US Laws, Codes, Statutes & Cases

OKLAHOMA STATUTES

TITLE 36.

INSURANCE

_________

§36101.  Short title.

Title 36 of the Oklahoma Statutes shall be known and may be cited as the Oklahoma Insurance Code.

Amended by Laws 1983, c. 68, § 1, eff. Nov. 1, 1983.  

§36102.  "Insurance" defined.

"Insurance" is a contract whereby one undertakes to indemnify another or to pay a specified amount upon determinable contingencies.

Laws 1957, p. 215, § 102.  

§36103.  "Insurer" defined.

A.  "Insurer" includes every person engaged in the business of making contracts of insurance or indemnity.

B.  A nonprofit hospital service and medical indemnity corporation is an insurer within the meaning of this Code.

C.  Burial associations shall be deemed not to be insurers.

Laws 1957, p. 215, § 103.  

§36104.  "Person" defined.

"Person" includes an individual, company, insurer, association, organization, society, reciprocal or interinsurance exchange, partnership, syndicate, business trust, corporation, Lloyd's association, and entity, and association, group or department of underwriters and any farmer's educational and cooperative union.

Added by Laws 1957, p. 216, § 104, operative July 1, 1957.  Amended by Laws 2004, c. 16, § 1, eff. Nov. 1, 2004.

§36105.  "Transacting" insurance.

"Transact" with respect to insurance includes any of the following:

1.  Solicitation and inducement.

2.  Preliminary negotiations.

3.  Effectuation of a contract of insurance.

4.  Transaction of matters subsequent to effectuation of the contract and arising out of it.

Laws 1957, p. 216, § 105.  

§36106.  "Insurance Commissioner" defined.

A.  When used with reference to administration of this Code, "Insurance Commissioner" or "Commissioner" means the Insurance Commissioner of the State of Oklahoma.

Laws 1957, p. 216, § 106.  

§36107.  "Board" defined.

When used with reference to the administration of this Code, "State Insurance Board", "Insurance Board" or "Board" means the State Board for Property and Casualty Rates established by Section 331, Article 3, of this Code.

Laws 1957, p. 216, § 107; Laws 1965, c. 60, § 1, eff. July 1, 1965.  

§36-107.2.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36108.  "Insurance Department" defined.

Unless the context otherwise requires, "Insurance Department" or "Department" means the Insurance Department established by Section 301, Article 3 of this Code.

Laws 1957, p. 216, § 108.  

§36109.  Compliance required.

No person shall transact a business of insurance in Oklahoma without complying with the applicable provisions of this Code.

Laws 1957, p. 216, § 109.  

§36110.  Application as to particular types of insurers.

No provision of the Oklahoma Insurance Code, Section 101 et seq. of this title, shall apply to:

1.  Nonprofit hospital service and medical indemnity corporations, except as stated in Sections 601 et seq. and 2601 et seq. of this title;

2.  Fraternal benefit societies, except as stated in Section 2701.1 et seq. of this title;

3.  Farmers' mutual fire insurance associations, except as stated in Section 2801 et seq. of this title;

4.  Mutual benefit associations, except as stated in Section 2401 et seq. of this title;

5.  Domestic burial associations;

6.  Any domestic association organized subject to the supervision or by the authority of any incorporated Grange Order of Patrons of Husbandry, when the association is formed exclusively for the mutual benefit of the members of such order.  Effective January 1, 1982, The Oklahoma State Union of the Farmers' Educational and Cooperative Union of America shall comply with all provisions of the Oklahoma Insurance Code;

7.  Trust companies organized pursuant to the provisions of Title 6 of the Oklahoma Statutes except that the title insurance and surety insurance business of such trust companies shall be subject to the Oklahoma Insurance Code;

8.  Soliciting agents of mutual insurance corporations or associations, operating only in this state, that issue no stock or other form of security, do not operate for profit, and have none of their funds inure to the benefit of individuals except in the form of less expensive insurance and necessary expenses of operation, if provisions are made in the bylaws of the insurer for the election of any soliciting agents by a majority of the policyholders in the area where the soliciting agent solicits insurance;

9.  The Mutual Aid Association of the Church of the Brethren or the Mutual Aid Association of the Mennonite and Brethren in Christ;

10.  Incorporated or unincorporated banking associations having been in existence for over fifteen (15) years and consisting of more than seventy-five (75) member banks within this state for issuance of blanket fidelity bonds for banks within this state for each bank's own use, or any nonprofit trust sponsored by such associations' member banks providing employee benefits such as life, health, accident, disability, pension and retirement benefits for banks, bank holding companies and subsidiaries thereof, the associations' employees and associate members;

11.  A religious publication, or subscribers of the publication, when the publication:

a. is a nonprofit religious organization,

b. is limited to subscribers who are members of the same denomination or religion,

c. acts as an organizational clearinghouse for information between subscribers who have financial, physical or medical needs and subscribers with the present ability to pay subscribers with present financial or medical needs,

d. provides for the financial or medical needs of a subscriber through payments directly from one subscriber to another, and

e. suggests amounts that subscribers may voluntarily give with no assumption of risk or promise to pay either among the subscribers or between the subscribers and the publication; or

12.  Charitable organizations that:

a. are described in Section 501(c)(3) of the Internal Revenue Code and Section 170(c) of the Internal Revenue Code,

b. issue qualified charitable gift annuity contracts,

c. have a minimum of One Hundred Thousand Dollars ($100,000.00) in unrestricted assets that are exclusive of the assets comprising its qualified charitable gift annuities, and

d. have been in continuous operation for at least three (3) years or are successors or affiliates of a charitable organization that has been in continuous operation for at least three (3) years,

except as stated in the Oklahoma Charitable Gift Annuity Act.

Added by Laws 1957, p. 216, § 110.  Amended by Laws 1975, c. 334, § 1, emerg. eff. June 12, 1975; Laws 1979, c. 56, § 1, emerg. eff. April 11, 1979; Laws 1982, c. 190, § 1, operative Oct. 1, 1982; Laws 1984, c. 110, § 1, eff. Nov. 1, 1984; Laws 1988, c. 83, § 3, emerg. eff. March 25, 1988; Laws 1993, c. 34, § 1, emerg. eff. April 2, 1993; Laws 1994, c. 118, § 1, eff. Sept. 1, 1994; Laws 1996, c. 249, § 1, emerg. eff. May 28, 1996; Laws 1997, c. 418, § 2, eff. Nov. 1, 1997; Laws 1998, c. 141, § 13, emerg. eff. April 21, 1998.

§36114.  Existing actions, violations.

Repeal by this act of any law shall not affect or abate any right heretofore accrued, action or proceeding heretofore commenced, or any unlawful act heretofore committed under such laws and punishment or deprivation of license or authority as a consequence thereof as provided by such law, but all proceedings hereafter taken with respect thereto shall conform to the applicable provisions of this Code insofar as possible.  All such laws shall be deemed to continue in force to the extent made necessary by this provision.

Laws 1957, p. 217, § 114.  

§36115.  Particular provisions prevail.

Provisions of this Code relative to a particular kind of insurance or a particular type of insurer or to a particular matter shall prevail over provisions relating to insurance in general or insurers in general or to such matter in general.

Laws 1957, p. 217, § 115.  

§36117.  General penalty.

In addition to any other penalty which may be applicable thereto, either under this Code or otherwise, violation of any provision of this Code shall constitute a misdemeanor and shall be punishable as such where no greater penalty is provided therefor.

Laws 1957, p. 217, § 117.  

§36-121.  Computation of time periods.

In computing any period of time prescribed or allowed by this title, by the rules of the Commissioner or the State Board for Property and Casualty Rates, or by any applicable statute, the day of the act, event, or default from which the designated period of time begins to run shall not be included.  The last day of the period so computed shall be included, unless it is a Saturday, a Sunday, a legal holiday as defined by the Oklahoma Statutes, or any day when the office of the Commissioner does not remain open for public business until 4:00 p.m., in which event the period runs until the end of the next day when the office of the Commissioner is open until 4:00 p.m.  When the period of time prescribed or allowed is less than seven (7) days, intermediate Saturdays, Sundays and legal holidays shall be excluded in the computation.

Added by Laws 1997, c. 418, § 3, eff. Nov. 1, 1997.

§36-301.  Insurance Department.

The Insurance Department of the State of Oklahoma is hereby created.  The Department shall consist of the Insurance Commissioner and the State Board for Property and Casualty Rates.  The powers and duties of the Insurance Commissioner shall be those created by this Code and not reserved to the Board and such powers and duties of the Board as the Board may request the Commissioner to perform.  The powers and duties of the State Board for Property and Casualty Rates shall be those created by the applicable provisions of the Insurance Code.  The Insurance Department shall be situated in one area in the State Capitol or some other location conveniently accessible to the general public subject to the provisions of Sections 63 and 94 of Title 74 of the Oklahoma Statutes and Section 580:20-13-5 of the Oklahoma Administrative Code.

Added by Laws 1957, p. 217, § 301.  Amended by Laws 1965, c. 60, § 2, eff. July 1, 1965; Laws 1980, c. 322, § 2, eff. Jan. 1, 1981; Laws 1986, c. 207, § 76, operative July 1, 1986; Laws 1987, c. 210, § 1, eff. July 1, 1987; Laws 1996, c. 10, § 1, emerg. eff. March 26, 1996.

§36302.  Insurance Commissioner.

The Insurance Commissioner of the State of Oklahoma shall be at least twentyfive (25) years of age and a resident of the State of Oklahoma for at least five (5) years, and have had at least five (5) years' experience in the insurance industry in administration, sales, servicing or regulation.  The Insurance Commissioner shall not be financially interested, directly or indirectly, in any insurer, agency or insurance transaction except as a policyholder or claimant under a policy.

Amended by Laws 1983, c. 68, § 2, eff. Nov. 1, 1983.  

§36303.  Official seal of Insurance Commissioner.

The Insurance Commissioner shall have an official seal, the center of which shall be the same as that of the Great Seal of the State of Oklahoma, and which shall be distinguished by the words "Insurance Commissioner  State of Oklahoma" inscribed in the circular band surrounding the remainder of the device.  This seal shall be the official seal of the office.  Every certificate and other document or paper duly executed by the Insurance Commissioner, authorized employees of the Insurance Department, or independent hearing examiners and all copies or photographic copies of papers certified by authority of the Commissioner and authenticated by the seal shall have the same force and effect as the original would in any suit or proceedings in any court of this state.

Added by Laws 1957, p. 218, § 303.  Amended by Laws 1997, c. 418, § 4, eff. Nov. 1, 1997.

§36304.  Funds to be deposited weekly.

The State Insurance Commissioner shall deposit weekly with the State Treasurer all funds in his hands collected for the use of the state.

Laws 1957, p. 218, § 304; Laws 1980, c. 159, § 4, emerg. eff. April 2, 1980.  

§36-305.  Commissioner may appoint assistants; legal counsel.

A.  The Insurance Commissioner may appoint such deputies, assistants, examiners, actuaries, attorneys, clerks and employees, at salaries to be fixed by the Insurance Commissioner, as may be necessary properly to discharge the duties imposed upon the Insurance Commissioner under this Code.  The Insurance Commissioner shall appoint all examiners for his office.  The attorneys appointed by the Insurance Commissioner shall be the legal advisors for the office of Insurance Commissioner and are authorized to appear for and represent the Insurance Commissioner in any and all litigation that may arise in the discharge of his duties except as otherwise provided elsewhere in this Code.  Provided, the Insurance Commissioner, whenever he deems it necessary, may call upon the Attorney General of the State of Oklahoma for legal counsel, and such assistance as may be required to enforce provisions of this Code.

B.  No deputy, assistant or employee of the Commissioner shall be financially interested, directly or indirectly, in any insurer, agency or insurance transaction except as a policyholder or claimant under a policy; except, that as to such matters wherein a conflict of interests does not exist on the part of any such individual, the Commissioner may employ from time to time insurance actuaries or other technicians who are independently practicing their professions even though similarly employed by insurers and others.  This section shall not be deemed to prohibit employment by the Commissioner of retired or pensioned personnel of insurers or insurance organizations.

Added by Laws 1957, p. 218, § 305.

§36305.1.  Delinquency proceedings; appointment of personnel; exemptions.

In any proceeding commenced against an insurer pursuant to Article 18 or 19 of Title 36 of the Oklahoma Statutes for the purpose of liquidating, rehabilitating, reorganizing or conserving such insurer:

1.  No former employee of the Insurance Department shall be employed or appointed to serve in any capacity by the court to assist the Insurance Department for a period of one (1) year following such employee's former employment;

2.  No former member of the State Legislature shall be employed to assist the Insurance Department for a period of two (2) years following the expiration of such member's service in office; and

3.  If any former officer or employee of any other company has been employed to assist the Insurance Department with the said proceeding against the insurer, such other company may not purchase the assets of or acquire any other interest in said insurer for a period of one (1) year following the expiration or termination of such officer's or employee's term of office or employment.

Amended by Laws 1987, c. 210, § 3, eff. July 1, 1987.  

§36-306.  Records - Disclosure.

A.  The records, books, and papers pertaining to the official transactions, filings, examinations, investigations, and proceedings of the Insurance Department shall be maintained by the Department until disposition thereof has been approved by the Archives and Records Commission.  These records, books, and papers shall be public records of the state.  However, reports of examinations of insurers shall be filed and made public only as provided in Section 309.4 of this title.  Open and ongoing investigative and disciplinary files shall not be made public until their completion or unless they are ordered to be made public by the proper judicial official.  Files of the claims division of the Commissioner's office, including complaints and requests for assistance from insureds, and insurance agency and company records, shall not be public records and shall not be disclosed except in connection with disciplinary proceedings by the Commissioner.  Final market conduct orders shall be open public records.

B.  Any document or other information generated by the Insurance Department or received by the Insurance Department from a governmental agency or any other public body of any kind, including an insurance guaranty fund or risk pool board, that has a protection from disclosure under any statute or evidentiary privilege from disclosure, while in the possession of the body that generated the information, shall retain its confidential character while in the possession of the Insurance Department.  The Insurance Department may require that any agency or public body providing a document or other information, if it expects the information to be treated confidentially by the Insurance Department, to also provide simultaneously an express reference to the claimed protection from disclosure.

C.  A court shall quash any subpoena commanding the disclosure of confidential information or closed records of the Insurance Department absent a showing of justification for such disclosure.

Added by Laws 1957, p. 219, § 306.  Amended by Laws 1980, c. 322, § 3, eff. Jan. 1, 1981; Laws 1983, c. 68, § 3, eff. Nov. 1, 1983; Laws 1985, c. 328, § 1, emerg. eff. July 29, 1985; Laws 1997, c. 418, § 5, eff. Nov. 1, 1997.

§36-306.1.  Availability of data necessary for review - Confidentiality - Sharing of data - Definitions.

A.  A supervisory agency shall make available to a requesting agency any data obtained or generated by, and in the possession of, the supervisory agency and that the requesting agency deems necessary for review in connection with the supervision of any person over which the requesting agency has direct supervisory authority.  However, the requested data must relate to the person, or an affiliate of the person, over which the requesting agency has direct supervisory authority.  An agency has direct supervisory authority over a person if such authority is specifically provided by statute, or the agency granted the person's charter, license, or registration, or otherwise granted permission for the person to conduct its business in this state.

B.  When a requesting agency and a federal regulatory agency or self-regulatory association have concurrent jurisdiction over a person, a requesting agency may share with such agency or association data received from a supervisory agency.  However, the federal regulatory agency or self-regulatory association must return such shared data to the requesting agency unless the federal regulatory agency or self-regulatory association has obtained approval from the supervisory agency to retain the data.  The term "federal regulatory agency" shall not include law enforcement agencies.

C.  1.  Notwithstanding any other statute, rule, or policy governing or relating to records of the requesting agency, all data received by a requesting agency from a supervisory agency shall be and remain confidential and not open to public inspection, subpoena, or any other form of disclosure while in the possession of the requesting agency.  Any request for inspection, subpoena, or other form of disclosure must be directed at the supervisory agency from which the data originated and disclosure thereof shall be subject to the laws, rules, and policies governing or relating to records of the supervisory agency.

2.  The provisions of data by a supervisory agency to a requesting agency under this section shall not constitute a waiver of, or otherwise affect, any privilege or claim of confidentiality that a supervisory agency may claim with respect to such data under any federal laws or laws of this state.

D.  A supervisory agency is not required to share original documents with a requesting agency.  A requesting agency shall reimburse the supervisory agency for costs associated with providing copies of data to the requesting agency.

E.  Nothing in the Oklahoma Financial Privacy Act, Sections 2201 through 2206 of Title 6 of the Oklahoma Statutes, shall prohibit the sharing of data as described in this section.  Additionally, neither a supervisory agency nor requesting agency shall be required to follow any procedure described in the Oklahoma Financial Privacy Act when sharing data as described in this section.

F.  As used in this section:

1.  "Affiliate" shall mean any person that controls, is controlled by, or is under common control with another person.  A person shall be deemed to have "control" over any person if the person:

a. directly or indirectly or acting through one or more other persons owns, controls, or has power to vote ten percent (10%) or more of any class of voting securities of the other person, or

b. the person controls in any manner the election, appointment, or designation of a majority of the directors, trustees, or other managing officers of the person;

2.  "Data" shall mean copies of any documents, reports, examination reports, letters, correspondence, orders, stipulations, memorandums of understanding, agreements, or any other records not open for public inspection generated by a supervisory agency or obtained by a supervisory agency from the person it supervises, whether in paper or electronic format.  However, "data" shall not include records that a requesting agency receives from a supervisory agency pursuant to this section;

3.  "Requesting agency" shall mean, as applicable, the Oklahoma State Banking Department, the Oklahoma Insurance Department, or the Oklahoma Department of Securities, that requests from a supervisory agency data relating to a person over which the requesting agency does not have direct supervisory authority;

4.  "Supervision" shall mean any examination, assessment, order, stipulation, agreement, report, memorandum of understanding, or other regulatory matter or process that a requesting agency is authorized to perform in relation to a person; and

5.  "Supervisory agency" shall mean, as applicable, the Oklahoma State Banking Department, the Oklahoma Insurance Department, or the Oklahoma Department of Securities, that maintains data relating to a person over which the agency has direct supervisory authority.

Added by Laws 2000, c. 205, § 32, emerg. eff. May 17, 2000.

§36-307.  Duties of Insurance Commissioner.

The Insurance Commissioner shall be charged with the duty of administration and enforcement of the provisions of this Code and of any requirements placed on an insurance company pursuant to subsection L of section 1111 of Title 47 of the Oklahoma Statutes, except those duties specifically assigned to the State Board for Property and Casualty Rates.  The Insurance Commissioner shall provide such administrative and staff support as required by the Board.  The Insurance Commissioner shall have jurisdiction over complaints against all persons engaged in the business of insurance, and shall hear all matters either in person, by authorized disinterested employees, or by hearing examiners appointed by the Commissioner for that purpose.  It shall be the duty of the Insurance Commissioner to file and safely keep all books and papers required by law to be filed with the Insurance Department, and to keep and preserve in permanent form a full record of proceedings, including a concise statement of the conditions of such insurers and other entities reported and examined by the Department and its examiners.  The Commissioner shall, annually, at the earliest practicable date after returns are received from the several authorized insurers and other organizations, make a report to the Governor of the State of Oklahoma of the affairs of the Office of the Insurance Commissioner, which report shall contain a tabular statement and synopsis of the several statements, as accepted by the Insurance Commissioner, which shall include with respect to each insurance company the admitted assets, liabilities except capital, capital and surplus, Oklahoma premium income, amount of claims paid in Oklahoma, and such other matters as may be of benefit to the public.  The Commissioner may make recommendations regarding the subject of insurance in this state, and shall set forth in a statement the various sums received and disbursed by the Department, from and to whom and for what purpose.  Such report shall be published by and subject to the order of the said Insurance Commissioner.  The Insurance Commissioner shall, upon retiring from office, deliver to the qualified successor all furniture, records, papers and property of the office.

Added by Laws 1957, p. 219, § 307.  Amended by Laws 1965, c. 60, § 3, eff. July 1, 1965; Laws 1972, c. 162, § 1, emerg. eff. April 7, 1972; Laws 1980, c. 322, § 4, eff. Jan. 1, 1981; Laws 1986, c. 207, § 77, operative July 1, 1986; Laws 1987, c. 210, § 4, eff. July 1, 1987; Laws 1997, c. 418, § 6, eff. Nov. 1, 1997; Laws 2005, c. 355, § 3, eff. Nov. 1, 2005.

§36307.1.  Rules and regulations.

The Commissioner may adopt reasonable rules and regulations for the implementation and administration of the provisions of the Insurance Code.

Added by Laws 1983, c. 89, § 14, eff. Nov. 1, 1983.  

§36-307.2.  Nonpublic personal information.

A.  No person shall disclose any nonpublic personal information contrary to the provisions of Title V of the Gramm-Leach-Bliley Act of 1999, Public Law No. 106-102.

B.  The Insurance Commissioner may promulgate rules necessary to carry out the provisions of this section.

C.  Nothing in this section shall be construed to create a private cause of action.

Added by Laws 2001, c. 363, § 1, eff. July 1, 2001.

§36-308.  Repealed by Laws 1991, c. 204, § 14, eff. Sept. 1, 1991.

§36-309.  Repealed by Laws 1991, c. 204, § 14, eff. Sept. 1, 1991.

§36-309.1.  Examinations - Definitions.

As used in Sections 309.1 through 309.7 of this title:

1.  "Commissioner" means the Insurance Commissioner;

2.  "Company" means any person engaging in or proposing or attempting to engage in any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the administrative or regulatory authority of the Commissioner;

3.  "Department" means the Insurance Department;

4.  "Examiner" means any individual or firm having been authorized by the Commissioner to conduct an examination;

5.  "Insurer" means every person engaged in the business of making contracts of insurance or indemnity including not-for-profit hospital service and medical indemnity corporations; and

6.  "Person" means any individual, aggregation of individuals, trust, association, recognized legal entity, or any affiliate thereof.

Added by Laws 1991, c. 204, § 1, eff. Sept. 1, 1991.  Amended by Laws 1997, c. 418, § 7, eff. Nov. 1, 1997.

§36-309.2.  Nature and frequency of examinations - Reports in lieu of examinations.

A.  The Insurance Commissioner or an examiner may conduct an examination under Sections 309.1 through 309.7 of this title of any company as often as the Commissioner deems appropriate but shall at a minimum, conduct an examination of every domestic insurer licensed in this state not less frequently than once every three (3) years.  The Commissioner shall, at a minimum, conduct or cause to be conducted an examination of every foreign insurer licensed in this state not less frequently than once every five (5) years.  The Commissioner may accept examinations conducted by other states on foreign insurers domiciled in such states pursuant to subsection C of this section.  In scheduling and determining the nature, scope and frequency of the examinations, the Commissioner shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified financial examiners or public accountants and other criteria as set forth in the Examiners' Handbook adopted by the National Association of Insurance Commissioners and in effect when the Commissioner exercises discretion under this subsection.  The Commissioner may also make examinations upon the request of one or more persons pecuniarily interested therein, who shall make affidavit of their belief, with specifications of their reasons therefor, that the company is in an unsound condition.

B.  For purposes of completing an examination of any company under Sections 309.1 through 309.7 of this title, the Commissioner may examine or investigate any person, or the business of any person, insofar as such examination or investigation is, in the sole discretion of the Commissioner, necessary or material to the examination of the company.

C.  In lieu of an examination under Sections 309.1 through 309.7 of this title of any foreign or alien insurer licensed in this state, the Commissioner may accept an examination report on such company as prepared by the insurance department for the company's state of domicile or port-of-entry state if:

1.  The insurance department was at the time of the examination accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program; or

2.  The examination is performed with the participation of one or more examiners who are employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.

D.  The Commissioner may authorize any employee of the Insurance Department to exercise the Commissioner's authority under Sections 309.1 through 309.7 of this title.

Added by Laws 1991, c. 204, § 2, eff. Sept. 1, 1991.  Amended by Laws 1993, c. 79, § 1, eff. Sept. 1, 1993; Laws 1997, c. 418, § 8, eff. Nov. 1, 1997.

§36-309.3.  Appointment of examiner - Compliance with examiner's requests - Powers of Commissioner.

A.  Upon determining that an examination should be conducted, the Insurance Commissioner shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination.  In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners' Handbook adopted by the National Association of Insurance Commissioners as supplemented by rules of the Commissioner.  The Commissioner may also employ such other guidelines or procedures as the Commissioner may deem appropriate.

B.  Every company or person from whom information is sought, including all of its officers, directors, employees and agents, shall provide to the Commissioner and examiners timely, convenient, and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business and affairs of the company being examined.  The officers, directors, employees and agents of the company or person shall facilitate such examination and aid in such examination so far as it is in their power to do so.  The refusal of any company, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension or refusal of, or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the Commissioner's jurisdiction.  Any such proceedings for suspension, revocation or refusal of any license or authority shall be conducted pursuant to Section 619 of this title.

C.  The Commissioner or examiners shall have the power to issue subpoenas, to administer oaths and to examine under oath any person as to any matter pertinent to the examination.  Upon the failure or refusal of any person to obey a subpoena, the Commissioner may petition a court of competent jurisdiction, and upon proper showing, the Court may enter any order compelling the witness to appear and testify or produce documentary evidence.  Failure to obey the court order shall be punishable as contempt of court.

D.  When making an examination under Sections 309.1 through 309.7 of this title, the Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or an accounting firm or individual holding a permit to practice public accounting, certified financial examiners or other professionals and specialists as examiners, the cost of which shall be borne by the company which is the subject of the examination.

E.  Nothing contained in Sections 309.1 through 309.7 of this title shall be construed to limit the Commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state.  Findings of fact and conclusions made in any examination report shall be prima facie evidence in any legal or regulatory action.

F.  Nothing contained in Sections 309.1 through 309.7 of this title shall be construed to limit the Commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company workpapers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the Commissioner may deem appropriate.

Added by Laws 1991, c. 204, § 3, eff. Sept. 1, 1991.  Amended by Laws 1997, c. 418, § 9, eff. Nov. 1, 1997.

§36-309.4.  Report of examination - Review by Commissioner - Investigatory hearing - Disclosure.

A.  All examination reports shall be comprised of only facts appearing upon the books, records, or other documents of the company, its agents or other persons examined, or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs, and such conclusions and recommendations as the examiners find reasonably warranted from such facts.

B.  No later than thirty (30) days following completion of the examination, the examiner in charge shall file with the Insurance Department a verified written report of examination under oath.  Upon receipt of the verified report, the Department shall transmit the report to the company examined, together with a notice which shall afford such company examined a reasonable opportunity of not more than twenty (20) days to make a written submission or written rebuttal with respect to any matters contained in the examination report.

C.  Within twenty (20) days of the end of the period allowed for the receipt of written submissions or written rebuttals, the Insurance Commissioner shall fully consider and review the report, together with any written submissions or written rebuttals and any relevant portions of the examiners' workpapers and enter an order:

1.  Adopting the examination report as filed or with modification or corrections.  If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the Commissioner, the Commissioner may order the company to take any action the Commissioner considers necessary and appropriate to cure such violation;

2.  Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information, and refiling pursuant to subsection A of this section; or

3.  Calling for an investigatory hearing with notice pursuant to the Administrative Procedures Act to the company for purposes of obtaining additional documentation, data, information and testimony.

D.  1.  All orders entered pursuant to paragraph 1 of subsection C of this section shall be accompanied by findings and conclusions resulting from the Commissioner's consideration and review of the examination report, relevant examiner workpapers and any written submissions or rebuttals.  Any such order shall be considered a final administrative decision and may be appealed pursuant to the Administrative Procedures Act, and shall be served upon the company by certified mail, together with a copy of the adopted examination report.  Within thirty (30) days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.  Upon proper order of the Commissioner, the company shall deliver by mail or otherwise, within thirty (30) days of the date of the order, a copy of the adopted report and related orders to all states and jurisdictions in which the company is licensed to transact the business of insurance.

2.  Any hearing conducted pursuant to paragraph 3 of subsection C of this section by the Commissioner or authorized representative, shall be conducted as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the Commissioner's review of relevant workpapers or by the written submission or rebuttal of the company.  Within thirty (30) days of the conclusion of any such hearing, the Commissioner shall enter an order pursuant to paragraph 1 of subsection C of this section.

