to the
insured any unearned assessment computed pro rata.
     (2) A mutual fire insurer shall use and
issue only the standard form of policy required by ORS 742.202, except that:
     (a) It is not required upon cancellation
of the insurance policy or certificate of membership to return any part of any
policy, certificate, membership or inspection fee that may have been charged.
     (b) Where a definite part of the amount
charged has been collected for and designated as an expense assessment, it may
by bylaw determine the amount of refund that shall be made from such expense
assessment.
     (c) If it is on an assessment basis,
levying assessments at such times and in such amounts as are necessary to
defray its losses and expenses, it may provide by bylaw that no part of the
assessments shall be returned.
     (d) If it is organized for the insurance
of a single class of risks and the assessment charged in a flat sum, it may
provide in the insurance policy that no return assessment shall be paid upon
cancellation. [Formerly 744.460 and then 743.681]
CHILD CARE
FACILITY
     742.260
Cancellation of homeowner or fire policy; coverage for child care; definition. (1) An insurer offering homeowner or renter
liability or fire insurance may not cancel or refuse to issue or renew a policy
on a private home solely on the basis that the policyholder operates a child
care facility if the policyholder is registered or certified pursuant to ORS
657A.030 and 657A.250 to 657A.450.
     (2) A homeowner or renter liability or
fire insurance policy may not provide coverage for losses arising out of or in
connection with child care provided by a registered or certified child care
facility. Coverage for losses arising out of or in connection with child care
by a registered or certified child care facility may be provided only by a
separate policy or indorsement for which premiums are assessed and paid.
     (3) As used in this section, “child care
facility” has the meaning given in ORS 657A.250. [1995 c.685 §2; 1999 c.743 §23]
HOME
PROTECTION INSURANCE
     742.280
Home protection insurance; rules. (1) A home protection policy shall specify:
     (a) The home, home components and personal
property relating to the home or its components that are covered by the policy.
     (b) The exclusions to and limitations on
the coverage.
     (c) The period during which the policy
will be in effect and the renewal terms, if any.
     (d) The particulars regarding the
performance of services, if any, by or on behalf of the insurer, including but
not necessarily limited to the following:
     (A) The kinds of services to be performed
by or on behalf of the insurer, and the terms and conditions of the
performance.
     (B) The service fee or deductible amount,
if any, to be charged for the services.
     (C) All limitations regarding the
performance of services, including any restrictions on the time period during
which, or geographical area within which, services may be requested or will be
performed.
     (D) A statement that services will be
performed upon the insuredÂ’s telephoned request to the insurer, without any
requirement that a claim form or service application be filed before service is
performed.
     (E) A representation that services will be
initiated by or under the direction of the insurer within 48 hours after
request is made for services.
     (e) All other provisions which are
required by the Insurance Code or by rules issued by the Director of the
Department of Consumer and Business Services.
     (2) A home protection policy shall be
noncancellable during the term for which it is originally written, except for
nonpayment of the premium charge for the policy or for fraud or
misrepresentation of facts material to the issuance of the policy. However, a
policy providing coverage while the subject home is being offered for sale is
cancellable in accordance with the policy provisions if no sale is made. A home
protection policy is not renewable unless its terms provide otherwise.
     (3) The director may adopt rules regarding
home protection policies in order to protect the interests of persons affected
by the policy contract. The director may not adopt rules specifying the home
components or related personal property which must be covered by a home
protection policy, except to the extent necessary to:
     (a) Obtain fairness in the exclusions from
coverage; or
     (b) Avoid illusory coverage caused by the
nature or extent of the exclusions from coverage. [Formerly 743.690]
MORTGAGE
INSURANCE
     742.282
Limitations on issuance of mortgage insurance. (1) No mortgage insurer shall provide
insurance with respect to an obligation which exceeds, solely or in combination
with liens existing at the time the insured loan is made:
     (a) Ninety-five percent of the fair market
value of the securing property at the time the loan is made, or such higher
percentage as may be authorized by the Director of the Department of Consumer and
Business Services and permitted by the insurerÂ’s domicile, if the obligation
insured is secured by a mortgage, deed of trust or other instrument
constituting a first lien or first charge.
     (b) Ninety percent of the fair market
value of the securing property at the time the loan is made, or such higher
percentage as may be authorized by the director and permitted by the insurerÂ’s
domicile, if the obligation insured is secured by a mortgage, deed of trust or
other instrument constituting a junior lien or junior charge. In determining
the 90 percent limitation, the full amount of a line of credit to be secured by
a junior lien shall be considered the amount of the loan.
     (2) A mortgage insurer at its option may
limit its coverage net of reinsurance to a maximum of 25 percent of the amount
of the obligation insured if the obligation insured is secured by a mortgage,
deed of trust or other instrument constituting a first lien or first charge. In
such event, the mortgage insurer may, in lieu of acquiring title to the
property securing the obligation and paying the entire obligation, elect to pay
its coverage percent of the obligation. In computing the aggregate amount of
insured obligations under ORS 731.516, only the percent of the coverage net of
reinsurance on the insured obligation shall be included in the aggregate
amount.
     (3) A mortgage insurer may insure an
obligation secured by a mortgage, deed of trust or other instrument
constituting a junior lien or junior charge, subject to the following
provisions:
     (a) The mortgage insurer shall limit its
coverage net of reinsurance to a maximum of 25 percent of the amount of the
obligation insured and all liens existing at the time the insured loan is made.
In computing the aggregate amount of insured obligations under ORS 731.516,
only the percent of the coverage net of reinsurance shall be included in the
aggregate amount.
     (b) Notwithstanding paragraph (a) of this
subsection, the mortgage insurer may elect to insure a portfolio of loans
secured by instruments constituting a junior lien on real estate, provided that
the total amount at risk in any one portfolio shall not at any time exceed 20
percent of the original principal mortgage loans insured.
     (c) In lieu of acquiring title to the
property securing an obligation to which this subsection applies and paying the
entire obligation, the mortgage insurer may elect to pay its coverage percent
of the obligation.
     (4) A mortgagor shall not be required to
pay, directly or indirectly, the cost of mortgage insurance on a loan secured
by a junior lien when the indebtedness evidencing that loan, combined with all
existing mortgage loan amounts at the time the loan is made, is less than 60
percent of the fair market value of the real estate at the time the junior loan
is made. No mortgagee or financial institution shall be required to obtain
mortgage insurance or junior lien mortgage insurance by reason of this section.
     (5) No mortgage insurer shall issue a
policy of lease insurance with respect to real property not improved by a
building or buildings designed to be occupied for industrial or commercial
purposes. [Formerly 746.030 and then 743.705; 1991 c.67 §197; 1995 c.582 §2]
     742.284
Insured obligations as legal investments and securities for deposit. (1) Obligations insured by mortgage
insurance policies issued in conformity with the Insurance Code shall be legal
investments for all trust funds held by any executor, administrator,
conservator, trustee or other person or corporation holding trust funds, and
also for the funds of banks, banking institutions and trust companies, and
shall be accepted by this state and its officers and officials as securities
constituting any part of any fund or deposit required by law to be made with
this state, or any officer or official thereof, by any trust company doing
business in this state. All premiums required to be paid according to the terms
of any such mortgage insurance policy may be charged to or paid out of the
income from the obligations covered thereby. In the case of such fund or
deposit required by law, such obligations must constitute a first lien on real
property that is worth at least double the amount of such lien.
     (2) The provisions of subsection (1) of
this section with respect to legal investments for funds shall also apply to
obligations not so insured if:
     (a) The obligation constitutes a first
lien upon a marketable title to real property;
     (b) There exists a lease insurance policy
covering the property securing the obligation, issued in conformity with the
Insurance Code;
     (c) The aggregate lease payments so
insured exceeds the amount of the obligation; and
     (d) The insurer is legally bound to remit
all lease insurance proceeds directly to the owner of the obligation. [Formerly
746.080 and then 743.708]
     742.286
Mortgage insurance; who may write. All policies and contracts of insurance covering liens or security
interests in real property shall be written by authorized mortgage insurers. No
other class of insurer may write any form of mortgage insurance. [Formerly 743.711]
     742.300 [Formerly 743.720; repealed by 1993 c.265 §14]
     742.302 [Formerly 743.723; repealed by 1993 c.265 §14]
SURETY
INSURANCE
     742.350
Bonds, undertakings and other obligations required by law may be executed by
surety insurers. (1)
Whenever any bond, undertaking, recognizance, or other obligation is by law or
the charter, ordinance, rules or regulations of any municipality, board, body,
organization, court, judge or public officer required or permitted to be made,
given, tendered or filed with surety or sureties, and whenever the performance
of any act, duty or obligation, or the refraining from any act is required or
permitted to be guaranteed, such bond, undertaking, obligation, recognizance or
guaranty may be executed by an authorized surety insurer.
     (2) The execution by such an insurer of
any such obligation is in all respects a full and complete compliance with
every requirement that it be executed by one surety, or by one or more
sureties, or that such sureties be residents or householders, or freeholders,
or either or both, or possess any other qualification.
     (3) A surety insurer may be required to
justify as surety. It shall be sufficient justification for such surety insurer
when examined as to its qualifications to exhibit the certificate of authority
issued to it by the Director of the Department of Consumer and Business
Services or a certified copy thereof. [Formerly 747.080 and then 743.732]
     742.352
Reimbursement of private persons required to give bond, letter of credit or
other obligation. Any
receiver, assignee, guardian, conservator, trustee, executor, administrator or
other fiduciary, required by law or the order of any court or judge to give a
bond, letter of credit or other obligation as such, may include as a part of
the lawful expense of executing the trust, such reasonable sum paid an insurer
for becoming surety on the bond or an issuer of a letter of credit as may be
allowed by the court in which, or judge before whom, the person is required to
account. Such sum shall not exceed one percent per annum of the amount of the
bond or letter of credit. [Formerly 747.100 and then 743.735; 1991 c.331 §129]
     742.354
Reimbursement of public officials required to give bond or letter of credit. Any state, county or municipal officer or
officer of any school district, public board or public commission within this
state, or any deputy employed in the office of any such official, who is
required by law, ordinance, regulation or public policy to give a bond or
letter of credit for the faithful performance of duties, shall be allowed a
reasonable sum paid a surety insurer for becoming surety on the bond, or paid
to a letter of credit issuer for issuing a letter of credit. Such sum shall not
exceed one-half of one percent per annum of the amount of the bond or letter of
credit. Such premium or fee shall be paid out of the proper state, county,
municipal, district, board or commission funds. [Formerly 747.110 and then
743.738; 1991 c.331 §130]
     742.356
Surety insurer may take measures to reduce risk of loss. (1) Any surety insurer may contract for and
receive and hold on deposit and in trust property of any kind as collateral
security on any policy of guaranty or suretyship executed by it. The insurer
may manage, realize on and dispose of the property so received and held on
deposit as may be agreed to between it and the person making the deposit.
     (2) Any receiver, assignee, guardian,
conservator, trustee, executor, administrator or other fiduciary or party from
whom a policy of guaranty or suretyship is by law required or permitted may
agree and arrange with the surety insurer for the deposit for safekeeping of
any or all moneys, assets and other property for which the person is or may be
responsible in a bank, savings bank, safe deposit or trust company authorized
by law to do business as such, in such manner as to prevent the withdrawal or
alienation of such money, assets or other property, or any part thereof,
without the written consent of the surety insurer or an order of a court of competent
jurisdiction or a judge thereof made on such notice to the surety insurer as
the court or judge may direct.
     (3) Generally, it shall be lawful for a
surety insurer to enter into any contract of indemnity or security with any
person if such contract is not otherwise prohibited by law or against public
policy. [Formerly 747.130 and then 743.741]
     742.358
Release of surety on official bonds by action of obligee. (1) Any official whose duty it is to approve
any bond or undertaking given in favor of the state or any county, city, school
district, drainage or irrigation district, board or commission within the state
may cancel the bond or undertaking by serving written notice of its election so
to do upon the principal and surety or sureties on such bond or undertaking 10
days before it desires the cancellation of the obligation to take effect.
     (2) The official at the time of serving
such notice shall also file with the officer or official occupying the position
of secretary or clerk of the state, county, city, school district, drainage or
irrigation district, board or commission, as the case may be, at the regular
place of business of such secretary or clerk, a certified copy of such notice.
At the expiration of 10 days from the filing of such notice, the surety or
sureties upon such bond or undertaking shall be discharged from further
liability thereon. [Formerly 747.140 and then 743.744]
     742.360
Release of surety on bond of public official by action of surety. (1) The surety or sureties on the bond of any
public official in this state shall be released from any future liability
thereon upon giving notice of election to be released as provided in this
section.
     (2) A surety desiring to be released from
liability on the bond of any state officer may file with the Governor or
Secretary of State 30 days before the surety desires the release to take
effect, a notice in writing, duly subscribed by the surety or someone in behalf
of the surety, setting forth the name and office of the person for whom the
surety is surety, the amount for which the surety is liable as such, and the
desire of the surety to be released from further liability on account thereof.
A duplicate of such notice shall also be served personally on the officer
unless the officer has left this state, in which case it may be served by
publication for 20 days in some newspaper printed at the seat of government, or
if none is printed there, then in such newspaper as shall be designated by the
Governor or Secretary of State.
     (3) A surety desiring to be released from
liability on the bond of any county officer may file and serve a similar
notice. The notice, except when it concerns the county clerk personally, shall
be filed with the county clerk. When the county clerk is personally concerned
the notice shall be filed with the county treasurer.
     (4) A surety desiring to be released from
liability on the bond of any city officer may file and serve a similar notice
with the city clerk or mayor.
     (5) A surety desiring to be released from
any other official bond or undertaking shall file and serve a similar notice
with the officer, person or authority whose duty it is to approve such bonds.
     (6) A notice which under this section may
be served by publication may be published in a newspaper in the same county or,
if no newspaper is published therein, then in an adjoining or other county,
without any order from any court or other authority. In all cases for which
publication is provided, a printed or written notice posted in at least three
conspicuous places in the county for the time specified shall be deemed legal
notice thereof. [Formerly 747.150 and then 743.747]
     742.362
Release of surety on depository bond; provision required in such bonds. (1) A surety wishing to terminate the
liability undertaken upon any bank depository bond or undertaking given to
guarantee the safekeeping and return of any public moneys deposited in the bank
may do so by giving notice of election so to do to the principal and to the
official whose duty it is to approve such bond or undertaking. A surety is
released from any future liability upon any such depository bond or undertaking
at the expiration of 30 days after the giving of such notice.
     (2) Where the form of depository bond or
undertaking given to protect any public moneys is prescribed by statute or
regulation the right to cancel such bond or undertaking shall be expressed in
such bonds or undertakings by adding a paragraph to the prescribed form in
substantially the following form: “The above-named surety shall have the right
to terminate any future liability hereunder by serving written notice of
election so to do upon the principal and (here insert the official title of the
state or county treasurer, or other officials whose duty it is to approve such
bond), and thereupon the said surety shall be discharged from any future
liability hereunder for any default of the said principal occurring after the
expiration of 30 days from and after the service of such notice.” The purpose
of such cancellation privilege is to afford the surety a means of obtaining
definite release from its liability.
     (3) Any official or officials whose duty
it is to approve any bank depository bond given to protect the deposits of any
official moneys, on the officialÂ’s own motion or upon written request from any
bank in whose behalf such a bond is issued, may terminate the future liability
on the bond by giving notice to the surety of elections so to do. Thereupon the
surety shall be discharged from any future liability upon any such depository
bond for any default of the principal occurring after the expiration of 30 days
from and after the service of such notice. [Formerly 743.750]
     742.364
Fixing amount of new bond after release from original. Whenever a notice is filed, or filed and
served, as provided in ORS 742.358, 742.360 and 742.362, or received after
mailed as provided in ORS 742.366, the proper authority shall prescribe the
penalty or amount in which a new or additional bond or undertaking shall be
filed. If no such order is made the new or additional bond or undertaking shall
be executed for the same amount as the original. [Formerly 747.170 and then
743.753]
     742.366
Cancellation of bond by surety.
(1) As used in this section:
     (a) “Bond” means any undertaking,
recognizance or other obligation required by statute, ordinance or regulation
to be executed by a surety and given to a public body by any person as a
condition to the granting of a permit, license or franchise by a public body.
     (b) “Public body” means the state and any
department, agency, board or commission of the state, any city, county, school
district or other political subdivision or municipal or public corporation, any
instrumentality thereof and any court.
     (2) The surety may cancel a bond by
sending notice of cancellation by registered or certified mail to the public
body with which the bond is filed and to the principal at the principalÂ’s
address of record with the surety. Such cancellation takes effect on the date
specified in the notice but not earlier than the 30th day after the date of
mailing. The surety shall have no liability under the bond for an act or
default occurring after the effective date of such cancellation.
