2007 Oregon Code - Chapter 743 :: Chapter 743 - Health and Life Insurance
Chapter 743 —
Health and Life Insurance
2007 EDITION
HEALTH AND LIFE INSURANCE
INSURANCE
GENERAL PROVISIONS
743.010Â Â Â Â Health
insurance policy and health benefit plan forms; rules
743.013Â Â Â Â Disclosure
of differences in replacement health insurance policies; nonduplication for
persons 65 and older; rules
743.015Â Â Â Â Filing
and approval of credit life and credit health insurance forms; filing of rates
743.018Â Â Â Â Filing
of rates for life and health insurance
743.024Â Â Â Â Personal
insurance, insurable interest and beneficiaries
743.027Â Â Â Â Consent
of individual required for life and health insurance; exceptions
743.028Â Â Â Â Uniform
health insurance claim forms
743.030Â Â Â Â Life
insurance for benefit of charity
743.039Â Â Â Â Alteration
of application for life or health insurance
743.041Â Â Â Â Payment
discharges insurer
743.043Â Â Â Â Assignment
of policies
743.046Â Â Â Â Exemption
of proceeds of individual life insurance other than annuities
743.047Â Â Â Â Exemption
of proceeds of group life insurance
743.049Â Â Â Â Exemption
of proceeds of annuity policies; assignability of rights
743.050Â Â Â Â Exemption
of proceeds of health insurance
743.053Â Â Â Â Prohibition
on requirement that death or dismemberment occur in less than 180 days after
accident
POLICY LANGUAGE SIMPLIFICATION
743.100Â Â Â Â Short
title
743.101Â Â Â Â Purpose
743.103Â Â Â Â Definitions
for ORS 743.100 to 743.109
743.104Â Â Â Â Scope
of ORS 743.100 to 743.109
743.106Â Â Â Â
743.107Â Â Â Â When
director may authorize lower standards
743.109Â Â Â Â Approval
of certain policy forms containing specified provisions; conditions for
approval
INDIVIDUAL LIFE INSURANCE AND ANNUITIES
(Generally)
743.150Â Â Â Â Scope
of ORS 743.150, 743.153 and 743.156
743.153Â Â Â Â Statement
of benefits
743.154Â Â Â Â Acceleration
of death benefits; rules
743.156Â Â Â Â Statement
of premium
(Individual Life Insurance Policies)
743.159Â Â Â Â Scope
of ORS 743.162 to 743.243
743.162Â Â Â Â Payment
of premium
743.165Â Â Â Â Grace
period
743.168Â Â Â Â Incontestability
743.171Â Â Â Â Incontestability
and limitation of liability after reinstatement
743.174Â Â Â Â Entire
contract
743.177Â Â Â Â Statements
of insured
743.180Â Â Â Â Misstatement
of age
743.183Â Â Â Â Dividends
743.186Â Â Â Â Policy
loan
743.187Â Â Â Â Maximum
interest rate on policy loan; adjustable interest rate
743.189Â Â Â Â Reinstatement
743.192Â Â Â Â Payment
of claim; payment of interest upon failure to pay proceeds
743.195Â Â Â Â Installment
payments
743.198Â Â Â Â Title
743.201Â Â Â Â Beneficiary
of industrial policies
743.204Â Â Â Â Standard
Nonforfeiture Law for Life Insurance; applicability
743.207Â Â Â Â Required
provisions relating to nonforfeiture
743.210Â Â Â Â Determination
of cash surrender values; applicability to certain policies
743.213Â Â Â Â Determination
of paid-up nonforfeiture benefits
743.215Â Â Â Â Calculation
of adjusted premiums
743.216Â Â Â Â Adjusted
premiums; applicability
743.218Â Â Â Â Requirements
for determination of future premium amounts or minimum values
743.219Â Â Â Â Supplemental
rules for calculating nonforfeiture benefits
743.221Â Â Â Â Cash
surrender values upon default in premium payment
743.222Â Â Â Â Policy
benefits and premiums that shall be disregarded in calculating cash surrender
values and paid-up nonforfeiture benefits
743.225Â Â Â Â Prohibited
provisions
743.228Â Â Â Â Acts
of corporate insured or beneficiary with respect to policy
743.230Â Â Â Â Variable
life policy provisions
743.231    “Profit-sharing
policy” defined
743.234    “Charter
policy” or “founders policy” defined
743.237    “Coupon
policy” defined
743.240Â Â Â Â Profit-sharing,
charter or founders policies prohibited
743.243Â Â Â Â Restrictions
on form of coupon policy
743.245Â Â Â Â Variable
life insurance policy provisions
743.247Â Â Â Â Notice
to variable life insurance policyholders
(Individual Annuity and Pure Endowment
Policies)
743.252Â Â Â Â Scope
of ORS 743.255 to 743.273
743.255Â Â Â Â Grace
period for annuities
743.258Â Â Â Â Incontestability
743.261Â Â Â Â Entire
contract
743.264Â Â Â Â Misstatement
of age or sex
743.267Â Â Â Â Dividends
743.268Â Â Â Â Advancement
of policy loans
743.269Â Â Â Â Periodic
payments for period certain
743.270Â Â Â Â Reinstatement
743.271Â Â Â Â Periodic
stipulated payments on variable annuities
743.272Â Â Â Â Computing
benefits
743.273Â Â Â Â Standard
provisions of reversionary annuities
743.275Â Â Â Â Standard
Nonforfeiture Law for Individual Deferred Annuities; application
743.278Â Â Â Â Required
provisions in annuity policies; exception
743.284Â Â Â Â Computation
of benefits
743.287Â Â Â Â Commencement
of annuity payments at optional maturity dates; calculation of benefits
743.290Â Â Â Â Notice
of nonpayment of certain benefits to be included in annuity policy
743.293Â Â Â Â Minimum
forfeiture amounts for annuity policies; rules
743.295Â Â Â Â Effect
of certain life insurance and disability benefits on minimum nonforfeiture
amounts
GROUP LIFE INSURANCE
743.303Â Â Â Â Requirements
for issuance of group life insurance policies
743.306Â Â Â Â Required
provisions in group life insurance policies
743.309Â Â Â Â Nonforfeiture
provisions
743.312Â Â Â Â Grace
period
743.315Â Â Â Â Incontestability
743.318Â Â Â Â Application;
representations by policyholders and insureds
743.321Â Â Â Â Evidence
of insurability
743.324Â Â Â Â Misstatement
of age
743.327Â Â Â Â Payments
under policy; payment of interest upon failure to pay proceeds
743.330Â Â Â Â Issuance
of certificates
743.333Â Â Â Â Termination
of individual coverage
743.336Â Â Â Â Termination
of policy or class of insured persons
743.339Â Â Â Â Death
during period for conversion to individual policy
743.342Â Â Â Â Statement
furnished to insured under credit life insurance policy
743.345Â Â Â Â Assignability
of group life policies
743.348Â Â Â Â Certain
sales practices prohibited
743.351Â Â Â Â Eligibility
of association to be group life policyholder; rules
743.354Â Â Â Â Requirements
for certain group life policies issued to trustees of certain funds; rules
743.356Â Â Â Â Continuing
coverage upon replacement of group life policy
743.358Â Â Â Â Borrowing
by certificate holders under group life policy
743.360Â Â Â Â Alternative
group life insurance coverage
CREDIT LIFE AND CREDIT HEALTH INSURANCE
743.371Â Â Â Â Definitions
for credit life and credit health insurance provisions
743.372Â Â Â Â Applicability
of credit life and credit health insurance provisions
743.373Â Â Â Â Forms
of credit life and credit health insurance
743.374Â Â Â Â Limits
on amount of credit life insurance
743.375Â Â Â Â Limit
on amount of credit health insurance
743.376Â Â Â Â Duration
of credit life and credit health insurance
743.377Â Â Â Â Credit
life and credit health insurance policy or group certificate; contents;
delivery of policy, certificate or copy of application
743.378Â Â Â Â Charges
and refunds to debtor
743.379Â Â Â Â Status
of remuneration to creditor
743.380Â Â Â Â Claim
report and payment
HEALTH INSURANCE
(Individual)
743.402Â Â Â Â Exceptions
to individual health insurance policy requirements
743.405Â Â Â Â General
requirements
743.408Â Â Â Â Mandatory
provisions
743.411Â Â Â Â Entire
contract; changes
743.414Â Â Â Â Time
limit on certain defenses; incontestability
743.417Â Â Â Â Grace
period
743.420Â Â Â Â Reinstatement
743.423Â Â Â Â Notice
of claim
743.426Â Â Â Â Claim
forms
743.429Â Â Â Â Proofs
of loss
743.432Â Â Â Â Time
of payment of claims
743.435Â Â Â Â Payment
of claims
743.438Â Â Â Â Physical
examinations and autopsy
743.441Â Â Â Â Legal
actions
743.444Â Â Â Â Change
of beneficiary
743.447Â Â Â Â Optional
provisions
743.450Â Â Â Â Change
of occupation
743.453Â Â Â Â Misstatement
of age
743.456Â Â Â Â Other
insurance in same insurer
743.459Â Â Â Â Insurance
with other insurers; expense incurred benefits
743.462Â Â Â Â Insurance
with other insurers; other than expense incurred benefits
743.465Â Â Â Â Relation
of earnings to insurance
743.468Â Â Â Â Unpaid
premium
743.471Â Â Â Â Cancellation
743.472Â Â Â Â Permissible
reasons for cancellation or refusal to renew
743.474Â Â Â Â Conformity
with state statutes
743.477Â Â Â Â Illegal
occupation
743.483Â Â Â Â Arrangement
of provisions
743.486Â Â Â Â Scope
of term “insured” in statutory policy provisions
743.489Â Â Â Â Extension
of coverage beyond policy period; effect of misstatement of age
743.492Â Â Â Â Policy
return and premium refund provision
743.495Â Â Â Â Use
of terms “noncancelable” or “guaranteed renewable”; synonymous terms
743.498Â Â Â Â Statement
in policy of cancelability or renewability
(Group and Blanket)
743.522    “Group
health insurance” described
743.523Â Â Â Â Certain
sales practices prohibited
743.524Â Â Â Â Eligibility
of association to be group health policyholder; rules
743.526Â Â Â Â Determination
of whether trustees are policyholders; consequences; rules
743.527Â Â Â Â When
group health insurance policies to continue in effect upon payment of premium
by insured individual
743.528Â Â Â Â Required
provisions in group health insurance policies
743.529Â Â Â Â Continuation
of benefits after termination of group health insurance policy; rules
743.530Â Â Â Â Continuation
of benefits after injury or illness covered by workersÂ’ compensation
743.531Â Â Â Â Direct
payment of hospital and medical services; rate limitations
743.533Â Â Â Â Leased
workers; offering group health insurance
743.534    “Blanket
health insurance” defined
743.537Â Â Â Â Required
provisions for blanket health insurance policies
743.540Â Â Â Â Application
and certificates not required for blanket health insurance policies
743.543Â Â Â Â Payment
of benefits under blanket health insurance policies
743.546Â Â Â Â Exemption
of policy form approval for blanket health insurance policies
743.549Â Â Â Â Restriction
on reduction of benefits provisions in group and blanket health insurance
policies
743.550Â Â Â Â Student
health insurance
743.552Â Â Â Â Guidelines
for application of ORS 743.549; rules
743.560Â Â Â Â Minimum
grace period; notice upon termination of policy; effect of failure to notify
743.562Â Â Â Â Applicability
of ORS 743.560
743.565Â Â Â Â Separate
notice to policyholder required before cancellation of individual or group
health insurance policy for nonpayment of premium
743.566Â Â Â Â Rules
for certain notice requirements
(Continuation)
743.600Â Â Â Â Availability
of continued coverage under group policy for surviving, divorced or separated
spouse 55 or older
743.601Â Â Â Â Procedure
for obtaining continuation of coverage under ORS 743.600
743.602Â Â Â Â Premium
for continuation of coverage under ORS 743.600; termination of right to
continuation
743.610Â Â Â Â Continuation
of coverage under group policy upon termination of employment or membership or
dissolution of marriage; applicability of waiting period to rehired employee
(Long Term Care)
743.650Â Â Â Â Long
Term Care Insurance Act; purpose; application
743.652Â Â Â Â Definitions
for ORS 743.650 to 743.664
743.653Â Â Â Â Prohibition
on certain policies
743.655Â Â Â Â Rules;
disclosure; contents of policy
743.656Â Â Â Â Eligibility
for benefits; providers required to be covered
743.662Â Â Â Â Rescission
of policy and denial of claims
743.664Â Â Â Â Offer
of nonforfeiture benefit; rules
(Medicare Supplement)
743.680Â Â Â Â Definitions
for ORS 743.680 to 743.689
743.682Â Â Â Â Application
of ORS 743.680 to 743.689
743.683Â Â Â Â Policy
contents; standards for benefit and claims payments; rules
743.684Â Â Â Â Filing
of policy; loss ratio standards; insurance producer compensation
743.685Â Â Â Â Outline
of coverage; information brochure; rules
743.686Â Â Â Â Right
to return of policy; premium refund
743.687Â Â Â Â Advertising
743.688Â Â Â Â Rules
743.689Â Â Â Â DirectorÂ’s
authority upon violation of ORS 743.680 to 743.689
(Small Employer, Group, Individual and Portability
Health Insurance, Generally)
743.730Â Â Â Â Definitions
for ORS 743.730 to 743.773
743.731Â Â Â Â Purposes
743.733Â Â Â Â Issuance
of group health benefit plan to affiliated group of employers; determination of
number of employees for purpose of determining eligibility; small employer
carrier
743.734Â Â Â Â Group
health benefit plans subject to provisions of specified laws; exemptions
743.736Â Â Â Â Requirements
for basic health benefit plans; approval of plans and forms; offering of plan
by carriers
743.737Â Â Â Â Requirements
for small employer health benefit plans
743.745Â Â Â Â Health
Insurance Reform Advisory Committee; appointment; duties
743.748Â Â Â Â Submission
of information by carriers offering health benefit plans
743.749Â Â Â Â Certifications
and disclosure of coverage
743.751Â Â Â Â Use
of health statements in group health benefit plans
743.752Â Â Â Â Coverage
in group health benefit plans; consideration of prospective enrollee health
status restricted; effect of discontinuing offer of plans; exceptions; coverage
by multiple employer welfare arrangements
743.754Â Â Â Â Requirements
for group health benefit plans
743.757Â Â Â Â Health
benefit coverage for guaranteed association
743.758Â Â Â Â Implementation
of Health Insurance Portability and Accountability Act of 1996; rules
743.760Â Â Â Â Approval
of portability plans; offering of plans by carriers; required provisions;
actuarial certification
743.761Â Â Â Â Satisfaction
of requirements of ORS 743.760 by carrier offering individual health benefit
plans
743.766Â Â Â Â Use
of health statements in individual health benefit plans; exclusions or
limitations on coverage; eligibility to apply for Oregon Medical Insurance
Pool; renewal; discontinuation of coverage
743.767Â Â Â Â Premium
rates for individual health benefit plans
743.769Â Â Â Â Carrier
marketing of individual health benefit plans; rules; duties of carrier
regarding applications; effect of discontinuing offer of plans
743.773Â Â Â Â Rules
for ORS 743.766 to 743.769
743.775Â Â Â Â Submission
of information by carriers offering individual health benefit plans
743.787Â Â Â Â Definitions
for ORS 743.788
743.788Â Â Â Â Prescription
drug identification card
743.790Â Â Â Â Rules
for prescription drug identification cards
MISCELLANEOUS
743.801Â Â Â Â Definitions
743.803Â Â Â Â Medical
services contract provisions; nonprovider party prohibitions; future contracts
743.804Â Â Â Â Requirements
for insurer offering health benefit plan
743.806Â Â Â Â Utilization
review requirements for medical services contracts to which insurer not party
743.807Â Â Â Â Utilization
review requirements for insurers offering health benefit plan
743.808Â Â Â Â Requirements
for insurers that require designation of participating primary care physician;
exceptions
743.811Â Â Â Â Applicability
743.814Â Â Â Â Requirements
for insurers offering managed health insurance; quality assessment; rules
743.817Â Â Â Â Requirements
for insurers offering managed health or preferred provider organization
insurance; rules; opportunity to participate
743.819Â Â Â Â Reporting
requirements; rules
743.821Â Â Â Â Required
managed health insurance contract provision; enrollee liability
743.823Â Â Â Â Enforcement
of NewbornsÂ’ and MothersÂ’ Health Protection Act of 1996
743.827Â Â Â Â Health
Care Consumer Protection Advisory Committee
743.829Â Â Â Â Decisions
regarding health care facility length of stay, level of care and follow-up care
743.831Â Â Â Â Consortium
established; managed health care performance
743.834Â Â Â Â Insurer
prohibited practices; patient communication and referral
743.837Â Â Â Â Prior
authorization requirements
743.839Â Â Â Â Disclosure
of information
743.842Â Â Â Â Emergency
eye care services without referral from primary care provider
743.845Â Â Â Â Designation
of womenÂ’s health care provider as primary care provider; direct access to
womenÂ’s health care provider
743.847Â Â Â Â Medicaid
not considered in coverage eligibility determination; claims by state Medicaid
agency; prohibited ground for denial of enrollment of child; insurer duties
RIGHTS OF ENROLLEES
743.854Â Â Â Â Continuity
of care
743.856Â Â Â Â Referrals
to specialists
743.857Â Â Â Â External
review
743.858Â Â Â Â Director
to contract with independent review organizations to provide external review;
rules
743.859Â Â Â Â Inclusion
of statements regarding external review in health benefit plans
743.861Â Â Â Â Enrollee
application for external review
743.862Â Â Â Â Duties
of independent review organizations
743.863Â Â Â Â Civil
penalty for failure to comply by insurer that agreed to be bound by decision
743.864Â Â Â Â Private
right of action
743.871Â Â Â Â Definitions
for ORS 743.871 to 743.893
743.874Â Â Â Â Estimate
of costs for in-network procedure or service
743.876Â Â Â Â Estimate
of costs for out-of-network procedure or service
743.878Â Â Â Â Submission
of methodology used to determine insurerÂ’s allowable charges
743.883Â Â Â Â Alternative
mechanism for disclosure of costs and charges
743.893Â Â Â Â Rules
PAYMENT OF CLAIMS
743.911Â Â Â Â Payment
or denial of health benefit plan claims; rules
743.913Â Â Â Â Interest
on unpaid claims
     743.003 [1967 c.359 §335; renumbered 742.001 in 1989]
     743.006 [Formerly 736.300; renumbered 742.003 in
1989]
     743.009 [1967 c.359 §337; 1969 c.336 §11; 1973 c.608
§1; renumbered 742.005 in 1989]
GENERAL
PROVISIONS
     743.010
Health insurance policy and health benefit plan forms; rules. In addition to all other powers of the
Director of the Department of Consumer and Business Services with respect
thereto, the director may issue rules with respect to policy forms and health
benefit plan forms described in ORS 742.005 (6)(a) and (b):
     (1) Establishing minimum benefit
standards;
     (2) Requiring the ratio of benefits to
premiums to be not less than a specified percentage in order to be considered
reasonable, and requiring the periodic filing of data that will demonstrate the
insurerÂ’s compliance; and
     (3) Establishing requirements intended to
discourage duplication or overlapping of coverage and replacement, without
regard to the advantage to policyholders, of existing policies by new policies.
[1979 c.857 §2; 1997 c.96 §1; 1999 c.987 §4a]
     743.011 [1985 c.827 §2; repealed by 1989 c.255 §15]
     743.012 [1967 c.359 §338; 1989 c.700 §13; renumbered
742.007 in 1989]
     743.013
Disclosure of differences in replacement health insurance policies;
nonduplication for persons 65 and older; rules. (1) The Director of the Department of
Consumer and Business Services shall adopt by rule requirements for disclosure
by group and individual health insurers to individual and group health
insurance policyholders the difference between coverage under the existing
policy and coverage being offered to replace that coverage.
     (2) The provisions of this section do not
apply to disability income insurance.
     (3) The director shall adopt by rule
requirements for nonduplication and replacement of major medical, Medicare
supplement, long term care and special illness policies for applicants 65 years
of age and older. The insurance producer shall offer to compare for any
applicants 65 years of age and older the applicantÂ’s existing policy or
policies and coverage being offered to replace or supplement the applicantÂ’s
existing coverage. [1989 c.474 §2; 2003 c.364 §106]
     743.015
Filing and approval of credit life and credit health insurance forms; filing of
rates. (1) All credit life
and credit health insurance policies subject to ORS 743.371 to 743.380, and all
certificates of insurance, notices of proposed insurance, applications for
insurance, indorsements and riders used in connection with such kinds of
policies, delivered or issued for delivery in this state and the schedules of
premium rates pertaining thereto shall be filed with the Director of the
Department of Consumer and Business Services. Such forms are subject to
approval, disapproval or withdrawal of approval by the director as provided in
ORS 742.003, 742.005 and 742.007.
     (2) An insurer may revise the schedules of
premium rates from time to time and shall file the revised schedules with the
director. An insurer may not issue any credit life or credit health insurance
policy for which the premium rate exceeds that determined by the schedules of
the insurer as then on file with the director.
     (3) If a group policy of credit life or
credit health insurance has been or is delivered in another state, the insurer
shall file only the group certificate, the individual application and the
notice of proposed insurance delivered or issued for delivery in this state as
specified in ORS 743.377 (2) and (4). The director shall approve the group
certificate, the individual application and the notice of proposed insurance if
the forms conform with the requirements specified in ORS 743.377 (2) and (4)
and the schedules of premium rates applicable to the insurance evidenced by the
certificate or notice are not in excess of the insurerÂ’s schedules of premium
rates filed with the director. [Formerly 739.595; 1969 c.336 §12; 1971 c.231 §20;
2005 c.185 §3]
     743.018
Filing of rates for life and health insurance. (1) Except for group life and health
insurance, and except as provided in ORS 743.015, every insurer shall file with
the Director of the Department of Consumer and Business Services all schedules
and tables of premium rates for life and health insurance to be used on risks in
this state, and shall file any amendments to or corrections of such schedules
and tables.
     (2) Except as provided ORS 743.737 and
743.760 and subsection (3) of this section, a rate filing by a carrier for any
of the following health benefit plans subject to ORS 743.730 to 743.773 shall
be available for public inspection immediately upon submission of the filing to
the director:
     (a) Health benefit plans for small
employers.
     (b) Portability health benefit plans.
     (c) Individual health benefit plans.
     (3) The director, upon request by a
carrier, may exempt from disclosure any part of the filing that the director
determines to contain trade secrets and that would, if disclosed, harm
competition. The part that the director determines to be exempt from disclosure
shall be considered confidential for purposes of ORS 705.137. The director may
not disclose a part of a filing subject to a carrierÂ’s request pending the
director’s determination under this subsection. [1967 c.359 §340; 2007 c.391 §1]
     743.021 [1967 c.359 §341; 1971 c.231 §21; 1973 c.525
§1; renumbered 742.009 in 1989]
     743.024
Personal insurance, insurable interest and beneficiaries. (1) Any individual of competent legal
capacity may procure or effect an insurance policy on the individualÂ’s own life
or body for the benefit of any person. However, except as provided in ORS
743.030, no person shall procure or cause to be procured any insurance policy
upon the life or body of another unless the benefits under such policy are
payable to the individual insured or the personal representatives of the
individual, or to a person having, at the time such policy was entered into, an
insurable interest in the individual insured.
     (2) If the beneficiary, assignee or other
payee under any policy made in violation of this section receives from the
insurer any benefits thereunder accruing upon the death, disablement or injury
of the individual insured, the individual insured or the individualÂ’s executor
or administrator, as the case may be, may maintain an action to recover such
benefits from the person so receiving them.
     (3) An insurer shall be entitled to rely
upon all statements, declarations and representations made by an applicant for
insurance relative to the matter of insurable interest. No insurer shall incur legal
liability, except as set forth in the policy, by virtue of any untrue
statements, declarations or representations so relied upon in good faith by the
insurer.
     (4) This section does not apply to annuity
policies. [1967 c.359 §342]
     743.027
Consent of individual required for life and health insurance; exceptions. No life or health insurance policy upon an
individual, except a policy of group life insurance or of group or blanket
health insurance, shall be made or effectuated unless at the time of the making
of the policy the individual insured, being of competent legal capacity to
contract, applies therefor or has consented thereto in writing, except in the
following cases:
     (1) A spouse may effectuate such insurance
upon the other spouse.
     (2) Any person having an insurable
interest in the life of a minor, or any person upon whom a minor is dependent
for support and maintenance, may effectuate insurance upon the life of or
pertaining to such minor.
     (3) Family policies may be issued insuring
any two or more members of a family on an application signed by either parent,
a stepparent, or by a husband or wife.
     (4) A person may effectuate insurance that
provides for the final expenses of an adult who is dependent upon the person
for support and maintenance. [1967 c.359 §342a; 1991 c.182 §2]
     743.028
Uniform health insurance claim forms. The Director of the Department of Consumer and Business Services shall
prescribe uniform health insurance claim forms which shall be used by all
insurers transacting health insurance in this state and by all state agencies
that require health insurance claim forms for their records. [1973 c.109 §2]
     743.030
Life insurance for benefit of charity. (1) Life insurance policies may be effected although the person paying
the consideration has no insurable interest in the life of the person insured
if a charitable, benevolent, educational or religious institution is designated
irrevocably as the beneficiary.
     (2) In making such policies the person
paying the premium shall make and sign the application therefor as owner. The
application also must be signed by the person whose life is to be insured. Such
a policy shall be valid and binding between and among all of the parties
thereto.
     (3) The person paying the consideration
for such insurance shall have all rights conferred by the policy to loan value
at any time during the premium-paying period, but not at maturity,
notwithstanding such person has no insurable interest in the life of the person
insured. [Formerly 739.420]
     743.033 [1967 c.359 §344; renumbered 742.011 in
1989]
     743.036 [Formerly 736.330; 1973 c.823 §149; repealed
by 1973 c.827 §83]
     743.037 [1973 c.521 §2; renumbered 743.721 in 1989]
     743.039
Alteration of application for life or health insurance. (1) An application for a life insurance
policy may not provide for alterations by any person other than the applicant
in either the application or the policy to be issued thereon with respect to
the amount of insurance, classification of risk, plan of insurance or the benefits
unless the application contains a statement that no such changes are effective
until approved in writing by the applicant.
     (2) No alteration of any written
application for any health insurance policy shall be made by any person other
than the applicant without the written consent of the applicant, except that
insertions may be made by the insurer, for administrative purposes only, in
such manner as to indicate clearly that such insertions are not to be ascribed
to the applicant. [1967 c.359 §346]
     743.041
Payment discharges insurer.
Whenever the proceeds of or payments under a life or health insurance policy
become payable in accordance with the terms of such policy, or the exercise of
any right or privilege under such policy, and the insurer makes payment in
accordance with the terms of the policy or in accordance with any written
assignment of the policy, the person so designated as being entitled to the
proceeds or payments shall be entitled to receive them and to give full
acquittance therefor, and such payments shall fully discharge the insurer from
all claims under the policy unless, before payment is made, the insurer has
received at its home office written notice by or on behalf of some other person
that such other person claims to be entitled to such proceeds or payments or
some interest in the policy. [Formerly 743.084]
     743.042 [1967 c.359 §347; 1985 c.465 §1; renumbered
742.013 in 1989]
     743.043
Assignment of policies. A
policy may be assignable or not assignable, as provided by its terms. Subject
to its terms relating to assignability, any life or health insurance policy,
under the terms of which the beneficiary may be changed upon the sole request
of the insured or owner, may be assigned either by pledge or transfer of title,
by an assignment executed by the insured or owner alone and delivered to the
insurer, whether or not the pledgee or assignee is the insurer. Any such
assignment shall entitle the insurer to deal with the assignee as the owner or
pledgee of the policy in accordance with the terms of the assignment, until the
insurer has received at its home office written notice of termination of the
assignment or pledge, or written notice by or on behalf of some other person
claiming some interest in the policy in conflict with the assignment. [Formerly
743.087]
     743.045 [Formerly 736.305; 1971 c.231 §22; 1985
c.465 §2; renumbered 742.016 in 1989]
     743.046
Exemption of proceeds of individual life insurance other than annuities. (1) When a policy of insurance is effected
by any person on any personÂ’s own life or on another life in favor of some
person other than that person having an insurable interest in the life insured,
the lawful beneficiary thereof, other than that person or that personÂ’s legal
representative, is entitled to its proceeds against the creditors or
representatives of the person effecting the policy.
     (2) The person to whom a policy of life
insurance is made payable may maintain an action thereon in the personÂ’s own
name.
     (3) A policy of life insurance payable to
a beneficiary other than the estate of the insured, having by its terms a cash
surrender value available to the insured, is exempt from execution issued from
any court in this state and in the event of bankruptcy of such insured is
exempt from all demands in legal proceeding under such bankruptcy.
     (4) Subject to the statute of limitations,
the amount of any premiums paid in fraud of creditors for such insurance, with
interest thereon, shall inure to their benefit from the proceeds of the policy.
The insurer issuing the policy shall be discharged of all liability thereon by
payment of its proceeds in accordance with its terms unless, before such
payment, the insurer has received at its home office written notice by or in
behalf of some creditor, with specifications of the amount claimed, claiming to
recover for certain premiums paid in fraud of creditors.
     (5) The insured under any policy within
this section shall not be denied the right to change the beneficiary when such
right is expressly reserved in the policy.
     (6) This section does not apply to annuity
policies. [Formerly 739.405 and then 743.099]
     743.047
Exemption of proceeds of group life insurance. (1) A policy of group life insurance or the
proceeds thereof payable to a person or persons other than the individual
insured or the individualÂ’s estate shall be exempt from debts and claims of
creditors or representatives of the individual insured and, in the event of
bankruptcy of the individual insured, from all demands in legal proceedings
under such bankruptcy.
     (2) The provisions of subsection (1) of
this section do not apply to group life insurance issued to a creditor covering
the creditorÂ’s debtors to the extent that such proceeds are applied to payment
of the obligation for the purpose of which the insurance was so issued. [Formerly
743.102]
     743.048 [Formerly 736.315; renumbered 742.018]
     743.049
Exemption of proceeds of annuity policies; assignability of rights. (1) The benefits, rights, privileges and
options which are due or prospectively due an annuitant under any annuity
policy issued before, on or after June 8, 1967, shall not be subject to
execution, nor shall the annuitant be compelled to exercise any such rights,
powers or options, nor shall creditors be allowed to interfere with or terminate
the policy, except:
     (a) As to amounts paid for or as premium
on any such annuity with intent to defraud creditors, with interest thereon,
and of which the creditor has given the insurer written notice at its home
office prior to the making of the payments to the annuitant out of which the
creditor seeks to recover. Any such notice shall specify the amount claimed or
such facts as will enable the insurer to ascertain such amount, and shall set
forth such facts as will enable the insurer to ascertain the annuity policy,
the annuitant and the payments sought to be avoided on the ground of fraud.
     (b) The total exemption of benefits
presently due and payable to any annuitant periodically or at stated times
under all annuity policies under which the person is an annuitant shall not at
any time exceed $500 per month for the length of time represented by such
installments. Such periodic payments in excess of $500 per month shall be
subject to garnishee execution to the same extent as are wages and salaries.
     (c) If the total benefits presently due
and payable to any annuitant under all annuity policies under which the person
is an annuitant shall at any time exceed payment at the rate of $500 per month,
the court may order such annuitant to pay to a judgment creditor or apply on
the judgment, in installments, the portion of such excess benefits as to the
court may appear just and proper, after due regard for the reasonable
requirements of the judgment debtor and family, if dependent upon the judgment
debtor, as well as any payments required to be made by the annuitant to other
creditors under prior court orders.
     (2) If the policy so provides, the
benefits, rights, privileges or options accruing under the policy to a
beneficiary or assignee shall not be transferable nor subject to commutation,
and if the benefits are payable periodically or at stated times, the same
exemptions and exceptions contained in this section for the annuitant shall
apply with respect to such beneficiary or assignee. [Formerly 743.105; 1991 c.182
§3]
     743.050
Exemption of proceeds of health insurance. Except as may otherwise be expressly provided by the policy, the
proceeds or avails of all health insurance policies and of provisions providing
benefits on account of the insuredÂ’s disability which are supplemental to life
insurance policies, issued before, on or after June 8, 1967, shall be exempt
from all liability for any debt of the insured, and from any debt of the
beneficiary existing at the time the proceeds are made available for the use of
the beneficiary. [Formerly 743.108]
     743.051 [1967 c.359 §350; renumbered 742.021 in
1989]
     743.052 [1971 c.372 §2; renumbered 743.719 in 1989]
     743.053
Prohibition on requirement that death or dismemberment occur in less than 180
days after accident. A life
insurance policy or health insurance policy, whether group or individual, that
contains provisions providing benefits in case of death or dismemberment by
accident shall not require that the death or dismemberment occur less than 180
days after the date of the accident in order for benefits to be paid under the
policy. [1991 c.182 §8]
     743.054 [1967 c.359 §351; renumbered 742.023 in
1989]
     743.055 [1991 c.875 §2; repealed by 1995 c.506 §11]
     743.057 [1967 c.359 §352; renumbered 742.026 in
1989]
     743.060 [1967 c.359 §353; renumbered 742.028 in
1989]
     743.063 [1967 c.359 §354; renumbered 742.033 in
1989]
     743.066 [1967 c.359 §355; 1971 c.231 §23; renumbered
742.036 in 1989]
     743.069 [1967 c.359 §356; renumbered 742.038 in
1989]
     743.072 [Formerly 736.310; 1971 c.231 §24; 1973
c.149 §1; renumbered 742.041 in 1989]
     743.075 [1967 c.359 §358; 1975 c.391 §1; 1977 c.742 §8;
renumbered 742.043 in 1989]
     743.078 [1967 c.359 §359; renumbered 742.046 in
1989]
     743.080 [1971 c.231 §5; 1983 c.249 §1; renumbered
742.048 in 1989]
     743.081 [1967 c.359 §360; renumbered 742.051 in
1989]
     743.084 [1967 c.359 §361; renumbered 743.041 in
1989]
     743.087 [1967 c.359 §362; renumbered 743.043 in
1989]
     743.090 [Formerly 736.335; repealed by 1973 c.827 §83]
     743.093 [1967 c.359 §364; renumbered 742.053 in
1989]
     743.096 [1967 c.359 §365; renumbered 742.056 in
1989]
     743.099 [Formerly 739.405; renumbered 743.046 in
1989]
POLICY
LANGUAGE SIMPLIFICATION
     743.100
Short title. ORS 743.100 to
743.109 may be cited as the Life and Health Insurance Policy Language
Simplification Act. [Formerly 743.350]
     743.101
Purpose. (1) The purpose of
the Life and Health Insurance Policy Language Simplification Act is to
establish minimum standards for language used in policies and certificates of
life insurance and health insurance delivered or issued for delivery in this
state in order to facilitate ease of reading.
     (2) ORS 743.100 to 743.109 is not intended
to increase the risk assumed by insurers or to supersede their obligation to
comply with the substance of other Insurance Code provisions applicable to
insurance policies. ORS 743.100 to 743.109 is not intended to impede
flexibility and innovation in the development of policy forms or content or to
lead to the standardization of policy forms or content. [Formerly 743.353]
     743.102 [1967 c.359 §367; renumbered 743.047 in
1989]
     743.103
Definitions for ORS 743.100 to 743.109. As used in ORS 743.100 to 743.109, “policy” has the meaning given in
ORS 731.122 and, in addition, includes a certificate issued pursuant to a group
insurance policy delivered or issued for delivery in this state. [Formerly
743.357]
     743.104
Scope of ORS 743.100 to 743.109. (1) ORS 743.100 to 743.109 apply to all policies delivered or issued
for delivery in this state, except:
     (a) Any policy that is a security subject
to federal jurisdiction.
     (b) Any group policy covering a group of
1,000 or more lives at date of issue, other than a group credit life insurance
policy or a group credit health insurance policy. However, this paragraph shall
not exempt any certificate issued pursuant to a group policy.
     (c) Any group annuity contract that serves
as a funding vehicle for a pension, profit-sharing or deferred compensation
plan.
     (d) Any form used in connection with, as a
conversion from, as an addition to, or, pursuant to a contractual provision, in
exchange for, a policy delivered or issued for delivery on a form approved or
permitted to be issued prior to the date the form must be approved under
section 9, chapter 708, Oregon Laws 1979.
     (e) The renewal of a policy delivered or
issued for delivery prior to the date the policy form must be approved under
section 9, chapter 708, Oregon Laws 1979.
     (f) Any certificate issued pursuant to a
group policy not delivered or issued for delivery in this state.
     (2) A non-English language policy will be
deemed to comply with ORS 743.106 if the insurer certifies that the policy is
translated from an English language policy that complies with ORS 743.106. [Formerly
743.362]
     743.105 [1967 c.359 §368; renumbered 743.049 in
1989]
     743.106
     (a) The policy text achieves a score of 40
or more on the Flesch reading ease test, or an equivalent score on any
comparable test as provided in subsection (3) of this section;
     (b) The policy, except for specification
pages, schedules and tables is printed in not less than 10-point type, one
point leaded;
     (c) The style, arrangement and overall
appearance of the policy give no undue prominence to any portion of the text,
including the text of any indorsements or riders; and
     (d) The policy contains a table of
contents or an index of the principal sections of the policy, if the policy has
more than 3,000 words of text printed on three or less pages, or regardless of
the number of words if the policy has more than three pages.
     (2) For the purposes of this section, a
Flesch reading ease test score shall be calculated as follows:
     (a) For policy forms containing 10,000
words or less of text, the entire form shall be analyzed. For policy forms
containing more than 10,000 words, two 200-word samples per page may be
analyzed instead of the entire form. The samples shall be separated by at least
20 printed lines.
     (b) The number of words and sentences in
the text shall be counted and the total number of words divided by the total
number of sentences. The figure obtained shall be multiplied by a factor of 1.015.
     (c) The total number of syllables in the
text shall be counted and divided by the total number of words. The figure
obtained shall be multiplied by a factor of 84.6.
     (d) The sum of the figures computed under
paragraphs (b) and (c) of this subsection subtracted from 206.835 equals the
Flesch reading ease test score for the policy form.
     (e) For purposes of paragraphs (b) and (c)
of this subsection, the following procedures shall be used:
     (A) A contraction, hyphenated word or
numbers and letters, when separated by spaces, shall be counted as one word.
     (B) A unit of words ending with a period,
semicolon or colon shall be counted as a sentence.
     (C) A “syllable” means a unit of spoken
language consisting of one or more letters of a word as divided by an accepted
dictionary. If the dictionary shows two or more equally acceptable
pronunciations of a word, the pronunciation containing fewer syllables may be
used.
     (f) As used in this section, “text”
includes all written matter except the following:
     (A) The name and address of the insurer;
the name, number or title of the policy; the table of contents or index;
captions and subcaptions; specification pages; schedules or tables; and
     (B) Policy language drafted to conform to
the requirements of any state or federal law, regulation or agency
interpretation; policy language required by any collectively bargained
agreement; medical terminology; and words that are defined in the policy.
However, the insurer shall identify the language or terminology excepted by this
subparagraph and shall certify in writing that the language or terminology is
entitled to be excepted by this subparagraph.
     (3) Any other reading test may be approved
by the Director of the Department of Consumer and Business Services as an
alternative to the Flesch reading ease test if it is comparable in result to
the Flesch reading ease test.
     (4) Each policy filing shall be
accompanied by a certificate signed by an officer of the insurer stating that
the policy meets the minimum required reading ease score on the test used, or
stating that the score is lower than the minimum required but should be
authorized in accordance with ORS 743.107. To confirm the accuracy of a
certification, the director may require the submission of further information.
     (5) At the option of the insurer, riders,
indorsements, applications and other forms made a part of the policy may be
scored as separate forms or as part of the policy with which they may be used. [Formerly
743.365]
     743.107
When director may authorize lower standards. The Director of the Department of Consumer and Business Services may
authorize a lower score than the Flesch reading ease test score required by ORS
743.106 when, in the directorÂ’s sole discretion, the director finds that a
lower required score:
     (1) Will provide a more accurate
reflection of the readability of a policy form;
     (2) Is warranted by the nature of a
particular policy form or type or class of policy forms; or
     (3) Is caused by certain policy language
drafted to conform to the requirements of any state law, regulation or agency
interpretation. [Formerly 743.368]
     743.108 [1967 c.359 §369; renumbered 743.050 in
1989]
     743.109
Approval of certain policy forms containing specified provisions; conditions
for approval. A policy form
meeting the requirements of ORS 743.106 shall not be disapproved because of
other provisions of the Insurance Code that specify the content of policies, if
the policy form provides the policyholders and claimants protection not less
favorable than they would be entitled to under such provisions. [Formerly
743.370]
     743.111 [Formerly 744.090; renumbered 742.058 in
1989]
     743.114 [Formerly 736.325; 1971 c.123 §1; 1981 c.667
§1; renumbered 742.061 in 1989]
     743.115 [1987 c.774 §46; 1989 c.376 §1; renumbered
742.063 in 1989]
     743.116 [1971 c.603 §2; 1981 c.422 §1; 1981 c.891 §2;
renumbered 743.701 in 1989]
     743.117 [1967 c.271 §§2,3; renumbered 743.703 in
1989]
     743.118 [1987 c.720 §2; renumbered 743.704 in 1989]
     743.119 [1981 c.254 §2; renumbered 743.706 in 1989]
     743.120 [1975 c.135 §2; renumbered 743.707 in 1989]
     743.123 [1975 c.338 §2; renumbered 743.709 in 1989]
     743.125 [1979 c.268 §6; renumbered 743.710 in 1989]
     743.128 [1979 c.785 §20; renumbered 743.712 in 1989]
     743.132 [1979 c.1 §15; renumbered 743.713 in 1989]
     743.135 [1981 c.422 §5; 1989 c.721 §54; 1989 c.1080 §1;
renumbered 743.714 in 1989]
     743.138 [1987 c.739 §§2,4b; renumbered 743.715 in
1989]
     743.140 [1985 c.536 §1; renumbered 743.716 in 1989]
     743.143 [1985 c.312 §2; renumbered 743.717 in 1989]
     743.145 [1985 c.747 §59; renumbered 743.700 in 1989]
     743.147 [1987 c.530 §2; renumbered 743.718 in 1989]
INDIVIDUAL
LIFE INSURANCE AND ANNUITIES
(Generally)
     743.150
Scope of ORS 743.150, 743.153 and 743.156. This section and ORS 743.153 and 743.156 apply only to policies of
life insurance, other than group life insurance. [1967 c.359 §372]
     743.153
Statement of benefits. A
life insurance policy shall contain a provision stating the amount of benefits
payable or the method to be used or procedure to be followed in determining
such amount, the manner of payment and the consideration therefor. [Formerly
739.310]
     743.154
Acceleration of death benefits; rules. (1) A life insurance policy or a rider to a life insurance policy may
provide for the acceleration of death benefits as part of the life insurance
coverage. For purposes of this section, accelerated death benefits are benefits
that:
     (a) Are payable to the policy owner or
certificate holder during the lifetime of the insured, in anticipation of death
or upon the occurrence of specified life-threatening or catastrophic conditions
as defined by the policy or rider;
     (b) Reduce the death benefit otherwise
payable under the life insurance policy; and
     (c) Are payable upon the occurrence of a
single qualifying event that results in the payment of a benefit amount fixed
at the time of acceleration.
     (2) For purposes of this section, a
qualifying event is one or more of the following:
     (a) A medical condition that will result
in a drastically limited life span, as specified in the policy or rider, not
exceeding 24 months.
     (b) A medical condition that has required
or requires extraordinary medical intervention, such as a major organ
transplant or continuous artificial life support, without which the insured
would die.
     (c) Any condition that usually requires
continuous confinement in an eligible institution, as defined in the policy or
rider, if the insured is expected to remain there for the rest of the insuredÂ’s
life.
     (d) A medical condition that in the
absence of extensive or extraordinary medical treatment will result in a
drastically limited life span. Such conditions may include but are not limited
to one or more of the following:
     (A) Coronary artery disease resulting in
an acute infarction or requiring surgery;
     (B) Permanent neurological deficit
resulting from cerebral vascular accident;
     (C) End-stage renal failure; or
     (D) Acquired Immune Deficiency Syndrome.
     (e) Any other event determined by the
Director of the Department of Consumer and Business Services to be
life-threatening.
     (3) A policy or rider that provides for
the acceleration of death benefits:
     (a) Must also provide for the continuation
of the policy as to the amount of the death benefit that is not accelerated.
     (b) Must allow the policy owner or the
certificate holder to request payment at any time during the period that the
qualifying event continues.
     (4) A policy or rider that provides for
the acceleration of death benefits under this section shall not be described or
marketed by an insurer as long term care insurance or as providing long term
care benefits.
     (5) The director shall adopt rules
establishing minimum benefits, criteria for the payment of accelerated
benefits, disclosure requirements and actuarial standards. [1991 c.571 §2; 1993
c.17 §1]
     743.156
Statement of premium. A life
insurance policy shall contain a provision separately stating the premium for
each benefit provision of the policy for which such separate statement is
necessary, as determined by the Director of the Department of Consumer and
Business Services, to give adequate disclosure of the terms of the policy. [1967
c.359 §374]
(Individual
Life Insurance Policies)
     743.159
Scope of ORS 743.162 to 743.243. ORS 743.162 to 743.243 apply only to policies of life insurance other
than group life insurance, and do not apply to annuity or pure endowment
policies. Such sections apply to such policies that are policies of variable
life insurance, except to the extent the provisions of such sections are obviously
inapplicable to variable life insurance or are in conflict with other
provisions of such sections that are expressly applicable to variable life
insurance. [1967 c.359 §375; 1973 c.435 §16]
     743.162
Payment of premium. A life
insurance policy shall contain a provision relating to the time and place of
payment of premium. [1967 c.359 §376]
     743.165
Grace period. A life
insurance policy shall contain a provision that a grace period of 30 days, or,
at the option of the insurer, of one month of not less than 30 days, or of four
weeks in the case of industrial life insurance policies the premiums for which
are payable more frequently than monthly, shall be allowed within which the
payment of any premium after the first may be made, during which period of
grace the policy shall continue in full force. The insurer may impose an
interest charge not in excess of six percent per annum for the number of days
of grace elapsing before the payment of the premium. If a claim arises under
the policy during such period of grace the amount of any premium due or
overdue, together with interest and any deferred installment of the annual
premium, may be deducted from the policy proceeds. [1967 c.359 §377]
     743.168
Incontestability. (1) A life
insurance policy shall contain a provision that the policy shall be
incontestable after it has been in force for two years from its date of issue
during the lifetime of the insured, except for nonpayment of premiums. At the
option of the insurer the two-year limit within which the policy may be
contested shall not apply to the provisions for benefits in the event of total
and permanent disability and provisions which grant additional insurance
specifically against death by accident.
     (2) A provision in a life insurance policy
providing that such policy shall be incontestable after a specified period
shall preclude only a contest of the validity of the policy, and shall not
preclude the assertion at any time of defenses based upon provisions in the
policy which exclude or restrict coverage, whether or not such restrictions or
exclusions are excepted in such provision. [1967 c.359 §378]
     743.171
Incontestability and limitation of liability after reinstatement. (1) A reinstated policy of life insurance
may be contested on account of fraud or misrepresentation of facts material to
the reinstatement only for the same period following reinstatement, and with
the same conditions and exceptions, as the policy provides with respect to
contestability after original issuance.
     (2) When any policy of life insurance is
reinstated, such reinstated policy may exclude or restrict liability to the
same extent that such liability could have been or was excluded or restricted
when the policy was originally issued, and such exclusion or restriction shall
be effective from the date of reinstatement. [1967 c.359 §379]
     743.174
Entire contract. A life
insurance policy shall contain a provision that the policy constitutes the
entire contract between the parties. [1967 c.359 §380]
     743.177
Statements of insured. A
life insurance policy shall contain a provision that all statements made by or
on behalf of the insured shall, in the absence of fraud, be deemed
representations and not warranties, and that no such statement shall be used in
defense of a claim under the policy unless contained in a written application
and unless a copy of such application is indorsed upon or attached to the
policy when issued. [1967 c.359 §381]
     743.180
Misstatement of age. A life
insurance policy shall contain a provision that if it is found at any time
before final settlement under the policy that the age of the insured or of any
other person whose age is considered in determining the premium or benefit
accruing under the policy has been misstated, the amount payable or benefit accruing
under the policy shall be such as the premium would have purchased at the
correct age or ages, or the premium may be adjusted and credit given to the
insured or to the insurer, according to the insurerÂ’s published rate at date of
issue. [1967 c.359 §382]
     743.183
Dividends. (1) A life
insurance policy other than a nonparticipating policy shall contain a provision
that the policy shall participate in the divisible surplus of the insurer
annually, beginning not later than the end of the third policy year. Any policy
containing provision for participation beginning at the end of the first or the
second policy year may provide that dividends for either or both of such years
shall be paid subject to the payment of the premium for the next ensuing year.