3.  The Commissioner shall not appoint an examiner as an authorized representative to conduct the hearing.  The Commissioner or a representative of the Commissioner may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation whether under the control of the Department, the company or other persons.  The documents produced shall be included in the record, and testimony taken by the Commissioner or representative of the Commissioner shall be under oath and preserved for the record.

4.  Nothing contained in this section shall require the Department to disclose any information or records which would indicate or show the existence or content of any investigation or activity of a criminal justice agency.

5.  The hearing shall proceed with the Commissioner or a representative of the Commissioner posing questions to the persons subpoenaed.  Thereafter the company and the Department may present testimony relevant to the investigation.  The company and the Department shall be permitted to make closing statements and may be represented by counsel of their choice.

E.  1.  Upon the adoption of the examination report under paragraph 1 of subsection C of this section, the Commissioner shall continue to hold the content of the examination report as private and confidential information for a period of two (2) days except to the extent provided in subsection B of this section and subsection F of Section 309.3 of this title.  Thereafter, the Commissioner may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication.

2.  Nothing contained in Sections 309.1 through 309.7 of this title shall prevent or be construed as prohibiting the Commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the insurance department of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as such agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with Sections 309.1 through 309.7 of this title.

3.  In the event the Commissioner determines that regulatory action is appropriate as a result of any examination, the Commissioner may initiate any proceedings or actions as provided by law.

F.  All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the Commissioner or any other person in the course of an examination made under Sections 309.1 through 309.7 of this title shall be given confidential treatment and are not subject to subpoena and may not be made public by the Commissioner or any other person, except to the extent provided in subsection E of this section and subsection F of Section 309.3 of this title.  Access may also be granted to the National Association of Insurance Commissioners.  Such parties shall agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this section, unless the prior written consent of the company to which it pertains has been obtained.

Added by Laws 1991, c. 204, § 4, eff. Sept. 1, 1991.  Amended by Laws 2001, c. 363, § 2, eff. July 1, 2001.

§36-309.5.  Examiner's conflict of interest.

A.  No examiner may be appointed by the Insurance Commissioner if such examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under Sections 309.1 through 309.7 of this title.  This section shall not be construed to automatically preclude an examiner from being:

1.  A policyholder or claimant under an insurance policy;

2.  A grantor of a mortgage or similar instrument on such examiner's residence to a regulated entity if done under customary terms and in the ordinary course of business;

3.  An investment owner in shares of regulated diversified investment companies; or

4.  A settlor or beneficiary of a blind trust into which any otherwise impermissible holdings have been placed.

B.  Notwithstanding the requirements of this section, the Commissioner may retain from time to time, on an individual basis, qualified actuaries, an accounting firm or individual holding a permit to practice public accounting in this state, or other similar individuals who are independently practicing their professions, even though said persons may from time to time be similarly employed or retained by persons subject to examination under this act.  An examiner shall disclose to the Commissioner in writing any prior or existing personal or business relationship with any company to be examined by that examiner.

Added by Laws 1991, c. 204, § 5, eff. Sept. 1, 1991.  Amended by Laws 1997, c. 418, § 10, eff. Nov. 1, 1997.

§36-309.6.  Payment of charges.

Any insurer or person examined under the provisions of Sections 309.1 through 309.7 of this title shall pay the proper charges incurred in such examination, including the actual expense of the Insurance Commissioner or the expenses and compensation of an authorized representative and the expense and compensation of assistants and examiners employed therein.  All expenses incurred in such examination shall be verified by affidavit and a copy shall be filed in the office of the Commissioner.

Added by Laws 1991, c. 204, § 6, eff. Sept. 1, 1991.  Amended by Laws 1997, c. 418, § 11, eff. Nov. 1, 1997.

§36-309.7.  Liability.

A.  No cause of action shall arise nor shall any liability be imposed against the Insurance Commissioner, the Commissioner's authorized representatives, or any examiner appointed by the Commissioner for any statements made or conduct performed while carrying out the provisions of Sections 309.1 through 309.7 of this title, unless the conduct was objectively unreasonable and outside the scope of the person's duties.

B.  No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Commissioner or the Commissioner's authorized representative or examiner pursuant to an examination made under Sections 309.1 through 309.7 of this title, if such act of communication or delivery was not a fraudulent or criminal act.

C.  This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection A of this section.

D.  A person identified in subsection A of this section shall be entitled to an award of attorney's fees and costs if determined to be the prevailing party in a civil action arising out of activities in carrying out the provisions of Sections 309.1 through 309.7 of this title, if the court determines that the party bringing the action was not substantially justified in doing so.  For purposes of this section, a proceeding is substantially justified if it had a reasonable basis in law or fact at the time that it was initiated.

Added by Laws 1991, c. 204, § 7, eff. Sept. 1, 1991.  Amended by Laws 1997, c. 418, § 12, eff. Nov. 1, 1997.

§36310.  Examination reports.

A.  The Insurance Commissioner shall make a full written report of each examination, certified to by the Insurance Commissioner or the examiner in charge of the examination.

B.  The Insurance Commissioner shall furnish a copy of the report to the person examined not less than ten (10) days prior to filing the same in his office.  If such person so requests in writing within such tenday period, the Insurance Commissioner shall consider the objections of such person to the report as proposed, and shall not so file the report until after such modifications, if any, have been made therein as the Insurance Commissioner deems proper.

C.  The report, when filed, shall be admissible in evidence in any action or proceeding brought by the Insurance Commissioner against the person examined, or its officers or agents.  The Insurance Commissioner or his examiners may at any time testify and offer other proper evidence as to information secured during the course of an examination, whether or not a written report of the examination has at that time been either made, served, or filed in the Insurance Commissioner's office.

D.  The Insurance Commissioner may withhold from public inspection any examination or investigation report for so long as he deems prudent, but not to exceed thirty (30) days.

Laws 1957, p. 220, § 310.  

§36-310.1.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-310.2.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-310A.1.  Reporting of material acquisitions and disposition of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements.

A.  Every insurer domiciled in this state shall file a report with the Insurance Commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements have been submitted to the Commissioner for review, approval or information purposes pursuant to other provisions of the Oklahoma Insurance Code.

B.  The report required in subsection A of this section is due within fifteen (15) days after the end of the calendar month in which any of the foregoing transactions occur.

C.  One complete copy of the report, including any exhibits or other attachments, shall be filed with the National Association of Insurance Commissioners.

Added by Laws 1997, c. 273, § 1, eff. July 1, 1997.

§36-310A.2.  Material acquisitions or dispositions defined - Information to be disclosed in report.

A.  No acquisitions or dispositions of assets need be reported pursuant to Section 1 of this act if the acquisitions or dispositions are not material.  For purposes of this act, a material acquisition, or the aggregate of any series of related acquisitions during any thirty-day period, or disposition, or the aggregate of any series of related dispositions during any thirty-day period, is one that is nonrecurring and not in the ordinary course of business and involves more than five percent (5%) of the reporting insurer's total admitted assets as reported in its most recent annual statement filed with the Insurance Commissioner pursuant to Section 311 of Title 36 of the Oklahoma Statutes.

B.  1.  Asset acquisitions subject to Section 1 of this act include every purchase, lease, exchange, merger, consolidation, succession or any other acquisition.

2.  Asset dispositions subject to this act include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment whether for the benefit of creditors or otherwise, abandonment, destruction or other disposition.

C.  1.  The following information is required to be disclosed in any report of a material acquisition or disposition of assets:

a. date of the transaction,

b. manner of acquisition or disposition,

c. description of the assets involved,

d. nature and amount of the consideration given or received,

e. purpose of, or reason for, the transaction,

f. manner by which the amount of consideration was determined, and

g. gain or loss recognized or realized as a result of the transaction.

2.  Insurers are required to report material acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool.  An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if:

a. the insurer has less than One Million Dollars ($1,000,000.00) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement, and

b. the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer's capital and surplus.

Added by Laws 1997, c. 273, § 2, eff. July 1, 1997.

§36-310A.3.  Material nonrenewals, cancellations or revisions of ceded reinsurance agreements defined - Information to be disclosed in report.

A.  1.  No nonrenewals, cancellations or revisions of ceded reinsurance agreements need be reported pursuant to Section 1 of this act if the nonrenewals, cancellations or revisions are not material.  For purposes of this act, a material nonrenewal, cancellation or revision is one that affects:

a. as respects property and casualty business, including accident and health business written by a property and casualty insurer:

(1) more than fifty percent (50%) of the insurer's total ceded written premium, or

(2) more than fifty percent (50%) of the insurer's total ceded indemnity and loss adjustment reserves,

b. as respects life, annuity, and accident and health business:  more than fifty percent (50%) of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer's most recent annual statement, and

c. as respects either property and casualty or life, annuity, and accident and health business, either of the following events shall constitute a material revision which must be reported:

(1) an authorized reinsurer representing more than ten percent (10%) of a total cession is replaced by one or more unauthorized reinsurers, or

(2) previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than ten percent (10%) of a total cession.

2.  However, no filing shall be required if:

a. as respects property and casualty business, including accident and health business written by a property and casualty insurer:  the insurer's total ceded written premium represents, on an annualized basis, less than ten percent (10%) of its total written premium for direct and assumed business, or

b. as respects life, annuity, and accident and health business:  the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent (10%) of the statutory reserve requirement prior to any cession.

B.  1.  The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of ceded reinsurance agreements:

a. effective date of the nonrenewal, cancellation or revision,

b. the description of the transaction with an identification of the initiator thereof,

c. purpose of, or reason for, the transaction, and

d. if applicable, the identity of the replacement reinsurers.

2.  Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool.  An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if:

a. the insurer has less than One Million Dollars ($1,000,000.00) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement, and

b. the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer's capital and surplus.

Added by Laws 1997, c. 273, § 3, eff. July 1, 1997.

§36-311.  Annual statement by companies - Annual license or certificate of authority to transact business.

A.  1.  All insurers authorized to do business under the provisions of this Code shall, annually, on or before the first day of March, file with the National Association of Insurance Commissioners (NAIC), statements which shall exhibit the financial condition of insurers on the thirty-first day of December of the previous year and its business of that year.  Annual statements shall be filed electronically as approved by the NAIC, along with applicable fees.  Domestic insurers shall file a printed annual financial statement along with all supplement filings in the office of the Insurance Commissioner annually on or before the first day of March.

2.  Foreign insurers shall file an Affidavit of Filing and Financial Statement Attestation annually on or before the first day of March.  The Insurance Commissioner may require foreign insurers to file the annual financial statement in a printed format.  Such document required by the Insurance Commissioner shall be due annually on or before the first day of March.

3.  For good cause shown, the Insurance Commissioner may extend the time within which such statements may be filed.  The statements shall be in such general form and context as approved by the National Association of Insurance Commissioners for the kinds of insurance to be reported upon, and as supplemented for additional information required by the Insurance Commissioner by rule.  In addition, the statements shall be prepared in accordance with the NAIC annual statement instruction handbooks, including any supplemental filings described in the NAIC annual instruction handbook, and follow the accounting procedures and practices prescribed by the NAIC accounting practices and procedure manuals as supplemented by the Insurance Commissioner by rule.  The assets and liabilities shall be computed pursuant to the most conservative method allowed by the laws of this state.  Such statements shall be subscribed and sworn to by the president and secretary and other proper officers.  The license or certificate of authority to transact the business of insurance in this state shall be renewed unless the Insurance Commissioner finds that the facts do not warrant renewal, and that the insurer has not fully complied with all laws applicable to the insurer.  Upon initial licensure, the Commissioner shall issue a license, or certificate of authority, subject to all requirements and conditions of the law, to transact business in this state, specifying in the certificate the particular kind or kinds of insurance it is authorized to transact.  The annual statement of an insurer of a foreign country shall embrace only its business and condition in the United States, and shall be subscribed and sworn to by its resident manager or principal representative in charge of its United States business, or other officer duly authorized.  Any amendments and addendums to the annual statement subsequently filed with the Commissioner shall also be filed with the National Association of Insurance Commissioners, and the insurer shall pay the applicable filing fees.

B.  In the absence of actual malice, or gross negligence, members of the National Association of Insurance Commissioners, their duly authorized committees, subcommittees and task forces, their delegates, National Association of Insurance Commissioners' employees, and all others charged with the responsibility of collecting, reviewing, analyzing and disseminating the information developed from the filing of the annual statement shall be acting as agents of the Commissioner under the authority of this section and shall not be subject to civil liability for libel, slander or any other cause of action by virtue of their collection, review and analysis or disseminating of the data and information collected from the filings required under this section.

C.  All financial analysis ratios and examination synopses pertaining to insurance companies, which are submitted to the Commissioner by the National Association of Insurance Commissioners' Insurance Regulatory Information System, are confidential records which shall not be available for public inspection and shall not be disclosed by the Commissioner except in receivership proceedings.

Added by Laws 1957, p. 220, § 311, operative July 1, 1957.  Amended by Laws 1976, c. 23, § 1, emerg. eff. March 15, 1976; Laws 1986, c. 251, § 1, eff. Nov. 1, 1986; Laws 1987, c. 175, § 1, eff. Nov. 1, 1987; Laws 1992, c. 178, § 1, eff. Sept. 1, 1992; Laws 1993, c. 79, § 2, eff. Sept. 1, 1993; Laws 1997, c. 418, § 13, eff. Nov. 1, 1997; Laws 2001, c. 363, § 3, eff. July 1, 2001; Laws 2002, c. 307, § 1, eff. Nov. 1, 2002; Laws 2003, c. 150, § 1, eff. Nov. 1, 2003; Laws 2004, c. 274, § 1, eff. July 1, 2004.

§36-311.1.  Fraudulent or false statement - Failure to timely file statement - Penalty.

A.  Any insurer who files with the Insurance Commissioner any statement required by this Code knowing such statement to be fraudulent and materially false, upon conviction, shall be guilty of a felony, for which the punishment shall be a fine of not to exceed Fifty Thousand Dollars ($50,000.00).  Any officer, actuary, or employee of such insurer who causes such statement to be filed, knowing the fraudulent and materially false nature thereof, upon conviction, shall be guilty of a felony, for which the punishment for each occurrence shall be a fine of not to exceed Twenty-five Thousand Dollars ($25,000.00), or commitment to the custody of the Department of Corrections for not less than one (1) year and not more than five (5) years or both said fine and commitment, and shall never again be permitted to act as an actuary, officer, or director of any insurer licensed to do business in this state.

B.  Any insurer who fails without reasonable cause and permission of the Commissioner to timely file any statement required by this Code shall be subject, after notice and opportunity for hearing, to censure, suspension or revocation of certificate.  Annual statements filed after the first day of March without express written advance permission of the Commissioner shall be accompanied by a late filing fee in the amount of Two Hundred Fifty Dollars ($250.00) or One Hundred Dollars ($100.00) per day, whichever is greater.  Repeated willful violations, after notice and opportunity for hearing, may subject the insurer to both censure, suspension, or revocation of certificate and civil penalty of not less than One Hundred Dollars ($100.00) nor more than Ten Thousand Dollars ($10,000.00) for each occurrence in addition to the late filing fee.  Any late filing fees and civil penalties collected pursuant to this subsection shall be deposited to the Insurance Commissioner Revolving Fund.

C.  Prosecution or administrative action for any violation of the provisions of this section shall be commenced within four (4) years after the violation is discovered.

Added by Laws 1957, p. 221, § 311.1.  Amended by Laws 1983, c. 68, § 4, eff. Nov. 1, 1983; Laws 1985, c. 328, § 2, emerg. eff. July 29, 1985; Laws 1986, c. 251, § 2, emerg. eff. June 13, 1986; Laws 1993, c. 270, § 36, eff. Sept. 1, 1993; Laws 1997, c. 418, § 14, eff. Nov. 1, 1997.

NOTE:  Laws 1997, c. 133, § 444 repealed by Laws 1999, 1st Ex.Sess., c. 5, § 452, eff. July 1, 1999.

NOTE:  Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 444 from July 1, 1998, to July 1, 1999.

§36311.2.  Reports on financial condition.

A.  The Insurance Commissioner may request financial information more frequently than quarterly if it appears an insurer is having financial difficulty, if erratic changes are occurring in the financial data of the company, if a considerable number of consumer complaints have been received, or if one or more transactions have occurred which appear to jeopardize the welfare of the policyholders.  The insurer also may be requested to furnish a plan of action to improve its underwriting performance.

B.  Any insurer upon request of the Commissioner shall furnish to the Insurance Commissioner within fortyfive (45) days following the close of any calendar quarter, except the fourth quarter, on blank forms prescribed by the Insurance Commissioner, a statement which shall exhibit the financial condition of the company as of the last date of the month immediately preceding reporting date.  Such reports for information purposes shall contain a complete listing of all written commitments to loan, guaranties of loans, or contractual obligations concerning loans or conditional liabilities to borrowers or lenders made during the quarter reported.  Such reports may require the inclusion of an exhibit of the operating results of the company for the three (3) months' period immediately preceding the date for which the financial condition is shown.  A completed blank form prescribed by the Commissioner for said statement shall be furnished by each insurer for each such reporting date.  Such statements shall be subscribed and sworn to by the president and the secretary and other proper officers of the company.  Failure of any insurer to execute and file such statements or exhibits as required herein shall constitute cause, after notice and hearing, for censure, suspension, or revocation of certificate of authority to transact an insurance business in this state or a fine of not less than One Hundred Dollars ($100.00) nor more than One Thousand Dollars ($1,000.00) for each occurrence, or both censure, suspension, or revocation, and fine.  The Commissioner shall set such cause for hearing and if he finds that the facts warrant, he shall order said censure, suspension, or revocation of the certificate of authority of the insurer found to be in default or said fine, or both said censure, suspension, or revocation, and fine.  Willful violations, after notice and hearing, may subject the insurer to both censure, suspension or revocation of certificate and a fine of not less than One Hundred Dollars ($100.00) or not more than Five Thousand Dollars ($5,000.00) for each violation.  The Insurance Commissioner may establish rules or regulations to carry out the purposes of this section.

Added by Laws 1970, c. 108, § 1, operative Sept. 30, 1970.  Amended by Laws 1974, c. 264, § 4, emerg. eff. May 29, 1974; Laws 1983, c. 68, § 5, eff. Nov. 1, 1983; Laws 1985, c. 328, § 3, emerg. eff. July 29, 1985; Laws 1986, c. 251, § 3, emerg. eff. June 13, 1986; Laws 2002, c. 307, § 2, eff. Nov. 1, 2002.

§36311.3.  Financial reports regarding real property.

In all financial reports of an insurer to the Insurance Commissioner, real property acquired by the insurer shall be entered as an asset on the basis of its original cost along with appropriate adjustments, or the appraised market value where it is expressly indicated that such amount is based on the appraised market value and such appraisal has approval of the Insurance Commissioner.

Laws 1972, c. 151, § 1, eff. Oct. 1, 1972.  

§36-312.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-312.1.  Report, disbursement and appropriation of taxes - Record and statement - Annual reports.

A.  For the fiscal year ending June 30, 2004, the Insurance Commissioner shall report and disburse one hundred percent (100%) of the fees and taxes collected under Section 624 of this title to the State Treasurer to be deposited to the credit of the Education Reform Revolving Fund created pursuant to Section 41.29b of Title 62 of the Oklahoma Statutes.  The Insurance Commissioner shall keep an accurate record of all such funds and make an itemized statement and furnish same to the State Auditor and Inspector, as to all other departments of this state.  The report shall be accompanied by an affidavit of the Insurance Commissioner or the Chief Clerk of such office certifying to the correctness thereof.

B.  For the fiscal year beginning July 1, 2006, and for each fiscal year thereafter, the Insurance Commissioner shall apportion an amount of the taxes and fees received from Section 624 of this title, which shall be at least One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) each year, but which shall also be computed on an annual basis by the Commissioner as the amount of insurance premium tax revenue loss attributable to the provisions of subsection H of Section 625.1 of this title and increased if necessary to reflect the annual computation, and which shall be apportioned before any other amounts, to the following pension systems and in the following amounts:

1.  Sixty-five percent (65%) to the Oklahoma Firefighters Pension and Retirement Fund in the manner provided for in Sections 49-119, 49-120 and 49-123 of Title 11 of the Oklahoma Statutes;

2.  Twenty-six percent (26%) to the Oklahoma Police Pension and Retirement System pursuant to the provisions of Sections 50-101 through 50-136 of Title 11 of the Oklahoma Statutes; and

3.  Nine percent (9%) to the Law Enforcement Retirement Fund.

C.  After the apportionment required by subsection B of this section, for the fiscal years beginning July 1, 2004, and ending June 30, 2009, the Insurance Commissioner shall report and disburse all of the fees and taxes collected under Section 624 of this title and Section 61 of this act, and the same are hereby apportioned as follows:

1.  Forty-one and seven-tenths percent (41.7%) of the taxes collected on premiums shall be allocated and disbursed for the Oklahoma Firefighters Pension and Retirement Fund, in the manner provided for in Sections 49-119, 49-120 and 49-123 of Title 11 of the Oklahoma Statutes;

2.  Seventeen percent (17%) of the taxes collected on premiums shall be allocated and disbursed to the Oklahoma Police Pension and Retirement System pursuant to the provisions of Sections 50-101 through 50-136 of Title 11 of the Oklahoma Statutes;

3.  Six and one-tenth percent (6.1%) of the taxes collected on premiums shall be allocated and disbursed to the Law Enforcement Retirement Fund; and

4.  All the balance and remainder of the taxes and fees provided in Section 624 of this title shall be paid to the State Treasurer to the credit of the General Revenue Fund of the state to provide revenue for general functions of state government.  The Insurance Commissioner shall keep an accurate record of all such funds and make an itemized statement and furnish same to the State Auditor and Inspector, as to all other departments of this state.  The report shall be accompanied by an affidavit of the Insurance Commissioner or the Chief Clerk of such office certifying to the correctness thereof.

D.  After the apportionment required by subsection B of this section, for the fiscal year ending June 30, 2010, and for each fiscal year thereafter the Insurance Commissioner shall report and disburse all of the fees and taxes collected under Section 624 of this title and Section 2204 of this title, and the same are hereby apportioned as follows:

1.  Thirty-four percent (34%) of the taxes collected on premiums shall be allocated and disbursed for the Oklahoma Firefighters Pension and Retirement Fund, in the manner provided for in Sections 49-119, 49-120 and 49-123 of Title 11 of the Oklahoma Statutes;

2.  Fourteen percent (14%) of the taxes collected on premiums shall be allocated and disbursed to the Oklahoma Police Pension and Retirement System pursuant to the provisions of Sections 50-101 through 50-136 of Title 11 of the Oklahoma Statutes;

3.  Five percent (5%) of the taxes collected on premiums shall be allocated and disbursed to the Law Enforcement Retirement Fund; and

4.  All the balance and remainder of the taxes and fees provided in Section 624 of this title shall be paid to the State Treasurer to the credit of the General Revenue Fund of the state to provide revenue for general functions of state government.  The Insurance Commissioner shall keep an accurate record of all such funds and make an itemized statement and furnish same to the State Auditor and Inspector, as to all other departments of this state.  The report shall be accompanied by an affidavit of the Insurance Commissioner or the Chief Clerk of such office certifying to the correctness thereof.

E.  The disbursements provided for in subsections A, B, C and D of this section shall be made monthly.  The Insurance Commissioner shall report annually to the Governor, the Speaker of the House of Representatives, the President Pro Tempore of the Senate and the State Auditor and Inspector, the amounts collected and disbursed pursuant to this section.

Added by Laws 1957, p. 221, § 312.1, operative July 1, 1957.  Amended by Laws 1957, p. 632, § 3, emerg. eff. May 31, 1957; Laws 1959, p. 133, § 1, emerg. eff. July 8, 1959; Laws 1963, c. 316, § 1, emerg. eff. June 19, 1963; Laws 1967, c. 43, § 1, emerg. eff. March 29, 1967; Laws 1969, c. 132, § 1, eff. July 1, 1969; Laws 1972, c. 58, § 1, emerg. eff. March 21, 1972; Laws 1975, c. 34, § 1, emerg. eff. March 25, 1975; Laws 1979, c. 30, § 10, emerg. eff. April 6, 1979; Laws 1981, c. 6, § 1, emerg. eff. March 19, 1981; Laws 1988, c. 83, § 4, emerg. eff. March 25, 1988; Laws 2003, c. 315, § 1, eff. July 1, 2003; Laws 2004, c. 368, § 54, eff. July 1, 2004; Laws 2005, c. 381, § 1, eff. July 1, 2006.

§36-312A.  Enforcement and recording of penalties and fees.

Civil penalties and fees imposed pursuant to the provisions of Title 36 of the Oklahoma Statutes may be enforced in the same manner in which civil judgments may be enforced.  All final orders of the Insurance Commissioner or State Board for Property and Casualty Rates imposing administrative charges, fees, civil penalties or fines may be recorded in the office of the Clerk of the District Court of Oklahoma County and, upon such recording, all appropriate writs and process shall issue and shall be enforced by the judges of said court upon application.

Added by Laws 1997, c. 418, § 15, eff. Nov. 1, 1997.

§36-313.  Requirements for orders and notices - Final agency action - Applicability of Administrative Procedure Act.

A.  Orders and notices of the Insurance Commissioner shall be in writing and shall be signed by either the Commissioner, an authorized employee of the Insurance Department, or an independent hearing examiner.  A final order signed by an independent hearing examiner, after hearing, shall be final agency action, notwithstanding the provisions of Section 311 of Title 75 of the Oklahoma Statutes.

B.  In the exercise of the powers and the performance of the duties enumerated in this title, the Commissioner and the State Board for Property and Casualty Rates shall comply with the procedures of the Administrative Procedures Act.  Any conflict between the provisions of Title 75 of the Oklahoma Statutes and of this title shall be resolved in favor of the provisions of this title.

Added by Laws 1957, p. 222, §313.  Amended by Laws 1987, c. 175, § 2, eff. Nov. 1, 1987; Laws 1997, c. 418, § 16, eff. Nov. 1, 1997.

§36-314.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-315.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-316.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-317.  Witnesses or evidence.

A.  The Insurance Commissioner may take depositions, subpoena witnesses or documentary evidence, administer oaths, and examine under oath any individual relative to the affairs of any person being examined, or relative to the subject of any hearing or investigation.

B.  All administrative subpoenas shall be served in the same manner as if issued from a district court or in accordance with the Administrative Procedures Act.  If any person fails to obey a subpoena lawfully served, the Commissioner may forthwith report such disobedience, together with a copy of the subpoena and proof of service thereof, to the district court of the county in which the person was required to appear, and such court shall forthwith cause such person to be produced and shall impose penalties as though the person had disobeyed a subpoena issued out of such court.

Added by Laws 1957, p. 223, § 317.  Amended by Laws 1997, c. 418, § 17, eff. Nov. 1, 1997.

NOTE:  Laws 1997, c. 133, § 445 repealed by Laws 1999, 1st Ex.Sess., c. 5, § 452, eff. July 1, 1999.

NOTE:  Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 445 from July 1, 1998, to July 1, 1999.

§36-318.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-319.  Appointment of independent hearing examiner - Fees - Time period for issuance of final order.

In conducting any hearing pursuant to the Insurance Code, the Insurance Commissioner may appoint an independent hearing examiner who shall sit as a quasi-judicial officer.  The ordinary fees and costs of such hearing examiner shall be assessed by the hearing examiner against the respondent, unless the respondent is the prevailing party.  Within thirty (30) days after termination of the hearing or of any rehearing thereof or reargument thereon, unless such time is extended by stipulation, a final order shall be issued.

Added by Laws 1957, p. 224, § 319.  Amended by Laws 1987, c. 175, § 3, eff. Nov. 1, 1987; Laws 1997, c. 418, § 18, eff. Nov. 1, 1997.

§36-320.  Judicial review.

A.  Any person aggrieved by a final order of the Insurance Commissioner may obtain judicial review in accordance with the Administrative Procedures Act.  The venue of any such action shall be in the district court of Oklahoma County.  A copy of such petition shall also forthwith be served upon the Insurance Commissioner and other parties in interest, if any, and the Insurance Commissioner shall thereupon certify and file in such court a transcript of the record of such hearing and a copy of the order appealed from.

B.  Upon filing of the petition the court shall have full jurisdiction, and shall determine whether such filing shall operate as a stay of the order appealed from.