     (3) Notwithstanding subsection (2) of this
section, a statute, ordinance, regulation or the provisions of a bond may
provide procedures for release of surety on a bond. [Formerly 743.755]
     742.368
Surety insurer may not deny power to execute bond; construction of policies. A surety insurer executing any bond or
undertaking under the provisions of the Insurance Code is estopped in any
proceeding, to deny its corporate power to execute such bond or undertaking or
to assume such liability, and all such bonds or undertakings shall in any
action be construed by the rules applicable to insurance policies and indemnity
contracts. [Formerly 747.180 and then 743.756]
     742.370
Bond construed as including omitted statutory provisions. Whenever any person is required by the
provisions of any statute to give a bond to this state or any of its political
subdivisions and the statute requires to be included therein any specific
provisions, the bond shall have the same legal effect as though such provisions
were included therein, although such provisions were omitted. [Formerly 747.190
and then 743.759]
     742.372
Guaranteed arrest bond certificate. As used in ORS 742.374 and 742.376, “guaranteed arrest bond
certificate” means any printed certificate which:
     (1) Is issued by an automobile club or
automobile association to any of its members;
     (2) Is signed by the member to whom it is
issued; and
     (3) Contains a printed statement that the
automobile club or automobile association and a named surety insurer guarantee
the appearance of the member whose signature appears on the certificate and
that, if the member does not make the appearance in court to guarantee which
the certificate is posted, they will pay in an amount not to exceed $1,000 any
fine or forfeiture imposed against the individual. [Formerly 747.082 and then
743.762]
     742.374
Surety may issue guaranteed arrest bond certificate not to exceed $1,000. Upon compliance with ORS 742.376, any
authorized domestic or foreign surety insurer may become surety in an amount
not to exceed $1,000 with respect to any unexpired guaranteed arrest bond
certificate that is issued by an automobile club or association. [Formerly
747.084 and then 743.765]
     742.376
Requirements to issue guaranteed arrest bond certificate. To become surety under ORS 742.374 with
respect to an unexpired guaranteed arrest bond certificate that is accepted
during any year under ORS 810.320, the surety insurer shall file with the
Director of the Department of Consumer and Business Services on a form
prescribed by the director an undertaking so to become surety for that year.
The undertaking shall state:
     (1) The name and address of each
automobile club or automobile association with respect to any guaranteed arrest
bond certificate of which the surety insurer undertakes to be surety; and
     (2) The unqualified obligation of the
surety insurer to pay the fine or forfeiture in an amount not to exceed $1,000
with respect to any individual who:
     (a) Posts an unexpired guaranteed arrest
bond certificate with respect to which under this section the surety insurer
has undertaken to be surety; and
     (b) Fails to make the appearance in court
to guarantee which the guaranteed arrest bond certificate was posted. [Formerly
747.086 and then 743.768]
REIMBURSEMENT
INSURANCE FOR SERVICE CONTRACTS
     742.390
Reimbursement insurance policy; contents; definitions. (1) A reimbursement insurance policy
insuring service contracts issued, sold or offered for sale in this state shall
conspicuously state that, upon failure of the obligor to perform under the
contract, the insurer that issued the policy shall pay on behalf of the obligor
any sums the obligor is legally obligated to pay or shall provide the service
that the obligor is legally obligated to perform according to the obligorÂ’s
contractual obligations under the service contracts issued by the obligor.
     (2) For purposes of this section and ORS
742.392:
     (a) “Obligor” has the meaning given in ORS
646A.152.
     (b) A “reimbursement insurance policy” is
a policy of insurance providing reimbursement coverage for all obligations and
liabilities under the terms of the service contract issued by the obligor
including claims against the obligor for return of the unearned purchase price
of the service contract.
     (c) “Service contract” has the meaning
given in ORS 646A.154. [1995 c.801 §7]
     Note: 742.390 and 742.392 were added to and made a
part of the Insurance Code by legislative action but were not added to or made
a part of ORS chapter 742 or any series therein. See Preface to Oregon Revised
Statutes for further explanation.
     742.392
Termination of reimbursement insurance policy. An insurer that issues a reimbursement
insurance policy shall not terminate the policy until a notice of termination
has been mailed or delivered to the Director of the Department of Consumer and
Business Services. The notice of termination shall be mailed or delivered to the
director at least 30 days prior to the date of termination. The termination of
a reimbursement insurance policy shall not reduce the issuerÂ’s responsibility
for service contracts sold by or on behalf of obligors prior to the date of the
termination. [1995 c.801 §8]
     Note: See note under 742.390.
MEDICAL
MALPRACTICE INSURANCE
     742.400
Duty to report claim of professional negligence to licensing board; contents of
report; public disclosure and posting of reports. (1) As used in this section:
     (a) “Claim” means a written demand for
payment from or on behalf of a covered practitioner for an injury alleged to
have been caused by professional negligence that is made in a complaint filed
with a court of appropriate jurisdiction.
     (b) “Covered practitioner” means a
physician, podiatric physician and surgeon, physician assistant, nurse
practitioner, optometrist, dentist, dental hygienist or naturopath.
     (c) “Disposition of a claim” means:
     (A) A judgment or award against the
covered practitioner by a court, a jury or an arbitrator;
     (B) A withdrawal or dismissal of the
claim; or
     (C) A settlement of the claim.
     (d) “Reporter” means:
     (A) A primary insurer;
     (B) A public body required to defend, save
harmless and indemnify an officer, employee or agent of the public body under
ORS 30.260 to 30.300;
     (C) An entity that self-insures or
indemnifies for claims alleging professional negligence on the part of a
covered practitioner; or
     (D) A health maintenance organization as
defined in ORS 750.005.
     (2) Within 30 days after receiving notice
of a claim, a reporter shall report the claim to the appropriate board, as
follows:
     (a) The Oregon Medical Board if the
covered practitioner is a physician, podiatric physician and surgeon or
physician assistant;
     (b) The Oregon State Board of Nursing if
the covered practitioner is a nurse practitioner;
     (c) The Oregon Board of Optometry if the
covered practitioner is an optometrist;
     (d) The Oregon Board of Dentistry if the
covered practitioner is a dentist or dental hygienist; or
     (e) The Board of Naturopathic Examiners if
the covered practitioner is a naturopath.
     (3) The report required under subsection
(2) of this section shall include:
     (a) The name of the covered practitioner;
     (b) The name of the person that filed the
claim;
     (c) The date on which the claim was filed;
and
     (d) The reason or reasons for the claim,
except that the report may not disclose any data that is privileged under ORS
41.675.
     (4) Within 30 days after the date of an
action taken in disposition of a claim, a reporter shall notify the appropriate
board identified in subsection (2) of this section of the disposition.
     (5)(a) A board that receives a report of a
claim under this section shall publicly post the report on the boardÂ’s website
if the claim results in a judicial finding or admission of liability or a money
judgment, award or settlement that involves a payment to the claimant. The
board may not publicly post information about claims that did not result in a
judicial finding or admission of liability or a money judgment, award or
settlement that involves a payment to the claimant but shall make the
information available to the public upon request. The board shall remove from
the boardÂ’s website any record based on a reported claim against a covered
practitioner if the board does not receive another report of a claim against
the practitioner within four years after the date reported under subsection
(3)(c) of this section.
     (b) If a board discloses information about
a claim that is the subject of a report received under this section, the board
shall indicate in the disclosure whether the claim resulted in a judicial
finding or an admission of liability or a money judgment, an award or a
settlement that involves a payment to the claimant. A board may not publicly
disclose or publish any allegations or factual assertions included in the claim
unless the complaint resulted in a judicial finding or an admission of
liability or a money judgment, an award or a settlement that involves a payment
to the claimant.
     (c) For purposes of this subsection, “judicial
finding” means a finding of liability by a court, a jury or an arbitrator.
     (6) A board that receives a report under
this section shall provide copies of the report to each health care facility
licensed under ORS 441.015 to 441.087, 441.525 to 441.595, 441.815, 441.820,
441.990, 442.342, 442.344 and 442.400 to 442.463 that employs or grants staff
privileges to the covered practitioner.
     (7) A person that reports in good faith
concerning any matter required to be reported under this section is immune from
civil liability by reason of making the report. [Formerly 743.780 and then
743.770; 1991 c.401 §7; 1997 c.131 §3; 2007 c.803 §1]
     742.405
Conditions for issuance of medical malpractice insurance. (1) No insurer may require membership in a
professional association as a condition of issuance of medical malpractice
insurance to a physician. However, nothing in this subsection prohibits an
insurer from requiring as a condition of coverage of a nonmember that the nonmember
agrees to be subject to reasonable risk management, loss control or other
similar programs and conditions to which members are subject, whether imposed
by the insurer or the association.
     (2) No insurer who issues medical
malpractice insurance to a physician may assess any surcharge or offer any
discount to the physician based on whether or not the physician is a member of
a professional association.
     (3) For purposes of this section, joint
underwriting associations and risk retention groups shall be considered
insurers. [Formerly 743.771]
     Note: 742.405 was added to and made a part of the
Insurance Code by legislative action but was not added to ORS chapter 742 or
any series therein. See Preface to Oregon Revised Statutes for further
explanation.
DISCOUNT
MEDICAL PLANS
     742.420
Definitions for ORS 742.420 to 742.440. As used in ORS 742.420 to 742.440:
     (1) “Discount medical plan” means a
contract, agreement or other business arrangement between a discount medical
plan organization and a plan member in which the organization, in exchange for
fees, service or subscription charges, dues or other consideration, offers or
purports to offer the plan member access to providers and the right to receive
medical and ancillary services at a discount from providers.
     (2) “Discount medical plan organization”
means a person that contracts on behalf of plan members with a provider, a
provider network or another discount medical plan organization for access to
medical and ancillary services at a discounted rate and determines what plan
members will pay as a fee, service or subscription charge, dues or other
consideration for a discount medical plan.
     (3) “Licensee” means a discount medical
plan organization that has obtained a license from the Director of the
Department of Consumer and Business Services in accordance with ORS 742.426.
     (4) “Medical and ancillary services”
means, except when administered by or under contract with the State of Oregon,
any care, service, treatment or product provided for any dysfunction, injury or
illness of the human body including, but not limited to, physician care,
inpatient care, hospital and surgical services, emergency and ambulance
services, audiology services, dental care services, vision care services,
mental health services, substance abuse counseling or treatment, chiropractic
services, podiatric care services, laboratory services, home health care
services, medical equipment and supplies or prescription drugs.
     (5) “Plan member” means an individual who
pays fees, service or subscription charges, dues or other consideration in
exchange for the right to participate in a discount medical plan.
     (6)(a) “Provider” means a person that has
contracted or otherwise agreed with a discount medical plan organization to
provide medical and ancillary services to plan members at a discount from the
personÂ’s ordinary or customary fees or charges.
     (b) “Provider” does not include:
     (A) A person that, apart from any
agreement or contract with a discount medical plan organization, provides
medical and ancillary services at a discount or at fixed or scheduled prices to
patients or customers the person serves regularly; or
     (B) A person that does not charge fees,
service or subscription charges, dues or other consideration in exchange for
providing medical and ancillary services at a discount or at fixed or scheduled
prices.
     (7) “Provider network” means a person that
negotiates directly or indirectly with a discount medical plan organization on
behalf of more than one provider that provides medical or ancillary services to
plan members. [2007 c.272 §2]
     Note: 742.420 to 742.440 become operative July 1,
2008. See section 15, chapter 272, Oregon Laws 2007.
     Note: 742.420 to 742.440 were added to and made a
part of the Insurance Code by legislative action but were not added to ORS
chapter 742 or any series therein. See Preface to Oregon Revised Statutes for
further explanation.
     742.422
License requirement for conducting business as discount medical plan
organization. (1) A person
may not conduct business as or purport to conduct business as a discount
medical plan organization unless the person first obtains a license to operate
as a discount medical plan organization from the Director of the Department of
Consumer and Business Services in accordance with ORS 742.426.
     (2) The license requirement set forth in
subsection (1) of this section does not apply to an insurer that offers a
discount medical plan. [2007 c.272 §3]
     Note: See notes under 742.420.
     742.424
Requirement for contract with provider; contents of contract; retention of
record. (1) A discount
medical plan organization shall have a written contract or other written
agreement with all providers or provider networks that the organization
includes or purports to include in a discount medical plan, or with an entity
that contracts with or enters into an agreement with a provider network on the
organizationÂ’s behalf.
     (2) The contract or other agreement
between a discount medical plan organization and a provider must include:
     (a) A list of the medical and ancillary
services included in the discount medical plan;
     (b) The provider’s discount rate or rates
or a schedule that reflects the providerÂ’s fixed or discounted prices for the
medical and ancillary services subject to the discount medical plan; and
     (c) A provision in which the provider
agrees not to charge plan members more for medical and ancillary services than
the amount listed in the providerÂ’s price schedule or an amount that reflects
the application of the providerÂ’s discount rate.
     (3) The contract or other agreement
between a discount medical plan organization and a provider network, or between
an entity and a provider network when the entity contracts with or enters into
an agreement with a provider network on the organizationÂ’s behalf, shall
require the provider network to have written agreements with providers that, in
addition to meeting the requirements of subsection (2) of this section:
     (a) Authorize the provider network to
contract with or enter into an agreement with the discount medical plan
organization or the entity on behalf of the provider; and
     (b) Require the provider network to
maintain an up-to-date list of the providers that are part of the provider
network and to provide the updated list each month to the discount medical plan
organization.
     (4) A discount medical plan organization
shall retain copies of the contracts or agreements and other documents
described in this section at all times during which the organization operates
in this state. [2007 c.272 §4]
     Note: See notes under 742.420.
     742.426
License application; investigation; issuance; grounds for denial. (1) Each applicant for a license to operate
as a discount medical plan organization shall apply to the Director of the
Department of Consumer and Business Services in a form and manner that the
director prescribes by rule. An application for a license under this section
must contain all of the following:
     (a) The applicant’s name, fictitious name,
assumed business name and any other identity the applicant uses in conducting
business.
     (b) The applicant’s business address,
mailing address, electronic mail address and the Internet address of any
website the applicant maintains for public access.
     (c) The applicant’s federal employer
identification number or Internal Revenue Service taxpayer identification
number.
     (d) The applicant’s principal place of
business inside or outside this state.
     (e) The name of and contact information
for a person that the applicant has designated to provide information to
consumers or answer consumer questions.
     (f) The name and address of the applicant’s
agent for the service of process, notice or demand, or a power of attorney that
the applicant has executed and by which the applicant appoints the director as
the applicantÂ’s agent for the service of process, notice or demand.
     (g) A list of individual providers or
providers included in the provider network that provide services in this state
and a list of the medical and ancillary services the applicant offers or
intends to offer to plan members as part of a discount medical plan or the
Internet address of a website that lists the providers and services offered.
     (h) A list of the persons that the
applicant has authorized or intends to authorize to market a discount medical
plan in this state under a name that is different from the applicantÂ’s name.
     (i) The name, trade name, service mark or
other means by which a consumer can identify the discount medical plan the
applicant offers or intends to offer and any different name, trade name,
service mark or other means the applicant uses to identify the same discount
medical plan to persons other than consumers.
     (j) A statement that discloses:
     (A) Any criminal conviction in the
five-year period before the date of application involving the applicant, a
member of the board of directors or an officer of the applicant and any person
owning or having the right to acquire 10 percent or more of the voting
securities of the applicant; and
     (B) Any pending investigation into the
applicantÂ’s business activities brought by a licensing, regulatory or law
enforcement authority in any jurisdiction.
     (k) A statement in which the applicant
agrees to submit to the personal jurisdiction of the courts of this state.
     (L) A statement that discloses any
instance in which another jurisdiction has denied the applicant a license or
other authority to operate as a discount medical plan organization or has
suspended or revoked any such license or other authority after issuance.
     (m) Other information the director may require
that enables the director, after reviewing all of the information submitted
under this subsection, to determine whether the applicant:
     (A) Is financially responsible;
     (B) Has adequate experience and expertise
to operate a discount medical plan organization; and
     (C) Is of good character.
     (2) Upon receipt of a completed
application for a license to operate as a discount medical plan organization,
the director may investigate the applicant as necessary to verify the
information contained in the application. Except as provided in subsection (3)
of this section, if the director is satisfied that the information contained in
the application is accurate and complete, the director shall issue a license to
the applicant.
     (3) The director may deny a license to any
applicant if the director finds in writing that:
     (a) The applicant has provided false,
misleading, incomplete or inaccurate information in the application; or
     (b) The applicant is not qualified to
operate as a discount medical plan organization because the applicant is not
financially responsible, does not have adequate experience or expertise, or has
engaged in dishonest, fraudulent or illegal practices or conduct in any
business or profession.