The owner of the policy shall have the right each year to have the dividend
arising from such participation paid in cash, and if the policy provides other
dividend options, it shall further provide which dividend option is effective
if the owner does not elect one of such options on or before the expiration of
the period of grace allowed for the payment of the premium.
     (2) In participating industrial life
insurance policies, in lieu of the provision required in subsection (1) of this
section, there shall be a provision that, beginning not later than the end of
the fifth policy year, the policy shall participate annually in the divisible
surplus in the manner set forth in the policy.
     (3) This section does not apply to any
form of paid-up insurance or temporary insurance or endowment insurance issued
or granted in exchange for lapsed or surrendered policies. [1967 c.359 §383]
     743.186
Policy loan. (1) A life
insurance policy shall contain a provision that after three full yearsÂ’
premiums have been paid and after the policy has a cash surrender value and
while no premium is in default beyond the grace period for payment, the insurer
will advance, on proper assignment or pledge of the policy and on the sole
security thereof, an amount equal to or, at the option of the party entitled
thereto, less than the loan value of the policy, at a rate of interest not
exceeding the maximum rate permitted by the policy loan provision. The interest
rate provision shall comply with ORS 743.187. The loan value of the policy
shall be equal to the cash surrender value at the end of the then current
policy year, less any existing indebtedness not already deducted in determining
such cash surrender value including any interest then accrued but not due, any
unpaid balance of the premium for the current policy year, and interest on the
loan to the end of the current policy year. The policy may also provide that:
     (a) Interest on any indebtedness that is
90 or more days past due shall be added to the existing indebtedness and shall
bear interest at the rate applicable to the existing indebtedness; and
     (b) Except as provided in ORS 743.187, if
the total indebtedness on the policy, including interest due or accrued, equals
or exceeds the amount of the loan value of the policy, the policy shall
terminate and become void upon 30 daysÂ’ notice by the insurer mailed to the
last-known address of the insured or other policy owner and of any assignee of
record at the home office of the insurer.
     (2) The policy shall reserve to the
insurer the right to defer the granting of a loan, other than for the payment
of any premium to the insurer, for six months after application therefor.
     (3) The policy, at the insurer’s option,
may provide for automatic premium loan.
     (4) This section does not apply to term insurance
policies or term insurance benefits provided by rider or supplemental policy
provisions, or to industrial life insurance policies. [1967 c.359 §384; 1975
c.575 §1; 1981 c.412 §18; 2001 c.318 §12]
     743.187
Maximum interest rate on policy loan; adjustable interest rate. (1) Except as provided otherwise in this
section, the maximum interest rate in the policy loan provision required by ORS
743.186 shall be eight percent per year. The insurer may include in the policy
loan provision, in lieu of a fixed maximum interest rate, a provision for an
adjustable interest rate. The adjustable interest rate provision must comply
with this section. A limitation on interest rates under state law, other than a
limitation contained in the Insurance Code, shall not apply to interest rates
for life insurance policy loans unless the limitation specifically applies to
life insurance policy loans.
     (2) The adjustable interest rate
provision:
     (a) Shall state in substance that in
accordance with the policy and the law of the jurisdiction in which the policy
is delivered, the insurer will establish from time to time the interest rate
for an existing or a new policy loan; and
     (b) Shall set forth the dates on which the
insurer will determine policy loan interest rates. These determination dates
shall be at regular intervals no longer than one year and no shorter than three
months.
     (3) The maximum interest rate permitted
for a policy loan under the adjustable interest rate provision shall be
established by the provision as the higher of:
     (a) The interest rate used to calculate
cash surrender values under the policy during the same period, plus one
percent; and
     (b) The Moody’s Corporate Bond Yield
Average - Monthly Average Corporates, as published by MoodyÂ’s
Investors Service, Inc., for the calendar month which precedes by two months
the month in which the determination date for the policy loan interest rate
falls. However, if the MoodyÂ’s Corporate Bond Yield Average - Monthly
Average Corporates is no longer published by MoodyÂ’s Investors Service, Inc.,
or if the National Association of Insurance Commissioners determines that the
MoodyÂ’s Corporate Bond Yield Average - Monthly Average Corporates is
no longer an appropriate rate for this purpose, the Director of the Department
of Consumer and Business Services by rule may establish the method of
determining the rate under this paragraph. The directorÂ’s rule, to the maximum
extent reasonable, shall be consistent with the pertinent actions of the
National Association of Insurance Commissioners.
     (4) On any date specified in the
adjustable interest rate provision of the policy for determining the policy
loan interest rate:
     (a) The insurer may increase the existing
rate if the maximum rate permitted by the provision exceeds the existing rate
by at least one-half of one percent. The increase shall not be less than
one-half of one percent or more than the amount by which the permitted maximum
rate exceeds the existing rate; and
     (b) The insurer shall decrease the
existing rate if the existing rate exceeds the maximum rate permitted by the
provision by at least one-half of one percent. The decrease shall not be less
than the amount by which the existing rate exceeds the permitted maximum rate.
     (5) The insurer under the adjustable
interest rate provision shall give notice of the policy loan interest rate and
related matters to the policy owner and all other persons entitled to notice by
the policy, as follows:
     (a) In the case of a loan other than for
payment of a premium to the insurer, the insurer shall give notice of the
initial interest rate on the loan when the loan is made.
     (b) In the case of a loan for payment of a
premium to the insurer, the insurer shall give notice of the initial interest
rate on the loan as soon as reasonably practicable after the loan is made.
However, the insurer need not give this notice when an additional premium loan
is made at the same interest rate then applicable to an existing premium loan
to the borrower.
     (c) In the case of a policy with an
outstanding loan, the insurer shall give notice of each increase in the loan
interest rate reasonably in advance of the increase.
     (d) Notices given under this subsection
shall include in substance the information required by subsection (2) of this
section.
     (6) Notwithstanding ORS 743.186, a policy
shall not terminate in a particular policy year solely because a change in the
policy loan interest rate during that year caused the total indebtedness under
the policy to reach the policy loan value. The policy shall remain in force
during that year unless and until it would have terminated in the absence of
any policy loan interest rate change during that year. [1981 c.412 §20]
     743.189
Reinstatement. A life
insurance policy shall contain a provision that if in the event of a default in
premium payments the value of the policy has been applied to provide a paid-up
nonforfeiture benefit, and if this benefit is currently in force and the
original policy has not been surrendered to the insurer and canceled, and if a
period of not more than three years has elapsed since the default (or two years
in the case of an industrial life insurance policy), the policy may be
reinstated upon furnishing evidence of insurability satisfactory to the insurer
and payment of arrears of premiums and payment or reinstatement of any other
indebtedness to the insurer under the policy, with interest at a rate not
exceeding the maximum permitted by the policy loan provision. [1967 c.359 §385;
1981 c.412 §21]
     743.192
Payment of claim; payment of interest upon failure to pay proceeds. (1) A life insurance policy shall contain a
provision that when the policy becomes a claim by the death of the insured,
settlement shall be made upon receipt of due proof of death and of the interest
of the claimant.
     (2) If the insurer fails to pay the
proceeds of or make payment under the policy within 30 days after receipt of
due proof of death and of the interest of the claimant, and if the beneficiary
elects to receive a lump sum settlement, the insurer shall pay interest on any
money due and unpaid after expiration of the 30-day period. The insurer shall
compute the interest from the date of the insuredÂ’s death until the date of
payment, at a rate not lower than that paid by the insurer on other
withdrawable policy owner funds. At the end of the 30-day period, the insurer
shall notify the named beneficiary or beneficiaries at their last-known address
that interest at the applicable rate will be paid on the lump sum proceeds from
the date of death of the insured.
     (3) Nothing in this section shall be
construed to allow an insurer to withhold payment of money payable under a life
insurance policy to any named beneficiary for a period longer than reasonably
necessary to transmit the payment. [1967 c.359 §386; 1983 c.754 §2]
     743.195
Installment payments. A life
insurance policy shall contain a table showing the amounts of installments, if
any, by which its proceeds may be payable. [1967 c.359 §387]
     743.198
Title. A life insurance
policy shall contain a title briefly and correctly describing the policy. If an
industrial life insurance policy, it shall have the words “industrial policy”
imprinted on the face thereof as part of the descriptive matter. [1967 c.359 §388]
     743.201
Beneficiary of industrial policies. An industrial life insurance policy shall have the name of the
beneficiary designated thereon, or in the application or other form if attached
to the policy, with a reservation of the right to designate or change the
beneficiary after the issuance of the policy unless such beneficiary has been
irrevocably designated. The policy may also provide that no designation or
change of beneficiary shall be binding on the insurer until indorsed on the
policy by the insurer, and that the insurer may refuse to indorse the name of
any proposed beneficiary who does not appear to the insurer to have an
insurable interest in the life of the insured. The policy may also provide that
if the beneficiary designated in the policy does not make a claim under the
policy or does not surrender the policy with due proof of death within the
period stated in the policy, which shall not be less than 30 days after the
death of the insured, or if the beneficiary is the estate of the insured, or is
a minor, or dies before the insured, or is not legally competent to give a
valid release, then the insurer may make any payment thereunder to the executor
or administrator of the insured, or to any relative of the insured by blood or
legal adoption or connection by marriage, or to any person appearing to the
insurer to be equitably entitled thereto by reason of having been named
beneficiary, or by reason of having incurred expense for the maintenance,
medical attention or burial of the insured. The policy may also include a
similar provision applicable to any other payment due under the policy. [1967
c.359 §389]
     743.204
Standard Nonforfeiture Law for Life Insurance; applicability. (1) ORS 743.204 to 743.222 may be cited as
the Standard Nonforfeiture Law for Life Insurance.
     (2) The operative date of the Standard
Nonforfeiture Law for Life Insurance as to any policy is the earlier of:
     (a) January 1, 1948; or
     (b) The date specified in a written
notice, filed with the Director of the Department of Consumer and Business
Services by the insurer, of election to comply with the Standard Nonforfeiture
Law for Life Insurance as to such policy as of the specified date.
     (3) The Standard Nonforfeiture Law for
Life Insurance shall not apply to:
     (a) Any reinsurance, group insurance, pure
endowment, annuity or reversionary annuity policy.
     (b) Any term policy or renewal thereof, of
uniform amount, which provides no guaranteed nonforfeiture or endowment
benefits, of 20 years or less expiring before age 71, for which uniform
premiums are payable during the entire term of the policy. For this purpose,
the age at death for a joint term life insurance policy shall be the age at
death of the oldest life.
     (c) Any term policy of decreasing amount,
which provides no guaranteed nonforfeiture or endowment benefits, if each
adjusted premium, calculated as specified in ORS 743.215 and 743.216, is less
than the adjusted premium so calculated on a term policy or renewal thereof of
uniform amount, which provides no guaranteed nonforfeiture benefits or
endowment benefits, which is issued at the same age, for the same initial
amount of insurance and for a term of 20 years or less that expires before age
71 and for which uniform premiums are payable during the entire term of the
policy. For this purpose, the age at death for a joint term life insurance
policy shall be the age at death of the oldest life.
     (d) Any policy which provides no
guaranteed nonforfeiture or endowment benefits, and for which policy the cash
surrender value or present value of paid-up nonforfeiture benefit calculated
for the beginning of any policy year as specified in ORS 743.210, 743.213,
743.215 and 743.216 does not exceed two and one-half percent of the amount of
insurance at the beginning of such year. [Formerly 739.340; 1977 c.320 §13;
1981 c.609 §12]
     743.207
Required provisions relating to nonforfeiture. (1) A life insurance policy shall contain in
substance the following provisions, or corresponding provisions which in the
opinion of the Director of the Department of Consumer and Business Services are
at least as favorable to the defaulting or surrendering policyholder as are the
minimum requirements specified in this section, and which are essentially in
compliance with ORS 743.221:
     (a) That in the event of default in any
premium payment the insurer will grant, upon proper request not later than 60
days after the due date of the premium in default, a paid-up nonforfeiture
benefit on a plan stipulated in the policy, effective as of such due date, of
the amount required by ORS 743.213. In lieu of this stipulated benefit the
insurer may substitute, upon proper request made not later than 60 days after
the due date of the premium in default, another paid-up nonforfeiture benefit
which is actuarially equivalent and provides a greater amount or longer period
of death benefit or, if applicable, a greater amount or earlier payment of
endowment benefit.
     (b) That upon surrender of the policy
within 60 days after the due date of any premium payment in default after
premiums have been paid for at least three full years in the case of ordinary
life insurance or five full years in the case of industrial life insurance, the
insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash
surrender value of the amount required by ORS 743.210.
     (c) That a specified paid-up nonforfeiture
benefit will become effective as specified in the policy unless the person
entitled to make such election elects another available option not later than
60 days after the due date of the premium in default.
     (d) That, if the policy has become paid up
by completion of all premium payments or if it is continued under any paid-up
nonforfeiture benefit which became effective on or after the third policy
anniversary in the case of ordinary life insurance or the fifth policy
anniversary in the case of industrial life insurance, the insurer will pay,
upon surrender of the policy within 30 days after any policy anniversary, a
cash surrender value of the amount required by ORS 743.210.
     (e)(A) In the case of all policies other
than those provided for in subparagraph (B) of this paragraph, a statement of
the mortality table and interest rate used in calculating the cash surrender
values and the paid-up nonforfeiture benefits available under the policy,
together with a table showing the cash surrender value, if any, and paid-up
nonforfeiture benefit, if any, available under the policy on each policy
anniversary either during the first 20 policy years or during the term of the
policy, whichever is shorter. Such values and benefits shall be calculated on
the assumption that there are no dividends or paid-up additions credited to the
policy and that there is no indebtedness to the insurer on the policy. At the
option of the insurer such table may also show such values and benefits for any
year or years beyond the 20th policy year.
     (B) In the case of policies which provide,
on a basis guaranteed in the policy, for unscheduled changes in benefits or
premiums, or which provide an option for changes in benefits or premiums other
than by change to a new policy, a statement of the mortality table, interest
rate and method used in calculating cash surrender values and paid-up
nonforfeiture benefits available under the policy.
     (f)(A) A statement that the cash surrender
values and the paid-up nonforfeiture benefits available under the policy are
not less than the minimum values and benefits required by or pursuant to the
insurance law of the state in which the policy is delivered.
     (B) An explanation of the manner in which
the cash surrender values and the paid-up nonforfeiture benefits are altered by
the existence of any paid-up additions credited to the policy or any
indebtedness to the insurer on the policy.
     (C) If a detailed statement of the method
of computation of the cash surrender values and paid-up nonforfeiture benefits
shown in the policy is not stated in the policy, a statement that the method of
computation has been filed with the insurance supervisory official of the state
in which the policy is delivered.
     (D) A statement of the method to be used
in calculating the cash surrender value and paid-up nonforfeiture benefit
available under the policy on any policy anniversary beyond the last
anniversary for which such values and benefits are shown for consecutive years
in the policy.
     (2) Any of the provisions set forth in
subsection (1) of this section, or portions of the provisions, not applicable
by reason of the particular plan of insurance may, to the extent inapplicable,
be omitted from the policy.
     (3) The insurer shall reserve the right to
defer the payment of any cash surrender value for a period of six months after
demand therefor with surrender of the policy. [Formerly 739.345; 1981 c.609 §13]
     743.210
Determination of cash surrender values; applicability to certain policies. (1) Except as otherwise provided in
subsections (2) and (3) of this section, any cash surrender value available
under a life insurance policy in the event of default in a premium payment due
on any policy anniversary, whether or not required by ORS 743.207, shall be an
amount not less than the excess, if any, of the present value, on such
anniversary, of the future guaranteed benefits which would have been provided
for by the policy, including any existing paid-up additions, if there had been
no default, over the sum of:
     (a) The present value on such anniversary
of the adjusted premiums, as defined in ORS 743.215 and 743.216, corresponding
to premiums which would have fallen due on and after such anniversary; and
     (b) The amount of any indebtedness to the
insurer on the policy.
     (2) This subsection applies to a life
insurance policy issued on or after the operative date defined in ORS 743.215
which provides supplemental life insurance or annuity benefits by rider or
supplemental policy provision at the option of the insured and for an identifiable
additional premium. For such a policy, the cash surrender value shall be an
amount not less than the cash surrender value required by subsection (1) of
this section for a policy otherwise similar to the subject policy but without
such rider or supplemental policy provision, plus the cash surrender value
required by subsection (1) of this section for a policy which provides only the
benefits provided by such rider or supplemental policy provision in the subject
policy.
     (3) This subsection applies to a family
life insurance policy issued on or after the operative date defined in ORS
743.215 which policy defines a primary insured and provides term insurance on
the life of the spouse of the primary insured with a term that expires before
age 71 of the spouse. For such a policy, the cash surrender value shall be an
amount not less than the cash surrender value required by subsection (1) of
this section for a policy otherwise similar to the subject policy but without
such term insurance on the life of the spouse, plus the cash surrender value
required by subsection (1) of this section for a policy which provides only the
benefits provided by such term insurance on the life of the spouse in the
subject policy.
     (4) Any cash surrender value available
within 30 days after any policy anniversary under any policy which has been
paid up by completion of all premium payments or any policy which has been
continued under any paid-up nonforfeiture benefit, whether or not required by
ORS 743.207, shall be an amount not less than the present value, on such
anniversary, of the future guaranteed benefits provided for by the policy,
including any existing paid-up additions, decreased by the amount of any
indebtedness to the insurer on the policy. [Formerly 739.350; 1981 c.609 §14]
     743.213
Determination of paid-up nonforfeiture benefits. Any paid-up nonforfeiture benefit available
under a life insurance policy in the event of default in a premium payment due
on any policy anniversary shall be such that its present value as of such
anniversary shall be at least equal to the cash surrender value then provided
for by the policy or, if none is provided for, that cash surrender value which
would have been required by ORS 743.207 in the absence of the condition that
premiums have been paid for at least a specified period. [Formerly 739.355;
1981 c.609 §15]
     743.215
Calculation of adjusted premiums. (1) This section applies to all life insurance policies issued on or
after the operative date defined in this subsection for the issuing insurer.
After January 1, 1982, any insurer may file with the Director of the Department
of Consumer and Business Services a written notice of its election to comply
with the provisions of this section with regard to any number of plans of
insurance after a specified date before January 1, 1989. The specified date
shall be the operative date of this subsection for the plan or plans, but if an
insurer elects to make this subsection operative before January 1, 1989, for
fewer than all plans, the insurer must comply with rules adopted by the
director. There is no limit to the number of times that an insurer may make the
election. If an insurer makes no such election, the operative date of this
section for the insurer shall be January 1, 1989.
     (2) Except as provided in subsection (8)
of this section, the adjusted premiums referred to in ORS 743.210 for any life
insurance policy to which this section applies shall be calculated as provided
in this subsection, on an annual basis, as a uniform percentage of the
respective premiums specified in the policy for each policy year, excluding
amounts payable as extra premiums to cover impairments or special hazards and
excluding any uniform annual contract charge or policy fee specified in the
policy statement of the method to be used in calculating the cash surrender
values and paid-up nonforfeiture benefits. This percentage shall be such that
the present value, at the date of issue of the policy, of all such adjusted
premiums shall equal the sum of:
     (a) The present value at the policy issue
date of the future guaranteed benefits provided for by the policy;
     (b) One percent of either the amount of
insurance, if the insurance is uniform in amount, or the average of the amounts
of insurance at the beginning of each of the first 10 policy years; and
     (c) One hundred twenty-five percent of the
nonforfeiture net level premium as defined in subsection (3) of this section.
For this purpose, any excess of the nonforfeiture net level premium over four
percent of such uniform or average amount of insurance shall be disregarded.
     (3) The nonforfeiture net level premium
referred to in subsection (2) of this section shall equal the present value, at
the date of issue of the policy, of the guaranteed benefits provided for by the
policy divided by the present value, at the date of issue of the policy, of an
annuity of one per annum payable on the date of issue and on each anniversary
of the policy on which a premium falls due.
     (4) In the case of policies which provide,
on a basis guaranteed in the policy, for unscheduled changes in benefits or
premiums, or which provide an option for changes in benefits or premiums other
than by change to a new policy, the adjusted premiums and present values shall
initially be calculated on the assumption that future benefits and premiums do
not change from those stipulated by the policy at the date of issue. At the
time of any such change in the benefits or premiums the future adjusted
premiums, nonforfeiture net level premiums and present values shall be
recalculated as provided in subsection (5) of this section on the assumption
that future benefits and premiums do not change from those stipulated by the
policy immediately after the change.
     (5) Except as otherwise provided in
subsection (8) of this section, the recalculated future adjusted premiums
referred to in subsection (4) of this section shall be calculated as provided
in this subsection, on an annual basis, as a uniform percentage of the
respective future premiums specified in the policy for each policy year,
excluding amounts payable as extra premiums to cover impairments and special
hazards and excluding any uniform annual contract charge or policy fee
specified in the policy statement of the method to be used in calculating the
cash surrender values and paid-up nonforfeiture benefits. This percentage shall
be such that the present value, at the date of change to the newly defined
benefits or premiums, of all such future adjusted premiums shall equal A plus B
minus C, where these amounts are defined as follows:
     (a) “A” equals the present value, as of
the date of change, of the future guaranteed benefits provided for by the
policy.
     (b) “B” equals the additional expense
allowance, if any, for the policy, as defined in subsection (6) of this section.
     (c) “C” equals the cash surrender value
under the policy, if any, or present value of any paid-up nonforfeiture benefit
under the policy, as of the date of change.
     (6) The additional expense allowance at
the date of the change to the newly defined benefits or premiums, as referred
to in subsection (5) of this section, shall equal the sum of:
     (a) One percent of the excess, if
positive, of the average of the amounts of insurance at the beginning of each
of the first 10 policy years subsequent to the change, over the average of the
amounts of insurance, as defined before the change, at the beginning of each of
the first 10 policy years subsequent to the last previous change or the policy
issue date if there has been no change.
     (b) One hundred twenty-five percent of the
change, if positive, in the amount of the nonforfeiture net level premium from
the amount applicable prior to the change in policy benefits or premiums to the
amount of the recalculated nonforfeiture net level premium determined from subsection
(7) of this section as of the date of the change in policy benefits or
premiums.
     (7) The recalculated nonforfeiture net
level premium referred to in subsection (6) of this section shall equal Y
divided by Z, where these amounts are defined as follows:
     (a) “Y” equals the sum of:
     (A) The nonforfeiture net level premium
applicable prior to the change times the present value at the date of change of
an annuity of one per annum payable on each anniversary of the policy, on or
subsequent to the date of the change, on which a premium would have fallen due
had the change not occurred; and
     (B) The present value at the date of
change of the increase in future guaranteed benefits provided for by the
policy.
     (b) “Z” equals the present value at the
date of change of an annuity of one per annum payable on each anniversary of
the policy, on or subsequent to the date of change, on which a premium falls
due.
     (8) Notwithstanding any other provisions
of this section, the provisions of this subsection shall apply in the case of a
policy issued on a substandard basis which provides reduced graded amounts of
insurance determined so that, in each policy year, the policy has the same
tabular mortality cost as for an otherwise similar policy of a higher nongraded
amount or amounts of insurance issued on the standard basis. Adjusted premiums
and present values for a policy on such a substandard basis may be calculated
as if the policy were issued to provide such a higher nongraded amount or
amounts of insurance on the standard basis.
     (9) Except as provided in subsection (10)
of this section, all adjusted premiums and present values referred to in the
Standard Nonforfeiture Law for Life Insurance shall, for all policies of life
insurance to which this section applies, be calculated on the mortality and
interest bases as follows:
     (a) For ordinary life insurance mortality:
     (A) The Commissioners 1980 Standard
Ordinary Mortality Table shall be used; or
     (B) At the option of the insurer for any
one or more specified plans of life insurance, the Commissioners 1980 Standard
Ordinary Mortality Table with Ten-Year Select Mortality Factors may be used
instead of such table without Ten-Year Select Mortality Factors.
     (b) For industrial life insurance
mortality, the Commissioners 1961 Standard Industrial Mortality Table shall be
used.
     (c) For all policies issued in a
particular calendar year, an interest rate shall be used which does not exceed
the nonforfeiture interest rate, as defined in subsection (11) of this section,
for policies issued in that year.
     (10) The following provisions shall also
apply, for policies to which this section applies, to the calculation of
premiums and values referred to in the Standard Nonforfeiture Law for Life
Insurance:
     (a) At the option of the insurer, such
calculations for all policies issued in a particular calendar year may be made
on the basis of an interest rate which does not exceed the nonforfeiture
interest rate, as defined in subsection (11) of this section, for policies
issued in the last preceding calendar year.
     (b) Under any paid-up nonforfeiture
benefit, including any paid-up dividend additions, any cash surrender value
available, whether or not required by ORS 743.207, shall be calculated on the
basis of the mortality table and interest rate used in determining the amount
of such paid-up nonforfeiture benefit and paid-up dividend additions.
     (c) An insurer shall calculate the amount
of any guaranteed paid-up nonforfeiture benefit, including any paid-up
additions, on the basis of an interest rate no lower than that specified in the
policy for calculating cash surrender values.
     (d) In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if any, offered as
a nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1980 Extended Term Insurance Table for
policies of ordinary life insurance, and not more than those shown in the
Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial
life insurance.
     (e) For insurance issued on a substandard
basis, the calculation of premiums and values may be based on appropriate
modifications of the mortality tables referred to in subsection (9) of this
section and in this subsection.
     (f) Any ordinary life mortality tables
adopted after 1980 by the National Association of Insurance Commissioners that
are approved under rules issued by the director for use in determining the
minimum nonforfeiture standard may be substituted for the Commissioners 1980
Standard Ordinary Mortality Table with or without Ten-Year Select Mortality
Factors, or for the Commissioners 1980 Extended Term Insurance Table.
     (g) Any industrial life mortality tables
adopted after 1980 by the National Association of Insurance Commissioners that
are approved under rules issued by the director for use in determining the
minimum nonforfeiture standard may be substituted for the Commissioners 1961
Standard Industrial Mortality Table or the Commissioners 1961 Industrial
Extended Term Insurance Table.
     (11) The nonforfeiture interest rate for
any policy issued in a particular calendar year shall equal 125 percent of the
calendar year statutory valuation interest rate for such policy as defined in
the Standard Valuation Law, rounded to the nearer one-quarter of one percent.
     (12) Notwithstanding any other provision
in this chapter or ORS chapter 743A, for any previously approved policy form,
any refiling of nonforfeiture values or their methods of computation which
involves only a change in the interest rate or mortality table used to compute
nonforfeiture values shall not of itself require refiling of any other
provisions of that policy form. [1981 c.609 §17; 1983 c.282 §1]
     743.216
Adjusted premiums; applicability. This section applies only to life insurance policies issued before the
operative date defined in ORS 743.215. For such policies:
     (1) Except as provided in subsection (3)
of this section, the adjusted premiums referred to in ORS 743.210 shall be
calculated on an annual basis and shall be such uniform percentage of the
respective premiums specified in the policy for each policy year, excluding any
extra premiums charged because of impairments or special hazards, that the
present value, at the date of issue of the policy, of all such adjusted
premiums shall be equal to the sum of:
     (a) The present value at the policy issue
date of the future guaranteed benefits provided for by the policy.
     (b) Two percent of the amount of insurance
if the insurance is uniform in amount, or of the equivalent uniform amount as
defined in subsection (2) of this section if the amount of insurance varies
with duration of the policy.
     (c) Forty percent of the adjusted premium
for the first policy year. For this purpose, any excess of the adjusted premium
over four percent of the amount of insurance or equivalent uniform amount shall
be disregarded.
     (d) Twenty-five percent of either the
adjusted premium for the first policy year or the adjusted premium for a whole
life policy for the same uniform or the same equivalent uniform amount of
insurance with uniform premiums for the whole of life issued at the same age,
whichever is less. For this purpose, any excess of the adjusted premium over
four percent of the amount of insurance or equivalent uniform amount shall be
disregarded.
     (2) In the case of a policy providing an
amount of insurance varying with duration of the policy, the equivalent uniform
amount of the subject policy for the purpose of this section shall be the
uniform amount of insurance provided by an otherwise similar policy, containing
the same endowment benefit or benefits, if any, issued at the same age and for
the same term, the amount of which does not vary with duration and the benefits
under which have the same present value at the date of issue as the benefits
under the subject policy. However, in the case of a policy providing a varying
amount of insurance issued on the life of a child under age 10, the equivalent
uniform amount may be computed as though the amount of insurance provided by
the subject policy prior to the attainment of age 10 were the amount provided
by the subject policy at age 10.
     (3) The adjusted premiums for any policy
providing term insurance benefits by rider or supplemental policy provision
shall be calculated in accordance with this subsection. The amounts specified
in paragraphs (a) and (b) of this subsection shall be calculated separately.
Each such amount shall be calculated as specified in subsections (1) and (2) of
this section. However, for the purposes of subsection (1)(b), (c) and (d) of
this section, the amount of insurance or equivalent uniform amount of insurance
used in the calculation of the adjusted premiums referred to in paragraph (b)
of this subsection shall be equal to the excess of the uniform or equivalent
uniform amount determined for the entire policy over the amount used in the
calculation of the adjusted premiums in paragraph (a) of this subsection. The
adjusted premiums for the entire policy shall equal the sum of:
     (a) The adjusted premiums for an otherwise
similar policy issued at the same age without such term insurance benefits; and
     (b) During the period for which premiums
for such term insurance benefits are payable, the adjusted premiums for such
term insurance benefits.
     (4) Except as provided in paragraphs (a)
and (b) of this subsection and subsection (5) of this section, all adjusted
premiums and present values referred to in the Standard Nonforfeiture Law for
Life Insurance shall for all policies of ordinary life insurance to which this
section applies be calculated on the basis of the Commissioners 1941 Standard
Ordinary Mortality Table. Such calculations for any category of ordinary life
insurance issued on female lives may, however, be based on an age not more than
six years younger than the actual age of the insured. Except as provided in
paragraphs (a) and (b) of this subsection and subsection (7) of this section,
such calculations of adjusted premiums and present values for all policies of
industrial life insurance shall be made on the basis of the 1941 Standard
Industrial Mortality Table. All calculations shall be made on the basis of the
rate of interest, not exceeding three and one-half percent per annum, specified
in the policy for calculating cash surrender values and paid-up nonforfeiture
benefits. The following exceptions pertain:
     (a) In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if any, offered as
a nonforfeiture benefit, the rates of mortality assumed may be not more than
130 percent of the rates of mortality according to the respective table.
     (b) For insurance issued on a substandard
basis, the calculation of adjusted premiums and present values may be based on
such other table of mortality as may be specified by the insurer and approved
by the Director of the Department of Consumer and Business Services.
     (5) This subsection applies only to
policies of ordinary life insurance to which this section applies and which are
issued on or after the operative date of this subsection as defined in
subsection (6) of this section. For such policies, all adjusted premiums and
present values referred to in the Standard Nonforfeiture Law for Life Insurance
shall, except as provided in paragraphs (a) and (b) of this subsection, be calculated
on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and
the rate of interest specified in the policy for calculating cash surrender
values and paid-up nonforfeiture benefits. Such calculations for any category
of ordinary life insurance issued on female lives may, however, be based on an
age not more than six years younger than the actual age of the insured. Such
rate of interest shall not exceed three and one-half percent, except that a
rate of interest not exceeding four percent may be used for policies issued
from January 1, 1974, to December 31, 1977, and a rate of interest not
exceeding five and one-half percent may be used for policies issued on or after
January 1, 1978, and with the further exception that for any single premium
whole life or endowment insurance policy a rate of interest not exceeding six
and one-half percent may be used. The following exceptions pertain:
     (a) In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if any, offered as
a nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1958 Extended Term Insurance Table.
     (b) For insurance issued on a substandard
basis, the calculation of adjusted premiums and present values may be based on
such other table of mortality as may be specified by the insurer and approved
by the director.
     (6) After August 9, 1961, any insurer may
file with the director a written notice of its election to comply with the
provisions of subsection (5) of this section after a specified date before
January 1, 1966. After the filing of such notice, such specified date shall be
the operative date of subsection (5) of this section for the insurer with
respect to the ordinary life policies it thereafter issues. If an insurer makes
no such election, such operative date for the insurer shall be January 1, 1966.
     (7) This subsection applies only to
policies of industrial life insurance to which this section applies and which
are issued on or after the operative date of this subsection as defined in
subsection (8) of this section. For such policies, all adjusted premiums and
present values referred to in the Standard Nonforfeiture Law for Life Insurance
shall, except as provided in paragraphs (a) and (b) of this subsection, be
calculated on the basis of the Commissioners 1961 Standard Industrial Mortality
Table and the rate of interest specified in the policy for calculating cash
surrender values and paid-up nonforfeiture benefits. Such rate of interest
shall not exceed three and one-half percent, except that a rate of interest not
exceeding four percent may be used for policies issued from January 1, 1974, to
December 31, 1977, and a rate of interest not exceeding five and one-half
percent may be used for policies issued on or after January 1, 1978, and with
the further exception that for any single premium whole life or endowment
insurance policy a rate of interest not exceeding six and one-half percent may
be used. The following exceptions pertain:
     (a) In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if any, offered as
a nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1961 Industrial Extended Term Insurance Table.
     (b) For insurance issued on a substandard
basis, the calculation of adjusted premiums and present values may be based on
such other table of mortality as may be specified by the insurer and approved
by the director.
     (8) After September 2, 1963, any insurer
may file with the director a written notice of its election to comply with the
provisions of subsection (7) of this section after a specified date before
January 1, 1968. After the filing of such notice, such specified date shall be
the operative date of subsection (7) of this section for the insurer with
respect to the industrial life insurance policies it thereafter issues. If an
insurer makes no such election, such operative date for the insurer shall be
January 1, 1968. [Formerly 739.360; 1973 c.636 §6; 1977 c.320 §14; 1981 c.609 §16]
     743.218
Requirements for determination of future premium amounts or minimum values. In the case of policies of life insurance
which provide for determination of future premium amounts by the insurer on the
basis of current estimates of future experience, or policies of life insurance
which are of such a nature that minimum values cannot in the judgment of the
Director of the Department of Consumer and Business Services be determined by
the methods otherwise described in the Standard Nonforfeiture Law for Life
Insurance, the following requirements shall apply:
     (1) The director must be satisfied that
the policy benefits are substantially as favorable to policyholders and
insureds as the minimum benefits otherwise required by the Standard
Nonforfeiture Law for Life Insurance;
     (2) The director must be satisfied that
the benefits and the pattern of premiums of the policy are not misleading to
prospective policyholders or insureds; and
     (3) The cash surrender values and paid-up
nonforfeiture benefits provided by the policy must not be less than the minimum
values and benefits required for the policy as calculated by a method
consistent with the principles of the Standard Nonforfeiture Law for Life Insurance,
as determined under rules issued by the director. [1981 c.609 §18]
     743.219
Supplemental rules for calculating nonforfeiture benefits. (1) Any cash surrender value and any paid-up
nonforfeiture benefit available under a life insurance policy in the event of
default in a premium payment due at any time other than on the policy
anniversary date shall be calculated with allowance for the lapse of time and
the payment of fractional premiums beyond the last preceding policy
anniversary.
     (2) All values referred to in the Standard
Nonforfeiture Law for Life Insurance may be calculated on the assumption that
any death benefit is payable at the end of the policy year of death.
     (3) The net value of any paid-up
additions, other than paid-up term additions, shall not be less than the
amounts used to provide the additions. [Formerly 739.365; 1981 c.609 §19]
     743.221
Cash surrender values upon default in premium payment. (1) This section shall apply to all life
insurance policies issued on or after January 1, 1986.
     (2) Any cash surrender value available in
the event of default in a premium payment due on any policy anniversary under a
life insurance policy to which this section applies shall be in an amount which
does not differ, by more than two-tenths of one percent of the amount of
insurance, if uniform, or the average of the amounts of insurance at the
beginning of each of the first 10 policy years, from A plus B minus C, where
these amounts are defined as follows:
     (a) “A” equals the basic cash value on
such anniversary as defined in subsection (3) of this section.
     (b) “B” equals the present value on such
anniversary of any existing paid-up additions.
     (c) “C” equals the amount of any
indebtedness to the insurer under the policy on such anniversary.
     (3)(a) The basic cash value referred to in
subsection (2) of this section shall equal the present value, on a particular
subject policy anniversary, of the future guaranteed benefits which would have
been provided for by the policy if there had been no premium default, excluding
any existing paid-up additions and before deduction of any indebtedness to the
insurer, less the present value on such anniversary of the nonforfeiture
factors, as defined in subsection (4) of this section, corresponding to
premiums which would have fallen due on and after such anniversary. The basic
cash value shall be taken as zero if this calculation produces a negative
result.
     (b) Supplemental life insurance or annuity
benefits and family coverage, as described in ORS 743.210 or 743.216, whichever
is applicable to the policy, shall affect the basic cash value in the same
manner as is provided in ORS 743.210 or 743.216 for their effect on the cash
surrender values.
     (4)(a) Except as provided in paragraph (b)
of this subsection, the nonforfeiture factor referred to in subsection (3) of
this section shall for each policy year equal a percentage of the adjusted
premium for that policy year as defined in ORS 743.215 or 743.216, whichever is
applicable to the policy. This percentage must:
     (A) Be uniform for each policy year
between the second policy anniversary and the later of:
     (i) The fifth policy anniversary; and
     (ii) The first policy anniversary at which
there is available under the policy a cash surrender value in an amount, before
including any paid-up additions and before deducting any indebtedness, at least
equal to two-tenths of one percent of the amount of insurance, if uniform, or
of the average of the amounts of insurance at the beginning of each of the
first 10 policy years; and
     (B) Be such that no percentage after the
later policy anniversary defined in subparagraph (A) of this paragraph applies
to fewer than five consecutive policy years.
     (b) No basic cash value may be less than
the value which would be obtained if the adjusted premiums for the policy as
defined in ORS 743.215 or 743.216, whichever is applicable to the policy, were
substituted for the nonforfeiture factors defined in this subsection in the
calculation of the basic cash value.
     (5) All adjusted premiums and present
values referred to in this section shall for a particular policy be calculated
on the same mortality and interest bases as are used in demonstrating the
compliance of the policy with the Standard Nonforfeiture Law for Life
Insurance. The cash surrender values referred to in this section shall include
any endowment benefits provided for by the policy.
     (6)(a) Any cash surrender value available
other than in the event of default in a premium payment due on a policy
anniversary, and the amount of any paid-up nonforfeiture benefit available
under the policy in the event of default in a premium payment, shall be
determined in a manner consistent with the manner specified for determining the
analogous minimum amounts under the Standard Nonforfeiture Law for Life Insurance.
     (b) The amounts of any cash surrender
values and any paid-up nonforfeiture benefits granted in connection with
additional benefits such as those described in ORS 743.222 shall conform with
the principles of this section. [1981 c.609 §21]
     743.222
Policy benefits and premiums that shall be disregarded in calculating cash
surrender values and paid-up nonforfeiture benefits. (1) Notwithstanding ORS 743.210, in
ascertaining minimum cash surrender values and paid-up nonforfeiture benefits
required by the Standard Nonforfeiture Law for Life Insurance, benefits and
their respective premiums provided for in a life insurance policy shall be
disregarded where the benefits are payable:
     (a) In the event of death or dismemberment
by accident or accidental means;
     (b) In the event of total and permanent
disability;
     (c) As reversionary annuity or deferred
reversionary annuity benefits;
     (d) As term insurance benefits provided by
a rider or supplemental policy provision to which, if issued as a separate
policy, the Standard Nonforfeiture Law for Life Insurance would not apply;
     (e) As term insurance on the life of a
child or on the lives of children provided in a policy on the life of a parent
of the child, if such term insurance expires before the childÂ’s age is 26, is
uniform in amount after the childÂ’s age is one, and has not become paid up by
reason of the death of a parent of the child; or
     (f) As other policy benefits additional to
life insurance and endowment benefits.
     (2) No benefits such as are described in
subsection (1) of this section are required to be included in any paid-up
nonforfeiture benefits. [Formerly 739.370; 1981 c.609 §20]
     743.225
Prohibited provisions. No
life insurance policy shall contain any of the following provisions:
     (1) A provision limiting the time within
which any action at law or suit in equity may be commenced to less than three
years after the cause of action or suit accrues.
     (2) A provision by which the policy
purports to be issued or to take effect more than six months before the
original application for the insurance was made.
     (3) A provision for forfeiture of the
policy for failure to repay any loan on the policy or any interest on such loan
while the total indebtedness on the policy is less than the loan value thereof.
[Formerly 739.315]
     743.228
Acts of corporate insured or beneficiary with respect to policy. (1) Whenever a corporation organized under
the laws of this state or qualified to do business in this state has caused to
be insured the life of any director, officer, agent or employee, or whenever
such corporation is named as a beneficiary in or assignee of any life insurance
policy, due authority to effect, assign, release, relinquish, convert,
surrender, change the beneficiary or take any other or different action with
reference to such insurance shall be sufficiently evidenced to the insurer by a
written statement under oath showing that such action has been approved by a
majority of the board of directors. Such a statement shall be signed by the
president and secretary of the corporation and bear the corporate seal.
     (2) Such a statement shall be binding upon
the corporation and shall protect the insurer concerned in any act done or
suffered by it upon the faith thereof without further inquiry into the validity
of the corporate authority or the regularity of the corporate proceedings.
     (3) No person shall be disqualified by
reason of interest in the subject matter from acting as a director or as a
member of the executive committee of such a corporation on any corporate act
touching such insurance. [Formerly 739.415]
     743.230
Variable life policy provisions. A variable life insurance policy shall contain in substance the
following provisions:
     (1) A provision that there will be a
period of grace of 30 days within which payment of any premium after the first
may be made, during which period of grace the policy will continue in full
force. If a claim arises under the policy during such period of grace, the
amount of any premiums due or overdue, together with interest not in excess of
six percent per annum and any deferred installment of the annual premium, may
be deducted from the policy proceeds. The policy may contain a statement of the
basis for determining any variation in benefits that may occur as a result of
the payment of premium during the period of grace.
     (2) A provision that the policy will be
reinstated at any time within three years from the date of a default in premium
payments, unless the cash surrender value has been paid or the period of
extended insurance has expired, upon the production of evidence of insurability
satisfactory to the insurer and the payment of an amount not exceeding the
greater of:
     (a) All overdue premiums and any other
indebtedness to the insurer upon said policy with interest at a rate not
exceeding six percent per annum; and
     (b) One hundred ten percent of the
increase in cash surrender value resulting from reinstatement.
     (3) A provision for cash surrender values
and paid-up insurance benefits available as nonforfeiture options in the event
of default in a premium payment after premiums have been paid for a specified
period. If the policy does not include a table of figures for the options so
available, the policy shall provide that the insurer will furnish, at least
once in each policy year, a statement showing the cash value as of a date no
earlier than the next preceding policy anniversary.
     (a) The method of computation of cash
values and other nonforfeiture benefits shall be as described either in the
policy or in a statement filed with the Director of the Department of Consumer
and Business Services, and shall be actuarially appropriate to the variable
nature of the policy.
     (b) The method of computation must result,
if the net investment return credited to the policy at all times from the date
of issue equals the specified investment increment factor, with premiums and
benefits determined accordingly under the terms of the policy, in cash values
and other nonforfeiture benefits at least equal to the minimum values required
by the Standard Nonforfeiture Law for a policy with such premiums and benefits.
The method of computation may disregard incidental minimum guarantees as to the
dollar amounts payable. Incidental minimum guarantees include, but are not
limited to, a guarantee which provides that the amount payable at death or
maturity shall be at least equal to the amount that would be payable if the net
investment return credited to the policy at all times from the date of issue is
equal to the specified investment increment factor.
     (4) A provision specifying the investment
increment factor to be used in computing the dollar amount of variable benefits
or other variable payments or values under the policy, and guaranteeing that
expense and mortality results will not adversely affect such dollar amounts. [1973
c.435 §18]
     743.231
“Profit-sharing policy” defined. “Profit-sharing policy” means:
     (1) A life insurance policy which by its
terms expressly provides that the policyholder will participate in the
distribution of earnings or surplus other than earnings or surplus
attributable, by reasonable and nondiscriminatory standards, to the
participating policies of the insurer and allocated to the policyholder on
reasonable and nondiscriminatory standards; or
     (2) A life insurance policy the provisions
of which, through sales material or oral presentations, are interpreted by the
insurer to prospective policyholders as entitling the policyholder to the
benefits described in subsection (1) of this section. [Formerly 739.705]
     743.234
“Charter policy” or “founders policy” defined. “Charter policy” or “founders policy” means:
     (1) A life insurance policy which by its
terms expressly provides that the policyholder will receive some preferential
or discriminatory advantage or benefit not available to persons who purchase
insurance from the insurer at future dates or under other circumstances; or
     (2) A life insurance policy the provisions
of which, through sales material or oral presentations, are interpreted by the
insurer to prospective policyholders as entitling the policyholder to the
benefits described in subsection (1) of this section. [Formerly 739.710]
     743.237
“Coupon policy” defined. “Coupon
policy” means a life insurance policy which provides a series of pure
endowments maturing periodically in amounts not exceeding the gross annual
policy premiums. The term “pure endowment” or “endowment” is used in its
accepted actuarial sense, meaning a benefit becoming payable at a specific
future date if the insured person is then living. [Formerly 739.715]
     743.240
Profit-sharing, charter or founders policies prohibited. No profit-sharing, charter or founders
policy shall be issued or delivered in this state. [Formerly 739.720]
     743.243
Restrictions on form of coupon policy. Coupon policies issued or delivered in this state shall be subject to
the following provisions:
     (1) No detachable coupons or certificates
or passbooks may be used. No other device may be used which tends to emphasize
the periodic endowment benefits or which tends to create the impression that
the endowments represent interest earnings or anything other than benefits
which have been purchased by part of the policyholderÂ’s premium payments.
     (2) Each endowment benefit must have a
fixed maturity date and payment of the endowment benefit shall not be
contingent upon the payment of any premium becoming due on or after such
maturity date.
     (3) The endowment benefits must be
expressed in dollar amounts rather than as percentages of other quantities or
in other ways, both in the policy itself and in the sale thereof.
     (4) A separate premium for the periodic
endowment benefits must be shown in the policy adjacent to the rest of the
policy premium information and must be given the same emphasis in the policy
and in the sale thereof as that given the rest of the policy premium
information. This premium shall be calculated with mortality, interest and
expense factors which are consistent with those for the basic policy premium. [1967
c.359 §403]
     743.245
Variable life insurance policy provisions. A variable life insurance policy shall contain a provision stating the
essential features of the procedures to be followed by the insurer in
determining benefits thereunder. Such a policy, and any certificate evidencing
such a policy, shall contain on its first page a clear and prominent statement
to the effect that benefits thereunder are variable. [1973 c.435 §14]
     743.247
Notice to variable life insurance policyholders. An insurer issuing individual variable life
insurance policies shall mail to each policyholder at least once in each policy
year after the first, at the last address of the policyholder known to the
insurer:
     (1) A statement reporting the investments
held in the applicable separate account.
     (2) A statement reporting as of a date not
more than four months preceding the date of mailing:
     (a) In the case of an annuity policy under
which payments have not yet commenced, the number of accumulation units
credited to such policy and the dollar value of a unit, or the value of the
policyholderÂ’s account; and
     (b) In the case of a life insurance
policy, the dollar amount of the death benefit. [1973 c.435 §15]
(Individual
Annuity and Pure Endowment Policies)
     743.252
Scope of ORS 743.255 to 743.273. ORS 743.255 to 743.273 apply only to annuity and pure endowment
policies, other than reversionary annuity policies except as provided in ORS
743.273, and other than group annuity policies, and shall not apply to
reversionary or deferred annuity benefits included in life insurance policies.
Such sections apply to such policies that are variable annuity policies, except
to the extent the provisions of such sections are obviously inapplicable to
variable annuities or are in conflict with other provisions of such sections
that are expressly applicable to variable annuities. [1967 c.359 §404; 1973
c.435 §19]
     743.255
Grace period for annuities.
An annuity or pure endowment policy shall contain a provision that there shall
be a period of grace of one month, but not less than 30 days, within which any
stipulated payment to the insurer falling due after the first such payment may
be made, subject at the option of the insurer to an interest charge thereon at
the rate specified in the policy but not exceeding six percent per annum for
the number of days of grace elapsing before such payment, during which period
of grace the policy shall continue in full force. In case a claim arises under
the policy on account of death prior to expiration of the period of grace
before the overdue payment to the insurer or the deferred payments of the
current policy year, if any, are made, the amount of such payments, with
interest on any overdue payments, may be deducted from any amount payable under
the policy in settlement. [1967 c.359 §405]
     743.258
Incontestability. If any
statement other than those relating to age, sex and identity are required as a
condition to issuing an annuity or pure endowment policy, the policy shall
contain a provision that the policy shall be incontestable after it has been in
force during the lifetime of the person or of each of the persons as to whom
such statements are required, for a period of two years from its date of issue,
except for nonpayment of stipulated payments to the insurer. At the option of
the insurer the two year limit within which the policy may be contested shall
not apply to any provisions relative to benefits in the event of disability and
any provisions which grant insurance specifically against death by accident or
accidental means. [1967 c.359 §406]
     743.261
Entire contract. An annuity
or pure endowment policy shall contain a provision that the policy, including a
copy of the application if indorsed upon or attached to the policy when issued,
shall constitute the entire contract between the parties. [1967 c.359 §407]
     743.264
Misstatement of age or sex.