Added by Laws 1957, p. 224, § 320.  Amended by Laws 1997, c. 418, § 19, eff. Nov. 1, 1997.

§36-321.  Fees and licenses - Revolving fund - Deposits.

A.  The Insurance Commissioner shall collect in advance the following fees and licenses:

1.  For filing charter documents:

Original charter documents, articles of incorporation, bylaws, or record of organization of alien or foreign insurers, or certified copies thereof $50.00

2.  Certificate of Authority:

(a)  Issuance:

Fraternal benefit societies, alien or foreign $150.00

Hospital service and medical indemnity corporations, alien or foreign $150.00

All other alien or foreign insurers $150.00

(b)  Renewal:

Fraternal benefit societies, alien or foreign $150.00

Hospital service and medical indemnity corporations, alien or foreign $150.00

All other alien or foreign insurers $150.00

3.  For filing appointment of Insurance Commissioner as agent for service of process $10.00

4.  Miscellaneous:

(a)  Copies of records, per page $0.40

(b)  Amended charter documents, articles of incorporation or bylaws of domestic, alien or foreign insurers or health maintenance organizations $50.00

(c)  Certificate of Commissioner, under seal $5.00

(d)  For filing Merger and Acquisition Forms $1,000.00

(e)  For filing Variable Product Forms $200.00

(f)  For filing a Life, Accident and Health Policy and Health Maintenance Organization contract $50.00

(g)  For filing an advertisement or rider application to a Life, Accident and Health Policy and Health Maintenance Organization contract $25.00

(h)  Pending Company Review $1,000.00

(i)  For filing a Viatical Settlement Contract or Life Settlement $50.00

(j)  For filing an advertisement for Viatical Settlement or Life Settlement $25.00

(k)  For filing application for Viatical Settlement or Life Settlement Contract $25.00

(l)  Miscellaneous form filing $25.00

B.  All fees and licenses not above dedicated, nor dedicated by Section 628 of this title, collected by the Insurance Commissioner as provided by this Code, shall be paid into the State Treasury weekly.  The State Treasury is authorized and directed to deduct from said amount so paid a sum equal to one-tenth (1/10) of such payment and place the same to the credit of the General Revenue Fund of the state.  The remainder of said amount so paid is hereby allocated and appropriated to the State Insurance Commissioner Revolving Fund and shall by the State Treasurer be placed to the credit of the State Insurance Commissioner Revolving Fund.

C.  There shall be assessed an annual fee of Five Hundred Dollars ($500.00) payable by each insurer, health maintenance organization, fraternal benefit society, hospital service and medical indemnity corporation, charitable and benevolent corporation, or United States surplus lines insurance companies licensed to do business in this state, to pay for the filing, processing, and reviewing of annual and quarterly financial statements by personnel of the Office of the State Insurance Commissioner.

D.  Filings required as part of a health maintenance organization application for a certificate of authority shall not be subject to the fees set out in this section except for the original charter documents, issuance of certificate of authority, and pending company review fees.

Added by Laws 1957, p. 224, § 321, operative July 1, 1957.  Amended by Laws 1965, c. 60, § 6, eff. July 1, 1965; Laws 1967, c. 389, § 1, emerg. eff. May 23, 1967; Laws 1968, c. 244, § 1, emerg. eff. April 24, 1968; Laws 1969, c. 84, § 1, emerg. eff. March 18, 1969; Laws 1977, c. 202, § 4, emerg. eff. June 14, 1977; Laws 1980, c. 164, § 14, emerg. eff. April 15, 1980; Laws 1983, c. 68, § 7, eff. Nov. 1, 1983; Laws 1985, c. 328, § 4, emerg. eff. July 29, 1985; Laws 1990, c. 258, § 79, operative July 1, 1990; Laws 1992, c. 65, § 1, eff. Sept. 1, 1992; Laws 1993, c. 270, § 37, eff. Sept. 1, 1993; Laws 1994, c. 129, § 1, eff. Sept. 1, 1994; Laws 2002, c. 307, § 3, eff. Nov. 1, 2002; Laws 2004, c. 274, § 2, eff. July 1, 2004.

§36-321.1.  Report fees - Information requests - Costs.

A.  There shall be collected at the time of filing of a report, a fee payable by each insurer required to file a report under Section 101 et seq. of this title, provided the insurer's total written premium per liability category exceeds the requisite filing fee, which shall be Four Hundred Dollars ($400.00) for each periodic claims report required by Section 1250.9 of this title.

B.  All public requests for information provided by this act shall be in writing.  All requests for copying such data shall be in writing and may be provided to the requestor after such reasonable time to process such copying and shall be at such costs as provided in Section 321 of this title or, if computerized printouts are necessary, at such reasonable costs as established by the Commissioner, or if such items cannot be reproduced by the Commissioner, then such information may, after notification to the requestor, be sent to a private contractor, and such costs shall be payable by the requestor.

C.  All amounts received pursuant to this section by the Insurance Commissioner shall be paid into the State Treasury to the credit of the State Insurance Commissioner's Revolving Fund for the purpose of fulfilling and accomplishing the conditions and purposes of Section 101 et seq. of this title.

Added by Laws 1986, c. 315, § 15, emerg. eff. June 24, 1986.  Amended by Laws 1994, c. 294, § 1, eff. Sept. 1, 1994; Laws 1997, c. 418, § 20, eff. Nov. 1, 1997.

§36331.  Board created; membership; terms; qualifications; travel expenses; conflict of interest; meetings.

A.  There is hereby created the State Board for Property and Casualty Rates composed of five (5) members.  Four members shall be appointed by the Governor, with the advice and consent of the Senate, one of whom shall be designated by the Governor as Secretary.  The Insurance Commissioner shall serve as Chairman and may temporarily designate various members of his staff to serve as his designee for all purposes stated in Sections 331 through 348.1 of this title.  Any person who has been appointed to the Board shall not file as a candidate for any public office while serving on the Board or within two (2) years from the time his term of service with the Board has ended.  The members appointed by the Governor shall serve for terms of one (1), two (2), three (3) and four (4) years, respectively.  Upon the expiration of the terms of the four members first appointed by the Governor pursuant to the provisions of Sections 331 through 348.1 of this title, their successors shall be appointed for terms of four (4) years.  The members of the Board appointed by the Governor shall hold office for the terms of their appointment and shall be removed only for cause.

B.  The appointed members of the State Board for Property and Casualty Rates shall be at least twentyseven (27) years of age and shall each have been a resident of the state for three (3) years immediately preceding his appointment.  Each member of the Board shall be reimbursed for travel expenses as provided for in the State Travel Reimbursement Act.

C.  No member of the Board or any employee of the Insurance Department of the State of Oklahoma shall represent, directly or indirectly, in any capacity or for any consideration, an admitted or nonadmitted insurer or any person, firm, or corporation who has or who may have proceedings before the Insurance Department.  No member of the Board or any employee of the Insurance Department shall accept any gift, lodging, transportation, or other thing of value from any such person, firm, or corporation, except those fees and charges authorized by law.  Violation of any provision of this subsection shall be grounds for removal from office or position.

D.  A majority of the members of said Board shall constitute a quorum.

E.  All meetings of the Board shall be subject to the requirements of the Oklahoma Open Meeting Act, Section 301 et seq. of Title 25 of the Oklahoma Statutes.

Amended by Laws 1983, c. 248, § 2, emerg. eff. June 21, 1983; Laws 1985, c. 178, § 15, operative July 1, 1985; Laws 1986, c. 207, § 78, operative July 1, 1986; Laws 1987, c. 210, § 2, eff. July 1, 1987.  

§36332.  General duties - Powers.

A.  The State Board for Property and Casualty Rates is hereby vested with the duty and authority of enforcing and administering all applicable provisions of the Insurance Code pertaining to the jurisdiction of the Board.  The Board may make reasonable rules and regulations necessary for effectuating such provisions of this Code.

B.  The Board shall have powers and authority expressly conferred upon it by or reasonably implied from the provisions of this Code.  The Board shall have the power to approve, disapprove, or approve with modifications, filings submitted to it.

C.  The Board may conduct such examinations and investigations of insurance matters, within the scope of its authority, as it may deem proper to secure information useful in the lawful administration of the applicable provisions of the Insurance Code.

D.  The Insurance Commissioner on behalf of the Board shall have the authority to employ actuaries, statisticians, accountants, attorneys, auditors, investigators or any other technicians as the Insurance Commissioner may deem necessary or beneficial to examine any filings for rate revisions made by insurers or rating organizations and to examine such records of the insurers or rating organizations as may be deemed appropriate in conjunction with the filing for a rate revision in order to determine that the rates or other filings are consistent with the terms, conditions, requirements and purposes of the Insurance Code, and to verify, validate and investigate the information upon which the insurer or rating organization relies to support such filing.

1.  The Commissioner shall maintain a list of technicians qualified pursuant to rules adopted by the Board who are proficient in the lines of insurance for which the Board approves rates.  Upon request of the Commissioner or the Board, the Commissioner shall employ the next available technician in rotation on the list, proficient in the line or lines of insurance being reviewed.  The Commissioner may deviate from the list when employing technicians for loss cost filings pursuant to Section 901.5 of this title.

2.  All reasonable expenses incurred in such filing review shall be paid by the insurer or rating organization making the filing.

E.  The Commissioner shall employ for the Board examiners to ensure that the rates which have been approved by or filed with the Board are the rates which are being used by the insurer or by the insurers whose rating organization has had a rate approval or rate filing.

1.  Any insurer examined pursuant to the provisions of this section shall pay all reasonable charges incurred in such examination, including the actual expense of the Commissioner or the expenses and compensation of the authorized representative of the Commissioner and the expense and compensation of assistants and examiners employed therein.

2.  All expenses incurred in such examination shall be verified by affidavit and a copy shall be filed and kept in the office of the Insurance Commissioner.

Added by Laws 1957, p. 226, § 332.  Amended by Laws 1965, c. 60, § 5, eff. July 1, 1965; Laws 1979, c. 276, § 2, emerg. eff. June 5, 1979; Laws 1980, c. 322, § 6, eff. Jan. 1, 1981; Laws 1986, c. 207, § 79, operative July 1, 1986; Laws 1987, c. 210, § 5, eff. July 1, 1987; Laws 2001, c. 363, § 4, eff. July 1, 2001.

§36333.  Board records; voting; seal.

The Insurance Commissioner shall keep a record of the proceedings of the Board.  All acts of the Board shall be by majority vote of the members.  The decision of a majority of the members of the Board shall be binding.  The Insurance Commissioner shall have a seal, the center of which shall be the same as that of the Great Seal of the State of Oklahoma and shall be distinguished by the words "State Board for Property and Casualty Rates" inscribed in the circular band surrounding the remainder of the device.  The Insurance Commissioner shall certify to the proceedings of the Board under seal and his certificates under seal shall be evidence of the record of the proceedings of the Board.

Amended by Laws 1986, c. 207, § 80, operative July 1, 1986.  

§36334.1.  Training of rate analysts and assistant rate analysts; tuition and fees.

The Insurance Commissioner is hereby authorized to arrange for the training of rate analysts and assistant rate analysts.  Funds appropriated to the Insurance Commissioner may be used to pay the tuition and fees of the above personnel while receiving training related to the operations of the Board.

Amended by Laws 1982, c. 238, § 4, emerg. eff. May 4, 1982; Laws 1986, c. 207, § 81, operative July 1, 1986.  

§36-335.  Conflicts of interest - Exceptions.

No employee of the Insurance Department shall be financially interested, directly or indirectly, in any insurer, agency or insurance transaction except as a policyholder or claimant under a policy; except, that as to such matters wherein a conflict of interest does not exist on the part of any such individual, the Insurance Commissioner may employ from time to time insurance actuaries or other technicians who are independently practicing their professions even though similarly employed by insurers and others. This section shall not be deemed to prohibit employment by the Insurance Commissioner of retired or pensioned personnel of insurers or insurance organizations.  In addition, this section shall not be deemed to prohibit employees of the Insurance Department from investing in mutual funds that may own stock in insurance companies, or from having an interest in retirement or pension plans, other than self-directed plans, that may own stock in insurance companies.

Added by Laws 1957, p. 226, § 335.  Amended by Laws 1980, c. 322, § 9, eff. Jan. 1, 1981; Laws 1986, c. 207, § 82, operative July 1, 1986; Laws 1997, c. 418, § 21, eff. Nov. 1, 1997.

§36-341.1.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-344.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-346.  Order on hearing.

A.  In conducting any hearing the State Board for Property and Casualty Rates shall sit as a quasi-judicial or quasi-legislative body.  Within thirty (30) calendar days after termination of the hearing or of any rehearing thereof or reargument thereon, it shall make its order on hearing in writing by the Board or by the Insurance Commissioner when authorized by the Board, covering matters involved in such hearing and in any rehearing or reargument thereof, and shall give a copy of such order to the same persons given notice of the hearing.

B.  The order shall be signed by a majority of the members of the Board and shall comply with the provisions of Section 312 of Title 75 of the Oklahoma Statutes.

C.  The order may affirm, modify, or nullify action theretofore taken or may constitute the taking of new action within the scope of the notice of hearing.

D.  An order or notice may be served in accordance with the Administrative Procedures Act.

Added by Laws 1957, p. 228, § 346.  Amended by Laws 1987, c. 210, § 8, eff. July 1, 1987; Laws 1997, c. 418, § 22, eff. Nov. 1, 1997.

§36348.1.  Fees and licenses.

A.  The Insurance Commissioner shall collect the following fees and licenses for the Board and the Property and Casualty Division:

1.  Rating organizations, application fee for issuance of license $200.00

2.  Miscellaneous:

a. Certificate of Insurance Commissioner, under seal $20.00

b. Upon each transaction of filing of documents required pursuant to the provisions of Section 3610 of this title:

(1) For an individual insurer $50.00

(2) For an approved rating or advisory organization:

(a) Basic fee $50.00

(b) Additional fee for each member or subscriber insurer $10.00,

not to exceed $500.00

3.  For each rate, loss cost and rule filing request pursuant to the provisions of Sections 902.1, 903 et seq., and 981 et seq. of this title:

a. For an individual insurer $100.00

b. For an approved rating or advisory organization:

(1) Basic fee $100.00

(2) Additional fee for each member or subscriber insurer $10.00,

not to exceed $500.00.

B.  All fees and licenses collected by the Insurance Commissioner as provided in this section shall be paid into the State Treasury on a weekly basis to the credit of the Insurance Commissioner's Revolving Fund for the purpose of carrying out and enforcing the provisions of Article 9 of the Insurance Code.

C.  The fees, licenses, and taxes imposed by the Board or the Commissioner upon persons, firms, associations, or corporations licensed pursuant to this section shall be payment in full with respect thereto of and in lieu of all demands for any and all state, county, district, and municipal license fees, license taxes, business privilege taxes, business privilege fees, and charges of every kind now or hereafter imposed upon all such persons, firms, associations, or corporations.  This subsection shall not affect other fees, licenses and taxes imposed by the Insurance Code.

D.  Any costs incurred by the Board or the Commissioner in the process of review and analysis of a filing shall be assessed against the company or organization making the filing.

Added by Laws 1957, p. 229, § 348.1, operative July 1, 1957.  Amended by Laws 1965, c. 60, § 7, eff. July 1, 1965; Laws 1980, c. 322, § 14, eff. Jan. 1, 1981; Laws 1983, c. 248, § 4, emerg. eff. June 21, 1983; Laws 1985, c. 236, § 3, operative Sept. 1, 1985; Laws 1986, c. 207, § 86, operative July 1, 1986; Laws 1987, c. 210, § 10, eff. July 1, 1987; Laws 1991, c. 215, § 6, eff. July 1, 1991; Laws 2002, c. 307, § 4, eff. Nov. 1, 2002; Laws 2005, c. 129, § 1, eff. Nov. 1, 2005.

§36-349.  Repealed by Laws 2001, c. 363, § 30, eff. July 1, 2001.

§36-351.  Renumbered as § 1938 of this title by Laws 1997, c. 418, § 127, eff. Nov. 1, 1997.

§36-352.  Commissioner authorized to refund certain fees.

A.  1.  Upon request by an applicant, the Insurance Commissioner may refund to the applicant all or any portion of any fees collected by the Commissioner pursuant to law including but not limited to any unearned fees and application fees.  Such fees may be refunded, if requested, prior to any official action being taken by the Commissioner or prior to the occurrence of the action for which the application was made or in such other circumstances that the Commissioner deems proper.

2.  The Commissioner may retain a portion of the fee if it is determined that administrative costs were incurred by the Insurance Department in the action.

B.  The Commissioner shall promulgate permanent rules and may promulgate emergency rules to implement the provisions of this section pursuant to the Administrative Procedures Act.

Added by Laws 1997, c. 418, § 24, eff. Nov. 1, 1997.

§36-353.  Repealed by Laws 1999, c. 397, § 47, emerg. eff. June 10, 1999.

§36-361.  Anti-Fraud Unit - Investigations - Confidentiality of records.

A.  There is hereby created within the Insurance Department, under the control and direction of the Insurance Commissioner, an "Anti-Fraud Unit" within the Legal and Investigation Division of the Insurance Department.

B.  The Anti-Fraud Unit, upon inquiry, complaint, or referral shall investigate the extent, if any, to which a violation has occurred of any statute or administrative rule of this state pertaining to insurance fraud and may initiate any necessary investigation.  Whenever the Unit determines that a violation of any criminal law of this state may have occurred, it may refer the matter to the Oklahoma State Bureau of Investigation for further investigation pursuant to Section 150.5 of Title 74 of the Oklahoma Statutes or the Attorney General pursuant to Section 18b of Title 74 of the Oklahoma Statutes.  The Insurance Department shall retain the authority to initiate and prosecute any civil action it deems necessary or advisable.

C.  The Anti-Fraud Unit may employ investigators who are commissioned by the Insurance Commissioner to serve as peace officers, as defined by and pursuant to the guidelines and requirements of Section 3311 of Title 70 of the Oklahoma Statutes and Sections 99 and 99a of Title 21 of the Oklahoma Statutes.

D.  Records, documents, reports and evidence obtained or created by the Anti-Fraud Division as a result of an inquiry or investigation of suspected insurance fraud shall be confidential and shall not be subject to the Oklahoma Open Records Act or to outside review or release by any individual, but shall be subject to court order.  Information and records shall be disclosed upon request to officers and agents of federal, state, county, or municipal law enforcement agencies, to the Oklahoma State Bureau of Investigation, to the Attorney General's office and to district attorneys, in the furtherance of criminal investigations.

Added by Laws 1999, c. 344, § 1, emerg. eff. June 8, 1999.  Amended by Laws 2002, c. 307, § 5, eff. Nov. 1, 2002; Laws 2004, c. 131, § 1; Laws 2005, c. 129, § 2, eff. Nov. 1, 2005.

§36-362.  Insurance Department Anti-Fraud Revolving Fund - Fees.

A.  There is hereby created in the State Treasury a revolving fund for the Insurance Commissioner to be designated the "Insurance Department Anti-Fraud Revolving Fund".  The fund shall be a continuing fund, not subject to fiscal year limitations and shall consist of all monies received and collected by the Insurance Department pursuant to subsection B of this section and all other monies designated to the fund by law.  All monies accruing to the credit of said fund are hereby appropriated and may be budgeted and expended by the Insurance Commissioner for the purposes of investigation of suspected insurance fraud and civil or administrative action in cases involving suspected insurance fraud.  Expenditures from said fund shall be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of State Finance for approval and payment.

B.  The following shall pay an annual fee of Seven Hundred Fifty Dollars ($750.00) to the Insurance Department which shall be payable quarterly in the amount of One Hundred Eighty-seven Dollars and fifty cents ($187.50):  Life, accident and health insurers; property and casualty insurers; county mutual fire insurers; mutual benefit associations; fraternal benefit societies; reciprocal insurers; motor service clubs; title insurers; nonprofit insurers; health maintenance organizations (HMOs); service warranty associations; surplus lines carriers; multiple employer welfare arrangements (MEWAs); trusts which write surety policies; prepaid dental plan organizations; and accredited reinsurers.  The payments shall be due on or before the last day of the month following each calendar quarter.  Within sixty (60) days after each calendar quarter, the Commissioner shall transfer:

1.  Twenty-five percent (25%) of all monies collected by the Insurance Department pursuant to this section to the Attorney General's Insurance Fraud Unit Revolving Fund created in Section 19.3 of Title 74 of the Oklahoma Statutes, for use by the Attorney General in the investigation and prosecution of insurance fraud; and

2.  Fifteen percent (15%) of all monies collected by the Insurance Department pursuant to this section to the OSBI Revolving Fund created in Section 150.19a of Title 74 of the Oklahoma Statutes, for use by the Oklahoma State Bureau of Investigation in the investigation of insurance fraud.

Added by Laws 1999, c. 344, § 2, emerg. eff. June 8, 1999.  Amended by Laws 2001, c. 363, § 5, eff. July 1, 2001; Laws 2002, c. 307, § 6, eff. Nov. 1, 2002; Laws 2004, c. 131, § 2.

§36-363.  Notification of suspected fraud.

A.  Any insurer who has reason to believe that a person or entity has engaged in or is engaging in an act or practice that violates any statute or administrative rule of this state related to insurance fraud shall immediately notify the Anti-Fraud Unit of the Insurance Department.

B.  In the absence of fraud, bad faith, reckless disregard for the truth, or actual malice, no person, insurer, or agent of an insurer shall be liable for damages in a civil action or subject to criminal prosecution for supplying information about suspected insurance fraud to the Anti-Fraud Division of the Insurance Department or any other agency involved in the investigation or prosecution of suspected insurance fraud.  The immunity provided in this subsection shall not extend to any person, insurer, or agent of an insurer for communications or publications about suspected insurance fraud to any other person or entity.

Added by Laws 1999, c. 344, § 3, emerg. eff. June 8, 1999.

§36601.  "Domestic" insurer defined.

A "domestic" insurer is one formed under the laws of Oklahoma.

Laws 1957, p. 230, § 601.  

§36602.  "Foreign" insurer defined.

A "foreign" insurer is one formed under the laws of another state or government of the United States.

Laws 1957, p. 230, § 602.  

§36603.  "Alien" insurer defined.

An "alien" insurer is one formed under the laws of a country other than the United States.

Laws 1957, p. 230, § 603.  

§36604.  "State," "United States" defined.

A.  "State" means any state, commonwealth, territory, or district of the United States.

B.  "United States" includes the states, territories, districts, and commonwealths thereof.

Laws 1957, p. 230, § 604.  

§36605.  "Charter" defined.

"Charter" means articles of incorporation, of agreement, of association, or other basic constituent document of a corporation, subscribers' agreement and power of attorney of a reciprocal insurer, or underwriters' agreement and power of attorney of a Lloyd's insurer.

Laws 1957, p. 231, § 605.  

§36606.  Authority to transact insurance required.

A.  No person shall act as an insurer and no insurer shall transact insurance in Oklahoma except as authorized by a subsisting authority granted to it by the Insurance Commissioner, except as to such transactions as are expressly otherwise provided for in this Code.

B.  No such authority shall be required for an insurer, formerly so licensed in Oklahoma and now licensed in another state as a resident insurer or who has merged with an insurer in another state, to enable it to investigate and settle losses under its policies lawfully written in Oklahoma, or to liquidate such assets and liabilities of the insurer (other than collection of new premiums) as may have resulted from its former authorized operations in Oklahoma.

C.  An insurer, who has relocated in another state or has merged with an insurer in another state and is not transacting new insurance business in Oklahoma but continuing collection of premiums on and servicing of policies remaining in force as to residents of or risks located in Oklahoma, is transacting insurance in Oklahoma for the purpose of premium tax requirements only and is not required to have a certificate of authority therefor.  This subsection shall not apply to insurers which have withdrawn from Oklahoma prior to the effective date of this Code.

D.  As to an insurance coverage on a subject of insurance not resident, located, or expressly to be performed in Oklahoma at time of issuance, and solicited, written, and delivered outside Oklahoma at the time of issuance, no such authority shall be required of an insurer as to subsequent transactions in Oklahoma on account thereof, and the provisions of this Code shall not apply to such insurance or insurance coverage, except for the purpose of premium tax requirements.

Amended by Laws 1985, c. 328, § 5, emerg. eff. July 29, 1985.  

§36606.1.  Certain foreign insurers may become domestic insurers  Requirements and procedures.

A.  1.  Any insurer which is organized under the laws of any other state and is admitted to do business in this state for the purpose of transacting insurance may become a domestic insurer by complying with all of the requirements of law relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a location in this state, provided, the Insurance Commissioner approves the insurer's application for redomestication following a public hearing.  Said domestic insurer will be entitled to like certificates and licenses to transact business in this state and shall be subject to the authority and jurisdiction of this state.

2.  The Commissioner shall approve an insurer's application to redomesticate unless, after a public hearing thereon, he finds that:  a. the insurer cannot comply with all the requirements of law relative to the organization and licensing of a domestic insurer,

b. after redomestication, the insurer would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed,

c. the effect of the redomestication would be substantially to lessen competition in insurance in this state or tend to create a monopoly therein,

d. the financial condition of the insurer is such as might jeopardize or prejudice the interest of its policyholders or the state and is not in the public interest, or

e. the competence, experience and integrity of those persons who control the operation of the insurer are such that it would not be in the interest of the policyholders, the public or the state to permit the redomestication.

3.  The insurer's application to redomesticate shall contain information acceptable to the Commissioner concerning its financial condition, its plan of operation for the succeeding three (3) years, and information concerning the competence, experience and integrity of those persons who control the operation of the insurer.

4.  The application for redomestication shall be deemed approved unless the Commissioner has, within thirty (30) days after the conclusion of the hearing, entered his order disapproving the redomestication.

B.  Any domestic insurer may, upon the approval of the Insurance Commissioner, transfer its domicile to any other state in which it is admitted to transact the business of insurance, and upon such a transfer, shall cease to be a domestic insurer, and shall be admitted to this state if qualified as a foreign insurer.  The Commissioner shall approve any such proposed transfer unless he shall determine such transfer is not in the interest of the policyholders of this state.

C.  The certificate of authority, agents appointments and licenses, rates, and other items which the Insurance Commissioner allows, in his discretion, which are in existence at the time any insurer licensed to transact the business of insurance in this state transfers its corporate domicile to this or any other state by merger, consolidation or any other lawful method shall continue in full force and effect upon such transfer if such insurer remains duly qualified to transact the business of insurance in this state. All outstanding policies of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the Commissioner.  Every transferring insurer shall file new policy forms with the Commissioner on or before the effective date of the transfer, but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as approved by, the Commissioner.  However, every such transferring insurer shall notify the Commissioner of the details of the proposed transfer, and shall file promptly, any resulting amendments to corporate documents required to be filed with the Commissioner.

D.  The Insurance Commissioner may promulgate rules and regulations to carry out the purposes of this section.

§36607.  General qualifications to transact insurance.

A.  To qualify for and hold authority to transact insurance in Oklahoma an insurer must be otherwise in compliance with the provisions of this Code and with its charter powers, and must be an incorporated stock insurer, an incorporated mutual insurer, a mutual benefit association, a nonprofit hospital service and medical indemnity corporation, a farmers mutual fire insurance association, a Lloyd's association or a reciprocal insurer, of the same general type as may be formed as a domestic insurer under this Code; except, that no foreign or alien insurer shall be authorized to transact insurance in Oklahoma which does not maintain reserves as required by Article 15 (Assets and Liabilities) applicable to the kind or kinds of insurance transacted by such insurer.

B.  No certificate of authority or license to transact any kind of insurance business in this state shall be issued, renewed or continued in effect, to any domestic, foreign or alien insurance company or other insurance entity which is owned or financially controlled in whole or in part by another state of the United States, or by a foreign government, or by any political subdivision of either, or which is an agency of any such state, government or subdivision.

Laws 1957, p. 231, § 607.  

§36-607.1.  Certain entities considered insurers.

Notwithstanding any other provision of law, an entity organized pursuant to the Interlocal Cooperation Act, Section 1001 et seq. of Title 74 of the Oklahoma Statutes, for the purpose of transacting insurance shall be considered an insurer at such time that the entity has within a twelve-month period received aggregate premiums of One Million Dollars ($1,000,000.00) for all kinds of insurance that the entity transacts.  Such an entity shall be eligible to qualify for and hold a certificate of authority to transact insurance in this state.

Added by Laws 1994, c. 214, § 1, eff. July 1, 1994.