     (4) If the director denies a license under
this section, the applicant may request a hearing under ORS 183.435. Upon
receiving the applicantÂ’s request, the director shall grant the applicant a
hearing under ORS 183.413 to 183.470. [2007 c.272 §5]
     Note: See notes under 742.420.
     742.428
Duties of licensee. A
licensee shall:
     (1) Notify the Director of the Department
of Consumer and Business Services immediately whenever the licenseeÂ’s license
or other form of authority to operate as a discount medical plan organization
in another jurisdiction is suspended, revoked or not renewed in that
jurisdiction.
     (2) Describe in a notice to the director
any change in the name, address or contact information of the discount medical
plan organization provided in the application under ORS 742.426 within 30 days
after making the change. [2007 c.272 §6]
     Note: See notes under 742.420.
     742.430
License term; renewal; rules.
A license obtained under ORS 742.426 is effective for one year, or for a longer
period if the Director of the Department of Consumer and Business Services so
prescribes by rule. The director shall prescribe by rule conditions and
procedures under which a licensee may renew a license that has expired. [2007
c.272 §7]
     Note: See notes under 742.420.
     742.432
Duties of discount medical plan organization. A discount medical plan organization shall establish or provide, in
connection with every discount medical plan:
     (1) A 30-day period in which new plan
members may review the discount medical plan and decide whether to continue or
to cancel the plan for any reason. The discount medical plan organization shall
provide to a member who cancels a discount medical plan within the 30-day
period a full and unconditional refund for any fees, service or subscription
charges, dues or other consideration the member paid, except that the discount
medical plan organization may retain the amount of any one-time processing fee
that is less than an amount established by the Director of the Department of
Consumer and Business Services by rule. The 30-day period begins on the day
following the date on which the member completed any application for the plan
or the day following the date on which the member paid any fees, service or
subscription charges, dues or other consideration, whichever is later.
     (2) A standard set of procedures by which
a new plan member may obtain a refund under subsection (1) of this section.
     (3) A toll-free telephone line and an
Internet website. The toll-free telephone line must enable plan members to
contact the discount medical plan organization with questions and requests for
assistance. The website must list all providers in the organizationÂ’s provider
network, and the organization must provide the same information to plan members
in writing upon request.
     (4) Disclosures, in writing in a font not
less than 12 points in size and on the first content page of advertisements,
marketing materials or brochures made available to the public and relating to a
discount medical plan, that:
     (a) The discount medical plan is not
insurance; and
     (b) Plan members must pay for all medical
and ancillary services, but will receive a discount from providers. [2007 c.272
§8]
     Note: See notes under 742.420.
     742.434
Prohibited activities. (1) A
person may not use or disseminate in marketing, advertising, promotional, sales
or plan documents or other informational materials for discount medical plans
or in communications with plan members or prospective plan members:
     (a) Misleading, deceptive or false
statements; or
     (b) The terms “health plan,” “coverage,” “copay,”
“copayments,” “deductible,” “preexisting condition,” “guaranteed issue,” “premium,”
“preferred provider organization” or other terms in a manner that could
reasonably mislead an individual into believing that the discount medical plan
is insurance.
     (2) For the purposes of subsection (1) of
this section, “misleading, deceptive or false statements” includes, but is not
limited to, statements that:
     (a) Are misleading in fact or implication,
including statements that, while containing truthful elements, conceal or omit
information necessary or relevant for a consumer to make informed decisions
concerning discount medical plans; or
     (b) Have a capacity or tendency to mislead
or deceive based on the overall impression a reasonable consumer may form after
seeing or hearing the statements.
     (3) A person may not represent in any
marketing, advertising, promotional, sales or plan documents or other
informational materials for a discount medical plan or in communications with
plan members or prospective plan members that the State of
     (4) Before a person uses an advertisement,
a brochure, a discount card or promotional or marketing material for marketing,
promoting, selling or distributing a discount medical plan, the discount
medical plan organization shall approve the material in writing.
     (5) At the request of the Director of the
Department of Consumer and Business Services, a discount medical plan
organization shall submit to the director an advertisement, a brochure, a
discount card or promotional or marketing material used for marketing,
promoting, selling or distributing a discount medical plan. [2007 c.272 §9]
     Note: See notes under 742.420.
     742.436
Investigative powers of director; expenses. The Director of the Department of Consumer and Business Services may
investigate a person operating or purporting to operate as a discount medical
plan organization and may require the person at any time to produce marketing,
promotional and advertising materials, records, books, files or other
information the person uses in conducting business as a discount medical plan
organization. During an investigation, the person shall respond to the directorÂ’s
inquiries promptly and truthfully and in the manner or form the director
requires. The person subject to an investigation under this section shall pay
the expenses incurred in conducting the investigation. [2007 c.272 §10]
     Note: See notes under 742.420.
     742.438
License suspension, revocation or failure to renew; grounds; effect. (1) The Director of the Department of
Consumer and Business Services by order may suspend, revoke or refuse to renew
a license issued under ORS 472.426 if the director finds in writing that:
     (a) Any fact or condition exists that, if
the fact or condition had existed at the time the licensee applied for a
license to operate as a discount medical plan organization, would have been
grounds for the director to deny a license to the licensee;
     (b) The licensee has not complied or is
not complying with the licenseeÂ’s obligations under ORS 742.424, 742.426,
742.428, 742.432 or 742.436 or any rule adopted thereunder or the licensee has
violated or is violating a prohibition under ORS 742.434; or
     (c) The licensee’s license or other
authority to operate as a discount medical plan organization in another state
has been suspended or revoked or has not been renewed.
     (2) A licensee subject to an order of the
director suspending or revoking a license shall have an opportunity for a
hearing under ORS 183.413 to 183.470.
     (3) After the director issues a final
order to suspend or revoke a license, the person subject to the order may not
conduct further business as a discount medical plan organization in this state.
Immediately after the director issues a final order suspending or revoking a
license, the person subject to the order shall:
     (a) Cease operations as a discount medical
plan organization in this state;
     (b) Cancel all pending transactions with
plan members and refund any fees, service or subscription charges, dues or
other consideration collected in exchange for services the person would have
provided to plan members in connection with a discount medical plan after the
effective date of the final order suspending or revoking the personÂ’s license;
and
     (c) Wind up all business conducted in
connection with the personÂ’s operations as a discount medical plan organization
in this state, if necessary. [2007 c.272 §11]
     Note: See notes under 742.420.
     742.440
Injunction; damages; venue; time for commencing action. (1) A person, a municipal or other public
corporation or, at the request of the Director of the Department of Consumer
and Business Services, the Attorney General may bring an action in a circuit
court of this state against a person that operates or purports to operate as a
discount medical plan organization but that has not obtained a license under
ORS 742.426, to:
     (a) Enjoin the person from operating or
purporting to operate as a discount medical plan organization or from violating
ORS 742.432 or 742.434 or any rule adopted thereunder; or
     (b) Recover actual damages or statutory
damages under this section that arise from the personÂ’s violation of ORS
742.432 or 742.434 or any rule adopted thereunder.
     (2) A plaintiff may bring an action under
this section in the county where:
     (a) The plaintiff resides or conducts
business; or
     (b) The defendant marketed, offered for
sale or sold, promoted, distributed or advertised a discount medical plan.
     (3) If the court finds that the defendant
has violated ORS 742.422, 742.432 or 742.434 or any rule adopted thereunder,
the court shall enjoin the defendant from continuing the violation.
     (4) Unless a plaintiff seeks actual or
statutory damages under this section, the plaintiff need not allege or prove
actual damages to bring an action for an injunction under this section.
     (5) In addition to injunctive relief, the
plaintiff who prevails in an action brought under this section is entitled to
recover from the defendant:
     (a) $100 for each discount medical plan
membership sold or otherwise distributed within this state or $10,000,
whichever is greater;
     (b) Three times the amount of actual
damages, if any, that the plaintiff sustained;
     (c) Reasonable attorney fees;
     (d) Costs; and
     (e) Any other relief the court deems proper.
     (6) A plaintiff must commence an action
under this section within two years after the date on which the violation
described in subsection (1) of this section occurred or within two years after
the plaintiff bringing the action discovered or in the exercise of reasonable
diligence should have discovered the violation. The plaintiff may have an
additional 180 days after the two-year period provided in this subsection
within which to commence an action if the plaintiff can prove by a
preponderance of the evidence that the plaintiff failed to timely commence the
action because of conduct by the defendant calculated solely to induce the
plaintiff to refrain from or postpone commencement of the action.
     (7) The remedies provided in this section
are cumulative and are in addition to any other applicable criminal, civil or
administrative penalties. [2007 c.272 §12]
     Note: See notes under 742.420.
MOTOR VEHICLE
LIABILITY INSURANCE
(Issuance of
Insurance Card)
     742.447
Insurance card. Every
insurer that issues motor vehicle insurance that is designed to meet either the
financial or future responsibility requirements of ORS chapter 806 shall issue
with the policy a card that shows the effective date and the expiration date of
the insurance. [1993 c.746 §1]
     Note: 742.447 was enacted into law by the
Legislative Assembly but was not added to or made a part of ORS chapter 742 or
any series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.
(Generally)
     742.449
Prohibition on assignment to high risk category on certain grounds. An insurer issuing motor vehicle liability
insurance policies in this state may not assign an insured or applicant for
insurance to a higher risk category than the person would otherwise be assigned
to solely because the person has:
     (1) Let a prior motor vehicle liability
policy lapse, unless the person was in violation of ORS 806.010 at any time
after the prior policy lapsed; or
     (2) Had driving privileges suspended
pursuant to ORS 809.280 (7) or (9) if the suspension is based on a nondriving
offense. [1989 c.419 §2; 1991 c.860 §6]
     742.450
Contents of motor vehicle liability policy; permitted exclusions. (1) Every motor vehicle liability insurance
policy issued for delivery in this state shall state the name and address of
the named insured, the coverage afforded by the policy, the premium charged
therefor, the policy period and the limits of liability.
     (2) Every motor vehicle liability
insurance policy issued for delivery in this state shall contain an agreement
or indorsement stating that, as respects bodily injury and death or property
damage, or both, the insurance provides either:
     (a) The coverage described in ORS 806.070
and 806.080; or
     (b) The coverage described in ORS 806.270.
     (3) The agreement or indorsement required
by subsection (2) of this section shall also state that the insurance provided
is subject to all the provisions of the Oregon Vehicle Code relating to
financial responsibility requirements as defined in ORS 801.280 or future
responsibility filings as defined in ORS 801.290, as appropriate.
     (4) Every motor vehicle liability
insurance policy issued for delivery in this state shall provide liability
coverage to at least the limits specified in ORS 806.070.
     (5) Every motor vehicle liability
insurance policy issued for delivery in this state shall provide liability
coverage, up to the limits of coverage under the policy for a vehicle owned by
the named insured, for the operation by the named insured of a motor vehicle
provided to the named insured, without regard to whether the named insured is
charged for the use of the motor vehicle, if:
     (a) The motor vehicle is provided to the
named insured by a person engaged in the business of repairing or servicing
motor vehicles; and
     (b) The motor vehicle is provided to the
named insured as a temporary replacement vehicle while the named insuredÂ’s
vehicle is being repaired or serviced.
     (6) A motor vehicle liability insurance
policy issued for delivery in this state may exclude by name from coverage
required by subsection (2)(a) of this section any person other than the named
insured, for any of the reasons stated in subsection (7) of this section. When
an insurer excludes a person as provided by this subsection, the insurer shall
obtain a statement or indorsement, signed by each of the named insureds, that
the policy will not provide any coverage required by subsection (2)(a) of this
section when the motor vehicle is driven by any named excluded person.
     (7) A person may be excluded from coverage
under a motor vehicle liability insurance policy as provided in subsection (6)
of this section:
     (a) Because of the driving record of the
person. The Director of the Department of Consumer and Business Services by
rule may establish restrictions on the use of the driving record in addition to
other restrictions established by law.
     (b) Because of any reason or set of
criteria established by the director by rule.
     (8) Every motor vehicle liability
insurance policy issued for delivery in this state shall contain a provision
that provides liability coverage for each family member of the insured residing
in the same household as the insured in an amount equal to the amount of
liability coverage purchased by the insured. [Formerly 486.541 and then 743.776;
1991 c.768 §3; 1999 c.438 §2; 2007 c.782 §1]
     742.454
Liabilities that need not be covered. The motor vehicle liability insurance policy required by ORS 806.010,
806.060, 806.080, 806.240 or 806.270 need not insure any liability under any
workersÂ’ compensation law; nor any liability on account of bodily injury to or
death of an employee of the insured while engaged in the employment, other than
domestic, of the insured, or while engaged in the operation, maintenance or
repair of a vehicle; nor any liability for damage to property owned by, rented
to, in charge of, or transported by the insured. [Formerly 486.546 and then
743.778]
     742.456
When insurerÂ’s liability accrues; nonforfeiture provisions. The liability of an insurer with respect to
the motor vehicle liability insurance policy required by ORS 806.060, 806.240
or 806.270 shall become absolute whenever injury or damage covered by the
policy occurs. The policy may not be canceled or annulled as to such liability
by any agreement between the insurer and the insured after the occurrence of
the injury or damage. No statement made by the insured or on behalf of the
insured and in violation of the policy shall defeat or void the policy. This
section does not apply to motor vehicle liability insurance policies other than
those required in connection with ORS 806.060, 806.240 or 806.270. [Formerly
486.551 and then 743.779]
     742.458
General provisions governing liability policies. Every motor vehicle liability insurance
policy shall be subject to the following provisions, which need not be
contained therein:
     (1) The policy, the written application
therefor, if any, and any rider or indorsement that does not conflict with the
laws relating to motor vehicle liability insurance policies shall constitute
the entire contract between the parties.
     (2) The satisfaction by the insured of a
judgment for injury or damage shall not be a condition precedent to the right
or duty of the insurer to make payment on account of such injury or damage.
     (3) Any binder issued pending the issuance
of a motor vehicle liability insurance policy shall be deemed to fulfill the
requirements for such a policy. [Formerly 486.556 and then 743.781]
     742.460
InsurerÂ’s right to provide for reimbursement and proration. Any motor vehicle liability insurance policy
may provide that the insured shall reimburse the insurer for any payment the
insurer would not have been obligated to make under the terms of the policy
except for the provisions of ORS 742.450 to 742.464, 806.080 and 806.270 and it
may further provide for the prorating of the insurance thereunder with other
valid and collectible insurance. [Formerly 486.561 and then 743.782; 1995 c.79 §363]
     742.462
InsurerÂ’s right to settle claims. The insurer shall have the right to settle any claim covered by the
policy, and if such settlement is made in good faith, the amount thereof shall
be deductible from the limits of liability specified in respect to a motor
vehicle liability insurance policy. [Formerly 486.564 and then 743.784]
     742.464
Excess coverage permitted; combining policies to meet requirements. Any policy which grants the coverage
required for a motor vehicle liability insurance policy under ORS 742.450,
806.080 and 806.270 may also grant any lawful coverage in excess of or in addition
to the required coverage, and such excess or additional coverage shall not be
subject to the provisions of ORS 742.031, 742.400 and 742.450 to 742.464. With
respect to a policy which grants such excess or additional coverage only that
part of the coverage which is required by ORS 806.080 and 806.270 is subject to
the requirements of those sections. [Formerly 486.566 and then 743.785]
     742.466
Disputes over coverage for physical damage; independent appraisal; rules. (1) In the event of a dispute between the
insurer and insured under a motor vehicle liability policy concerning coverage
for physical damage, if the policy contains a provision authorizing the insured
to obtain an independent appraisal by a disinterested party of the physical
damage, that provision shall apply.
     (2) If a motor vehicle liability policy
does not contain a provision described in subsection (1) of this section, then
notwithstanding any other provision of the policy, any resolution of the
dispute shall be subject to rules adopted by the Director of the Department of
Consumer and Business Services. [Formerly 743.840]
     742.468
Certain policies not considered motor vehicle liability policies. For purposes of statutes mandating kinds or
amounts of coverage that motor vehicle liability policies must contain, the
following shall not be considered motor vehicle liability policies:
     (1) Comprehensive general liability
policies.
     (2) Excess liability policies.
     (3) Umbrella liability policies. [1993
c.709 §10]
(Age-Based
Discount)
     742.490
Premium reduction; conditions; application. (1) Any rate, rating plan or rating system filed with the Director of
the Department of Consumer and Business Services for a motor vehicle insurance
policy offering liability, personal injury protection or collision coverage,
shall provide an appropriate reduction in premium charges for such coverage if:
     (a) The principal operator of the covered
vehicle is an insured 55 years of age or older.