An annuity or pure endowment policy shall contain a provision that if the age
or sex of the person or persons upon whose life or lives the policy is made, or
of any of them, has been misstated, the amount payable or benefits accruing
under the policy shall be such as the stipulated payment or payments to the
insurer would have purchased according to the correct age or sex, and that if
the insurer has made any overpayment or overpayments on account of any such misstatement,
the amount thereof with interest at the rate specified in the policy but not
exceeding six percent per annum may be charged against the current or next
succeeding payment or payments to be made by the insurer under the policy. [1967
c.359 §408]
     743.267
Dividends. If an annuity or
pure endowment policy is participating, it shall contain a provision that the
insurer shall annually ascertain and apportion any divisible surplus accruing
on the policy. [1967 c.359 §409]
     743.268
Advancement of policy loans.
(1) An insurer may advance a policy loan equal to or less than the loan value
of an annuity policy or a pure endowment policy if:
     (a) The policy premium is not in default
beyond the grace period for payment;
     (b) The insured has properly assigned or
pledged the policy on the sole security thereof; and
     (c) The interest rate provision complies
with ORS 743.187 and does not exceed the maximum interest rate permitted by the
policy loan provision.
     (2) An insurer may establish a minimum
loan amount that may not exceed $1,000.
     (3) Except as provided in subsection (4)
of this section, the loan value of the policy shall be equal to the cash
surrender value of the policy, less any existing indebtedness and interest due
that is not already deducted in determining the cash surrender value, plus any
interest then accrued but not credited.
     (4) Subsection (3) of this section does
not apply to a policy for which the loan value is established by federal law.
When the loan value is established by federal law, the policy shall indicate
the loan value as a dollar amount, a percentage of the cash surrender value or
a combination of both.
     (5) Except as provided in ORS 743.187, if
the total indebtedness on the policy, including interest due or accrued, equals
or exceeds the amount of the loan value of the policy, the policy shall
terminate and become void upon 30 daysÂ’ notice by the insurer mailed to the
last-known address of the insured or other policy owner and of any assignee of
record at the home office of the insurer. However, if there is any remaining
cash surrender value under the policy after deducting the total indebtedness on
the policy, an insurer may not terminate the policy.
     (6) A insurer may provide for automatic
premium loans in an annuity policy or a pure endowment policy.
     (7) An annuity policy or a pure endowment
policy may reserve to the insurer the right to defer the granting of a loan,
other than for payment of any premium to the insurer, for six months after
application for the loan if the insurer makes a written request to and receives
written approval from the chief insurance regulator of the state of domicile of
the insurer prior to exercising a deferral. [2005 c.185 §5]
     743.269
Periodic payments for period certain. An annuity policy meeting the requirements of this section may provide
that periodic payments shall be made under the policy for a period certain.
Payments under such a policy shall begin on a date less than 13 months after
the date on which the insurer issues the policy. The policy shall provide that
payments will be made for a period of five years or more. The periodic payments
may be fixed or variable in amount. If such policy offers commuted values on
the annuity, such values must be based on an interest rate not more than one percent
in excess of the interest rates that were used in determining the payments when
the annuity was purchased. [1995 c.632 §2]
     743.270
Reinstatement. An annuity or
pure endowment policy shall contain a provision that the policy may be
reinstated at any time within one year from a default in making stipulated
payments to the insurer, unless the cash surrender value has been paid, but all
overdue stipulated payments and any indebtedness to the insurer on the policy
shall be paid or reinstated with interest at the rate specified in the policy
but not exceeding six percent per annum, and in cases where applicable the
insurer may also include a requirement of evidence of insurability satisfactory
to the insurer. [1967 c.359 §410]
     743.271
Periodic stipulated payments on variable annuities. A variable annuity policy requiring periodic
stipulated payments to the insurer shall contain in substance the following
provisions:
     (1) A provision that there will be a
period of grace of 30 days within which any stipulated payment to the insurer
after the first may be made, during which period of grace the policy will
continue in full force. The policy may include a statement of the basis for
determining the date as of which any such payment received during the period of
grace will be applied.
     (2) A provision that, at any time within
one year from the date of a default in making periodic stipulated payments to
the insurer during the life of the annuitant, and unless the cash surrender
value has been paid, the policy may be reinstated upon payment to the insurer
of the overdue payments and all indebtedness to the insurer on the policy, with
interest. The policy may include a statement of the basis for determining the
date as of which the amount to cover such overdue payments and indebtedness
will be applied.
     (3) A provision specifying the options
available in the event of a default in a periodic stipulated payment. Such
options may include an option to surrender the policy for a cash value as
determined by the policy, and shall include an option to receive a paid-up
annuity if the policy is not surrendered for cash, the amount of the paid-up
annuity being determined by applying the value of the policy at the annuity
commencement date in accordance with the terms of the policy. [1973 c.435 §21]
     743.272
Computing benefits. (1) A
variable annuity policy shall specify the investment increment factors to be
used in computing the dollar amount of variable benefits or other variable
payments or values under the policy, and may guarantee that expense or
mortality results or both will not adversely affect such dollar amounts. In the
case of an individual variable annuity policy under which the expense or
mortality results may adversely affect the dollar amount of benefits, the
expense and mortality factors shall be correspondingly specified in the policy.
“Expense” as used in this subsection may exclude some or all taxes, as
specified in the policy.
     (2) In computing the dollar amount of
variable benefits or other policy payments or values:
     (a) The annual net investment increment
assumption shall not exceed five percent, except with the approval of the
Director of the Department of Consumer and Business Services; and
     (b) To the extent that the level of
benefits may be affected by future mortality results, the mortality factor
shall be determined from the Annuity Mortality Table for 1949, Ultimate, or any
modification of that table not having a lower life expectancy at any age or, if
approved by the director, from another table. [1973 c.435 §22]
     743.273
Standard provisions of reversionary annuities. A policy of reversionary annuity shall
contain in substance the following provisions:
     (1) The provisions specified in ORS
743.255 to 743.267, except that under ORS 743.255 the insurer may at its option
provide for an equitable reduction of the amount of the annuity payments in
settlement of an overdue payment in lieu of providing for deduction of the
overdue payment from an amount payable upon settlement under the policy.
     (2) A provision that the policy may be
reinstated at any time within three years from the date of default in making
stipulated payments to the insurer, upon production of evidence of insurability
satisfactory to the insurer, and upon the condition that all overdue payments and
any indebtedness to the insurer on account of the policy be paid or reinstated
with interest at the rate specified in the policy but not exceeding six percent
per annum. [1967 c.359 §411]
     743.275
Standard Nonforfeiture Law for Individual Deferred Annuities; application. (1) ORS 743.275 to 743.295 may be cited as
the Standard Nonforfeiture Law for Individual Deferred Annuities.
     (2) The Standard Nonforfeiture Law for
Individual Deferred Annuities does not apply to:
     (a) Reinsurance.
     (b) A group annuity policy purchased under
a retirement or deferred compensation plan established or maintained by an
employer, including a partnership or sole proprietorship, or by an employee
organization, or by both. This exclusion does not apply, however, to a plan providing
individual retirement accounts or individual retirement annuities under section
408 of the federal Internal Revenue Code.
     (c) A premium deposit fund.
     (d) A variable annuity policy.
     (e) An investment annuity policy.
     (f) An immediate annuity policy.
     (g) A deferred annuity policy after
annuity payments have commenced.
     (h) A reversionary annuity.
     (i) A policy delivered outside this state
through an agent or other representative of the insurer issuing the policy. [1977
c.320 §2; 2003 c.370 §1]
     743.278
Required provisions in annuity policies; exception. (1) An annuity policy shall contain in
substance the following provisions, or corresponding provisions that in the
opinion of the Director of the Department of Consumer and Business Services are
at least as favorable to the policyholder:
     (a) That upon the termination of
considerations under the policy, or upon the written request of the
policyholder, the insurer shall grant a paid-up annuity benefit on a plan
stipulated in the policy, of the value specified in ORS 743.284 and 743.287.
     (b) That, if the policy provides for a
lump sum settlement at maturity or any other time, the insurer shall pay upon
surrender of the policy on or before the start of annuity payments, in lieu of
a paid-up annuity benefit, a cash surrender benefit of the amount specified in
ORS 743.284 and 743.287. The insurer may reserve the right to defer the payment
of the cash surrender benefit for a period not to exceed six months after
demand therefor with surrender of the policy, if the insurer makes a written
request and receives written approval from the director. The request shall
address the necessity and equitability to all policyholders of the deferral.
     (c) A statement of the mortality table, if
any, and interest rates used in calculating any minimum guaranteed paid-up
annuity, cash surrender or death benefits that are guaranteed under the policy,
together with sufficient information to determine the amount of the benefits.
     (d) A statement that any paid-up annuity,
cash surrender or death benefits available under the policy are not less than
the minimum benefits required by any statute of the state in which the policy
is delivered and an explanation of the manner in which the benefits are altered
by the existence of any additional amounts credited by the insurer to the
policy, any indebtedness to the insurer on the policy or any prior withdrawals
from or partial surrenders of the policy.
     (2) Notwithstanding subsection (1) of this
section, a deferred annuity policy may provide that if no considerations have
been received for two full years and the portion of the paid-up annuity benefit
at maturity on the plan stipulated in the policy arising from prior
considerations paid would be less than $20 monthly, the insurer at its option
may terminate the policy by payment in cash of the then present value of the
portion of the paid-up annuity benefit. The value shall be calculated on the
basis of the mortality table, if any, and the interest rate specified in the
policy for determining the paid-up annuity benefit. By this payment the insurer
shall be relieved of further obligations under the policy. [1977 c.320 §3; 2003
c.370 §2]
     743.281
[1977 c.320 §4; repealed by
2003 c.370 §9]
     743.284
Computation of benefits. (1)
Any paid-up annuity benefit available under an annuity policy shall be such
that its present value on the date annuity payments are to commence is at least
equal to the minimum nonforfeiture amount on that date. The present value shall
be computed using the mortality table, if any, and the interest rate specified
in the policy for determining the minimum paid-up annuity benefits guaranteed
in the policy.
     (2) For annuity policies that provide cash
surrender benefits, the cash surrender benefits available prior to maturity shall
not be less than the present value as of the date of surrender of the portion
of the policy maturity value of the paid-up annuity benefit that would be
provided under the policy at maturity arising from considerations paid prior to
the time of cash surrender, reduced by appropriate amounts reflecting any
previous withdrawals from or partial surrenders of the policy. The present
value shall be calculated using an interest rate not more than one percent
higher than the interest rate specified in the policy for accumulating the net
considerations to determine maturity value, shall be decreased by the amount of
any indebtedness to the insurer on the policy, including interest due and
accrued, and shall be increased by any existing additional amounts credited by
the insurer to the policy. In no event shall the cash surrender benefit be less
than the minimum nonforfeiture amount on the date of surrender. The death
benefit under an annuity policy that provides cash surrender benefits shall be
at least equal to the cash surrender benefit.
     (3) For annuity policies that do not
provide cash surrender benefits, the present value of the paid-up annuity
benefit available as a nonforfeiture option at any time prior to maturity may
not be less than the present value of the portion of the maturity value of the
paid-up annuity benefits provided under the policy arising from considerations
paid before the policy is surrendered in exchange for, or changed to, a
deferred paid-up annuity. The present value shall be calculated for the period
prior to the maturity date on the basis of the interest rate specified in the
policy for accumulating the net considerations to determine the value, and
shall be increased by any additional amounts credited by the insurer to the
policy. For annuity policies that do not provide any death benefits before
annuity payments start, present values shall be calculated on the basis of such
interest rate and the mortality table specified in the policy for determining
the maturity value of paid-up annuity benefit. In no event, however, shall the
present value of a paid-up annuity benefit be less than the minimum
nonforfeiture amount at that time. [1977 c.320 §5; 2003 c.370 §5]
     743.287
Commencement of annuity payments at optional maturity dates; calculation of
benefits. (1) For the
purpose of determining the benefits calculated under ORS 743.284 (2) and (3) in
the case of annuity policies under which an election may be made to have
annuity payments commence at optional maturity dates, the maturity date shall
be considered to be the latest date for which such election is permitted by the
policy, but not later than the policy anniversary next following the annuitantÂ’s
70th birthday or the 10th anniversary of the policy, whichever is later.
     (2) Any paid-up annuity, cash surrender or
death benefits available at any time, other than on the policy anniversary of a
policy with fixed scheduled considerations, shall be calculated with allowance
for the lapse of time and the payment of any scheduled considerations beyond
the start of the policy year in which termination of considerations occurs. [1977
c.320 §6; 2003 c.370 §6]
     743.290
Notice of nonpayment of certain benefits to be included in annuity policy. An annuity policy that does not provide cash
surrender benefits or does not provide death benefits at least equal to the
minimum nonforfeiture amount prior to the start of annuity payments shall
include a statement in a prominent place in the policy that the benefits are
not provided. [1977 c.320 §7; 2003 c.370 §7]
     743.293
Minimum forfeiture amounts for annuity policies; rules. (1) The minimum values as specified in ORS
743.284 and 743.287 of any paid-up annuity, cash surrender or death benefits
available under an annuity policy shall be based on minimum nonforfeiture
amounts as described in this section.
     (2) The minimum nonforfeiture amount at or
prior to the commencement of any annuity payments shall be equal to an
accumulation up to that time at rates of interest as indicated in subsection
(4) of this section of the net considerations previously paid, decreased by the
sum of the following:
     (a) Any prior withdrawals from or partial
surrenders of the contract accumulated at rates of interest as indicated in
subsection (4) of this section;
     (b) An annual contract charge of $50,
accumulated at rates of interest as indicated in subsection (4) of this
section;
     (c) Any premium tax paid by the insurer
for the policy, accumulated at rates of interest as indicated in subsection (4)
of this section; and
     (d) The amount of any indebtedness to the
insurer on the policy, including interest due and accrued.
     (3) For purposes of subsection (2) of this
section, the net considerations for a given policy year used to define the
minimum nonforfeiture amount shall be an amount equal to 87.5 percent of the
gross considerations credited to the policy during that policy year.
     (4)(a) The interest rate used in
determining minimum nonforfeiture amounts shall be an annual rate of interest
determined as the lesser of three percent per annum and the rate established
under paragraph (b) of this subsection. The rates established shall be
specified in the policy if the interest rate is reset.
     (b) The following provisions apply to the
rate:
     (A) The rate shall be the five-year
constant maturity treasury rate reported by the Federal Reserve as of a date
certain or an average over a period, rounded to the nearest one-twentieth of
one percent, that is specified in the policy and that is no longer than 15
months prior to the policy issue date or redetermination date under paragraph
(c) of this subsection, reduced by 125 basis points.
     (B) The resulting interest rate under
subparagraph (A) of this paragraph may not be less than one percent.
     (c) The interest rate shall apply to an
initial period and may be redetermined for additional periods. The
redetermination date, basis and period, if any, shall be stated in the policy.
The basis is the date certain or an average over a specified period that
produces the value of the five-year constant maturity treasury rate to be used
at each redetermination date.
     (5) During the period or term that a
policy provides substantive participation in an equity indexed benefit, it may
increase the reduction described in subsection (4)(b) of this section by up to
an additional 100 basis points to reflect the value of the equity index
benefit. The present value on the policy issue date and at each redetermination
date thereafter, may not exceed the market value of the benefit. The Director
of the Department of Consumer and Business Services may require a demonstration
that the present value of the additional reduction does not exceed the market
value of the benefit. If a demonstration is not acceptable to the director, the
director may disallow or limit the additional reduction.
     (6) The director may adopt rules to
implement subsection (5) of this section and to provide for further adjustments
to the calculation of minimum nonforfeiture amounts for policies that provide
substantive participation in an equity index benefit and for other policies
that the director determines justify an adjustment. [2003 c.370 §4]
     743.295
Effect of certain life insurance and disability benefits on minimum
nonforfeiture amounts. (1)
For an annuity policy that includes, by rider or supplemental contract
provision, both annuity benefits and life insurance benefits that exceed the
greater of cash surrender benefits or a return of the gross considerations with
interest, the minimum nonforfeiture benefits shall equal the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum nonforfeiture
benefits, if any, for the life insurance portion, computed as if each portion
were a separate policy.
     (2) Notwithstanding ORS 743.284 and
743.287, additional benefits payable in the event of total and permanent
disability, as reversionary annuity or deferred reversionary annuity benefits,
or as other policy benefits additional to life insurance, endowment and annuity
benefits, and considerations for all such additional benefits, shall be disregarded
in ascertaining the minimum nonforfeiture amounts and paid-up annuity, cash
surrender and death benefits required by the Standard Nonforfeiture Law for
Individual Deferred Annuities. The inclusion of such benefits may not be
required in any paid-up benefits unless the additional benefits would
separately require minimum nonforfeiture amounts and paid-up annuity, cash
surrender and death benefits. [1977 c.320 §8; 2003 c.370 §8]
GROUP LIFE
INSURANCE
     743.303
Requirements for issuance of group life insurance policies. Policies of group life insurance are subject
to the following requirements:
     (1) The policy shall be issued upon the
lives of persons who are associated in a common group formed for purposes other
than the obtaining of insurance, except that either of the following kinds of
policies may be issued to persons other than those in a common group:
     (a) Group policies of credit life
insurance; or
     (b) Group policies of mortgage life
insurance on first and second mortgages secured by real estate.
     (2) No fewer than two lives are insured at
the date of issue of the policy.
     (3) The amounts of insurance under the
policy shall be based on some plan precluding individual selection, except that
optional supplemental insurance may be available to persons insured under the
policy, if the amounts of such supplemental insurance are based upon age,
salary, rank or similar objective standards.
     (4) The premium for the policy must be
paid from the funds of the group policyholder or from funds contributed by
persons insured under the policy, or from both sources.
     (5) For the purposes of this section, the
term “mortgage” includes trust deeds.
     (6) As used in this section, “trust deed”
has the meaning given in ORS 86.705. [1967 c.359 §412; 1971 c.231 §44; 1991
c.182 §4; 1993 c.426 §1; 2007 c.560 §2]
     743.306
Required provisions in group life insurance policies. (1) Except as provided in subsection (2) of
this section a group life insurance policy shall contain in substance the
provisions described in ORS 743.309 to 743.342.
     (2) The provisions described in ORS
743.327 to 743.339 shall not apply to policies of group credit life insurance. [1967
c.359 §413]
     743.309
Nonforfeiture provisions. If
a group life insurance policy is on a plan of insurance other than the term
plan, it shall contain nonforfeiture provision or provisions which in the
opinion of the Director of the Department of Consumer and Business Services are
equitable to the insured persons and to the policyholder, but nothing in this
section shall be construed to require that group life insurance policies
contain the same nonforfeiture provisions as are required for individual life
insurance policies. [1967 c.359 §414]
     743.312
Grace period. A group life
insurance policy shall contain a provision that the policyholder is entitled to
a grace period of 31 days for the payment of any premium due except the first,
during which grace period the death benefit coverage shall continue in force,
unless the policyholder shall have given the insurer written notice of
discontinuance in advance of the date of discontinuance and in accordance with
the terms of the policy. The policy may provide that the policyholder shall be
liable to the insurer for the payment of a pro rata premium for the time the
policy was in force during such grace period. [1967 c.359 §415]
     743.315
Incontestability. A group
life insurance policy shall contain a provision that the validity of the policy
shall not be contested, except for nonpayment of premiums, after it has been in
force for two years from its date of issue; and that no statement made by any
person insured under the policy relating to the insurability of the person
shall be used in contesting the validity of the insurance with respect to which
such statement was made after such insurance has been in force prior to the
contest for a period of two years during such personÂ’s lifetime nor unless it
is contained in a written instrument signed by the person. [1967 c.359 §416]
     743.318
Application; representations by policyholders and insureds. A group life insurance policy shall contain
a provision that a copy of the application, if any, of the policyholder shall
be attached to the policy when issued, that all statements made by the
policyholder or by the persons insured shall be deemed representations and not
warranties, and that no statement made by any person insured shall be used in
any contest unless a copy of the instrument containing the statement is or has
been furnished to such person or the beneficiary of the person. [1967 c.359 §417]
     743.321
Evidence of insurability. A
group life insurance policy shall contain a provision setting forth the
conditions, if any, under which the insurer reserves the right to require a
person eligible for insurance to furnish evidence of individual insurability
satisfactory to the insurer as a condition to part or all of the coverage. [1967
c.359 §418]
     743.324
Misstatement of age. A group
life insurance policy shall contain a provision specifying an equitable
adjustment of premiums or of benefits or of both to be made in the event the
age of a person insured has been misstated, such provision to contain a clear
statement of the method of adjustment to be used. [1967 c.359 §419]
     743.327
Payments under policy; payment of interest upon failure to pay proceeds. (1) A group life insurance policy shall
contain a provision that any sum becoming due by reason of the death of a
person insured shall be payable to the beneficiary designated by the person
insured, subject to the provisions of the policy in the event there is no
designated beneficiary, as to all or any part of such sum, living at the death
of the person insured, and subject to any right reserved by the insurer in the
policy and set forth in the certificate to pay at its option a part of such sum
not exceeding $500 to any person appearing to the insurer to be equitably
entitled thereto by reason of having incurred funeral or other expenses
incident to the last illness or death of the person insured.
     (2) If the insurer fails to pay the proceeds
of or make payment under the policy within 30 days after receipt of due proof
of death and of the interest of the claimant, and if the beneficiary elects to
receive a lump sum settlement, the insurer shall pay interest on any money due
and unpaid after expiration of the 30-day period. The insurer shall compute the
interest from the date of the insuredÂ’s death until the date of payment, at a
rate not lower than that paid by the insurer on other withdrawable policy owner
funds. At the end of the 30-day period, the insurer shall notify the designated
beneficiary or beneficiaries at their last-known address that interest at the
applicable rate will be paid on the lump sum proceeds from the date of death of
the insured.
     (3) Nothing in this section shall be construed
to allow an insurer to withhold payment of money payable under a group life
insurance policy to any designated beneficiary for a period longer than
reasonably necessary to transmit the payment. [1967 c.359 §420; 1983 c.754 §3]
     743.330
Issuance of certificates. A
group life insurance policy shall contain a provision that the insurer will
issue to the policyholder for delivery to each person insured an individual
certificate setting forth a statement as to the insurance protection to which
the person is entitled, to whom the insurance benefits are payable, and the
rights and conditions set forth in ORS 743.333, 743.336 and 743.339. [1967
c.359 §421]
     743.333
Termination of individual coverage. A group life insurance policy shall contain a provision that if the
insurance, or any portion of it, on a person covered under the policy ceases
because of termination of employment or of membership in the class or classes
eligible for coverage under the policy, such person shall be entitled to have
issued by the insurer, without evidence of insurability, an individual policy
of life insurance without disability or other supplementary benefits, provided
application for the individual policy shall be made, and the first premium paid
to the insurer, within 31 days after such termination, and provided further
that:
     (1) The individual policy shall, at the
option of such person, be on any one of the forms, except term insurance, then
customarily issued by the insurer at the age and for the amount applied for;
     (2) The individual policy shall be in an
amount not in excess of the amount of life insurance which ceases because of
such termination, less the amount of any life insurance for which such person
is or becomes eligible under the same or any other group policy within 31 days
after such termination, provided that any amount of insurance which shall have
matured on or before the date of such termination as an endowment payable to
the person insured, whether in one sum or in installments or in the form of an
annuity, shall not, for the purposes of this provision, be included in the
amount which is considered to cease because of such termination; and
     (3) The premium on the individual policy
shall be at the insurerÂ’s then customary rate applicable to the form and amount
of the individual policy, to the class of risk to which such person then
belongs, and to the age attained on the effective date of the individual
policy. [1967 c.359 §422]
     743.336
Termination of policy or class of insured persons. A group life insurance policy shall contain
a provision that if the group policy terminates or is amended so as to
terminate the insurance of any class of insured persons, every person insured
thereunder at the date of such termination whose insurance terminates and who
has been so insured for at least five years prior to such termination date
shall be entitled to have issued by the insurer an individual policy of life
insurance, subject to the same conditions and limitations as are provided by
ORS 743.333, except that the group policy may provide that the amount of such
individual policy shall not exceed the smaller of:
     (1) The amount of the person’s life
insurance protection ceasing because of the termination or amendment of the
group policy, less the amount of any life insurance for which the person is or
becomes eligible under any group policy issued or reinstated by the same or
another insurer within 31 days after such termination; and
     (2) $10,000. [1967 c.359 §423; 1989 c.784 §16]
     743.339
Death during period for conversion to individual policy. A group life insurance policy shall contain
a provision that if a person insured under the group policy dies during the
period within which the person would have been entitled to have an individual
policy issued in accordance with ORS 743.333 or 743.336 and before such an
individual policy shall have become effective, the amount of life insurance
which the person would have been entitled to have issued under such individual
policy shall be payable as a claim under the group policy, whether or not
application for the individual policy or the payment of the first premium
therefor has been made. [1967 c.359 §424]
     743.342
Statement furnished to insured under credit life insurance policy. A group credit life insurance policy shall
contain a provision that the insurer will furnish to the policyholder for
delivery to each debtor insured under the policy a form which will contain a
statement that the life of the debtor is insured under the policy and that any
death benefit paid thereunder by reason of death shall be applied to reduce or
extinguish the indebtedness. [1967 c.359 §425]
     743.345
Assignability of group life policies. Nothing in the Insurance Code or in any other law shall be construed
to prohibit any person insured under a group life insurance policy from making
an assignment of all or any part of the incidents of ownership under such
policy, including but not limited to the privilege to have issued an individual
policy of life insurance pursuant to the provisions of ORS 743.333 to 743.339
and the right to name a beneficiary. Subject to the terms of the policy or an
agreement between the insured, the group policyholder and the insurer relating
to assignment of incidents of ownership under the policy, such an assignment by
an insured is valid for the purpose of vesting in the assignee, in accordance
with any provisions included in the assignment as to the time at which it is to
be effective, all of such incidents of ownership so assigned, but without
prejudice to the insurer on account of any payment it may make, or individual
policy it may issue in accordance with ORS 743.333 to 743.339, prior to receipt
of notice of the assignment. [1971 c.231 §6; 2005 c.22 §491]
     743.348
Certain sales practices prohibited. (1) No person selling group life insurance is authorized to sell
membership in a common group for the purpose of qualifying an applicant who is
an individual for group life insurance.
     (2) No person selling membership in a
common group is authorized to offer group life insurance for the purpose of
selling membership in the common group. [1989 c.784 §6]
     743.350 [1979 c.708 §2; renumbered 743.100 in 1989]
     743.351
Eligibility of association to be group life policyholder; rules. (1) An insurer shall not offer a policy of
group life insurance in this state to an association as the policyholder or
offer coverage under such a policy, whether the policy is issued in this or
another state, unless the Director of the Department of Consumer and Business
Services determines that the association satisfies the following requirements:
     (a) The association must have had an
active existence for at least one year;
     (b) The association must insure under the
policy the employees or members of the association, or employees of members of
the association, for the benefit of persons other than the association or its
officers or trustees; and
     (c) The association must be maintained
primarily for purposes other than the procurement of insurance.
     (2) An insurer shall submit evidence to
the director that the association satisfies the requirements of subsection (1)
of this section. The director shall review the evidence and may request
additional evidence as needed.
     (3) An insurer shall submit to the
director any changes in the evidence submitted under subsection (2) of this
section.
     (4) The director may order an insurer to
cease offering group life insurance to an association if the director
determines that the association does not meet the requirements under subsection
(1) of this section.
     (5) For purposes of this section:
     (a) An association includes a labor union.
     (b) “Employees” may include retired
employees.
     (6) The director may adopt rules to carry
out this section. [1989 c.784 §7]
     743.353 [1979 c.708 §3; renumbered 743.101 in 1989]
     743.354
Requirements for certain group life policies issued to trustees of certain
funds; rules. (1) An insurer
shall not offer in this state a policy of group life insurance that is
described in this section and insures persons in this state, or shall not offer
coverage under such a policy, whether the policy is to be issued in this or
another state, unless the Director of the Department of Consumer and Business
Services determines that the requirements of subsections (2) and (3) of this
section are satisfied. This section applies to a policy to be issued to the
trustees of a fund established for:
     (a) Two or more employers in the same or
related industry;
     (b) One or more labor unions;
     (c) One or more employers and one or more
labor unions; or
     (d) An association determined by the
director to satisfy the requirements of ORS 743.351 (1).
     (2) A policy of group life insurance shall
provide coverage for the benefit of employees of the employers, members of the
unions or members of the association. The policy may include as employees the
officers and managers of the employer, and the individual proprietor or
partners if the employer is an individual proprietor or a partnership. In
addition to such employees, the policy may also insure retired employees and
the trustees or their employees, or both, if their duties are principally
connected with the trust.
     (3) The director shall determine with
respect to a policy whether the trustees are the policyholder. If the director
determines that the trustees are the policyholder and if the policy is issued
or proposed to be issued in this state, the policy is subject to the Insurance
Code. If the director determines that the trustees are not the policyholder,
the evidence of coverage that is issued or proposed to be issued in this state
to a participating employer, labor union or association shall be deemed to be a
group life insurance policy subject to the Insurance Code. For purposes of this
section, the director may determine that the trustees are not the policyholder
if:
     (a) The evidence of coverage issued or
proposed to be issued to a participating employer, labor union or association
is in fact the primary statement of coverage for the employer, labor union or
association; and
     (b) The trust arrangement is under the
actual control of the insurer.
     (4) An insurer shall submit evidence to
the director showing that the requirements of subsections (2) and (3) of this
section are satisfied. The director shall review the evidence and may request
additional evidence as needed.
     (5) An insurer shall submit to the
director any changes in the evidence submitted under subsection (4) of this
section.
     (6) The director may adopt rules to carry
out this section. [1989 c.784 §8]
     743.356
Continuing coverage upon replacement of group life policy. When coverage under a group life insurance
policy is replaced by coverage under another group life insurance policy, the
insurer offering the policy that is replaced shall continue to provide coverage
for each certificate holder under the replaced policy whose premium payments
are suspended because the certificate holder is disabled. [1989 c.784 §9]
     Note: 743.356 was enacted into law by the
Legislative Assembly but was not added to or made a part of ORS chapter 743 or
any series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.
     743.357 [1979 c.708 §4; renumbered 743.103 in 1989]
     743.358
Borrowing by certificate holders under group life policy. (1) An insurer of a group life insurance
policy may authorize certificate holders under the policy to borrow upon the
policy, subject to the following provisions:
     (a) The insurer may require a certificate
holder, in order to borrow on the policy, to have been a certificate holder
under the policy for a minimum period specified by the insurer.
     (b) The insurer may require that no
premium on the policy be in default beyond the grace period for payment.
     (2) An insurer authorizing a certificate
holder under a group life insurance policy may establish a minimum loan amount,
but the amount may not exceed $1,000.
     (3) An insurer may charge a fixed interest
rate not exceeding eight percent per year, or an adjustable interest rate. The
policy provision establishing an adjustable interest rate must comply with ORS
743.187. The exemption from a limitation on interest rates under state law
established in ORS 743.187 for individual life insurance policies also applies
to interest rates established pursuant to this section.
     (4) The loan value of a certificate shall
be equal to 90 percent of the cash surrender value of the certificate at the
time of the loan, less any existing indebtedness not already deducted,
including any unpaid interest. This subsection does not apply to certificates
issued under a group policy for which the loan value is established by federal
law. [1991 c.182 §9]
     743.360
Alternative group life insurance coverage. (1) Group life insurance coverage offered to a resident in this state
under a group life insurance policy issued to a group other than one described
in ORS 743.351 or 743.354 may be delivered if:
     (a) The Director of the Department of
Consumer and Business Services finds that:
     (A) The issuance of the policy is in the
best interest of the public;
     (B) The issuance of the policy would
result in economies of acquisition or administration; and
     (C) The benefits are reasonable in
relation to the premiums charged;
     (b) The premium for the policy is paid
either from funds of a policyholder, from funds contributed by a covered person
or from both; and
     (c) An insurer has the discretion to
exclude or limit coverage for a voluntary plan on any person for whom evidence
of individual insurability is not satisfactory to the insurer.
     (2) The requirements of ORS 743.303 do not
apply to a policy authorized under subsection (1) of this section. [2001 c.943 §3]
     743.362 [1979 c.708 §5; renumbered 743.104 in 1989]
     743.365 [1979 c.708 §6; renumbered 743.106 in 1989]
     743.368 [1979 c.708 §7; renumbered 743.107 in 1989]
     743.370 [1979 c.708 §8; renumbered 743.109 in 1989]
CREDIT LIFE
AND CREDIT HEALTH INSURANCE
     743.371
Definitions for credit life and credit health insurance provisions. (1) “Credit life insurance” means insurance
on the life of a debtor pursuant to or in connection with a specific loan or
other credit transaction.
     (2) “Credit health insurance” means
insurance on a debtor to provide indemnity for payments becoming due on a
specific loan or other credit transaction while the debtor is disabled as
defined in the policy.
     (3) “Creditor” means the lender of money
or vendor or lessor of goods, services, property, rights or privileges for
which payment is arranged through a credit transaction, or any successor to the
right, title or interest of any such lender, vendor or lessor, and an
affiliate, associate or subsidiary of any of them or any director, officer or
employee of any of them or any other person in any way associated with any of
them.
     (4) “Debtor” means a borrower of money or
a purchaser or lessee of goods, services, property, rights or privileges for
which payment is arranged through a credit transaction.
     (5) “Indebtedness” means the total amount
payable by a debtor to a creditor in connection with a loan or other credit
transaction. [Formerly 739.565 and then 743.561]
     743.372
Applicability of credit life and credit health insurance provisions. (1) All life or health insurance in
connection with loans or other credit transactions shall be subject to ORS
743.371 to 743.380, except:
     (a) Insurance in connection with a loan or
other credit transaction of more than 10 yearsÂ’ duration; or
     (b) Insurance, the issuance of which is an
isolated transaction on the part of the insurer not related to an agreement or
a plan for insuring debtors of the creditor.
     (2) Notwithstanding subsection (1) of this
section, credit life and credit health insurance may be issued for up to 10
years in connection with a loan or other credit transaction of any duration. [Formerly
739.570 and then 743.564]
     743.373
Forms of credit life and credit health insurance. Credit life and credit health insurance
shall be issued only in the following forms:
     (1) Individual policies of life insurance
issued to debtors on the term plan.
     (2) Individual policies of health
insurance issued to debtors on a term plan, or disability benefit provisions in
individual policies of credit life insurance.
     (3) Group policies of life insurance
issued to creditors providing insurance upon the lives of debtors on the term
plan.
     (4) Group policies of health insurance
issued to creditors on a term plan insuring debtors, or disability benefit
provisions in group credit life insurance policies. [Formerly 739.575 and then
743.567]
     743.374
Limits on amount of credit life insurance. (1) The initial amount of credit life insurance shall not exceed the
total amount repayable under the contract of indebtedness and, where an
indebtedness is repayable in substantially equal installments, the amount of
insurance shall at no time exceed the scheduled or actual amount of unpaid
indebtedness, whichever is greater.
     (2) Notwithstanding the provisions of
subsection (1) of this section, insurance on agricultural credit transaction
commitments not exceeding 18 months in duration may be written up to the amount
of the loan commitment, on a nondecreasing or level term plan.
     (3) Notwithstanding the provisions of
subsection (1) of this section, insurance on educational credit transaction
commitments may include the portion of such commitment that has not been
advanced by the creditor. [Formerly 743.570]
     743.375
Limit on amount of credit health insurance. The total amount of periodic indemnity payable by credit health
insurance in the event of disability, as defined in the policy, shall not
exceed the aggregate of the periodic scheduled unpaid installments of the
indebtedness; and the amount of each periodic indemnity payment shall not
exceed the original indebtedness divided by the number of periodic
installments. [Formerly 741.425 and then 743.573]
     743.376
Duration of credit life and credit health insurance. (1) The term of any credit life or credit
health insurance shall, subject to acceptance by the insurer, commence on the
date when the debtor becomes obligated to the creditor, except that, where a
group policy provides coverage with respect to existing obligations, the insurance
on a debtor with respect to such indebtedness shall commence on the effective
date of the policy. Where evidence of insurability is required and such
evidence is furnished more than 30 days after the date when the debtor becomes
obligated to the creditor, the term of the insurance may commence on the date
on which the insurer determines the evidence to be satisfactory, and in such
event there shall be an appropriate refund or adjustment of any charge to the
debtor for insurance.
     (2) The term of the insurance shall not
extend more than 15 days beyond the scheduled maturity date of the indebtedness
except when extended without additional cost to the debtor.
     (3) If the indebtedness is discharged
because of renewal or refinancing prior to the scheduled maturity date, the
insurance in force shall be terminated before any new insurance may be issued
in connection with the renewed or refinanced indebtedness.
     (4) In all cases of termination of the
insurance prior to the scheduled maturity date of the indebtedness, a refund
shall be paid or credited as provided in ORS 743.378. [Formerly 739.585 and
then 743.576]
     743.377
Credit life and credit health insurance policy or group certificate; contents;
delivery of policy, certificate or copy of application. (1) All credit life or credit health
insurance shall be evidenced by an individual policy or, in the case of group
insurance, by a certificate of insurance, which individual policy or group
certificate of insurance shall be delivered to the debtor.
     (2) Each individual policy or group
certificate of credit life or credit health insurance, or both shall, in
addition to other requirements of law, set forth:
     (a) The name and home-office address of
the insurer;
     (b) The name or names of the debtor, or in
the case of a certificate under a group policy, the identity by name or
otherwise of the debtor;
     (c) The premium or amount of payment by
the debtor separately for credit life insurance and for credit health
insurance;
     (d) A description of the coverage
including the amount and term thereof, and any exceptions, limitations and
restrictions; and
     (e) A statement that the benefits shall be
paid to the creditor to reduce or extinguish the unpaid indebtedness and,
wherever the amount of insurance may exceed the unpaid indebtedness, that any
such excess shall be payable to a beneficiary, other than the creditor, named
by the debtor or to the estate of the debtor.
     (3) Such individual policy or group
certificate of insurance shall be delivered to the insured debtor at the time
the indebtedness is incurred except as provided in subsection (4) of this
section.
     (4) If such individual policy or group
certificate of insurance is not delivered to the debtor at the time the
indebtedness is incurred, a copy of the application for insurance or a notice
of proposed insurance, signed by the debtor and setting forth the name and
home-office address of the insurer, the name or names of the debtor, the
premium or amount of payment by the debtor separately for credit life insurance
and for credit health insurance, and the amount, term and a brief description
of the coverage provided, shall be delivered to the debtor at the time the
indebtedness is incurred. The copy of the application for insurance or notice
of proposed insurance shall also refer exclusively to insurance coverage, and
shall be separate and apart from the loan, sale or other credit statement of
account, instrument or agreement, unless the information required by this
subsection is prominently set forth therein. Upon acceptance of the insurance
by the insurer and within 30 days of the date upon which the indebtedness is
incurred, the insurer shall cause the individual policy or group certificate of
insurance to be delivered to the debtor. The application for insurance or notice
of proposed insurance shall state that upon acceptance by the insurer, the
insurance shall become effective as provided in ORS 743.376.
     (5) If an insurer other than the named
insurer accepts the risk, then the debtor shall receive a policy or certificate
of insurance setting forth the name and home-office address of the substituted
insurer and the amount of the premium to be charged, and if the amount of
premium is less than that set forth in the notice of proposed insurance an
appropriate refund shall be made. [Formerly 739.590 and then 743.579]
     743.378
Charges and refunds to debtor.
(1) Each individual policy or group certificate of credit life or credit health
insurance, or both, shall provide that in the event of termination of the
insurance prior to the scheduled maturity date of the indebtedness, any refund
of an amount paid by the debtor for insurance shall be paid or credited
promptly to the person entitled thereto. However, the Director of the
Department of Consumer and Business Services shall prescribe a minimum refund
and no refund which would be less than such minimum need be made. The formula
to be used in computing such refund shall be filed with and approved by the
director.
     (2) If a creditor requires a debtor to
make any payment for credit life insurance or credit health insurance and an
individual policy or group certificate of insurance is not issued, the creditor
shall immediately give written notice to such debtor and shall promptly make an
appropriate credit to the account.
     (3) The amount charged to a debtor for
credit life insurance and for credit health insurance shall not exceed the
respective premiums charged by the insurer, as computed at the time the charge
to the debtor is determined. [Formerly 739.600 and then 743.582]
     743.379
Status of remuneration to creditor. Notwithstanding the provisions of any other law of this state which
may expressly or by construction provide otherwise, any commission or service
fee or other benefit or return to any creditor arising out of the sale or
provision of credit life and credit health insurance shall not be deemed
interest or charges in connection with loans or credit transactions. [Formerly
739.603 and then 743.585]
     743.380
Claim report and payment.
(1) All claims under policies of credit life or credit health insurance, or
both, shall be promptly reported to the insurer or its designated claim
representative and the insurer shall maintain adequate claim files. All claims
shall be settled as soon as possible and in accordance with the terms of the
policy.
     (2) All claims shall be paid either by
draft drawn upon the insurer or by check of the insurer to the order of the
claimant to whom payment is due pursuant to the policy provisions or, upon
direction of such claimant, to the one specified. [Formerly 739.610 and then
743.588]
HEALTH
INSURANCE
(Individual)
     743.402
Exceptions to individual health insurance policy requirements. Nothing in ORS 743.405 to 743.498, 743A.160
and 743A.164 shall apply to or affect:
     (1) Any workers’ compensation insurance
policy or any liability insurance policy with or without supplementary expense
coverage therein;
     (2) Any policy of reinsurance;
     (3) Any blanket or group policy of
insurance; or
     (4) Any life insurance policy, or policy
supplemental thereto which contains only such provisions relating to health
insurance as:
     (a) Provide additional benefits in case of
death or dismemberment or loss of sight by accident; or
     (b) Operate to safeguard such policy
against lapse, or to give a special surrender value or special benefit or an
annuity in the event the insured shall become totally and permanently disabled,
as defined by the policy or supplemental policy.
     (5) Coverage under ORS 735.600 to 735.650.
[Formerly 741.022; 2001 c.356 §5]
     743.405
General requirements. An
individual health insurance policy must meet the following requirements:
     (1) The entire money and other
considerations therefor shall be expressed therein.
     (2) The time at which the insurance takes
effect and terminates shall be expressed therein.
     (3) It shall purport to insure only one
person, except that a policy may insure, originally or by subsequent amendment,
upon the application of an adult member of a family who shall be deemed the
policyholder, any two or more eligible members of that family, including
husband, wife, dependent children or any children under a specified age which
shall not exceed 19 years and any other person dependent upon the policyholder.
     (4) The policy may not be issued
individually to an individual in a group of persons as described in ORS 743.522
for the purpose of separating the individual from health insurance benefits
offered or provided in connection with a group health benefit plan.
     (5) Except as provided in ORS 743.498, the
style, arrangement and overall appearance of the policy may not give undue
prominence to any portion of the text, and every printed portion of the text of
the policy and of any indorsements or attached papers shall be plainly printed
in lightfaced type of a style in general use, the size of which shall be
uniform and not less than 10 point with a lower case unspaced alphabet length
not less than 120 point. Captions shall be printed in not less than 12-point
type. As used in this subsection, “text” includes all printed matter except the
name and address of the insurer, name or title of the policy, the brief
description if any, and captions and subcaptions.
     (6) The exceptions and reductions of
indemnity must be set forth in the policy. Except those required by ORS 743.411
to 743.477, 743A.160 and 743A.164, exceptions and reductions shall be printed
at the insurerÂ’s option either included with the applicable benefit provision
or under an appropriate caption such as EXCEPTIONS, or EXCEPTIONS AND
REDUCTIONS. However, if an exception or reduction specifically applies only to
a particular benefit of the policy, a statement of the exception or reduction
must be included with the applicable benefit provision.
     (7) Each form constituting the policy,
including riders and indorsements, must be identified by a form number in the
lower left-hand corner of the first page of the policy.
     (8) The policy may not contain provisions
purporting to make any portion of the charter, rules, constitution or bylaws of
the insurer a part of the policy unless such portion is set forth in full in
the policy, except in the case of the incorporation of or reference to a
statement of rates or classification of risks, or short rate table filed with
the Director of the Department of Consumer and Business Services. [Formerly 741.120;
1999 c.987 §5]
     743.408
Mandatory provisions. Except
as provided in ORS 742.021, a health insurance policy shall contain the
provisions set forth in ORS 743.411 to 743.444 and 743A.160. Such provisions
shall be preceded individually by the caption appearing in such sections or, at
the option of the insurer, by such appropriate individual or group captions or
subcaptions as the Director of the Department of Consumer and Business Services
may approve. [1967 c.359 §428]
     743.411
Entire contract; changes. A
health insurance policy shall contain a provision as follows: “ENTIRE CONTRACT;
CHANGES: This policy, including the indorsements and the attached papers, if
any, constitutes the entire contract of insurance. No change in this policy
shall be valid until approved by an executive officer of the insurer and unless
such approval be indorsed hereon or attached hereto. No insurance producer has
authority to change this policy or to waive any of its provisions.” [1967 c.359
§429; 2003 c.364 §107]
     743.412 [1977 c.632 §2; 1981 c.319 §1; 2001 c.900 §230;
renumbered 743A.160 in 2007]
     743.414
Time limit on certain defenses; incontestability. (1) A health insurance policy shall contain
a provision as follows: “TIME LIMIT ON CERTAIN DEFENSES: After two years from
the date of issue of this policy no misstatements, except fraudulent
misstatements, made by the applicant in the application for such policy shall
be used to void the policy or to deny a claim for loss incurred or disability,
as defined in the policy, commencing after the expiration of that period.”
     (2) The policy provision set forth in
subsection (1) of this section shall not be so construed as to affect any legal
requirement for avoidance of a policy or denial of a claim during such initial
two-year period, or to limit the application of ORS 743.450 to 743.462 in the
event of misstatement with respect to age or occupation or other insurance.
     (3) A policy which the insured has the
right to continue in force subject to its terms by the timely payment of premium
until at least age 50 or, in the case of a policy issued after age 44, for at
least five years from its date of issue, may contain in lieu of the provision
set forth in subsection (1) of this section the following provision, from which
the clause in parentheses may be omitted at the insurer’s option: “INCONTESTABLE:
After this policy has been in force for a period of two years during the
lifetime of the insured (excluding any period during which the insured is
disabled), it shall become incontestable as to the statements contained in the
application.”
     (4) The policy shall contain a provision
as follows, which shall be a separate paragraph under the same caption as, and
immediately following, the provision set forth in subsection (1) or (3) of this
section: “No claim for loss incurred or disability, as defined in the policy,
commencing after two years from the date of issue of this policy shall be
reduced or denied on the ground that a disease or physical condition not
excluded from coverage by name or specific description effective on the date of
loss had existed prior to the effective date of coverage of this policy.” [1967
c.359 §430; 1969 c.159 §1]
     743.417
Grace period. (1) An
individual health insurance policy shall contain a provision as follows: “GRACE
PERIOD: A minimum grace period of 10 days after the premium due date will be
granted for the payment of each premium falling due after the first premium,
during which grace period the policy shall continue in force.”
     (2) A policy that contains a cancellation
provision may add the following clause at the end of the provision set forth in
subsection (1) of this section: “subject to the right of the insurer to cancel
in accordance with the cancellation provision hereof.”
     (3) A policy in which the insurer reserves
the right to refuse renewal shall have the following clause at the beginning of
the provision set forth in subsection (1) of this section: “Unless not less
than 30 days prior to the premium due date the insurer has delivered to the
insured or has mailed to the last address of the insured as shown by the
records of the insurer written notice of its intention not to renew this policy
beyond the period for which the premium has been accepted. The insurer shall
state in the notice the reason for its refusal to renew this policy.” [1967
c.359 §431; 1989 c.784 §19; 2001 c.943 §9]
     743.420
Reinstatement. (1) A health
insurance policy shall contain a provision as follows: “REINSTATEMENT: If any
renewal premium is not paid within the grace period, a subsequent acceptance of
premium by the insurer or by any insurance producer duly authorized by the
insurer to accept such premium, without requiring in connection therewith an
application for reinstatement, shall reinstate the policy; provided, however, that
if the insurer or such insurance producer requires an application for
reinstatement and issues a conditional receipt for the premium tendered, the
policy will be reinstated upon approval of such application by the insurer or,
lacking such approval, upon the 45th day following the date of such conditional
receipt unless the insurer has previously notified the insured in writing of
its disapproval of such application. The reinstated policy shall cover only
loss resulting from such accidental injury as may be sustained after the date
of reinstatement and loss due to such sickness as may begin more than 10 days
after such date. In all other respects the insured and insurer shall have the
same rights thereunder as they had under the policy immediately before the due
date of the defaulted premium, subject to any provisions indorsed hereon or
attached hereto in connection with the reinstatement. Any premium accepted in
connection with a reinstatement shall be applied to a period for which premium
has not been previously paid, but not to any period more than 60 days prior to
the date of reinstatement.”