§36608.  Workers' compensation insurance.

A casualty insurer shall not be authorized to transact workers' compensation insurance in this state without first complying with the applicable provisions of Title 85, Oklahoma Statutes 1951, as amended.

Added by Laws 1957, p. 231, § 608, operative July 1, 1957.

§36609.  Kinds of insurance an insurer may transact.

An insurer which otherwise qualifies therefor may be authorized to transact any one kind or combination of kinds of insurance as defined in Section 701 et seq. of this title, except:

1.  A life insurer shall not be authorized to transact any other kind of insurance except accident and health and workers' compensation and employer liability equivalent insurance if otherwise qualified to do so on or after September 1, 1994, pursuant to the provisions of Section 65 of Title 85 of the Oklahoma Statutes or if immediately prior to the effective date of this Code any life insurer lawfully held a subsisting certificate of authority granting it the right to transact in Oklahoma additional kinds of insurance other than accident and health, so long as the insurer is otherwise in compliance with this Code the Insurance Commissioner shall continue to authorize such insurer to transact the same kinds of insurance as those specified in such prior certificate of authority;

2.  A reciprocal insurer shall not transact life insurance;

3.  A Lloyd's insurer shall not transact life insurance;

4.  A title insurer shall be a stock insurer and shall not transact any other kind of insurance; and

5.  No insurer shall issue for delivery or deliver in this state any contract of insurance which imposes contingent or assessment liability upon a resident of this state.

Added by Laws 1957, p. 231, § 609.  Amended by Laws 1981, c. 112, § 1; Laws 1986, c. 251, § 4, eff. Nov. 1, 1986; Laws 1995, c. 355, § 1, eff. July 1, 1995.

§36610.  Capital funds or minimum surplus required.

A.  To qualify for authority to incorporate an insurance company or to transact any one or more kinds of insurance an insurer shall possess and maintain, after the effective date of this act, surplus in regard to policyholders, which is defined as the aggregate of the capital and surplus, in an amount not less than One Million Five Hundred Thousand Dollars ($1,500,000.00).

B.  Any domestic insurer lawfully authorized to transact the business of insurance in Oklahoma immediately prior to the effective date of this act shall not be required to increase its capital or surplus to meet increased requirements of this act, provided, however, that in no event shall such insurer reduce its capital or surplus below the figure required of such insurer on October 31, 2002.

C.  Wherever the language paidin capital, capital, capital stock or a similar term (if a stock company) or surplus, expendable surplus or a similar term (if a mutual or reciprocal insurer) is used elsewhere in this code, the term surplus in regard to policyholders may be used interchangeably when applicable.

Added by Laws 1957, p. 232, § 610, operative July 1, 1957.  Amended by Laws 1961, p. 266, § 1, emerg. eff. March 29, 1961; Laws 1967, c. 231, § 1, emerg. eff. May 4, 1967; Laws 1980, c. 185, § 1, eff. Oct. 1, 1980; Laws 2002, c. 307, § 7, eff. Nov. 1, 2002.

§36-611.  Repealed by Laws 2003, c. 150, § 8, eff. Nov. 1, 2003.

§36612.  Additional kinds of insurance  Requirments.

A.  An insurance company which incorporates or is authorized initially to transact the business of insurance in Oklahoma after the effective date of this act may transact all kinds of insurance with no additional capital or surplus requirements.

B.  An insurance company which incorporated or was initially authorized to transact the business of insurance in Oklahoma prior to the effective date of this act and which is otherwise qualified therefor may be authorized to transact combinations of kinds of insurance (other than the life and accident and health combination shown in Section 610 of this article) while possessing and maintaining thereafter additional surplus in regard to policyholders not less in amount than that determined in subsection C of this section.

C.  For any lawful combination add One Hundred Thousand Dollars ($100,000.00) for each additional kind of insurance included in the combination, to the amount required under Section 610 of this article for that one kind of insurance in the combination for which the largest amount is required under said Section 610, except:

1.  Vehicle and accident and health insurance may be combined with casualty, and in any combination including casualty, without funds in addition to those required because of casualty.

2.  An insurer, if otherwise qualified therefor, may be authorized to transact all kinds of insurance except life and title insurance.

3.  The amount of such surplus in regard to policyholders shall not in any event be less than would be required if the insurer proposed to transact in Oklahoma all those kinds of insurance which it is transacting elsewhere.

Laws 1957, p. 233, § 612; Laws 1967, c. 231, § 2, emerg. eff. May 4, 1967; Laws 1980, c. 185, § 3, eff. Oct. 1, 1980.  

§36612.1.  Kinds of insurance; requirements.

No insurer organized or authorized to write or issue noncancelable or guaranteed renewable accident and health policies in any state shall be, or continue to be, licensed to do business in this state unless the insurer possesses and maintains a surplus as regards policyholders in excess of Two Million Dollars ($2,000,000.00).  Insurers licensed in this state on or before November 1, 1984, may maintain no less than One Million Dollars ($1,000,000.00) surplus as regards policyholders.

Amended by Laws 1984, c. 149, § 3, eff. Nov. 1, 1984.  

§36612.2.  Workers' compensation insurance  Required capital and surplus.

After November 1, 1987, no insurer who requests to write workers' compensation insurance in this state shall be permitted to transact the business of workers' compensation insurance in this state unless the insurer possesses and maintains a surplus as regards policyholders, as defined in Section 610 of Title 36 of the Oklahoma Statutes, in excess of Five Million Dollars ($5,000,000.00).  Should the surplus as regards policyholders fall below Five Million Dollars ($5,000,000.00), the insurer shall not be permitted to write any additional workers' compensation insurance until the surplus meets the statutory requirements as established in this section.

Added by Laws 1987, c. 175, § 4, eff. Nov. 1, 1987.  

§36-613.  Deposit requirements.

A.  Except as provided in subsection C of this section, any insurer that incorporates or is authorized initially to transact the business of insurance in Oklahoma after the effective date of this act shall not be issued a certificate of authority by the Insurance Commissioner unless it has deposited in trust with the State Treasurer through the Insurance Commissioner's office cash or securities eligible for the investment of capital funds of domestic insurers under this Code in an amount not less than Three Hundred Thousand Dollars ($300,000.00).  The Insurance Commissioner may require a greater amount to be deposited in trust if the Insurance Commissioner finds that a greater amount is warranted for the protection of the policyholders of the insurer pursuant to rules promulgated by the Insurance Commissioner.  Any amount over Three Hundred Thousand Dollars ($300,000.00) must be documented and reasons stated by the Commissioner in writing for the excess deposit amount.  The Commissioner will annually review those insurers with deposits above Three Hundred Thousand Dollars ($300,000.00) to determine whether such additional deposits remain justified.

B.  The Insurance Commissioner shall not issue a certificate of authority to any insurer that incorporated or was initially authorized to transact the business of insurance in Oklahoma prior to the effective date of this act unless it has deposited in trust with the State Treasurer through the Insurance Commissioner's office cash or securities eligible for the investment of capital funds of domestic insurers under this Code in an amount not less than the surplus in regard to policyholders, or net admitted assets (if a Lloyd's association) required pursuant to this Code to be maintained for authority to transact the kinds of insurance to be transacted, except that in the case of life and/or accident and health insurers the deposit shall be in the amount of One Hundred Thousand Dollars ($100,000.00).

C.  1.  As to domestic title insurers, the deposit shall be as required by Article 50 (Title Insurers).

2.  As to foreign insurers, in lieu of such deposit or part thereof in this state, the Insurance Commissioner may accept the current certificate in proper form of the public official having supervision over insurers in any other state to the effect that a like deposit or part thereof by such insurer is being maintained in public custody in such state in trust for the purpose, among other reasonable purposes, of protection of all the insurer's policyholders or of all its policyholders and creditors.

3.  As to alien insurers, other than title insurers, in lieu of such deposit or part thereof in this state, the Insurance Commissioner may accept the certificate of the official having supervision over insurance of another state in the United States, given under his hand and seal, that the insurer maintains within the United States by way of deposits with public depositaries, or in trust institutions within the United States approved by such official, assets available for discharge of its United States insurance obligations, which assets shall be in amount not less than the outstanding liabilities of the insurer arising out of its insurance transactions in the United States, together with the largest deposit required by this Code to be made in this state by any type of domestic insurer transacting like kinds of insurance.

D.  Any securities deposited by insurers shall be issued to the Insurance Commissioner and the insurer and shall not be released by any company holding such security without the signatures of the Insurance Commissioner and the authorized insurer's personnel.  Failure of any company holding such security to comply with this subsection may result, after hearing by the proper licensing authority, in a fine of not more than Twenty-five Thousand Dollars ($25,000.00) per occurrence.

Added by Laws 1957, p. 233, § 613.  Amended by Laws 1980, c. 185, § 4, eff. Oct. 1, 1980; Laws 1986, c. 251, § 5, eff. Nov. 1, 1986; Laws 2000, c. 353, § 2, eff. Nov. 1, 2000.

§36613.1.  Surety bond or other security arrangement required.

Any insurance company transacting the business of property and casualty insurance in this state shall not be issued a new or renewal certificate of approval unless the company has provided a corporate surety bond or approved alternative security arrangement in an amount determined by the State Insurance Commissioner to be sufficient to provide for the return of unearned premiums if a policy is canceled during the term thereof by an insurance company. The State Insurance Commissioner shall promulgate rules and regulations to implement and carry out the provisions of this section.

Added by Laws 1986, c. 134, § 1, emerg. eff. April 17, 1986.  

§36-615.  Repealed by Laws 2002, c. 307, § 36, eff. Nov. 1, 2002.

§36-615.1.  Application to transact insurance.

Unless otherwise instructed by the Insurance Commissioner, an applicant requesting to be admitted to transact insurance in this state shall follow the instructions outlined in the National Association of Insurance Commissioners (NAIC) Uniform Certificate of Authority Application (UCAA) instructions.

Added by Laws 2002, c. 307, § 8, eff. Nov. 1, 2002.

§36-615.2.  Biographical affidavit.

All domestic insurers and health maintenance organizations are required to keep biographical information current.  Domestic insurers and health maintenance organizations are required to provide Biographical Affidavits within thirty (30) days of any change in officers, directors, key management or any person acquiring ten percent (10%) or more controlling interest in a domestic insurer.  The information shall be on the National Association of Insurance Commissioners (NAIC) UCAA Biographical Affidavit Form.  The Biographical Affidavit is to be certified by an independent third party acceptable to the Insurance Commissioner that has conducted a comprehensive review of the background of the applicant and has indicated that the Biographical Affidavit has no significantly inaccurate or conflicting information and is accepted as the Business Character Report.  As used in this section, "independent third party" is one that has no affiliation with the applicant and is in the business of providing background checks or investigations.  The Business Character Report must be current and shall not be older than one (1) year.

Added by Laws 2004, c. 274, § 3, eff. July 1, 2004.  Amended by Laws 2005, c. 129, § 3, eff. Nov. 1, 2005.

§36616.  Issuance or refusal of certificate.

A.  If upon completion of application the Insurance Commissioner finds that the insurer has met the requirements for and is entitled thereto under this Code, he shall issue to the insurer a proper certificate of authority; if he does not so find, the Insurance Commissioner shall issue his order refusing such certificate.  The Insurance Commissioner shall not issue a certificate of authority to any domestic insurer incorporated after January 1, 1970, unless each of the shareholders of the common capital stock thereof is entitled at the shareholders meetings to one vote for each share standing in his name in the books of the corporation.  The Insurance Commissioner shall act upon an application for a certificate of authority within thirty (30) days after its completion.

B.  The certificate, if issued, shall specify the kind or kinds of insurance the insurer is authorized to transact in Oklahoma.  At the insurer's request, the Insurance Commissioner may issue a certificate of authority limited to particular types of insurance included within a kind of insurance as defined in this code.

Laws 1957, p. 234, § 616; Laws 1969, c. 289, § 1; Laws 1970, c. 109, § 1, emerg. eff. April 1, 1970.  

§36617.  Renewal and amendment of certificate.

A.  All certificates of authority shall, beginning November 1, 2002, be perpetual and automatically renewed as of March 1 of each year, unless the insurer fails to qualify for renewal pursuant to the requirements of the Insurance Code.

B.  The Insurance Commissioner may amend a certificate of authority at any time to accord with changes in the insurer's charter or insuring powers.

Added by Laws 1957, p. 235, § 617, operative July 1, 1957.  Amended by Laws 2002, c. 307, § 9, eff. Nov. 1, 2002.

§36618.  Mandatory revocation or suspension.

The Insurance Commissioner shall refuse to renew or shall revoke or suspend an insurer's certificate of authority:

1.  If such action is required by any provision of this Code, or

2.  If the insurer no longer meets the requirements for the authority originally granted, on account of deficiency in assets or otherwise.

Laws 1957, p. 235, § 618.  

§36-619.  Discretionary revocation or suspension; civil fines.

A.  The Insurance Commissioner may after opportunity for a hearing refuse to renew, or may revoke or suspend an insurer's certificate of authority, in addition to other grounds in this Code, if the insurer:

1.  Violates any provision of this Code other than those as to which refusal, suspension, or revocation is mandatory;

2.  Knowingly fails to comply with any lawful rule or order of the Insurance Commissioner;

3.  Is found by the Insurance Commissioner to be in unsound condition or in such condition as to render its further transaction of insurance in this state hazardous to its policyholders or to the people of this state;

4.  Without reasonable cause compels claimants under its policies to accept less than the amount due them or to bring suit against it to secure full payment;

5.  Refuses to be examined or to produce its accounts, records, and files for examination by the Insurance Commissioner when required;

6.  Fails to pay any final judgment rendered against it in this state within thirty (30) days after the judgment becomes final; or

7.  Is affiliated with and under the same general management or interlocking directorate or ownership as another insurer which transacts direct insurance in this state without having a certificate of authority therefor, except as permitted to a surplus line insurer under Article 11 of this title (Unauthorized Insurers).

B.  In addition to or in lieu of any applicable revocation or suspension of an insurer's certificate of authority, any insurer who knowingly and willfully violates this Code may be subject to a civil penalty of not more than Five Thousand Dollars ($5,000.00) for each occurrence.

C.  In addition to or in lieu of any sanction, the Commissioner may require an insurer to restrict its insurance writings, obtain additional contributions to surplus, withdraw from the state, reinsure all or part of its business, increase capital, surplus, deposits or any other account for the security of policyholders or creditors, or provide independent actuarial review.

Added by Laws 1957, p. 235, § 619.  Amended by Laws 1980, c. 182, § 1, eff. Oct. 1, 1980; Laws 1986, c. 251, § 6, eff. Nov. 1, 1986; Laws 1997, c. 418, § 25, eff. Nov. 1, 1997.

§36619.1.  Availability of coverage without regard to geographic location.

All insurers, as a condition of their authority to transact insurance in this state, shall make available all of the kinds of insurance coverage that they are transacting in this state to all Oklahoma residents, without regard to geographic location, but subject to the insurers' underwriting standards.

Added by Laws 1986, c. 134, § 2, emerg. eff. April 17, 1986.  

§36-619.2.  Workers' Compensation Fraud Unit of Office of Attorney General - Notification of certain violations.

Any insurer which has reason to believe that a person has engaged in or is engaging in an act or practice that violates any workers' compensation fraud statute or administrative rule of this state shall immediately notify the Workers' Compensation Fraud Unit of the Office of the Attorney General.

Added by Laws 1993, c. 349, § 30, eff. Sept. 1, 1993.

§36620.  Name of insurer.

A.  No insurer shall be authorized to transact insurance in Oklahoma which has or uses a name so similar to that of any insurer already so authorized as to cause uncertainty or confusion; except, that in case of conflict of names between two insurers the Insurance Commissioner may permit or require the newlyauthorized insurer to use in Oklahoma such supplementation or modification of its name as may reasonably be necessary to avoid such conflict.

B.  No insurer shall be authorized to transact insurance in Oklahoma which has or uses a name which tends to deceive or mislead as to the type of organization of the insurer.

Laws 1957, p. 235, § 620.  

§36-621.  Service of legal process on foreign or alien insurers.

A.  Each authorized foreign or alien insurer shall appoint the Insurance Commissioner as its agent to receive service of legal process, other than a subpoena, issued against it in this state upon any cause of action arising from its transaction of business in this state.  The appointment shall be irrevocable, shall bind any successor and shall remain in effect as long as there is in force in this state any contract made by the insurer or obligations arising therefrom.

B.  Service of such process against a foreign or alien insurer shall be made only by service of process upon the Insurance Commissioner.  Service of process against a domestic insurer may be made upon the insurer in the manner provided by laws applying to business entities generally, or upon the insurer's attorneyinfact if a reciprocal insurer or a Lloyds association.

C.  Each such insurer at time of application for a certificate of authority shall file with the Insurance Commissioner designation of the name and address of the person to whom process against it served upon the Insurance Commissioner is to be forwarded.  The insurer may change such designation by a new filing.

Added by Laws 1957, p. 235, § 621.  Amended by Laws 1997, c. 418, § 26, eff. Nov. 1, 1997; Laws 1997, c. 418, § 26, eff. Nov. 1, 1997.

§36-622.  Manner of service of process.

A.  Triplicate copies of legal process against an insurer for whom the Insurance Commissioner is agent shall be served upon the Commissioner at the principal offices of the Insurance Department.  When legal process against an insurer for whom the Insurance Commissioner is agent is issued, it shall be served in triplicate by any manner now provided by law or in lieu thereof by mailing triplicate copies of such legal process in the United States mails with postage prepaid to the Insurance Commissioner with return receipt requested, in which event service shall be sufficient upon showing of proof of mailing to the Commissioner with the return receipt attached.  At the time of service the plaintiff shall pay to the Insurance Commissioner Twenty Dollars ($20.00), taxable as costs in the action.  Upon receiving service, the Insurance Commissioner shall promptly forward a copy thereof by mail with return receipt requested to the person last so designated by the insurer to receive the same.

B.  Process served upon the Insurance Commissioner and copy thereof forwarded as provided in this section shall constitute service upon the insurer.

C.  Any monies received by the Insurance Commissioner pursuant to subsection A of this section shall be deposited with the State Treasurer, who shall place the same to the credit of the State Insurance Commissioner Revolving Fund.

Added by Laws 1957, p. 236, § 622.  Amended by Laws 1983, c. 68, § 6, eff. Nov. 1, 1983; Laws 1984, c. 215, § 3, operative June 30, 1984; Laws 1986, c. 251, § 7, emerg. eff. June 13, 1986; Laws 1997, c. 418, § 27, eff. Nov. 1, 1997.

§36-623.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-624.  Report of premiums, fees and taxes - Payment - Penalties.

A.  Every insurance company, copartnership, insurance association, interinsurance exchange, person, insurer, nonprofit hospital service and medical indemnity corporation, or health maintenance organization, doing business in this state in the execution or exchange of contracts of insurance, indemnity or health maintenance services, or as an insurance company of any nature or character whatsoever, hereinafter referred to in this article as an insurance company, or company, shall, annually, on or before the first day of March, report under oath of the president or secretary or other chief officer of such company to the Insurance Commissioner, the total amount of direct written premiums, membership, application, policy and/or registration fees charged during the preceding calendar year, or since the last return of such direct written premiums, membership, application, policy and/or registration fees was made by such company, from insurance of every kind upon persons or on the lives of persons resident in this state, or upon real and personal property located within this state, and/or upon any other risks insured within this state, provided, that with respect to the tax payable annually, considerations received for annuity contracts and payments received by a health maintenance organization from the Secretary of Health and Human Services pursuant to a contract issued under the provisions of 42 U.S.C., Section 1395mm(g) shall no longer be deemed to be premiums for insurance and shall no longer be subject to the tax imposed by this section.  Every such company shall, at the same time, pay to the Insurance Commissioner:

1.  An annual license fee as prescribed by Section 321 of this title; and

2.  An annual tax on all of the direct written premiums after all returned premiums are deducted, and on all membership, application, policy and/or registration fees, installment and/or finance fees or charges collected thereby, for the privileges of having written, continued and/or serviced insurance on lives, property and/or other risks in this state and of having made and serviced investments therein during the then expiring license year except premiums or fees paid by any county, city, town or school district funds or by their duly constituted authorities performing a public service organized pursuant to Sections 1001 through 1008 of Title 74 of the Oklahoma Statutes, or Sections 176 through 180.4 of Title 60 of the Oklahoma Statutes.  Provided, no deduction shall be made from premiums for dividends paid to policyholders.  The rate of taxation for all entities subject to the tax shall be two and twentyfive onehundredths percent (2.25%).  If any insurance company or other entity liable for the taxes levied pursuant to the provisions of this section fails to remit such taxes in a timely manner, it shall remain liable therefor together with interest thereon at an annual rate equal to the average United States Treasury Bill rate of the preceding calendar year as certified by the State Treasurer on the first regular business day in January of each year, plus four percentage points.

B.  For all insurance companies or other entities taxed pursuant to this section, the annual license fee and tax and all required membership, application, policy, registration, and agent appointment fees shall be in lieu of all other state taxes or fees, except those taxes and fees provided for in the Insurance Code, and the taxes and fees of any subdivision or municipality of the state, except ad valorem taxes and the tax required to be paid pursuant to Section 50001 of Title 68 of the Oklahoma Statutes.  Any company, except health maintenance organizations, failing to make such returns and payments promptly and correctly shall forfeit and pay to the Insurance Commissioner, in addition to the amount of the taxes and fees and interest, the sum of Five Hundred Dollars ($500.00) or an amount equal to one percent (1%) of the unpaid amount, whichever is greater; and the company so failing or neglecting for sixty (60) days shall thereafter be debarred from transacting any business of insurance in this state until the taxes, fees and penalties are fully paid, and the Insurance Commissioner shall revoke the license or certificate of authority granted to the agent or agents of that company to transact business in this state.  Provided, that when any such insurance company, copartnership, insurance association, interinsurance exchange, person, insurer, or nonprofit hospital service and indemnity corporation, applies for the first time for a license to do business in Oklahoma, it shall, at the time of making such application, pay a license fee as prescribed by Section 1425 of this title, and, on or before the first day of March, following, pay the premium tax, membership, application, policy, registration, and agent appointment fees, as hereinbefore provided.  Such license fee, tax and membership, application, policy, registration, and appointment fees shall be in lieu of all other state taxes or fees, except those taxes and fees provided for in the Insurance Code, and the taxes and fees of any subdivision or municipality of the state, except ad valorem taxes and the tax required to be paid pursuant to Section 50001 of Title 68 of the Oklahoma Statutes.

C.  Any health maintenance organization failing to file premium tax returns and payments promptly and correctly shall forfeit and pay to the Insurance Commissioner, in addition to the amount of the taxes, the sum of Five Hundred Dollars ($500.00) or an amount equal to one percent (1%) of the unpaid amount, whichever is greater.  Any health maintenance organization failing or neglecting to pay the tax and penalty shall be debarred from operating in this state and the Insurance Commissioner shall revoke the license of the health maintenance organization, until such taxes and penalties are fully paid.

Added by Laws 1957, p. 236, § 624.  Amended by Laws 1965, c. 60, § 10, eff. July 1, 1965; Laws 1965, c. 194, § 1; Laws 1979, c. 39, § 1, eff. July 1, 1979; Laws 1982, c. 138, § 1, emerg. eff. April 9, 1982; Laws 1985, c. 179, § 1, emerg. eff. June 21, 1985; Laws 1986, c. 251, § 8, eff. Nov. 1, 1986; Laws 1987, c. 175, § 5, eff. Nov. 1, 1987; Laws 1988, c. 83, § 5, emerg. eff. March 25, 1988; Laws 1989, c. 227, § 1; Laws 1989, c. 373, § 17, operative July 1, 1989; Laws 1990, c. 227, § 1, emerg. eff. May 18, 1990; Laws 1997, c. 418, § 28, eff. Nov. 1, 1997; Laws 2001, c. 363, § 6, eff. July 1, 2001; Laws 2003, c. 197, § 55, eff. Nov. 1, 2003.

§36624.1.  Tax credit for taxes paid by domestic insurer in foreign state.

If, by the laws of any state other than this state, or by the action of any public official of another state, any insurer or company, as defined in Section 624 of this Code, organized or domiciled in this state, shall be required to pay taxes for the privilege of doing business in such other state, and such amounts are imposed or assessed so that the taxes which are or would be imposed against Oklahoma domestic insurance companies are greater than those taxes required of insurers organized or domiciled in such other states, to the extent such amounts are legally due to such other states, an insurer or company organized or domiciled in this state may claim a credit against the tax payable pursuant to this article for any calendar year prior to 1989 of a sum not to exceed one hundred percent (100%) of such amount.  Provided, for the tax attributed to premiums collected prior to July 1, 1988, the credit shall not be greater than the tax payable for such premiums; for the tax attributed to premiums collected on or after July 1, 1988 through December 31, 1988, the credit authorized by this section and the investment credit authorized by Section 625 of this title shall not reduce the tax payable for such premiums to less than one percent (1%).

Beginning with the taxes payable for calendar year 1989, the premium tax levied by Section 624 of this title shall not be reduced by the credit provided for in this section.

Added by Laws 1985, c. 328, § 6, emerg. eff. July 29, 1985. Amended by Laws 1988, c. 83, § 6, emerg. eff. March 25, 1988.  

§36-624.2.  Refund of erroneously paid premium tax - Filing - Demand for hearing.

A.  Any taxpayer who has paid to the State of Oklahoma, through error of fact, or computation, or misinterpretation of law, any premium tax collected by the Oklahoma Insurance Commissioner may, as hereinafter provided, be refunded the amount of such tax so erroneously paid, without interest.

B.  Any taxpayer who has so paid any such premium tax may, within three (3) years from the date of payment thereof, file with the Insurance Commissioner a verified claim for refund of such tax so erroneously paid.  The Insurance Commissioner may accept an amended premium report or return as a verified claim for refund if the amended report or return establishes a liability less than the original report or return previously filed.

C.  Said claim so filed with the Insurance Commissioner, except for an amended report or return, shall specify the name of the taxpayer, certificate of authority or license number of the taxpayer, the time when and period for which said premium tax was paid, the nature and kind of premium tax so paid, the amount of the premium tax which said taxpayer claimed was erroneously paid, the grounds upon which a refund is sought, and such other information or data relative to such payment as may be necessary to an adjustment thereof by the Insurance Commissioner.  It shall be the duty of the Insurance Commissioner to determine what amount of refund, if any, is due as soon as practicable, but no later than ninety (90) days after such claim has been filed, and advise the taxpayer about the correctness of the taxpayer's claim, and the claim for refund shall be approved or denied by written notice to the taxpayer.

D.  If the claim for refund is denied, the taxpayer may file a demand for hearing with the Insurance Commissioner.  The demand for hearing must be filed on or before the thirtieth day after the date the notice of denial was mailed.  If the taxpayer fails to file a demand for hearing, the claim for refund shall be barred.

E.  Upon the taxpayer's timely filing of a demand for hearing, the Insurance Commissioner shall set a date for hearing upon the claim for refund which date shall not be later than sixty (60) days from the date the demand for hearing was mailed.  The taxpayer shall be notified of the time and place of the hearing.  The hearing may be held after the sixty-day period provided by this subsection upon agreement of the taxpayer.

Added by Laws 2003, c. 124, § 1, eff. Nov. 1, 2003.

§36-624.3.  Refund of adverse economically targeted and home office credit deductions.

A.  As used in this section:

1.  "Economically targeted credits" means any credit against the insurance premium tax other than the home office credits;

2.  "Home office credits" means the credits against insurance premium tax authorized pursuant to Section 625.1 of Title 36 of the Oklahoma Statutes;

3.  "Insurance premium tax" means those levies imposed pursuant to Sections 624 and 628 of Title 36 of the Oklahoma Statutes; and

4.  "Insurance premium tax liabilities" means the total liability of any insurance company created by the insurance premium tax.

B.  Any taxpayer adversely affected by a requirement of the Oklahoma Insurance Department for deducting home office credits after the deduction of economically targeted credits in computation of the taxpayer's insurance premium tax liabilities for the period July 2003, through June 2006, shall be granted a refund, pursuant to the provisions of Section 624.2 of Title 36 of the Oklahoma Statutes, for the difference between the insurance premium tax liability as it would have been computed had the home office credit been deducted prior to economically targeted credits and the insurance premium tax liability as it was actually computed for such periods.