     (b) The principal operator of the covered
vehicle has successfully completed, within the appropriate time as specified in
this subsection, a motor vehicle accident prevention course approved by the
Department of Transportation. To meet the requirements of this subsection, a
course must be completed no more than three years prior to the beginning of the
policy period for which the discounted rate applies if the person is less than
70 years of age at the time of taking the course or no more than two years
prior to the beginning of the policy period for which the discounted rate
applies if the person is 70 years of age or more at the time of taking the
course.
     (c) There are no persons under 25 years of
age who regularly operate the vehicle.
     (d) The vehicle is not classified for
underwriting purposes as used for a business.
     (2) If the person qualifying for a premium
reduction under subsection (1) of this section is the principal operator of two
or more vehicles, the premium discount shall apply to only one vehicle. No more
than one premium discount may be applied to one vehicle. [1989 c.379 §§2,4]
     742.492
Duration of reduction.
Except as otherwise provided in this section, the premium reduction required by
ORS 742.490 (1) shall be effective for an insured for a three-year period after
successful completion of the approved course if the person is less than 70
years of age at the time of taking the course or for a two-year period after
successful completion of an approved course if the person is 70 years of age or
more at the time of taking the course. An insurer may require, as a condition
of maintaining the discount, that the insured:
     (1) Not be involved in an accident for
which the insured is at fault; and
     (2) Not be convicted of or plead guilty or
nolo contendere to a moving traffic violation. [1989 c.379 §3]
     742.494
Certification of completion of course. Any organization offering a motor vehicle accident prevention course
approved by the Department of Transportation shall issue a certificate to each
person who successfully completes the course. The person shall present the
certificate to an insurer to qualify for the premium discount required under
ORS 742.490 (1). [1989 c.379 §5]
     742.496
Limitation on qualification for discount. No person shall receive a discount under ORS 742.490 to 742.494 if the
person takes the approved course as a punishment, specified by a court or other
government entity, for a moving traffic violation. [1989 c.379 §6]
(Uninsured
Motorist Coverage)
     742.500
Definitions for ORS 742.500 to 742.506. As used in ORS 742.500 to 742.506:
     (1) “Uninsured motorist coverage” means
coverage within the terms and conditions specified in ORS 742.504 insuring the
insured, the heirs or legal representative of the insured for all sums which
the insured or they shall be legally entitled to recover as damages for bodily
injury or death caused by accident and arising out of the ownership,
maintenance or use of an uninsured motor vehicle in amounts or limits not less
than the amounts or limits prescribed for bodily injury or death under ORS
806.070.
     (2) “Motor vehicle” means every
self-propelled device in, upon or by which any person or property is or may be
transported or drawn upon a public highway, but does not include:
     (a) Devices used exclusively upon
stationary rails or tracks;
     (b) Motor trucks as defined in ORS 801.355
that have a registration weight, as defined by ORS 803.430 of more than 8,000
pounds, when the insured has employees who operate such trucks and such
employees are covered by any workersÂ’ compensation law, disability benefits law
or any similar law; or
     (c) Farm-type tractors or self-propelled
equipment designed for use principally off public highways. [Formerly 743.786]
     742.502
Uninsured motorist coverage; underinsurance coverage. (1) Every motor vehicle liability policy
insuring against loss suffered by any natural person resulting from liability
imposed by law for bodily injury or death arising out of the ownership,
maintenance or use of a motor vehicle shall provide in the policy or by
indorsement on the policy uninsured motorist coverage when the policy is
either:
     (a) Issued for delivery in this state; or
     (b) Issued or delivered by an insurer
doing business in this state with respect to any motor vehicle then principally
used or principally garaged in this state.
     (2)(a) A motor vehicle bodily injury
liability policy shall have the same limits for uninsured motorist coverage as
for bodily injury liability coverage unless a named insured in writing elects
lower limits. The insured may not elect limits lower than the amounts
prescribed to meet the requirements of ORS 806.070 for bodily injury or death.
Uninsured motorist coverage shall include underinsurance coverage for bodily
injury or death caused by accident and arising out of the ownership,
maintenance or use of a motor vehicle with motor vehicle liability insurance
that provides recovery in an amount that is less than the insuredÂ’s uninsured
motorist coverage. Underinsurance coverage shall be equal to uninsured motorist
coverage less the amount recovered from other motor vehicle liability insurance
policies.
     (b) If a named insured elects lower
limits, the named insured shall sign a statement electing lower limits within
60 days of the time the named insured makes the election. The statement shall
acknowledge that a named insured was offered uninsured motorist coverage with
the limits equal to those for bodily injury liability. The statement shall
contain a brief summary, which may not be construed as part of the insurance
contract, of what uninsured and underinsured motorist coverages provide and
shall state the price for coverage with limits equal to the named insuredÂ’s
bodily injury liability limits and the price for coverage with the lower limits
requested by the named insured. The statement shall remain in force until
rescinded in writing by a named insured or until the motor vehicle bodily
injury liability limits are changed. The form of statement used to comply with
this paragraph shall be approved by the Department of Consumer and Business
Services.
     (c) A statement electing lower limits need
not be signed when vehicles are either added to or subtracted from a policy or
when the policy is amended, renewed, modified or replaced by the same company
or group of companies under common ownership or control unless the liability
limits of the policy are changed.
     (3) The insurer issuing the policy may
offer one or more options of uninsured motorist coverage larger than the
amounts prescribed to meet the requirements of ORS 806.070 and in excess of the
limits provided under the policy for motor vehicle bodily injury liability
insurance. Offers of uninsured motorist coverage shall include underinsurance
coverage for bodily injury or death caused by accident and arising out of the
ownership, maintenance or use of a motor vehicle with motor vehicle liability
insurance that provides recovery in an amount that is less than the insuredÂ’s
uninsured motorist coverage. Underinsurance coverage shall be equal to
uninsured motorist coverage less the amount recovered from other motor vehicle
liability insurance policies.
     (4) Underinsurance coverage is subject to
ORS 742.504 and 742.542.
     (5) Uninsured motorist coverage and
underinsurance coverage shall provide coverage for bodily injury or death when:
     (a) The limits for uninsured motorist
coverage of the insured equal the limits of the liability policy of the person
whose fault caused the bodily injury or death; and
     (b) The amount of liability insurance
recovered is less than the limits for uninsured motorist coverage of the
insured.
     (6) Uninsured motorist coverage and
underinsurance coverage shall provide coverage for bodily injury or death if
the amount recovered from a self-insurer is less than the limits for uninsured
motorist coverage of the insured.
     (7) As used in this section and except as
otherwise provided in this subsection, “amount recovered from other motor
vehicle liability insurance policies” means the proceeds of liability insurance
or the proceeds received from a public body under ORS 30.270 recovered by or on
behalf of the injured party. Proceeds recovered on behalf of the injured party
include proceeds received by the injured partyÂ’s insurer as reimbursement for
personal injury protection benefits provided to the injured person, proceeds
received by the medical providers of the injured person and proceeds received
as attorney fees on the claim of the injured person. Where applicable liability
insurance policy limits are exhausted upon payment, settlement or judgment by
division among two or more injured persons, “amount recovered from other motor
vehicle liability insurance policies” means the proceeds that are recovered by
or on behalf of the injured person but does not include any proceeds of that
liability policy received by other injured persons. [Formerly 743.789; 1993
c.709 §11; 1997 c.808 §1; 2003 c.220 §1; 2005 c.235 §1; 2007 c.287 §2; 2007
c.782 §2]
     742.504
Required provisions of uninsured motorist coverage. Every policy required to provide the
coverage specified in ORS 742.502 shall provide uninsured motorist coverage
that in each instance is no less favorable in any respect to the insured or the
beneficiary than if the following provisions were set forth in the policy.
However, nothing contained in this section requires the insurer to reproduce in
the policy the particular language of any of the following provisions:
     (1)(a) Notwithstanding ORS 30.270, the
insurer will pay all sums that the insured, the heirs or the legal
representative of the insured is legally entitled to recover as general and
special damages from the owner or operator of an uninsured vehicle because of
bodily injury sustained by the insured caused by accident and arising out of
the ownership, maintenance or use of the uninsured vehicle. Determination as to
whether the insured, the insuredÂ’s heirs or the insuredÂ’s legal representative
is legally entitled to recover such damages, and if so, the amount thereof,
shall be made by agreement between the insured and the insurer, or, in the
event of disagreement, may be determined by arbitration as provided in
subsection (10) of this section.
     (b) No judgment against any person or
organization alleged to be legally responsible for bodily injury, except for
proceedings instituted against the insurer as provided in this policy, shall be
conclusive, as between the insured and the insurer, on the issues of liability
of the person or organization or of the amount of damages to which the insured
is legally entitled.
     (2) As used in this policy:
     (a) “Bodily injury” means bodily injury,
sickness or disease, including death resulting therefrom.
     (b) “Hit-and-run vehicle” means a vehicle
that causes bodily injury to an insured arising out of physical contact of the
vehicle with the insured or with a vehicle the insured is occupying at the time
of the accident, provided:
     (A) The identity of either the operator or
the owner of the hit-and-run vehicle cannot be ascertained;
     (B) The insured or someone on behalf of
the insured reported the accident within 72 hours to a police, peace or
judicial officer, to the Department of Transportation or to the equivalent
department in the state where the accident occurred, and filed with the insurer
within 30 days thereafter a statement under oath that the insured or the legal
representative of the insured has a cause or causes of action arising out of
the accident for damages against a person or persons whose identities are
unascertainable, and setting forth the facts in support thereof; and
     (C) At the insurer’s request, the insured
or the legal representative of the insured makes available for inspection the
vehicle the insured was occupying at the time of the accident.
     (c) “Insured,” when unqualified and when
applied to uninsured motorist coverage, means:
     (A) The named insured as stated in the
policy and any person designated as named insured in the schedule and, while
residents of the same household, the spouse of any named insured and relatives
of either, provided that neither the relative nor the spouse is the owner of a
vehicle not described in the policy and that, if the named insured as stated in
the policy is other than an individual or husband and wife who are residents of
the same household, the named insured shall be only a person so designated in
the schedule;
     (B) Any child residing in the household of
the named insured if the insured has performed the duties of a parent to the
child by rearing the child as the insuredÂ’s own although the child is not
related to the insured by blood, marriage or adoption; and
     (C) Any other person while occupying an
insured vehicle, provided the actual use thereof is with the permission of the
named insured.
     (d) “Insured vehicle,” except as provided
in paragraph (e) of this provision, means:
     (A) The vehicle described in the policy or
a newly acquired or substitute vehicle, as each of those terms is defined in
the public liability coverage of the policy, insured under the public liability
provisions of the policy; or
     (B) A nonowned vehicle operated by the
named insured or spouse if a resident of the same household, provided that the
actual use thereof is with the permission of the owner of the vehicle and the
vehicle is not owned by nor furnished for the regular or frequent use of the
insured or any member of the same household.
     (e) “Insured vehicle” does not include a
trailer of any type unless the trailer is a described vehicle in the policy.
     (f) “Occupying” means in or upon or
entering into or alighting from.
     (g) “Phantom vehicle” means a vehicle that
causes bodily injury to an insured arising out of a motor vehicle accident that
is caused by a vehicle that has no physical contact with the insured or the
vehicle the insured is occupying at the time of the accident, provided:
     (A) The identity of either the operator or
the owner of the phantom vehicle cannot be ascertained;
     (B) The facts of the accident can be
corroborated by competent evidence other than the testimony of the insured or
any person having an uninsured motorist claim resulting from the accident; and
     (C) The insured or someone on behalf of
the insured reported the accident within 72 hours to a police, peace or
judicial officer, to the Department of Transportation or to the equivalent
department in the state where the accident occurred, and filed with the insurer
within 30 days thereafter a statement under oath that the insured or the legal
representative of the insured has a cause or causes of action arising out of
the accident for damages against a person or persons whose identities are
unascertainable, and setting forth the facts in support thereof.
     (h) “State” includes the
     (i) “Stolen vehicle” means an insured
vehicle that causes bodily injury to the insured arising out of a motor vehicle
accident if:
     (A) The vehicle is operated without the
consent of the insured;
     (B) The operator of the vehicle does not
have collectible motor vehicle bodily injury liability insurance;
     (C) The insured or someone on behalf of
the insured reported the accident within 72 hours to a police, peace or
judicial officer or to the equivalent department in the state where the
accident occurred; and
     (D) The insured or someone on behalf of
the insured cooperates with the appropriate law enforcement agency in the
prosecution of the theft of the vehicle.
     (j) “Sums that the insured, the heirs or
the legal representative of the insured is legally entitled to recover as
general and special damages from the owner or operator of an uninsured vehicle”
means the amount of damages that:
     (A) A claimant could have recovered in a
civil action from the owner or operator at the time of the injury after
determination of fault or comparative fault and resolution of any applicable
defenses;
     (B) Are calculated without regard to the
tort claims limitations of ORS 30.260 to 30.300; and
     (C) Are no larger than benefits payable
under the terms of the policy as provided in subsection (7) of this section.
     (k) “Uninsured vehicle,” except as
provided in paragraph (L) of this provision, means:
     (A) A vehicle with respect to the
ownership, maintenance or use of which there is no collectible motor vehicle
bodily injury liability insurance, in at least the amounts or limits prescribed
for bodily injury or death under ORS 806.070 applicable at the time of the
accident with respect to any person or organization legally responsible for the
use of the vehicle, or with respect to which there is collectible bodily injury
liability insurance applicable at the time of the accident but the insurance
company writing the insurance denies coverage or the company writing the
insurance becomes voluntarily or involuntarily declared bankrupt or for which a
receiver is appointed or becomes insolvent. It shall be a disputable
presumption that a vehicle is uninsured in the event the insured and the
insurer, after reasonable efforts, fail to discover within 90 days from the
date of the accident, the existence of a valid and collectible motor vehicle
bodily injury liability insurance applicable at the time of the accident.
     (B) A hit-and-run vehicle.
     (C) A phantom vehicle.
     (D) A stolen vehicle.
     (E) A vehicle that is owned or operated by
a self-insurer:
     (i) That is not in compliance with ORS
806.130 (1)(c); or
     (ii) That provides recovery to an insured
in an amount that is less than the limits for uninsured motorist coverage of
the insured.
     (L) “Uninsured vehicle” does not include:
     (A) An insured vehicle, unless the vehicle
is a stolen vehicle;
     (B) Except as provided in paragraph (k)(E)
of this subsection, a vehicle that is owned or operated by a self-insurer
within the meaning of any motor vehicle financial responsibility law, motor
carrier law or any similar law;
     (C) A vehicle that is owned by the United
States of America, Canada, a state, a political subdivision of any such
government or an agency of any such government;
     (D) A land motor vehicle or trailer, if
operated on rails or crawler-treads or while located for use as a residence or
premises and not as a vehicle;
     (E) A farm-type tractor or equipment
designed for use principally off public roads, except while actually upon
public roads; or
     (F) A vehicle owned by or furnished for
the regular or frequent use of the insured or any member of the household of
the insured.
     (m) “Vehicle” means every device in, upon
or by which any person or property is or may be transported or drawn upon a
public highway, but does not include devices moved by human power or used
exclusively upon stationary rails or tracks.
     (3) This coverage applies only to
accidents that occur on and after the effective date of the policy, during the
policy period and within the
     (4)(a) This coverage does not apply to
bodily injury of an insured with respect to which the insured or the legal
representative of the insured shall, without the written consent of the
insurer, make any settlement with or prosecute to judgment any action against
any person or organization who may be legally liable therefor.
     (b) This coverage does not apply to bodily
injury to an insured while occupying a vehicle, other than an insured vehicle,
owned by, or furnished for the regular use of, the named insured or any
relative resident in the same household, or through being struck by the
vehicle.
     (c) This coverage does not apply so as to
inure directly or indirectly to the benefit of any workersÂ’ compensation
carrier, any person or organization qualifying as a self-insurer under any
workersÂ’ compensation or disability benefits law or any similar law or the
State Accident Insurance Fund Corporation.
     (d) This coverage does not apply with
respect to underinsured motorist benefits unless:
     (A) The limits of liability under any
bodily injury liability insurance applicable at the time of the accident
regarding the injured person have been exhausted by payment of judgments or
settlements to the injured person or other injured persons;
     (B) The described limits have been offered
in settlement, the insurer has refused consent under paragraph (a) of this
subsection and the insured protects the insurerÂ’s right of subrogation to the
claim against the tortfeasor;
     (C) The insured gives credit to the
insurer for the unrealized portion of the described liability limits as if the
full limits had been received if less than the described limits have been
offered in settlement, and the insurer has consented under paragraph (a) of
this subsection; or
     (D) The insured gives credit to the
insurer for the unrealized portion of the described liability limits as if the
full limits had been received if less than the described limits have been
offered in settlement and, if the insurer has refused consent under paragraph
(a) of this subsection, the insured protects the insurerÂ’s right of subrogation
to the claim against the tortfeasor.