     (2) The last sentence of the provision set
forth in subsection (1) of this section may be omitted from any policy which
the insured has the right to continue in force subject to its terms by the
timely payment of premiums until at least age 50 or, in the case of a policy
issued after age 44, for at least five years from its date of issue. [1967
c.359 §432; 2001 c.943 §10; 2003 c.364 §108]
     743.423
Notice of claim. (1) A
health insurance policy shall contain a provision as follows: “NOTICE OF CLAIM:
Written notice of claim must be given to the insurer within 20 days after the
occurrence or commencement of any loss covered by the policy, or as soon
thereafter as is reasonably possible. Notice given by or on behalf of the
insured or the beneficiary to the insurer at ___ (insert the location of
such office as the insurer may designate for the purpose), or to any authorized
agent of the insurer, with information sufficient to identify the insured,
shall be deemed notice to the insurer.”
     (2) In a policy providing a loss-of-time
benefit which may be payable for at least two years, an insurer may at its
option insert the following between the first and second sentences of the
provision set forth in subsection (1) of this section: “Subject to the
qualifications set forth below, if the insured suffers loss of time on account
of disability for which indemnity may be payable for at least two years, the
insured shall, at least once in every six months after having given notice of
claim, give to the insurer notice of continuance of such disability, except in
the event of legal incapacity. The period of six months following any filing of
proof by the insured or any payment by the insurer on account of such claim or
any denial of liability in whole or in part by the insurer shall be excluded in
applying this provision. Delay in the giving of such notice shall not impair
the insuredÂ’s right to any indemnity which would otherwise have accrued during
the period of six months preceding the date on which such notice is actually
given.” [1967 c.359 §433]
     743.426
Claim forms. A health
insurance policy shall contain a provision as follows: “CLAIM FORMS: The
insurer, upon receipt of a notice of claim, will furnish to the claimant such
forms as are usually furnished by it for filing proof of loss. If such forms
are not furnished within 15 days after the giving of such notice, the claimant
shall be deemed to have complied with the requirements of this policy as to
proof of loss upon submitting, within the time fixed in the policy for filing
proofs of loss, written proof covering the occurrence, the character and the
extent of the loss for which claim is made.” [1967 c.359 §434]
     743.429
Proofs of loss. A health
insurance policy shall contain a provision as follows: “PROOFS OF LOSS: Written
proof of loss must be furnished to the insurer at its office in case of claim
for loss for which this policy provides any periodic payment contingent upon
continuing loss within 90 days after the termination of the period for which
the insurer is liable and in case of claim for any other loss within 90 days
after the date of such loss. Failure to furnish such proof within the time
required shall not invalidate or reduce any claim if it was not reasonably
possible to give proof within such time, provided such proof is furnished as
soon as reasonably possible and in no event, except in the absence of legal
capacity, later than one year from the time proof is otherwise required.” [1967
c.359 §435]
     743.432
Time of payment of claims. A
health insurance policy shall contain a provision as follows: “TIME OF PAYMENT
OF CLAIMS: Indemnities payable under this policy for any loss other than loss
for which this policy provides any periodic payment will be paid immediately
upon receipt of due written proof of such loss. Subject to due written proof of
loss, all accrued indemnities for loss for which this policy provides periodic
payment will be paid ______ (insert period for payment which must not be less
frequently than monthly) and any balance remaining unpaid upon the termination
of liability will be paid immediately upon receipt of due written proof.” [1967
c.359 §436]
     743.435
Payment of claims. (1) A
health insurance policy shall contain a provision as follows: “PAYMENT OF
CLAIMS: Indemnity for loss of life will be payable in accordance with the
beneficiary designation and the provisions respecting such payment which may be
prescribed herein and effective at the time of payment. If no such designation
or provision is then effective, such indemnity shall be payable to the estate
of the insured. Any other accrued indemnities unpaid at the insuredÂ’s death
may, at the option of the insurer, be paid either to such beneficiary or to
such estate. All other indemnities will be payable to the insured.”
     (2) The following provisions, or either of
them, may be included with the provision set forth in subsection (1) of this
section at the option of the insurer:
     (a) “If any indemnity of this policy shall
be payable to the estate of the insured, or to an insured or beneficiary who is
a minor or otherwise not competent to give a valid release, the insurer may pay
such indemnity, up to an amount not exceeding $___ (insert an amount which shall
not exceed $1,000), to any relative by blood or connection by marriage of the
insured or beneficiary who is deemed by the insurer to be equitably entitled
thereto. Any payment made by the insurer in good faith pursuant to this
provision shall fully discharge the insurer to the extent of such payment.”
     (b) “Subject to any written direction of
the insured in the application or otherwise all or a portion of any indemnities
provided by this policy on account of hospital, nursing, medical or surgical
services may, at the insurerÂ’s option and unless the insured requests otherwise
in writing not later than the time of filing proofs of such loss, be paid
directly to the hospital or person rendering such services; but it is not
required that the service be rendered by a particular hospital or person.” [1967
c.359 §437]
     743.438
Physical examinations and autopsy. A health insurance policy shall contain a provision as follows: “PHYSICAL
EXAMINATIONS AND AUTOPSY: The insurer at its own expense shall have the right
and opportunity to examine the person of the insured when and as often as it
may reasonably require during the pendency of a claim hereunder and to make an
autopsy in case of death where it is not forbidden by law.” [1967 c.359 §438]
     743.441
Legal actions. A health
insurance policy shall contain a provision as follows: “LEGAL ACTIONS: No
action at law or in equity shall be brought to recover on this policy prior to
the expiration of 60 days after written proof of loss has been furnished in
accordance with the requirements of this policy. No such action shall be
brought after the expiration of three years after the time written proof of
loss is required to be furnished.” [1967 c.359 §439]
     743.444
Change of beneficiary. (1) A
health insurance policy shall contain a provision as follows: “CHANGE OF
BENEFICIARY: Unless the insured makes an irrevocable designation of
beneficiary, the right to change of beneficiary is reserved to the insured and
the consent of the beneficiary or beneficiaries shall not be requisite to
surrender or assignment of this policy or to any change of beneficiary or
beneficiaries or to any other changes in this policy.”
     (2) The first clause of the provision set
forth in subsection (1) of this section, relating to the irrevocable designation
of beneficiary, may be omitted at the insurer’s option. [1967 c.359 §440]
     743.447
Optional provisions. Except
as provided in ORS 742.021, provisions in a health insurance policy respecting
the matters set forth in ORS 743.450 to 743.477 and 743A.164 shall be in the
words which appear in such sections. Any such provision contained in the policy
shall be preceded individually by the appropriate caption appearing in such
sections or, at the option of the insurer, by such appropriate individual or
group captions or subcaptions as the Director of the Department of Consumer and
Business Services may approve. [1967 c.359 §441]
     743.450
Change of occupation. A
health insurance policy may contain a provision as follows: “CHANGE OF
OCCUPATION: If the insured be injured or contract sickness after having changed
occupation to one classified by the insurer as more hazardous than that stated
in this policy or while doing for compensation anything pertaining to an
occupation so classified, the insurer will pay only such portion of the
indemnities provided in this policy as the premium paid would have purchased at
the rates and within the limits fixed by the insurer for such more hazardous
occupation. If the insured changes occupation to one classified by the insurer
as less hazardous than that stated in this policy, the insurer, upon receipt of
proof of such change of occupation, will reduce the premium rate accordingly,
and will return the excess pro rata unearned premium from the date of change of
occupation or from the policy anniversary date immediately preceding receipt of
such proof, whichever is the more recent. In applying this provision, the
classification of occupational risk and the premium rates shall be such as have
been last filed by the insurer prior to the occurrence of the loss for which
the insurer is liable or prior to date of proof of change in occupation with
the state official having supervision of insurance in the state where the
insured resided at the time this policy was issued; but if such filing was not
required, then the classification of occupational risk and the premium rates
shall be those last made effective by the insurer in such state prior to the
occurrence of the loss or prior to the date of proof of change in occupation.” [1967
c.359 §442]
     743.453
Misstatement of age. A
health insurance policy may contain a provision as follows: “MISSTATEMENT OF
AGE: If the age of the insured has been misstated, all amounts payable under
this policy shall be such as the premium paid would have purchased at the
correct age.” [1967 c.359 §443]
     743.456
Other insurance in same insurer. (1) A health insurance policy may contain a provision as follows: “OTHER
INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness
policy or policies previously issued by the insurer to the insured be in force
concurrently herewith, making the aggregate indemnity for _____ (insert type of
coverage or coverages) in excess of $___ (insert maximum limit of indemnity or
indemnities), the excess insurance shall be void and all premiums paid for such
excess shall be returned to the insured or to the estate of the insured.”
     (2) In lieu of the provisions set forth in
subsection (1) of this section, the policy may contain a provision as follows: “OTHER
INSURANCE IN THIS INSURER: Insurance effective at any one time on the insured
under a like policy or policies in this company is limited to the one such
policy elected by the insured, the beneficiary or the estate of the insured, as
the case may be, and the insurer will return all premiums paid for all other
such policies.” [1967 c.359 §444]
     743.459
Insurance with other insurers; expense incurred benefits. (1) A health insurance policy may contain a
provision as follows: “INSURANCE WITH OTHER INSURERS: If there be other valid
coverage, not with this insurer, providing benefits for the same loss on a
provision of service basis or on an expense incurred basis and of which this
insurer has not been given written notice prior to the occurrence or
commencement of loss, the only liability under any expense incurred coverage of
this policy shall be for such proportion of the loss as the amount which would
otherwise have been payable hereunder plus the total of the like amounts under
all such other valid coverages for the same loss of which this insurer had
notice bears to the total like amounts under all valid coverages for such loss,
and for the return of such portion of the premiums paid as shall exceed the pro
rata portion for the amount so determined. For the purpose of applying this
provision when other coverage is on a provision of service basis, the ‘like
amountÂ’ of such other coverage shall be taken as the amount which the services
rendered would have cost in the absence of such coverage.”
     (2) If the policy provision set forth in
subsection (1) of this section is included in a policy which also contains the
policy provision set forth in ORS 743.462, there shall be added to the caption
of the provision set forth in subsection (1) of this section the phrase “EXPENSE
INCURRED BENEFITS.” The insurer may, at its option, include in this provision a
definition of “other valid coverage,” approved as to form by the Director of
the Department of Consumer and Business Services, which definition shall be
limited in subject matter to coverage provided by organizations subject to
regulation by insurance law or by insurance authorities of this or any other
state of the United States or any province of Canada, and by hospital or
medical service organizations, and to any other coverage the inclusion of which
may be approved by the director. In the absence of such definition such term
shall not include group insurance, automobile medical payments insurance or
coverage provided by hospital or medical service organizations or by union welfare
plans or employer or employee benefit organizations. For the purpose of
applying the policy provision set forth in this section with respect to any
insured, any amount of benefit provided for such insured pursuant to any
compulsory benefit statute (including any workersÂ’ compensation or employerÂ’s
liability statute), whether provided by a governmental agency or otherwise,
shall in all cases be deemed to be “other valid coverage” of which the insurer
has had notice. In applying the policy provision set forth in this section no
third party liability coverage shall be included as “other valid coverage.” [1967
c.359 §445]
     743.462
Insurance with other insurers; other than expense incurred benefits. (1) A health insurance policy may contain a
provision as follows: “INSURANCE WITH OTHER INSURERS: If there be other valid
coverage, not with this insurer, providing benefits for the same loss on other
than an expense incurred basis and of which this insurer has not been given
written notice prior to the occurrence or commencement of loss, the only
liability for such benefits under this policy shall be for such proportion of
the indemnities otherwise provided hereunder for such loss as the like
indemnities of which the insurer had notice (including the indemnities under
this policy) bear to the total amount of all like indemnities for such loss,
and for the return of such portion of the premium paid as shall exceed the pro
rata portion for the indemnities thus determined.”
     (2) If the policy provision set forth in subsection
(1) of this section is included in a policy which also contains the policy
provision set forth in ORS 743.459, there shall be added to the caption of the
provision set forth in subsection (1) of this section the phrase “OTHER
BENEFITS.” The insurer may, at its option, include in this provision a
definition of “other valid coverage,” approved as to form by the Director of
the Department of Consumer and Business Services, which definition shall be
limited in subject matter to coverage provided by organizations subject to
regulation by insurance law or by insurance authorities of this or any other
state of the United States or any province of Canada, and to any other coverage
the inclusion of which may be approved by the director. In the absence of such
definition such term shall not include group insurance, or benefits provided by
union welfare plans or by employer or employee benefit organizations. For the
purpose of applying the policy provision set forth in this section with respect
to any insured, any amount of benefit provided for such insured pursuant to any
compulsory benefit statute (including any workersÂ’ compensation or employerÂ’s
liability statute), whether provided by a governmental agency or otherwise,
shall in all cases be deemed to be “other valid coverage” of which the insurer
has had notice. In applying the policy provision set forth in this section no
third party liability coverage shall be included as “other valid coverage.” [1967
c.359 §446]
     743.465
Relation of earnings to insurance. (1) A health insurance policy may contain a provision as follows: “RELATION
OF EARNINGS TO INSURANCE: If the total monthly amount of loss of time benefits
promised for the same loss under all valid loss of time coverage upon the
insured, whether payable on a weekly or monthly basis, shall exceed the monthly
earnings of the insured at the time disability commenced or the average monthly
earnings of the insured for the period of two years immediately preceding a
disability for which claim is made, whichever is the greater, the insurer will
be liable only for such proportionate amount of such benefits under this policy
as the amount of such monthly earnings or such average monthly earnings of the
insured bears to the total amount of monthly benefits for the same loss under
all such coverage upon the insured at the time such disability commences and
for the return of such part of the premiums paid during such two years as shall
exceed the pro rata amount of the premiums for the benefits actually paid
hereunder; but this shall not operate to reduce the total monthly amount of
benefits payable under all such coverage upon the insured below the sum of $200
or the sum of the monthly benefits specified in such coverages, whichever is
the lesser, nor shall it operate to reduce benefits other than those payable
for loss of time.”
     (2) The policy provision set forth in
subsection (1) of this section may be inserted only in a policy which the
insured has the right to continue in force subject to its terms by the timely payment
of premiums until at least age 50 or, in the case of a policy issued after age
44, for at least five years from its date of issue. The insurer may, at its
option, include in this provision a definition of “valid loss of time coverage,”
approved as to form by the Director of the Department of Consumer and Business
Services, which definition shall be limited in subject matter to coverage
provided by governmental agencies or by organizations subject to regulation by
insurance law or by insurance authorities of this or any other state of the
United States or any province of Canada, or to any other coverage the inclusion
of which may be approved by the director or any combination of such coverages.
In the absence of such definition such term shall not include any coverage
provided for such insured pursuant to any compulsory benefit statute (including
any workersÂ’ compensation or employerÂ’s liability statute), or benefits
provided by union welfare plans or by employer or employee benefit
organizations. [1967 c.359 §447]
     743.468
Unpaid premium. A health
insurance policy may contain a provision as follows: “UNPAID PREMIUM: Upon the
payment of a claim under this policy, any premium then due and unpaid or
covered by any note or written order may be deducted therefrom.” [1967 c.359 §448]
     743.471
Cancellation. A health
insurance policy may contain a provision as follows: “CANCELLATION: The insurer
may cancel this policy by written notice delivered to the insured, or mailed to
the last address of the insured as shown by the records of the insurer. The
notice must state the reason for cancellation and the date on which the
cancellation shall be effective. Except as provided under the ‘GRACE PERIOD’
provision of this policy for nonpayment of premium, cancellation shall not
become effective earlier than the 30th day after the date of the notice. After
the policy has been continued beyond its original term, the insured may cancel
this policy at any time by written notice delivered or mailed to the insurer,
effective upon receipt or on such later date as may be specified in such
notice. In the event of cancellation, the insurer will return promptly the
unearned portion of any premium paid. If the insured cancels, the earned
premium shall be computed by the use of the short rate table last filed with
the state official having supervision of insurance in the state where the
insured resided when the policy was issued. If the insurer cancels, the earned
premium shall be computed pro rata. Cancellation shall be without prejudice to
any claim originating prior to the effective date of cancellation.” [1967 c.359
§449; 1989 c.784 §20]
     743.472
Permissible reasons for cancellation or refusal to renew. An insurer selling individual health
insurance policies may cancel or refuse to renew an individual health insurance
policy only if the insurer makes a determination to cancel or not to renew all
policies of the same type and form as the individual policy, or if the ground
for cancellation or nonrenewal is any of the following and is stated as a
provision of the policy:
     (1) A fraudulent or material misstatement
made by the applicant in an application for the health policy. A material
misstatement is subject to any time limit, as specified by law and included in
the policy, for voiding the policy on the basis of a misstatement. For purposes
of this subsection, a misstatement may include an incorrect statement or a
misrepresentation, omission or concealment of fact;
     (2) Excess or other insurance in the same
insurer, as described in ORS 743.456;
     (3) Nonpayment of premium; or
     (4) Any other reason specified by the
Director of the Department of Consumer and Business Services by rule. [1989
c.784 §18; 1991 c.182 §5]
     Note: 743.472 was added to and made a part of
743.405 to 743.498 by legislative action but was not added to any smaller
series therein. See Preface to Oregon Revised Statutes for further explanation.
     743.474
Conformity with state statutes.
A health insurance policy may contain a provision as follows: “CONFORMITY WITH
STATE STATUTES: Any provision of this policy which, on its effective date, is
in conflict with the statutes of the state in which the insured resides on such
date hereby is amended to conform to the minimum requirements of such statutes.”
[1967 c.359 §450]
     743.477
Illegal occupation. A health
insurance policy may contain a provision as follows: “ILLEGAL OCCUPATION: The
insurer shall not be liable for any loss to which a contributing cause was the
insuredÂ’s commission of or attempt to commit a felony or to which a
contributing cause was the insured’s being engaged in an illegal occupation.” [1967
c.359 §451]
     743.480 [1967 c.359 §452; 1979 c.744 §64; 2007 c.128
§1; renumbered 743A.164 in 2007]
     743.483
Arrangement of provisions.
The provisions of a health insurance policy which are the subject of ORS
743.408 to 743.477, 743A.160 and 743A.164, or any corresponding provisions
which are used in lieu thereof in accordance with the Insurance Code, shall be
printed in the consecutive order of such sections or, at the option of the
insurer, any such provision may appear as a unit in any part of the policy,
with other provisions to which it may be logically related, provided the
resulting policy shall not be in whole or in part unintelligible, uncertain,
ambiguous, abstruse, or likely to mislead a person to whom the policy is
offered, delivered or issued. [1967 c.359 §453]
     743.486
Scope of term “insured” in statutory policy provisions. As used in ORS 743.402 to 743.498, 743A.160
and 743A.164, the word “insured” shall not be construed as preventing a person
other than the insured with a proper insurable interest from making application
for and owning a policy covering the insured or from being entitled under such
a policy to any indemnities, benefits and rights provided therein. [1967 c.359 §454]
     743.489
Extension of coverage beyond policy period; effect of misstatement of age. If any health insurance policy contains a
provision establishing, as an age limit or otherwise, a date after which the
coverage provided by the policy will not be effective, and if such date falls
within a period for which premium is accepted by the insurer or if the insurer
accepts a premium after such date, the coverage provided by the policy shall
continue in force subject to any right of cancellation until the end of the
period for which premium has been accepted. In the event the age of the insured
has been misstated and if, according to the correct age of the insured, the
coverage provided by the policy would not have become effective, or would have
ceased prior to the acceptance of such premium or premiums, then the liability
of the insurer shall be limited to the refund, upon request, of all premiums
paid for the period not covered by the policy. [Formerly 741.170]
     743.492
Policy return and premium refund provision. Every health insurance policy except single premium nonrenewable
policies shall have printed on its face or attached thereto a notice stating in
substance that the person to whom the policy is issued shall be permitted to
return the policy within 10 days of its delivery to the purchaser and to have
the premium paid refunded if, after examination of the policy, the purchaser is
not satisfied with it for any reason. If a policyholder or purchaser pursuant
to such notice returns the policy to the insurer at its home or branch office
or to the insurance producer through whom it was purchased, it shall be void
from the beginning and the parties shall be in the same position as if no
policy had been issued. [Formerly 741.180; 2003 c.364 §109]
     743.495
Use of terms “noncancelable” or “guaranteed renewable”; synonymous terms. (1) No health insurance policy shall contain
the following unqualified terms except as provided in this subsection:
     (a) The unqualified terms “noncancelable”
or “noncancelable and guaranteed renewable” may be used only in a policy which
the insured has the right to continue in force for life by the timely payment
of premiums set forth in the policy, during which period the insurer has no
right to make unilaterally any change in any provision of the policy while the
policy is in force.
     (b) The unqualified term “guaranteed
renewable,” except as provided in paragraph (a) of this subsection, may be used
only in a policy which the insured has the right to continue in force for life
by the timely payment of premiums, during which period the insurer has no right
to make unilaterally any change in any provision of the policy while the policy
is in force, except that the insurer may make changes in premium rates by
classes.
     (2) The limitations prescribed in
subsection (1) of this section on the use of the term “noncancelable” shall
also apply to any synonymous term such as “not cancelable” and such limitations
on the use of the term “guaranteed renewable” shall also apply to any
synonymous term such as “guaranteed continuable.” [Formerly 741.190]
     743.498
Statement in policy of cancelability or renewability. (1) A health insurance policy which is
noncancelable or guaranteed renewable as those terms are used in ORS 743.495,
except that the insuredÂ’s right is for a limited period of more than one year
rather than for life, shall contain the applicable one of the following
statements, or such other statement which, in the opinion of the Director of
the Department of Consumer and Business Services, is equally clear or more
definite as to the subject matter:
     (a) “THIS POLICY IS NONCANCELABLE ______”
(designating the applicable period such as, for example, “to age ___ (specify),”
or “for the period of ___ (specify) years from date of issuance”) if the policy
is noncancelable for such period.
     (b) “THIS POLICY IS GUARANTEED RENEWABLE ______”
(designating the applicable period such as, for example, “to age ___ (specify),”
or “for the period of ___ (specify) years from date of issuance”) if the policy
is guaranteed renewable for such period.
     (2) Except for policies meeting the
conditions specified in ORS 743.495 or subsection (1) of this section, and
except as provided in subsection (3) of this section, a health insurance policy
shall contain the applicable one of the following statements, or such other
statement which, in the opinion of the director, is equally clear or more
definite as to the subject matter:
     (a) “THIS POLICY MAY BE CANCELED BY THE
INSURER ONLY FOR A REASON PERMITTED BY LAW” if the policy contains a provision
for cancellation by the insurer.
     (b) “THE INSURER MAY REFUSE TO RENEW THIS
POLICY ONLY FOR A REASON PERMITTED BY LAW” if the policy is not guaranteed
renewable.
     (3) The limitations and requirements as to
the use of terms contained in ORS 743.495 and this section shall not prohibit
the use of other terms for policies having other guarantees of renewability,
provided such terms, in the opinion of the director are accurate, clear and not
likely to be confused with the terms contained in ORS 743.495 and this section,
and are incorporated in a concise statement relating to the guarantees of
renewability.
     (4) The statement required by this section
shall be printed in a type not smaller than the type used for captions. It shall
appear prominently on the first page of the policy and shall be a part of the
brief description if the policy has a brief description on its first page. [Formerly
741.200; 1989 c.784 §20a]
     743.516 [1967 c.359 §459; repealed by 1999 c.987 §28]
     743.519 [1967 c.359 §460; 1971 c.231 §25; repealed
by 1999 c.987 §28]
     743.520 [1971 c.231 §4; repealed by 1999 c.987 §28]
(Group and
Blanket)
     743.522
“Group health insurance” described. (1) “Group health insurance” means that form of health insurance covering
groups of persons described in this section, with or without one or more
members of their families or one or more of their dependents, or covering one
or more members of the families or one or more dependents of such groups of
persons, and issued upon one of the following bases:
     (a) Under a policy issued to an employer
or trustees of a fund established by an employer, who shall be deemed the
policyholder, insuring employees of such employer for the benefit of persons
other than the employer. As used in this paragraph, “employees” includes:
     (A) The officers, managers and employees
of the employer;
     (B) The individual proprietor or partners
if the employer is an individual proprietor or partnership;
     (C) The officers, managers and employees
of subsidiary or affiliated corporations;
     (D) The individual proprietors, partners
and employees of individuals and firms, if the business of the employer and
such individual or firm is under common control through stock ownership,
contract or otherwise;
     (E) The trustees or their employees, or
both, if their duties are principally connected with such trusteeship;
     (F) The leased workers of a client
employer; and
     (G) Elected or appointed officials if a
policy issued to insure employees of a public body provides that the term “employees”
includes elected or appointed officials.
     (b) Under a policy issued to an
association, including a labor union, that has an active existence for at least
one year, that has a constitution and bylaws and that has been organized and is
maintained in good faith primarily for purposes other than that of obtaining
insurance, which shall be deemed the policyholder, insuring members, employees
or employees of members of the association for the benefit of persons other
than the association or its officers or trustees.
     (c) Under a policy issued to the trustees
of a fund established by two or more employers in the same or related industry
or by one or more labor unions or by one or more employers and one or more
labor unions or by an association as described in paragraph (b) of this
subsection, insuring employees of the employers or members of the unions or of
such association, or employees of members of such association for the benefit
of persons other than the employers or the unions or such association. As used
in this paragraph, “employees” may include the officers, managers and employees
of the employer, and the individual proprietor or partners if the employer is
an individual proprietor or partnership. The policy may provide that the term “employees”
includes the trustees or their employees, or both, if their duties are
principally connected with such trusteeship.
     (d) Under a policy issued to any person or
organization to which a policy of group life insurance may be issued or
delivered in this state, to insure any class or classes of individuals that
could be insured under such group life policy.
     (2) Group health insurance offered to a
resident of this state under a group health insurance policy issued to a group
other than one described in subsection (1) of this section may be delivered if:
     (a) The Director of the Department of
Consumer and Business Services finds that:
     (A) The issuance of the policy is in the
best interest of the public;
     (B) The issuance of the policy would
result in economies of acquisition or administration; and
     (C) The benefits are reasonable in
relation to the premiums charged; and
     (b) The premium for the policy is paid
either from funds of a policyholder, from funds contributed by a covered person
or from both.
     (3) As used in this section and ORS
743.533:
     (a) “Client employer” means an employer to
whom workers are provided under contract and for a fee on a leased basis by a
worker leasing company licensed under ORS 656.850.
     (b) “Employee” may include a retired employee.
     (c) “Leased worker” means a worker
provided by a worker leasing company licensed under ORS 656.850. [1967 c.359 §461;
1975 c.229 §1; 1989 c.784 §13; 2001 c.943 §4; 2005 c.22 §492]
     743.523
Certain sales practices prohibited. (1) No person selling group health insurance is authorized to sell
membership in an association, including a labor union, for the purpose of
qualifying an applicant who is an individual for group health insurance.
     (2) No person selling membership in an
association, including a labor union, is authorized to offer group health
insurance for the purpose of selling membership in the association. [1989 c.784
§10]
     743.524
Eligibility of association to be group health policyholder; rules. (1) An insurer may not offer a policy of group
health insurance to an association as the policyholder or offer coverage under
such a policy, whether issued in this or another state, unless the Director of
the Department of Consumer and Business Services determines that the
association satisfies the requirements of an association under ORS 743.522
(1)(b).
     (2) An insurer shall submit evidence to
the director that the association satisfies the requirements under ORS 743.522
(1)(b). The director shall review the evidence and may request additional evidence
as needed.
     (3) An insurer shall submit to the
director any changes in the evidence submitted under subsection (2) of this
section.
     (4) The director may order an insurer to
cease offering health insurance to an association if the director determines
that the association does not meet the standards under ORS 743.522 (1)(b).
     (5) The director may adopt rules to carry
out this section. [1989 c.784 §11; 2005 c.22 §493]
     743.525 [1967 c.359 §462; repealed by 1981 c.752 §17]
     743.526
Determination of whether trustees are policyholders; consequences; rules. (1) An insurer may not offer a policy of
group health insurance described in ORS 743.522 (1)(c) that insures persons in
this state or offer coverage under such a policy, whether the policy is to be
issued in this or another state, unless the Director of the Department of
Consumer and Business Services determines that the requirements of this section
and ORS 743.522 (1)(c) are satisfied.
     (2) The director shall determine with
respect to a policy whether the trustees are the policyholder. If the director
determines that the trustees are the policyholder and if the policy is issued
or proposed to be issued in this state, the policy is subject to the Insurance
Code. If the director determines that the trustees are not the policyholder,
the evidence of coverage that is issued or proposed to be issued in this state
to a participating employer, labor union or association shall be deemed to be a
group health insurance policy subject to the provisions of the Insurance Code.
The director may determine that the trustees are not the policyholder if:
     (a) The evidence of coverage issued or
proposed to be issued to a participating employer, labor union or association
is in fact the primary statement of coverage for the employer, labor union or
association; and
     (b) The trust arrangement is under the
actual control of the insurer.
     (3) An insurer shall submit evidence to
the director showing that the requirements of subsection (2) of this section
and ORS 743.522 (1)(c) are satisfied. The director shall review the evidence
and may request additional evidence as needed.
     (4) An insurer shall submit to the
director any changes in the evidence submitted under subsection (3) of this
section.
     (5) The director may adopt rules to carry
out this section. [1989 c.784 §12; 2005 c.22 §494]
     Note: Sections 11 and 14, chapter 752, Oregon Laws
2007, provide:
     Sec.
11. (1) The Department of
Consumer and Business Services shall monitor, on a continuing basis,
association health plans to determine the degree to which the claims experience
of nonretained association groups exceeds the claims experience of the
associationÂ’s member groups as a whole.
     (2) The Director of the Department of
Consumer and Business Services shall report to the Legislative Assembly by
February 1 of each odd-numbered year on the findings under subsection (1) of
this section and may recommend legislative changes based upon the findings.
[2007 c.752 §11]
     Sec.
14. Sections 11 and 12 of
this 2007 Act are repealed on January 2, 2014. [2007 c.752 §14]
     743.527
When group health insurance policies to continue in effect upon payment of premium
by insured individual. (1)
Every group health insurance policy delivered or issued for delivery in this
state shall contain in substance the following provisions, applicable to the
coverage for hospital or medical services or expenses provided under the
policy:
     (a) A provision that, when the premium for
the policy or any part thereof is paid by an employer under the terms of a
collective bargaining agreement, if there is a cessation of work by employees
insured under the policy due to a strike or lockout, the policy, upon timely
payment of the premium, will continue in effect with respect to those employees
insured by the policy on the date of the cessation of work who continue to pay
their individual contribution and who assume and pay the contribution due from
the employer.
     (b) A provision that, when an employee
insured under the policy pays a contribution pursuant to paragraph (a) of this
subsection, if the policyholder is not a trustee of a fund established or
maintained in whole or in part by an employer, the employeeÂ’s individual
contribution shall be:
     (A) The rate in the policy, on the date
cessation of work occurs, applicable to an individual in the class to which the
employee belongs as set forth in the policy; or
     (B) If the policy does not provide for a
rate applicable to individuals, an amount equal to the amount determined by
dividing the total monthly premium in effect under the policy at the date of
cessation of work by the total number of persons insured under the policy on
such date.
     (c) A provision that, when an employee
insured under the policy pays a contribution pursuant to paragraph (a) of this
subsection, if the policyholder is a trustee of a fund established or
maintained in whole or in part by an employer, the employeeÂ’s individual
contribution shall be the amount which the employee and employer would have
been required to contribute if the cessation of work had not occurred.
     (2) Every group health insurance policy
delivered or issued for delivery in this state may contain in substance the
following provisions applicable to the coverage for hospital or medical
services or expenses provided under the policy:
     (a) A provision that, when employees
insured under the policy pay contributions pursuant to subsection (1)(a) of
this section, the continuation of insurance under the policy is contingent upon
the collection of individual contributions by the union representing the
employees when the policyholder is not a trustee and by the policyholder or the
policyholderÂ’s agent when the policyholder is a trustee.
     (b) A provision that, when employees
insured under the policy pay contributions pursuant to subsection (1)(a) of this
section, the continuation of insurance under the policy on each employee is
contingent upon timely payment of contributions by the employees and timely
payment of the premium by the entity responsible for collecting the individual
contributions.
     (c) A provision that, when employees
insured under the policy pay contributions pursuant to subsection (1)(a) of
this section, each individual premium rate under the policy may be increased by
not more than 20 percent, or by any higher percentage approved by the Director
of the Department of Consumer and Business Services, during the period of
cessation of work in order to provide sufficient compensation to the insurer
for increased administrative costs and increased mortality and morbidity. If
the policy contains the provision allowed under this paragraph, an employeeÂ’s
contribution paid under subsection (1)(a) of this section shall be increased by
the same percentage.
     (d) A provision that, when the policy is a
policy insuring employees and which may continue in effect as provided in
subsection (1)(a) of this section, if the premium is unpaid at the date of
cessation of work and the premium became due prior to such cessation of work,
the continuation of insurance is contingent upon payment of the premium prior to
the date the next premium becomes due under the terms of the policy.
     (e) Any provision with respect to the
continuation of the policy as provided in subsection (1)(a) of this section
that the director may approve.
     (3) Nothing in this section shall be deemed
to limit any right which the insurer may have in accordance with the terms of a
policy to increase or decrease the premium rates before, during or after a
cessation of work by employees insured under the policy when the insurer had
the right to increase the premium rates even if the cessation of work did not
occur. If such a premium rate change is made, it shall be effective on such
date as the insurer shall determine in accordance with the terms of the policy.
     (4) Nothing in this section shall be deemed
to require continuation of any coverage in a group health insurance policy
insuring employees and which may continue in effect as provided in subsection
(1)(a) of this section for longer than:
     (a) The time that 75 percent of insured
employees continue such coverage;
     (b) For an individual employee, the time
at which the employee takes full-time employment with another employer; or
     (c) Six months after cessation of work by
the insured employees. [1979 c.797 §2; 1981 c.395 §1]
     743.528
Required provisions in group health insurance policies. A group health insurance policy shall
contain in substance the following provisions:
     (1) A provision that, in the absence of
fraud, all statements made by applicants, the policyholder or an insured person
shall be deemed representations and not warranties, and that no statement made
for the purpose of effecting insurance shall avoid the insurance or reduce
benefits unless contained in a written instrument signed by the policyholder or
the insured person, a copy of which has been furnished to the policyholder or
to the person or the beneficiary of the person.
     (2) A provision that the insurer will
furnish to the policyholder for delivery to each employee or member of the
insured group a statement in summary form of the essential features of the
insurance coverage of the employee or member, to whom the insurance benefits
are payable, and the applicable rights and conditions set forth in ORS 743.527,
743.529, 743.600 to 743.610 and 743.760. If dependents are included in the
coverage, only one statement need be issued for each family unit.
     (3) A provision that to the group
originally insured may be added from time to time eligible new employees or
members or dependents, as the case may be, in accordance with the terms of the
policy. [1967 c.359 §463; 1981 c.752 §13; 1997 c.716 §23]
     743.529
Continuation of benefits after termination of group health insurance policy;
rules. (1) Every group
health insurance policy that provides coverage for hospital or medical services
or expenses shall provide that the insurer shall continue its obligation for
benefits under the policy for any person insured under the policy who is
hospitalized on the date of termination if the policy is terminated and
immediately replaced by a group health insurance policy issued by another
insurer. Any payment required under this section is subject to all terms,
limitations and conditions of the policy except those relating to termination
of benefits. Any obligation by an insurer under this section continues until
the hospital confinement ends or hospital benefits under the policy are
exhausted, whichever is earlier.
     (2) The Director of the Department of
Consumer and Business Services may adopt rules providing for uninterrupted
coverage for individuals insured under a group health insurance policy
providing coverage for hospital or medical expenses, when such a policy is
replaced by a policy of similar benefits, whether issued by the same insurer or
another. [1977 c.402 §5; 1991 c.182 §6]
     743.530
Continuation of benefits after injury or illness covered by workersÂ’
compensation. Every policy
of group health insurance delivered or issued for delivery in this state shall
contain a provision applicable to the coverage for hospital or medical services
or expenses provided under the policy that if an employee incurs an injury or
illness for which a workersÂ’ compensation claim is filed, that policy will
continue in effect with respect to that employee upon timely payment by the
employee of the premium that includes the individual contribution and the
contribution due from the employer under the applicable benefit plan. The
employee may maintain such coverage until whichever of the following events
first occurs:
     (1) The employee takes full-time
employment with another employer; or
     (2) Six months from the date that the
employee first makes payment under this section. [1985 c.634 §2]
     743.531
Direct payment of hospital and medical services; rate limitations. (1) A group health insurance policy may on
request by the group policyholder provide that all or any portion of any
indemnities provided by such policy on account of hospital, nursing, medical or
surgical services may, at the insurerÂ’s option, be paid directly to the
hospital or person rendering such services. However, the amount of any such
payment shall not exceed the amount of benefit provided by the policy with
respect to the service or billing of the provider of aid. The amount of such
payments pursuant to one or more assignments shall not exceed the amount of
expenses incurred on account of such hospitalization or medical or surgical
aid.
     (2) Nothing in this section is intended to
authorize an insurer to:
     (a) Furnish or provide directly services
of hospitals or physicians and surgeons; or
     (b) Direct, participate in or control the
selection of the specific hospital or physician and surgeon from whom the
insured secures services or who exercises medical or dental professional
judgment.
     (3) Nothing in subsection (2) of this
section prevents an insurer from negotiating and entering into contracts for
alternative rates of payment with providers and offering the benefit of such
alternative rates to insureds who select such providers. An insurer may utilize
such contracts by offering a choice of plans at the time an insured enrolls,
one of which provides benefits only for services by members of a particular
provider organization with whom the insurer has an agreement. If an insured
chooses such a plan, benefits are payable only for services rendered by a
member of that provider organization, unless such services were requested by a
member of such organization or are rendered as the result of an emergency.
     (4) Payment so made shall discharge the
insurerÂ’s obligation with respect to the amount of insurance so paid.
     (5) Insurers shall provide group
policyholders with a current roster of institutional and professional providers
under contract to provide services at alternative rates under their group
policy and shall also make such lists available for public inspection during
regular business hours at the insurerÂ’s principal office within this state. [1967
c.359 §464; 1985 c.747 §71; 1989 c.784 §23]
     743.532 [1987 c.782 §2; repealed by 1989 c.1044 §7]
     743.533
Leased workers; offering group health insurance. (1) A leasing company may offer group health
insurance to its leased workers. If the leasing company does not offer group
health insurance to its leased workers, the client employer may offer group
health insurance to the leased workers.
     (2) If a leasing company offers group
health insurance to its leased workers, the leasing company shall offer group
health insurance to all its leased workers in the same manner. [2001 c.943 §5]
     743.534
“Blanket health insurance” defined. “Blanket health insurance” means that form of a health insurance
covering groups of persons defined in this section and issued on one of the
following bases:
     (1) Under a policy issued to a common
carrier or to an operator, owner or lessee of a means of transportation, who
shall be deemed the policyholder, insuring a group of persons who may become
passengers and which group is defined by reference to their travel status on
such common carrier or means of transportation.
     (2) Under a policy issued to an employer,
who shall be deemed the policyholder, insuring any group of employees,
dependents or guests, defined by reference to specified hazards incident to an
activity or activities or operations of the policyholder.
     (3) Under a policy issued to a college,
school or other institution of learning, a school district or districts, or
school jurisdictional unit, or to the head, principal or governing board of any
such educational unit, who or which shall be deemed the policyholder, insuring
students, teachers or employees.
     (4) Under a policy issued to a religious,
charitable, recreational, educational, or civic organization, or branch
thereof, which shall be deemed the policyholder, insuring any group of members
or participants defined by reference to specified hazards incident to an
activity or activities or operations sponsored or supervised by such
policyholder.
     (5) Under a policy issued to a sports
team, camp or sponsor thereof, who shall be deemed the policyholder, insuring
members, campers, employees, officials or supervisors.
     (6) Under a policy issued to a volunteer
fire department, first aid, civil defense, or other such volunteer
organization, which shall be deemed the policyholder, insuring any group of
members or participants defined by reference to specified hazards incident to
an activity or activities or operations sponsored or supervised by such
policyholder.
     (7) Under a policy issued to a newspaper
or other publisher, which shall be deemed the policyholder, insuring its
carriers.
     (8) Under a policy issued to an
association, including a labor union, which has a constitution and bylaws and
which has been organized and is maintained in good faith for purposes other
than that of obtaining insurance, which shall be deemed the policyholder,
insuring any group of members or participants defined by reference to specified
hazards incident to an activity or activities or operations sponsored or
supervised by such policyholder.
     (9) Under a policy issued to cover any
other risk or class of risks which, in the discretion of the Director of the
Department of Consumer and Business Services, may be properly eligible for
blanket health insurance. The discretion of the director may be exercised on an
individual risk basis or class of risks basis, or both. [1967 c.359 §465]
     743.537
Required provisions for blanket health insurance policies. A blanket health insurance policy shall
contain provisions which in the opinion of the Director of the Department of
Consumer and Business Services are not less favorable to the policyholder and
the individual insureds than the provisions described in ORS 743.411, 743.423,
743.426, 743.429, 743.432, 743.438 and 743.441. [1967 c.359 §466]
     743.540
Application and certificates not required for blanket health insurance
policies. An individual
application need not be required from a person insured under a blanket health
insurance policy, nor shall it be necessary for the insurer to furnish each
person a certificate. [1967 c.359 §467]
     743.543
Payment of benefits under blanket health insurance policies. All benefits under a blanket health
insurance policy shall be payable to the person insured, or to the designated
beneficiary or beneficiaries of the person, or to the estate of the person,
except that if the person insured is a minor or otherwise not competent to give
a valid release, such benefits may be made payable to the parent, guardian or
other person actually supporting the person. However, the policy may provide
that all or a portion of any indemnities provided by such policy on account of
hospital, nursing, medical or surgical services may, at the option of the
insurer and unless the insured requests otherwise in writing not later than the
time of filing proofs of such loss, be paid directly to the hospital or person
rendering such services; but the policy may not require that the services be
rendered by a particular hospital or person. Payment so made shall discharge
the obligation of the insurer with respect to the amount of insurance so paid. [1967
c.359 §468]
     743.546
Exemption of policy form approval for blanket health insurance policies. The Director of the Department of Consumer
and Business Services may exempt from the policy form filing and approval
requirements of ORS 742.003, for so long as the director deems proper, any
blanket health insurance policy to which in the opinion of the director such
requirements may not practicably be applied, or may dispense with such filing
and approval whenever, in the opinion of the director, it is not desirable or
necessary for the protection of the public. [1967 c.359 §469]
     743.549
Restriction on reduction of benefits provisions in group and blanket health
insurance policies. No group
or blanket health insurance policy providing hospital, medical or surgical
expense benefits, and which contains a provision for the reduction of benefits
otherwise payable thereunder on the basis of other existing coverages, shall
provide that such reduction operates to reduce total benefits payable below an
amount equal to 100 percent of total allowable expenses, except as provided for
in a collective bargaining agreement. [1973 c.143 §2; 1989 c.1080 §2]
     743.550
Student health insurance.
(1) Student health insurance is subject to ORS 743.537, 743.540, 743.543,
743.546 and 743.549, except as provided in this section.
     (2) Coverage under a student health
insurance policy may be mandatory for all students at the institution,
voluntary for all students at the institution, or mandatory for defined classes
of students and voluntary for other classes of students. As used in this
subsection, “classes” refers to undergraduates, graduate students, domestic
students, international students or other like classifications. Any differences
based on a studentÂ’s nationality may be established only for the purpose of
complying with federal law in effect when the policy is issued.
     (3) When coverage under a student health
insurance policy is mandatory, the policyholder may allow any student subject
to the policy to decline coverage if the student provides evidence acceptable
to the policyholder that the student has similar health coverage.
     (4) A student health insurance policy may
provide for any student to purchase optional supplemental coverage.
     (5) Student health insurance coverage for
athletic injuries may:
     (a) Exclude coverage for injuries of
students who have not obtained medical release for a similar injury; and
     (b) Be provided in excess of or in
addition to any other coverage under any other health insurance policy,
including a student health insurance policy.
     (6) A student health insurance policy may provide
that coverage under the policy is secondary to any other health insurance for
purposes of guidelines established under ORS 743.552.
     (7) A student health insurance policy may
provide, on request by the policyholder, that all or any portion of any indemnities
provided by such policy on account of hospital, nursing, medical or surgical
services may, at the insurerÂ’s option, be paid directly to the hospital or
person rendering such services. However, the amount of any such payment shall
not exceed the amount of benefit provided by the policy with respect to the
service or billing of the provider of aid. The amount of such payments pursuant
to one or more assignments shall not exceed the amount of expenses incurred on
account of such hospitalization or medical or surgical aid.
     (8) An insurer providing student health
insurance as primary coverage may negotiate and enter into contracts for
alternative rates of payment with providers and offer the benefit of such
alternative rates to insureds who select such providers. An insurer may utilize
such contracts by offering a choice of plans at the time an insured enrolls,
one of which provides benefits only for services by members of a particular
provider organization with whom the insurer has an agreement. If an insured
chooses such a plan, benefits are payable only for services rendered by a
member of that provider organization, unless such services were requested by a
member of such organization or are rendered as the result of an emergency.
     (9) Payments made under subsection (8) of
this section shall discharge the insurerÂ’s obligation with respect to the
amount of insurance paid.
     (10) An insurer shall provide each student
health insurance policyholder with a current roster of institutional and
professional providers under contract to provide services at alternative rates
under the group policy and shall also make such lists available for public
inspection during regular business hours at the insurerÂ’s principal office
within this state.
     (11) As used in this section, “student
health insurance” means that form of health insurance under a policy issued to
a college, school or other institution of learning, a school district or
districts, or school jurisdictional unit, or recognized student government at
an institution of higher education within the Oregon University System, or to
the head, principal or governing board of any such educational unit, who or
which shall be deemed the policyholder, that is available exclusively to
students at the college, school or other institution. [1995 c.623 §2]
     743.552
Guidelines for application of ORS 743.549; rules. The Director of the Department of Consumer
and Business Services shall by rule establish guidelines for the application of
ORS 743.549, including:
     (1) The procedures by which persons
insured under such policies are to be made aware of the existence of such a
provision;
     (2) The benefits which may be subject to
such a provision;
     (3) The effect of such a provision on the
benefits provided;
     (4) Establishment of the order of benefit
determination; and
     (5) Reasonable claim administration
procedures to expedite claim payments under such a provision which shall
include a time limit of 14 days beyond which the insurer shall not delay
payment of a claim by reason of the application of coordination of benefits
provision. [1973 c.143 §3]
     743.555 [1973 c.143 §4; repealed by 2005 c.22 §495]
     743.556 [1987 c.411 §2; 1989 c.721 §55; 1991 c.67 §198;
1991 c.470 §19; 1991 c.654 §2; 1999 c.1086 §1; 2001 c.900 §217; 2003 c.33 §5; 2005
c.705 §1; 2007 c.71 §240; renumbered 743A.168 in 2007]
     743.557 [1975 c.698 §2; 1977 c.632 §3; 1981 c.319 §2;
1983 c.601 §5; repealed by 1987 c.411 §9]
     743.558 [1973 c.613 §2; 1983 c.601 §6; repealed by
1987 c.411 §9]
     743.559 [1983 c.601 §12; repealed by 1991 c.182 §20]
     743.560
Minimum grace period; notice upon termination of policy; effect of failure to
notify. (1) A group health
insurance policy shall contain a provision allowing a minimum grace period of
10 days after the premium due date for payment of premium.
     (2) An insurer of a group health insurance
policy providing coverage for hospital or medical expenses, other than coverage
limited to expenses from accidents or specific diseases, that seeks to
terminate a policy for nonpayment of premium shall notify the policyholder as
described in ORS 743.565.
     (3) An insurer of a group health insurance
policy providing coverage for hospital or medical expenses, other than coverage
limited to expenses from accidents or specific diseases, shall notify the group
policyholder when the policy is terminated and the coverage is not replaced by
the group policyholder. The notice required under this subsection:
     (a) Must be given on a form prescribed by
the Department of Consumer and Business Services;
     (b) Must explain the rights of the
certificate holders regarding continuation of coverage provided by federal and
state law and portability coverage in accordance with ORS 743.760; and
     (c) Must be given by mail and must be
mailed not later than 10 working days after the date on which the group policy
terminates according to the terms of the policy.
     (4) A group health insurance policy to
which subsection (3) of this section applies shall contain a provision
requiring the insurer to notify the group policyholder when the policy is
terminated and the coverage is not replaced by the group policyholder. Each
certificate issued under the policy shall also contain a statement of the
provision required under this subsection.