C.  The provisions of this section shall be deemed sufficient grounds for the granting of a refund claim pursuant to subsection C of Section 624.2 of Title 36 of the Oklahoma Statutes.

D.  No refund otherwise payable pursuant to the provisions of this section shall be paid to a claimant prior to July 1, 2007.

E.  Refunds paid on or after July 1, 2007, pursuant to the provisions of this section shall only be paid from those insurance premium taxes and fees that would be apportioned to the General Revenue Fund of the State Treasury.  No refund otherwise payable pursuant to the provisions of this section shall be paid from insurance premium taxes or fees that would be apportioned to the Oklahoma Firefighters Pension and Retirement Fund, the Oklahoma Police Pension and Retirement System or the Law Enforcement Retirement Fund.

F.  Any and all premium tax credits to be utilized or recovered in a subsequent year are fully admitted as an asset to the insurer owning or generating said credits.

Added by Laws 2005, c. 381, § 3, eff. July 1, 2006.

§36625.  Credit against tax by investment in Oklahoma securities.

A.  If the annual statement of any insurance company or other entity taxed pursuant to the provisions of Section 624 of this title covering the period of time from January 1, 1988 through June 30, 1988, shows it to have investments at the close of said period of time in Oklahoma securities, as hereinafter defined, of as much as two percent (2%) but less than twelve percent (12%) of its admitted assets, it will be entitled to a credit on the premium tax levied on premiums collected during said period of time by paragraph 2 of Section 624 of this article so as to reduce the same to a tax of two and threefourths percent (2 3/4%); if said investments are as much as twelve percent (12%) but less than fourteen percent (14%) of said assets its annual premium tax shall be reduced to a tax of two and onehalf percent (2 1/2%); if said investments are as much as fourteen percent (14%) but less than sixteen percent (16%) of said assets its annual premium tax shall be reduced to a tax of two and onefourth percent (2 1/4%); if said investments are as much as sixteen percent (16%) but less than eighteen percent (18%) of said assets its annual premium tax shall be reduced to a tax of two percent (2%); if said investments are as much as eighteen percent (18%) but less than twenty percent (20%) of said assets its annual premium tax shall be reduced to a tax of one and threefourths percent (1 3/4%); if said investments are as much as twenty percent (20%) but less than twentytwo percent (22%) of said assets its annual premium tax shall be reduced to a tax of one and onehalf percent (1 1/2%); if said investments are as much as twentytwo percent (22%) but less than twentyfour percent (24%) of said assets its annual premium tax shall be reduced to a tax of one and onefourth percent (1 1/4%); if said investments are as much as twentyfour percent (24%) but less than twentysix percent (26%) of said assets its annual premium tax shall be reduced to a tax of one percent (1%); if said investments are as much as twentysix percent (26%) percent but less than twentyeight percent (28%) of said assets its annual premium tax shall be reduced to a tax of threefourths of one percent (3/4 of 1%); if said investments are as much as twentyeight percent (28%) but less than thirty percent (30%) of said assets its annual premium tax shall be reduced to a tax of onehalf of one percent (1/2 of 1%); if said investments are as much as thirty percent (30%) of said assets its annual premium tax shall be reduced to no percent (0%).

B.  If the annual statement of any insurance company or other entity taxed pursuant to the provisions of Section 624 of this title covering calendar year 1988 shows it to have investments in Oklahoma securities, as hereinafter defined, for the period of time beginning July 1, 1988 through December 31, 1988, of as much as two percent (2%) but less than twelve percent (12%) of its admitted assets, it will be entitled to a credit on the premium tax levied by paragraph 2 of Section 624 of this article so as to reduce the same to a tax of two and threefourths percent (2 3/4%); if said investments are as much as twelve percent (12%) but less than fourteen percent (14%) of said assets its annual premium tax shall be reduced to a tax of two and onehalf percent (2 1/2%); if said investments are as much as fourteen percent (14%) but less than sixteen percent (16%) of said assets its annual premium tax shall be reduced to a tax of two and onefourth percent (2 1/4%); if said investments are as much as sixteen percent (16%) but less than eighteen percent (18%) of said assets its annual premium tax shall be reduced to a tax of two percent (2%); if said investments are as much as eighteen percent (18%) but less than twenty percent (20%) of said assets its annual premium tax shall be reduced to a tax of one and threefourths percent (1 3/4%); if said investments are as much as twenty percent (20%) but less than twentytwo percent (22%) of said assets its annual premium tax shall be reduced to a tax of one and onehalf percent (1 1/2%); if said investments are as much as twentytwo percent (22%) but less than twentyfour percent (24%) of said assets its annual premium tax shall be reduced to a tax of one and onefourth percent (1 1/4%); if said investments are as much as twentyfour percent (24%) of said assets its annual premium tax shall be reduced to a tax of one percent (1%).  The credits authorized by this subsection and the credits authorized by Section 624.1 of this title shall not reduce the premium tax rate for premiums collected on or after July 1, 1988 through December 31, 1988, of an insurance company or other entity subject to said tax to less than one percent (1%).

C.  Beginning with the taxes payable for calendar year 1989, the premium tax levied by Section 624 of this title shall not be reduced by the credits for investment of assets provided for in this section.

D.  Oklahoma securities as used in this section shall mean real estate in this state, bonds of the State of Oklahoma, bonds or interestbearing warrants of any county, city, town, school district or municipality or subdivision of the State of Oklahoma, notes or bonds secured by mortgages or other liens on real estate located in the State of Oklahoma, cash deposits in regularly established national or state banks, Federal Savings and Loan Associations, Federal Savings Banks, or any institution insured by either the Federal Deposit Insurance Corporation or Federal Savings and Loan Insurance Corporation, in this state on the basis of the average monthly deposits throughout the calendar year, policy loans secured by the legal reserve on policies insuring residents of the State of Oklahoma, and any other Oklahoma property or securities in which by the laws of the State of Oklahoma such insurance companies may invest their funds.

Provided, that if any insurance company, copartnership, association, interinsurance exchange, person, insurer, nonprofit hospital service and medical indemnity corporation, or health maintenance organization secures such a credit prior to such a holding, it shall, within ninety (90) days after the mailing thereto by the Insurance Commissioner of a registered notice of said holding and the amount of said credit, pay said amount to the Insurance Commissioner, and if it fails to do so it shall be the duty of the Attorney General to institute proceedings in the name of the State of Oklahoma on the relation of the Insurance Commissioner in a court of competent jurisdiction to collect said amount.

Amended by Laws 1985, c. 179, § 2, emerg. eff. June 21, 1985; Laws 1988, c. 83, § 7, emerg. eff. March 25, 1988.  

§36-625.1.  Premium tax credit.

A.  A foreign or alien insurer which is subject to the tax imposed by Section 624 of this title shall be entitled to a credit against said tax actually paid to and placed in the General Revenue Fund of the state, not including any of said tax monies placed in pension funds and not including any of said tax monies placed in escrow, if, during the year for which the tax is being assessed, the insurer or its affiliate maintained a regional home office in this state in a building owned or leased by the insurer.  To receive a credit against the tax imposed for the year in which the regional home office was established, said office must have been maintained continuously from on or before August 1 of that year through the last day of the calendar year.  For succeeding years, an insurer or its affiliate shall have maintained the regional home office continuously from the first day of the calendar year for which the tax is imposed through the last day of that calendar year.  The credit shall be equal to the following percentages of the amount due after the credits authorized by Sections 624.1 and 625 of this title have been deducted:

1.  Fifteen percent (15%), if there are more than two hundred full-time, year-round Oklahoma employees, but less than three hundred full-time, year-round Oklahoma employees;

2.  Twenty-five percent (25%), if there are more than three hundred full-time, year-round Oklahoma employees, but less than four hundred full-time, year-round Oklahoma employees;

3.  Thirty-five percent (35%), if there are more than four hundred full-time, year-round Oklahoma employees, but less than five hundred full-time, year-round Oklahoma employees; or

4.  Fifty percent (50%), if there are five hundred or more full-time, year-round Oklahoma employees.

B.  A domestic insurer with four hundred or more full-time, year-round Oklahoma employees which is subject to the tax imposed by Section 624 of this title shall be entitled to a credit against said tax actually paid to and placed in the General Revenue Fund of the state, not including any of said tax monies placed in pension funds and not including any of said tax monies placed in escrow, if, during the year previous to the year for which the tax is being assessed, the insurer or its affiliate maintained a regional home office in this state in a building owned or leased by the insurer and during the year for which the tax is being assessed, the insurer establishes its home office in this state in a building owned or leased by the insurer.  To receive a credit against the tax imposed for the year in which the home office was established, said office must have been maintained continuously from on or before August 1 of that year through the last day of the calendar year.  For succeeding years, an insurer shall have maintained the home office continuously from the first day of the calendar year for which the tax is imposed through the last day of that calendar year.  Insurers who take action before August 1, 2000, to establish their home office in this state shall be entitled to a credit against the tax imposed on or after January 1, 2001, which shall be in addition to the credit the insurer is entitled to for that year.  The credit shall be equal to the following percentages of the amount due after the credits authorized by Sections 624.1 and 625 of this title have been deducted:

1.  Thirty-five percent (35%), if there are more than four hundred full-time, year-round Oklahoma employees, but less than five hundred full-time, year-round Oklahoma employees; or

2.  Fifty percent (50%), if there are five hundred or more full-time, year-round Oklahoma employees.

C.  A domestic insurer which is subject to the tax imposed by Section 624 of this title shall be entitled to a credit against said tax actually paid to and placed in the General Revenue Fund of the state, not including any of said tax monies placed in pension funds and not including any of said tax monies placed in escrow, if, during the year for which the tax is being assessed, the insurer maintained a regional home office in at least five (5) or more counties in this state in buildings owned or leased by the insurer.  To receive a credit against the tax imposed for the year in which the regional home offices were established, said offices must have been maintained continuously from on or before August 1 of that year through the last day of the calendar year.  For succeeding years, an insurer shall have maintained the regional home offices continuously from the first day of the calendar year for which the tax is imposed through the last day of that calendar year.  The credit shall be equal to the percentage of the amount due after the credits authorized by Sections 624.1 and 625 of this title have been deducted as established in subsection A of this section.

D.  Proof that an insurer qualifies for the credit authorized by this section shall be on forms prescribed by the Insurance Commissioner and shall be submitted to the Commissioner annually with the report which is filed pursuant to Section 624 of the Insurance Code.

E.  The credit provided for in subsections A, B and C of this section shall be based on the total number of Oklahoma employees in the regional or home office when a group of insurers which are under common management and control maintain a regional home office or home office in this state in a building owned or leased by the group of insurers.  The credit provided for in subsections A, B and C of this section may be allocated among the insurance company and the insurance company affiliates at the discretion of the insurance company on a per-insurance-company basis.

F.  As used in this section:

1.  "Regional home office" means an office transacting insurance, as defined in Section 105 of this title, and performing insurance company operations, which is defined as one or more or any combination of the following functions and services performed in connection with the development, sale, and administration of products giving rise to receipts subject to a premium tax on domestic and foreign insurance companies, or domestic or foreign health care insurance corporations: actuarial, medical, legal, investments, accounting, auditing, underwriting, policy issuance, information, policyholder services, premium collection, claims, advertising and publications, public relations, human resources, marketing, sales office staff, training of sales and service personnel, and clerical, managerial, and other support for any such functions or services;

2.  "Common management and control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an insurer, whether through the ownership of voting securities, by contract, or otherwise, unless the power is executed by a person acting in an official capacity, performing duties imposed and exercising authority granted because of the person's position as an officer or employee of the insurer.  Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing twenty-five percent (25%) or more of the voting securities of the insurer;

3.  "Oklahoma employees" means persons who are employed in Oklahoma after January 1, 2000, and who are common law employees of an insurance company or its affiliate.  Oklahoma employees do not include independent contractors or any persons to the extent that the compensation of that person is based on commissions;

4.  "Insurance company" means any entity subject to a premium tax on domestic and foreign insurance companies, or domestic or foreign health care insurance corporations, including the attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney.  A reciprocal and its attorney-in-fact shall be a single entity; and

5.  "Home office" means the executive offices of an insurance company which is domiciled in this state.

G.  Each insurer or insurance group requesting a credit under this section shall certify by affidavit, approved as to form by the Commissioner, that the insurer has met all of the qualifications required by this section and is authorized to a credit against the premium tax which actually shall be paid to, and placed in the General Revenue Fund of the state, exclusive of any amounts of the tax which shall be credited to pension funds pursuant to law and exclusive of any amounts which shall be placed into escrow.  The Commissioner may do an examination for the sole purpose of certifying that all requirements of this section are being met by the insurer requesting to obtain any credits against premium tax.

H.  For the fiscal year beginning July 1, 2006, and for each fiscal year thereafter, and notwithstanding any other provisions of Title 36 of the Oklahoma Statutes or any other provision of law governing the order in which the credit authorized by this section is to be deducted from the liability of the company claiming such credit to the contrary, the credit authorized by this section shall be deducted from the insurance premium tax liability of the company claiming such credit prior to the deduction of any other credits that may be claimed against such liability.

Added by Laws 1987, c. 137, § 1, eff. Nov. 1, 1987.  Amended by Laws 2000, c. 346, § 1, eff. Jan. 1, 2001; Laws 2005, c. 381, § 2, eff. July 1, 2006.

§36625.2.  Premium tax credit  Applicable insurers.

A.  The tax credits set forth in Section 1 of this act shall apply to insurers who take action after November 1, 1987, to:

1.  Establish new regional home offices; or

2.  Expand existing regional home offices, and hire new employees.

B.  An insurer in either category of the requirements of paragraph A of this section must also meet the hiring minimum requirements for the applicable tax credit bracket in Section 1 of this act.

Added by Laws 1987, c. 137, § 2, eff. Nov. 1, 1987.  

§36-625.3.  Insurance companies - Home office - Tax credit.

An insurance company that has operated a regional home office in this state that has qualified for the tax credit provided for in Section 625.1 of Title 36 of the Oklahoma Statutes and that redomiciles and moves its home office to this state shall continue to receive such tax credit under the terms for which is was originally allowed.

Added by Laws 2000, c. 315, § 10, eff. July 1, 2000.

§36-625.4.  Credit against premium tax.

A.  One hundred percent (100%) of any assessment paid by an insurer under the Oklahoma Property and Casualty Insurance Guaranty Association Act shall be allowed to that insurer as a credit against its premium tax levied under Section 624 of Title 36 of the Oklahoma Statutes.  The tax credit referred to in this section shall be allowed at a rate of ten percent (10%) per year for ten (10) successive years following the date of assessment and, at the option of the insurer, may be taken over an additional number of years.  The balance of any tax credit not claimed in a particular year may be reflected in the books and records of the insurer as an admitted asset of the insurer for all purposes.

B.  Available credit against premium tax allowed under subsection A of this section may be transferred or assigned among or between insurers if:

1.  A merger, acquisition, or total assumption of reinsurance among or between the insurers occurs; or

2.  The Insurance Commissioner by order approves the transfer or assignment.

Added by Laws 2002, c. 307, § 11, eff. Nov. 1, 2002.

§36626.  Collection proceedings.

If any entity such as is referred to in this article fails to pay the annual premium tax levied by Section 624 of this Code, it shall be the duty of the Attorney General to institute proceedings in the name of the State of Oklahoma on the relation of the Insurance Commissioner in a court of competent jurisdiction to collect said amount.

Amended by Laws 1985, c. 179, § 3, emerg. eff. June 21, 1985.  

§36-627.  Repealed by Laws 2005, c. 129, § 26, eff. Nov. 1, 2005.

§36628.  Retaliation.

When by or pursuant to the laws of any other state or foreign country any premium or income or other taxes, or any fees, fines, penalties, licenses, deposit requirements or other material obligations, prohibitions or restrictions are imposed upon Oklahoma insurers doing business, or that might seek to do business in such other state or country, or upon the agents of such insurers, which in the aggregate are in excess of such taxes, fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions directly imposed upon similar insurers or agents of such other state or foreign country under the statutes of this state, so long as such laws continue in force or are so applied, the same obligations, prohibitions and restrictions of whatever kind shall be imposed upon similar insurers or agents of such other state or foreign country doing business in Oklahoma.  All insurance companies of other nations shall be held to the same obligations and prohibitions that are imposed by the state where they have elected to make their deposit and establish their principal agency in the United States.  Any tax, license or other obligation imposed by any city, county or other political subdivision of a state or foreign country on Oklahoma insurers or their agents shall be deemed to be imposed by such state or foreign country within the meaning of this section.  The provisions of this section shall not apply to ad valorem taxes on real or personal property or to personal income taxes.  Monies collected pursuant to this section shall be paid by the Insurance Commissioner to the State Treasury to the credit of the General Revenue Fund of the state.

Added by Laws 1957, p. 239, § 628.  Amended by Laws 1990, c. 258, § 80, operative July 1, 1990; Laws 2001, c. 363, § 7, eff. July 1, 2001.

§36-629.  Estimate and prepayment of premium tax - Crediting.

A.  Every insurance company transacting business in this state whose premium tax, paid with respect to the previous calendar year's premiums, was One Thousand Dollars ($1,000.00) or more, shall make an estimate each year as provided herein and remit with each estimate a prepayment of its annual premium tax for the current calendar year equal to one-fourth (1/4) of its annual premium tax paid with respect to the previous calendar year's premiums.  Estimates, with remittance, shall be made on or before April 15, June 15, September 15 and December 15, respectively.

B.  All sums prepaid by an insurance company shall be allowed as credits against its annual return for premium tax payable on or before the first day of March.  If sums prepaid exceed the insurance company's annual premium tax payable on or before the first day of March, the excess shall be refunded or shall be allowed as credits against subsequent prepayments of the tax as the insurance company shall elect on the annual return for premium tax filed for the year by the insurance company with respect to which such excess prepayments were made.  Provided, in the case of an insurance company which has made prepayments of its premium tax in excess of its annual premium tax payable, the part of the excess prepayments as has not been credited against subsequent prepayments of the tax shall be refunded to the insurance company upon application within one hundred eighty (180) days after application is made.

Added by Laws 1971, c. 191, § 1, emerg. eff. June 4, 1971.  Amended by Laws 1972, c. 59, § 1, emerg. eff. March 25, 1972; Laws 1982, c. 164, § 1, operative July 1, 1982; Laws 1988, c. 83, § 8, emerg. eff. March 25, 1988; Laws 1997, c. 418, § 29, eff. Nov. 1, 1997; Laws 2004, c. 274, § 4, eff. July 1, 2004; Laws 2005, c. 129, § 4, eff. Nov. 1, 2005.

§36-630.  Failure to make payments timely - Penalties.

Failure to make such payments timely shall subject the insurance company to a penalty of ten percent (10%) of the tax due and said tax and penalty shall be further subject to interest at the rate of six percent (6%) per annum, from the date said payment should have been paid, until the tax, penalty and interest are paid.

Added by Laws 1971, c. 191, § 2, emerg. eff. June 4, 1971.  Amended by Laws 2004, c. 274, § 5, eff. July 1, 2004.

§36-631.  Deposit of premium tax - Payments to Medicaid Contingency Revolving Fund - Transfer of funds received from tax protest litigation.

A.  Said premium tax as collected shall be deposited by the thirtieth day of the month of receipt to the credit of the General Revenue Fund subject only to the allocations thereof as otherwise provided by law.

B.  That portion of premium tax assessed on the premiums of Medicaid recipients collected from the University of Oklahoma Managed Care Plan sponsored by the University of Oklahoma Health Sciences Center and from qualified health plans that contract with the Oklahoma Health Care Authority to provide managed care to participants in the State Medicaid program, as provided in Section 624 of this title, shall be paid by the thirtieth day of the month of receipt to the credit of the Medicaid Contingency Revolving Fund, created in Section 1010.8 of Title 56 of the Oklahoma Statutes.

Added by Laws 1971, c. 191, § 3, emerg. eff. June 4, 1971.  Amended by Laws 1987, c. 203, § 107, operative July 1, 1987; Laws 1988, c. 127, § 2, emerg. eff. April 12, 1988; Laws 1988, c. 204, § 1, operative July 1, 1988; Laws 1995, c. 331, § 1, eff. Nov. 1, 1995; Laws 1996, c. 302, § 1, eff. July 1, 1996.

§36-632.  Certain entities subject to jurisdiction of Insurance Commissioner and Oklahoma Insurance Code - Exemptions.

A.  Unless otherwise provided for by law or exempted by the provisions of this section, any person or other entity which provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or ophthalmologic expenses, whether coverage is by direct payment, reimbursement, or other means, shall be presumed to be subject to the jurisdiction of the Insurance Commissioner unless the person or other entity shows that while providing coverage the person or entity is subject to the jurisdiction of another agency of this or another state, any subdivision of this state, or the federal government, or provides a plan of selfinsurance or other employee welfare benefit program for an individual employer or labor union maintained pursuant to a collective bargaining agreement or other arrangement which provides for health care services solely for its employees or members and their dependents.

B.  A person or entity may show that it is subject to the jurisdiction of another agency of this or another state, any subdivision of this state, or the federal government by providing to the Insurance Commissioner the certificate, license, or other document issued by the other governmental agency which permits or qualifies the person or entity to provide those services.

C.  Any person or entity which is unable to show that it is subject to the jurisdiction of another agency of this or another state, any subdivision of this state, or the federal government, or provides an employee welfare benefit program for an individual employer or labor union as provided for in subsection A of this section, shall submit to an examination by the Insurance Commissioner to determine the organization and solvency of the person or entity, and to determine whether or not the person or entity is in compliance with applicable provisions of the Oklahoma Insurance Code, Section 101 et seq. of this title.

D.  Any person or entity unable to show that it is subject to the jurisdiction of another agency of this or another state, any subdivision of this state, or the federal government, or provides an employee welfare benefit program for an individual employer or labor union as provided for in subsection A of this section, shall be subject to all appropriate provisions of the Oklahoma Insurance Code regarding the conduct of its business.

1.  Any agent, broker, administrator, or other person or company which advertises, solicits, negotiates, procures, sells, renews, continues, or administers coverage in this state which is provided by any person or entity specified in subsection C of this section for expenses specified in subsection A of this section shall advise any purchaser, prospective purchaser, and covered person of the lack of insurance or other coverage, if the coverage for expenses specified in subsection A of this section is not fully insured or otherwise fully covered by a company authorized to do such business in this state; and

2.  Any administrator who advertises or administers coverage in this state which is provided by any person or entity specified in subsection C of this section for expenses specified in subsection A of this section shall advise any agent, broker, or other person or company which advertises, solicits, negotiates, sells, procures, renews, or continues said coverage of the elements of the coverage including the amount of stoploss insurance in effect.

E.  1.  Those entities which are not licensed insurers in this state, other than a hospital service and medical indemnity corporation as authorized in Section 2601 et seq. of this title, shall place the following statement in conspicuous boldface type on the front page of their policy or certificate:  "State insurance insolvency guaranty funds are not available for your use in the event of insolvency or liquidation of this company"; and

2.  Those entities which are not licensed insurers, or not subject to the jurisdiction of the Insurance Commissioner or any other state agency, shall place the following statement in conspicuous boldface type on the front page of their policy, plan or certificate:  "This policy, plan or certificate and this entity are not subject to the jurisdiction of the Oklahoma State Insurance Commissioner".

Added by Laws 1984, c. 42, § 1, eff. Nov. 1, 1984.  Amended by Laws 1987, c. 172, § 1, eff. Nov. 1, 1987; Laws 1997, c. 418, § 30, eff. Nov. 1, 1997.

§36-633.  MEWA defined - Information relating to administrative services contracts.

A.  As used in this act, the term "Multiple Employer Welfare Arrangement" or "MEWA" means that term as defined in Section 3 of the Employee Retirement Income Security Act of 1974, 29 U.S.C., Section 1002(40)(A), as amended, that meets either or both of the following criteria:

1.  One or more of the employer members of the MEWA is either domiciled in this state or has its principal place of business or principal administrative office in this state; or

2.  The MEWA solicits an employer that is domiciled in this state or that has its principal place of business or principal administrative office in this state.

B.  Each insurer licensed to do business in this state, including any corporation organized under the provisions of Article 26 of Title 36 of the Oklahoma Statutes, that administers a MEWA shall provide the Insurance Commissioner with such information regarding the insurer's administrative services contract or contracts with such MEWA or MEWAs that the Commissioner may reasonably require.

C.  A MEWA shall be administered only by a licensed insurer or a licensed third party administrator.

Added by Laws 1992, c. 374, § 1, eff. Jan. 1, 1993.

§36-634.  Valid license required - Exempt entities.

A.  It is unlawful to operate, maintain or establish a MEWA unless the MEWA has a valid license issued by the Insurance Commissioner.  Any MEWA operating in this state without a valid license is an unauthorized insurer.

B.  This act shall not apply to:

1.  A MEWA that offers or provides benefits that are fully insured by an authorized insurer;

2.  A MEWA that is exempt from state insurance regulation in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) (Public Law 43-406);

3.  Any plan that has no more than two employer members which share substantial common support other than income generated by their respective similar business classification;

4.  A plan that has no more than two employer members, which together have a combined net worth of more than Five Million Dollars ($5,000,000.00) and each of such member employers participated in the continuous sponsorship and maintenance of such MEWA for the benefit of their employees for a period of more than ten (10) years next preceding the effective date of this act;

5.  A MEWA which has been in existence and has provided health insurance for at least five (5) years prior to January 1, 1993, and which was established by a trade, industry or professional association of employers that has a constitution or by-laws, that has been organized and maintained in good faith for at least thirty (30) continuous years prior to January 1, 1993, and its members are persons, firms or corporations qualified to print legal notices pursuant to Section 106 of Title 25 of the Oklahoma Statutes; or

6.  A nonprofit professional trade association pursuant to Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3), which has maintained either a self-funded plan or a fully insured plan of coverage for the payment of expenses to or for members of the association for a period of ten (10) or more consecutive years and which coverage is provided to at least five hundred covered participants to establish and maintain a self-funded plan.

C.  Any entity which claims to be exempt from state regulation pursuant to subsection B of this section shall provide to the Commissioner strict proof establishing such exemption.

Added by Laws 1992, c. 374, § 2, eff. Jan. 1, 1993.  Amended by Laws 2004, c. 416, § 1, emerg. eff. June 4, 2004.

§36-635.  License eligibility requirements - Filing of contracts.

A.  To meet the requirements for issuance of a license and to maintain a MEWA, a MEWA either must be:

1. a. nonprofit,

b. (1) established by a trade association, industry association or professional association of employers or professionals that has a constitution or bylaws and that has been organized and maintained in good faith for a continuous period of five (5) years for purposes other than that of obtaining or providing insurance, or

(2) requires membership in an association described in division (1) of this subparagraph in order to obtain the insurance offered by the MEWA,

c. operated pursuant to a trust agreement by a board of trustees that has complete fiscal control over the MEWA and that is responsible for all operations of the MEWA.  Except as provided in this paragraph, the trustees must:

(1) be owners, shareholders, partners, officers, directors, or employees of one or more employers in the MEWA.  With the Insurance Commissioner's approval, a person who is not such an owner, shareholder, partner, officer, director, or employee may serve as a trustee if that person possesses the expertise required for such service.  A trustee may not be an owner, shareholder, partner, officer or employee of the administrator or service company of the MEWA,

(2) have the authority to approve applications of association members for participation in the MEWA, and

(3) have the authority to contract with an authorized administrator or service company to administer the operations of the MEWA,

d. neither offered nor advertised to the public generally,

e. operated in accordance with sound actuarial principles, and

f. offered only after Two Hundred Thousand Dollars ($200,000.00) of cash or federally guaranteed obligations of less than five-year maturity that have a fixed or recoverable principal amount or such other investments as the Commissioner may authorize by rule is titled in such a manner that it may not be traded, sold or otherwise expended without the consent of the Insurance Commissioner; provided, said funds shall be taken into account in determining whether the MEWA is actuarially sound, and evidence of said investment shall be filed with the State Treasurer; or

2. a. operated pursuant to a trust agreement for a trust which has its situs in this state, is operated pursuant to a trust agreement by a board of trustees that has complete fiscal control over the MEWA, is responsible for all operations of the MEWA, and which has as one of its trustees a financial institution which is independent of the entity which established the MEWA.  Except as provided in this paragraph, the board of trustees must have owners, shareholders, partners, officers, directors or employees of one or more employers in the MEWA.  With the Insurance Commissioner's approval, a person who is not such an owner, shareholder, partner, officer, director or employee may serve as a trustee if that person possesses the expertise required for such service.  A trustee shall not be an owner, shareholder, partner, officer, director or employee of the administrator or service company of the MEWA,

b. operated and administered in a manner that causes all assets of the MEWA to be held in trust until paid either:

(1) for the benefit of individuals who receive medical, dental or similar benefits from the MEWA, or

(2) for the expenses of the MEWA, such as the fees of the trustee, licensed agents, administrator, service company, and all expenses of complying with the provisions of this act,

c. offered only to employers for the benefit of their employees,

d. operated in accordance with sound actuarial principles, and

e. offered only after Two Hundred Thousand Dollars ($200,000.00) of cash or federally guaranteed obligations of less than five-year maturity that have a fixed or recoverable principal amount or such other investments as the Commissioner may authorize by rule is titled in such a manner that it may not be traded, sold or otherwise expended without the consent of the Insurance Commissioner; provided, said funds shall be taken into account in determining whether the MEWA is actuarially sound, and evidence of said investment shall be filed with the State Treasurer.