     (e) When seeking consent under paragraph
(a) or (d) of this subsection, the insured shall allow the insurer a reasonable
time in which to collect and evaluate information related to consent to the
proposed offer of settlement. The insured shall provide promptly to the insurer
any information that is reasonably requested by the insurer and that is within
the custody and control of the insured. Consent will be presumed to be given if
the insurer does not respond within a reasonable time. For purposes of this
paragraph, a “reasonable time” is no more than 30 days from the insurer’s
receipt of a written request for consent, unless the insured and the insurer
agree otherwise.
     (5)(a) As soon as practicable, the insured
or other person making claim shall give to the insurer written proof of claim,
under oath if required, including full particulars of the nature and extent of
the injuries, treatment and other details entering into the determination of
the amount payable hereunder. The insured and every other person making claim
hereunder shall submit to examinations under oath by any person named by the
insurer and subscribe the same, as often as may reasonably be required. Proof
of claim shall be made upon forms furnished by the insurer unless the insurer
fails to furnish the forms within 15 days after receiving notice of claim.
     (b) Upon reasonable request of and at the
expense of the insurer, the injured person shall submit to physical
examinations by physicians selected by the insurer and shall, upon each request
from the insurer, execute authorization to enable the insurer to obtain medical
reports and copies of records.
     (6) If, before the insurer makes payment
of loss hereunder, the insured or the legal representative of the insured
institutes any legal action for bodily injury against any person or
organization legally responsible for the use of a vehicle involved in the
accident, a copy of the summons and complaint or other process served in
connection with the legal action shall be forwarded immediately to the insurer
by the insured or the legal representative of the insured.
     (7)(a) The limit of liability stated in
the declarations as applicable to “each person” is the limit of the insurer’s
liability for all damages because of bodily injury sustained by one person as
the result of any one accident and, subject to the above provision respecting
each person, the limit of liability stated in the declarations as applicable to
“each accident” is the total limit of the company’s liability for all damages
because of bodily injury sustained by two or more persons as the result of any
one accident.
     (b) Any payment made under this coverage
to or for an insured shall be applied in reduction of any amount that the
insured may be entitled to recover from any person who is an insured under the
bodily injury liability coverage of this policy.
     (c) Any amount payable under the terms of
this coverage because of bodily injury sustained in an accident by a person who
is an insured under this coverage shall be reduced by:
     (A) All sums paid on account of the bodily
injury by or on behalf of the owner or operator of the uninsured vehicle and by
or on behalf of any other person or organization jointly or severally liable
together with the owner or operator for the bodily injury, including all sums
paid under the bodily injury liability coverage of the policy; and
     (B) The amount paid and the present value
of all amounts payable on account of the bodily injury under any workersÂ’
compensation law, disability benefits law or any similar law.
     (d) Any amount payable under the terms of
this coverage because of bodily injury sustained in an accident by a person who
is an insured under this coverage shall be reduced by the credit given to the
insurer pursuant to subsection (4)(d)(C) or (D) of this section.
     (e) The amount payable under the terms of
this coverage may not be reduced by the amount of liability proceeds offered,
described in subsection (4)(d)(B) or (D) of this section, that has not been
paid to the injured person. If liability proceeds have been offered and not
paid, the amount payable under the terms of the coverage shall include the
amount of liability limits offered but not accepted due to the insurerÂ’s
refusal to consent. The insured shall cooperate so as to permit the insurer to
proceed by subrogation or assignment to prosecute the claim against the
uninsured motorist.
     (8) No action shall lie against the
insurer unless, as a condition precedent thereto, the insured or the legal
representative of the insured has fully complied with all the terms of this
policy.
     (9)(a) With respect to bodily injury to an
insured:
     (A) While occupying a vehicle owned by a
named insured under this coverage, the insurance under this coverage is
primary.
     (B) While occupying a vehicle not owned by
a named insured under this coverage, the insurance under this coverage shall
apply only as excess insurance over any primary insurance available to the
occupant that is similar to this coverage, and this excess insurance shall then
apply only in the amount by which the applicable limit of liability of this
excess coverage exceeds the sum of the applicable limits of liability of all
primary insurance available to the occupant.
     (b) If an insured is an insured under
other primary or excess insurance available to the insured that is similar to
this coverage, then the insuredÂ’s damages are deemed not to exceed the higher
of the applicable limits of liability of this insurance or the additional
primary or excess insurance available to the insured, and the insurer is not
liable under this coverage for a greater proportion of the insuredÂ’s damages
than the applicable limit of liability of this coverage bears to the sum of the
applicable limits of liability of this insurance and other primary or excess
insurance available to the insured.
     (c) With respect to bodily injury to an
insured while occupying any motor vehicle used as a public or livery
conveyance, the insurance under this coverage shall apply only as excess
insurance over any other insurance available to the insured that is similar to
this coverage, and this insurance shall then apply only in the amount by which
the applicable limit of liability of this coverage exceeds the sum of the
applicable limits of liability of all other insurance.
     (10) If any person making claim hereunder
and the insurer do not agree that the person is legally entitled to recover
damages from the owner or operator of an uninsured vehicle because of bodily
injury to the insured, or do not agree as to the amount of payment that may be
owing under this coverage, then, in the event the insured and the insurer elect
by mutual agreement at the time of the dispute to settle the matter by
arbitration, the arbitration shall take place as described in section 2,
chapter 328, Oregon Laws 2007. Any judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof, provided,
however, that the costs to the insured of the arbitration proceeding do not
exceed $100 and that all other costs of arbitration are borne by the insurer. “Costs”
as used in this provision does not include attorney fees or expenses incurred
in the production of evidence or witnesses or the making of transcripts of the
arbitration proceedings. The person and the insurer each agree to consider
themselves bound and to be bound by any award made by the arbitrators pursuant
to this coverage in the event of such election. At the election of the insured,
the arbitration shall be held:
     (a) In the county and state of residence
of the insured;
     (b) In the county and state where the
insuredÂ’s cause of action against the uninsured motorist arose; or
     (c) At any other place mutually agreed
upon by the insured and the insurer.
     (11) In the event of payment to any person
under this coverage:
     (a) The insurer shall be entitled to the
extent of the payment to the proceeds of any settlement or judgment that may
result from the exercise of any rights of recovery of the person against any
uninsured motorist legally responsible for the bodily injury because of which
payment is made;
     (b) The person shall hold in trust for the
benefit of the insurer all rights of recovery that the person shall have
against such other uninsured person or organization because of the damages that
are the subject of claim made under this coverage, but only to the extent that
the claim is made or paid herein;
     (c) If the insured is injured by the joint
or concurrent act or acts of two or more persons, one or more of whom is
uninsured, the insured shall have the election to receive from the insurer any
payment to which the insured would be entitled under this coverage by reason of
the act or acts of the uninsured motorist, or the insured may, with the written
consent of the insurer, proceed with legal action against any or all persons
claimed to be liable to the insured for the injuries. If the insured elects to
receive payment from the insurer under this coverage, then the insured shall
hold in trust for the benefit of the insurer all rights of recovery the insured
shall have against any other person, firm or organization because of the
damages that are the subject of claim made under this coverage, but only to the
extent of the actual payment made by the insurer;
     (d) The person shall do whatever is proper
to secure and shall do nothing after loss to prejudice such rights;
     (e) If requested in writing by the
insurer, the person shall take, through any representative not in conflict in
interest with the person, designated by the insurer, such action as may be
necessary or appropriate to recover payment as damages from such other
uninsured person or organization, such action to be taken in the name of the
person, but only to the extent of the payment made hereunder. In the event of a
recovery, the insurer shall be reimbursed out of the recovery for expenses,
costs and attorney fees incurred by the insurer in connection therewith; and
     (f) The person shall execute and deliver
to the insurer any instruments and papers as may be appropriate to secure the
rights and obligations of the person and the insurer established by this
provision.
     (12)(a) The parties to this coverage agree
that no cause of action shall accrue to the insured under this coverage unless
within two years from the date of the accident:
     (A) Agreement as to the amount due under
the policy has been concluded;
     (B) The insured or the insurer has
formally instituted arbitration proceedings;
     (C) The insured has filed an action
against the insurer; or
     (D) Suit for bodily injury has been filed
against the uninsured motorist and, within two years from the date of
settlement or final judgment against the uninsured motorist, the insured has
formally instituted arbitration proceedings or filed an action against the
insurer.
     (b) For purposes of this subsection:
     (A) “Date of settlement” means the date on
which a written settlement agreement or release is signed by an insured or, in
the absence of these documents, the date on which the insured or the attorney
for the insured receives payment of any sum required by the settlement
agreement. An advance payment as defined in ORS 31.550 shall not be deemed a
payment of a settlement for purposes of the time limitation in this subsection.
     (B) “Final judgment” means a judgment that
has become final by lapse of time for appeal or by entry in an appellate court
of an appellate judgment. [Formerly 743.792; 1993 c.18 §156; 1993 c.596 §38;
1997 c.808 §2; 2003 c.175 §2; 2005 c.22 §490; 2005 c.236 §1; 2005 c.246 §2;
2005 c.247 §2; 2007 c.131 §1; 2007 c.287 §3; 2007 c.328 §5; 2007 c.457 §1; 2007
c.782 §3]
     Note: The amendments to 742.504 by section 6,
chapter 328, Oregon Laws 2007, become operative January 2, 2012, and apply to
motor vehicle liability policies issued or renewed on or after January 2, 2012.
See sections 7 and 11, chapter 328, Oregon Laws 2007. The text that is
operative on and after January 2, 2012, is set forth for the userÂ’s
convenience.
     742.504. Every policy required to provide the
coverage specified in ORS 742.502 shall provide uninsured motorist coverage
that in each instance is no less favorable in any respect to the insured or the
beneficiary than if the following provisions were set forth in the policy.
However, nothing contained in this section requires the insurer to reproduce in
the policy the particular language of any of the following provisions:
     (1)(a) Notwithstanding ORS 30.270, the insurer
will pay all sums that the insured, the heirs or the legal representative of
the insured is legally entitled to recover as general and special damages from
the owner or operator of an uninsured vehicle because of bodily injury
sustained by the insured caused by accident and arising out of the ownership,
maintenance or use of the uninsured vehicle. Determination as to whether the
insured, the insuredÂ’s heirs or the insuredÂ’s legal representative is legally
entitled to recover such damages, and if so, the amount thereof, shall be made
by agreement between the insured and the insurer, or, in the event of
disagreement, may be determined by arbitration as provided in subsection (10)
of this section.
     (b) No judgment against any person or
organization alleged to be legally responsible for bodily injury, except for
proceedings instituted against the insurer as provided in this policy, shall be
conclusive, as between the insured and the insurer, on the issues of liability
of the person or organization or of the amount of damages to which the insured
is legally entitled.
     (2) As used in this policy:
     (a) “Bodily injury” means bodily injury,
sickness or disease, including death resulting therefrom.
     (b) “Hit-and-run vehicle” means a vehicle
that causes bodily injury to an insured arising out of physical contact of the
vehicle with the insured or with a vehicle the insured is occupying at the time
of the accident, provided:
     (A) The identity of either the operator or
the owner of the hit-and-run vehicle cannot be ascertained;
     (B) The insured or someone on behalf of
the insured reported the accident within 72 hours to a police, peace or
judicial officer, to the Department of Transportation or to the equivalent
department in the state where the accident occurred, and filed with the insurer
within 30 days thereafter a statement under oath that the insured or the legal
representative of the insured has a cause or causes of action arising out of
the accident for damages against a person or persons whose identities are unascertainable,
and setting forth the facts in support thereof; and
     (C) At the insurer’s request, the insured
or the legal representative of the insured makes available for inspection the
vehicle the insured was occupying at the time of the accident.
     (c) “Insured,” when unqualified and when
applied to uninsured motorist coverage, means:
     (A) The named insured as stated in the
policy and any person designated as named insured in the schedule and, while
residents of the same household, the spouse of any named insured and relatives
of either, provided that neither the relative nor the spouse is the owner of a
vehicle not described in the policy and that, if the named insured as stated in
the policy is other than an individual or husband and wife who are residents of
the same household, the named insured shall be only a person so designated in
the schedule;
     (B) Any child residing in the household of
the named insured if the insured has performed the duties of a parent to the
child by rearing the child as the insuredÂ’s own although the child is not
related to the insured by blood, marriage or adoption; and
     (C) Any other person while occupying an
insured vehicle, provided the actual use thereof is with the permission of the
named insured.
     (d) “Insured vehicle,” except as provided
in paragraph (e) of this provision, means:
     (A) The vehicle described in the policy or
a newly acquired or substitute vehicle, as each of those terms is defined in
the public liability coverage of the policy, insured under the public liability
provisions of the policy; or
     (B) A nonowned vehicle operated by the
named insured or spouse if a resident of the same household, provided that the
actual use thereof is with the permission of the owner of the vehicle and the
vehicle is not owned by nor furnished for the regular or frequent use of the
insured or any member of the same household.
     (e) “Insured vehicle” does not include a
trailer of any type unless the trailer is a described vehicle in the policy.
     (f) “Occupying” means in or upon or entering
into or alighting from.
     (g) “Phantom vehicle” means a vehicle that
causes bodily injury to an insured arising out of a motor vehicle accident that
is caused by a vehicle that has no physical contact with the insured or the
vehicle the insured is occupying at the time of the accident, provided:
     (A) The identity of either the operator or
the owner of the phantom vehicle cannot be ascertained;
     (B) The facts of the accident can be
corroborated by competent evidence other than the testimony of the insured or
any person having an uninsured motorist claim resulting from the accident; and
     (C) The insured or someone on behalf of
the insured reported the accident within 72 hours to a police, peace or
judicial officer, to the Department of Transportation or to the equivalent
department in the state where the accident occurred, and filed with the insurer
within 30 days thereafter a statement under oath that the insured or the legal
representative of the insured has a cause or causes of action arising out of the
accident for damages against a person or persons whose identities are
unascertainable, and setting forth the facts in support thereof.
     (h) “State” includes the
     (i) “Stolen vehicle” means an insured
vehicle that causes bodily injury to the insured arising out of a motor vehicle
accident if:
     (A) The vehicle is operated without the
consent of the insured;
     (B) The operator of the vehicle does not
have collectible motor vehicle bodily injury liability insurance;
     (C) The insured or someone on behalf of
the insured reported the accident within 72 hours to a police, peace or
judicial officer or to the equivalent department in the state where the
accident occurred; and
     (D) The insured or someone on behalf of
the insured cooperates with the appropriate law enforcement agency in the
prosecution of the theft of the vehicle.
     (j) “Sums that the insured, the heirs or
the legal representative of the insured is legally entitled to recover as
general and special damages from the owner or operator of an uninsured vehicle”
means the amount of damages that:
     (A) A claimant could have recovered in a
civil action from the owner or operator at the time of the injury after
determination of fault or comparative fault and resolution of any applicable
defenses;
     (B) Are calculated without regard to the
tort claims limitations of ORS 30.260 to 30.300; and
     (C) Are no larger than benefits payable
under the terms of the policy as provided in subsection (7) of this section.
     (k) “Uninsured vehicle,” except as
provided in paragraph (L) of this provision, means:
     (A) A vehicle with respect to the
ownership, maintenance or use of which there is no collectible motor vehicle
bodily injury liability insurance, in at least the amounts or limits prescribed
for bodily injury or death under ORS 806.070 applicable at the time of the
accident with respect to any person or organization legally responsible for the
use of the vehicle, or with respect to which there is collectible bodily injury
liability insurance applicable at the time of the accident but the insurance
company writing the insurance denies coverage or the company writing the
insurance becomes voluntarily or involuntarily declared bankrupt or for which a
receiver is appointed or becomes insolvent. It shall be a disputable
presumption that a vehicle is uninsured in the event the insured and the
insurer, after reasonable efforts, fail to discover within 90 days from the
date of the accident, the existence of a valid and collectible motor vehicle
bodily injury liability insurance applicable at the time of the accident.
     (B) A hit-and-run vehicle.
     (C) A phantom vehicle.
     (D) A stolen vehicle.
     (E) A vehicle that is owned or operated by
a self-insurer:
     (i) That is not in compliance with ORS
806.130 (1)(c); or
     (ii) That provides recovery to an insured
in an amount that is less than the limits for uninsured motorist coverage of
the insured.