     (5) If an insurer fails to give notice as
required by this section, the insurer shall continue the group health insurance
policy of the group policyholder in full force from the date notice should have
been provided until the date that the notice is received by the policyholder
and shall waive the premiums owing for the period for which the coverage is
continued under this subsection. The time period within which the certificate
holder may exercise any right to continuation or portability shall commence on
the date that the policyholder receives the notice.
     (6) The insurer shall supply the employer
holding the terminated policy with the necessary information for the employer
to be able to notify properly the employee of the employeeÂ’s right to
continuation of coverage under state and federal law and portability coverage
in accordance with ORS 743.760. [1991 c.673 §§3,4; 1993 c.454 §1; 1997 c.716 §24;
2001 c.943 §11]
     743.561 [Formerly 739.565; renumbered 743.371 in
1989]
     743.562
Applicability of ORS 743.560.
ORS 743.560 applies to multiple employer trusts when an employer ceases to
participate therein. [1991 c.673 §5]
     743.564 [Formerly 739.570; 1969 c.336 §13; 1989
c.1073 §1; renumbered 743.372 in 1989]
     743.565
Separate notice to policyholder required before cancellation of individual or
group health insurance policy for nonpayment of premium. Before a health insurer selling an
individual policy or group health benefit plan, as defined in ORS 743.730, may
cancel a policy for nonpayment of premium, the insurer must mail a separate
notice to the policyholder at least 10 days prior to the end of the grace
period informing the policyholder that the premium was not received and that
the policy will be terminated as of the premium due date if the premium is not
received by the end of the applicable grace period required by ORS 743.417 and
743.560. The notice shall be in writing and mailed by first class mail to the
last-known address of the policyholder. [2001 c.943 §8]
     743.566
Rules for certain notice requirements. The Director of the Department of Consumer and Business Services shall
adopt rules necessary for the implementation and administration of ORS 743.565
and the amendments to ORS 743.417, 743.420, 743.560, 743.737, 743.754 and
743.766 by sections 9 to 14, chapter 943, Oregon Laws 2001. [2001 c.943 §16]
     Note: 743.566 was enacted into law by the
Legislative Assembly but was not added to or made a part of ORS chapter 743 or
any series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.
     743.567 [Formerly 739.575; renumbered 743.373 in
1989]
     743.570 [1967 c.359 §473; renumbered 743.374 in
1989]
     743.573 [Formerly 741.425; renumbered 743.375 in
1989]
     743.576 [Formerly 739.585; renumbered 743.376 in
1989]
     743.579 [Formerly 739.590; renumbered 743.377 in
1989]
     743.582 [Formerly 739.600; renumbered 743.378 in
1989]
     743.585 [Formerly 739.603; renumbered 743.379 in
1989]
     743.588 [Formerly 739.610; renumbered 743.380 in
1989]
(Continuation)
     743.600
Availability of continued coverage under group policy for surviving, divorced
or separated spouse 55 or older. (1) A group health insurance policy providing coverage for hospital or
medical expenses, other than coverage limited to expenses from accidents or
specific diseases, shall contain a provision that:
     (a) The surviving spouse of a certificate
holder may continue coverage under the policy, at the death of the certificate
holder, with respect to the spouse and any dependent children whose coverage
under the policy otherwise would terminate because of the death of the
certificate holder if the surviving spouse is 55 years of age or older at the
time of the death; and
     (b) The divorced or legally separated
spouse of a certificate holder may continue coverage under the policy, upon
dissolution of marriage with, or legal separation from, the certificate holder,
with respect to the divorced or legally separated spouse and any dependent
children whose coverage under the policy otherwise would terminate because of
the dissolution of marriage or legal separation, if the divorced or legally
separated spouse is 55 years of age or older at the time of the dissolution or
legal separation.
     (2) Continued coverage for dental, vision
care or prescription drug expenses shall be offered to legally separated,
divorced or surviving spouses and any dependent children eligible under
subsection (1) of this section if such coverage is or was available to the
certificate holder. [Formerly 743.851]
     743.601
Procedure for obtaining continuation of coverage under ORS 743.600. (1) As used in subsections (1) to (6) of
this section, “plan administrator” means:
     (a) The person designated as the plan
administrator by the instrument under which the group health insurance plan is
operated; or
     (b) If no plan administrator is
designated, the plan sponsor.
     (2) Within 60 days of legal separation or
the entry of a judgment of dissolution of marriage, a legally separated or
divorced spouse eligible for continued coverage under ORS 743.600 who seeks
such coverage shall give the plan administrator written notice of the legal
separation or dissolution. The notice shall include the mailing address of the
legally separated or divorced spouse.
     (3) Within 30 days of the death of a
certificate holder whose surviving spouse is eligible for continued coverage
under ORS 743.600, the group policyholder shall give the plan administrator
written notice of the death and of the mailing address of the surviving spouse.
     (4) Within 14 days of receipt of notice
under subsection (2) or (3) of this section, the plan administrator shall
notify the legally separated, divorced or surviving spouse that the policy may
be continued. The notice shall be mailed to the mailing address provided to the
plan administrator and shall include:
     (a) A form for election to continue the
coverage;
     (b) A statement of the amount of periodic
premiums to be charged for the continuation of coverage and of the method and
place of payment; and
     (c) Instructions for returning the
election form by mail within 60 days after the date of mailing of the notice by
the plan administrator.
     (5) Failure of the legally separated,
divorced or surviving spouse to exercise the election in accordance with
subsection (4) of this section shall terminate the right to continuation of
benefits.
     (6) If a plan administrator fails to
notify the legally separated, divorced or surviving spouse as required by
subsection (4) of this section, premiums shall be waived from the date the
notice was required until the date notice is received by the legally separated,
divorced or surviving spouse.
     (7) The provisions of ORS 743.600 to
743.602 apply only to employers with 20 or more employees and group health
insurance plans with 20 or more certificate holders. [Formerly 743.852; 2003
c.576 §557]
     743.602
Premium for continuation of coverage under ORS 743.600; termination of right to
continuation. If a legally
separated, divorced or surviving spouse elects continuation of coverage under
ORS 743.601 (1) to (6):
     (1) The monthly premium for the
continuation shall not be greater than the amount that would be charged if the
legally separated, divorced or surviving spouse were a current certificate
holder of the group plan plus the amount that the group policyholder would
contribute toward the premium if the legally separated, divorced or surviving
spouse were a certificate holder of the group plan, plus an additional amount
not to exceed two percent of the certificate holder and group plan holder
contributions, for the costs of administration.
     (2) The first premium shall be paid by the
legally separated, divorced or surviving spouse within 45 days of the date of
the election.
     (3) The right to continuation of coverage
shall terminate upon the earliest of any of the following:
     (a) The failure to pay premiums when due,
including any grace period allowed by the policy;
     (b) The date that the group policy is
terminated as to all group members except that if a different group policy is
made available to group members, the legally separated, divorced or surviving
spouse shall be eligible for continuation of coverage as if the original policy
had not been terminated;
     (c) The date on which the legally
separated, divorced or surviving spouse becomes insured under any other group
health plan;
     (d) The date on which the legally
separated, divorced or surviving spouse remarries and becomes covered under
another group health plan; or
     (e) The date on which the legally
separated, divorced or surviving spouse becomes eligible for federal Medicare
coverage. [Formerly 743.853]
     743.603 [Formerly 744.070; renumbered 742.200 in
1989]
     743.606 [1967 c.359 §481; 1967 c.453 §3; renumbered
742.202 in 1989]
     743.607 [1967 c.453 §2; renumbered 742.204 in 1989]
     743.609 [1967 c.359 §482; 1971 c.231 §26; renumbered
742.206 in 1989]
     743.610
Continuation of coverage under group policy upon termination of employment or
membership or dissolution of marriage; applicability of waiting period to
rehired employee. (1) A
group health insurance policy providing coverage for hospital or medical
expenses, other than coverage limited to expenses from accidents or specific
diseases, shall contain a provision that certificate holders whose coverage
under the policy otherwise would terminate because of termination of employment
or membership may continue coverage under the policy for themselves and their
eligible dependents as provided in this section.
     (2) Continuation of coverage shall be
available only to a certificate holder who has been insured continuously under
the policy or similar predecessor policy during the three-month period ending
on the date of the termination of employment or membership.
     (3) Continuation of coverage shall not be
available to a certificate holder who is eligible for:
     (a) Federal Medicare coverage; or
     (b) Coverage for hospital or medical expenses
under any other program which was not covering the certificate holder
immediately before the certificate holderÂ’s termination of employment or
membership.
     (4) The continued coverage need not
include benefits for dental, vision care or prescription drug expense, or any
other benefits under the policy additional to hospital and medical expense
benefits.
     (5) A certificate holder who has
terminated employment or membership and who wishes to continue coverage must
request continuation in writing not later than 10 days after the later of the
date on which employment or membership terminated and the date on which the
employer or group policyholder gave the certificate holder notice of the right
to continue coverage. However, a certificate holder may not make a request for
continuation more than 31 days after the date of termination of employment or
membership.
     (6) A certificate holder who requests
continuation of coverage must pay the premium on a monthly basis and in
advance, as provided in this subsection. The certificate holder shall pay the
premium to the insurer or to the employer or policyholder, whichever the group
policy provides. The required premium payment may not exceed the group premium
rate, for the insurance being continued under the group policy, as of the date
the premium payment is due. The certificate holder must pay the first premium
not later than 31 days after the date on which the certificate holderÂ’s
coverage under the policy otherwise would end.
     (7) Continuation of coverage as provided
under this section shall end upon the earliest of the following dates:
     (a) Six months after the date on which the
certificate holderÂ’s coverage under the policy otherwise would have ended
because of termination of employment or membership.
     (b) The end of the period for which the
certificate holder last made timely premium payment, if the certificate holder
fails to make timely payment of a required premium payment.
     (c) The premium payment due date
coinciding with or next following the date the certificate holder becomes
eligible for federal Medicare coverage.
     (d) The date on which the policy is
terminated or the certificate holderÂ’s employer terminates participation under
the policy. However, if the employer replaces the coverage which is terminating
for the certificate holder with similar coverage under another group policy:
     (A) The certificate holder may obtain
coverage under the replacement group policy for the balance of the period that
the certificate holder would have remained covered under the replaced group
policy under this section;
     (B) The minimum level of benefits to be
provided the certificate holder by the replacement group policy shall be the
applicable level of benefits of the replaced policy reduced by any benefits
still payable under that policy; and
     (C) The replaced policy shall continue to
provide benefits to the certificate holder to the extent of that policyÂ’s
accrued liabilities and extensions of benefits as if the replacement had not
occurred.
     (8) The group health insurance policy also
shall contain a provision that:
     (a) The surviving spouse of a certificate
holder, if any, who is not eligible for continuation of coverage under ORS
743.600 may continue coverage under the policy, at the death of the certificate
holder, with respect to the spouse and any dependent children whose coverage
under the policy otherwise would terminate because of the death, in the same
manner that a certificate holder may exercise the right under this section.
     (b) The spouse of a certificate holder, if
any, who is not eligible for continuation of coverage under ORS 743.600 may
continue coverage under the policy, upon dissolution of marriage with the
certificate holder, with respect to the spouse and any children whose coverage
under the policy otherwise would terminate because of the dissolution of
marriage, in the same manner that a certificate holder may exercise the right
under this section.
     (c) A spouse who requests continuation of
coverage under this subsection must pay the premium for the spouse and any
dependent children, on a monthly basis and in advance, as provided in this
paragraph. The spouse shall pay the premium to the insurer or to the employer
or policyholder, whichever the group policy provides. The required premium
payment under this subsection may not exceed the group premium rate, for the
insurance being continued under the group policy, as of the date the premium
payment is due.
     (9) A certificate holder who has
terminated employment by reason of layoff shall not be subject upon any rehire
that occurs within six months of the time of the layoff to any waiting period
prerequisite to coverage under the employerÂ’s group health insurance policy if
the certificate holder was eligible for coverage at the time of the termination
and regardless of whether the certificate holder continued coverage during the
layoff.
     (10) This section applies only to
employers who are not required to make available continuation of health
insurance benefits under Titles X and XXII of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, P.L. 99-272, April 7, 1986. [Formerly
743.850]
     743.611 [Formerly 743.855; 1991 c.673 §6; repealed
by 1995 c.603 §42]
     743.612 [1967 c.359 §483; 1985 c.465 §3; renumbered
742.208 in 1989]
     743.613 [Formerly 743.860; repealed by 1995 c.603 §42]
     743.614 [Formerly 743.865; repealed by 1995 c.603 §42]
     743.615 [1967 c.359 §484; renumbered 742.210 in
1989]
     743.616 [Formerly 743.870; repealed by 1995 c.603 §42]
     743.617 [Formerly 743.875; repealed by 1995 c.603 §42]
     743.618 [1967 c.359 §485; renumbered 742.212 in
1989]
     743.619 [Formerly 743.880; repealed by 1995 c.603 §42]
     743.620 [Formerly 743.885; repealed by 1995 c.603 §42]
     743.621 [1967 c.359 §486; renumbered 742.214 in
1989]
     743.622 [Formerly 743.890; repealed by 1995 c.603 §42]
     743.624 [1967 c.359 §487; renumbered 742.216 in
1989]
     743.627 [1967 c.359 §488; renumbered 742.218 in
1989]
     743.630 [1967 c.359 §489; renumbered 742.220 in
1989]
     743.633 [1967 c.359 §490; renumbered 742.222 in 1989]
     743.636 [1967 c.359 §491; 1989 c.426 §2; renumbered
742.224 in 1989]
     743.639 [1967 c.359 §492; renumbered 742.226 in
1989]
     743.642 [1967 c.359 §493; renumbered 742.228 in
1989]
     743.645 [1967 c.359 §494; 1989 c.426 §1; renumbered
742.230 in 1989]
     743.648 [1967 c.359 §495; renumbered 742.232 in
1989]
(Long Term
Care)
     743.650
Long Term Care Insurance Act; purpose; application. (1) ORS 743.650 to 743.664 may be known and
cited as the “Long Term Care Insurance Act.”
     (2) The purpose of ORS 743.650 to 743.664
is to:
     (a) Promote the public interest in long
term care insurance;
     (b) Promote the availability of long term
care insurance policies;
     (c) Protect applicants for long term care
insurance from unfair or deceptive sales or enrollment practices;
     (d) Establish standards for long term care
insurance;
     (e) Facilitate public understanding and
comparison of long term care insurance policies;
     (f) Facilitate flexibility and innovation
in the development of long term care insurance coverage; and
     (g) Ensure that
     (3) The requirements of ORS 743.650 to
743.664, 748.603 and 750.055 apply to policies and certificates delivered or
issued for delivery in this state on or after December 31, 1989. ORS 743.650 to
743.664, 748.603 and 750.055 are not intended to supersede the obligations of
entities subject to ORS 743.650 to 743.664, 748.603 and 750.055 to comply with
the substance of other applicable insurance laws insofar as such laws do not
conflict with ORS 743.650 to 743.664, 748.603 and 750.055, except that laws and
rules designed and intended to apply to Medicare supplement insurance policies
shall not be applied to long term care insurance. A policy that is not
advertised, marketed or offered as long term care insurance or nursing home
insurance is not required to meet the requirements of ORS 743.650 to 743.664,
748.603 and 750.055. [1989 c.1022 §§1,2,3; 2007 c.486 §1]
     Note: See note under 743.662.
     743.651 [1967 c.359 §496; renumbered 742.234 in
1989]
     743.652
Definitions for ORS 743.650 to 743.664. As used in ORS 743.650 to 743.664, unless the context requires
otherwise:
     (1) “Applicant” means:
     (a) In the case of an individual long term
care insurance policy, the person who seeks to contract for benefits; and
     (b) In the case of a group long term care
insurance policy, the proposed certificate holder.
     (2) “Certificate” means any certificate
issued under a group long term care insurance policy, if the policy has been
delivered or issued for delivery in this state.
     (3) “Group long term care insurance” means
a long term care insurance policy that is delivered or issued for delivery in
this state and issued to:
     (a) One or more employers or labor
organizations, or to a trust or to the trustees of a fund established by one or
more employers or labor organizations, or a combination thereof, for employees
or former employees or a combination thereof, or for members or former members,
or a combination thereof, of the labor organizations;
     (b) Any professional, trade or
occupational association for its members or former or retired members, or
combination thereof, if such association:
     (A) Is composed of individuals all of whom
are or were actively engaged in the same profession, trade or occupation; and
     (B) Has been maintained in good faith for
purposes other than obtaining insurance;
     (c)(A) An association or a trust or the
trustee of a fund established, created or maintained for the benefit of members
of one or more associations. Prior to advertising, marketing or offering the
policy within this state, the association or associations, or the insurer of
the association or associations shall file evidence with the director that the
association or associations have been organized and maintained in good faith
for purposes other than that of obtaining insurance; have been in active
existence for at least one year; and have a constitution and bylaws that
provide that:
     (i) The association or associations hold
regular meetings not less than annually to further purposes of the members;
     (ii) Except for credit unions, the
association or associations collect dues or solicit contributions from members;
and
     (iii) The members have voting privileges
and representation on the governing board and committees; and
     (B) Sixty days after the filing, the
association or associations shall be considered to satisfy the organizational
requirements, unless the director makes a finding that the association or
associations do not satisfy those organizational requirements; or
     (d) A group other than as described in
paragraphs (a), (b) and (c) of this subsection, subject to a finding by the
director that:
     (A) The issuance of the group policy is
not contrary to the best interest of the public;
     (B) The issuance of the group policy would
result in economies of acquisition or administration; and
     (C) The benefits are reasonable in
relation to the premiums charged.
     (4) “Long term care insurance” means any
insurance policy or rider advertised, marketed, offered or designed to provide
coverage for not less than 24 consecutive months for each covered person on an
expense incurred, indemnity, prepaid or other basis; for one or more necessary
or medically necessary services, including but not limited to nursing,
diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal
care services, provided in a setting other than an acute care unit of a
hospital. “Long term care insurance” includes group and individual annuities
and life insurance policies or riders that provide directly or supplement long
term care insurance. “Long term care insurance” also includes a policy or rider
that provides for payment of benefits based upon cognitive impairment or the loss
of functional capacity, and qualified long term care insurance contracts. Long
term care insurance may be issued by insurers; fraternal benefit societies;
nonprofit health, hospital and medical service corporations; prepaid health
plans; or health maintenance organizations, health care service contractors or
any similar organization to the extent they are otherwise authorized to issue
life or health insurance. “Long term care insurance” does not include any
insurance policy that is offered primarily to provide basic Medicare supplement
coverage, basic hospital expense coverage, basic medical-surgical expense
coverage, hospital confinement indemnity coverage, major medical expense
coverage, disability income or related asset protection coverage, catastrophic
coverage, accident only coverage, specified disease or specified accident
coverage or limited benefit health coverage. With regard to life insurance, “long
term care insurance” does not include life insurance policies that accelerate
the death benefit specifically for one or more of the qualifying events of
terminal illness, medical conditions requiring extraordinary medical
intervention or permanent institutional confinement, and that provide the
option of a lump-sum payment for those benefits and when neither the benefits
nor the eligibility for the benefits is conditioned upon the receipt of long
term care. Notwithstanding any other provision of ORS 743.650 to 743.664, any
product advertised, marketed or offered as long term care insurance is subject
to ORS 743.650 to 743.664.
     (5) “Policy” means any policy, contract,
subscriber agreement, rider or indorsement delivered or issued for delivery in
this state by an insurer; fraternal benefit society; nonprofit health, hospital
or medical service corporation; prepaid health plan; or health maintenance
organization, health care service contractor or any similar organization.
     (6) “Qualified long term care insurance”
means:
     (a) The portion of a life insurance
contract that provides long term care insurance coverage by rider or as part of
the contract and that satisfies the requirements of section 7702B(b) and (e) of
the Internal Revenue Code; or
     (b) Individual or group long term care
insurance as defined in this section that meets all of the following requirements
of section 7702B(b) of the Internal Revenue Code:
     (A) The only insurance protection provided
under the contract is coverage of qualified long term care services. A contract
shall not fail to satisfy the requirements of this subparagraph by reason of
payments being made on a per diem or other periodic basis without regard to the
expenses incurred during the period to which the payments relate.
     (B) The contract does not pay or reimburse
expenses incurred for services or items to the extent that the expenses are
reimbursable under Title XVIII of the Social Security Act, or would be
reimbursable but for the application of a deductible or coinsurance amount. The
requirements of this subparagraph do not apply to expenses that are
reimbursable under Title XVIII of the Social Security Act only as a secondary
payer. A contract does not fail to satisfy the requirements of this
subparagraph by reason of payments being made on a per diem or other periodic
basis without regard to the expenses incurred during the period to which the
payments relate.
     (C) The contract is guaranteed renewable
within the meaning of section 7702B(b)(1)(C) of the Internal Revenue Code.
     (D) The contract does not provide for a
cash surrender value or other money that can be paid, assigned, pledged as
collateral for a loan, or borrowed except as provided in subparagraph (E) of
this paragraph.
     (E) All refunds of premiums, and all
policyholder dividends or similar amounts, under the contract are to be applied
as a reduction in future premiums or to increase future benefits, except that a
refund on the event of death of the insured or a complete surrender or
cancellation of the contract cannot exceed the aggregate premiums paid under
the contract.
     (F) The contract meets the consumer
protection provisions set forth in section 7702B(g) of the Internal Revenue
Code. [1989 c.1022 §4; 1993 c.744 §30; 1995 c.79 §364; 2007 c.486 §2]
     Note: See note under 743.662.
     743.653
Prohibition on certain policies. Group long term care insurance coverage may not be offered to a
resident of this state under a group policy issued in another state to a group
described in ORS 743.652 (3)(d), unless this state or another state having
statutory and regulatory long term care insurance requirements substantially
similar to those adopted in this state has made a determination that such
requirements have been met. [1989 c.1022 §5; 1991 c.67 §199; 2007 c.486 §3]
     Note: See note under 743.662.
     743.654 [1967 c.359 §497; renumbered 742.236 in
1989]
     743.655
Rules; disclosure; contents of policy. (1)(a) The Director of the Department of Consumer and Business
Services shall adopt rules that include standards for full and fair disclosure
setting forth the manner, content and required disclosures for the sale of long
term care insurance policies, terms of renewability, initial and subsequent
conditions of eligibility, nonduplication of coverage provisions, coverage of
dependents, preexisting conditions, termination of insurance, program for
public understanding, continuation or conversion, probationary periods,
limitations, exceptions, reductions, elimination periods, underwriting at time
of application, requirements for replacement, recurrent conditions and
definitions of terms.
     (b) In adopting rules setting standards
under this section, the director must give timely notice to, and shall consider
recommendations from the Director of Human Services.
     (2) A long term care insurance policy may
not:
     (a) Be canceled, nonrenewed or otherwise
terminated on the grounds of the age or the deterioration of the mental or
physical health of the insured individual or certificate holder;
     (b) Contain a provision establishing a new
waiting period in the event existing coverage is converted to or replaced by a
new or other form within the same company, except with respect to an increase
in benefits voluntarily selected by the insured individual or group
policyholder;
     (c) Provide coverage for skilled nursing
care only or provide significantly more coverage for skilled care in a facility
than coverage for lower levels of care;
     (d) Exclude coverage for Alzheimer’s
disease and related dementias;
     (e) Be nonrenewed or otherwise terminated
for nonpayment of premiums until 31 days overdue and then only after notice of
nonpayment is given the policyholder prior to expiration of the 31 days, except
as otherwise provided by rule; or
     (f) Be sold to provide less than 24 months’
coverage.
     (3)(a) A long term care insurance policy
or certificate other than a policy or certificate issued to a group described
in ORS 743.652 (3)(a), (b) or (c) may not use a definition of “preexisting
condition” that is more restrictive than the following: “Preexisting condition”
means a condition for which medical advice or treatment was recommended by, or
received from a provider of health care services, within six months preceding
the effective date of coverage of an insured person.
     (b) A long term care insurance policy or
certificate other than a policy or certificate thereunder issued to a group
described in ORS 743.652 (3)(a), (b) or (c) may not exclude coverage for a loss
or confinement that is the result of a preexisting condition unless the loss or
confinement begins within six months following the effective date of coverage
of an insured person.
     (c) The Director of the Department of
Consumer and Business Services may extend the limitation periods set forth in
paragraphs (a) and (b) of this subsection as to specific age group categories
or specific policy forms upon findings that the extension is in the best
interest of the public.
     (d) The definition of preexisting
condition does not prohibit an insurer from using an application form designed
to elicit the complete health history of an applicant, over the 10 years
immediately prior to the date of application, and, on the basis of the answers
on the application, from underwriting in accordance with that insurerÂ’s
established underwriting standards. Unless otherwise provided in the policy or
certificate, a preexisting condition, regardless of whether it is disclosed on
the application, need not be covered until the waiting period described in
paragraph (b) of this subsection expires. A long term care insurance policy or
certificate may not exclude or use waivers or riders of any kind to exclude,
limit or reduce coverage or benefits for specifically named or described
preexisting diseases or physical conditions beyond the waiting period described
in paragraph (b) of this subsection.
     (4) A long term care insurance policy may
not be delivered or issued for delivery in this state if the policy:
     (a) Conditions eligibility for any
benefits on a prior hospitalization requirement;
     (b) Conditions eligibility for benefits
provided in an institutional care setting on the receipt of a higher level of
institutional care; or
     (c) Conditions eligibility for any
benefits other than waiver of premium or post-confinement, post-acute care or
recuperative benefits on a prior institutionalization requirement.
     (5)(a) A long term care insurance policy
containing post-confinement, post-acute care or recuperative benefits must
clearly label in a separate paragraph of the policy or certificate titled “Limitations
or Conditions of Eligibility for Benefits” all such limitations or conditions,
including any required number of days of confinement.
     (b) A long term care insurance policy or
rider that conditions eligibility of noninstitutional benefits on the prior
receipt of institutional care may not require a prior institutional stay of
more than 30 days.
     (6) Individual long term care insurance
applicants shall have the right to return the policy or certificate within 30
days of its delivery and to have the premium refunded if, after examination of
the policy or certificate, the applicant is not satisfied for any reason. Long
term care insurance policies and certificates must have a notice prominently
printed on the first page or attached thereto stating in substance that the
applicant has the right to return the policy or certificate within 30 days of
its delivery and to have the premium refunded if, after examination of the
policy or certificate, other than a certificate issued pursuant to a policy
issued to a group described in ORS 743.652 (3)(a), the applicant is not
satisfied for any reason. This subsection also applies to denials of
applications. Any refund must be made within 30 days of the return or denial.
     (7)(a)(A) An outline of coverage shall be
delivered to a prospective applicant for long term care insurance at the time
of initial solicitation through means that prominently direct the attention of
the recipient to the document and its purpose.
     (B) The director by rule must prescribe a
standard format, including style, arrangement and overall appearance, and the
content of an outline of coverage.
     (C) In the case of solicitations by an
insurance producer, the insurance producer must deliver the outline of coverage
prior to the presentation of an application or enrollment form.
     (D) In the case of direct response
solicitations, the outline of coverage must be presented in conjunction with
any application or enrollment form.
     (E) In the case of a policy issued to a
group described in ORS 743.652 (3)(a), an outline of coverage is not required
to be delivered as long as the information described in paragraph (b) of this
subsection is contained in other materials related to the enrollment. Upon
request, these other materials must be made available to the director.
     (b) The outline of coverage must include:
     (A) A description of the principal
benefits and coverage provided in the policy;
     (B) A statement of the principal
exclusions, reductions and limitations contained in the policy;
     (C) A statement of the terms under which
the policy or certificate, or both, may be continued in force or discontinued,
including any reservation in the policy of a right to change premium.
Continuation or conversion provisions of group coverage shall be specifically
described;
     (D) A statement that the outline of
coverage is a summary only, not a contract of insurance, and that the policy or
group master policy contains governing contractual provisions;
     (E) A description of the terms under which
the policy or certificate may be returned and premium refunded;
     (F) A brief description of the
relationship of cost of care and benefits; and
     (G) A statement that discloses to the
policyholder or certificate holder whether the policy is intended to be
qualified long term care insurance as defined in ORS 743.652.
     (8) A certificate issued pursuant to a
group long term care insurance policy if the policy is delivered or issued for
delivery in this state shall include:
     (a) A description of the principal
benefits and coverage provided in the policy;
     (b) A statement of the principal
exclusions, reductions and limitations contained in the policy; and
     (c) A statement that the group master
policy determines governing contractual provisions.
     (9) If an application for a long term care
insurance policy or certificate is approved, the insurer must deliver the
policy or certificate to the applicant no later than 30 days after the date of
approval.
     (10) At the time of policy delivery, a
policy summary must be delivered for an individual life insurance policy that
provides long term care benefits within the policy or by rider. In the case of
direct response solicitations, the insurer must deliver the policy summary upon
the applicantÂ’s request, but regardless of request must make delivery not later
than at the time of policy delivery. In addition to complying with all
applicable requirements, the summary must also include the provisions required
in this subsection. The required provision may be incorporated into a basic
illustration or into the life insurance policy summary if required by rule. The
following provisions must be included in the summary:
     (a) An explanation of how the long term
care benefit interacts with other components of the policy, including
deductions from death benefits;
     (b) An illustration of the amount of
benefits, the length of benefits and the guaranteed lifetime benefits, if any,
for each covered person;
     (c) Any exclusions, reductions and
limitations on benefits of long term care;
     (d) A statement that any long term care
inflation protection option required by rule is not available under the policy;
and
     (e) If applicable to the policy type, the
following:
     (A) A disclosure of the effects of
exercising other rights under the policy;
     (B) A disclosure of guarantees related to
long term care costs of insurance charges; and
     (C) Current and projected maximum lifetime
benefits.
     (11) When a long term care benefit that is
funded through a life insurance policy by an acceleration of the death benefit
is in benefit payment status, the insurer must provide a monthly report to the
policyholder. The report must include:
     (a) Any long term care benefits paid out
during the month;
     (b) An explanation of any changes in the
policy, such as death benefits or cash values, owing to payment of long term
care benefits; and
     (c) The amount of long term care benefits
existing or remaining.
     (12) If a claim under a long term care
insurance policy is denied, then not later than the 60th day after the date of
a written request by the policyholder or certificate holder, or a
representative of either, the insurer must:
     (a) Provide a written explanation of the
reasons for the denial; and
     (b) Make available all information
directly related to the denial.
     (13) A policy may not be advertised,
marketed or offered as long term care or nursing home insurance unless it
complies with the provisions of ORS 743.650 to 743.664.
     (14) Rules adopted pursuant to ORS 743.650
to 743.664 shall be in accordance with the provisions of ORS chapter 183.
     (15) This section is exempt from ORS
743A.001. [1989 c.1022 §§6,7; 1991 c.67 §200; 2003 c.364 §110; 2007 c.486 §4]
     Note: See note under 743.662.
     743.656
Eligibility for benefits; providers required to be covered. (1) No long term care insurance policy shall
be delivered or issued for delivery in this state unless the policy determines
eligibility for benefits through a determination that is not more restrictive
than requiring that:
     (a) The policyholder be functionally
impaired and needing assistance in any three or more activities of daily living
as defined by the Director of the Department of Consumer and Business Services,
by rule, after consultation with the Director of Human Services.
     (b) Benefits must be payable when the
beneficiary is receiving covered services from any of the following providers
approved by the insurer:
     (A) Nursing home;
     (B) Assisted living;
     (C) Home care; and
     (D) Adult foster care.
     (c) The insurer shall approve nursing
home, assisted living, home care, adult foster home and any other providers of
covered services by using standards that have been submitted to and approved by
the director in consultation with the Director of Human Services.
     (2) No long term care policy that offers
only nursing home benefits shall be sold in this state. [1989 c.1022 §§13,14;
2003 c.14 §449]
     743.657 [1967 c.359 §498; renumbered 742.238 in
1989]
     743.660 [1967 c.359 §499; renumbered 742.240 in
1989]
     743.662
Rescission of policy and denial of claims. (1) For a policy or certificate that has been in force for less than
six months, an insurer may rescind a long term care insurance policy or
certificate or deny an otherwise valid long term care insurance claim upon a
showing of a misrepresentation that is material to the acceptance for coverage.
     (2) For a policy or certificate that has
been in force for at least six months but less than two years, an insurer may
rescind a long term care insurance policy or certificate or deny an otherwise
valid long term care insurance claim upon a showing of a misrepresentation that
is material to the acceptance for coverage and also pertains to the condition
for which benefits are sought.
     (3) After a policy or certificate has been
in force for two years, the policy or certificate is not contestable upon the
ground of misrepresentation alone. The policy or certificate may be contested
only upon a showing that the insured knowingly and intentionally misrepresented
relevant facts relating to the insuredÂ’s health.
     (4) A long term care insurance policy or
certificate may not be field issued based on medical or health status. A policy
or certificate is field issued for the purposes of this subsection if the
policy or certificate is issued by an insurance producer or a third party
administrator pursuant to underwriting authority granted to the insurance
producer or third party administrator by an insurer.
     (5) If an insurer has paid benefits under
the long term care insurance policy or certificate, the insurer may not recover
the benefit payments in the event that the policy or certificate is rescinded.
     (6) This section does not apply to the
remaining death benefit of a life insurance policy in the event of the death of
the insured if the policy accelerates benefits for long term care, but this
section otherwise applies to a life insurance policy that accelerates benefits
for long term care. In the event of the death of an insured, the remaining
death benefits under the life insurance policy are governed by ORS 743.168.
     (7) This section is exempt from ORS
743A.001. [2007 c.486 §6]
     Note: Section 18, chapter 486, Oregon Laws 2007,
provides:
     Sec.
18. Sections 6 [743.662] and
7 [743.664] of this 2007 Act and the amendments to ORS 743.650, 743.652,
743.653 and 743.655 by sections 1 to 4 of this 2007 Act apply to policies and
certificates delivered or issued for delivery on or after January 1, 2008.
[2007 c.486 §18]
     743.663 [1967 c.359 §500; renumbered 742.242 in
1989]
     743.664
Offer of nonforfeiture benefit; rules. (1) Except as provided in subsection (2) of this section, a long term
care insurance policy may not be delivered or issued for delivery in this state
unless the policyholder or certificate holder has been offered the option of
purchasing a policy or certificate including a nonforfeiture benefit. The offer
of a nonforfeiture benefit may be in the form of a rider that is attached to
the policy. If the policyholder or certificate holder declines the
nonforfeiture benefit, the insurer must provide a contingent benefit upon lapse
that is available for a specified period of time following a substantial
increase in premium rates.
     (2) When a group long term care insurance
policy is issued, the offer required in subsection (1) of this section must be
made to the group policyholder. However, if the policy is issued as group long
term care insurance as described in ORS 743.652 (3)(d), other than to a
continuing care retirement community or similar entity, the offering shall be
made to each proposed certificate holder.
     (3) The Director of the Department of
Consumer and Business Services by rule shall specify:
     (a) The type or types of nonforfeiture
benefits to be offered as part of long term care insurance policies and
certificates;
     (b) The standards for nonforfeiture
benefits; and
     (c) The standards governing contingent
benefits upon lapse, including a determination of the specified period of time
during which a contingent benefit upon lapse will be available and the
substantial premium increase that triggers a contingent benefit upon lapse as
described in subsection (1) of this section.
     (4) This section is exempt from ORS
743A.001. [2007 c.486 §7]
     Note: See note under 743.662.
     743.666 [Formerly 744.125; renumbered 742.244 in
1989]
     743.669 [Formerly 744.130; renumbered 742.246 in
1989]
     743.672 [Formerly 744.430; renumbered 742.248 in
1989]
     743.675 [Formerly 744.440; renumbered 742.250 in
1989]
     743.678 [Formerly 744.450; renumbered 742.252 in
1989]
(Medicare
Supplement)
     743.680
Definitions for ORS 743.680 to 743.689. As used in ORS 743.680 to 743.689, unless the context requires
otherwise:
     (1) “Applicant” means:
     (a) In the case of an individual Medicare
supplement policy or subscriber contract, the person who seeks to contract for
insurance benefits.
     (b) In the case of a group Medicare
supplement policy or subscriber contract, the proposed certificate holder.
     (2) “Certificate” means any certificate
issued under a group Medicare supplement policy, which certificate has been
delivered or issued for delivery in this state.
     (3) “Medicare” means the “Health Insurance
for the Aged Act,” Title XVIII of the Social Security Amendments of 1965.
     (4) “Medicare supplement policy” means a
group or individual policy of insurance or a subscriber contract which is
advertised, marketed or designed primarily as a supplement to reimbursements
under Medicare for the hospital, medical or surgical expenses of persons
eligible for Medicare. [1989 c.255 §1; 1993 c.113 §1]
     743.681 [Formerly 744.460; renumbered 742.254 in
1989]
     743.682
Application of ORS 743.680 to 743.689. (1) Except as otherwise specifically provided, ORS 743.680 to 743.689
apply to:
     (a) All Medicare supplement policies and
subscriber contracts delivered or issued for delivery in this state on or after
May 31, 1989; and
     (b) All certificates issued under group
Medicare supplement policies or subscriber contracts, which certificates have
been delivered or issued for delivery in this state on or after May 31, 1989.
     (2) ORS 743.680 to 743.689 do not apply to
a policy or contract of one or more employers or labor organizations, or of the
trustees of a fund established by one or more employers or labor organizations,
or combination thereof, for employees or former employees or a combination
thereof, or for members or former members, or a combination thereof, of the
labor organizations. [1989 c.255 §2]
     743.683
Policy contents; standards for benefit and claims payments; rules. (1) No Medicare supplement insurance policy,
contract or certificate in force in the state shall contain benefits which
duplicate benefits provided by Medicare.
     (2) The Director of the Department of
Consumer and Business Services shall adopt by rule specific standards for
policy provisions of Medicare supplement policies and certificates. The
standards shall be in addition to and in accordance with applicable laws of
this state. No requirement of the Insurance Code relating to minimum required
policy benefits, other than the minimum standards contained in ORS 743.680 to
743.689, shall apply to Medicare supplement policies. The standards may cover,
but not be limited to:
     (a) Terms of renewability;
     (b) Initial and subsequent conditions of
eligibility;
     (c) Nonduplication of coverage;
     (d) Probationary periods;
     (e) Benefit limitations, exceptions and
reductions;
     (f) Elimination periods;
     (g) Requirements for replacement;
     (h) Recurrent conditions; and
     (i) Definitions of terms.
     (3) Provisions established by the director
governing eligibility for Medicare supplement insurance shall not be limited to
persons qualifying for Medicare by reason of age.
     (4) The director may adopt by rule
standards that specify prohibited policy provisions not otherwise specifically
authorized by statute which, in the opinion of the director, are unjust, unfair
or unfairly discriminatory to any person insured or proposed for coverage under
a Medicare supplement policy.
     (5) Notwithstanding any other provision of
law of this state, a Medicare supplement policy may not deny a claim for losses
incurred more than six months from the effective date of coverage for a
preexisting condition. The policy may not define a preexisting condition more
restrictively than a condition for which medical advice was given or treatment
was recommended by or received from a physician within six months before the
effective date of coverage.
     (6) The director shall adopt by rule
standards for benefits and claims payment under Medicare supplement policies. [1989
c.255 §§3,4; 1993 c.113 §3]
     743.684
Filing of policy; loss ratio standards; insurance producer compensation. (1) Every insurer providing group Medicare
supplement insurance benefits to a resident of this state pursuant to ORS
743.682 shall file a copy of the master policy and any certificate used in this
state in accordance with the filing requirements and procedures applicable to
group Medicare supplement policies issued in this state. However, no insurer
shall be required to make a filing earlier than 30 days after insurance was
provided to a resident of this state under a master policy issued for delivery
outside this state.
     (2) Medicare supplement policies shall
return benefits which are reasonable in relation to the premium charged. The
Director of the Department of Consumer and Business Services shall adopt by
rule minimum standards for loss ratios of Medicare supplement policies on the
basis of incurred claims experience, or incurred health care expenses where
coverage is provided by a health maintenance organization on a service rather
than reimbursement basis, and earned premiums in accordance with accepted
actuarial principles and practices. Every entity providing Medicare supplement
policies or certificates in this state shall file annually its rates, rating
schedule and supporting documentation demonstrating that it is in compliance
with the applicable loss ratio standards of this state. All filings of rates
and rating schedules shall demonstrate that the actual and expected losses in
relation to premiums comply with the requirements of ORS 743.680 to 743.689.
     (3) No entity shall provide compensation
to insurance producers which is greater than the renewal compensation which
would have been paid on an existing policy if the existing policy is replaced
by another policy with the same company where the new policy benefits are
substantially similar to the benefits under the old policy and the old policy
was issued by the same insurer or insurer group. [1989 c.255 §5; 2003 c.364 §111]
     743.685
Outline of coverage; information brochure; rules. (1) In order to provide for full and fair
disclosure in the sale of Medicare supplement policies, no Medicare supplement
policy or certificate shall be delivered in this state unless an outline of
coverage is delivered to the applicant at the time application is made.
     (2) The Director of the Department of
Consumer and Business Services shall prescribe the format and content of the
outline of coverage required by subsection (1) of this section. The director
shall consult with the GovernorÂ’s Commission on Senior Services concerning the
content and format of the outline of coverage, especially in reference to the
ease with which senior citizens may understand the form and compare the
coverage provided under the policy to which the outline of coverage refers. For
purposes of this section, “format” means style, arrangements and overall
appearance, including such items as the size, color and prominence of type and
arrangement of text and captions. The outline of coverage required by
subsection (1) of this section shall include at least the following:
     (a) A description of the principal
benefits and coverage provided in the policy;
     (b) A statement of the renewal provisions,
including any reservation by the insurer of a right to change premiums and
disclosure of the existence of any automatic renewal premium increases based on
the policyholderÂ’s age; and
     (c) A statement that the outline of
coverage is a summary of the policy issued or applied for and that the policy
should be consulted to determine governing contractual provisions.
     (3) Insurers shall fill out the
standardized form and have the completed information included on the form
approved by the director before selling supplemental Medicare coverage in this
state.
     (4) In the purchase or renewal of a
Medicare supplement policy, a copy of the outline of coverage must be used in
explaining policy coverage to a purchaser and shall be provided to the
applicant at the time the sales presentation is made. The completed outline of
coverage shall be considered part of the sales presentation materials for the
purposes of ORS 742.009.
     (5) The insurer shall obtain
acknowledgment of receipt or certify delivery of the outline of coverage at the
time of sale.
     (6) The director may adopt by rule a
standard form and the contents of an informational brochure for persons
eligible for Medicare, which is intended to improve the buyerÂ’s ability to
select the most appropriate coverage and improve the buyerÂ’s understanding of
Medicare. Except in the case of direct response insurance policies, the
director may require by rule that the information brochure be provided to any
prospective insureds eligible for Medicare concurrently with delivery of the
outline of coverage. With respect to direct response insurance policies, the
director may require by rule that the prescribed brochure be provided upon
request to any prospective insureds eligible for Medicare, but in no event
later than the time of policy delivery.
     (7) The director may adopt by rule
captions or notice requirements, determined to be in the public interest and
designed to inform prospective insureds that particular insurance coverages are
not Medicare supplement coverages, for all health insurance policies sold to
persons eligible for Medicare, other than:
     (a) Medicare supplement policies; or
     (b) Disability income policies.
     (8) The director may adopt rules governing
the full and fair disclosure of the information in connection with the
replacement of health insurance policies, subscriber contracts or certificates
by persons eligible for Medicare. [1989 c.255 §6; 1993 c.113 §2; 1997 c.96 §2]
     743.686
Right to return of policy; premium refund. Medicare supplement policies or certificates shall have a notice
prominently printed on the first page of the policy or certificate or attached
thereto stating in substance that the applicant shall have the right to return
the policy or certificate within 30 days of its delivery and to have the
premium refunded if, after examination of the policy or certificate, the
applicant is not satisfied for any reason. Any refund made pursuant to this
section shall be paid directly to the applicant by the insurer in a timely
manner. [1989 c.255 §7]
     743.687
Advertising. Every insurer,
health care service plan or other entity providing Medicare supplement insurance
or benefits in this state shall provide a copy of any Medicare supplement
advertisement intended for use in this state whether through written, radio or
television medium to the Director of the Department of Consumer and Business
Services of this state for review or approval by the director to the extent it
may be required under state law. [1989 c.255 §8]
     743.688
Rules. Rules adopted
pursuant to ORS 743.680 to 743.689 shall be subject to the provisions of ORS
chapter 183. [1989 c.255 §9]
     743.689
DirectorÂ’s authority upon violation of ORS 743.680 to 743.689. In addition to any other applicable
penalties for violations of the Insurance Code, the Director of the Department
of Consumer and Business Services may require insurers violating any provision
of ORS 743.680 to 743.689 or rules adopted pursuant to ORS 743.680 to 743.689
to cease marketing any Medicare supplement policy or certificate in this state
which is related directly or indirectly to a violation or may require such
insurer to take such actions as are necessary to comply with the provisions of
ORS 743.680 to 743.689, or both. [1989 c.255 §10]
     743.690 [1981 c.247 §17; renumbered 742.280 in 1989]
     743.691 [2003 c.748 §2; renumbered 743A.110 in 2007]
     743.693 [1999 c.428 §2; 2001 c.104 §289; renumbered
743A.080 in 2007]
     743.694 [2001 c.742 §2; renumbered 743A.184 in 2007]
     743.695 [1997 c.573 §2; renumbered 743A.060 in 2007]
     743.697 [1997 c.573 §3; renumbered 743A.062 in 2007]
     743.699 [1997 c.651 §2; 2003 c.137 §1; renumbered
743A.012 in 2007]
     743.700 [Formerly 743.145; 2005 c.69 §1; 2005 c.482 §3;
2007 c.313 §4; renumbered 743A.001 in 2007]
     743.701 [Formerly 743.116; renumbered 743A.010 in
2007]
     743.702 [Formerly 746.010; repealed by 1969 c.692 §11]
     743.703 [Formerly 743.117; 2005 c.442 §4; renumbered
743A.040 in 2007]
     743.704 [Formerly 743.118; repealed by 2001 c.742 §3]
     743.705 [Formerly 746.030; 1969 c.692 §9; 1973 c.179
§1; 1982 s.s.1 c.5 §1; 1987 c.846 §13; renumbered 742.282 in 1989]
     743.706 [Formerly 743.119; renumbered 743A.148 in
2007]
     743.707 [Formerly 743.120; 1991 c.674 §2; 1995 c.506
§10; renumbered 743A.090 in 2007]
     743.708 [Formerly 746.080; 1969 c.692 §10; 1973
c.823 §150; renumbered 742.284 in 1989]
     743.709 [Formerly 743.123; renumbered 743A.048 in
2007]
     743.710 [Formerly 743.125; renumbered 743A.088 in
2007]
     743.711 [1987 c.846 §15; renumbered 742.286 in 1989]
     743.712 [Formerly 743.128; renumbered 743A.036 in
2007]
     743.713 [Formerly 743.132; 1993 c.142 §15; 2005 c.22
§496; renumbered 743A.028 in 2007]
     743.714 [Formerly 743.135; renumbered 743A.024 in
2007]
     743.715 [Formerly 743.138; repealed by 1991 c.182 §21]
     743.716 [Formerly 743.140; repealed by 1995 c.506 §11]
     743.717 [Formerly 743.143; renumbered 743A.180 in
2007]
     743.718 [Formerly 743.147; renumbered 743A.014 in
2007]
     743.719 [Formerly 743.052; renumbered 743A.032 in
2007]
     743.720 [1979 c.866 §4; 1987 c.774 §56; renumbered
742.300 in 1989]
     743.721 [Formerly 743.037; renumbered 743A.084 in
2007]
     743.722 [1989 c.832 §2; 1991 c.314 §3; 1995 c.79 §365;
repealed by 2007 c.313 §3]
     743.723 [1979 c.866 §5; 1981 c.525 §1; 1987 c.774 §57;
renumbered 742.302 in 1989]
     743.724 [Formerly 746.307; repealed by 1997 c.695 §2
(743.725 enacted in lieu of 743.724)]
     743.725 [1997 c.695 §3 (enacted in lieu of 743.724);
2003 c.446 §1; 2007 c.346 §1; renumbered 743A.044 in 2007]
     743.726 [1997 c.496 §2; 2003 c.263 §1; renumbered
743A.188 in 2007]
     743.727 [1993 c.575 §2; 1999 c.429 §1; renumbered
743A.100 in 2007]
     743.728 [1993 c.576 §2; 1999 c.429 §2; renumbered
743A.104 in 2007]
     743.729 [1993 c.407 §2; renumbered 743A.070 in 2007]
(Small
Employer, Group, Individual and Portability Health Insurance, Generally)
     743.730
Definitions for ORS 743.730 to 743.773. For purposes of ORS 743.730 to 743.773:
     (1) “Actuarial certification” means a
written statement by a member of the American Academy of Actuaries or other
individual acceptable to the Director of the Department of Consumer and
Business Services that a carrier is in compliance with the provisions of ORS
743.736, 743.760 or 743.761, based upon the personÂ’s examination, including a
review of the appropriate records and of the actuarial assumptions and methods
used by the carrier in establishing premium rates for small employer and
portability health benefit plans.