B.  1.  The MEWA shall issue to each covered employee a policy, contract, certificate, summary plan description, or other evidence of the benefits and coverages provided.  The policy, contract, certificate, summary plan description, or other evidence of the benefits, coverages provided, premium rates to be charged and any contracts between the MEWA and any administrator or service company, including any changes to those documents, must be filed with the Oklahoma Insurance Department.  The evidence of benefits and coverages provided shall contain, in boldface type on the face page of the policy and the certificate, the following statement:  "THE BENEFITS AND COVERAGES DESCRIBED HEREIN ARE PROVIDED THROUGH A TRUST FUND ESTABLISHED BY A GROUP OF EMPLOYERS (name of MEWA).  THE TRUST FUND IS NOT SUBJECT TO ANY INSURANCE GUARANTY ASSOCIATION.  OTHER RELATED FINANCIAL INFORMATION IS AVAILABLE FROM YOUR EMPLOYER OR FROM THE (name of MEWA).  EXCESS INSURANCE IS PROVIDED BY A LICENSED INSURANCE COMPANY TO COVER CERTAIN CLAIMS WHICH EXCEED CERTAIN AMOUNTS.  THIS IS THE ONLY SOURCE OF FUNDING FOR THESE BENEFITS AND COVERAGES."

2.  If applicable, the same documents shall contain in boldface type on the face page of the policy and the certificate:  "THE BENEFITS AND COVERAGE DESCRIBED HEREIN ARE FUNDED BY CONTRIBUTIONS FROM EMPLOYERS, EMPLOYEES, AND OTHER INDIVIDUALS ELIGIBLE FOR COVERAGE."

3.  Any statement required by this subsection is not required on identification cards issued to covered employees or other insureds.

C.  The Commissioner shall not grant or continue a license to any MEWA if the Commissioner reasonably deems that:

1.  Any trust, manager or administrator is incompetent, untrustworthy, or so lacking in insurance expertise as to make the operations of the MEWA hazardous to the potential and existing insureds;

2.  Any trustee, manager or administrator has been found guilty of or has pled guilty or no contest to a felony, a crime involving moral turpitude, or a crime punishable by imprisonment of one (1) year or more under the law of any state or country, whether or not a judgment or conviction has been entered; or

3.  Any trustee, manager or administrator has had any type of insurance license justifiably revoked in this or any other state.

D.  To qualify for and retain a license, a MEWA shall file all contracts with administrators or service companies with the Insurance Commissioner, and report any changes in such contracts to the Commissioner in advance of their implementation.  The Commissioner shall have the authority to cause any contract with an administrator or service company to be renegotiated if the Commissioner reasonably determines that the charges under any such contract are excessively high in light of the services being delivered under the contract.

E.  An initial filing fee of One Thousand Dollars ($1,000.00) is required for licensure.  Each subsequent year the MEWA is in operation, an annual fee of Two Hundred Fifty Dollars ($250.00) shall be required.

F.  Failure to maintain compliance with the eligibility requirements established by this section is a ground for denial, suspension or revocation of the license of a MEWA.

Added by Laws 1992, c. 374, § 3, eff. Jan. 1, 1993.  Amended by Laws 2002, c. 129, § 1, eff. Nov. 1, 2002.

§36-636.  Use of words or descriptions causing beneficiaries to believe MEWA is insurance company.

No licensed MEWA shall use in its name, contracts, literature, advertising in any medium, or any other printed matter any words or descriptions which would cause beneficiaries or potential beneficiaries to believe it is an insurance company.

Added by Laws 1992, c. 374, § 4, eff. Jan. 1, 1993.

§36-637.  Application for license.

Each MEWA shall file with the Insurance Commissioner an application for a license on a form prescribed by the Commissioner and signed under oath by officers of the association or the administrator of the MEWA.  The application shall include or have attached the following:

1.  A copy of any articles of incorporation, constitution and bylaws of any association;

2.  A list of the names, addresses and official capacities with the MEWA of the individuals who will be responsible for the management and conduct of the affairs of the MEWA, including all trustees, officers and directors.  Such individuals shall fully disclose the extent and nature of any contracts or arrangements between them and the MEWA, including possible conflicts of interest;

3.  A copy of the articles of incorporation, bylaws or trust agreement that governs the operation of the MEWA;

4.  A copy of the policy, contract, certificate, summary plan description or other evidence of the benefits and coverages provided to covered employees, including a table of the rates charged or proposed to be charged for each form of such contract.  A qualified actuary shall certify that:

a. the rates are neither inadequate, nor excessive, nor unfairly discriminatory,

b. the rates are appropriate for the classes of risks for which that have been computed, and

c. an adequate description of the rating methodology has been filed with the Commissioner and such methodology follows consistent and equitable actuarial principles.

For purposes of this section and Section 639 of this title, a qualified actuary is an actuary who is a Fellow of the Society of Actuaries (FSA), a member of the American Academy of Actuaries, or an Enrolled Actuary under the Employee Retirement Income Security Act of 1974 (29 U.S.C., Section 1001 et seq.) and has experience in establishing rates for a self-insured trust and health services being provided;

5.  Any administrator retained by the MEWA must be a licensed third party administrator.  The MEWA must provide proof of a fidelity bond which shall protect against acts of fraud or dishonesty in servicing the MEWA, covering each person responsible for servicing the MEWA, in an amount equal to the greater of ten percent (10%) of the contributions received by the MEWA or ten percent (10%) of the benefits paid, during the preceding calendar year, with a minimum amount requirement of Twenty Thousand Dollars ($20,000.00) and a maximum amount requirement of Five Hundred Thousand Dollars ($500,000.00);

6.  A copy of the MEWA's stop-loss agreement.  The stop-loss insurance agreement must be issued by an insurer authorized to do business in this state and must provide both specific and aggregate coverage with an aggregate retention of no more than one hundred twenty-five percent (125%) of the expected claims for the next plan year and a specific retention amount as annually indicated in the actuarial opinion.  The Insurance Commissioner shall have the authority to waive the requirements for aggregate stop-loss coverage if deemed appropriate;

7.  In the initial application, a feasibility study, made by a qualified actuary with an opinion acceptable to the Commissioner, that addresses market potential, market penetration, market competition, operating expenses, gross revenues, net income, total assets and liabilities, cash flow and other items as the Commissioner requires.  The study shall be for the greater of three (3) years or until the MEWA has been projected to be profitable for twelve (12) consecutive months.  The study must show that the MEWA would not, at any month end of the projection period, have less that ninety percent (90%) of the reserves as required by a qualified actuary;

8.  A copy of an audited financial statement of the MEWA prepared by a licensed certified public accountant;

9.  A copy of every contract between the MEWA and any administrator or service company; and

10.  Such additional information as the Commissioner may reasonably require.

Added by Laws 1992, c. 374, § 5, eff. Jan. 1, 1993.  Amended by Laws 2002, c. 129, § 2, eff. Nov. 1, 2002.

§36-638.  Compliance with provisions of Title 36 relating to examinations, deposits and solvency regulation.

Every MEWA shall comply with Articles 15 through 19 and Sections 308 through 310, 311.1 and 619 of Title 36 of the Oklahoma Statutes which pertain to examinations, deposits and solvency regulation.

Added by Laws 1992, c. 374, § 6, eff. Jan. 1, 1993.

§36-639.  Annual financial report - Actuarial certification - Quarterly financial statements - Penalties.

A.  Every MEWA shall, within ninety (90) days after the end of each fiscal year of the MEWA, or within any such extension of time that the Insurance Commissioner for good cause grants, file a report with the Commissioner, on forms acceptable to the Commissioner and verified by the oath of a member of the board of trustees or by an administrator of the MEWA, showing its financial condition on the last day of the preceding fiscal year.  The report shall contain an audited financial statement of the MEWA prepared in accordance with generally accepted accounting principles, including its balance sheet and a statement of the operations for the preceding fiscal year certified by an independent accounting firm or individual holding a permit to practice public accounting in this state.  The report shall also include an analysis of the adequacy of reserves and contributions or premiums charged, based on a review of past and projected claims and expenses.

B.  In conjunction with the annual report required in subsection A of this section, the MEWA shall submit an actuarial certification prepared by a qualified actuary that indicates:

1.  The MEWA is actuarially sound, with the certification considering the rates, benefits, and expenses of, and any other funds available for the payment of obligations of the MEWA;

2.  The rates being charged and to be charged for contracts are actuarially adequate to the end of the period for which rates have been guaranteed;

3.  The recommended amount of cash reserves the MEWA should maintain, which shall not be less than the greater of twenty percent (20%) of the total contributions in the preceding plan year or twenty percent (20%) of the total estimated contributions for the current plan year.  The cash reserves shall be calculated with proper actuarial regard for known claims, paid and outstanding, a history of incurred but not reported claims, claims handling expenses, unearned premium, a trend factor, and a margin for error.  Cash reserves required by this section shall be maintained in cash or federally guaranteed obligations of less than five-year maturity that have a fixed or recoverable principal amount or such other investments as the Commissioner may authorize by rule;

4.  Whether amounts reserved to cover the cost of health care benefits are:

a. calculated in accordance with the loss reserving standards that would be applicable to a private insurance company writing the same coverage,

b. computed in accordance with accepted loss reserving standards, including a reserve for Incurred But Not Reported Claims (IBNR), and

c. fairly stated in accordance with sound loss reserving standards;

5.  The recommended level of specific and aggregate stop-loss insurance that the MEWA should maintain and whether the MEWA is funding at the aggregate retention plus all other costs of the MEWA; and

6.  Such other information relating to the performance of the MEWA that is reasonably required by the Commissioner.

C.  The MEWA shall send an annual report to all of the employers, describing the financial condition of the MEWA as of the end of the last fiscal year.  The report must be sent at the same time as the filing of the annual statement of the MEWA.

D.  The Commissioner may require a MEWA to file quarterly, within forty-five (45) days after the end of each of the remaining fiscal quarters, a financial statement on a form prescribed by the Commissioner, verified by the oath of a member of the board of trustees and an administrator of the MEWA, showing its financial condition on the last day of the preceding quarter and the statement of a qualified actuary setting forth the actuary's opinion relating to the level of cash reserves in accordance with paragraphs 3 and 4 of subsection B of this section.

E.  Any MEWA that fails to file a report as required by this section is subject to Section 311 of this title; and, after notice and opportunity for hearing, the Commissioner may suspend the MEWA's authority to enroll new insureds or to do business in this state while the failure continues.

Added by Laws 1992, c. 374, § 7, eff. Jan. 1, 1993.  Amended by Laws 2002, c. 129, § 3, eff. Nov. 1, 2002.

§36-640.  Denial, suspension or revocation of license - Corrective action plans - Rescission or modification of suspension order.

A.  The Insurance Commissioner shall deny, suspend or revoke a MEWA's license if, after notice and opportunity for a hearing, the Commissioner finds that the MEWA:

1.  Is insolvent;

2.  Is using such methods and practices in the conduct of its business as to render its further transaction of business in this state hazardous or injurious to its participating employees, covered employees and dependents, or to the public;

3.  Has failed to pay any final judgment rendered against it in a court of competent jurisdiction within sixty (60) days after the judgment became final;

4.  Is or has been in violation of any material provisions of this act;

5.  Is no longer actuarially sound; or

6.  Is charging rates that are excessive, inadequate or unfairly discriminatory.

B.  The Commissioner may deny, suspend or revoke the license of any MEWA if, after notice and opportunity for a hearing, the Commissioner determines that the MEWA:

1.  Has violated any lawful order or rule of the Commissioner or any applicable provisions of this act;

2.  Has refused to produce its accounts, records or files for examination under Sections 308 through 310 of Title 36 of the Oklahoma Statutes or through any of its officers has refused to give information with respect to its affairs or to perform any other legal obligation as to an examination;

3.  Utilized persons to solicit enrollments through an unlicensed agent; or

4.  Has violated any provision of the Unfair Claim Settlement Practices Act, Section 1221 et seq. of Title 36 of the Oklahoma Statutes.

C.  Whenever the financial condition of the MEWA is such that, if not modified or corrected, its continued operation would result in impairment or insolvency, in addition to any provisions in this act, the Commissioner may order the MEWA to file with the Commissioner and implement a corrective action plan designed to do one or more of the following:

1.  Reduce the total amount of present potential liability for benefits by reinsurance or other means;

2.  Reduce the volume of new business being accepted;

3.  Reduce the expenses of the MEWA by specified methods; or

4.  Suspend or limit the writing of new business for a period of time.

If the MEWA fails to submit a plan within the time specified by the Commissioner or submits a plan that is insufficient to correct the MEWA's financial condition, the Commissioner may order the MEWA to implement one or more of the corrective actions listed in this subsection.

D.  The Commissioner shall, in the order suspending the authority of a MEWA to enroll new insureds, specify the period during which the suspension is to be in effect and the conditions, if any, that must be met prior to reinstatement of its authority to enroll new insureds.  The order of suspension is subject to rescission or modification by further order of the Commissioner before the expiration of the suspension period.  Reinstatement shall not be made unless requested in writing by the MEWA; however, the Commissioner shall not grant reinstatement if it is found that the circumstances for which suspension occurred still exist.

Added by Laws 1992, c. 374, § 8, eff. Jan. 1, 1993.

§36-641.  Promulgation of rules relating to multiple employer welfare arrangements.

The Insurance Commissioner may promulgate rules to implement the provisions of Sections 633 through 640 of Title 36 of the Oklahoma Statutes relating to multiple employer welfare arrangements.

Added by Laws 2002, c. 129, § 4, eff. Nov. 1, 2002.

§36-650.  Competition with Nine-One-One system prohibited.

Insurers, nonprofit health service plans, and health maintenance organizations shall not establish or promote an emergency medical response, triage, or transportation system in competition with or in substitution of the Nine-One-One system.  Insurers, nonprofit health service plans, and health maintenance organizations shall not use false or misleading language to discourage or prohibit access to the Nine-One-One system.

Added by Laws 2000, c. 353, § 3, eff. Nov. 1, 2000.

§36701.  Definitions not mutually exclusive.

It is intended that certain coverages may come within the definitions of two or more kinds of insurance as set forth in this article, and the fact that such a coverage is included within one definition shall not exclude such coverage as to any other kind of insurance within the definition of which such coverage likewise reasonably is includable.

Laws 1957, p. 239, § 701.  

§36702.  "Life insurance" defined.

"Life insurance" is insurance on human lives and insurance appertaining thereto or connected therewith.  The transacting of life insurance includes the granting of endowment benefits, additional benefits in the event of death or dismemberment by accident or accidental means, additional benefits in the event of the disability of the insured, optional modes of settlement of proceeds of life insurance, and additional benefits providing acceleration of life or endowment or annuity benefits in advance of the time they would otherwise be payable, as an indemnity for longterm care which is certified or ordered by a physician, including but not limited to, professional nursing care, medical care expenses, custodial nursing care, nonnursing custodial care provided in a nursing home or at a residence of the insured or providing such acceleration upon the occurrence of a castastrophic disease or diseases as designated and defined by the policy.  An insurer authorized to transact life insurance may also grant annuities.

Laws 1957, p. 239, § 702.  

§36703.  "Accident and health insurance" defined.

"Accident and health insurance" is insurance against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, and every insurance appertaining thereto.

Laws 1957, p. 239, § 703.  

§36704.  "Property insurance" defined.

"Property insurance" is insurance on real or personal property of every kind and interest therein, against loss or damage from any or all hazard or cause, and against loss consequential upon such loss or damage, other than noncontractual legal liability for any such loss or damage.  Property insurance shall also include miscellaneous insurance as defined in paragraph 11 of section 707 of this article except as to any noncontractual liability coverage includable therein.

Laws 1957, p. 239, § 704.  

§36705.  "Marine insurance" defined.

"Marine insurance" includes:

1.   Insurance against any and all kinds of loss or damage to vessels, craft, aircraft, cars, automobiles and vehicles of every kind, as well as all goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidence of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the same or during any delays, storage, transshipment, or reshipment incident thereto, including marine builders' risks and all personal property floater risks;

2.   Insurance against any and all kinds of loss or damage to person or to property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to the person arising out of the ownership, maintenance or use of automobiles);

3.   Insurance against any and all kinds of loss or damage to precious stones, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise;

4.   Insurance against any and all kinds of loss or damage to bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage) unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot or civil commotion or any or all of them are the only hazards to be covered;

5.   Insurance against any and all kinds of loss or damage to piers, wharves, docks and slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and civil commotion and each of them;

6.  Insurance against any and all kinds of loss or damage to other aids to navigation and transportation, including dry docks and marine railways, dams and appurtenant facilities for the control of waterways; and

7.   Marine protection and indemnity insurance, which is insurance against, or against legal liability of the insured for, loss, damage or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person.

Laws 1957, p. 240, § 705.  

§36706.  "Vehicle insurance" defined.

"Vehicle insurance" is insurance against loss of or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom, from any hazard or cause, and against any loss, liability or expense resulting from or incident to ownership, maintenance or use of any such vehicle, aircraft or animal; together with insurance against accidental death or accidental injury to individuals, including the named insured, while in, entering, alighting from, adjusting, repairing, cranking, or caused by being struck by a vehicle, aircraft or draft or riding animal, if such insurance is issued as a part of insurance on the vehicle, aircraft or draft or riding animal.

Laws 1957, p. 240, § 706.  

§36707.  "Casualty insurance" defined.

"Casualty insurance" includes vehicle insurance as defined in Section 706 and accident and health insurance as defined in Section 703, of this article, and in addition includes:

1.  Liability insurance, which is insurance against legal liability for the death, injury, or disability of any human being, or for damage to property; and provision of medical, hospital, surgical, disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance.

2.  Workers' compensation and employers' liability insurance, which is insurance of the obligations accepted by, imposed upon, or assumed by employers for death, disablement, or injury of employees.

3.  Burglary and theft insurance, which is insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation, or wrongful conversion, disposal, or concealment, or from any attempt at any of the foregoing, including supplemental coverages for medical, hospital, surgical, and funeral benefits sustained by the named insured or other person as a result of bodily injury during the commission of a burglary, robbery, or theft by another; also insurance against loss of or damage to monies, coins, bullion, securities, notes, drafts, acceptances, or any other valuable papers and documents, resulting from any cause.

4.  Personal property floater insurance, which is insurance upon personal effects against loss or damage from any cause.

5.  Glass insurance, which is insurance against loss or damage to glass, including its lettering, ornamentation, and fittings.

6.  Boiler and machinery insurance, which is insurance against any liability and loss or damage to property or interest resulting from accidents to or explosion of boilers, pipes, pressure containers, machinery, or apparatus, and to make inspection of and issue certificates of inspection upon boilers, machinery, and apparatus of any kind, whether or not insured.

7.  Leakage and fire extinguishing equipment insurance, which is insurance against loss or damage to any property or interest caused by the breakage or leakage of sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus, water pipes and containers, or by water entering through leaks or openings in buildings, and insurance against loss or damage to such sprinklers, hoses, pumps, and other fire extinguishing equipment or apparatus.

8.  Credit insurance, which is insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured.

9.  Malpractice insurance, which is insurance against legal liability of the insured, and against loss, damage, or expense incidental to a claim of such liability, and including medical, hospital, surgical, and funeral benefits to injured persons, irrespective of legal liability of the insured, arising out of the death, injury, or disablement of any person, or arising out of damage to the economic interest of any person, as the result of negligence in rendering expert, fiduciary, or professional services.

10.  Entertainments insurance, which is insurance indemnifying the producer of any motion picture, television, radio, theatrical, sport, spectacle, entertainment, or similar production, event, or exhibition against loss from interruption, postponement, or cancellation thereof due to death, accidental injury, or sickness of performers, participants, directors, or other principals.

11.  Miscellaneous insurance, which is insurance against any other kind of loss, damage, or liability properly a subject of insurance and not within any other kind of insurance as defined in this article, if such insurance is not disapproved by the Insurance Commissioner as being contrary to law or public policy.

Added by Laws 1957, p. 240, § 707, operative July 1, 1957.

§36708.  "Surety insurance" defined.

"Surety insurance" includes:

1.  Fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust.

2.  Insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings and contracts of suretyship.

3.  Insurance indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debt, deeds, mortgages, warehouse receipts or other valuable papers, documents, money, precious metals and articles made therefrom, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including any loss while the same are being transported in armored motor vehicles, or by messenger, but not including any other risks of transportation or navigation; also insurance against loss or damage to such an insured's premises or to his furnishings, fixtures, equipment, safes, and vaults therein, caused by burglary, robbery, theft, vandalism or malicious mischief, or any attempt thereat.

Laws 1957, p. 241, § 708.  

§36709.  "Title insurance" defined.

"Title insurance" is insurance of owners of property or others having an interest therein, or liens or encumbrances thereon, against loss by encumbrance, or defective titles, or invalidity, or adverse claim to title.

Laws 1957, p. 242, § 709.  

§36710.  Limit of risk.

A.  No insurer shall retain any risk on any one subject of insurance, whether located or to be performed in Oklahoma or elsewhere, in an amount exceeding ten percent (10%) of its surplus to policyholders.

B.  A "subject of insurance" for the purposes of this section, as to insurance against fire and hazards other than windstorm or earthquake, includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or other such hazard insured against.

C.  Reinsurance authorized by Section 711 of this article shall be deducted in determining risk retained.  As to surety risks, deduction shall also be made of the amount assumed by any established incorporated cosurety and the value of any security deposited, pledged, or held subject to the surety's consent and for the surety's protection.

D.  "Surplus to policyholders" for the purpose of this section shall be deemed to include any voluntary reserves which are not required pursuant to law, and shall be determined from the last sworn statement of the insurer on file with the Insurance Commissioner or by the last report of examination by the Insurance Commissioner, whichever is the more recent at time of assumption of such risk.

E.  As to alien insurers, other than life insurers domiciled in Canada, this section shall relate only to risks and surplus to policyholders of the insurer's United States branch.

F.  This section shall not apply to group life or group or blanket accident and health insurance, title insurance, insurance of ocean marine risks or maine protection and indemnity risks, workers' compensation insurance, employers' liability coverages, nor to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.

Added by Laws 1957, p. 242, § 710, operative July 1, 1957.

§36711.  Allowance for credit or increase in amount at risk - Contract requirements.

A.  1.  No credit shall be allowed, as an admitted asset or as a deduction from liability, to any ceding insurer for reinsurance nor increase the amount it is authorized to have at risk unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable under a contract or contracts reinsured by the assuming insurer on the basis of reported claims allowed by the liquidation court, without diminution because of the insolvency of the ceding insurer.  Such payments shall be made directly to the ceding insurer or to its domiciliary liquidator, except:

a. if the contract or other written agreement specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer, or

b. if the assuming insurer, with the consent of the direct insureds, has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.

2.  The reinsurance agreement may provide that the domiciliary liquidator of an insolvent ceding insurer shall give written notice to the assuming insurer of the pendence of a claim against such ceding insurer on the contract reinsured within a reasonable time after such claim is filed in the liquidation proceeding.  During the pendence of such claim, any assuming insurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defenses which it deems available to the ceding insurer, or its liquidator.  Such expense may be filed as a claim against the insolvent ceding insurer to the extent of a proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer.  If two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose one or more defenses to such claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though such expense had been incurred by the ceding insurer.

B.  This section shall not apply to insurance of ocean marine risks or marine protection and indemnity risks.

Added by Laws 1957, p. 242, § 711.  Amended by Laws 1984, c. 149, § 4, eff. Nov. 1, 1984; Laws 1993, c. 79, § 3, eff. Sept. 1, 1993; Laws 2000, c. 169, § 5, eff. Nov. 1, 2000.

§36900.1.  Short title.

Sections 11 through 36 of this act shall be known and may be cited as the "Oklahoma Insurance Rating Act".

Added by Laws 1987, c. 210, § 11, eff. July 1, 1987.  

§36-901.  Application of article.

A.  This article applies to every insurer including every stock or mutual insurer, reciprocal or interinsurance exchange or Lloyd's association authorized by any provisions of the laws of this state to transact any of the kinds of insurance covered by this article except:

1.  Life insurance;

2.  Accident and health insurance;

3.  Reinsurance, other than joint reinsurance, to the extent stated in this act;

4.  Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, as distinguished from inland marine, insurance policies;

5.  Insurance of hulls of aircraft, including their accessories and equipment, or against liability arising out of the ownership, maintenance or use of aircraft;

6.  Insurers exempted under Section 110 of this title;

7.  Title insurance;

8.  Insurance of bail bonds; and

9.  Personal risk property and casualty insurance.

B.  This article shall be administered by the State Board for Property and Casualty Rates.

Added by Laws 1957, p. 243, § 901, operative July 1, 1957.  Amended by Laws 1980, c. 322, § 32, eff. Jan. 1, 1981; Laws 1987, c. 210, § 12, eff. July 1, 1987; Laws 1994, c. 376, § 2; Laws 2004, c. 519, § 4, eff. Nov. 1, 2004.

NOTE:  Laws 1994, c. 331, § 1 repealed by Laws 1995, c. 1, § 40, emerg. eff. March 2, 1995.

§36901.1.  Purposes of act.

A.  The purposes of this act are:

1.  To promote the public welfare by regulating insurance rates to the end that they shall not be excessive, inadequate or unfairly discriminatory;

2.  To improve availability, fairness and reliability of insurance and insurance rates;

3.  To authorize essential cooperative action among insurers in the ratemaking process and to regulate such activity to prevent practices that tend to substantially lessen competition or to create a monopoly;

4.  To encourage the most efficient and economic marketing practices; and

5.  To encourage the providing of price and other information to enable consumers to purchase insurance suitable for their needs and to foster competitive insurance markets.

B.  This act shall be liberally construed to effectuate its purposes.

Added by Laws 1987, c. 210, § 13, eff. July 1, 1987.  

§36901.2.  Definitions.

As used in this act unless the context otherwise requires:

1.  "Act" means the Oklahoma Insurance Rating Act;

2.  "Board" means the State Board for Property and Casualty Rates created pursuant to Section 331 et seq. of Title 36 of the Oklahoma Statutes;

3.  "Commissioner" means the Insurance Commissioner of the State of Oklahoma or his designee;

4.  "Department" means the Insurance Department of the State of Oklahoma;

5.  "Rate" means the cost of insurance per exposure unit, whether expressed as a single number or as a prospective loss cost and an adjustment to account for the treatment of expenses, profit and variations in loss experience, prior to any application of individual risk variations based on loss or expense considerations, and does not include minimum premiums:

a. "prospective loss cost", as used in this paragraph, means that portion of a rate that does not include provisions for expenses, other than loss adjustment expenses, or profit, and are based on historical aggregate losses and loss adjustment expenses adjusted through development to their ultimate value and projected through trending to a future point in time, and

b. "expenses", as used in this paragraph, means that portion of a rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses, and fees; and

6.  "Rating organization" means any two or more insurers acting in cooperation or in concert for the purpose of making rates, rating plans or rating systems.

Added by Laws 1987, c. 210, § 14, eff. July 1, 1987.  Amended by Laws 1994, c. 129, § 2, eff. Sept. 1, 1994.

§36901.3.  Certification of filing.