     (L) “Uninsured vehicle” does not include:
     (A) An insured vehicle, unless the vehicle
is a stolen vehicle;
     (B) Except as provided in paragraph (k)(E)
of this subsection, a vehicle that is owned or operated by a self-insurer
within the meaning of any motor vehicle financial responsibility law, motor
carrier law or any similar law;
     (C) A vehicle that is owned by the United
States of America, Canada, a state, a political subdivision of any such
government or an agency of any such government;
     (D) A land motor vehicle or trailer, if
operated on rails or crawler-treads or while located for use as a residence or
premises and not as a vehicle;
     (E) A farm-type tractor or equipment
designed for use principally off public roads, except while actually upon
public roads; or
     (F) A vehicle owned by or furnished for
the regular or frequent use of the insured or any member of the household of
the insured.
     (m) “Vehicle” means every device in, upon
or by which any person or property is or may be transported or drawn upon a
public highway, but does not include devices moved by human power or used
exclusively upon stationary rails or tracks.
     (3) This coverage applies only to
accidents that occur on and after the effective date of the policy, during the
policy period and within the
     (4)(a) This coverage does not apply to
bodily injury of an insured with respect to which the insured or the legal
representative of the insured shall, without the written consent of the
insurer, make any settlement with or prosecute to judgment any action against
any person or organization who may be legally liable therefor.
     (b) This coverage does not apply to bodily
injury to an insured while occupying a vehicle, other than an insured vehicle,
owned by, or furnished for the regular use of, the named insured or any
relative resident in the same household, or through being struck by the
vehicle.
     (c) This coverage does not apply so as to
inure directly or indirectly to the benefit of any workersÂ’ compensation
carrier, any person or organization qualifying as a self-insurer under any
workersÂ’ compensation or disability benefits law or any similar law or the
State Accident Insurance Fund Corporation.
     (d) This coverage does not apply with
respect to underinsured motorist benefits unless:
     (A) The limits of liability under any
bodily injury liability insurance applicable at the time of the accident
regarding the injured person have been exhausted by payment of judgments or
settlements to the injured person or other injured persons;
     (B) The described limits have been offered
in settlement, the insurer has refused consent under paragraph (a) of this
subsection and the insured protects the insurerÂ’s right of subrogation to the
claim against the tortfeasor;
     (C) The insured gives credit to the insurer
for the unrealized portion of the described liability limits as if the full
limits had been received if less than the described limits have been offered in
settlement, and the insurer has consented under paragraph (a) of this
subsection; or
     (D) The insured gives credit to the
insurer for the unrealized portion of the described liability limits as if the
full limits had been received if less than the described limits have been
offered in settlement and, if the insurer has refused consent under paragraph
(a) of this subsection, the insured protects the insurerÂ’s right of subrogation
to the claim against the tortfeasor.
     (e) When seeking consent under paragraph
(a) or (d) of this subsection, the insured shall allow the insurer a reasonable
time in which to collect and evaluate information related to consent to the
proposed offer of settlement. The insured shall provide promptly to the insurer
any information that is reasonably requested by the insurer and that is within
the custody and control of the insured. Consent will be presumed to be given if
the insurer does not respond within a reasonable time. For purposes of this
paragraph, a “reasonable time” is no more than 30 days from the insurer’s
receipt of a written request for consent, unless the insured and the insurer
agree otherwise.
     (5)(a) As soon as practicable, the insured
or other person making claim shall give to the insurer written proof of claim,
under oath if required, including full particulars of the nature and extent of
the injuries, treatment and other details entering into the determination of
the amount payable hereunder. The insured and every other person making claim
hereunder shall submit to examinations under oath by any person named by the
insurer and subscribe the same, as often as may reasonably be required. Proof
of claim shall be made upon forms furnished by the insurer unless the insurer
fails to furnish the forms within 15 days after receiving notice of claim.
     (b) Upon reasonable request of and at the
expense of the insurer, the injured person shall submit to physical
examinations by physicians selected by the insurer and shall, upon each request
from the insurer, execute authorization to enable the insurer to obtain medical
reports and copies of records.
     (6) If, before the insurer makes payment
of loss hereunder, the insured or the legal representative of the insured
institutes any legal action for bodily injury against any person or
organization legally responsible for the use of a vehicle involved in the
accident, a copy of the summons and complaint or other process served in
connection with the legal action shall be forwarded immediately to the insurer
by the insured or the legal representative of the insured.
     (7)(a) The limit of liability stated in
the declarations as applicable to “each person” is the limit of the insurer’s
liability for all damages because of bodily injury sustained by one person as
the result of any one accident and, subject to the above provision respecting
each person, the limit of liability stated in the declarations as applicable to
“each accident” is the total limit of the company’s liability for all damages
because of bodily injury sustained by two or more persons as the result of any
one accident.
     (b) Any payment made under this coverage
to or for an insured shall be applied in reduction of any amount that the
insured may be entitled to recover from any person who is an insured under the
bodily injury liability coverage of this policy.
     (c) Any amount payable under the terms of
this coverage because of bodily injury sustained in an accident by a person who
is an insured under this coverage shall be reduced by:
     (A) All sums paid on account of the bodily
injury by or on behalf of the owner or operator of the uninsured vehicle and by
or on behalf of any other person or organization jointly or severally liable
together with the owner or operator for the bodily injury, including all sums
paid under the bodily injury liability coverage of the policy; and
     (B) The amount paid and the present value
of all amounts payable on account of the bodily injury under any workersÂ’
compensation law, disability benefits law or any similar law.
     (d) Any amount payable under the terms of
this coverage because of bodily injury sustained in an accident by a person who
is an insured under this coverage shall be reduced by the credit given to the
insurer pursuant to subsection (4)(d)(C) or (D) of this section.
     (e) The amount payable under the terms of
this coverage may not be reduced by the amount of liability proceeds offered, described
in subsection (4)(d)(B) or (D) of this section, that has not been paid to the
injured person. If liability proceeds have been offered and not paid, the
amount payable under the terms of the coverage shall include the amount of
liability limits offered but not accepted due to the insurerÂ’s refusal to
consent. The insured shall cooperate so as to permit the insurer to proceed by
subrogation or assignment to prosecute the claim against the uninsured
motorist.
     (8) No action shall lie against the insurer
unless, as a condition precedent thereto, the insured or the legal
representative of the insured has fully complied with all the terms of this
policy.
     (9)(a) With respect to bodily injury to an
insured:
     (A) While occupying a vehicle owned by a
named insured under this coverage, the insurance under this coverage is
primary.
     (B) While occupying a vehicle not owned by
a named insured under this coverage, the insurance under this coverage shall
apply only as excess insurance over any primary insurance available to the
occupant that is similar to this coverage, and this excess insurance shall then
apply only in the amount by which the applicable limit of liability of this
excess coverage exceeds the sum of the applicable limits of liability of all
primary insurance available to the occupant.
     (b) If an insured is an insured under
other primary or excess insurance available to the insured that is similar to
this coverage, then the insuredÂ’s damages are deemed not to exceed the higher
of the applicable limits of liability of this insurance or the additional
primary or excess insurance available to the insured, and the insurer is not
liable under this coverage for a greater proportion of the insuredÂ’s damages
than the applicable limit of liability of this coverage bears to the sum of the
applicable limits of liability of this insurance and other primary or excess
insurance available to the insured.
     (c) With respect to bodily injury to an
insured while occupying any motor vehicle used as a public or livery conveyance,
the insurance under this coverage shall apply only as excess insurance over any
other insurance available to the insured that is similar to this coverage, and
this insurance shall then apply only in the amount by which the applicable
limit of liability of this coverage exceeds the sum of the applicable limits of
liability of all other insurance.
     (10) If any person making claim hereunder
and the insurer do not agree that the person is legally entitled to recover
damages from the owner or operator of an uninsured vehicle because of bodily
injury to the insured, or do not agree as to the amount of payment that may be
owing under this coverage, then, in the event the insured and the insurer elect
by mutual agreement at the time of the dispute to settle the matter by
arbitration, the arbitration shall take place under the arbitration laws of the
State of Oregon or, if the parties agree, according to any other procedure. Any
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof, provided, however, that the costs to the insured
of the arbitration proceeding do not exceed $100 and that all other costs of
arbitration are borne by the insurer. “Costs” as used in this provision does
not include attorney fees or expenses incurred in the production of evidence or
witnesses or the making of transcripts of the arbitration proceedings. The
person and the insurer each agree to consider themselves bound and to be bound
by any award made by the arbitrators pursuant to this coverage in the event of
such election. At the election of the insured, the arbitration shall be held:
     (a) In the county and state of residence
of the insured;
     (b) In the county and state where the
insuredÂ’s cause of action against the uninsured motorist arose; or
     (c) At any other place mutually agreed
upon by the insured and the insurer.
     (11) In the event of payment to any person
under this coverage:
     (a) The insurer shall be entitled to the
extent of the payment to the proceeds of any settlement or judgment that may
result from the exercise of any rights of recovery of the person against any
uninsured motorist legally responsible for the bodily injury because of which
payment is made;
     (b) The person shall hold in trust for the
benefit of the insurer all rights of recovery that the person shall have
against such other uninsured person or organization because of the damages that
are the subject of claim made under this coverage, but only to the extent that
the claim is made or paid herein;
     (c) If the insured is injured by the joint
or concurrent act or acts of two or more persons, one or more of whom is
uninsured, the insured shall have the election to receive from the insurer any
payment to which the insured would be entitled under this coverage by reason of
the act or acts of the uninsured motorist, or the insured may, with the written
consent of the insurer, proceed with legal action against any or all persons
claimed to be liable to the insured for the injuries. If the insured elects to
receive payment from the insurer under this coverage, then the insured shall
hold in trust for the benefit of the insurer all rights of recovery the insured
shall have against any other person, firm or organization because of the
damages that are the subject of claim made under this coverage, but only to the
extent of the actual payment made by the insurer;
     (d) The person shall do whatever is proper
to secure and shall do nothing after loss to prejudice such rights;
     (e) If requested in writing by the
insurer, the person shall take, through any representative not in conflict in
interest with the person, designated by the insurer, such action as may be
necessary or appropriate to recover payment as damages from such other
uninsured person or organization, such action to be taken in the name of the
person, but only to the extent of the payment made hereunder. In the event of a
recovery, the insurer shall be reimbursed out of the recovery for expenses,
costs and attorney fees incurred by the insurer in connection therewith; and
     (f) The person shall execute and deliver
to the insurer any instruments and papers as may be appropriate to secure the
rights and obligations of the person and the insurer established by this
provision.
     (12)(a) The parties to this coverage agree
that no cause of action shall accrue to the insured under this coverage unless
within two years from the date of the accident:
     (A) Agreement as to the amount due under
the policy has been concluded;
     (B) The insured or the insurer has
formally instituted arbitration proceedings;
     (C) The insured has filed an action
against the insurer; or
     (D) Suit for bodily injury has been filed
against the uninsured motorist and, within two years from the date of
settlement or final judgment against the uninsured motorist, the insured has
formally instituted arbitration proceedings or filed an action against the
insurer.
     (b) For purposes of this subsection:
     (A) “Date of settlement” means the date on
which a written settlement agreement or release is signed by an insured or, in
the absence of these documents, the date on which the insured or the attorney
for the insured receives payment of any sum required by the settlement
agreement. An advance payment as defined in ORS 31.550 shall not be deemed a
payment of a settlement for purposes of the time limitation in this subsection.
     (B) “Final judgment” means a judgment that
has become final by lapse of time for appeal or by entry in an appellate court
of an appellate judgment.
     Note: Sections 2 and 4, chapter 328, Oregon Laws
2007, provide:
     Sec.
2. Unless the parties agree
otherwise, arbitration proceedings under ORS 742.504 shall be conducted as
follows:
     (1) Parties to an arbitration proceeding
shall submit the dispute to arbitration by a panel of three arbitrators. The panel
shall consist of one arbitrator chosen by each party and one arbitrator chosen
by the two arbitrators previously chosen to sit on the panel.
     (2) An arbitration proceeding shall be
conducted under local court rules in the county where the arbitration is held.
[2007 c.328 §2]
     Sec.
4. Section 2 of this 2007
Act is repealed on January 2, 2012. [2007 c.328 §4]
     742.506
Allocation of responsibility among insurers. Notwithstanding the contrary provisions of any policy, the provisions
of ORS 742.504 (9)(a) to (c) shall control allocation of responsibility between
insurers, except that if all policies potentially involved expressly allocate
responsibility between insurers, or self-insurers, without repugnancy, then the
terms of the policies shall control. [Formerly 743.795]
     742.508
Definitions for ORS 742.508 and 742.510. As used in this section and ORS 742.510:
     (1) “Covered motor vehicle” means a
private passenger motor vehicle or a self-propelled mobile home that is owned
by the named insured for which a premium has been paid for coverage under this
section and ORS 742.510.
     (2) “Insured vehicle” means a motor
vehicle described in the declarations for which a specific premium charge
indicates that underinsured motorists coverage is afforded but the term “insured
vehicle” shall not include a vehicle while used as a public or livery
conveyance.
     (3) “Private passenger motor vehicle”
means a four-wheel passenger or station wagon type motor vehicle not more than
12 years old and not used as a public or livery conveyance, and includes any
other four-wheel motor vehicle of the utility, pickup body, sedan delivery or
panel truck type not used for wholesale or retail delivery.
     (4)(a) “Uninsured vehicle” means:
     (A) A vehicle with respect to the
ownership, maintenance or use of which there is no collectible property damage
insurance, in at least the amounts or limits prescribed under ORS 806.070
(2)(c) applicable at the time of the accident with respect to any person or
organization legally responsible for the use of such vehicle, or with respect
to which there is such collectible insurance applicable at the time of the
accident but the insurance company writing the same denies coverage thereunder
or, within two years of the date of the accident, such company writing the same
becomes voluntarily or involuntarily declared bankrupt or for which a receiver
is appointed or becomes insolvent. It shall be a disputable presumption that a
vehicle is uninsured in the event the insured and the insurer, after reasonable
efforts, fail to discover within 90 days from the date of the accident, the
existence of valid and collectible property damage insurance applicable at the
time of the accident.
     (B) A hit-and-run vehicle as defined in
subsection (5) of this section.
     (C) A phantom vehicle as defined in
subsection (5) of this section.
     (b) As used in this section and ORS
742.510, “uninsured vehicle” does not include:
     (A) An insured vehicle;
     (B) A vehicle which is owned or operated
by a self-insurer within the meaning of any motor vehicle financial
responsibility law, motor carrier law or any similar law;
     (C) A vehicle which is owned by the United
States of America, Canada, a state, a political subdivision of any such
government or an agency of any of the foregoing;
     (D) A land motor vehicle or trailer, if
operated on rails or crawler-treads or while located for use as a residence or
premises and not as a vehicle;
     (E) A farm-type tractor or equipment
designed for use principally off public roads, except while actually upon
public roads; or
     (F) A vehicle owned by or furnished for
the regular or frequent use of the insured or any member of the household of
the insured.
     (5) As used in this section:
     (a) “Hit-and-run vehicle” means a vehicle
that causes damage to the covered vehicle of an insured arising out of physical
contact between the vehicles, provided:
     (A) There cannot be ascertained the
identity of either the operator or the owner of such hit-and-run vehicle;
     (B) The insured or someone on behalf of
the insured reports the accident within 72 hours to a police, peace or judicial
officer, to the Department of Transportation or to the equivalent department in
the state where the accident occurred, and files with the insurer within 30
days thereafter a statement under oath that the insured or the legal
representative of the insured has a cause or causes of action arising out of
such accident for damages against a person or persons whose identity is
unascertainable, and setting forth the facts in support thereof; and
     (C) At the insurer’s request, the insured
or the legal representative of the insured makes available for inspection the
vehicle which was insured at the time of the accident.
     (b) “Phantom vehicle” means a vehicle that
causes damage to the covered vehicle of an insured, although there is no
physical contact between the vehicles, provided:
     (A) There cannot be ascertained the
identity of either the operator or the owner of such phantom vehicle;
     (B) The facts of such accident can be
corroborated by competent evidence other than the testimony of the insured or
any passenger in the insured motor vehicle; and
     (C) The insured or someone on behalf of
the insured shall have reported the accident within 72 hours to a police, peace
or judicial officer, to the Department of Transportation or to the equivalent
department in the state where the accident occurred, and shall have filed with
the insurer within 30 days thereafter a statement under oath that the insured
or the legal representative of the insured has a cause or causes of action
arising out of such accident for damages against a person or persons whose
identity is unascertainable, and setting forth the facts in support thereof. [Formerly
743.796; 2003 c.175 §3]
     Note: 742.508 and 742.510 [formerly 743.796 and
743.797] were added to and made a part of ORS chapter 743 by legislative action
but were not added to ORS chapter 742 or any smaller series therein. See
Preface to Oregon Revised Statutes for further explanation.