     (2) “Affiliate” of, or person “affiliated”
with, a specified person means any carrier who, directly or indirectly through
one or more intermediaries, controls or is controlled by or is under common
control with a specified person. For purposes of this definition, “control” has
the meaning given that term in ORS 732.548.
     (3) “Affiliation period” means, under the
terms of a group health benefit plan issued by a health care service
contractor, a period:
     (a) That is applied uniformly and without
regard to any health status related factors to an enrollee or late enrollee in
lieu of a preexisting conditions provision;
     (b) That must expire before any coverage
becomes effective under the plan for the enrollee or late enrollee;
     (c) During which no premium shall be
charged to the enrollee or late enrollee; and
     (d) That begins on the enrollee’s or late
enrolleeÂ’s first date of eligibility for coverage and runs concurrently with
any eligibility waiting period under the plan.
     (4) “Basic health benefit plan” means a
health benefit plan for small employers that is required to be offered by all
small employer carriers and approved by the Director of the Department of
Consumer and Business Services in accordance with ORS 743.736.
     (5) “Bona fide association” means an
association that meets the requirements of 42 U.S.C. 300gg-11 as amended and in
effect on July 1, 1997.
     (6) “Carrier” means any person who
provides health benefit plans in this state, including a licensed insurance
company, a health care service contractor, a health maintenance organization,
an association or group of employers that provides benefits by means of a
multiple employer welfare arrangement or any other person or corporation
responsible for the payment of benefits or provision of services.
     (7) “Committee” means the Health Insurance
Reform Advisory Committee created under ORS 743.745.
     (8) “Creditable coverage” means prior
health care coverage as defined in 42 U.S.C. 300gg as amended and in effect on
July 1, 1997, and includes coverage remaining in force at the time the enrollee
obtains new coverage.
     (9) “Department” means the Department of
Consumer and Business Services.
     (10) “Dependent” means the spouse or child
of an eligible employee, subject to applicable terms of the health benefit plan
covering the employee.
     (11) “Director” means the Director of the
Department of Consumer and Business Services.
     (12) “Eligible employee” means an employee
of a small employer who works on a regularly scheduled basis, with a normal
work week of 17.5 or more hours. The employer may determine hours worked for
eligibility between 17.5 and 40 hours per week subject to rules of the carrier.
“Eligible employee” does not include employees who work on a temporary,
seasonal or substitute basis. Employees who have been employed by the small
employer for fewer than 90 days are not eligible employees unless the small
employer so allows.
     (13) “Employee” means any individual
employed by an employer.
     (14) “Enrollee” means an employee, dependent
of the employee or an individual otherwise eligible for a group, individual or
portability health benefit plan who has enrolled for coverage under the terms
of the plan.
     (15) “Exclusion period” means a period
during which specified treatments or services are excluded from coverage.
     (16) “Financially impaired” means a member
that is not insolvent and is:
     (a) Considered by the Director of the
Department of Consumer and Business Services to be potentially unable to
fulfill its contractual obligations; or
     (b) Placed under an order of
rehabilitation or conservation by a court of competent jurisdiction.
     (17)(a) “Geographic average rate” means
the arithmetical average of the lowest premium and the corresponding highest
premium to be charged by a carrier in a geographic area established by the
director for the carrierÂ’s:
     (A) Small employer group health benefit
plans;
     (B) Individual health benefit plans; or
     (C) Portability health benefit plans.
     (b) “Geographic average rate” does not
include premium differences that are due to differences in benefit design or
family composition.
     (18) “Group eligibility waiting period”
means, with respect to a group health benefit plan, the period of employment or
membership with the group that a prospective enrollee must complete before plan
coverage begins.
     (19)(a) “Health benefit plan” means any
hospital expense, medical expense or hospital or medical expense policy or
certificate, health care service contractor or health maintenance organization
subscriber contract, any plan provided by a multiple employer welfare
arrangement or by another benefit arrangement defined in the federal Employee
Retirement Income Security Act of 1974, as amended.
     (b) “Health benefit plan” does not include
coverage for accident only, specific disease or condition only, credit,
disability income, coverage of Medicare services pursuant to contracts with the
federal government, Medicare supplement insurance policies, coverage of CHAMPUS
services pursuant to contracts with the federal government, benefits delivered
through a flexible spending arrangement established pursuant to section 125 of
the Internal Revenue Code of 1986, as amended, when the benefits are provided
in addition to a group health benefit plan, long term care insurance, hospital indemnity
only, short term health insurance policies (the duration of which does not
exceed six months including renewals), student accident and health insurance
policies, dental only, vision only, a policy of stop-loss coverage that meets
the requirements of ORS 742.065, coverage issued as a supplement to liability
insurance, insurance arising out of a workersÂ’ compensation or similar law,
automobile medical payment insurance or insurance under which benefits are
payable with or without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent self-insurance.
     (c) Nothing in this subsection shall be
construed to regulate any employee welfare benefit plan that is exempt from
state regulation because of the federal Employee Retirement Income Security Act
of 1974, as amended.
     (20) “Health statement” means any
information that is intended to inform the carrier or insurance producer of the
health status of an enrollee or prospective enrollee in a health benefit plan. “Health
statement” includes the standard health statement developed by the Health
Insurance Reform Advisory Committee.
     (21) “Implementation of chapter 836,
Oregon Laws 1989” means that the Health Services Commission has prepared a
priority list, the Legislative Assembly has enacted funding of the list and all
necessary federal approval, including waivers, has been obtained.
     (22) “Individual coverage waiting period”
means a period in an individual health benefit plan during which no premiums
may be collected and health benefit plan coverage issued is not effective.
     (23) “Initial enrollment period” means a
period of at least 30 days following commencement of the first eligibility
period for an individual.
     (24) “Late enrollee” means an individual who
enrolls in a group health benefit plan subsequent to the initial enrollment
period during which the individual was eligible for coverage but declined to
enroll. However, an eligible individual shall not be considered a late enrollee
if:
     (a) The individual qualifies for a special
enrollment period in accordance with 42 U.S.C. 300gg as amended and in effect
on July 1, 1997;
     (b) The individual applies for coverage
during an open enrollment period;
     (c) A court has ordered that coverage be
provided for a spouse or minor child under a covered employeeÂ’s health benefit
plan and request for enrollment is made within 30 days after issuance of the
court order;
     (d) The individual is employed by an
employer who offers multiple health benefit plans and the individual elects a
different health benefit plan during an open enrollment period; or
     (e) The individual’s coverage under
Medicaid, Medicare, CHAMPUS, Indian Health Service or a publicly sponsored or
subsidized health plan, including but not limited to the Oregon Health Plan,
has been involuntarily terminated within 63 days of applying for coverage in a
group health benefit plan.
     (25) “Multiple employer welfare
arrangement” means a multiple employer welfare arrangement as defined in
section 3 of the federal Employee Retirement Income Security Act of 1974, as
amended, 29 U.S.C. 1002, that is subject to ORS 750.301 to 750.341.
     (26) “Oregon Medical Insurance Pool” means
the pool created under ORS 735.610.
     (27) “Preexisting conditions provision”
means a health benefit plan provision applicable to an enrollee or late
enrollee that excludes coverage for services, charges or expenses incurred
during a specified period immediately following enrollment for a condition for
which medical advice, diagnosis, care or treatment was recommended or received
during a specified period immediately preceding enrollment. For purposes of ORS
743.730 to 743.773:
     (a) Pregnancy does not constitute a
preexisting condition except as provided in ORS 743.766;
     (b) Genetic information does not
constitute a preexisting condition in the absence of a diagnosis of the
condition related to such information; and
     (c) A preexisting conditions provision
shall not be applied to a newborn child or adopted child who obtains coverage
in accordance with ORS 743A.090.
     (28) “Premium” includes insurance premiums
or other fees charged for a health benefit plan, including the costs of
benefits paid or reimbursements made to or on behalf of enrollees covered by
the plan.
     (29) “Rating period” means the 12-month
calendar period for which premium rates established by a carrier are in effect,
as determined by the carrier.
     (30)(a) “Small employer” means an employer
that employed an average of at least two but not more than 50 employees on
business days during the preceding calendar year, the majority of whom are
employed within this state, and that employs at least two eligible employees on
the date on which coverage takes effect under a health benefit plan issued by a
small employer carrier.
     (b) Any person that is treated as a single
employer under subsection (b), (c), (m) or (o) of section 414 of the Internal
Revenue Code of 1986 shall be treated as one employer for purposes of this
subsection.
     (c) The determination of whether an
employer that was not in existence throughout the preceding calendar year is a
small employer shall be based on the average number of employees that it is
reasonably expected the employer will employ on business days in the current
calendar year.
     (31) “Small employer carrier” means any carrier
that offers health benefit plans covering eligible employees of one or more
small employers. A fully insured multiple employer welfare arrangement
otherwise exempt under ORS 750.303 (4) may elect to be a small employer carrier
governed by the provisions of ORS 743.733 to 743.737. [1991 c.916 §3; 1993 c.18
§157; 1993 c.615 §25; 1993 c.649 §8; 1993 c.744 §31; 1995 c.603 §§1,36; 1997
c.716 §§1,2; 1999 c.547 §8; 1999 c.987 §6; 2001 c.943 §6; 2003 c.364 §112; 2005
c.744 §38; 2007 c.389 §1]
     743.731
Purposes. The purposes of
ORS 743.730 to 743.773 are:
     (1) To promote the availability of health
insurance coverage to groups regardless of their enrolleesÂ’ health status or
claims experience;
     (2) To prevent abusive rating practices;
     (3) To require disclosure of rating
practices to purchasers of small employer, portability and individual health
benefit plans;
     (4) To establish limitations on the use of
preexisting conditions provisions;
     (5) To make basic health benefit plans
available to all small employers;
     (6) To encourage the availability of
portability and individual health benefit plans for individuals who are not
enrolled in group health benefit plans;
     (7) To improve renewability and continuity
of coverage for employers and covered individuals;
     (8) To improve the efficiency and fairness
of the health insurance marketplace; and
     (9) To ensure that health insurance
coverage in Oregon satisfies the requirements of the Health Insurance
Portability and Accountability Act of 1996 (P.L. 104-191) and that enforcement
authority for those requirements is retained by the Director of the Department
of Consumer and Business Services. [1991 c.916 §2; 1993 c.18 §158; 1993 c.649 §11;
1995 c.603 §2; 1997 c.716 §4]
     743.732 [Formerly 747.080; renumbered 742.350 in
1989]
     743.733
Issuance of group health benefit plan to affiliated group of employers;
determination of number of employees for purpose of determining eligibility;
small employer carrier. (1)
If an affiliated group of employers is treated as a single employer under
subsection (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of
1986, a carrier may issue a single group health benefit plan to the affiliated
group on the basis of the number of employees in the affiliated group if the
group requests such coverage.
     (2) If a small employer carrier determines
that an employer has more than 50 employees, the carrier may provide a quote
for a group health benefit plan that is not subject to ORS 743.733 to 743.737.
If the employerÂ’s workforce consists of at least two but not more than 50
eligible employees, the small group carrier shall inform the employer that if
coverage is limited to the eligible employees, the carrier must treat the
employer as a small employer and shall provide a separate quote on that basis.
     (3) Subsequent to the issuance of a health
benefit plan to a small employer, a small employer carrier shall determine
annually the number of employees of the employer for purposes of determining
the employerÂ’s ongoing eligibility as a small employer. The provisions of ORS
743.733 to 743.737 shall continue to apply to a health benefit plan issued to a
small employer until the plan anniversary date following the date the employer
no longer meets the definition of a small employer. [1991 c.916 §4; 1993 c.18 §159;
1995 c.603 §3; 1999 c.987 §7; 2007 c.389 §4; subsection (3) of 2007 Edition
enacted as 2007 c.389 §3]
     743.734
Group health benefit plans subject to provisions of specified laws; exemptions. (1) Every group health benefit plan shall be
subject to the provisions of ORS 743.733 to 743.737, if the plan provides
health benefits covering one or more employees of a small employer and if any
one of the following conditions is met:
     (a) Any portion of the premium or benefits
is paid by a small employer or any eligible employee is reimbursed, whether
through wage adjustments or otherwise, by a small employer for any portion of
the health benefit plan premium; or
     (b) The health benefit plan is treated by
the employer or any of the eligible employees as part of a plan or program for
the purposes of section 106, section 125 or section 162 of the Internal Revenue
Code of 1986, as amended.
     (2) Except as provided in ORS 743.733 to
743.737, no law requiring the coverage or the offer of coverage of a health care
service or benefit applies to the basic health benefit plans offered or
delivered to a small employer.
     (3) Except as otherwise provided by law or
ORS 743.733 to 743.737, no health benefit plan offered to a small employer
shall:
     (a) Inhibit a small employer carrier from
contracting with providers or groups of providers with respect to health care
services or benefits; or
     (b) Impose any restriction on the ability
of a small employer carrier to negotiate with providers regarding the level or
method of reimbursing care or services provided under health benefit plans.
     (4) Except to determine the application of
a preexisting conditions provision for a late enrollee, a small employer
carrier shall not use health statements when offering small employer health
benefit plans and shall not use any other method to determine the actual or
expected health status of eligible enrollees. Nothing in this subsection shall
prevent a carrier from using health statements or other information after
enrollment for the purpose of providing services or arranging for the provision
of services under a health benefit plan.
     (5) Except in the case of a late enrollee
and as otherwise provided in this section, a small employer carrier shall not
impose different terms or conditions on the coverage, premiums or contributions
of any eligible employee in a small employer group that are based on the actual
or expected health status of any eligible employee.
     (6) A small employer carrier may provide
different health benefit plans to different categories of employees of a small
employer when the employer has chosen to establish different categories of
employees in a manner that does not relate to the actual or expected health
status of such employees or their dependents. The categories must be based on
bona fide employment-based classifications that are consistent with the
employerÂ’s usual business practice. Except as provided in ORS 743.736 (10):
     (a) When a small employer carrier offers
coverage to a small employer with no more than 25 eligible employees, the small
employer carrier shall offer coverage to all eligible employees of the small
employer, without regard to the actual or expected health status of any
eligible employee.
     (b) When a small employer carrier offers
coverage to a small employer with at least 26 but not more than 50 eligible
employees, the small employer carrier may limit coverage to the categories of
employees that the small employer has established as eligible for coverage,
provided that the categories are based on bona fide employment-based
classifications that are consistent with the employerÂ’s usual business
practice.
     (c) If the small employer elects to offer
coverage to dependents of eligible employees, the small employer carrier shall
offer coverage to all dependents of eligible employees, without regard to the
actual or expected health status of any eligible dependent.
     (7) A health benefit plan issued to a
small employer group through an association health plan is exempt from
subsection (1) of this section. For purposes of this subsection, an association
health plan is group health insurance described in ORS 743.522 (2) or a health
benefit plan that:
     (a) Is delivered or issued for delivery
to:
     (A) An association or trust established in
this state, that meets applicable requirements of ORS 743.524 or 743.526, or to
a multiple employer welfare arrangement located inside this state, subject to
ORS 750.301 to 750.341; or
     (B) An association or trust established in
another state, that is approved by the director under ORS 731.486 (7), or a
multiple employer welfare arrangement located in another state that complies
with ORS 750.311; and
     (b) Satisfies all of the following:
     (A) The initial premium rate for the
association health plan does not vary by more than 50 percent across the groups
of small employers under the plan.
     (B) The association policyholder does not
discriminate in membership requirements based on actual or expected health
status of individual enrollees or prospective enrollees, in accordance with ORS
743.752 (5).
     (C) Small employer groups that have two or
more eligible employees and that meet the membership requirements for the
association are not excluded from the association health plan.
     (D) Except as provided in subsection (8)
of this section, the association health plan maintains a 95 percent retention
rate.
     (8)(a) The 95 percent retention rate in
subsection (7) of this section does not include employer groups that:
     (A) Go out of business, whether through
merger, acquisition or any other reason;
     (B) No longer meet eligibility
requirements for membership in the association;
     (C) No longer meet participation
requirements for employers that are set forth in the plan documents; or
     (D) Fail to pay premiums.
     (b) An association health plan that fails
to maintain the 95 percent retention rate during any year may have 12 months to
correct the retention level before losing the exemption under subsection (7) of
this section. [1991 c.916 §5; 1993 c.18 §160; 1995 c.603 §4; 1997 c.716 §5;
1999 c.987 §8; 2007 c.389 §5; 2007 c.752 §4]
     Note: The amendments to 743.734 by section 9,
chapter 752,
     743.734. (1) Every group health benefit plan shall be
subject to the provisions of ORS 743.733 to 743.737, if the plan provides
health benefits covering one or more employees of a small employer and if any
one of the following conditions is met:
     (a) Any portion of the premium or benefits
is paid by a small employer or any eligible employee is reimbursed, whether
through wage adjustments or otherwise, by a small employer for any portion of
the health benefit plan premium; or
     (b) The health benefit plan is treated by
the employer or any of the eligible employees as part of a plan or program for
the purposes of section 106, section 125 or section 162 of the Internal Revenue
Code of 1986, as amended.
     (2) Except as provided in ORS 743.733 to
743.737, no law requiring the coverage or the offer of coverage of a health
care service or benefit applies to the basic health benefit plans offered or
delivered to a small employer.
     (3) Except as otherwise provided by law or
ORS 743.733 to 743.737, no health benefit plan offered to a small employer
shall:
     (a) Inhibit a small employer carrier from
contracting with providers or groups of providers with respect to health care
services or benefits; or
     (b) Impose any restriction on the ability
of a small employer carrier to negotiate with providers regarding the level or
method of reimbursing care or services provided under health benefit plans.
     (4) Except to determine the application of
a preexisting conditions provision for a late enrollee, a small employer
carrier shall not use health statements when offering small employer health
benefit plans and shall not use any other method to determine the actual or
expected health status of eligible enrollees. Nothing in this subsection shall
prevent a carrier from using health statements or other information after
enrollment for the purpose of providing services or arranging for the provision
of services under a health benefit plan.
     (5) Except in the case of a late enrollee
and as otherwise provided in this section, a small employer carrier shall not
impose different terms or conditions on the coverage, premiums or contributions
of any eligible employee in a small employer group that are based on the actual
or expected health status of any eligible employee.
     (6) A small employer carrier may provide
different health benefit plans to different categories of employees of a small
employer when the employer has chosen to establish different categories of
employees in a manner that does not relate to the actual or expected health
status of such employees or their dependents. The categories must be based on
bona fide employment-based classifications that are consistent with the
employerÂ’s usual business practice. Except as provided in ORS 743.736 (10):
     (a) When a small employer carrier offers
coverage to a small employer with no more than 25 eligible employees, the small
employer carrier shall offer coverage to all eligible employees of the small
employer, without regard to the actual or expected health status of any
eligible employee.
     (b) When a small employer carrier offers
coverage to a small employer with at least 26 but not more than 50 eligible
employees, the small employer carrier may limit coverage to the categories of
employees that the small employer has established as eligible for coverage,
provided that the categories are based on bona fide employment-based
classifications that are consistent with the employerÂ’s usual business
practice.
     (c) If the small employer elects to offer
coverage to dependents of eligible employees, the small employer carrier shall
offer coverage to all dependents of eligible employees, without regard to the
actual or expected health status of any eligible dependent.
     Note: Sections 12 and 14, chapter 752, Oregon Laws
2007, provide:
     Sec.
12. (1) ORS 743.734, as
amended by section 4 of this 2007 Act, applies to health benefit plans issued
or renewed on or after the effective date of this 2007 Act [July 12, 2007] and
before January 2, 2014.
     (2) An association health plan issued to a
group described in ORS 743.522 (2) prior to May 1, 2007, to an association or
trust approved prior to May 1, 2007, or to a multiple employer welfare
arrangement authorized prior to May 1, 2007, is not subject to the requirements
of ORS 743.734 (7)(b)(C) with respect to membership requirements in effect
prior to May 1, 2007. [2007 c.752 §12]
     Sec.
14. Sections 11 and 12 of
this 2007 Act are repealed on January 2, 2014. [2007 c.752 §14]
     743.735 [Formerly 747.100; 1973 c.823 §151;
renumbered 742.352 in 1989]
     743.736
Requirements for basic plans; approval of plans and forms; offering of plan by
carriers. (1) In order to
improve the availability and affordability of health benefit coverage for small
employers, the Health Insurance Reform Advisory Committee created under ORS
743.745 shall submit to the Director of the Department of Consumer and Business
Services two basic health benefit plans pursuant to ORS 743.745. One plan shall
be in the form of insurance and the second plan shall be consistent with the requirements
of the federal Health Maintenance Organization Act, 42 U.S.C. 300e et seq.
     (2)(a) The director shall approve the
basic health benefit plans following a determination that the plans provide for
maximum accessibility and affordability of needed health care services and
following a determination that the basic health benefit plans substantially
meet the social values that underlie the ranking of benefits by the Health
Services Commission and that the basic health benefit plans are substantially similar
to the Medicaid reform program under chapter 836, Oregon Laws 1989, funded by
the Legislative Assembly.
     (b) The basic health benefit plans shall
include benefits mandated under ORS 743A.168 until mental health, alcohol and
chemical dependency services are fully integrated into the Health Services
CommissionÂ’s priority list, and as funded by the Legislative Assembly, and
chapter 836, Oregon Laws 1989, is implemented.
     (c) The commission shall aid the director
by reviewing the basic health benefit plans and commenting on the extent to
which the plans meet these criteria.
     (3) After the director’s approval of the
basic health benefit plans submitted by the committee pursuant to subsection
(1) of this section, each small employer carrier shall submit to the director
the policy form or forms containing its basic health benefit plan. Each policy
form must be submitted as prescribed by the director and is subject to review
and approval pursuant to ORS 742.003.
     (4)(a) As a condition of transacting
business in the small employer health insurance market in this state, every
small employer carrier shall offer small employers an approved basic health
benefit plan and any other plans that have been submitted by the small employer
carrier for use in the small employer market and approved by the director.
     (b) Nothing in this subsection shall
require a small employer carrier to resubmit small employer health benefit
plans that were approved by the director prior to October 1, 1996, nor shall
small employer carriers be required to reinitiate new plan selection procedures
for currently enrolled small employers prior to the small employerÂ’s next
health benefit plan coverage anniversary date.
     (c) A carrier that offers a health benefit
plan in the small employer market only through one or more bona fide
associations is not required to offer that health benefit plan to small
employers that are not members of the bona fide association.
     (5) A small employer carrier shall issue
to a small employer any small employer health benefit plan offered by the
carrier if the small employer applies for the plan and agrees to make the
required premium payments and to satisfy the other provisions of the health
benefit plan.
     (6) A multiple employer welfare
arrangement, professional or trade association or other similar arrangement
established or maintained to provide benefits to a particular trade, business,
profession or industry or their subsidiaries shall not issue coverage to a
group or individual that is not in the same trade, business, profession or
industry as that covered by the arrangement. The arrangement shall accept all
groups and individuals in the same trade, business, profession or industry or
their subsidiaries that apply for coverage under the arrangement and that meet
the requirements for membership in the arrangement. For purposes of this
subsection, the requirements for membership in an arrangement shall not include
any requirements that relate to the actual or expected health status of the
prospective enrollee.
     (7) A small employer carrier shall,
pursuant to subsections (4) and (5) of this section, offer coverage to or
accept applications from a group covered under an existing small employer
health benefit plan whether or not a prospective enrollee is excluded from
coverage under the existing plan because of late enrollment. When a small
employer carrier accepts an application for such a group, the carrier may
continue to exclude the prospective enrollee excluded from coverage by the
replaced plan until the prospective enrollee would have become eligible for
coverage under that replaced plan.
     (8) No small employer carrier shall be
required to offer coverage or accept applications pursuant to subsections (4)
and (5) of this section if the director finds that acceptance of an application
or applications would endanger the carrierÂ’s ability to fulfill its contractual
obligations or result in financial impairment of the carrier.
     (9) Every small employer carrier shall
market fairly all small employer health benefit plans offered by the carrier to
small employers in the geographical areas in which the carrier makes coverage
available or provides benefits.
     (10)(a) No small employer carrier shall be
required to offer coverage or accept applications pursuant to subsections (4)
and (5) of this section in the case of any of the following:
     (A) To a small employer if the small
employer is not physically located in the carrierÂ’s approved service area;
     (B) To an employee if the employee does
not work or reside within the carrierÂ’s approved service areas; or
     (C) Within an area where the carrier
reasonably anticipates, and demonstrates to the satisfaction of the director,
that it will not have the capacity in its network of providers to deliver
services adequately to the enrollees of those groups because of its obligations
to existing group contract holders and enrollees.
     (b) A carrier that does not offer coverage
pursuant to paragraph (a)(C) of this subsection shall not offer coverage in the
applicable service area to new employer groups other than small employers until
the carrier resumes enrolling groups of new small employers in the applicable
area.
     (11) For purposes of ORS 743.733 to
743.737, except as provided in this subsection, carriers that are affiliated
carriers or that are eligible to file a consolidated tax return pursuant to ORS
317.715 shall be treated as one carrier and any restrictions or limitations
imposed by ORS 743.733 to 743.737 apply as if all health benefit plans
delivered or issued for delivery to small employers in this state by the
affiliated carriers were issued by one carrier. However, any insurance company
or health maintenance organization that is an affiliate of a health care
service contractor located in this state, or any health maintenance
organization located in this state that is an affiliate of an insurance company
or health care service contractor, may treat the health maintenance
organization as a separate carrier and each health maintenance organization
that operates only one health maintenance organization in a service area in
this state may be considered a separate carrier.
     (12) A small employer carrier that, after
September 29, 1991, elects to discontinue offering all of its small employer
health benefit plans under ORS 743.737 (5)(e), elects to discontinue renewing
all such plans or elects to discontinue offering and renewing all such plans is
prohibited from offering health benefit plans in the small employer market in
this state for a period of five years from one of the following dates:
     (a) The date of notice to the director
pursuant to ORS 743.737 (5)(e); or
     (b) If notice is not provided under
paragraph (a) of this subsection, from the date on which the director provides
notice to the carrier that the director has determined that the carrier has
effectively discontinued offering small employer health benefit plans in this
state. [1991 c.916 §6; 1993 c.649 §12; 1995 c.603 §5; 1997 c.716 §6; 1999 c.987
§9]
     743.737
Requirements for small employer health benefit plans. Health benefit plans covering small
employers shall be subject to the following provisions:
     (1) A preexisting conditions provision in
a small employer health benefit plan shall apply only to a condition for which
medical advice, diagnosis, care or treatment was recommended or received during
the six-month period immediately preceding the enrollment date of an enrollee
or late enrollee. As used in this section, the enrollment date of an enrollee
shall be the earlier of the effective date of coverage or the first day of any
required group eligibility waiting period and the enrollment date of a late
enrollee shall be the effective date of coverage.
     (2) A preexisting conditions provision in
a small employer health benefit plan shall terminate its effect as follows:
     (a) For an enrollee, not later than the
first of the following dates:
     (A) Six months following the enrollee’s
effective date of coverage; or
     (B) Ten months following the start of any
required group eligibility waiting period.
     (b) For a late enrollee, not later than 12
months following the late enrolleeÂ’s effective date of coverage.
     (3) In applying a preexisting conditions
provision to an enrollee or late enrollee, except as provided in this
subsection, all small employer health benefit plans shall reduce the duration
of the provision by an amount equal to the enrolleeÂ’s or late enrolleeÂ’s
aggregate periods of creditable coverage if the most recent period of
creditable coverage is ongoing or ended within 63 days of the enrollment date
in the new small employer health benefit plan. The crediting of prior coverage
in accordance with this subsection shall be applied without regard to the
specific benefits covered during the prior period. This subsection does not
preclude, within a small employer health benefit plan, application of:
     (a) An affiliation period that does not
exceed two months for an enrollee or three months for a late enrollee; or
     (b) An exclusion period for specified
covered services, as established by the Health Insurance Reform Advisory
Committee, applicable to all individuals enrolling for the first time in the
small employer health benefit plan.
     (4) Late enrollees may be excluded from
coverage for up to 12 months or may be subjected to a preexisting conditions
provision for up to 12 months. If both an exclusion from coverage period and a
preexisting conditions provision are applicable to a late enrollee, the
combined period shall not exceed 12 months.
     (5) Each small employer health benefit
plan shall be renewable with respect to all eligible enrollees at the option of
the policyholder, small employer or contract holder except:
     (a) For nonpayment of the required
premiums by the policyholder, small employer or contract holder.
     (b) For fraud or misrepresentation of the
policyholder, small employer or contract holder or, with respect to coverage of
individual enrollees, the enrollees or their representatives.
     (c) When the number of enrollees covered
under the plan is less than the number or percentage of enrollees required by
participation requirements under the plan.
     (d) For noncompliance with the small
employer carrierÂ’s employer contribution requirements under the health benefit
plan.
     (e) When the carrier discontinues offering
or renewing, or offering and renewing, all of its small employer health benefit
plans in this state or in a specified service area within this state. In order
to discontinue plans under this paragraph, the carrier:
     (A) Must give notice of the decision to
the Director of the Department of Consumer and Business Services and to all
policyholders covered by the plans;
     (B) May not cancel coverage under the
plans for 180 days after the date of the notice required under subparagraph (A)
of this paragraph if coverage is discontinued in the entire state or, except as
provided in subparagraph (C) of this paragraph, in a specified service area;
     (C) May not cancel coverage under the
plans for 90 days after the date of the notice required under subparagraph (A)
of this paragraph if coverage is discontinued in a specified service area
because of an inability to reach an agreement with the health care providers or
organization of health care providers to provide services under the plans
within the service area; and
     (D) Must discontinue offering or renewing,
or offering and renewing, all health benefit plans issued by the carrier in the
small employer market in this state or in the specified service area.
     (f) When the carrier discontinues offering
and renewing a small employer health benefit plan in a specified service area
within this state because of an inability to reach an agreement with the health
care providers or organization of health care providers to provide services
under the plan within the service area. In order to discontinue a plan under
this paragraph, the carrier:
     (A) Must give notice to the director and
to all policyholders covered by the plan;
     (B) May not cancel coverage under the plan
for 90 days after the date of the notice required under subparagraph (A) of
this paragraph; and
     (C) Must offer in writing to each small
employer covered by the plan, all other small employer health benefit plans
that the carrier offers in the specified service area. The carrier shall issue
any such plans pursuant to the provisions of ORS 743.733 to 743.737. The
carrier shall offer the plans at least 90 days prior to discontinuation.
     (g) When the carrier discontinues offering
or renewing, or offering and renewing, a health benefit plan for all small
employers in this state or in a specified service area within this state, other
than a plan discontinued under paragraph (f) of this subsection. With respect
to plans that are being discontinued, the carrier must:
     (A) Offer in writing to each small
employer covered by the plan, all health benefit plans that the carrier offers
in the specified service area.
     (B) Issue any such plans pursuant to the
provisions of ORS 743.733 to 743.737.
     (C) Offer the plans at least 90 days prior
to discontinuation.
     (D) Act uniformly without regard to the
claims experience of the affected policyholders or the health status of any
current or prospective enrollee.
     (h) When the director orders the carrier
to discontinue coverage in accordance with procedures specified or approved by
the director upon finding that the continuation of the coverage would:
     (A) Not be in the best interests of the
enrollees; or
     (B) Impair the carrier’s ability to meet
contractual obligations.
     (i) When, in the case of a small employer
health benefit plan that delivers covered services through a specified network
of health care providers, there is no longer any enrollee who lives, resides or
works in the service area of the provider network.
     (j) When, in the case of a health benefit
plan that is offered in the small employer market only through one or more bona
fide associations, the membership of an employer in the association ceases and
the termination of coverage is not related to the health status of any
enrollee.
     (k) For misuse of a provider network
provision. As used in this paragraph, “misuse of a provider network provision”
means a disruptive, unruly or abusive action taken by an enrollee that
threatens the physical health or well-being of health care staff and seriously
impairs the ability of the carrier or its participating providers to provide
services to an enrollee. An enrollee under this paragraph retains the rights of
an enrollee under ORS 743.804.
     (L) A small employer carrier may modify a
small employer health benefit plan at the time of coverage renewal. The
modification is not a discontinuation of the plan under paragraphs (e) and (g)
of this subsection.
     (6) Notwithstanding any provision of
subsection (5) of this section to the contrary, any small employer carrier
health benefit plan subject to the provisions of ORS 743.733 to 743.737 may be
rescinded by a small employer carrier for fraud, material misrepresentation or
concealment by a small employer and the coverage of an enrollee may be
rescinded for fraud, material misrepresentation or concealment by the enrollee.
     (7) A small employer carrier may continue
to enforce reasonable employer participation and contribution requirements on
small employers applying for coverage. However, participation and contribution
requirements shall be applied uniformly among all small employer groups with
the same number of eligible employees applying for coverage or receiving
coverage from the small employer carrier. In determining minimum participation
requirements, a carrier shall count only those employees who are not covered by
an existing group health benefit plan, Medicaid, Medicare, CHAMPUS, Indian
Health Service or a publicly sponsored or subsidized health plan, including but
not limited to the Oregon Health Plan.
     (8) Premium rates for small employer
health benefit plans shall be subject to the following provisions:
     (a) Each small employer carrier issuing
health benefit plans to small employers must file its geographic average rate
for a rating period with the director at least once every 12 months.
     (b)(A) The premium rates charged during a
rating period for health benefit plans issued to small employers may not vary
from the geographic average rate by more than 50 percent on or after January 1,
2008, except as provided in subparagraph (D) of this paragraph.
     (B) The variations in premium rates
described in subparagraph (A) of this paragraph shall be based solely on the
factors specified in subparagraph (C) of this paragraph. A small employer
carrier may elect which of the factors specified in subparagraph (C) of this
paragraph apply to premium rates for small employers. The factors that are based
on contributions or participation may vary with the size of the employer. All
other factors must be applied in the same actuarially sound way to all small
employers.
     (C) The variations in premium rates
described in subparagraph (A) of this paragraph may be based on one or more of
the following factors:
     (i) The ages of enrolled employees and
their dependents;
     (ii) The level at which the small employer
contributes to the premiums payable for enrolled employees and their
dependents;
     (iii) The level at which eligible
employees participate in the health benefit plan;
     (iv) The level at which enrolled employees
and their dependents engage in tobacco use;
     (v) The level at which enrolled employees
and their dependents engage in health promotion, disease prevention or wellness
programs;
     (vi) The period of time during which a
small employer retains uninterrupted coverage in force with the same small
employer carrier; and
     (vii) Adjustments to reflect the provision
of benefits not required to be covered by the basic health benefit plan and
differences in family composition.
     (D)(i) The premium rates determined in
accordance with this paragraph may be further adjusted by a small employer
carrier to reflect the expected claims experience of a small employer, but the extent
of this adjustment may not exceed five percent of the annual premium rate
otherwise payable by the small employer. The adjustment under this subparagraph
may not be cumulative from year to year.
     (ii) Except for small employers with 25 or
fewer employees, the premium rates adjusted under this subparagraph are not
subject to the provisions of subparagraph (A) of this paragraph.
     (E) A small employer carrier shall apply
the carrierÂ’s schedule of premium rate variations as approved by the Director
of the Department of Consumer and Business Services and in accordance with this
paragraph. Except as otherwise provided in this section, the premium rate
established for a health benefit plan by a small employer carrier shall apply
uniformly to all employees of the small employer enrolled in that plan.
     (c) Except as provided in paragraph (b) of
this subsection, the variation in premium rates between different small
employer health benefit plans offered by a small employer carrier must be based
solely on objective differences in plan design or coverage and must not include
differences based on the risk characteristics of groups assumed to select a
particular health benefit plan.
     (d) A small employer carrier may not
increase the rates of a health benefit plan issued to a small employer more
than once in a 12-month period. Annual rate increases shall be effective on the
plan anniversary date of the health benefit plan issued to a small employer.
The percentage increase in the premium rate charged to a small employer for a
new rating period may not exceed the sum of the following:
     (A) The percentage change in the
geographic average rate measured from the first day of the prior rating period
to the first day of the new period; and
     (B) Any adjustment attributable to changes
in age, except an additional adjustment may be made to reflect the provision of
benefits not required to be covered by the basic health benefit plan and
differences in family composition.
     (e) Premium rates for health benefit plans
shall comply with the requirements of this section.
     (9) In connection with the offering for
sale of any health benefit plan to a small employer, each small employer
carrier shall make a reasonable disclosure as part of its solicitation and
sales materials of:
     (a) The full array of health benefit plans
that are offered to small employers by the carrier;
     (b) The authority of the carrier to adjust
rates, and the extent to which the carrier will consider age, family
composition and geographic factors in establishing and adjusting rates;
     (c) Provisions relating to renewability of
policies and contracts; and
     (d) Provisions affecting any preexisting
conditions provision.
     (10)(a) Each small employer carrier shall
maintain at its principal place of business a complete and detailed description
of its rating practices and renewal underwriting practices, including
information and documentation that demonstrate that its rating methods and
practices are based upon commonly accepted actuarial practices and are in
accordance with sound actuarial principles.
     (b) Each small employer carrier shall file
with the director at least once every 12 months an actuarial certification that
the carrier is in compliance with ORS 743.733 to 743.737 and that the rating
methods of the small employer carrier are actuarially sound. Each such
certification shall be in a uniform form and manner and shall contain such
information as specified by the director. A copy of such certification shall be
retained by the small employer carrier at its principal place of business.
     (c) A small employer carrier shall make
the information and documentation described in paragraph (a) of this subsection
available to the director upon request. Except as provided in ORS 743.018 and
except in cases of violations of ORS 743.733 to 743.737, the information shall
be considered proprietary and trade secret information and shall not be subject
to disclosure by the director to persons outside the Department of Consumer and
Business Services except as agreed to by the small employer carrier or as
ordered by a court of competent jurisdiction.
     (11) A small employer carrier shall not
provide any financial or other incentive to any insurance producer that would
encourage the insurance producer to market and sell health benefit plans of the
carrier to small employer groups based on a small employer groupÂ’s anticipated
claims experience.
     (12) For purposes of this section, the
date a small employer health benefit plan is continued shall be the anniversary
date of the first issuance of the health benefit plan.
     (13) A small employer carrier must include
a provision that offers coverage to all eligible employees and to all
dependents to the extent the employer chooses to offer coverage to dependents.
     (14) All small employer health benefit plans
shall contain special enrollment periods during which eligible employees and
dependents may enroll for coverage, as provided in 42 U.S.C. 300gg as amended
and in effect on July 1, 1997. [1991 c.916 §7; 1993 c.18 §161; 1993 c.649 §10;
1995 c.603 §§6,37; 1997 c.716 §§7,8; 1999 c.987 §10; 2001 c.943 §12; 2003 c.364
§113; 2003 c.599 §§4,6; 2003 c.748 §5; 2007 c.389 §§6,7; 2007 c.391 §2]
     Note: Section 8, chapter 389, Oregon Laws 2007,
provides:
     Sec.
8. (1) The Director of the
Department of Consumer and Business Services may take any action before the
operative date specified in section 10 of this 2007 Act [January 1, 2008] to
enable the director to exercise, on and after the operative date specified in
section 10 of this 2007 Act, the duties, functions and powers conferred on the
director by section 3 of this 2007 Act [743.733 (3)] and the amendments to ORS
743.730, 743.733, 743.734 and 743.737 by sections 1 and 4 to 7 of this 2007
Act.
     (2) The director shall adopt rules prior
to the operative date specified in section 10 of this 2007 Act to phase in the
amendments to ORS 743.737 by sections 6 and 7 of this 2007 Act over a
three-year period beginning on the operative date specified in section 10 of
this 2007 Act. [2007 c.389 §8]
     743.738 [Formerly 747.110; renumbered 742.354 in
1989]
     743.739 [1991 c.916 §8; repealed by 1995 c.603 §32]
     743.740 [1991 c.916 §9; 1993 c.18 §162; repealed by
1995 c.603 §32]
     743.741 [Formerly 747.130; renumbered 742.356 in
1989]
     743.742 [1991 c.916 §10; repealed by 1995 c.603 §32]
     743.743 [1991 c.916 §11; 1993 c.18 §163; 1993 c.649 §13;
repealed by 1995 c.603 §32]
     743.744 [Formerly 747.140; renumbered 742.358 in
1989]
     743.745
Health Insurance Reform Advisory Committee; appointment; duties. The Director of the Department of Consumer
and Business Services shall appoint a Health Insurance Reform Advisory
Committee. This committee shall consist of at least one insurance producer, one
representative of a health maintenance organization, one representative of a
health care service contractor, one representative of a domestic insurer, one
representative of a labor organization and one representative of consumer
interests and shall have representation from the broad range of interests
involved in the small employer and individual market and shall include members
with the technical expertise necessary to carry out the following duties:
     (1)(a) Subject to approval by the
director, the committee shall recommend the form and level of coverages under
the basic health benefit plans pursuant to ORS 743.736 to be made available by
small employer carriers and the portability health benefit plans to be made
available pursuant to ORS 743.760 or 743.761. The committee shall take into
consideration the levels of health benefit plans provided in
     (A) Preferred provider provisions;
     (B) Utilization review of health care
services including review of medical necessity of hospital and physician
services;
     (C) Case management benefit alternatives;
     (D) Other managed care provisions;
     (E) Selective contracting with hospitals,
physicians and other health care providers; and
     (F) Reasonable benefit differentials
applicable to participating and nonparticipating providers.
     (b) The committee shall submit the basic
and portability health benefit plans and other recommendations to the director
within the time period established by the director. The health benefit plans
and other recommendations shall be deemed approved unless expressly disapproved
by the director within 30 days after the date the director receives the plans.
     (2) In order to ensure the broadest
availability of small employer and individual health benefit plans, the
committee shall recommend for approval by the director market conduct and other
requirements for carriers and insurance producers, including requirements
developed as a result of a request by the director, relating to the following:
     (a) Registration by each carrier with the
Department of Consumer and Business Services of its intention to be a small
employer carrier under ORS 743.733 to 743.737 or a carrier offering individual
health benefit plans, or both.
     (b) Publication by the Department of
Consumer and Business Services or the committee of a list of all small employer
carriers and carriers offering individual health benefit plans, including a
potential requirement applicable to insurance producers and carriers that no
health benefit plan be sold to a small employer or individual by a carrier not
so identified as a small employer carrier or carrier offering individual health
benefit plans.
     (c) To the extent deemed necessary by the
committee to ensure the fair distribution of high-risk individuals and groups
among carriers, periodic reports by carriers and insurance producers concerning
small employer, portability and individual health benefit plans issued,
provided that reporting requirements shall be limited to information concerning
case characteristics and numbers of health benefit plans in various categories
marketed or issued, or both, to small employers and individuals.
     (d) Methods concerning periodic
demonstration by small employer carriers, carriers offering individual health
benefit plans and insurance producers that the small employer and individual
carriers are marketing or issuing, or both, health benefit plans to small employers
or individuals in fulfillment of the purposes of ORS 743.730 to 743.773.
     (3) Subject to the approval of the
Director of the Department of Consumer and Business Services, the committee
shall develop a standard health statement to be used for all late enrollees and
by all carriers offering individual policies of health insurance.
     (4) Subject to the approval of the
director, the committee shall develop a list of the specified services for
small employer and portability plans for which carriers may impose an exclusion
period, the duration of the allowable exclusion period for each specified
service and the manner in which credit will be given for exclusion periods
imposed pursuant to prior health insurance coverage. [1991 c.916 §12; 1993 c.18
§164; 1995 c.603 §§10,38; 1999 c.987 §11; 2003 c.364 §114]
     743.746 [1997 c.716 §9c; repealed by 1999 c.987 §28]
     743.747 [Formerly 747.150; renumbered 742.360 in
1989]
     743.748
Submission of information by carriers offering health benefit plans. (1) Each carrier offering a health benefit
plan shall submit to the Director of the Department of Consumer and Business
Services on or before April 1 of each year a report that contains:
     (a) The following information for the
preceding year that is derived from the exhibit of premiums, enrollment and
utilization included in the carrierÂ’s annual report:
     (A) The total number of members;
     (B) The total amount of premiums;
     (C) The total amount of costs for claims;
     (D) The medical loss ratio;
     (E) The average amount of premiums per
member per month; and
     (F) The percentage change in the average
premium per member per month, measured from the previous year.
     (b) The following aggregate financial
information for the preceding year that is derived from the carrierÂ’s annual
report:
     (A) The total amount of general
administrative expenses, including identification of the five largest
nonmedical administrative expenses and the assessment against the carrier for
the Oregon Medical Insurance Pool;
     (B) The total amount of the surplus
maintained;
     (C) The total amount of the reserves
maintained for unpaid claims;
     (D) The total net underwriting gain or
loss; and
     (E) The carrier’s net income after taxes.
     (c) The retention rate and claims
experience of employer groups within the plan for the preceding year for
association health plans as described in ORS 743.734 (7). This information is
not subject to public disclosure under ORS chapter 192.
     (2) A carrier shall electronically submit
the information described in subsection (1) of this section in a format and
according to instructions prescribed by the Department of Consumer and Business
Services by rule after obtaining a recommendation from the Health Insurance
Reform Advisory Committee.
     (3) The advisory committee shall evaluate
the reporting requirements under subsection (1)(a) of this section by the
following market segments:
     (a) Individual health benefit plans;
     (b) Health benefit plans for small
employers;
     (c) Health benefit plans for employers
described in ORS 743.733;
     (d) Health benefit plans for employers
with more than 50 employees; and
     (e) Association health plans described in
ORS 743.734 (7).
     (4) The department shall make the
information reported under this section available to the public through a
searchable public website on the Internet. [2005 c.765 §2; 2007 c.752 §5]
     Note: The amendments to 743.748 by section 10,
chapter 752,
     743.748. (1) Each carrier offering a health benefit
plan shall submit to the Director of the Department of Consumer and Business
Services on or before April 1 of each year a report that contains:
     (a) The following information for the
preceding year that is derived from the exhibit of premiums, enrollment and
utilization included in the carrierÂ’s annual report:
     (A) The total number of members;
     (B) The total amount of premiums;
     (C) The total amount of costs for claims;
     (D) The medical loss ratio;
     (E) The average amount of premiums per
member per month; and
     (F) The percentage change in the average
premium per member per month, measured from the previous year.
     (b) The following aggregate financial information
for the preceding year that is derived from the carrierÂ’s annual report:
     (A) The total amount of general
administrative expenses, including identification of the five largest
nonmedical administrative expenses and the assessment against the carrier for
the Oregon Medical Insurance Pool;
     (B) The total amount of the surplus
maintained;
     (C) The total amount of the reserves
maintained for unpaid claims;
     (D) The total net underwriting gain or
loss; and
     (E) The carrier’s net income after taxes.
     (2) A carrier shall electronically submit
the information described in subsection (1) of this section in a format and
according to instructions prescribed by the Department of Consumer and Business
Services by rule after obtaining a recommendation from the Health Insurance
Reform Advisory Committee.
     (3) The advisory committee shall evaluate
the reporting requirements under subsection (1)(a) of this section by the
following market segments:
     (a) Individual health benefit plans;
     (b) Health benefit plans for small
employers;
     (c) Health benefit plans for employers
described in ORS 743.733; and
     (d) Health benefit plans for employers
with more than 50 employees.
     (4) The department shall make the
information reported under this section available to the public through a
searchable public website on the Internet.
     743.749
Certifications and disclosure of coverage. All carriers that offer individual or group health benefit plans shall
provide certifications and disclosure of coverage in accordance with 42 U.S.C.
300gg(e) and 300gg-43 as amended and in effect on July 1, 1997. [1997 c.716 §20]
     743.750 [1967 c.359 §516; renumbered 742.362 in
1989]
     743.751
Use of health statements in group health benefit plans. (1) Except to determine the application of a
preexisting conditions provision for a late enrollee, a carrier offering group
health benefit plans shall not use health statements when offering such plans
to a group of two or more prospective certificate holders and shall not use any
other method to determine the actual or expected health status of eligible
prospective enrollees. Nothing in this section shall prevent a carrier from
using health statements or other information after enrollment for the purpose
of providing services or arranging for the provision of services under a health
benefit plan or from obtaining aggregate group information related to
historical medical claims expenses and health behavior surveys for rating
purposes.
     (2) Subsection (1) of this section applies
only to group health benefit plans that are not small employer health benefit
plans. [1995 c.603 §15; 1997 c.716 §10]
     743.752
Coverage in group health benefit plans; consideration of prospective enrollee
health status restricted; effect of discontinuing offer of plans; exceptions;
coverage by multiple employer welfare arrangements. (1) Except in the case of a late enrollee
and as otherwise provided in this section, a carrier offering a group health
benefit plan to a group of two or more prospective certificate holders shall
not decline to offer coverage to any eligible prospective enrollee and shall
not impose different terms or conditions on the coverage, premiums or
contributions of any enrollee in the group that are based on the actual or
expected health status of the enrollee.