A.  In order to be certified by the Insurance Commissioner as complete, a filing shall contain, unless the Commissioner includes as part of the certification a specific finding that a particular item is not necessary and stating the reasons therefor, the following:

1.  A memorandum briefly summarizing the gist of the filing;

2.  An index to the filing;

3.  A clear and concise statement of the action desired to be taken by the State Board for Property and Casualty Rates;

4.  References to the sections of law and to rules and regulations which authorize the action desired to be taken by the Board or which support the information contained in the filing;

5.  An explanation of the application of the filing factors, which are contained in subsection A of Section 902.2 of this title, together with assumptions and conclusions concerning such factors;

6.  References to exhibits and other documents contained in the filing which are relied upon to support the action requested by the filing; and

7.  Any other information required by the Commissioner or the Board.

B.  If the filer is a rating organization, it is sufficient for such information to be provided in summary form for all the filer's members and subscribers.

C.  If a filing is incomplete, the Commissioner shall notify the filer, in writing, of the necessary materials required by this article, by rules of the Board or by orders adopted by the Board to complete the filing for certification.  The time for certification of the filing shall be tolled pending receipt of such information from the filer.  Upon receipt of the required information the time for completion of certification shall again begin to run.

D.  Upon certification of the completion of a filing by the Commissioner, the filing shall be placed on the agenda of the next regularly scheduled meeting of the Board.  Following certification, no meeting regarding a filing shall be held unless the requirements of subsection A of Section 901.4 of this title are met.

E.  If the Commissioner fails or refuses to certify completion of a filing which meets or exceeds the requirements of this act, the company or organization making the filing may request, in writing, that the Board certify the filing.  Certification by the Board shall have the same effect as if the Commissioner had certified the filing.

F.  Certification of the completion of the filing shall be accomplished within thirty (30) calendar days.  If the filing is not certified to be complete or if a dispute occurs regarding the certification of completion of the filing, then the dispute or failure or refusal to certify completion shall be presented to the Board at the next scheduled meeting for the Board's review and decision on certification.

Added by Laws 1987, c. 210, § 15, eff. July 1, 1987.  Amended by Laws 1997, c. 418, § 31, eff. Nov. 1, 1997.

§36901.4.  Hearings; period of advisement; additional information, analysis, consideration and investigation; exempt board meetings.

A.  Not less than ten (10) days in advance of a meeting to determine whether a hearing will be held, the Board shall give notice to each insurer or organization making the filing, to each party to the filing and to any person who annually requests in writing to be notified of filings made pursuant to this act, of the date, time and location of any hearing or rehearing, the name of the insurer or organization making the filing and of the parties to the filing and a brief statement of the action requested in the filing.

B.  Hearings shall be open to the public.

C.  Any person aggrieved with respect to a rate filing may make written application to the Board to participate in any hearing called by the Board.  If the Board finds the application to be supported by reasonable grounds, it may allow the applicant to appear in person or by counsel.

At the conclusion of any formal hearing and before the final closing of such hearing, any party in interest upon timely request shall be granted, as a matter of right, a continuance of twentyfour (24) hours for the purpose of making examination and analyses of documents introduced in the hearing.

D.  The evidentiary procedures of the Administrative Procedures Act, Sections 310 and 315 of Title 75 of the Oklahoma Statutes, shall apply to hearings conducted pursuant to this act.

E.  Upon written request seasonably made by a person affected by the hearing, and at such person's expense, the Board shall cause a full stenographic record of the proceedings to be made by a competent court reporter.  If transcribed, such record shall be a part of the Board's record of the hearing, and a copy of such stenographic record shall be furnished to any other party having a direct interest therein at the request and expense of such party.

F.  Following a hearing on a filing made pursuant to this act, the Board may take the matter under advisement for up to thirty (30) calendar days, subject to the provisions of Section 903 of Title 36 of the Oklahoma Statutes.

G.  At any time during the pendency of a filing, the Board may:

1.  Require the submission of additional information by any party to the filing;

2.  Solicit proposals for independent analysis of the filing by qualified technicians, such technicians to be chosen pursuant to the provisions of Section 332 of Title 36 of the Oklahoma Statutes;

3.  Consider the findings of its employees or the technician; and

4.  Conduct other or additional investigations including additional hearings.

H.  The provisions of this section shall not apply to regularly scheduled meetings of the Board which are governed by the provisions of the Oklahoma Open Meeting Act and where no hearing has been requested.

I.  The Board may utilize hearing officers to hear matters before the Board.  The hearing officer shall file a proposed order for any such matter with the Board.  The proposed order shall include findings of fact and conclusions of law.  Such proceedings shall be conducted in accordance with the Administrative Procedures Act.

Added by Laws 1987, c. 210, § 16, eff. July 1, 1987.  Amended by Laws 1991, c. 204, § 8, eff. Sept. 1, 1991.

§36-901.5.  Filing of advisory prospective loss costs and supporting actuarial data and statistical data for workers' compensation insurance.

A.  Rating organizations shall develop and file for approval with the Insurance Commissioner in accordance with the provisions of this section, a filing containing advisory prospective loss costs and supporting actuarial and statistical data for workers' compensation insurance.  Each insurer shall individually file their own specific profit and expense factors used to determine the final rates it will file for approval and the effective date of any rate changes.

B.  As used in this section:

1.  "Expenses" means that portion of a rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses and fees;

2.  "Rate" means the cost of insurance per exposure unit, whether expressed as a single number or as a prospective loss cost with an adjustment to account for the treatment of expenses, profit and variations in loss experience, prior to any application of individual risk variations based on loss or expense considerations, and does not include minimum premiums; and

3.  "Prospective loss costs" means that portion of a rate that does not include provision for expenses (other than loss adjustment expenses) or profit, and is based on historical aggregate losses and loss adjustment expenses adjusted through development to its ultimate value and projected through trending to a future point in time.

Added by Laws 1993, c. 349, § 22, eff. Sept. 1, 1993.  Amended by  Laws 1997, c. 418, § 32, eff. Nov. 1, 1997.

§36902.  Excessive, inadequate or unfairly discriminatory rates.

A.  The Board shall not approve rates for insurance which are excessive, inadequate, or unfairly discriminatory.

1.  An excessive rate is one which:

a. is unreasonably high for the insurance provided, or

b. is unreasonable because (1) a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable and (2) the rate is unreasonably high for the insurance provided.

2.  An inadequate rate is one which:

a. is (1) unreasonably low for the insurance provided and (2) the continued use of such rate endangers, or if continued would endanger, the solvency of the insurer, or

b. is (1) unreasonably low for the insurance provided and (2) the continued use of such rate by the insurer has, or if continued would have, the effect of destroying competition or creating a monopoly, or

c. is insufficient to cover projected losses, expenses and a reasonable margin for profit for the line of insurance coverage to be offered in this state by the filer.

3.  A rate shall not be unfairly discriminatory.

a. A rate is not unfairly discriminatory because it is based in part upon the establishment or modification of classifications of risks based upon:

(1) the size of the risk,

(2) the expense or difficulty in management of the risk,

(3) the individual experience of the risk,

(4) the location or dispersion of the risk, or

(5) any other reasonable consideration attributable to the risk.

b. A rate is not unfairly discriminatory in relation to another in the same class of business if it reflects equitably the differences in expected losses and expenses.  Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or with like expense factors but different loss exposures, if the rates reflect the differences with reasonable accuracy.

c. A rate shall be deemed unfairly discriminatory as to a risk or group of risks if the application of premium discounts, credits, or surcharges among such risks does not bear a reasonable relationship to the expected loss and expense experience among the various risks.

d. A rate shall never be based upon race, color, creed or national origin.

B.  The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance or subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

C.  Nothing in this act shall be construed to require uniformity in insurance rates, classifications, rating plans, or practices.

D.  Nothing in this act shall abridge or restrict the freedom of contract of insurers, agents, brokers or employees with reference to the commissions, compensation, or salaries to be paid to such agents, brokers, or employees by insurers.

E.  No insurer, agent, or broker shall make, issue, or deliver, or knowingly permit the making, issuance, or delivery of any policy of insurance within the scope of this law contrary to pertinent filings which are in effect for the insurer as provided in this article, except upon the written application of the insured stating his reasons therefor and filed with the Board, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk.  In the event of noncompliance with this subsection, the Board may, in addition to any other penalty provided by law, order a return of premium to the policyholder; plus interest thereon at an annual rate equal to the average United States Treasury Bill rate of the preceding calendar year as certified by the State Treasurer on the first regular business day in January of each year, plus four percentage points.

F.  The burden of compliance with the provisions of this act shall rest upon the insurer or rating organization in all matters involving a filing made pursuant to this act.

G.  Nothing in this act shall be construed to require the Board, when considering a filing made in accordance with the provisions of this act, to determine that existing rates no longer meet the requirements of this article.

Amended by Laws 1986, c. 251, § 9, eff. Nov. 1, 1986; Laws 1987, c. 210, § 17, eff. July 1, 1987; Laws 1988, c. 291, § 2, eff. Nov. 1, 1988.  

§36-902.1.  Repealed by Laws 2005, 1st Ex.Sess., c. 1, § 33, eff. July 1, 2005.

§36902.2.  Factors for review of filing - Weight - Prohibited expenses.

A.  The State Board for Property and Casualty Rates when reviewing a filing shall give due consideration to the following when, in its discretion, it determines that such factor or factors are applicable:

1.  Past loss experience within and outside this state;

2.  Prospective loss experience within and outside this state;

3.  Physical hazards insured;

4.  Safety and loss prevention programs;

5.  Underwriting practices and judgment;

6.  Catastrophe hazards;

7.  Reasonable underwriting profit and contingencies;

8.  Dividends, savings or unabsorbed premium deposits allowed or returned to policyholders;

9.  Past expenses within and outside this state;

10.  Prospective expenses within and outside this state;

11.  Existence of classification rates for a given risk;

12.  Investment income within and outside this state;

13.  Rarity or peculiarity of the risks within and outside this state;

14.  In the case of workers' compensation rates, differences in the hazard levels of different geographical regions of the state;

15.  All other relevant factors within and outside this state; and

16.  Whether existing rates continue to meet the standards of this article.

B.  The Board shall determine the weight to be accorded each of the factors contained in subsection A of this section.

C.  Past or prospective expenses within or outside this state pursuant to paragraphs 9 and 10 of subsection A of this section shall not include prohibited expenses for advertising or prohibited expenses for membership in organizations.

1.  For the purpose of this subsection:

a. "prohibited expenses for advertising" means the cost of advertising in any media the purpose of which is to influence legislation or to advocate support for or opposition to a candidate for public office;

b. "prohibited expenses for advertising" shall not mean:

(1) any communication to customers and the public of information regarding an insurer's insurance products,

(2) any communication to customers and the public of safety, safety education or loss prevention information,

(3) periodic publications or reports to stockholders or members required by the certificate or bylaws of the insurer,

(4) any communication with customers and the public which provides instruction in the use of the insurer's products and services, or

(5) any communication with customers and the public for giving notice or information required by law or otherwise necessary;

c. "prohibited expenses for membership" means the cost of membership in any organization which conducts substantial efforts, including but not limited to prohibited expenses for advertising, the purpose of which is to influence legislation or to advocate support for or opposition to a candidate for public office; and

d. "prohibited expenses for membership" shall not mean the cost of membership in rating organizations or other organizations the primary purpose of which is to provide statistical information on losses.

2.  The Board shall promulgate rules for the implementation of this subsection.

Added by Laws 1987, c. 210, § 18, eff. July 1, 1987.  Amended by Laws 1993, c. 349, § 23, eff. Sept. 1, 1993; Laws 1994, c. 129, § 3, eff. Sept. 1, 1994; Laws 1997, c. 418, § 34, eff. Nov. 1, 1997; Laws 2004, c. 519, § 6, eff. Nov. 1, 2004.

§36-902.3.  Workers' compensation.

A.  Workers' compensation premiums shall be calculated on a basis that, as nearly as is practicable, after the effects of experience rating and other applicable rating plans have been considered, the sum of expected losses and expected expenses as a percentage of premium shall be the same for high and low wage-paying employers in the same job classification.

B.  The State Board for Property and Casualty Rates and the Board of Managers of the State Insurance Fund shall:

1.  Determine the extent to which high wage-paying employers are paying premiums higher than those which would produce the same ratio of expected losses and expenses to premiums as for employers paying lower wages;

2.  Determine whether this effect is primarily seen in certain types of job classifications;

3.  Investigate alternatives and modifications to the current method of computing workers' compensation premiums, including wage rate recognition plans used in other states, split classifications, wage rate caps, and hours worked;

4.  Conduct a hearing or hearings on this matter, including consideration of other alternatives; and

5.  Adopt rules by January 1, 1996, to become effective on July 1, 1996, unless disapproved by the Legislature, to equalize, as nearly as is practicable, expected losses and expenses as a percentage of workers' compensation premiums for high and low wage-paying employers in the same job classification.  If the effect is found to be primarily seen in certain types of job classifications, the rules shall be adopted to apply only to such types of job classifications.  The adopted rules shall be subject to legislative review and shall be promulgated as permanent rules pursuant to the Administrative Procedures Act.  The agency rule report required by the Administrative Procedures Act shall include a rule impact statement together with an actuarial analysis of the proposed rule describing in detail the classes of persons who most likely will be affected by the proposed rules; the classes of persons who will benefit from the adopted rules; and the probable economic impact of the proposed rules upon the affected classes of persons.  The actuarial analysis shall be prepared by an independent actuary selected by the State Board of Property and Casualty Rates.  The rules shall not be invalidated on the ground that the contents of the rule impact statement or the actuarial analysis are insufficient or inaccurate.

C.  The cost of the premium adjustment plan shall be allocated among all employers purchasing workers' compensation insurance from all carriers, including the State Insurance Fund.

Added by Laws 1994, 2nd Ex. Sess., c. 1, § 3, emerg. eff. Nov. 4, 1994.

§36-902.4.  Use of workers' compensation insurance rates prior to filing - Licensed rating organization - Required filings.

A.  Rates for workers' compensation insurance may be used before being filed with the Insurance Department; provided, a rate shall be filed with the Department within thirty (30) days of initial use.  The rate shall stay in effect unless the Department reviews and disapproves the filing.

B.  Each licensed rating organization must file with the Department every manual of classification, every manual of rules and advisory rates, pure premium which has been fully adjusted and fully developed, every rating plan and modifications of any of the foregoing it intends to recommend for use no later than thirty (30) days after they take effect.  Further, each licensed rating organization must file with the Department the rate classification system, all rating rules, rating plans, policy forms, and underwriting rules or similar materials, and each modification of any of the foregoing which it requires its members and subscribers to adhere to no later than thirty (30) days before such filings or modifications are to take effect.

Added by Laws 2005, 1st Ex.Sess., c. 1, § 2, eff. July 1, 2005.

§36903.  Filing rates, rating plans, classifications, schedules, loss costs and other supplementary rate information - Procedure for approval or disapproval.

A.  1.  Every insurance company governed by the provisions of this act shall file with the Board, either directly or through a licensed rating organization of which it is a member or subscriber, all rates and rating plans and classifications, class rates, rating schedules, loss cost and all other supplementary rate information and every modification of any of the foregoing, which it uses or proposes to use in this state except as otherwise provided in this section.

2.  The Board shall send a notification of filing of rates to any person who annually requests, in writing, to be notified of filings pursuant to regulation of the Board.

3.  The Attorney General shall be notified within ten (10) days, in writing, of each:

a. filing of rates, whether for prior approval or for immediate use, and

b. certification of completion of a filing.

4.  The Attorney General shall be notified at least ten (10) days in advance, in writing, of each:

a. meeting of the Board, and

b. hearing conducted by the Board.

B.  Rates, rating plans, classifications, schedules, loss cost and other information shall be deemed approved ninety (90) calendar days following certification of completion of the filing as provided in this act unless, within the ninety-calendarday period:

1.  The Board by majority vote, approves, disapproves or approves with modification, the filing at one of its scheduled meetings or hearings;

2.  The Board orders a formal hearing on the filing; or

3.  The Board or the Commissioner, if a quorum of the Board is not available at the next regularly scheduled meeting, extends this period for one additional ninety-calendarday period.

C.  Nothing in this act shall be construed to require any filing for approval of rates, rating plans, classifications, schedules, loss cost and other information approved by the Board prior to July 1, 1987.

D.  Any formal hearing ordered by the Board shall be completed and a written order on the filing issued by the Board within one hundred twenty (120) calendar days from the date of the order setting the formal hearing, or the filing shall be deemed approved at the expiration of the one-hundred-twenty-day period.

E.  Rates or risks which are not by general custom of the business, or because of rarity or peculiar characteristics, written according to normal classification or rating procedure and which cannot be practicably filed before they are used, may be used before being filed.  The Board may make such examination as it may deem advisable to ascertain whether any such rates meet the requirements of this act.

F.  Whenever it shall be made to appear to the Board, either from its own information or from complaint of any party alleging to be aggrieved thereby, that there are reasonable grounds to believe that the rates on any or on all risks or classes of risks or kinds of insurance within the scope of this article are not in accordance with the terms of this act, it shall be the duty of the Board to investigate and determine whether or not any or all of such rates meet the requirements of this act.

G.  When investigating rates to determine whether or not they comply with the provisions of this act, the previously approved filing shall not be changed, altered, amended, or held in abeyance until after completion of the investigation and an opportunity for hearing in accordance with the provisions of this article.  Following such hearing, the Board shall enter its order in accordance with the provisions of this act.  The effective date of such order shall not be less than thirty (30) days nor more than sixty (60) days after the date of the order unless the Board determines that, in the public interest, a shorter or longer period is appropriate; provided, the filer has adequate time to implement such rate change.  Any such order shall apply prospectively only and shall not affect premiums collected on new or renewal policies issued prior to the effective date of this order.

H.  Under such rules as it shall adopt, the Board may, by written order, suspend or modify the requirements of filing as to any kind of insurance, subdivision or combination thereof, or as to classes of risks, the rates for which cannot practicably be filed before they are used.  Such orders, rules and regulations shall be made known to insurers and rating organizations affected thereby.  The Board may make such examination as it may deem advisable to ascertain whether any rates affected by such order meet the standards set forth in this act.  This subsection shall not apply to workers' compensation filings.

I.  If the Board finds that a filing does not meet the requirements of this act, it shall send to the insurer or rating organization which made such filing, written notice of disapproval of such filing, specifying therein in what respects it finds that such filing fails to meet the requirements of this act and stating that such filing shall not become effective to the extent disapproved.

Added by Laws 1957, p. 244, § 903, operative July 1, 1957.  Amended by Laws 1970, c. 314, § 1, emerg. eff. April 27, 1970; Laws 1982, c. 59, § 1, operative Oct. 1, 1982; Laws 1987, c. 210, § 19, eff. July 1, 1987; Laws 1988, c. 291, § 3, eff. Nov. 1, 1988; Laws 1991, c. 204, § 10, eff. Sept. 1, 1991; Laws 1994, c. 129, § 4, eff. Sept. 1, 1994; Laws 1997, c. 418, § 35, eff. Nov. 1, 1997; Laws 2001, c. 363, § 8, eff. July 1, 2001; Laws 2004, c. 519, § 7, eff. Nov. 1, 2004; Laws 2005, c. 1, § 36, emerg. eff. March 15, 2005; Laws 2005, c. 129, § 5, eff. Nov. 1, 2005.

NOTE:  Laws 2004, c. 274, § 6 repealed by Laws 2005, c. 1, § 37, emerg. eff. March 15, 2005.

§36-903.1.  Repealed by Laws 1997, c. 418, § 125, eff. Nov. 1, 1997.

§36-903.2.  Workplace safety plans - Expenses of implementation - Prohibition of increase of rate filings or reimbursement.

A.  No insurance company shall request and the State Board for Property and Casualty Rates shall not approve an increase for the expense portion of insurance company rate filings based upon the requirements of Sections 11 through 14 of this act.

B.  The State Insurance Fund shall not request and its Board of Managers shall not approve reimbursement for expenses based upon the requirements of Sections 11 through 14 of this act above the limitation on expenses of administration of the State Insurance Fund specified in Section 139 of Title 85 of the Oklahoma Statutes.

Added by Laws 1994, 2nd Ex. Sess., c. 1, § 15, emerg. eff. Nov. 4, 1994.

§36904.  Inspection of filed rates; information to insured; proceedings by aggrieved persons; false or misleading information; withholding policy or evidence.

A.  All schedules and insurance rates and supporting information filed in accordance with the provisions of this article shall be open to inspection to the public after such filings are made.

B.  Every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate.

C.  Every rating organization and every insurer which makes its own rates shall provide within the state reasonable means whereby any person, aggrieved by the application of its rating system, may be heard, in person or by his authorized representative, on his written request to revise the manner in which such rating system has been applied in connection with the insurance afforded him.  If the rating organization or insurer fails to grant or reject such request, within thirty (30) days after it is made, this applicant may proceed in the same manner as if his application had been rejected.  Any party affected by the action of such rating organization or such insurer on such request may, within thirty (30) days after written notice of such action, appeal to the Board, which, after a hearing held upon not less than ten (10) days written notice to the appellant and to such rating organization or insurer, may modify, affirm or reverse such action.

D.  No insurer, agent, broker, or rating organization may willfully withhold required information from or give false or misleading information to the Board.

E.  No insurer, agent, or broker shall fail to furnish to an insured any policy or comparable evidence of insurance to which the insured is entitled.

Amended by Laws 1987, c. 210, § 20, eff. July 1, 1987.  

§36905.  Cooperation by insurers; membership in rating organization not required.

A.  Subject to the provisions of this article and when licensed by the Board, two or more insurers may cooperate or act in concert with each other:

1.  As a rating organization, for the purpose of making rates, rating plans, or rating systems.  No insurer or group of insurers under the same general management and control shall be deemed to be a rating organization; and

2.  As an advisory organization, for the purpose of preparing policy forms, making underwriting rules, surveys, or inspections incident to but not including the making of rates, rating plans or rating systems, or collecting and furnishing to insurers or rating organizations loss or expense statistics or other statistical data, and acting in an advisory as distinguished from a rate making capacity.

B.  Subject to the provisions of this article, two or more insurers may cooperate or act in concert with each other:

1.  As a group or fleet of insurers operating under the same general management and control, for the purpose of conducting a complete insurance service; or

2.  As a group, association, or other organization for the purpose of joint underwriting or joint reinsurance, or of equitable apportionment and proper rating of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods.

C.  No insurer shall be required by this law to be a member or subscriber of any rating organization or stamping bureau.

Amended by Laws 1987, c. 210, § 21, eff. July 1, 1987.  

§36906.  Group, associations and organizations; duties; licensing; adherence to filings.

A. Every group, association, or other organization of insurers authorized to act as such under the terms of this article, except groups or fleets described in subsections C and D of Section 905 shall file with the Board (1) a copy of its constitution, its articles of agreement or association, or its certificate of incorporation, and of its bylaws, rules, and regulations governing the conduct of its business; (2) a list of its members and subscribers, if any; (3) the name and address of a resident of the state upon whom notices or orders of the Board or process affecting it may be served; and shall notify and file with the Board promptly any change in the foregoing.

B.  No group, association, or organization shall engage in any unfair or unreasonable practice in the conduct of its business.

C.  No rating organization shall conduct its business with respect to insurance on risks located within the state without a license from the Board.  To obtain such a license, a rating organization shall, in addition to the matters specified in subsection A of this section, supply to the Board a statement relating to its qualifications as a rating organization and its ability adequately to administer the rates, rules and regulations which it may make in behalf of its members and subscribers.  No rating organization shall be licensed in this state unless it execute and file with the Board its permission for any of its members to deviate from its rate, in accordance with subsection F of this section.

If the Board finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization, it shall forthwith issue a license specifying the kinds of insurance and subdivisions thereof for which the applicant is authorized to act as a rating organization, but if the Board does not so find within thirty (30) days after it has received such application, it shall at the request of the applicant, give the applicant a full hearing.

Licenses issued pursuant to this section shall remain in effect until suspended or revoked by the Board unless voluntarily surrendered by the rating organization.  The fee for said license shall be Twentyfive Dollars ($25.00).

The license of any rating organization may be suspended or revoked by the Board for failure to comply with this law or for incompetence or untrustworthiness.  The Board shall not revoke or suspend the license of any rating organization until it has given it not less than thirty (30) days notice of the proposed revocation or suspension and of the grounds alleged therefor and has afforded the rating organization an opportunity to be heard.  In lieu of revoking or suspending the license of any rating organization after hearing and for the causes named herein, the Board may subject such rating organization to a penalty of not more than Two Hundred Fifty Dollars ($250.00) when in its judgment it finds that the public interest would be best served by the continued operation of the rating organization.

D.  Every licensed rating organization shall, subject to reasonable rules and regulations, permit any insurer not a member to be subscriber to its rating services for any kind of insurance, or subdivision thereof for which it is authorized to act; shall give notice of changes in such rules and regulations to its subscribers; and shall furnish its rating services without discrimination to its members and subscribers.

E.  No licensed rating organization shall adopt any rule, effect any agreement, or take any action contrary to or inconsistent with the provisions of this law or which would have the effect of prohibiting, restricting, or regulating the payment or allowance by any of its members or subscribers of dividends, savings, or unabsorbed premium deposits; nor practice or sanction any plan or act of boycott, coercion, or intimidation; nor enter into or sanction any contract or act by which any person is restrained from lawfully engaging in the business of insurance.

F.  Every member of or a subscriber to a licensed rating organization shall adhere to the filings made on its behalf by such organization except that any such member or subscriber may deviate from such filing if it has filed with the rating organization and with the Board, at least fifteen (15) days before the effective date thereof, the deviation to be applied and the information upon which such deviation is based.  The Board shall disapprove such deviation if it finds that the deviation to applied would not be uniform in its application or would be inconsistent with the provisions of this article.

§36907.  General powers of Board.

In addition to any powers hereinbefore expressly enumerated in this law, the Board shall have full power and authority to enforce by regulations, orders, or otherwise all and singular, the provisions of this law, and the full intent thereof.  In particular it shall have the authority and power:

1.  To examine all records of insurers, advisory organizations and rating organizations and to require any insurer, agent, broker, advisory organization, and rating organization to furnish under oath such information as it may deem necessary for the administration of this law.  The expense of such examination shall be paid by the insurer, advisory organization, or rating organization examined.  In lieu of such examination the Board may, in its discretion, accept a report of examination made by any other insurance supervisory authority;

2.  To make and enforce such reasonable orders, rules, and regulations as may be necessary in making this law effective, but such orders, rules and regulations shall not be contrary to or inconsistent with the provisions of this law; and

3.  To issue an order, after a full hearing to all parties in interest requiring any insurer, group, association, or organization of insurers and the members and subscribers thereof to cease and desist from any unfair or unreasonable practice.

Amended by Laws 1987, c. 210, § 22, eff. July 1, 1987.  

§36907.1.  Monitoring and examination of rates and rating organizations.

A.  The Board shall monitor and examine the adequacy of rates of any insurer and rating organization in this state.  In so doing, the Board shall:

1.  Utilize existing relevant information, analytical systems and other sources; or

2.  Cause or participate in the development of new relevant information, analytical systems and other sources.

B.  The Board may require the maintenance and submission of records, memoranda or information relating to rates from such insurers and rating organizations.  The Board or any authorized representative of the Board may examine any such record, memoranda or information concerning rates.  The application for the acceptance of any license or permit issued pursuant to the provision of this title shall be deemed consent for the inspection and examination of such records, memoranda or information.

C.  The Board shall conduct such monitoring and examination required pursuant to this section within the Insurance Department, at the place of business of such insurers and rating organizations, in cooperation with other state insurance departments, through outside contractors or in any other appropriate manner.

D.  The cost of such examination and monitoring shall be assessed against insurers and rating organizations on an equitable and practical basis established, after hearing, in a rule promulgated by the Board.

E.  The monitoring and examinations required pursuant to the provisions of this section, shall be conducted in a reasonably economical manner.

F.  Any monies collected from administrative fees, fines, penalties and assessments against insurers and rating organizations pursuant to this act shall be deposited to the credit of the Insurance Commissioner's Revolving Fund for the purpose of carrying out and enforcing the provisions of this article.

Added by Laws 1985, c. 236, § 4, emerg. eff. July 8, 1985. Amended by Laws 1987, c. 210, § 23, eff. July 1, 1987.  

§36-908.  Administrative penalties; suspension of licenses.