     742.510
Property damage coverage for damage to vehicle caused by uninsured vehicle. (1) Every insurer issuing motor vehicle
liability insurance policies on private passenger motor vehicles or on
self-propelled mobile homes for delivery in this state shall have for sale
coverage for property damage to a vehicle of the insured caused by an uninsured
vehicle. Coverage offered under this section shall be at least the amount
prescribed to meet the requirements of ORS 806.070 for insurance for injury to
or destruction of the property of others in any one accident.
     (2) A policy with the coverage described
in this section does not cover the first $300 of property damage to the covered
motor vehicle as the result of an accident with a hit-and-run vehicle or
phantom vehicle. In all other cases the first $200 damage is not covered.
     (3) Coverage for property damage described
in this section:
     (a) Applies only to the amount of damages
the insured may be legally entitled to recover.
     (b) Does not include coverage for loss of
use of the covered vehicle. [Formerly 743.797; 1991 c.768 §5]
     Note: See note under 742.508.
(Personal
Injury Protection Benefits)
     742.518
Definitions for ORS 742.518 to 742.542. As used in ORS 742.518 to 742.542:
     (1) “Evaluation services” means physical
examinations or reviews of medical records of beneficiaries conducted at the
request of an insurer by either an employee of the insurer or a third-party
medical record or bill review service to determine whether the provision or
continuation of medical services is necessary or reasonable.
     (2) “Managed care services” means any
system of health care delivery that attempts to control or coordinate use of
health care services in order to contain health care expenditures or improve
quality of health care services.
     (3) “Motor vehicle” means a self-propelled
land motor vehicle or trailer, other than:
     (a) A farm-type tractor or other
self-propelled equipment designed for use principally off public roads, while
not upon public roads;
     (b) A vehicle operated on rails or
crawler-treads; or
     (c) A vehicle located for use as a
residence or premises.
     (4) “Motorcycle” and “moped” have the
meanings given those terms in ORS 801.345 and 801.365.
     (5) “Occupying” means in, or upon, or
entering into or alighting from.
     (6) “Pedestrian” means a person while not
occupying a self-propelled vehicle other than a wheelchair or a similar
low-powered motorized or mechanically propelled vehicle that is designed
specifically for use by a person with a physical disability and that is
determined to be medically necessary for the occupant of the wheelchair or
other low-powered vehicle.
     (7) “Personal injury protection benefits”
means the benefits described in ORS 742.518 to 742.542.
     (8) “Private passenger motor vehicle”
means a four-wheel passenger or station wagon type motor vehicle not used as a
public or livery conveyance, and includes any other four-wheel motor vehicle of
the utility, pickup body, sedan delivery or panel truck type not used for
wholesale or retail delivery other than farming, a self-propelled mobile home
and a farm truck.
     (9) “Proof of loss” means documentation
that allows an insurer to determine whether a person is entitled to personal
injury protection benefits and the amount of any benefit that is due.
     (10) “Provider” has the meaning given that
term in ORS 743.801. [2005 c.465 §2; 2007 c.70 §318; 2007 c.692 §1]
     742.520
Personal injury protection benefits for motor vehicle liability policies;
applicability. (1) Every
motor vehicle liability policy issued for delivery in this state that covers
any private passenger motor vehicle shall provide personal injury protection
benefits to the person insured thereunder, members of that personÂ’s family
residing in the same household, children not related to the insured by blood,
marriage or adoption who are residing in the same household as the insured and
being reared as the insuredÂ’s own, passengers occupying the insured motor
vehicle and pedestrians struck by the insured motor vehicle.
     (2) Personal injury protection benefits
apply to a personÂ’s injury or death resulting:
     (a) In the case of the person insured
under the policy and members of that personÂ’s family residing in the same
household, from the use, occupancy or maintenance of any motor vehicle, except
the following vehicles:
     (A) A motor vehicle, including a motorcycle
or moped, that is owned or furnished or available for regular use by any of
such persons and that is not described in the policy;
     (B) A motorcycle or moped which is not
owned by any of such persons, but this exclusion applies only when the injury
or death results from such personÂ’s operating or riding upon the motorcycle or
moped; and
     (C) A motor vehicle not included in
subparagraph (A) or (B) of this paragraph and not a private passenger motor
vehicle. However, this exclusion applies only when the injury or death results
from such personÂ’s operating or occupying the motor vehicle.
     (b) In the case of a passenger occupying
or a pedestrian struck by the insured motor vehicle, from the use, occupancy or
maintenance of the vehicle.
     (3) Personal injury protection benefits
consist of payments for expenses, loss of income and loss of essential services
as provided in ORS 742.524.
     (4) An insurer shall pay all personal
injury protection benefits promptly after proof of loss has been submitted to
the insurer.
     (5) The potential existence of a cause of
action in tort does not relieve an insurer from the duty to pay personal injury
protection benefits.
     (6) Disputes between insurers and
beneficiaries about the amount of personal injury protection benefits, or about
the denial of personal injury protection benefits, shall be decided by
arbitration if mutually agreed to at the time of the dispute. Arbitration under
this subsection shall take place as described in ORS 742.521.
     (7) An insurer:
     (a) May not enter into or renew any
contract that provides, or has the effect of providing, managed care services
to beneficiaries.
     (b) May enter into or renew any contract
that provides evaluation services for beneficiaries. [Formerly 743.800; 1991
c.768 §6; 1993 c.282 §1; 1993 c.596 §39; 1995 c.658 §114; 1997 c.344 §§1,2;
1997 c.808 §§3,4; 1999 c.434 §1; 2003 c.813 §1; 2005 c.465 §3; 2007 c.328 §8]
     742.521
Conditions applicable to arbitration proceedings. (1) Arbitration proceedings under ORS
742.520 shall be conducted under local court rules in the county where the
arbitration is held.
     (2) Findings and awards made in an
arbitration proceeding under this section:
     (a) Are binding on the parties to the
arbitration proceeding;
     (b) Are not binding on any other party;
and
     (c) May not be used for the purpose of
collateral estoppel. [2007 c.328 §3]
     Note: 742.521 was added to and made a part of ORS
chapter 742 by legislative action but was not added to any smaller series
therein. See Preface to Oregon Revised Statutes for further explanation.
     742.522
Binding arbitration under ORS 742.520; costs. (1) Costs to the insured of the arbitration proceeding under ORS
742.520 (6) shall not exceed $100 and all other costs of arbitration shall be
borne by the insurer.
     (2) As used in this section, “costs” does
not include attorney fees or expenses incurred in the production of evidence or
witnesses or the making of transcripts of the arbitration proceedings. [Formerly
743.802; 2007 c.328 §9]
     742.524
Contents of personal injury protection benefits; deductibles. (1) Personal injury protection benefits as
required by ORS 742.520 shall consist of the following payments for the injury
or death of each person:
     (a) All reasonable and necessary expenses
of medical, hospital, dental, surgical, ambulance and prosthetic services
incurred within one year after the date of the personÂ’s injury, but not more
than $15,000 in the aggregate for all such expenses of the person. Expenses of
medical, hospital, dental, surgical, ambulance and prosthetic services shall be
presumed to be reasonable and necessary unless the provider is given notice of
denial of the charges not more than 60 calendar days after the insurer receives
from the provider notice of the claim for the services. At any time during the
first 50 calendar days after the insurer receives notice of claim, the provider
shall, within 10 business days, answer in writing questions from the insurer
regarding the claim. For purposes of determining when the 60-day period
provided by this paragraph has elapsed, counting of days shall be suspended if
the provider does not supply written answers to the insurer within 10 days and
shall not resume until the answers are supplied.
     (b) If the injured person is usually
engaged in a remunerative occupation and if disability continues for at least
14 days, 70 percent of the loss of income from work during the period of the
injured personÂ’s disability until the date the person is able to return to the
personÂ’s usual occupation. This benefit is subject to a maximum payment of
$1,250 per month and a maximum payment period in the aggregate of 52 weeks. As
used in this paragraph, “income” includes but is not limited to salary, wages,
tips, commissions, professional fees and profits from an individually owned
business or farm.
     (c) If the injured person is not usually
engaged in a remunerative occupation and if disability continues for at least
14 days, the expenses reasonably incurred by the injured person for essential
services that were performed by a person who is not related to the injured
person or residing in the injured personÂ’s household in lieu of the services
the injured person would have performed without income during the period of the
personÂ’s disability until the date the person is reasonably able to perform
such essential services. This benefit is subject to a maximum payment of $30
per day and a maximum payment period in the aggregate of 52 weeks.
     (d) All reasonable and necessary funeral
expenses incurred within one year after the date of the personÂ’s injury, but
not more than $5,000.
     (e) If the injured person is a parent of a
minor child and is required to be hospitalized for a minimum of 24 hours, $25
per day for child care, with payments to begin after the initial 24 hours of
hospitalization and to be made for as long as the person is unable to return to
work if the person is engaged in a remunerative occupation or for as long as
the person is unable to perform essential services that the person would have
performed without income if the person is not usually engaged in a remunerative
occupation, but not to exceed $750.
     (2) With respect to the insured person and
members of that personÂ’s family residing in the same household, an insurer may
offer forms of coverage for the benefits required by subsection (1)(a), (b) and
(c) of this section with deductibles of up to $250. [Formerly 743.805; 1991
c.768 §7; 2003 c.813 §2; 2005 c.341 §1]
     742.525
Provider charges. (1) Except
as provided in subsection (2) of this section, a provider shall charge a person
who receives personal injury protection benefits or that personÂ’s insurer the
lesser of:
     (a) An amount that does not exceed the
amount the provider charges the general public; or
     (b) An amount that does not exceed the fee
schedules for medical services published pursuant to ORS 656.248 for expenses
of medical, hospital, dental, surgical, ambulance and prosthetic services.
     (2) For expenses of hospital services that
are subject to the adjusted cost-to-charge ratio specified for a hospital in
the hospital fee schedule published pursuant to ORS 656.248, a provider of
hospital services shall charge a person who receives personal injury protection
benefits or that personÂ’s insurer the greater of:
     (a) The amount of the hospital charges
multiplied by the adjusted cost-to-charge ratio specified for the hospital; or
     (b) Ninety percent of the hospital
charges. [2003 c.813 §4; 2005 c.341 §4]
     Note: 742.525 was added to and made a part of
742.518 to 742.542 by legislative action but was not added to any smaller
series therein. See Preface to Oregon Revised Statutes for further explanation.
     742.526
Primary nature of benefits.
(1) The personal injury protection benefits with respect to:
     (a) The insured and members of the family
of the insured residing in the same household injured while occupying the
insured motor vehicle shall be primary.
     (b) Passengers injured while occupying the
insured motor vehicle shall be primary.
     (c) The insured and members of family
residing in the same household injured as pedestrians shall be primary.
     (d) The insured and members of family
residing in the same household injured while occupying a motor vehicle not
insured under the policy shall be excess.
     (e) Pedestrians injured by the insured
motor vehicle, other than the insured and members of family residing in the
same household, shall be excess over any other collateral benefits to which the
injured person is entitled, including but not limited to insurance benefits,
governmental benefits or gratuitous benefits.
     (2) The personal injury protection
benefits may be reduced or eliminated, if it is so provided in the policy, when
the injured person is entitled to receive, under the laws of this state or any
other state or the
     742.528
Notice of denial of payment of benefits. An insurer who denies payment of personal injury protection benefits
to or on behalf of an insured shall:
     (1) Provide written notice of the denial,
within 60 calendar days of receiving a claim from the provider, to the insured,
stating the reason for the denial and informing the insured of the method for
contesting the denial; and
     (2) Provide a copy of the notice of the
denial, within 60 calendar days of receiving a claim from the provider, to a
provider of services under ORS 742.524 (1)(a). [Formerly 743.812; 1993 c.265 §1]
     742.529
Payment based on incorrect determination of responsibility; notice; repayment. If personal injury protection benefits are
paid based on information that appeared to establish proof of loss and the
insurer paying the benefits later determines the insurer was not responsible
for the payment, the insurer shall give notice and explanation to the provider
that the payment was incorrectly issued. Immediately after receiving the notice
and explanation the provider shall promptly repay the insurer. [2007 c.692 §3]
     Note: 742.529 was added to and made a part of
742.518 to 742.542 by legislative action but was not added to any smaller series
therein. See Preface to Oregon Revised Statutes for further explanation.
     742.530
Exclusions from coverage.
(1) The insurer may exclude from the coverage for personal injury protection
benefits any injured person who:
     (a) Intentionally causes self-injury;
     (b) Is participating in any prearranged or
organized racing or speed contest or practice or preparation for any such
contest; or
     (c) Willfully conceals or misrepresents
any material fact in connection with a claim for personal injury protection benefits.
     (2) The insurer may exclude from the
coverage for the benefits required by ORS 742.524 (1)(b) and (c) any person
injured as a pedestrian in an accident outside this state, other than the
insured person or a member of that personÂ’s family residing in the same
household. [Formerly 743.815; 2005 c.341 §2]
     742.532
Benefits may be more favorable than those required by ORS 742.520, 742.524 and
742.530. Nothing in ORS
742.518 to 742.542 is intended to prevent an insurer from providing more
favorable benefits than the personal injury protection benefits described in
ORS 742.520, 742.524 and 742.530. [Formerly 743.820]
     742.534
Reimbursement of other insurers paying benefits; arbitrating issues of
liability and amount of reimbursement. (1) Except as provided in ORS 742.544, every authorized motor vehicle
liability insurer whose insured is or would be held legally liable for damages
for injuries sustained in a motor vehicle accident by a person for whom
personal injury protection benefits have been furnished by another such
insurer, or for whom benefits have been furnished by an authorized health
insurer, shall reimburse such other insurer for the benefits it has so
furnished if it has requested such reimbursement, has not given notice as
provided in ORS 742.536 that it elects recovery by lien in accordance with that
section and is entitled to reimbursement under this section by the terms of its
policy. Reimbursement under this subsection, together with the amount paid to
injured persons by the liability insurer, shall not exceed the limits of the
policy issued by the insurer.
     (2) In calculating such reimbursement, the
amount of benefits so furnished shall be diminished in proportion to the amount
of negligence attributable to the person for whom benefits have been so
furnished, and the reimbursement shall not exceed the amount of damages legally
recoverable by the person.
     (3) Disputes between insurers as to such
issues of liability and the amount of reimbursement required by this section
shall be decided by arbitration.
     (4) Findings and awards made in such an
arbitration proceeding are not admissible in any action at law or suit in
equity.
     (5) If an insurer does not request
reimbursement under this section for recovery of personal injury protection
payments, then the insurer may only recover personal injury protection payments
under the provisions of ORS 742.536 or 742.538. [Formerly 743.825; 1993 c.709 §7;
2007 c.392 §1]
     742.536
Notice of claim or legal action to insurer; insurer to elect manner of recovery
of benefits furnished; lien of insurer. (1) When an authorized motor vehicle liability insurer has furnished
personal injury protection benefits, or an authorized health insurer has
furnished benefits, for a person injured in a motor vehicle accident, if such
injured person makes claim, or institutes legal action, for damages for such
injuries against any person, such injured person shall give notice of such
claim or legal action to the insurer by personal service or by registered or
certified mail. Service of a copy of the summons and complaint or copy of other
process served in connection with such a legal action shall be sufficient
notice to the insurer, in which case a return showing service of such notice
shall be filed with the clerk of the court but shall not be a part of the
record except to give notice.
     (2) The insurer may elect to seek
reimbursement as provided in this section for benefits it has so furnished, out
of any recovery under such claim or legal action, if the insurer has not been a
party to an interinsurer reimbursement proceeding with respect to such benefits
under ORS 742.534 and is entitled by the terms of its policy to the benefit of
this section. The insurer shall give written notice of such election within 30
days from the receipt of notice or knowledge of such claim or legal action to
the person making claim or instituting legal action and to the person against
whom claim is made or legal action instituted, by personal service or by
registered or certified mail. In the case of a legal action, a return showing
service of such notice of election shall be filed with the clerk of the court
but shall not be a part of the record except to give notice to the claimant and
the defendant of the lien of the insurer.
     (3) If the insurer so serves such written
notice of election and, where applicable, such return is so filed:
     (a) The insurer has a lien against such
cause of action for benefits it has so furnished, less the proportion, not to
exceed 100 percent, of expenses, costs and attorney fees incurred by the
injured person in connection with the recovery that the amount of the lien
before such reduction bears to the amount of the recovery.
     (b) The injured person shall include as
damages in such claim or legal action the benefits so furnished by the insurer.