     (2) A carrier that elects to discontinue
offering all of its group health benefit plans under ORS 743.754 (6)(e), elects
to discontinue renewing all such plans or elects to discontinue offering and
renewing all such plans is prohibited from offering health benefit plans in the
group market in this state for a period of five years from one of the following
dates:
     (a) The date of notice to the Director of
the Department of Consumer and Business Services pursuant to ORS 743.754
(6)(e); or
     (b) If notice is not provided under
paragraph (a) of this subsection, from the date on which the director provides
notice to the carrier that the director has determined that the carrier has
effectively discontinued offering group health benefit plans in this state.
     (3) Subsection (1) of this section applies
only to group health benefit plans that are not small employer health benefit
plans.
     (4) Nothing in this section shall prohibit
an employer from providing different group health benefit plans to various
categories of employees as defined by the employer nor prohibit an employer
from providing health benefit plans through different carriers so long as the
employerÂ’s categories of employees are established in a manner that does not
relate to the actual or expected health status of the employees or their
dependents.
     (5) A multiple employer welfare
arrangement, professional or trade association, or other similar arrangement
established or maintained to provide benefits to a particular trade, business,
profession or industry or their subsidiaries, shall not issue coverage to a
group or individual that is not in the same trade, business, profession or
industry or their subsidiaries as that covered by the arrangement. The
arrangement shall accept all groups and individuals in the same trade,
business, profession or industry or their subsidiaries that apply for coverage
under the arrangement and that meet the requirements for membership in the
arrangement. For purposes of this subsection, the requirements for membership
in an arrangement shall not include any requirements that relate to the actual
or expected health status of the prospective enrollee. [1995 c.603 §16; 1997
c.716 §11; 1999 c.987 §12]
     743.753 [Formerly 747.170; 1969 c.526 §2; renumbered
742.364 in 1989]
     743.754
Requirements for group health benefit plans. The following requirements apply to all group health benefit plans
covering two or more certificate holders:
     (1) A preexisting conditions provision in
a group health benefit plan shall apply only to a condition for which medical
advice, diagnosis, care or treatment was recommended or received during the
six-month period immediately preceding the enrollment date of an enrollee or
late enrollee. As used in this section, the enrollment date of an enrollee
shall be the earlier of the effective date of coverage or the first day of any
required group eligibility waiting period and the enrollment date of a late
enrollee shall be the effective date of coverage.
     (2) A preexisting conditions provision in
a group health benefit plan shall terminate its effect as follows:
     (a) For an enrollee not later than the
first of the following dates:
     (A) Six months following the enrollee’s
effective date of coverage; or
     (B) Twelve months following the start of
any required group eligibility waiting period.
     (b) For a late enrollee, not later than 12
months following the late enrolleeÂ’s effective date of coverage.
     (3) In applying a preexisting conditions
provision to an enrollee or late enrollee, except as provided in this
subsection, all group benefit plans shall reduce the duration of the provision
by an amount equal to the enrolleeÂ’s or late enrolleeÂ’s aggregate periods of
creditable coverage if the most recent period of creditable coverage is ongoing
or ended within 63 days of the enrollment date in the new group health benefit
plan. The crediting of prior coverage in accordance with this subsection shall
be applied without regard to the specific benefits covered during the prior
period. This subsection does not preclude, within a group health benefit plan,
application of:
     (a) An affiliation period that does not
exceed two months for an enrollee or three months for a late enrollee; or
     (b) An exclusion period for specified
covered services applicable to all individuals enrolling for the first time in
the group health benefit plan.
     (4) Late enrollees may be excluded from
coverage for up to 12 months or may be subjected to a preexisting conditions
provision for up to 12 months. If both an exclusion from coverage period and a
preexisting conditions provision are applicable to a late enrollee, the
combined period shall not exceed 12 months.
     (5) All group health benefit plans shall
contain special enrollment periods during which eligible employees and
dependents may enroll for coverage, as provided in 42 U.S.C. 300gg as amended
and in effect on July 1, 1997.
     (6) Each group health benefit plan shall
be renewable with respect to all eligible enrollees at the option of the
policyholder except:
     (a) For nonpayment of the required
premiums by the policyholder.
     (b) For fraud or misrepresentation of the
policyholder or, with respect to coverage of individual enrollees, the
enrollees or their representatives.
     (c) When the number of enrollees covered
under the plan is less than the number or percentage of enrollees required by
participation requirements under the plan.
     (d) For noncompliance with the carrier’s
employer contribution requirements under the health benefit plan.
     (e) When the carrier discontinues offering
or renewing, or offering and renewing, all of its group health benefit plans in
this state or in a specified service area within this state. In order to
discontinue plans under this paragraph, the carrier:
     (A) Must give notice of the decision to
the Director of the Department of Consumer and Business Services and to all
policyholders covered by the plans;
     (B) May not cancel coverage under the
plans for 180 days after the date of the notice required under subparagraph (A)
of this paragraph if coverage is discontinued in the entire state or, except as
provided in subparagraph (C) of this paragraph, in a specified service area;
     (C) May not cancel coverage under the
plans for 90 days after the date of the notice required under subparagraph (A)
of this paragraph if coverage is discontinued in a specified service area
because of an inability to reach an agreement with the health care providers or
organization of health care providers to provide services under the plans
within the service area; and
     (D) Must discontinue offering or renewing,
or offering and renewing, all health benefit plans issued by the carrier in the
group market in this state or in the specified service area.
     (f) When the carrier discontinues offering
and renewing a group health benefit plan in a specified service area within this
state because of an inability to reach an agreement with the health care
providers or organization of health care providers to provide services under
the plan within the service area. In order to discontinue a plan under this
paragraph, the carrier:
     (A) Must give notice of the decision to
the director and to all policyholders covered by the plan;
     (B) May not cancel coverage under the plan
for 90 days after the date of the notice required under subparagraph (A) of
this paragraph; and
     (C) Must offer in writing to each
policyholder covered by the plan, all other group health benefit plans that the
carrier offers in the specified service area. The carrier shall offer the plans
at least 90 days prior to discontinuation.
     (g) When the carrier discontinues offering
or renewing, or offering and renewing, a health benefit plan for all groups in
this state or in a specified service area within this state, other than a plan
discontinued under paragraph (f) of this subsection. With respect to plans that
are being discontinued, the carrier must:
     (A) Offer in writing to each policyholder
covered by the plan, one or more health benefit plans that the carrier offers
in the specified service area.
     (B) Offer the plans at least 90 days prior
to discontinuation.
     (C) Act uniformly without regard to the
claims experience of the affected policyholders or the health status of any
current or prospective enrollee.
     (h) When the director orders the carrier
to discontinue coverage in accordance with procedures specified or approved by
the director upon finding that the continuation of the coverage would:
     (A) Not be in the best interests of the
enrollees; or
     (B) Impair the carrier’s ability to meet
contractual obligations.
     (i) When, in the case of a group health
benefit plan that delivers covered services through a specified network of
health care providers, there is no longer any enrollee who lives, resides or
works in the service area of the provider network.
     (j) When, in the case of a health benefit
plan that is offered in the group market only through one or more bona fide
associations, the membership of an employer in the association ceases and the
termination of coverage is not related to the health status of any enrollee.
     (k) For misuse of a provider network
provision. As used in this paragraph, “misuse of a provider network provision”
means a disruptive, unruly or abusive action taken by an enrollee that
threatens the physical health or well-being of health care staff and seriously
impairs the ability of the carrier or its participating providers to provide
services to an enrollee. An enrollee under this paragraph retains the rights of
an enrollee under ORS 743.804.
     (L) A carrier may modify a group health
benefit plan at the time of coverage renewal. The modification is not a
discontinuation of the plan under paragraphs (e) and (g) of this subsection.
     (7) Notwithstanding any provision of
subsection (6) of this section to the contrary, a group health benefit plan may
be rescinded by a carrier for fraud, material misrepresentation or concealment
by a policyholder and the coverage of an enrollee may be rescinded for fraud,
material misrepresentation or concealment by the enrollee.
     (8) A carrier that continues to offer
coverage in the group market in this state is not required to offer coverage in
all of the carrierÂ’s group health benefit plans. If a carrier, however, elects
to continue a plan that is closed to new policyholders instead of offering
alternative coverage in its other group health benefit plans, the coverage for all
existing policyholders in the closed plan is renewable in accordance with
subsection (6) of this section.
     (9) This section applies only to group
health benefit plans that are not small employer health benefit plans. [1995
c.603 §17; 1995 c.603 §40; 1997 c.716 §§12,13; 1999 c.987 §13; 2001 c.943 §13;
2003 c.748 §6]
     743.755 [1969 c.526 §1; renumbered 742.366 in 1989]
     743.756 [Formerly 747.180; renumbered 742.368 in
1989]
     743.757
Health benefit coverage for guaranteed association. (1) As used in this section, “guaranteed
association” means an association that:
     (a) The Director of the Department of
Consumer and Business Services has determined under ORS 743.524 meets the
requirements described in ORS 743.522 (1)(b); and
     (b) Is a statewide nonprofit organization
representing the interests of individuals licensed under ORS chapter 696.
     (2) A carrier may offer a health benefit
plan to a guaranteed association if the plan provides health benefits covering
500 or more members or dependents of members of the association.
     (3) When a carrier offers coverage to a
guaranteed association under subsection (2) of this section, the carrier shall
offer coverage to all members of the association and all dependents of the
members of the association without regard to the actual or expected health
status of any member or any dependent of a member of the association.
     (4) A carrier offering a health benefit
plan under subsection (2) of this section shall establish premium rates as
follows:
     (a) For the initial 12-month period of
coverage, the carrier shall submit to the director a certified statement that
the premium rates charged to the guaranteed association are actuarially sound.
The statement must be signed by an actuary certifying the accuracy of the
rating methodology as established by the
     (b) For any subsequent 12-month period of
coverage, according to a rating methodology as established by the
     (5) A member of a guaranteed association
may apply for coverage offered by a carrier under subsection (2) of this
section only:
     (a) If the member has been an active
member of the association for no less than 30 days;
     (b) During an annual open enrollment
period offered by the association; and
     (c) After meeting any additional
eligibility requirements agreed upon by the association and the carrier.
     (6) Notwithstanding subsection (5) of this
section, if a member or a dependent of a member of a guaranteed association
terminates coverage under the health benefit plan, the member or dependent
shall be excluded from coverage for 12 months from the date of termination of
coverage. The member may enroll for coverage of the member or the dependent
during an annual open enrollment period following the expiration of the exclusion
period. [2005 c.571 §2]
     743.758
Implementation of Health Insurance Portability and Accountability Act of 1996;
rules. The Department of
Consumer and Business Services may adopt rules incorporating, implementing and
administering the Health Insurance Portability and Accountability Act of 1996
(P.L. 104-191) and federal regulations that are issued in conjunction with the
Act, to the extent that such federal law and regulations are not inconsistent
with any provision of Oregon law. [1997 c.716 §21]
     743.759 [Formerly 747.190; renumbered 742.370 in
1989]
     743.760
Approval of portability plans; offering of plans by carriers; required
provisions; actuarial certification. (1) As used in this section:
     (a) “Carrier” means an insurer authorized
to issue a policy of health insurance in this state. “Carrier” does not include
a multiple employer welfare arrangement.
     (b)(A) “Eligible individual” means an
individual who:
     (i) Has left coverage that was
continuously in effect for a period of 180 days or more under one or more
Oregon group health benefit plans, has applied for portability coverage not
later than the 63rd day after termination of group coverage issued by an Oregon
carrier and is an Oregon resident at the time of such application; or
     (ii) On or after January 1, 1998, meets
the eligibility requirements of 42 U.S.C. 300gg-41, as amended and in effect on
January 1, 1998, has applied for portability coverage not later than the 63rd
day after termination of group coverage issued by an
     (B) Except as provided in subsection (12)
of this section, “eligible individual” does not include an individual who
remains eligible for the individualÂ’s prior group coverage or would remain
eligible for prior group coverage in a plan under the federal Employee
Retirement Income Security Act of 1974, as amended, were it not for action by
the plan sponsor relating to the actual or expected health condition of the
individual, or who is covered under another health benefit plan at the time
that portability coverage would commence or is eligible for the federal
Medicare program.
     (c) “Portability health benefit plans” and
“portability plans” mean health benefit plans for eligible individuals that are
required to be offered by all carriers offering group health benefit plans and
that have been approved by the Director of the Department of Consumer and
Business Services in accordance with this section.
     (2)(a) In order to improve the
availability and affordability of health benefit plans for individuals leaving
coverage under group health benefit plans, the Health Insurance Reform Advisory
Committee created under ORS 743.745 shall submit to the director two
portability health benefit plans pursuant to ORS 743.745. One plan shall be in
the form of insurance and the second plan shall be consistent with the type of
coverage provided by health maintenance organizations. For each type of
portability plan, the committee shall design and submit to the director:
     (A) A prevailing benefit plan, which shall
reflect the benefit coverages that are prevalent in the group health insurance
market; and
     (B) A low cost benefit plan, which shall
emphasize affordability for eligible individuals.
     (b) Except as provided in ORS 743.730 to
743.773, no law requiring the coverage or the offer of coverage of a health
care service or benefit shall apply to portability health benefit plans.
     (3) The director shall approve the
portability health benefit plans if the director determines that the plans
provide for appropriate accessibility and affordability of needed health care
services and comply with all other provisions of this section.
     (4) After the director’s approval of the
portability plans submitted by the committee under this section, each carrier
offering group health benefit plans shall submit to the director the policy
form or forms containing at least one low cost benefit and one prevailing
benefit portability plan offered by the carrier that meets the required
standards. Each policy form must be submitted as prescribed by the director and
is subject to review and approval pursuant to ORS 742.003.
     (5) Within 180 days after approval by the
director of the portability plans submitted by the committee, as a condition of
transacting group health insurance in this state, each carrier offering group
health benefit plans shall make available to eligible individuals the
prevailing benefit and low cost benefit portability plans that have been
submitted by the carrier and approved by the director under subsection (4) of
this section.
     (6) A carrier offering group health
benefit plans shall issue to an eligible individual who is leaving or has left
group coverage provided by that carrier any portability plan offered by the
carrier if the eligible individual applies for the plan within 63 days of
termination of prior coverage and agrees to make the required premium payments
and to satisfy the other provisions of the portability plan.
     (7) Premium rates for portability plans
shall be subject to the following provisions:
     (a) Each carrier must file the geographic
average rate for each of its portability health benefit plans for a rating
period with the director on or before March 15 of each year.
     (b) The premium rates charged during the
rating period for each portability health benefit plan shall not vary from the
geographic average rate, except that the premium rate may be adjusted to
reflect differences in benefit design, family composition and age. Adjustments
for age shall comply with the following:
     (A) For each plan, the variation between
the lowest premium rate and the highest premium rate shall not exceed 100
percent of the lowest premium rate.
     (B) Premium variations shall be determined
by applying uniformly the carrierÂ’s schedule of age adjustments for portability
plans as approved by the director.
     (c) Premium variations between the
portability plans and the rest of the carrierÂ’s group plans must be based
solely on objective differences in plan design or coverage and must not include
differences based on the actual or expected health status of individuals who
select portability health benefit plans. For purposes of determining the
premium variations under this paragraph, a carrier may:
     (A) Pool all portability plans with all
group health benefit plans; or
     (B) Pool all portability plans for
eligible individuals leaving small employer group health benefit plan coverage
with all plans offered to small employers and pool all portability plans for
eligible individuals leaving other group health benefit plan coverage with all
health benefit plans offered to such other groups.
     (d) A carrier may not increase the rates
of a portability plan issued to an enrollee more than once in any 12-month
period. Annual rate increases shall be effective on the anniversary date of the
plan issued to the enrollee. The percentage increase in the premium rate
charged to an enrollee for a new rating period may not exceed the average
increase in the rest of the carrierÂ’s applicable group health benefit plans
plus an adjustment for age.
     (8) No portability plans under this
section may contain preexisting conditions provisions, exclusion periods,
waiting periods or other similar limitations on coverage.
     (9) Portability health benefit plans shall
be renewable with respect to all enrollees at the option of the enrollee,
except:
     (a) For nonpayment of the required
premiums by the policyholder;
     (b) For fraud or misrepresentation by the
policyholder;
     (c) When the carrier elects to discontinue
offering all of its group health benefit plans in accordance with ORS 743.737
and 743.754; or
     (d) When the director orders the carrier
to discontinue coverage in accordance with procedures specified or approved by
the director upon finding that the continuation of the coverage would:
     (A) Not be in the best interests of the
enrollees; or
     (B) Impair the carrier’s ability to meet
its contractual obligations.
     (10)(a) Each carrier offering group health
benefit plans shall maintain at its principal place of business a complete and
detailed description of its rating practices and renewal underwriting practices
relating to its portability plans, including information and documentation that
demonstrate that its rating methods and practices are based upon commonly
accepted actuarial practices and are in accordance with sound actuarial
principles.
     (b) Each such carrier shall file with the
director annually on or before March 15 an actuarial certification that the
carrier is in compliance with this section and that its rating methods are
actuarially sound. Each such certification shall be in a form and manner and
shall contain such information as specified by the director. A copy of such
certification shall be retained by the carrier at its principal place of
business.
     (c) Each such carrier shall make the
information and documentation described in paragraph (a) of this subsection
available to the director upon request. Except as provided in ORS 743.018 and
except in cases of violations of the Insurance Code, the information is
proprietary and trade secret information and shall not be subject to disclosure
by the director to persons outside the Department of Consumer and Business
Services except as agreed to by the carrier or as ordered by a court of
competent jurisdiction.
     (11) A carrier offering group health
benefit plans shall not provide any financial or other incentive to any
insurance producer that would encourage the insurance producer to market and
sell portability plans of the carrier on the basis of an eligible individualÂ’s
anticipated claims experience.
     (12) An individual who is eligible to
obtain a portability plan in accordance with this section may obtain such a
plan regardless of whether the eligible individual qualifies for a period of
continuation coverage under federal law or under ORS 743.600 or 743.610.
However, an individual who has elected such continuation coverage is not
eligible to obtain a portability plan until the continuation coverage has been
discontinued by the individual or has been exhausted. [1995 c.603 §18; 1997 c.716
§25; 1999 c.987 §14; 2003 c.364 §115; 2007 c.391 §3]
     743.761
Satisfaction of requirements of ORS 743.760 by carrier offering individual
health benefit plans. (1) A
carrier approved pursuant to subsection (4) of this section that offers
individual health benefit plans may satisfy the requirements of ORS 743.760 by
issuing any individual health benefit plan offered by the carrier to any
eligible individual as defined in ORS 743.760 who:
     (a) Is leaving or has left a group health
benefit plan provided by that carrier;
     (b) Applies for the policy; and
     (c) Agrees to make the required premium
payments and to satisfy the other provisions of the plan.
     (2) All health benefit plans issued
pursuant to subsection (1) of this section shall:
     (a) Comply with ORS 743.767 and 743.769;
and
     (b) Contain no preexisting conditions
provisions, exclusion periods, waiting periods or other similar limitations on
coverage.
     (3) A carrier offering plans pursuant to
this section shall offer plans that meet the standards and requirements
described in ORS 743.760 (2).
     (4) The Director of the Department of
Consumer and Business Services shall adopt standards for minimum participation
in the individual market necessary for a carrier to offer policies under this
section and shall develop a program for approval of carriers under this
section. [1995 c.603 §19]
     743.762 [Formerly 747.082; 1989 c.634 §1; renumbered
742.372 in 1989]
     743.763 [1995 c.603 §20; 1997 c.716 §26; renumbered
735.616 in 1997]
     743.765 [Formerly 747.084; 1989 c.634 §2; renumbered
742.374 in 1989]
     743.766
Use of health statements in individual health benefit plans; exclusions or
limitations on coverage; eligibility to apply for
     (2)(a) If an individual is accepted for
coverage under an individual health benefit plan, the carrier shall not impose
exclusions or limitations on coverage greater than:
     (A) A preexisting conditions provision
that complies with the following requirements:
     (i) The provision shall apply only to a
condition for which medical advice, diagnosis, care or treatment was
recommended or received during the six-month period immediately preceding the
individualÂ’s effective date of coverage; and
     (ii) The provision shall terminate its
effect no later than six months following the individualÂ’s effective date of
coverage;
     (B) An individual coverage waiting period
of 90 days; or
     (C) An exclusion period for specified
covered services applicable to all individuals enrolling for the first time in
the individual health benefit plan.
     (b) Pregnancy may constitute a preexisting
condition for purposes of this section.
     (3) If the carrier elects to restrict
coverage through the application of a preexisting conditions provision or an
individual coverage waiting period provision, the carrier shall reduce the
duration of the provision by an amount equal to the individualÂ’s aggregate
periods of creditable coverage if the most recent period of creditable coverage
is ongoing or ended within 63 days of the effective date of coverage in the new
individual health benefit plan. The crediting of prior coverage in accordance
with this subsection shall be applied without regard to the specific benefits
covered during the prior period.
     (4) If an eligible prospective enrollee is
rejected for coverage under an individual health benefit plan, the prospective
enrollee shall be eligible to apply for coverage under the Oregon Medical
Insurance Pool.
     (5) If a carrier accepts an individual for
coverage under an individual health benefit plan, the carrier shall renew the
policy except:
     (a) For nonpayment of the required
premiums by the policyholder.
     (b) For fraud or misrepresentation by the
policyholder.
     (c) When the carrier discontinues offering
or renewing, or offering and renewing, all of its individual health benefit
plans in this state or in a specified service area within this state. In order
to discontinue the plans under this paragraph, the carrier:
     (A) Must give notice of the decision to
the Director of the Department of Consumer and Business Services and to all
policyholders covered by the plans;
     (B) May not cancel coverage under the
plans for 180 days after the date of the notice required under subparagraph (A)
of this paragraph if coverage is discontinued in the entire state or, except as
provided in subparagraph (C) of this paragraph, in a specified service area;
     (C) May not cancel coverage under the
plans for 90 days after the date of the notice required under subparagraph (A)
of this paragraph if coverage is discontinued in a specified service area
because of an inability to reach an agreement with the health care providers or
organization of health care providers to provide services under the plans
within the service area; and
     (D) Must discontinue offering or renewing,
or offering and renewing, all health benefit plans issued by the carrier in the
individual market in this state or in the specified service area.
     (d) When the carrier discontinues offering
and renewing an individual health benefit plan in a specified service area
within this state because of an inability to reach an agreement with the health
care providers or organization of health care providers to provide services
under the plan within the service area. In order to discontinue a plan under
this paragraph, the carrier:
     (A) Must give notice of the decision to
the director and to all policyholders covered by the plan;
     (B) May not cancel coverage under the plan
for 90 days after the date of the notice required under subparagraph (A) of
this paragraph; and
     (C) Must offer in writing to each
policyholder covered by the plan, all other individual health benefit plans
that the carrier offers in the specified service area. The carrier shall offer
the plans at least 90 days prior to discontinuation.
     (e) When the carrier discontinues offering
or renewing, or offering and renewing, an individual health benefit plan for
all individuals in this state or in a specified service area within this state,
other than a plan discontinued under paragraph (d) of this subsection. With
respect to plans that are being discontinued, the carrier must:
     (A) Offer in writing to each policyholder
covered by the plan, one or more individual health benefit plans that the
carrier offers in the specified service area.
     (B) Offer the plans at least 90 days prior
to discontinuation.
     (C) Act uniformly without regard to the
claims experience of the affected policyholders or the health status of any
current or prospective enrollee.
     (f) When the director orders the carrier
to discontinue coverage in accordance with procedures specified or approved by
the director upon finding that the continuation of the coverage would:
     (A) Not be in the best interests of the
enrollee; or
     (B) Impair the carrier’s ability to meet
its contractual obligations.
     (g) When, in the case of an individual
health benefit plan that delivers covered services through a specified network
of health care providers, the enrollee no longer lives, resides or works in the
service area of the provider network and the termination of coverage is not
related to the health status of any enrollee.
     (h) When, in the case of a health benefit
plan that is offered in the individual market only through one or more bona
fide associations, the membership of an individual in the association ceases
and the termination of coverage is not related to the health status of any
enrollee.
     (i) For misuse of a provider network
provision. As used in this paragraph, “misuse of a provider network provision”
means a disruptive, unruly or abusive action taken by an enrollee that
threatens the physical health or well-being of health care staff and seriously
impairs the ability of the carrier or its participating providers to provide
service to an enrollee. An enrollee under this paragraph retains the rights of
an enrollee under ORS 743.804.
     (j) A carrier may modify an individual
health benefit plan at the time of coverage renewal. The modification is not a
discontinuation of the plan under paragraphs (c) and (e) of this subsection.
     (6) Notwithstanding any other provision of
this section, a carrier may rescind an individual health benefit plan for
fraud, material misrepresentation or concealment by an enrollee.
     (7) A carrier that withdraws from the
market for individual health benefit plans must continue to renew its
portability health benefit plans that have been approved pursuant to ORS
743.761.
     (8) A carrier that continues to offer
coverage in the individual market in this state is not required to offer
coverage in all of the carrierÂ’s individual health benefit plans. However, if a
carrier elects to continue a plan that is closed to new individual
policyholders instead of offering alternative coverage in its other individual
health benefit plans, the coverage for all existing policyholders in the closed
plan is renewable in accordance with subsection (5) of this section. [1995
c.603 §§22,41; 1997 c.716 §§15,16; 1999 c.987 §15; 2001 c.943 §14; 2003 c.748 §7]
     743.767
Premium rates for individual health benefit plans. Premium rates for individual health benefit
plans shall be subject to the following provisions:
     (1) Each carrier must file the geographic
average rate for its individual health benefit plans for a rating period with
the Director of the Department of Consumer and Business Services on or before
March 15 of each year.
     (2) The premium rates charged during a
rating period for individual health benefit plans issued to individuals shall
not vary from the individual geographic average rate, except that the premium
rate may be adjusted to reflect differences in benefit design, family
composition and age. For age adjustments to the individual plans, a carrier
shall apply uniformly its schedule of age adjustments for individual health
benefit plans as approved by the director.
     (3) A carrier may not increase the rates
of an individual health benefit plan more than once in a 12-month period except
as approved by the director. Annual rate increases shall be effective on the
anniversary date of the individual health benefit planÂ’s issuance. The
percentage increase in the premium rate charged for an individual health
benefit plan for a new rating period may not exceed the sum of the following:
     (a) The percentage change in the carrier’s
geographic average rate for its individual health benefit plan measured from
the first day of the prior rating period to the first day of the new period;
and
     (b) Any adjustment attributable to changes
in age and differences in benefit design and family composition.
     (4) Notwithstanding any other provision of
this section, a carrier that imposes an individual coverage waiting period
pursuant to ORS 743.766 may impose a monthly premium rate surcharge for a
period not to exceed six months and in an amount not to exceed the percentage
by which the rates for coverage under the Oregon Medical Insurance Pool exceed
the rates established by the Oregon Medical Insurance Pool Board as applicable
for individual risks under ORS 735.625. The surcharge shall be approved by the
Director of the Department of Consumer and Business Services and, in
combination with the waiting period, shall not exceed the actuarial value of a
six-month preexisting conditions provision. [1995 c.603 §23; 1999 c.987 §16]
     743.768 [Formerly 747.086; 1983 c.338 §964; 1989
c.634 §3; renumbered 742.376 in 1989]
     743.769
Carrier marketing of individual health benefit plans; rules; duties of carrier
regarding applications; effect of discontinuing offer of plans. (1) Each carrier shall actively market all
individual health benefit plans sold by the carrier.
     (2) Except as provided in subsection (3)
of this section, no carrier or insurance producer shall, directly or
indirectly, discourage an individual from filing an application for coverage
because of the health status, claims experience, occupation or geographic
location of the individual.
     (3) Subsection (2) of this section does
not apply with respect to information provided by a carrier to an individual
regarding the established geographic service area or a restricted network
provision of a carrier.
     (4) Rejection by a carrier of an
application for coverage shall be in writing and shall state the reason or
reasons for the rejection.
     (5) The Director of the Department of
Consumer and Business Services may establish by rule additional standards to
provide for the fair marketing and broad availability of individual health
benefit plans.
     (6) A carrier that elects to discontinue
offering all of its individual health benefit plans under ORS 743.766 (5)(c) or
to discontinue offering and renewing all such plans is prohibited from offering
and renewing health benefit plans in the individual market in this state for a
period of five years from the date of notice to the director pursuant to ORS
743.766 (5)(c) or, if such notice is not provided, from the date on which the
director provides notice to the carrier that the director has determined that
the carrier has effectively discontinued offering individual health benefit
plans in this state. This subsection does not apply with respect to a health
benefit plan discontinued in a specified service area by a carrier that covers
services provided only by a particular organization of health care providers or
only by health care providers who are under contract with the carrier. [1995
c.603 §24; 1999 c.987 §17; 2003 c.364 §116; 2003 c.590 §§1,3]
     743.770 [Formerly 743.780; 1987 c.774 §60;
renumbered 742.400 in 1989]
     743.771 [1987 c.774 §151; renumbered 742.405 in
1989]
     743.772 [Formerly 743.783; renumbered 742.031 in
1989]
     743.773
Rules for ORS 743.766 to 743.769. The Director of the Department of Consumer and Business Services shall
adopt all rules necessary for the implementation and administration of ORS
743.766 to 743.769. [1995 c.603 §25]
     743.774 [Formerly 486.097; renumbered 806.190 in
1987]
     743.775
Submission of information by carriers offering individual health benefit plans. Each carrier that offers individual health
benefit plans shall submit to the Director of the Department of Consumer and
Business Services any information requested by the director for the purpose of
assessing the impact of the amendments to ORS 743.769 and 746.600 by sections 1
and 2, chapter 590, Oregon Laws 2003. [2003 c.590 §8]
     743.776 [Formerly 486.541; renumbered 742.450 in
1989]
     743.778 [Formerly 486.546; renumbered 742.454 in
1989]
     743.779 [Formerly 486.551; 1989 c.700 §14;
renumbered 742.456 in 1989]
     743.780 [1975 c.796 §10; 1977 c.448 §12; 1985 c.103 §14;
1985 c.323 §10; 1985 c.624 §17a; renumbered 743.770; renumbered 742.400 in
1989]
     743.781 [Formerly 486.556; 1989 c.700 §15;
renumbered 742.458 in 1989]
     743.782 [Formerly 486.561; 1989 c.700 §16;
renumbered 742.460 in 1989]
     743.783 [Formerly 736.320; renumbered 743.772;
renumbered 742.031 in 1989]
     743.784 [Formerly 486.564; 1989 c.700 §17;
renumbered 742.462 in 1989]
     743.785 [Formerly 486.566; renumbered 742.464 in
1989]
     743.786 [1967 c.482 §1; 1971 c.523 §11; 1979 c.842 §7;
1983 c.338 §965; renumbered 742.500 in 1989]
     743.787
Definitions for ORS 743.788.
As used in ORS 743.788:
     (1) “Carrier” has the meaning given that
term in ORS 743.730.
     (2) “Enrollee” has the meaning given that
term in ORS 743.730.
     (3) “Health benefit plan” has the meaning
given that term in ORS 743.730. [2001 c.549 §2]
     743.788
Prescription drug identification card. (1) A carrier that provides coverage for prescription drugs provided
on an outpatient basis and issues a card or other technology for claims
processing, or an administrator of a health benefit plan including, but not
limited to, a third party administrator for a self-insured plan, a pharmacy
benefits manager and an administrator of a state administered plan, shall issue
to an enrollee a prescription drug identification card or other technology that
contains all information required for proper claims adjudication.
     (2) Upon renewal of a health benefit plan,
a carrier or administrator shall issue a prescription drug identification card
or other technology containing all current information required for proper
claims adjudication.
     (3) A carrier or administrator of a health
benefit plan is not required to issue a prescription drug identification card
or other technology separate from another identification card or technology
issued to an enrollee under the health benefit plan if the identification card
or technology contains all of the information required for proper claims
adjudication. [2001 c.549 §3]
     743.789 [1967 c.482 §2; 1975 c.390 §1; 1981 c.586 §1;
1983 c.338 §966; 1987 c.632 §1; renumbered 742.502 in 1989]
     743.790
Rules for prescription drug identification cards. The Director of the Department of Consumer
and Business Services may adopt rules to implement ORS 743.788 and may consider
any relevant standards developed by a standards development organization
accredited by the American National Standards Institute that represents
organizations interested in electronic standardization with the pharmacy
services sector of the health care industry and the requirements of the Health
Insurance Portability and Accountability Act of 1996, Public Law 104-191. [2001
c.549 §4]
     743.791 [2005 c.482 §2; renumbered 743A.108 in 2007]
     743.792 [1967 c.482 §3; 1977 c.600 §3; 1979 c.842 §8;
1983 c.338 §967; renumbered 742.504 in 1989]
     743.793 [2003 c.91 §4; renumbered 743A.064 in 2007]
     743.794 [2005 c.477 §2; renumbered 743A.120 in 2007]
     743.795 [1979 c.842 §10; renumbered 742.506 in 1989]
     743.796 [1987 c.742 §3; renumbered 742.508 in 1989]
     743.797 [1987 c.742 §2; renumbered 742.510 in 1989]
     743.798 [2005 c.628 §2; renumbered 743A.050 in 2007]
     743.799 [2005 c.765 §6; renumbered 743A.124 in 2007]
     743.800 [1971 c.523 §2; 1973 c.551 §1; 1975 c.784 §1;
1979 c.871 §45; 1981 c.414 §1; 1983 c.338 §968; 1987 c.588 §1; renumbered
742.520 in 1989]
MISCELLANEOUS
     743.801
Definitions. As used in ORS
743.801, 743.803, 743.804, 743.806, 743.807, 743.808, 743.811, 743.814,
743.817, 743.819, 743.821, 743.823, 743.827, 743.829, 743.831, 743.834,
743.837, 743.839, 743.854, 743.856, 743.857, 743.858, 743.859, 743.861,
743.862, 743.863, 743.864, 743.911, 743.913 and 743A.012:
     (1) “Emergency medical condition” means a
medical condition that manifests itself by acute symptoms of sufficient
severity, including severe pain, that a prudent layperson possessing an average
knowledge of health and medicine would reasonably expect that failure to
receive immediate medical attention would place the health of a person, or a
fetus in the case of a pregnant woman, in serious jeopardy.
     (2) “Emergency medical screening exam”
means the medical history, examination, ancillary tests and medical determinations
required to ascertain the nature and extent of an emergency medical condition.
     (3) “Emergency services” means those
health care items and services furnished in an emergency department and all
ancillary services routinely available to an emergency department to the extent
they are required for the stabilization of a patient.
     (4) “Enrollee” has the meaning given that
term in ORS 743.730.
     (5) “Grievance” means a written complaint
submitted by or on behalf of an enrollee regarding the:
     (a) Availability, delivery or quality of
health care services, including a complaint regarding an adverse determination
made pursuant to utilization review;
     (b) Claims payment, handling or
reimbursement for health care services; or
     (c) Matters pertaining to the contractual
relationship between an enrollee and an insurer.
     (6) “Health benefit plan” has the meaning
provided for that term in ORS 743.730.
     (7) “Independent practice association”
means a corporation wholly owned by providers, or whose membership consists
entirely of providers, formed for the sole purpose of contracting with insurers
for the provision of health care services to enrollees, or with employers for
the provision of health care services to employees, or with a group, as
described in ORS 743.522, to provide health care services to group members.
     (8) “Insurer” has the meaning provided for
that term in ORS 731.106. For purposes of ORS 743.801, 743.803, 743.804,
743.806, 743.807, 743.808, 743.811, 743.814, 743.817, 743.819, 743.821,
743.823, 743.827, 743.829, 743.831, 743.834, 743.837, 743.839, 743.854,
743.856, 743.857, 743.858, 743.859, 743.861, 743.862, 743.863, 743.864,
743.911, 743.913, 743A.012, 750.055 and 750.333, “insurer” also includes a
health care service contractor as defined in ORS 750.005.
     (9) “Managed health insurance” means any
health benefit plan that:
     (a) Requires an enrollee to use a
specified network or networks of providers managed, owned, under contract with
or employed by the insurer in order to receive benefits under the plan, except
for emergency or other specified limited service; or
     (b) In addition to the requirements of
paragraph (a) of this subsection, offers a point-of-service provision that
allows an enrollee to use providers outside of the specified network or
networks at the option of the enrollee and receive a reduced level of benefits.
     (10) “Medical services contract” means a
contract between an insurer and an independent practice association, between an
insurer and a provider, between an independent practice association and a
provider or organization of providers, between medical or mental health
clinics, and between a medical or mental health clinic and a provider to
provide medical or mental health services. “Medical services contract” does not
include a contract of employment or a contract creating legal entities and
ownership thereof that are authorized under ORS chapter 58, 60 or 70, or other
similar professional organizations permitted by statute.
     (11)(a) “Preferred provider organization
insurance” means any health benefit plan that:
     (A) Specifies a preferred network of
providers managed, owned or under contract with or employed by an insurer;
     (B) Does not require an enrollee to use
the preferred network of providers in order to receive benefits under the plan;
and
     (C) Creates financial incentives for an
enrollee to use the preferred network of providers by providing an increased
level of benefits.
     (b) “Preferred provider organization
insurance” does not mean a health benefit plan that has as its sole financial
incentive a hold harmless provision under which providers in the preferred
network agree to accept as payment in full the maximum allowable amounts that
are specified in the medical services contracts.
     (12) “Prior authorization” means a
determination by an insurer prior to provision of services that the insurer
will provide reimbursement for the services. “Prior authorization” does not
include referral approval for evaluation and management services between
providers.
     (13) “Provider” means a person licensed,
certified or otherwise authorized or permitted by laws of this state to
administer medical or mental health services in the ordinary course of business
or practice of a profession.
     (14) “Stabilization” means that, within
reasonable medical probability, no material deterioration of an emergency
medical condition is likely to occur.
     (15) “Utilization review” means a set of
formal techniques used by an insurer or delegated by the insurer designed to
monitor the use of or evaluate the medical necessity, appropriateness, efficacy
or efficiency of health care services, procedures or settings. [1995 c.672 §1;
1997 c.343 §18; 2001 c.266 §1; 2001 c.747 §5; 2003 c.87 §21; 2003 c.137 §§3,4;
2005 c.418 §2]
     743.802 [1987 c.588 §5; renumbered 742.522 in 1989]
     743.803
Medical services contract provisions; nonprovider party prohibitions; future
contracts. (1) A medical
services contract may not require the provider, as an element of the contract
or as a condition of compensation for services, to agree:
     (a) In the event of alleged improper
medical treatment of a patient, to indemnify the other party to the medical
services contract for any damages, awards or liabilities including but not
limited to judgments, settlements, attorney fees, court costs and any associated
charges incurred for any reason other than the negligence or intentional act of
the provider or the providerÂ’s employees;
     (b) To charge the other party to the
medical services contract a rate for services rendered pursuant to the medical
services contract that is no greater than the lowest rate that the provider
charges for the same service to any other person;
     (c) To deny care to a patient because of a
determination made pursuant to the medical services contract that the care is
not covered or is experimental, or to deny referral of a patient to another
provider for the provision of such care, if the patient is informed that the
patient will be responsible for the payment of such noncovered, experimental or
referral care and the patient nonetheless desires to obtain such care or
referral; or
     (d) Upon the provider’s withdrawal from or
termination or nonrenewal of the medical services contract, not to treat or
solicit a patient even at that patientÂ’s request and expense.
     (2) A medical services contract shall:
     (a) Grant to the provider adequate notice
and hearing procedures, or such other procedures as are fair to the provider
under the circumstances, prior to termination or nonrenewal of the medical
services contract when such termination or nonrenewal is based upon issues
relating to the quality of patient care rendered by the provider.
     (b) Set forth generally the criteria used
by the other party to the medical services contract for the termination or
nonrenewal of the medical services contract.
     (c) Entitle the provider to an annual
accounting accurately summarizing the financial transactions between the
parties to the medical services contract for that year.
     (d) Allow the provider to withdraw from
the care of a patient when, in the professional judgment of the provider, it is
in the best interest of the patient to do so.
     (e) Provide that a doctor of medicine or
osteopathy licensed under ORS chapter 677 shall be retained by the other party
to the medical services contract and shall be responsible for all final medical
and mental health decisions relating to coverage or payment made pursuant to
the medical services contract.
     (f) Provide that a physician who is
practicing in conformity with ORS 677.095 may advocate a decision, policy or
practice without being subject to termination or penalty for the sole reason of
such advocacy.
     (g)(A) Entitle the party to the medical
services contract who is being reimbursed for the provision of health care
services on a basis that includes financial risk withholds, or the partyÂ’s
representative, to a full accounting of health benefits claims data and related
financial information on no less than a quarterly basis by the party to a
medical service contract who has made reimbursement, as follows:
     (i) The data shall include all pertinent
information relating to the health care services provided, including related
provider and patient information, reimbursements made and amounts withheld
under the financial risk withhold provisions of the medical services contract
for the period of time under reconciliation and settlement between the parties.
     (ii) Any reconciliation and settlement
undertaken pursuant to a medical services contract shall be based directly and
exclusively upon data provided to the party who is being reimbursed for the
provision of health care services.
     (iii) All data, including supplemental
information or documentation, necessary to finalize the reconciliation and
settlement provisions of a medical services contract relating to financial risk
withholds shall be provided to the party who is being reimbursed for the
provision of health care services no later than 30 days prior to finalizing the
reconciliation and settlement.
     (B) Nothing in this paragraph shall be
construed to prevent parties to a medical services contract from mutually
agreeing to alternative reconciliation and settlement policies and procedures.
     (h) Provide that when continuity of care
is required to be provided under a health benefit plan by ORS 743.854, the
insurer and the individual provider shall provide continuity of care to
enrollees as provided in ORS 743.854.
     (3) The other party to a medical services
contract shall not:
     (a) Refer to other documents or
instruments in a contract unless the nonprovider party agrees to make available
to the provider for review a copy of the documents or instruments within 72
hours of request; or
     (b) Provide as an element of a contract
with a third party relating to the provision of medical services to a patient
of the provider that the providerÂ’s patient may not sue or otherwise recover
from the nonprovider party, or must hold the nonprovider party harmless for,
any and all expenses, damages, awards or liabilities that arise from the
management decisions, utilization review provisions or other policies or
determinations of the nonprovider party that have an impact on the providerÂ’s
treatment decisions and actions with regard to the patient.
     (4) An insurer, independent practice
association, medical or mental health clinic or other party to a medical services
contract shall provide the criteria for selection of parties to future medical
services contracts upon the request of current or prospective parties. [1995
c.672 §2; 1997 c.343 §19; 1997 c.759 §4; 1999 c.271 §1; 2001 c.266 §4]
     Note: 743.803, 743.806 and 743.811 were enacted
into law by the Legislative Assembly but were not added to or made a part of
ORS chapter 743. See Preface to Oregon Revised Statutes for further
explanation.
     743.804
Requirements for insurer offering health benefit plan. All insurers offering a health benefit plan
in this state shall:
     (1) Have a written policy that recognizes
the rights of enrollees:
     (a) To voice grievances about the
organization or health care provided;
     (b) To be provided with information about
the organization, its services and the providers providing care;
     (c) To participate in decision making
regarding their health care; and
     (d) To be treated with respect and
recognition of their dignity and need for privacy.
     (2) Provide a summary of policies on
enrolleesÂ’ rights and responsibilities to all participating providers upon
request and to all enrollees either directly or, in the case of group coverage,
to the employer or other policyholder for distribution to enrollees.
     (3) Have a timely and organized system for
resolving grievances and appeals. The system shall include:
     (a) A systematic method for recording all
grievances and appeals, including the nature of the grievances, and significant
actions taken;
     (b) Written procedures explaining the
grievance and appeal process, including a procedure to assist enrollees in
filing written grievances;
     (c) Written decisions in plain language
justifying grievance determinations, including appropriate references to
relevant policies, procedures and contract terms;
     (d) Standards for timeliness in responding
to grievances or appeals that accommodate the clinical urgency of the
situation;
     (e) Notice in all written decisions
prepared pursuant to this subsection that the enrollee may file a complaint
with the Director of the Department of Consumer and Business Services; and
     (f) An appeal process for grievances that
includes at least the following:
     (A) Three levels of review, the second of
which shall be by persons not previously involved in the dispute and the third
of which shall provide external review pursuant to an external review program
meeting the requirements of ORS 743.857, 743.859 and 743.861;
     (B)
     (C) Written decisions in plain language
justifying appeal determinations, including specific references to relevant
provisions of the health benefit plan and related written corporate practices.
     (4) If the insurer has a prescription drug
formulary, have:
     (a) A written procedure by which a
provider with authority to prescribe drugs and medications may prescribe drugs
and medications not included in the formulary. The procedure shall include the
circumstances when a drug or medication not included in the formulary will be
considered a covered benefit; and
     (b) A written procedure to provide full
disclosure to enrollees of any cost sharing or other requirements to obtain
drugs and medications not included in the formulary.
     (5) Furnish to all enrollees either
directly or, in the case of a group policy, to the employer or other
policyholder for distribution to enrollees written general information
informing enrollees about services provided, access to services, charges and
scheduling applicable to each enrolleeÂ’s coverage, including:
     (a) Benefits and services included and how
to obtain them, including any restrictions that apply to services obtained
outside the insurerÂ’s network or outside the insurerÂ’s service area, and the
availability of continuity of care as required by ORS 743.854;
     (b) Provisions for referrals, if any, for
specialty care, behavioral health services and hospital services and how
enrollees may obtain the care or services;
     (c) Provisions for after-hours and
emergency care and how enrollees may obtain that care, including the insurerÂ’s
policy, if any, on when enrollees should directly access emergency care and use
9-1-1 services;
     (d) Charges to enrollees, if applicable,
including any policy on cost sharing for which the enrollee is responsible;
     (e) Procedures for notifying enrollees of:
     (A) A change in or termination of any
benefit;
     (B) If applicable, termination of a
primary care delivery office or site; and
     (C) If applicable, assistance available to
enrollees affected by the termination of a primary care delivery office or site
in selecting a new primary care delivery office or site;
     (f) Procedures for appealing decisions
adversely affecting the enrolleeÂ’s benefits or enrollment status;
     (g) Procedures, if any, for changing
providers;
     (h) Procedures for voicing grievances,
including the option of obtaining external review under the insurerÂ’s program
established pursuant to ORS 743.857, 743.859 and 743.861;
     (i) A description of the procedures, if
any, by which enrollees and their representatives may participate in the
development of the insurerÂ’s corporate policies and practices;
     (j) Summary information on how the insurer
makes decisions regarding coverage and payment for treatment or services,
including a general description of any prior authorization and utilization
review requirements that affect coverage or payment;
     (k) A summary of criteria used to
determine if a service or drug is considered experimental or investigational;
     (L) Information about provider, clinic and
hospital networks, if any, including a list of network providers and
information about how the enrollee may obtain current information about the
availability of individual providers, the hours the providers are available and
a description of any limitations on the ability of enrollees to select primary
and specialty care providers;
     (m) A general disclosure of any
risk-sharing arrangements the insurer has with physicians and other providers;
     (n) A summary of the insurer’s procedures
for protecting the confidentiality of medical records and other enrollee
information;
     (o) A description of any assistance
provided to non-English-speaking enrollees;
     (p) A summary of the insurer’s policies,
if any, on drug prescriptions, including any drug formularies, cost sharing
differentials or other restrictions that affect coverage of drug prescriptions;
     (q) Notice of the enrollee’s right to file
a complaint or seek other assistance from the Director of the Department of
Consumer and Business Services; and
     (r) Notice of the information that is
available upon request pursuant to subsection (6) of this section and
information that is available from the Department of Consumer and Business
Services pursuant to ORS 743.804, 743.807, 743.814 and 743.817.
     (6) Provide the following information upon
the request of an enrollee or prospective enrollee:
     (a) Rules related to the insurer’s drug
formulary, if any, including information on whether a particular drug is
included or excluded from the formulary;
     (b) Provisions for referrals, if any, for
specialty care, behavioral health services and hospital services and how
enrollees may obtain the care or services;
     (c) A copy of the insurer’s annual report
on grievances and appeals as submitted to the department under subsection (9)
of this section;
     (d) A description of the insurer’s
risk-sharing arrangements with physicians and other providers consistent with
risk-sharing information required by the federal Health Care Financing
Administration pursuant to 42 C.F.R. 417.124 (3)(b) as in effect on June 18,
1997;
     (e) A description of the insurer’s
efforts, if any, to monitor and improve the quality of health services;
     (f) Information about any insurer
procedures for credentialing network providers and how to obtain the names,
qualifications and titles of the providers responsible for an enrolleeÂ’s care;
and
     (g) A description of the insurer’s
external review program established pursuant to ORS 743.857, 743.859 and
743.861.
     (7) Except as otherwise provided in this
subsection, provide to enrollees, upon request, a written summary of
information that the insurer may consider in its utilization review of a
particular condition or disease to the extent the insurer maintains such criteria.
Nothing in this section shall require an insurer to advise an enrollee how the
insurer would cover or treat that particular enrolleeÂ’s disease or condition.
Utilization review criteria that is proprietary shall be subject to verbal
disclosure only.
     (8) Provide the following information to
an enrollee when the enrollee has filed a grievance:
     (a) Detailed information on the insurer’s
grievance and appeal procedures and how to use them;
     (b) Information on how to access the
complaint line of the Department of Consumer and Business Services; and
     (c) Information explaining how an enrollee
applies for external review of the insurerÂ’s actions under the external review
program established by the insurer pursuant to ORS 743.857.
     (9) Provide annual summaries to the
Department of Consumer and Business Services of the insurerÂ’s aggregate data
regarding grievances, appeals and applications for external review in a format
prescribed by the department to ensure consistent reporting on the number,
nature and disposition of grievances, appeals and applications for external
review.
     (10) Ensure that the confidentiality of
specified patient information and records is protected, and to that end:
     (a) Adopt and implement written
confidentiality policies and procedures;
     (b) State the insurer’s expectations about
the confidentiality of enrollee information and records in medical service
contracts; and
     (c) Afford enrollees the opportunity to
approve or deny the release of identifiable medical personal information by the
insurer, except as otherwise permitted or required by law.
     (11) Notify an enrollee of the enrollee’s
rights under the health benefit plan at the time that the insurer notifies the
enrollee of an adverse decision. The notification shall include:
     (a) Notice of the right of the enrollee to
apply for internal and external review of the adverse decision;
     (b) A statement whether a decision by an
independent review organization is binding on the insurer and enrollee;
     (c) A statement that if the decision is
not binding on the insurer and if the insurer does not comply with the
decision, the enrollee may sue the insurer as provided in ORS 743.864; and
     (d) Information on filing a complaint with
the Director of the Department of Consumer and Business Services. [1997 c.343 §3;
2001 c.266 §15; 2003 c.87 §22]
     743.805 [1971 c.523 §3; 1973 c.551 §2; 1975 c.784 §2;
1981 c.414 §2; 1987 c.588 §2; 1989 c.775 §1; renumbered 742.524 in 1989]
     743.806
Utilization review requirements for medical services contracts to which insurer
not party. All utilization
review performed pursuant to a medical services contract to which an insurer is
not a party shall comply with the following:
     (1) The criteria used in the review
process and the method of development of the criteria shall be made available
for review to a party to such medical services contract upon request.
     (2) A doctor of medicine or osteopathy
licensed under ORS chapter 677 shall be responsible for all final
recommendations regarding the necessity or appropriateness of services or the
site at which the services are provided and shall consult as appropriate with
medical and mental health specialists in making such recommendations.
     (3) Any patient or provider who has had a
request for treatment or payment for services denied as not medically necessary
or as experimental shall be provided an opportunity for a timely appeal before
an appropriate medical consultant or peer review committee.
     (4) A provider request for prior
authorization of nonemergency service must be answered within two business
days, and qualified health care personnel must be available for same-day
telephone responses to inquiries concerning certification of continued length
of stay. [1995 c.672 §6; 1997 c.343 §20]
     Note: See note under 743.803.
     743.807
Utilization review requirements for insurers offering health benefit plan. (1) All insurers offering a health benefit
plan in this state that provide utilization review or have utilization review
provided on their behalf shall file an annual summary with the Department of
Consumer and Business Services that describes all utilization review policies,
including delegated utilization review functions, and documents the insurerÂ’s
procedures for monitoring of utilization review activities.
     (2) All utilization review activities
conducted pursuant to subsection (1) of this section shall comply with the
following:
     (a) The criteria used in the utilization
review process and the method of development of the criteria shall be made
available for review to contracting providers upon request.
     (b) A doctor of medicine or osteopathy
licensed under ORS chapter 677 shall be responsible for all final
recommendations regarding the necessity or appropriateness of services or the
site at which the services are provided and shall consult as appropriate with
medical and mental health specialists in making such recommendations.
     (c) Any patient or provider who has had a
request for treatment or payment for services denied as not medically necessary
or as experimental shall be provided an opportunity for a timely appeal before
an appropriate medical consultant or peer review committee.
     (d) A provider request for prior
authorization of nonemergency service must be answered within two business
days, and qualified health care personnel must be available for same-day
telephone responses to inquiries concerning certification of continued length
of stay. [1997 c.343 §4]
     743.808
Requirements for insurers that require designation of participating primary care
physician; exceptions. (1)
All insurers offering a health benefit plan in this state that requires an
enrollee to designate a participating primary care physician shall:
     (a) Permit the enrollee to change
participating primary care physicians at will, except that the enrollee may be
restricted to making changes no more frequently than two times in any 12-month
period and may be limited to designating only those participating primary care
physicians accepting new patients.
     (b) Have available for employer purchasers
of group health plans a point-of-service benefit plan providing for payment for
the services of a provider on a fee-for-service or discounted fee-for-service
basis with reasonable access to a broad array of licensed providers in the
insurerÂ’s geographic service area. Any higher premium for the point-of-service
benefit plan may not exceed true actuarial cost, including administrative
costs, to the insurer.
     (2) A health maintenance organization that
is exempt from federal income tax under Internal Revenue Code section 501(c)(3)
or (4) shall not be required to offer a point-of-service benefit plan as
required by subsection (1)(b) of this section if offering such a plan could
result in loss of federal tax-exempt status. Until such time as the federal
government establishes guidelines for health maintenance organizations exempt
from federal income tax that offer point-of-service benefit plans, such a
health maintenance organization shall not be required to offer a
point-of-service benefit plan if:
     (a) Enrollment in Internal Revenue Code
section 501(m) coverages exceeds five percent of its business; or
     (b) Revenue from Internal Revenue Code
section 501(m) coverages exceeds five percent of its revenue.
     (3) A health maintenance organization that
is federally qualified under 42 U.S.C. 300e et seq. shall not be required to
offer a point-of-service benefit plan in a manner or to an extent that is
inconsistent with federal law and regulation. [1995 c.672 §4; 1997 c.343 §1;
1999 c.987 §19]
     743.809 [1995 c.672 §5; repealed by 2003 c.87 §26]
     743.810 [1971 c.523 §4; 1973 c.551 §4; 1975 c.784 §3;
renumbered 742.526 in 1989]
     743.811
Applicability. The
provisions of ORS 743.801, 743.803, 743.806 and 743.808 do not apply to medical
services contracts for services to be provided under ORS chapter 656. [1995
c.672 §7a; 2001 c.104 §290; 2003 c.87 §23]
     Note: See note under 743.803.
     743.812 [1987 c.588 §4; renumbered 742.528 in 1989]
     743.813 [1995 c.669 §2; renumbered 743.845 in 1997]
     743.814
Requirements for insurers offering managed health insurance; quality
assessment; rules. All
insurers offering managed health insurance in this state shall:
     (1) Have a quality assessment program that
enables the insurer to evaluate, maintain and improve the quality of health
services provided to enrollees. The program shall include data gathering that
allows the plan to measure progress on specific quality improvement goals
chosen by the insurer.
     (2) File an annual summary with the
Department of Consumer and Business Services that describes quality assessment
activities, including any activities related to credentialing of providers, and
reports any progress on the insurerÂ’s quality improvement goals.
     (3) File annually with the department the
following information:
     (a) Results of all publicly available federal
Centers for Medicare and Medicaid Services reports and accreditation surveys by
national accreditation organizations.
     (b) The insurer’s health promotion and
disease prevention activities, if any, including a summary of screening and
preventive health care activities covered by the insurer. In addition to the
summary required in this paragraph, the consortium established pursuant to ORS
743.831 shall develop recommendations for, and the department shall adopt rules
requiring, reporting of an insurerÂ’s health promotion and disease prevention
activities related to:
     (A) Two specific preventive measures;
     (B) One specific chronic condition; and
     (C) One specific acute condition. [1997
c.343 §5; 2003 c.14 §450]
     743.815 [1971 c.523 §5; 1973 c.551 §3; 1975 c.784 §4;
1981 c.414 §3; renumbered 742.530 in 1989]
     743.816 [1995 c.506 §2; renumbered 743.847 in 1997]
     743.817
Requirements for insurers offering managed health or preferred provider
organization insurance; rules; opportunity to participate. An insurer offering managed health insurance
or preferred provider organization insurance in this state shall:
     (1) File an annual summary with the
Department of Consumer and Business Services that reports on the scope and
adequacy of the insurerÂ’s network and the insurerÂ’s ongoing monitoring to
ensure that all covered services are reasonably accessible to enrollees. The
Director of the Department of Consumer and Business Services shall adopt rules
establishing uniform indicators that insurers offering managed health insurance
or preferred provider organization insurance must use for reporting under this
subsection, including but not limited to reporting on the scope and adequacy of
networks. For the purpose of developing the rules, the director shall consult with
an advisory committee appointed by the director. The advisory committee must
include representatives of persons likely to be affected by the rules,
including consumers, purchasers of health insurance and insurers that offer
managed health insurance or preferred provider organization insurance.
     (2) Establish a means to provide to the
insurerÂ’s managed care plan or preferred provider organization insurance
enrollees, purchasers and providers a meaningful opportunity to participate in
the development and implementation of insurer policy and operation through:
     (a) The establishment of advisory panels;
     (b) Consultation with advisory panels on
major policy decisions; or
     (c) Other means including but not limited
to:
     (A) Governing board meetings or special meetings
at which enrollees, purchasers and providers are invited to express opinions;
and
     (B) Enrollee councils that are given a
reasonable opportunity to meet with the governing board or its designee. [1997
c.343 §6; 2001 c.266 §6]
     743.819
Reporting requirements; rules.
The Department of Consumer and Business Services shall develop by rule
reporting requirements as necessary for the consistent and efficient
implementation of ORS 743.804, 743.807, 743.814 and 743.817. In order to
minimize duplicative reporting requirements, the department shall accept copies
of reports prepared for national accreditation organizations as sufficient to
meet the reporting requirements developed pursuant to this section to the
extent that the reports include the information required by the department
pursuant to this section. [1997 c.343 §11]
     743.820 [1971 c.523 §6; 1975 c.784 §5; 1981 c.414 §4;
renumbered 742.532 in 1989]
     743.821
Required managed health insurance contract provision; enrollee liability. All insurers offering managed health
insurance in this state shall include in contracts with providers a provision
requiring that in the event the insurer fails to pay for health care services
covered by the health benefit plan, the provider shall not bill or otherwise
attempt to collect from enrollees for amounts owed by insurers, and enrollees
shall not be liable to the provider for any sums owed by the insurer. Nothing
in this section shall be construed to in any manner limit the applicability of
ORS 750.095 (2). [1997 c.343 §7]
     743.823
Enforcement of NewbornsÂ’ and MothersÂ’ Health Protection Act of 1996. The Department of Consumer and Business
Services shall enforce insurer compliance with the federal NewbornsÂ’ and
Mothers’ Health Protection Act of 1996. [1997 c.343 §8]
     743.825 [1971 c.523 §7; 1975 c.784 §6; 1987 c.569 §4;
1987 c.632 §2; renumbered 742.534 in 1989]
     743.827
Health Care Consumer Protection Advisory Committee. The Director of the Department of Consumer
and Business Services shall appoint a Health Care Consumer Protection Advisory
Committee with fair representation of health care consumers, providers and
insurers. The committee shall advise the director regarding the implementation
of ORS 743.801, 743.803, 743.804, 743.806, 743.807, 743.808, 743.811, 743.814,
743.817, 743.819, 743.821, 743.823, 743.827, 743.829, 743.831, 743.834,
743.837, 743.839 and 743A.012 and other issues related to health care consumer
protection. [1997 c.343 §10; 2003 c.87 §24; 2003 c.137 §5; 2005 c.418 §3]
     743.828 [1975 c.784 §8; renumbered 742.536 in 1989]
     743.829
Decisions regarding health care facility length of stay, level of care and
follow-up care. (1) All
clinical decisions regarding length of stay in a health care facility as
defined in ORS 442.015, transfer between levels of care and follow-up care
shall be the decision of the treating provider in consultation with the
patient, as appropriate.
     (2) An insurer may not terminate or
restrict the practice privileges of any provider solely on the basis of one or
more decisions made pursuant to subsection (1) of this section. [1997 c.343 §12]
     743.830 [1971 c.523 §8; 1975 c.784 §9; renumbered
742.538 in 1989]
     743.831
Consortium established; managed health care performance. (1) The Administrator of the Office for
Oregon Health Policy and Research shall establish a consortium of interested
parties that shall:
     (a) Develop, on a voluntary basis,
standardized, quantitative performance measurements of managed health insurance
organizations for use by health care consumers, purchasers and providers to
continuously assess the quality of clinical and service-related aspects of
health care arranged for or provided by managed health insurance organizations;
     (b) Encourage managed health insurance
organizations to collect, on a voluntary basis, the performance measurements
specified in paragraph (a) of this subsection and share that information with
the consortium;
     (c) Develop, test, refine and produce one
or more managed health care performance scorecards to provide consumers and
purchasers with accurate, reliable and timely comparisons of managed health
insurance organizations with respect to:
     (A) Organizational characteristics;
     (B) Clinical quality measurements;
     (C) Service-related quality measurements;
and
     (D) Member and patient satisfaction; and
     (d) Carry out the activities specified in
this subsection with the objective of:
     (A) Utilizing, to the greatest extent
feasible and desirable, nationally developed quality assessment tools; and
     (B) Minimizing duplicative quality
assessment activities and associated administrative costs.
     (2) The consortium established pursuant to
subsection (1) of this section shall be comprised of representatives of:
     (a) Health care consumers;
     (b) Private-sector and public-sector
health care purchasers;
     (c) Managed health insurance
organizations;
     (d) Health care providers, including but
not limited to physicians, nurses and hospitals;
     (e) State agencies, including but not
limited to the Department of Consumer and Business Services and the Department
of Human Services;
     (f)
     (g) Other groups or organizations as
determined to be appropriate by the administrator to ensure broad
representation of interests and expertise.
     (3) The Office for Oregon Health Policy
and Research shall:
     (a) Provide staffing for the consortium;
and
     (b) Seek public and private funds to
assist in the work of the consortium. [1997 c.343 §13]
     743.833 [1975 c.784 §12; renumbered 742.540 in 1989]
     743.834
Insurer prohibited practices; patient communication and referral. No insurer may terminate or otherwise
financially penalize a provider for:
     (1) Providing information to or
communicating with a patient in a manner that is not slanderous, defamatory or
intentionally inaccurate concerning:
     (a) Any aspect of the patient’s medical
condition;
     (b) Any proposed treatment or treatment
alternatives, whether covered by the insurerÂ’s health benefit plan or not; or
     (c) The provider’s general financial
arrangement with the insurer.
     (2)(a) Referring a patient to another
provider, whether or not that provider is under contract with the insurer. If a
provider refers a patient to another provider, the referring provider shall:
     (A) Comply with the insurer’s written policies
and procedures with respect to any such referrals; and
     (B) Inform the patient that the referral
services may not be covered by the insurer.
     (b) Allocation of costs for referral
services shall be a matter of contract between the provider and the insurer.
Allocation of costs to the provider by contract shall not be considered a
penalty under this section. [1997 c.343 §15]
     743.835 [1971 c.523 §9; 1975 c.784 §10; 1987 c.632 §3;
renumbered 742.542 in 1989]
     743.837
Prior authorization requirements. Except in the case of misrepresentation, prior authorization
determinations shall be subject to the following requirements:
     (1) Prior authorization determinations
relating to benefit coverage and medical necessity shall be binding on the
insurer if obtained no more than 30 days prior to the date the service is
provided.
     (2) Prior authorization determinations
relating to enrollee eligibility shall be binding on the insurer if obtained no
more than five business days prior to the date the service is provided. [1997
c.343 §16]
     743.839
Disclosure of information.
Nothing in ORS 743.804, 743.807, 743.814 to 743.839 and 743A.012 shall be
construed to require disclosure of information that is otherwise privileged or
confidential under any other provision of law. [1997 c.343 §17; 2003 c.137 §6;
2005 c.418 §4]
     743.840 [1985 c.527 §2; renumbered 742.466 in 1989]
     743.842
Emergency eye care services without referral from primary care provider. (1) As used in this section:
     (a) “Eye care practitioner” means an optometrist
or ophthalmologist licensed by the State of
     (b) “Eye care services” means health care
services related to the care of the eye and related structures as specified by
a health benefit plan.
     (c) “Health benefit plan” has the meaning
provided for that term in ORS 743.730.
     (2) Any insurer that offers a health
benefit plan that provides coverage of eye care services shall allow any
enrollee to receive covered eye care services on an emergency basis without
first receiving a referral or prior authorization from a primary care provider.
However, an insurer may require the enrollee to receive a referral or prior
authorization from a primary care provider for any subsequent surgical
procedures. Nothing in this subsection shall be construed to require that
covered eye care services rendered by an eye care practitioner on an emergency
basis be furnished in a hospital or similar medical facility.
     (3) An insurer described in subsection (2)
of this section may not:
     (a) Impose a deductible or coinsurance for
eye care services that is greater than the deductible or coinsurance imposed
for other medical services under the health benefit plan.
     (b) Require an eye care practitioner to
hold hospital privileges as a condition of participation as a provider in the
health benefit plan.
     (4) Nothing in this section:
     (a) Requires an insurer to provide
coverage or reimbursement of eye care services;
     (b) Requires an insurer to provide
coverage or reimbursement of refractive surgery, ophthalmic materials, lenses,
eyeglasses or other appurtenances; or
     (c) Prevents an enrollee from receiving
eye care or other covered services from the enrolleeÂ’s primary care provider in
accordance with the terms of the enrolleeÂ’s health benefit plan.
     (5) This section is exempt from ORS
743A.001. [1999 c.749 §2]
     743.845
Designation of womenÂ’s health care provider as primary care provider; direct
access to womenÂ’s health care provider. (1) For purposes of this section:
     (a) “Pregnancy care” means the care
necessary to support a healthy pregnancy and care related to labor and
delivery.
     (b) “Women’s health care provider” means
an obstetrician or gynecologist, physician assistant specializing in womenÂ’s
health, advanced registered nurse practitioner specialist in womenÂ’s health or
certified nurse midwife, practicing within the applicable lawful scope of
practice.
     (2) Every health insurance policy that
covers hospital, medical or surgical expenses and requires an enrollee to
designate a participating primary care provider shall permit a female enrollee
to designate a womenÂ’s health care provider as the enrolleeÂ’s primary care
provider if:
     (a) The women’s health care provider meets
the standards established by the insurer in collaboration with interested
parties, including but not limited to the Oregon section of the American
College of Obstetricians and Gynecologists; and
     (b) The women’s health care provider
requests that the insurer make the provider available for designation as a
primary care provider.
     (3) If a female enrollee has designated a
primary care provider who is not a womenÂ’s health care provider, an insurance
policy as described in subsection (2) of this section shall permit the enrollee
to have direct access to a womenÂ’s health care provider for the following
services:
     (a) At least one annual preventative women’s
health examination;
     (b) Medically necessary follow-up visits
resulting from a preventative womenÂ’s health examination. A health plan may
require the womenÂ’s health care provider to notify and consult with the enrolleeÂ’s
primary care provider; and
     (c) Pregnancy care.
     (4) The standards established by the
insurer under subsection (2) of this section shall not prohibit an insurer from
establishing the maximum number of participating primary care providers and
participating womenÂ’s health care providers necessary to serve a defined
population or geographic service area. [Formerly 743.813; 1999 c.607 §1; 2001
c.104 §291]
     743.847
Medicaid not considered in coverage eligibility determination; claims by state
Medicaid agency; prohibited ground for denial of enrollment of child; insurer
duties. (1) For the purposes
of this section:
     (a) “Health insurer” or “insurer” means an
employee benefit plan, self-insured plan, managed care organization or group
health plan, a third party administrator, fiscal intermediary or pharmacy
benefit manager of the plan or organization, or other party that is by statute,
contract or agreement legally responsible for payment of a claim for a health
care item or service.
     (b) “Medicaid” means medical assistance
provided under 42 U.S.C. 1396a (section 1902 of the Social Security Act).
     (2) A health insurer is prohibited from
considering the availability or eligibility for medical assistance in this or
any other state under Medicaid when considering eligibility for coverage or
making payments under its group or individual plan for eligible enrollees,
subscribers, policyholders or certificate holders.
     (3) To the extent that payment for covered
expenses has been made under the state Medicaid program for health care items
or services furnished to an individual, in any case when a third party has a
legal liability to make payments, the state is considered to have acquired the
rights of the individual to payment by any other party for those health care items
or services.
     (4) An insurer may not deny a claim
submitted by the state Medicaid agency, or a prepaid managed care health
services organization described in ORS 414.725, under subsection (3) of this
section based on the date of submission of the claim, the type or format of the
claim form or a failure to present proper documentation at the point of sale
that is the basis of the claim if:
     (a) The claim is submitted by the agency
or the prepaid managed care health services organization within the three-year
period beginning on the date on which the health care item or service was
furnished; and
     (b) Any action by the agency or the
prepaid managed care health services organization to enforce its rights with
respect to the claim is commenced within six years of the agencyÂ’s or
organizationÂ’s submission of the claim.
     (5) An insurer must provide to the state
Medicaid agency or a prepaid managed care health services organization, upon
request, the following information:
     (a) The period during which a Medicaid
recipient, the spouse or dependents may be or may have been covered by the
plan;
     (b) The nature of coverage that is or was
provided by the plan; and
     (c) The name, address and identifying
numbers of the plan.
     (6) An insurer may not deny enrollment of
a child under the group or individual health plan of the childÂ’s parent on the
ground that:
     (a) The child was born out of wedlock;
     (b) The child is not claimed as a
dependent on the parentÂ’s federal tax return; or
     (c) The child does not reside with the child’s
parent or in the insurerÂ’s service area.
     (7) When a child has group or individual
health coverage through an insurer of a noncustodial parent, the insurer must:
     (a) Provide such information to the
custodial parent as may be necessary for the child to obtain benefits through
that coverage;
     (b) Permit the custodial parent or the
provider, with the custodial parentÂ’s approval, to submit claims for covered
services without the approval of the noncustodial parent; and
     (c) Make payments on claims submitted in
accordance with paragraph (b) of this subsection directly to the custodial
parent, the provider or, if a claim is filed by the state Medicaid agency or a
prepaid managed health care services organization, directly to the agency or
the organization.
     (8) When a parent is required by a court
or administrative order to provide health coverage for a child, and the parent
is eligible for family health coverage, the insurer must:
     (a) Permit the parent to enroll, under the
family coverage, a child who is otherwise eligible for the coverage without
regard to any enrollment season restrictions;
     (b) If the parent is enrolled but fails to
make application to obtain coverage for the child, enroll the child under
family coverage upon application of the childÂ’s other parent, the state agency
administering the Medicaid program or the state agency administering 42 U.S.C.
651 to 669, the child support enforcement program; and
     (c) Not disenroll or eliminate coverage of
the child unless the insurer is provided satisfactory written evidence that:
     (A) The court or administrative order is
no longer in effect; or
     (B) The child is or will be enrolled in
comparable health coverage through another insurer which will take effect not
later than the effective date of disenrollment.
     (9) An insurer may not impose requirements
on a state agency that has been assigned the rights of an individual eligible
for medical assistance under Medicaid and covered for health benefits from the
insurer if the requirements are different from requirements applicable to an
agent or assignee of any other individual so covered.
     (10) The provisions of ORS 743A.001 do not
apply to this section. [Formerly 743.816; 2007 c.484 §2]
     743.850 [1981 c.752 §1; 1983 c.817 §1; 1987 c.505 §1;
renumbered 743.610 in 1989]
     743.851 [1987 c.505 §3; renumbered 743.600 in 1989]
     743.852 [1987 c.505 §§3a,4; 1989 c.784 §22;
renumbered 743.601 in 1989]
     743.853 [1987 c.505 §5; renumbered 743.602 in 1989]
RIGHTS OF
ENROLLEES
     743.854
Continuity of care. (1) As
used in this section, “continuity of care” means the feature of a health
benefit plan under which an enrollee who is receiving care from an individual
provider is entitled to continue with care with the individual provider for a
limited period of time after the medical services contract terminates.
     (2) An insurer offering managed health
insurance or preferred provider organization insurance in this state shall
provide continuity of care to an enrollee under a health benefit plan if:
     (a) A medical services contract or other
contract for an individual providerÂ’s services is terminated;
     (b) The provider no longer participates in
the provider network; and
     (c) The insurer does not cover services
when services are provided to enrollees by the individual provider or covers
services at a benefit level below the benefit level specified in the plan for
out-of-network providers.
     (3) In order to obtain continuity of care,
an enrollee must request continuity of care from the insurer.
     (4) An enrollee of a health benefit plan
is entitled to continuity of care when the following conditions are met:
     (a) The enrollee is undergoing an active
course of treatment that is medically necessary and, by agreement of the
individual provider and the enrollee, it is desirable to maintain continuity of
care; and
     (b) The contractual relationship between
the individual provider and the insurer described in subsection (2) of this
section with respect to the plan covering the enrollee has ended, except as
provided in subsection (5) of this section.
     (5) A health benefit plan is not required
to provide continuity of care when the contractual relationship between the
individual provider and the insurer described in subsection (2) of this section
ends under one of the following circumstances:
     (a) The contractual relationship between
the individual provider and the insurer has ended because the individual
provider:
     (A) Has retired;
     (B) Has died;
     (C) No longer holds an active license;
     (D) Has relocated out of the service area;
     (E) Has gone on sabbatical; or
     (F) Is prevented from continuing to care
for patients because of other circumstances; or
     (b) The contractual relationship has
terminated in accordance with provisions of the medical services contract
relating to quality of care and all contractual appeal rights of the individual
provider have been exhausted.
     (6) A health benefit plan is not required
to provide continuity of care if the enrollee leaves a health benefit plan or
if the policyholder discontinues the plan in which the enrollee is enrolled.
     (7) Except as provided for pregnancy in
subsection (8) of this section, an enrollee who is entitled to continuity of
care shall receive the care until the earlier of the following dates:
     (a) The day following the date on which
the active course of treatment entitling the enrollee to continuity of care is
completed; or
     (b) The 120th day after the date of
notification by the insurer to the enrollee of the termination of the
contractual relationship with the individual provider, as required by
subsection (9) of this section.
     (8) An enrollee who is undergoing care for
a pregnancy and who becomes entitled to continuity of care after commencement
of the second trimester of the pregnancy shall receive the care until the later
of the following dates:
     (a) The 45th day after the birth; or
     (b) As long as the enrollee continues
under an active course of treatment, but not later than the 120th day after the
date of notification by the insurer to the enrollee of the termination of the
contractual relationship with the individual provider as required by subsection
(9) of this section.
     (9) An insurer shall give written notice
of the termination of the contractual relationship between the insurer and the
individual provider and of the right to obtain continuity of care to those
enrollees that the insurer knows or reasonably should know are under the care
of the individual provider. The notice may be given prior to the date on which
the termination of the contractual relationship with the individual provider
takes effect only if the insurer gives notice in a good faith belief that the
termination will take effect as stated in the notice. In any event, the notice
shall be given to those enrollees not later than the 10th day after the date on
which the termination of the contractual relationship with the individual
provider takes effect. If the insurer first learns the identity of an affected
enrollee after the date of termination of the contractual relationship with the
individual provider or after the date on which the insurer gave notice to the
other affected enrollees, then the insurer shall give a notice of termination
to the affected enrollee not later than the 10th day after learning that
enrolleeÂ’s identity.
     (10) For the purpose of notifying an
enrollee under subsection (7)(b) or (8)(b) of this section:
     (a) The date of notification by the
insurer is the earlier of the date on which the enrollee receives the notice or
the date on which the insurer receives or approves the request for continuity
of care.
     (b) If an individual provider belongs to a
provider group, the provider group may deliver the notice if the insurer agrees
that the provider group may do so and if the notice clearly provides the
information that the plan is required to provide to the enrollee under
subsection (9) of this section.
     (11) A health benefit plan may condition
continuity of care upon the requirement that the individual provider adhere to
the medical services contract between the provider and the insurer and accept
the contractual reimbursement rate applicable at the time of contract
termination or, if the contractual reimbursement rate was not based on a fee
for service, a rate equivalent to the contractual rate. [2001 c.266 §3]
     743.855 [1981 c.752 §2; renumbered 743.611 in 1989]
     743.856
Referrals to specialists.
(1) If an insurer offers a health benefit plan that requires, as a condition of
coverage for specialty care services, a referral by a physician who is
authorized under the plan or under the medical services contract between the
physician and the insurer to refer an enrollee to specialty care services, the
insurer must include the requirements of this section in the plan. The
requirements apply only to benefits for which the member is contractually
eligible under the plan. The requirements are as follows:
     (a) The plan must establish and implement
a procedure for standing referrals, so that an enrollee is not required to
obtain approval from the authorized physician for each appointment with a
specialist after the initial appointment.
     (b) The plan must allow a standing
referral for an enrollee if the authorized physician determines that the
enrollee needs continuing care from a specialist.
     (c) The plan must allow an enrollee to
request and obtain a second medical opinion or consultation from a second
physician who is a network provider and who is authorized to make decisions
regarding the need for a referral to a specialist. If the plan does not have a
network provider available to give a second medical opinion or consultation,
the plan must allow the enrollee to obtain the opinion or consultation from a
similarly qualified physician who is not a network provider. The plan may not
impose a charge for the second medical opinion or consultation that is greater
than the cost that the enrollee would otherwise pay for an initial medical
opinion or consultation from the second physician.
     (2) A specialist to whom an enrollee is
referred must make regular reports to the authorized physician under subsection
(1) of this section in accordance with best practices for coordinated care as
established by the insurer. [2001 c.266 §5]
     743.857
External review. (1) An
insurer offering health benefit plans in this state shall have an external
review program that meets the requirements of this section and ORS 743.859 and
743.861. Each insurer shall provide the external review through an independent
review organization that is under contract with the Director of the Department
of Consumer and Business Services to provide external review. Each health
benefit plan must allow an enrollee, by applying to the insurer, to obtain
review by an independent review organization of a dispute relating to an
adverse decision by the insurer on one or more of the following:
     (a) Whether a course or plan of treatment
is medically necessary.
     (b) Whether a course or plan of treatment
is experimental or investigational.
     (c) Whether a course or plan of treatment
that an enrollee is undergoing is an active course of treatment for purposes of
continuity of care under ORS 743.854.
     (2) An insurer shall incur all costs of
its external review program. The insurer may not establish or charge a fee
payable by enrollees for conducting external review.
     (3) When an enrollee applies for external
review, the insurer shall request the director to appoint an independent review
organization. When an independent review organization is appointed, the insurer
shall forward all medical records and other relevant materials to the
independent review organization and shall produce additional information as
requested by the independent review organization to the extent that the
information is reasonably available to the insurer. The insurer shall furnish
all such records, materials and information in a timely manner in order to
enable a timely decision by the independent review organization. The director
may establish timelines for the purpose of this subsection.
     (4) An insurer shall expedite an enrollee’s
case if a provider with an established clinical relationship to the enrollee
certifies in writing and provides supporting documentation that the ordinary
time period for external review would seriously jeopardize the life or health
of the enrollee or the enrolleeÂ’s ability to regain maximum function. [2001
c.266 §8]
     743.858
Director to contract with independent review organizations to provide external
review; rules. (1) The
Director of the Department of Consumer and Business Services shall contract
with independent review organizations as provided in this section for the
purpose of providing external review under ORS 743.857. The director may have
contracts with no more than five independent review organizations at any one
time. Contracts shall be let with independent review organizations on a
biennial basis. A contract may be renewed if both parties agree.
     (2) The director shall seek public comment
when the director proposes to enter into a contract with an independent review
organization or proposes to renew or not renew a contract.
     (3) When evaluating proposals to contract
with independent review organizations, the director shall consider factors that
include but are not limited to relative expertise, professionalism, quality of
compliance with the rules established under subsection (4) of this section,
cost and record of past performance.
     (4) The director shall adopt rules
governing independent review organizations, their composition and their
conduct. The rules shall include but need not be limited to:
     (a) Professional qualifications of health
care providers, physicians or contract specialists making external review
determinations;
     (b) Criteria requiring independent review
organizations to demonstrate protections against bias and conflicts of
interest;
     (c) Procedures for conducting external
reviews;
     (d) Procedures for complaint investigations;
     (e) Procedures for ensuring the
confidentiality of medical records transmitted to the independent review
organizations for use in external reviews;
     (f) Fairness of procedures used by
independent review organizations;
     (g) Fees for external reviews;
     (h) Timelines for decision making and
notice to the parties; and
     (i) Quality assurance mechanisms to ensure
timeliness and quality of review.
     (5) The director shall develop procedures
for assigning cases filed by enrollees to independent review organizations
under contract with the director. The cases shall be assigned on a random
basis. The procedures shall allow an insurer only one opportunity to reject the
assignment of an independent review organization to a particular case. [2001
c.266 §9]
     743.859
Inclusion of statements regarding external review in health benefit plans. (1) An insurer of a health benefit plan
shall include in the plan the following statements, in boldfaced type or
otherwise emphasized:
     (a) A statement of the right of enrollees
to apply for external review by an independent review organization; and
     (b) A statement of whether the insurer
agrees to be bound by decisions of independent review organizations.
     (2) If an insurer states in the health
benefit plan as provided in subsection (1) of this section that the insurer is
not bound by the decisions of independent review organizations, the plan and
the written information provided by the plan must prominently disclose that:
     (a) The insurer is not bound by the
decisions of independent review organizations;
     (b) The insurer may follow nonetheless a
decision by an independent review organization; and
     (c) If the insurer does not follow a
decision of an independent review organization, the enrollee has the right to
sue the insurer.
     (3) If an insurer states in the health
benefit plan as provided in subsection (1) of this section that the insurer is
bound by the decisions of independent review organizations, the plan must
prominently disclose that fact. The plan must also state that the insurer
agrees to act in accordance with the decision of the independent review
organization notwithstanding the definition of medical necessity in the plan. [2001
c.266 §10]
     743.860 [1981 c.752 §3; renumbered 743.613 in 1989]
     743.861
Enrollee application for external review. (1) An enrollee shall apply in writing for external review of an
adverse decision by the insurer of a health benefit plan not later than the
180th day after receipt of the insurerÂ’s final written decision following its
internal review through its grievance and appeal process under ORS 743.804. An
enrollee is eligible for external review only if the enrollee has satisfied the
following requirements:
     (a) The enrollee must have signed a waiver
granting the independent review organization access to the medical records of
the enrollee.
     (b) The enrollee must have exhausted the
planÂ’s internal grievance procedures established pursuant to ORS 743.804. The
insurer may waive the requirement of compliance with the internal grievance procedures
and have a dispute referred directly to external review upon the enrolleeÂ’s
consent.
     (2) An enrollee who applies for external
review of an adverse decision shall provide complete and accurate information
to the independent review organization in a timely manner. [2001 c.266 §11]
     743.862
Duties of independent review organizations. (1) An independent review organization shall perform the following
duties when appointed under ORS 743.857 to review a dispute under a health
benefit plan between an insurer and an enrollee:
     (a) Decide whether the dispute is covered
by the conditions established in ORS 743.857 for external review and notify the
enrollee and insurer in writing of the decision. If the decision is against the
enrollee, the independent review organization shall notify the enrollee of the
right to file a complaint with or seek other assistance from the Director of
the Department of Consumer and Business Services and the availability of other
assistance as specified by the director.
     (b) Appoint a reviewer or reviewers as
determined appropriate by the independent review organization.
     (c) Notify the enrollee of information
that the enrollee is required to provide and any additional information the
enrollee may provide, and when the information must be submitted.
     (d) Notify the insurer of additional
information the independent review organization requires and when the
information must be submitted.
     (e) Decide the dispute relating to the
adverse decision of the insurer under ORS 743.857 (1) and issue the decision in
writing.
     (2) A decision by an independent review
organization shall be based on expert medical judgment after consideration of
the enrolleeÂ’s medical record, the recommendations of each of the enrolleeÂ’s
providers, relevant medical, scientific and cost-effectiveness evidence and
standards of medical practice in the
     (3) When review is expedited, the
independent review organization shall issue a decision not later than the third
day after the date on which the enrollee applies to the insurer for an
expedited review.
     (4) When a review is not expedited, the
independent review organization shall issue a decision not later than the 30th
day after the enrollee applies to the insurer for a review.
     (5) An independent review organization
shall file synopses of its decisions with the director according to the format
and other requirements established by the director. The synopses shall exclude
information that is confidential, that is otherwise exempt from disclosure
under ORS 192.501 and 192.502 or that may otherwise allow identification of an
enrollee. The director shall make the synopses public. [2001 c.266 §12]
     743.863
Civil penalty for failure to comply by insurer that agreed to be bound by
decision. (1) If an insurer
has agreed under the provisions of a health benefit plan to be bound by the
decision of an independent review organization and the insurer fails to comply
with such a decision, the Director of the Department of Consumer and Business
Services shall impose on the insurer a civil penalty of not less than $100,000
and not more than $1 million.
     (2) A decision of an independent review
organization is admissible in any legal proceeding involving the insurer or the
enrollee and involving the disputed issues subject to external review.
     (3) The sanctions under subsection (1) of
this section and the remedies under subsection (2) of this section are in
addition to and not in lieu of other sanctions, rights and remedies provided by
law or contract. [2001 c.266 §13]
     743.864
Private right of action. (1)
An enrollee who is the subject of a decision of an independent review
organization has a private right of action against the insurer for damages
arising from an adverse decision by the insurer that is subject to external
review if:
     (a) The insurer states in the health
benefit plan in which the enrollee is enrolled that the insurer is not bound by
the decisions of an independent review organization; and
     (b) The insurer fails to comply with the
decision.
     (2) The Legislative Assembly intends that
there is no private right of action under subsection (1) of this section if a
court finds either subsection (1)(a) or (b) of this section to be
unconstitutional or otherwise void. [2001 c.266 §14]
     743.865 [1981 c.752 §4; renumbered 743.614 in 1989]
     743.866 [2001 c.747 §2; renumbered 743.911 in 2007]
     743.868 [2001 c.747 §3; renumbered 743.913 in 2007]
     743.870 [1981 c.752 §5; renumbered 743.616 in 1989]
     743.871
Definitions for ORS 743.871 to 743.893. As used in ORS 743.871 to 743.893:
     (1) “In-network” means performed by a
provider or provider group that has directly contracted with the insurer.
     (2) “Out-of-network” means performed by a
provider or provider group that has not contracted or has indirectly contracted
with the insurer. [2007 c.390 §1]
     Note: 743.871 to 743.893 were enacted into law by
the Legislative Assembly but were not added to or made a part of ORS chapter
743 or any series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.
     743.874
Estimate of costs for in-network procedure or service. (1) An insurer offering a health benefit
plan as defined in ORS 743.730 must establish a procedure for providing to an
enrollee in the plan a reasonable estimate of an enrolleeÂ’s costs for an
in-network procedure or service covered by the enrolleeÂ’s health benefit plan,
in advance of the procedure or service, when an enrollee or an enrolleeÂ’s
authorized representative provides the following information to the insurer:
     (a) The type of procedure or service;
     (b) The name of the provider;
     (c) The enrollee’s member number or policy
number; and
     (d) If requested by the insurer, the site
where the procedure or service will be performed.
     (2) The estimate of costs described in
subsection (1) of this section must include an itemization of:
     (a) The enrollee’s deductible;
     (b) The amount of the deductible that has
been met by processed claims;
     (c) Coinsurance, copayment or other cost
share to be paid by the enrollee for the procedure or service; and
     (d) Any applicable benefit maximum.
     (3) Subsections (1) and (2) of this
section apply to the insurerÂ’s five most common procedures or services within
each of the following categories:
     (a) Office visits;
     (b) Diagnostic radiology and imaging;
     (c) Diagnostic pathology and laboratory
procedures;
     (d) Normal vaginal delivery;
     (e) Immunizations;
     (f) Orthopedic-musculoskeletal surgery;
and
     (g) Digestive system endoscopy.
     (4) In addition to the information
specified in subsections (1) and (2) of this section, the insurerÂ’s estimate
must include the following disclosures:
     (a) That other services may be provided to
the enrollee that are medically necessary and appropriate as part of the common
procedures, of which the insurer or enrollee may not be aware at the time of
the inquiry and for which the enrollee may have additional financial
responsibility;
     (b) That the enrollee may be responsible
for costs of procedures or services not covered by the plan;
     (c) How an enrollee may contact the
insurer for an explanation, if the estimate differs from the actual cost or if
the enrollee has other questions; and
     (d) The toll-free telephone number of the
consumer advocacy unit of the Department of Consumer and Business Services and
the address for the departmentÂ’s consumer information and complaints website.
     (5) An insurer must make the information
required by this section available to enrollees and in-network providers
through an interactive website and by toll-free telephone.
     (6) This section does not prohibit an
insurer from providing information in addition to or in more detail than the
information required by this section. [2007 c.390 §2]
     Note: 743.874 becomes operative July 1, 2009. See
section 7, chapter 390, Oregon Laws 2007.
     Note: See note under 743.871.
     743.875 [1981 c.752 §6; renumbered 743.617 in 1989]
     743.876
Estimate of costs for out-of-network procedure or service. (1) An insurer offering a health benefit
plan as defined in ORS 743.730 must establish a procedure for providing to an
enrollee in the plan a reasonable estimate of the enrolleeÂ’s costs for an
out-of-network procedure or service covered by the enrolleeÂ’s health benefit
plan, including the difference between the insurerÂ’s allowable charge and the
billed charge for the procedure or service, in advance of the procedure or
service, when an enrollee or an enrolleeÂ’s authorized representative provides
the following information to the insurer:
     (a) The type of procedure or service;
     (b) The name of the provider;
     (c) The enrollee’s member number or policy
number;
     (d) If requested by the insurer, the site
where the procedure or service will be performed; and
     (e) The provider’s billed charge amount.
     (2) The estimate of costs described in
subsection (1) of this section must include an itemization of:
     (a) The enrollee’s deductible;
     (b) The amount of the deductible that has
been met by processed claims;
     (c) Coinsurance, copayment or other cost
share to be paid by the enrollee for the procedure or service;
     (d) Any applicable benefit maximum;
     (e) The difference between the insurer’s
allowable charge and the billed charge for the procedure or service; and
     (f) The insurer’s average payment or
allowable charge for the procedure or service if performed in-network.
     (3) Subsections (1) and (2) of this
section apply to the insurerÂ’s five most common procedures or services within
each of the following categories:
     (a) Office visits;
     (b) Diagnostic radiology and imaging;
     (c) Diagnostic pathology and laboratory
procedures;
     (d) Normal vaginal delivery;
     (e) Immunizations;
     (f) Orthopedic-musculoskeletal surgery;
and
     (g) Digestive system endoscopy.
     (4) In addition to the information
specified in subsections (1) and (2) of this section, the insurerÂ’s estimate
must include the following disclosures:
     (a) That other services may be provided to
the enrollee that are medically necessary and appropriate as part of the common
procedures, of which the insurer or enrollee may not be aware at the time of
the inquiry and for which the enrollee may have additional financial
responsibility;
     (b) That the enrollee may be responsible
for costs of procedures or services not covered by the plan;
     (c) How an enrollee may contact the
insurer for an explanation, if the estimate differs from the actual cost or if
the enrollee has other questions; and
     (d) The toll-free telephone number of the
consumer advocacy unit of the Department of Consumer and Business Services and
the address for the departmentÂ’s consumer information and complaints website.
     (5) An insurer must make the information
required by this section available to enrollees and out-of-network providers
through an interactive website and by toll-free telephone.
     (6) This section does not prohibit an
insurer from providing information in addition to or in more detail than the
information required by this section. [2007 c.390 §3]
     Note: 743.876 becomes operative July 1, 2009. See
section 7, chapter 390, Oregon Laws 2007.
     Note: See note under 743.871.
     743.878
Submission of methodology used to determine insurerÂ’s allowable charges. (1) An insurer offering a health benefit
plan as defined in ORS 743.730 must submit to the Director of the Department of
Consumer and Business Services:
     (a) Upon request by the director, the
methodology used to determine the insurerÂ’s allowable charges for
out-of-network procedures and services or, if the insurer uses a third party to
determine the charges, the methodology used by the third party to determine
allowable charges;
     (b) For approval, a written explanation of
the method used by the insurer to determine the allowable charge, that is in
plain language and that must be provided upon request to enrollees directly,
or, in the case of group coverage, to the employer or other policyholder for
distribution to enrollees; and
     (c) Information prescribed by the director
as necessary to assess the effect of the disclosure requirements in ORS 743.874
and 743.876 on the individual and group health insurance markets.
     (2) The director shall consider the
recommendations of the Health Insurance Reform Advisory Committee in
prescribing the information required for submission under subsection (1)(c) of
this section. [2007 c.390 §4]
     Note: See note under 743.871.
     743.880 [1981 c.752 §7; renumbered 743.619 in 1989]
     743.883
Alternative mechanism for disclosure of costs and charges. The Director of the Department of Consumer
and Business Services may waive the requirements of ORS 743.874 or 743.876 to
allow an insurer to use an alternative disclosure mechanism, provided that the
mechanism enables enrollees to access information substantially similar to or
more extensive than the information disclosed in ORS 743.874 or 743.876. [2007
c.390 §5]
     Note: See note under 743.871.
     743.885 [1981 c.752 §8; renumbered 743.620 in 1989]
     743.890 [1981 c.752 §9; renumbered 743.622 in 1989]
     743.893
Rules. The Director of the
Department of Consumer and Business Services shall adopt rules necessary to
carry out the purposes of ORS 743.871 to 743.893. [2007 c.390 §6]
     Note: See note under 743.871.
     743.900 [1971 c.476 §2; 1975 c.570 §1; renumbered
742.560 in 1989]
     743.905 [1971 c.476 §3; renumbered 742.562 in 1989]
     743.910 [1971 c.476 §4; 1977 c.600 §7; 1989 c.426 §3;
renumbered 742.564 in 1989]
PAYMENT OF
CLAIMS
     743.911
Payment or denial of health benefit plan claims; rules. (1) Except as provided in this subsection,
when a claim under a health benefit plan is submitted to an insurer by a
provider on behalf of an enrollee, the insurer shall pay a clean claim or deny
the claim not later than 30 days after the date on which the insurer receives
the claim. If an insurer requires additional information before payment of a
claim, not later than 30 days after the date on which the insurer receives the
claim, the insurer shall notify the enrollee and the provider in writing and
give the enrollee and the provider an explanation of the additional information
needed to process the claim. The insurer shall pay a clean claim or deny the
claim not later than 30 days after the date on which the insurer receives the
additional information.
     (2) A contract between an insurer and a
provider may not include a provision governing payment of claims that limits
the rights and remedies available to a provider under this section and ORS
743.913 or has the effect of relieving either party of their obligations under
this section and ORS 743.913.
     (3) An insurer shall establish a method of
communicating to providers the procedures and information necessary to complete
claim forms. The procedures and information must be reasonably accessible to
providers.
     (4) This section does not create an
assignment of payment to a provider.
     (5) Each insurer shall report to the
Director of the Department of Consumer and Business Services annually on its
compliance under this section according to requirements established by the
director.
     (6) The director shall adopt by rule a
definition of “clean claim” and shall consider the definition of “clean claim”
used by the federal Department of Health and Human Services for the payment of
Medicare claims. [Formerly 743.866]
     743.913
Interest on unpaid claims.
(1) An insurer that fails to pay a claim to a provider within the timelines
established in ORS 743.911 shall pay simple interest of 12 percent per annum on
the unpaid amount of the claim that is due and owing, accruing from the date
after the payment was due until the claim is paid. Interest on any overdue
payment for a claim begins to accrue on the 31st day after:
     (a) The date on which the insurer received
the claim; or
     (b) The date the insurer receives the
requested additional information.
     (2) The interest is payable with the
payment of the claim. An insurer is not required to pay interest that is in the
amount of $2 or less on any claim.
     (3) The availability of interest under
subsection (1) of this section is in addition to and not in lieu of
administrative actions and penalties that may be imposed by the Director of the
Department of Consumer and Business Services under the Insurance Code. [Formerly
743.868]
     743.915 [1971 c.476 §5; repealed by 1975 c.570 §2
(743.916 enacted in lieu of 743.915)]
     743.916 [1975 c.570 §3 (enacted in lieu of 743.915);
1977 c.600 §8; 1989 c.426 §4; renumbered 742.566 in 1989]
     743.920 [1971 c.476 §6; renumbered 742.568 in 1989]
     743.925 [1971 c.476 §7; renumbered 742.570 in 1989]
     743.930 [1971 c.476 §8; 1977 c.600 §4; renumbered
742.572 in 1989]
     743.940 [1987 c.774 §36; renumbered 742.700 in 1989]
     743.942 [1987 c.774 §37; renumbered 742.702 in 1989]
     743.944 [1987 c.774 §38; renumbered 742.704 in 1989]
     743.946 [1987 c.774 §§39,40; 1989 c.700 §18;
renumbered 742.706 in 1989]
     743.948 [1987 c.774 §41; renumbered 742.708 in 1989]
     743.950 [1987 c.774 §42; 1989 c.181 §1; renumbered
742.710 in 1989]
_______________
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