     (c) In the case of a legal action, the
action shall be taken in the name of the injured person.
     (4) As used in this section, “makes claim”
or “claim” refers to a written demand made and delivered for a specific amount
of damages and which meets other requirements reasonably established by the
directorÂ’s rule. [Formerly 743.828]
     742.538
Subrogation rights of insurers to certain amounts received by claimant;
recovery actions against persons causing injury. If a motor vehicle liability insurer has
furnished personal injury protection benefits, or a health insurer has
furnished benefits, for a person injured in a motor vehicle accident, and the
interinsurer reimbursement benefit of ORS 742.534 is not available under the
terms of that section, and the insurer has not elected recovery by lien as
provided in ORS 742.536, and is entitled by the terms of its policy to the
benefit of this section:
     (1) The insurer is entitled to the
proceeds of any settlement or judgment that may result from the exercise of any
rights of recovery of the injured person against any person legally responsible
for the accident, to the extent of such benefits furnished by the insurer less
the insurerÂ’s share of expenses, costs and attorney fees incurred by the
injured person in connection with such recovery.
     (2) The injured person shall hold in trust
for the benefit of the insurer all such rights of recovery which the injured
person has, but only to the extent of such benefits furnished.
     (3) The injured person shall do whatever
is proper to secure, and shall do nothing after loss to prejudice, such rights.
     (4) If requested in writing by the
insurer, the injured person shall take, through any representative not in
conflict in interest with the injured person designated by the insurer, such
action as may be necessary or appropriate to recover such benefits furnished as
damages from such responsible person, such action to be taken in the name of
the injured person, but only to the extent of the benefits furnished by the insurer.
In the event of a recovery, the insurer shall also be reimbursed out of such
recovery for the injured personÂ’s share of expenses, costs and attorney fees
incurred by the insurer in connection with the recovery.
     (5) In calculating respective shares of
expenses, costs and attorney fees under this section, the basis of allocation
shall be the respective proportions borne to the total recovery by:
     (a) Such benefits furnished by the
insurer; and
     (b) The total recovery less (a).
     (6) The injured person shall execute and
deliver to the insurer such instruments and papers as may be appropriate to
secure the rights and obligations of the insurer and the injured person as
established by this section.
     (7) Any provisions in a motor vehicle
liability insurance policy or health insurance policy giving rights to the
insurer relating to subrogation or the subject matter of this section shall be
construed and applied in accordance with the provisions of this section. [Formerly
743.830]
     742.540
Rules. The Director of the
Department of Consumer and Business Services shall have authority to issue such
rules as are reasonably necessary to carry out the purposes of ORS 742.518 to
742.542. [Formerly 743.833]
     742.542
Effect of personal injury protection benefits paid. Payment by a motor vehicle liability insurer
of personal injury protection benefits for its own insured shall be applied in
reduction of the amount of damages that the insured may be entitled to recover
from the insurer under uninsured or underinsured motorist coverage for the same
accident but may not be applied in reduction of the uninsured or underinsured
motorist coverage policy limits. [Formerly 743.835; 1997 c.808 §10]
     742.544
Reimbursement for personal injury protection benefits paid. (1) A provider of personal injury protection
benefits shall be reimbursed for personal injury protection payments made on
behalf of any person only to the extent that the total amount of benefits paid
exceeds the economic damages as defined in ORS 31.710 suffered by that person.
As used in this section, “total amount of benefits” means the amount of money
recovered by a person from:
     (a) Applicable underinsured motorist
benefits described in ORS 742.502 (2);
     (b) Liability insurance coverage available
to the person receiving the personal injury protection benefits from other
parties to the accident;
     (c) Personal injury protection payments;
and
     (d) Any other payments by or on behalf of
the party whose fault caused the damages.
     (2) Nothing in this section requires a person
to repay more than the amount of personal injury protection benefits actually
received. [1993 c.709 §9]
(Cancellation)
     742.560
Definitions for ORS 742.560 to 742.572. As used in ORS 742.560 to 742.572:
     (1) “Cancellation” means termination of
coverage by an insurer, other than termination at the request of the insured,
during a policy period.
     (2) “Expiration” means termination of
coverage by reason of the policy having reached the end of the term for which
it was issued or the end of the period for which a premium has been paid.
     (3) “Nonpayment of premium” means failure
of the named insured to discharge when due any of the insuredÂ’s obligations in
connection with the payment of premiums on the policy, or any installment of
such premium, whether the premium is payable directly to the insurer or an
insurance producer who is its agent or indirectly under any premium finance
plan or extension of credit.
     (4) “Nonrenewal” means a notice by an
insurer to the named insured that the insurer is unwilling to renew a policy.
     (5) “Policy” means any insurance policy
that provides automobile liability coverage, uninsured motorist coverage,
automobile medical payments coverage or automobile physical damage coverage on
individually owned private passenger vehicles, including pickup and panel
trucks and station wagons, that are not used as a public or livery conveyance
for passengers, nor rented to others. However, ORS 742.560 to 742.572 do not
apply to any policy:
     (a) Issued under an automobile assigned
risk plan;
     (b) Insuring more than four automobiles;
     (c) Covering garage, automobile sales
agency, repair shop, service station or public parking place operation hazards;
or
     (d) Issued principally to cover personal
or premises liability of an insured even though such insurance may also provide
some incidental coverage for liability arising out of the ownership,
maintenance or use of a motor vehicle on the premises of such insured or on the
ways immediately adjoining such premises.
     (6) “Renewal” or “to renew” means to
continue coverage for an additional policy period upon expiration of the
current policy period of a policy. Any policy with a policy period or term of
less than six months shall for the purpose of ORS 742.560 to 742.572 be
considered as if written for a policy period or term of six months. Any policy
written for a term longer than one year or any policy with no fixed expiration
date shall for the purpose of ORS 742.560 to 742.572 be considered as if
written for successive policy periods or terms of one year but not extending
beyond the actual term for which the policy was written. [Formerly 743.900;
2003 c.364 §103; 2007 c.71 §239]
     742.562
Grounds for cancellation of policies; notice required; applicability. (1) A notice of cancellation of a policy
shall be effective only if it is based on one or more of the following reasons:
     (a) Nonpayment of premium.
     (b) Fraud or material misrepresentation
affecting the policy or in the presentation of a claim thereunder, or violation
of any of the terms or conditions of the policy.
     (c) The named insured or any operator
either resident in the same household or who customarily operates an automobile
insured under the policy has had driving privileges suspended or revoked
pursuant to law during the policy period, or, if the policy is a renewal,
during its policy period or the 180 days immediately preceding its effective
date. An insurer may not cancel a policy for the reason that the driving
privileges of the named insured or operator were suspended pursuant to ORS 809.280
(7) or (9) if the suspension was based on a nondriving offense.
     (2) This section shall not apply to any
policy or coverage which has been in effect less than 60 days at the time
notice of cancellation is mailed or delivered by the insurer unless it is a
renewal policy.
     (3) This section shall not apply to
nonrenewal. [Formerly 743.905; 1991 c.860 §7a]
     742.564
Manner of giving cancellation notice. (1) No notice of cancellation of a policy to which ORS 742.562 applies
shall be effective unless mailed or delivered by the insurer to the named
insured at least 30 days prior to the effective date of cancellation and
accompanied by a statement of the reason or reasons for cancellation, provided,
however, that where cancellation is for nonpayment of premium at least 10 daysÂ’
notice of cancellation accompanied by the reason therefor shall be given.
     (2) This section shall not apply to
nonrenewal. [Formerly 743.910]
     742.566
Renewal of policies; requirements for refusal to renew. (1) An insurer shall offer renewal of a
policy, contingent upon payment of premium as stated in the offer, to an
insured unless the insurer mails or delivers to the named insured, at the
address shown in the policy, at least 30 daysÂ’ advance notice of nonrenewal.
Such notice shall contain or be accompanied by a statement of the reason or
reasons for nonrenewal.
     (2) The insurer shall not be required to
notify the named insured or any other insured of nonrenewal of the policy if
the insurer has mailed or delivered a notice of expiration or cancellation on
or prior to the 30th day preceding expiration of the policy period.
     (3) Notwithstanding the failure of an
insurer to comply with this section, the policy shall terminate on the
effective date of any replacement or succeeding automobile insurance policy,
with respect to any automobile designated in both policies.
     (4) An insurer may not refuse to renew a
policy for the reason that the driving privileges of the named insured or any
operator either resident in the same household or who customarily operates an
automobile insured under the policy were suspended pursuant to ORS 809.280 (7)
or (9) if the suspension was based on a nondriving offense. [Formerly 743.916;
1991 c.860 §7b]
     742.568
Proof of cancellation or nonrenewal notice. Proof of mailing notice of cancellation, or of intention not to renew
or of reasons for cancellation, to the named insured at the address shown in
the policy, shall be sufficient proof of notice. [Formerly 743.920]
     742.570
Notifying insured under canceled or unrenewed policy of eligibility for participation
in insurance pool. When
automobile bodily injury and property damage liability coverage is canceled,
other than for nonpayment of premium, or in the event of failure to renew
automobile bodily injury and property damage liability coverage to which ORS
742.566 applies, the insurer shall notify the named insured of possible
eligibility for automobile liability insurance through any insurance pool or
facility operating in this state, whether voluntarily or under statute or rule.
Such notice shall accompany or be included in the notice of cancellation or the
notice of intent not to renew. [Formerly 743.925]
     742.572
Immunity from liability of persons furnishing information regarding
cancellation or nonrenewal of policies. There shall be no liability on the part of and no cause of action of
any nature shall arise against the Director of the Department of Consumer and
Business Services or against any insurer, its authorized representative, its
agents, its employees, or any firm, person or corporation furnishing to the
insurer information as to reasons for cancellation or nonrenewal, for any
statement made by any of them in any written notice of cancellation or
nonrenewal, or in any other communication, oral or written, specifying the
reasons for cancellation or nonrenewal, or providing of information pertaining
thereto, or for statements made or evidence submitted at any hearings conducted
in connection therewith. [Formerly 743.930]
(Report by
Insurer to Department of Transportation)
     742.580
Report of cancellation, nonrenewal or issuance of motor vehicle liability
policy. Every insurer that
issues motor vehicle insurance that is designed to meet either the financial or
future responsibility requirements of ORS chapter 806 shall report to the
Department of Transportation within 30 days of the day that a person or the
insurer cancels or fails to renew such a policy and within 15 days of the day
that an insurer issues such a policy. The insurer shall report the personÂ’s name
and residence address, the vehicle identification number of each vehicle
covered by the policy, whether the policy was bought, canceled or not renewed
and any other information required by the department by rule under ORS 806.195.
[1993 c.746 §4]
CANCELLATION
AND NONRENEWAL OF CASUALTY OR COMMERCIAL LIABILITY POLICIES
(Cancellation
Based on Holding Public Office)
     742.690
Limitations on cancellation; refusal to issue or renew insurance. (1) An insurer offering casualty insurance
or commercial liability insurance may not cancel or refuse to issue or renew a
policy solely on the basis that the policyholder holds a public office.
     (2) An insurer offering casualty insurance
or commercial liability insurance may not include a provision in the insurance
contract limiting coverage under the contract solely on the basis that the
policyholder holds a public office. [1997 c.778 §2]
(Commercial
Liability Policies)
     742.700
Definitions for ORS 742.700 to 742.710. As used in ORS 742.700 to 742.710:
     (1) “Cancellation” means termination of a
policy at a date other than its expiration date.
     (2) “Expiration date” means the date upon
which coverage under a policy ends. For a policy written for a term longer than
one year or with no fixed expiration date, “expiration date” means the annual
anniversary date of the policy.
     (3) “Nonpayment of premium” means the
failure or inability of the named insured to discharge any obligation in
connection with the payment of premium on a policy of insurance subject to ORS
742.700 to 742.710, whether the payments are payable directly to the insurer or
an insurance producer who is its agent or indirectly payable under a premium
finance plan or extension of credit.
     (4) “Nonrenewal” means the refusal of an
insurer to renew a policy at its expiration date.
     (5) “Renewal” or “renew” means the
issuance of, or the offer to issue by an insurer, a policy succeeding a policy
previously issued and delivered by the same insurer or the issuance of a
certificate or notice extending the terms of an existing policy for a specified
period beyond its expiration date. [Formerly 743.940; 2003 c.364 §104]
     742.702
Grounds for cancellation; notice. (1) Except as provided in ORS 742.710, a contract of commercial
liability insurance may not be canceled by an insurer before the expiration of
the policy, except on one or more of the following grounds:
     (a) Nonpayment of premium.
     (b) Fraud or material misrepresentation
made by or with the knowledge of the named insured in obtaining the policy,
continuing the policy or in presenting a claim under the policy.
     (c) Substantial increase in the risk of
loss after insurance coverage has been issued or renewed, including but not
limited to an increase in exposure due to rules, legislation or court decision.
     (d) Failure to comply with reasonable loss
control recommendations.
     (e) Substantial breach of contractual
duties, conditions or warranties.
     (f) Determination by the Director of the
Department of Consumer and Business Services that the continuation of a line of
insurance or class of business to which the policy belongs will jeopardize a
companyÂ’s solvency or will place the insurer in violation of the insurance laws
of Oregon or any other state.
     (g) Loss or decrease in reinsurance
covering the risk.
     (h) Any other reason approved by the
director by rule.
     (2) Cancellation of a commercial liability
policy shall not be effective until at least 10 working days after the insured
receives a written notice of cancellation. The notice shall state the effective
date of and the reason for cancellation and shall inform the insured of the
hearing rights established by ORS 742.704.
     (3) This section does not apply to
policies canceled because of action by an insurer under ORS 731.482. [Formerly
743.942]
     742.704
Hearing. Within 30 days
after receiving a notice of cancellation under ORS 742.702, an insured may
request a hearing before the Director of the Department of Consumer and
Business Services. The purpose of this hearing shall be limited to establishing
the existence of the proof or evidence given by the insurer in its notice of
cancellation. The burden of proving the reason for cancellation shall be upon
the insurer. [Formerly 743.944]
     742.706
Renewal; nonrenewal. (1) If
an insurer offers or purports to renew a commercial liability policy, but on
terms less favorable to the insured or at higher rates, the new terms or rates
may take effect on the renewal date, if the insurer provides the insured, and
the insurance producer if any, 45 daysÂ’ written notice. If the insurer does not
provide such notice, the insured may cancel the renewal policy within 45 days
after receipt of the notice or delivery of the renewal policy. Earned premium
for the period of time the renewal policy was in force shall be calculated pro
rata at the lower of the current or previous yearÂ’s rate. If the insured
accepts the renewal, any premium increase or changes in terms shall be
effective immediately following the prior policyÂ’s expiration date.
     (2) Nonrenewal of a commercial liability
policy shall not be effective until at least 45 days after the insured receives
a written notice of nonrenewal. If, after an insurer provides a notice of
nonrenewal as described in this subsection, the insurer extends the policy 90
days or less, an additional notice of nonrenewal is not required with respect
to the extension.
     (3) Subsection (1) of this section does
not apply:
     (a) If the change is a rate, form or plan
filed with the Director of the Department of Consumer and Business Services and
applicable to the entire line of insurance or class of business to which the
policy belongs; or
     (b) To a premium increase based on the
altered nature or extent of the risk insured against.
     (4) If a commercial liability policy is
issued for a term longer than one year, and for additional consideration a
premium is guaranteed, the insurer may not refuse to renew the policy or
increase the premium for the term of that policy. [Formerly 743.946; 2003 c.364
§105; 2005 c.102 §1]
     742.708
Proof of receipt of notice.
A post office certificate of mailing to the named insured at the named insuredÂ’s
last-known address shall constitute conclusive proof that the named insured
received the notice of cancellation or nonrenewal on the third calendar day
after the date of the certificate of mailing. [Formerly 743.948]
     742.710
Exemptions from provisions of ORS 742.700 to 742.708. (1) ORS 742.700 to 742.708 do not apply to:
     (a) Any commercial liability insurance
policy that has not been previously renewed if the policy has been in effect
less than 60 days at the time notice of cancellation is mailed or otherwise
delivered.
     (b) Any policy subject to the provisions
of ORS 742.560 to 742.572.
     (c) Workers’ compensation insurance.
     (d) Any assigned risk program.
     (e) Any excess liability insurance policy,
including any commercial umbrella policy and any excess umbrella policy.
     (2) The Director of the Department of
Consumer and Business Services may suspend, in whole or in part, the
applicability of ORS 742.700 to 742.708 to any insurer if, in the directorÂ’s
discretion, its application will endanger the ability of the insurer to fulfill
its contractual obligations. [Formerly 743.950; 2005 c.185 §15]
_______________
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