The State Board for Property and Casualty Rates may, if it finds that any person or organization has violated the provisions of any statute for which the Board has jurisdiction, impose a penalty of not less than One Hundred Dollars ($100.00) nor more than Five Thousand Dollars ($5,000.00) for each such violation.  Such penalties may be in addition to any other penalty provided by law.

No penalty shall be imposed except upon a written order of the Board, stating its findings made after a hearing held not less than ten (10) days after written notice to a person or organization alleged to have violated any statute for which the Board has jurisdiction specifying the alleged violation.

Added by Laws 1957, p. 247, § 908.  Amended by Laws 1983, c. 68, § 8, eff. Nov. 1, 1983; Laws 1987, c. 210, § 24, eff. July 1, 1987;  Laws 1997, c. 418, § 36, eff. Nov. 1, 1997.

§36924.1.  Automobile or motorcycle accident prevention course for certain individuals  Reduction of premium charges.

A.  Any schedule of rates or rating plan for automobile or motorcycle liability and physical damage insurance submitted to or filed with the State Insurance Commissioner shall provide for an appropriate reduction in premium charges for those insured persons for a three-year period after successfully completing a motor vehicle accident prevention course which shall include but not be limited to an automobile or motorcycle accident prevention course meeting the criteria established by the Department of Public Safety.  Provided, however, there shall be no reduction in premiums for a selfinstructed course or a course which does not provide for actual classroom or field driving instruction for a minimum number of hours as determined by the Department of Public Safety.  Provided further, there shall be no reduction in premiums for a course attended pursuant to a court order in connection with a motor vehicle violation or an alcohol or drugrelated offense.

B.  All insurance companies writing automobile or motorcycle liability and physical damage insurance in this state shall allow an appropriate reduction in premium charges to all eligible persons pursuant to this section.

C.  The approved course shall be taught by instructors approved by the Department of Public Safety.

D.  Upon successfully completing the approved course, each participant shall be issued by the sponsoring agency of the course, a certificate which shall be the basis of qualification for the discount on insurance.

E.  Each participant shall successfully complete an approved course each three (3) years to continue to be eligible for the discount on insurance.

F.  An approved course pursuant to this section shall provide at least six (6) hours of instruction.

Added by Laws 1985, c. 122, § 1, eff. Jan. 1, 1986.  Amended by Laws 1990, c. 297, § 1, eff. Sept. 1, 1990; Laws 1991, c. 204, § 11, eff. Sept. 1, 1991; Laws 1995, c. 138, § 1, eff. Nov. 1, 1995; Laws 2002, c. 49, § 1, eff. Nov. 1, 2002; Laws 2004, c. 519, § 8, eff. Nov. 1, 1004.

§36924.2.  Rating plans for workers' compensation selfinsureds  Reduced premium charges for successful participation in occupational safety and health programs  Qualification  Certificate  Records  Review of premium credit program.

A.  Any rate, schedule of rates or rating plan for workers' compensation insurance submitted to or filed with the State Board for Property and Casualty Rates, or fixed by the Board of Managers of CompSource Oklahoma, and premiums, by whatever name, for workers' compensation for selfinsureds except for group selfinsured associations shall provide for an appropriate reduction in premium charges, by whatever name, for those eligible insured employers who have successfully participated in the occupational safety and health consultation, education and training program administered by the Commissioner of the Department of Labor pursuant to Section 414 of Title 40 of the Oklahoma Statutes.

B.  All insurance companies writing workers' compensation insurance in this state, including CompSource Oklahoma, and all selfinsureds providing workers' compensation insurance except for group selfinsured associations, shall allow an appropriate reduction in premium charges to all eligible employers who qualify for the reduction pursuant to the provisions of this section.

C.  Eligible employers shall be those employers:

1.  Who are insured by an insurance company writing workers' compensation insurance in this state;

2.  Who are selfinsured; or

3.  Who are insured by CompSource Oklahoma.

D.  In order to qualify for the reduction in workers' compensation insurance premium, an employer shall successfully participate annually in the occupational safety and health consultation, education and training program administered by the Department of Labor.  Successful participation shall be defined as:

1.  Undergoing a safety and health hazard survey of the workplace, including an evaluation of the employer's safety and health program and onsite interviews with employees by the Department's consultant;

2.  Correcting all hazards identified during the onsite visit within a reasonable period of time as established by the Department;

3.  Establishing an effective workplace safety and health program and implementing program provisions within a reasonable period of time as established by the Department.  The program shall include:

a. demonstration of management commitment to worker safety and health,

b. procedures for identifying and controlling workplace hazards,

c. development and communication of safety plans, rules and work procedures, and

d. training for supervisors and employees in safe and healthful work practices;

4.  Reducing by onethird (1/3) or more the extent to which the lost workday case rate, as measured by the Department of Labor, was above the national average for the industry at the time the employer elected to participate in the occupational safety and health consultation, education and training program, or maintaining a rate at or below the national average for the industry; and

5.  Documenting a reduction in workers' compensation claims for the preceding year by showing one of the following:

a. a ten percent (10%) reduction in the dollar amount of claims,

b. a ten percent (10%) reduction in the severity of claims, or

c. no reported claims,

as a result of attending the occupational safety and health consultation, education and training program administered by the Department of Labor.

E.  1.  Upon successful participation in the occupational safety and health consultation, education and training program as defined in subsection D of this section, an employer shall be issued a certificate by the Commissioner of the Department of Labor which shall be the basis of qualification for the reduction in workers' compensation insurance premium, by whatever name.  The certificate shall qualify the employer for a premium reduction for a oneyear period.

2.  Upon issuance of a certificate to an employer, the Commissioner of the Department of Labor shall mail a copy of the certificate to the employer's insurer.  Any insurer required by this section to allow an appropriate reduction in premium charges to a qualified employer which willfully fails to allow such reduction after receiving a copy of the certificate shall be subject, after notice and hearing, to an administrative fine, imposed by the Insurance Commissioner, which shall be not less than Ten Thousand Dollars ($10,000.00) or three times the amount of the premium reduction, whichever is greater.  The Insurance Commissioner shall promulgate rules necessary to carry out the provisions of this paragraph.

F.  The Insurance Commissioner, the Administrator of the Workers' Compensation Court and the CompSource Oklahoma President and Chief Executive Officer shall maintain records documenting reductions in workers' compensation insurance premiums granted pursuant to this section and shall make an annual report of such reductions to the President Pro Tempore of the Senate and the Speaker of the House of Representatives by May 1 of each year.  Insurers shall report such premium reductions in their annual statement.

G.  CompSource Oklahoma shall instruct its actuary to continually review the insurance premium credit program, developed and implemented pursuant to Section 142a of Title 85 of the Oklahoma Statutes, to determine if the program is detrimental to the financial stability of CompSource Oklahoma.  If the actuary determines that the program contributes detrimentally to the financial stability of CompSource Oklahoma, the actuary shall immediately recommend to the CompSource Oklahoma President and Chief Executive Officer that the safety premium reduction cease for a oneyear period.

Added by Laws 1988, c. 317, § 1, eff. Nov. 1, 1988.  Amended by Laws 1990, c. 2, § 1, eff. Sept. 1, 1990; Laws 1993, c. 349, § 24, eff. Sept. 1, 1993; Laws 1994, c. 129, § 5, eff. Sept. 1, 1994; Laws 2002, c. 50, § 1, eff. Nov. 1, 2002.

§36-924.3.  Appeals of rating classification.

The State Board for Property and Casualty Rates shall adopt rules and regulations creating a procedure for an employer to appeal its rating classification for workers' compensation insurance to the Board.  Any hearings pursuant to this procedure shall be subject to the Administrative Procedures Act.

Added by Laws 1990, c. 283, § 21, eff. Sept. 1, 1990.

§36928.  Rating organizations.

A.  Every group, corporation, unincorporated association, organization of insurers, partnership or individual, whether located within or outside this state, may make application to the Board for license as a rating organization for such kinds of insurance, or subdivision or class of risk or a part or combination thereof as are specified in its application and shall file:  (1) a copy of its constitution, its articles of agreement or association, or its certificate of incorporation, and of its bylaws, rules and regulations governing the conduct of its business, (2) a list of its members and subscribers, (3) the name and address of a resident of this state upon whom notices or orders of the Board or process affecting such rating organization may be served, and (4) a statement of its qualifications as a rating organization.  If the Board finds that the applicant is competent, trustworthy and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association, or certificate of incorporation and its bylaws, rules and regulations governing the conduct of its business conform to the requirements of law, it may issue a license specifying the kinds of insurance, or subdivision or class of risk, or part or combination thereof, for which the applicant is authorized to act as a rating organization.  Every such application shall be granted or denied in whole or in part by the Board within ninety (90) days of the date of its filing with it. Licenses pursuant to this section shall remain in effect for one (1) year until suspended or revoked by the Board.  The fee for said license shall be Five Hundred Dollars ($500.00).

B.  Licenses issued pursuant to this section may be suspended or revoked by the Board, after hearing upon notice, in the event the rating organization ceases to meet the requirements of this section. The Board shall not revoke or suspend the license of any rating organization until it has given not less than thirty (30) days' notice of the proposed revocation or suspension and of the grounds alleged therefor.  In lieu of revoking or suspending a license, the Board may impose a penalty of not more than One Hundred Dollars ($100.00) for each violation.  Each day such violation continues shall constitute a separate offense.

C.  Every rating organization shall notify and file promptly with the Board every change in:  (1) its constitution, its articles of agreement or association, or its certificate of incorporation and its bylaws, rules and regulations governing the conduct of its business, (2) its list of members and subscribers, and (3) the name and address of the resident of this state designated by it upon whom notices or orders of the Board or process affecting such rating organization may be served.

D.  Subject to rules and regulations which have been approved by the Board as reasonable, each rating organization shall permit any insurer, not a member, to be a subscriber to its rating services for any kind of insurance, subdivision or class of risk, or a part or combination thereof, for which it is authorized to act as a rating organization.  Notice of proposed changes in such rules and regulations shall be given to subscribers.  Each rating organization shall furnish its rating services without discrimination to its members and subscribers.  The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber shall, at the request of any subscriber or any such insurer, be reviewed by the Board at a hearing held upon at least ten (10) days' written notice to such rating organization and to such subscriber or insurer.  If the Board finds that such rule or regulation is unreasonable in its application to subscribers, it shall order that such rule or regulation shall not be applicable to subscribers.  If the rating organization fails to grant or reject an insurer's application for subscribership within thirty (30) days after it was made, the insurer may request a review by the Board as if the application had been rejected.  If the Board finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, it shall order the rating organization to admit the insurer as a subscriber.  If it finds that the action of the rating organization was justified, it shall make an order affirming its action.

E.  No rating organization shall adopt any rule or effect any agreement, or take any action contrary to or inconsistent with the provisions of this act or the effect of which would be, to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers; nor practice nor sanction any plan or act of boycott, coercion, or intimidation; nor enter into nor sanction any contract or act by which any person is restrained from lawfully engaging in the business of insurance.

F.  Cooperation among rating organizations or among rating organizations and insurers in ratemaking or in other matters within the scope of this act is hereby authorized, provided the filings resulting from such cooperation are subject to all the provisions of this act which are applicable to filings generally.  The Board may review such cooperative activities and practices and if, after a hearing, it finds that any such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this act, it may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this act, and require the discontinuance of such activity or practice.

G.  Any rating organization may provide for the examination of policies, daily reports, binders, renewal certificates, endorsements or other evidences of insurance, or the cancellation thereof, and may make reasonable rules governing their submission.  Such rules shall contain a provision that in the event any insurer does not, within ninety (90) days, furnish satisfactory evidence to the rating organization of the correction of any error or omission previously called to its attention by the rating organization, it shall be the duty of the rating organization to notify the Board thereof.  All information so submitted for examination shall be confidential.

H.  Any rating organization may subscribe for or purchase actuarial, technical or other services, and such services shall be available to all members and subscribers without discrimination.

Amended by Laws 1987, c. 210, § 25, eff. July 1, 1987.  

§36929.  Adherence to filings of rating organization - Deviations.

Every member of, or subscriber to, a licensed rating organization may adhere to the filings made on its behalf by such organization, except that any such member or subscriber may deviate from such filings as authorized herein if it has filed with the rating organization and with the Board, the deviation to be applied and information necessary to justify the deviation, provided such deviation, other than direct deviations as are authorized by this act, is approved by the Board.  If approved, the deviation shall remain in force until such approval is withdrawn by the insurer with the approval of the Board when required.  The Board shall approve any such deviation requiring Board action unless it finds that the deviation to be applied would not be uniform in its application or would be inconsistent with the provisions of this act, but unless it approves the deviation within thirty (30) days it shall, within a reasonable time, grant a hearing to the applicant at the applicant's request.

Added by Laws 1980, c. 322, § 23, eff. Jan. 1, 1981.  Amended by Laws 1987, c. 210, § 26, eff. July 1, 1987; Laws 2001, c. 363, § 9, eff. July 1, 2001; Laws 2004, c. 519, § 9, eff. Nov. 1, 2004.

§36930.  Appeals from actions or decisions of rating organization.

Any member or subscriber of a rating organization may appeal to the Board from the action or decision of such rating organization in approving or rejecting any proposed change in, or addition to, the filings of such rating organization and the Board shall, after a hearing held upon not less than ten (10) days' written notice to the appellant and to the rating organization, issue an order approving the action or decision of such rating organization or directing it to give further consideration to such proposal, or if such appeal is from the action or decision of the rating organization in rejecting a proposed addition to its filings, it may, in the event it finds that such action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings, on behalf of its members and subscribers, in a manner consistent with its findings, within a reasonable time after the issuance of such order.

Amended by Laws 1987, c. 210, § 27, eff. July 1, 1987.  

§36931.  Advisory organizations.

A.  Every group, association or other organization of insurers or rating organizations, whether located within or outside this state, which assists insurers who make their own filings by the collection and furnishing of loss or expense statistics, or by the submission of recommendations, but which do not make rate filings under this act, shall be known as an advisory organization.

B.  Every advisory organization shall file with the Board:

1.  A copy of its constitution, its articles of agreement or association, or its certificate of incorporation, and its bylaws, rules and regulations governing its activities;

2.  A list of its members;

3.  The name and address of a resident of this state upon whom notices or orders of the Board, or process issued at its direction, may be served; and

4.  An agreement that the Board may examine such advisory organization in accordance with the provisions of this act.

C.  If, after a hearing, the Board finds that the furnishing of such information, or assistance, involved any act or practice which is unfair or unreasonable or otherwise inconsistent with the provisions of this act, it may issue a written order specifying in what respects such act or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this act, and require the discontinuance of such act or practice.

D.  No insurer which makes its own filings, nor any rating organization shall support its filings by statistics, or adopt ratemaking recommendations, furnished to it by an advisory organization which has not complied with this section, or with an order of the Board involving such statistics or recommendations issued under subsection C of this section.  If the Board finds such insurer or rating organization to be in violation of this subsection it may issue an order requiring the discontinuance of such act or practice.

Amended by Laws 1987, c. 210, § 28, eff. July 1, 1987.  

§36932.  Joint underwriting or joint reinsurance.

A.  Every group, association or other organization of insurers which engages in joint underwriting or joint reinsurance, shall be subject to regulation with respect thereto, as herein provided, subject, with respect to joint underwriting, to all other provisions of this act, and with respect to joint reinsurance as provided in this act.

B.  If, after a hearing, the Board finds that any activity or practice of any such group, association or other organization, is unfair or unreasonable, or otherwise inconsistent with the provisions of this act, it may issue a written order specifying in what respects such act or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this act, and require the discontinuance, within a reasonable time under the circumstances, of such act or practice.

Amended by Laws 1987, c. 210, § 29, eff. July 1, 1987.  

§36933.  Periodic examination of organizations and groups.

A.  The Board shall, at least once in five (5) years, make or cause to be made an examination of each rating organization licensed in this state as provided in this act, and it may, as often as it may deem expedient, make or cause to be made an examination of each advisory organization referred to in this act, and of each group, association, or other organization, referred to in this act.  The reasonable cost of any such examination shall be paid by the rating organization, advisory organization, group, or other organization, examined upon presentation of a detailed account of such costs.

B.  The officers, managers, agents and employees of such rating organization, advisory organization, group, association or other organization may be examined, at any time, under oath, and shall exhibit all books, records, accounts, documents or agreements governing its method of operation.

C.  In lieu of any such examination the Board may accept the report of an examination made by the insurance supervisory official of another state, pursuant to the laws of such state.

Amended by Laws 1987, c. 210, § 30, eff. July 1, 1987.  

§36934.  Statistics and data; rules and regulations.

A.  The Board shall promulgate rules and statistical plans adapted to each of the rating systems on file, which may be modified, from time to time, and which shall be used thereafter by each insurer in the recording and reporting of its loss and countrywide expense experience, in order that the experience of all insurers may be made available, at least annually, in such form and detail as may be necessary to aid it in determining whether rating systems comply with the standards set forth in this act.

1.  Such rules and plans may also provide for the recording and reporting of expense experience items which are specially applicable to this state and are not susceptible to determination by a prorating of countrywide expense experience.

2.  In promulgating such rules and plans, the Board shall give due consideration to the rating system on file and, in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states.

3.  No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system filed by it.

4.  The Board may designate one or more rating organizations or other agencies to assist it in gathering such experience and making compilations thereof, and such compilations shall be made available, subject to reasonable rules promulgated by the Board, to insurers and rating organizations.

B.  Reasonable rules and plans may be promulgated by the Board for the interchange of data necessary for the application of rating plans.

C.  In order to further uniform administration of rate regulatory laws, the Board and every insurer and rating organization may exchange information and experience data with insurance supervisory officials, insurers and rating organizations in other states and may consult with them with respect to ratemaking and the application of rating systems.

D.  The Board may make reasonable rules and regulations necessary to effect the purposes of this act.

Amended by Laws 1987, c. 210, § 31, eff. July 1, 1987.  

§36-935.  Withholding or giving false or misleading information - Violations - Penalties.

A.  No person shall willfully withhold information from, or knowingly give false or misleading information to, the Board, or any statistical agency designated by the Board, or any rating organization, which will affect the rates or premiums chargeable under this act.

B.  A person convicted of violating this section shall be guilty of a felony and, upon conviction, shall be punished by a fine of not less than One Thousand Dollars ($1,000.00) nor more than Ten Thousand Dollars ($10,000.00), or by imprisonment for not more than three (3) years or by both such fine and imprisonment.

Added by Laws 1980, c. 322, § 29, eff. Jan. 1, 1981.  Amended by Laws 1987, c. 210, § 32, eff. July 1, 1987; Laws 1997, c. 133, § 446, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 328, eff. July 1, 1999.

NOTE:  Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 446 from July 1, 1998, to July 1, 1999.

§36-936.  Suspension or revocation of license.

A.  The Board may suspend the license of any rating organization which fails to comply with an order of the Board within the time limit established by such order, or any extension thereof which the Board may grant.  The Board shall not suspend the license of any rating organization for failure to comply with an order until the time prescribed for judicial review has expired or if an action for judicial review has been commenced, until the order has been affirmed or the action has been dismissed.  The Board may determine when a suspension of license shall become effective and when it shall terminate, unless it modifies or rescinds the suspension, or until the order upon which the suspension is based is modified, rescinded, or reversed.

B.  No license shall be suspended or revoked except upon a written order of the Board, stating its findings of fact and conclusions of law, made after a hearing held upon not less than ten (10) days' written notice to the person or legal entity, specifying the alleged violation.

Added by Laws 1980, c. 322, § 30, eff. Jan. 1, 1981.  Amended by Laws 1987, c. 210, § 33, eff. July 1, 1987; Laws 1997, c. 418, § 37, eff. Nov. 1, 1997.

§36937.  Hearing on order or decision by Board made without a hearing  Appeal to Supreme Court.

A.  Any insurer or rating organization aggrieved by any order or decision of the Board, made without a hearing, may, within thirty (30) days after notice of the order to the insurer or organization, make written request to the Board for a hearing thereon.  The Board shall hear such party or parties within twenty (20) days after receipt of such request and shall give not less than ten (10) days' written notice of the time and place of the hearing.  Within fifteen (15) days after such hearing, the Board shall affirm, reverse or modify its previous action, specifying its reasons therefor. Pending such hearing and decision thereon, the Board may suspend or postpone the effective date of its previous action.

B.  Nothing contained in this act shall require the observance at any hearing, of formal rules of pleading or evidence.

C.  Except as otherwise provided in this act, any order or decision of the State Board for Property and Casualty Rates made pursuant to this act shall be subject to review by appeal to the Supreme Court of Oklahoma at the instance of any party in interest. Such party in interest may appeal from such order or decision by filing with the Clerk of the Supreme Court, within thirty (30) days from the date of such order or decision, a petition in error with a copy of the order or decision appealed from.  The time limit prescribed herein for filing the petition in error may not be extended.  The Supreme Court shall prescribe, by rule, the manner in which the record of the proceedings, sought to be reviewed, shall be perfected and the time for its completion.  The appeal shall not stay the execution of any order or decision of the Board unless the Supreme Court shall, for cause shown, order that said decision or order be stayed pending such appeal, in which event the Court shall determine the terms and conditions upon which the same shall be stayed; provided, premiums collected prior to the effective date of the order of the Court imposing a stay shall be retained by the insurer unless the Court finds that such premiums were obtained by fraud, or unless otherwise ordered by the Court.

The Court may, in disposing of the issue before it, determine all issues of law and fact, and may modify, affirm or reverse the order or decisions of the Board in whole or in part.

Amended by Laws 1988, c. 28, § 1, eff. Nov. 1, 1988.  

§36-940.  Inquiry regarding making claim - Prohibited acts.

No insurer that issues any type of property or casualty insurance policy in this state shall increase premium rates, cancel a policy, or refuse to issue or renew a policy solely on the basis of a policyholder inquiring about making a claim, if the policyholder does not in fact submit a claim.

Added by Laws 2004, c. 32, § 1, eff. Nov. 1, 2004.

§36941.  Certain cancellation, refusal to renew or increase of premium rate for motor vehicle liability or collision insurance policies prohibited  Exemptions.

A.  No insurance carrier who issues motor vehicle insurance policies in this state shall assign driving record points, cancel, refuse to issue or renew, or charge a higher premium rate for any motor vehicle liability or collision insurance policy for the reason that the insured has been involved in a motor vehicle collision and was not at fault.

B.  No insurance carrier who issues motor vehicle insurance policies in this state shall cancel, refuse to issue or renew, or charge a higher premium for any motor vehicle liability or collision insurance policy for the reason that the insured had lower liability limits with a previous insurer without actuarial justification.  This prohibition includes using prior limits for company or tier placement unless the insurer provides actuarial justification.

C.  This section shall not apply to an insured who has been convicted of:

1.  Homicide or assault arising out of the operation of any motor vehicle; or

2.  A violation of Section 11902 or 761 of Title 47 of the Oklahoma Statutes as being impaired by or under the influence of alcohol or intoxicating liquor or who was under the influence of any substance included in the Uniform Controlled Dangerous Substances Act.

Added by Laws 1980, c. 99, § 1, eff. Oct. 1, 1980.  Amended by Laws 1984, c. 254, § 4, eff. Nov. 1, 1984; Laws 1988, c. 27, § 1, eff. Nov. 1, 1988.  Renumbered from § 7508 of Title 47 by Laws 1988, c. 27, § 4, eff. Nov. 1, 1988.  Amended by Laws 2001, c. 363, § 10, eff. July 1, 2001; Laws 2004, c. 519, § 10, eff. Nov. 1, 2004; Laws 2005, c. 1, § 38, emerg. eff. March 15, 2005.

NOTE:  Laws 2004, c. 96, § 1 repealed by Laws 2005, c. 1, § 39, emerg. eff. March 15, 2005.

§36-941.2.  Motor vehicle liability policies - Provision relating to financial responsibility limits of another state or province.

Every motor vehicle liability insurance policy approved by the Insurance Commissioner shall include a provision providing that the financial responsibility limits of another state or province shall be met if so required by the other state and if the financial responsibility limits of the other state or province are higher than those required by the state where the motor vehicle is principally garaged.  The policy does not have to contain the exact wording of this section or any other exact wording.  Language which is substantially similar to this section shall be considered to be in compliance with this section.

Added by Laws 2004, c. 96, § 2, eff. Nov. 1, 2004.

§36942.  Motor vehicle liability or collision policies  Traffic record as basis of determination  Penalties.

Any insurance carrier that issues motor vehicle liability or collision insurance policies in this state shall not establish or apply premium rates, increase premium rates, cancel a policy, or refuse to issue or renew a policy, based on any traffic record maintained by the Department of Public Safety which covers a period of time more than three (3) years prior to the date the insurance carrier makes a determination to take any such action.

Added by Laws 1988, c. 27, § 2, eff. Nov. 1, 1988.  Amended by Laws 2004, c. 519, § 11, eff. Nov. 1, 2004.

§36-943.  Motor vehicle policies - Insurers prohibited from canceling, increasing premium rates or refusing to issue or renew policy based on traffic charges under certain circumstances.

A.  No insurance carrier who issues motor vehicle policies in this state shall use traffic complaints, traffic citations or other legal forms of traffic charges as a basis for cancellation of a motor vehicle insurance policy, increasing premium rates for a motor vehicle insurance policy or refusing to issue or renew a motor vehicle insurance policy, where:

1.  the insured was acquitted of the charge;

2.  the insured was arrested and no charges were filed; or

3.  the insured was arrested and the charges were dismissed.

B.  The Insurance Commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance business in this state of any insurance carrier violating the provisions of this section or may censure the insurer or impose a fine.

Added by Laws 1990, c. 81, § 1, eff. Sept. 1, 1990.

§36-944.  Motor vehicle policies - Restriction on cancellation or increasing rates.

No insurer shall, directly or indirectly, use traffic tickets or convictions for traffic offenses as a basis for cancellation of automobile insurance policies or increasing insurance premium rates for automobile insurance policies where such ticket or conviction is for exceeding the speed limit specified in Article 8 of Chapter 11 of Title 47 of the Oklahoma Statutes, but not exceeding the speed limit previously in force where the violation occurred; nor shall any insurer in any way penalize or adversely affect any insured for any such violation or conviction.

Added by Laws 1974, c. 3, § 2, operative March 4, 1974.  Amended by Laws 1987, c. 25, § 2, emerg. eff. April 15, 1987.  Renumbered from § 11-801b of Title 47 by Laws 2002, c. 397, § 35, eff. Nov. 1, 2002.  Amended by Laws 2005, c. 129, § 6, eff. Nov. 1, 2005.

§36-950.  Short title.

This act shall be known and may be cited as the "Use of Credit Information in Personal Insurance Act".

Added by Laws 2003, c. 127, § 1, eff. Nov. 1, 2003.

§36-951.  Application of act.

This act shall apply to personal insurance and not to commercial insurance.  This act shall apply to personal insurance policies either written to be effective or renewed on or after nine (9) months following the effective date of this act.

Added by Laws 2003, c. 127, § 2, eff. Nov. 1, 2003.

§36-952.  Definitions.

As used in this act:

1.  "Adverse action" means a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of personal insurance;

2.  "Affiliate" means any company that controls, is controlled by, or is under common control with another company;

3.  "Applicant" means an individual who has applied to be covered by a personal insurance policy with an insurer;

4.  "Consumer" means an insured whose credit information is used or whose insurance score is calculated in the underwriting or rating of a personal insurance policy or an applicant for such a policy;

5.  "Consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties;

6.  "Credit information" means any credit-related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance.  Information that is not credit-related shall not be considered "credit information", regardless of whether it is contained in a credit report or in an application, or is used to calculate an insurance score;

7.  "Credit report" means any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing or credit capacity which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor to determine personal insurance premiums, eligibility for coverage, or tier placement;

8.  "Insurance score" means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit information for the purposes of predicting the future insurance loss exposure of an individual applicant or insured; and

9.  "Personal insurance" means private passenger automobile, homeowners, motorcycle, mobile-homeowners and noncommercial dwelling fire insurance policies and boat, personal watercraft, snowmobile and recreational vehicle policies.  Such policies must be individually underwritten for personal, family or household use.  No other type of insurance shall be included as personal insurance for the purpose of this act.

Added by Laws 2003, c. 127, § 3, eff. Nov. 1, 2003.

§36-953.  Use of credit information - Prohibited acts.

An insurer authorized to do business in this state that uses credit information to underwrite or rate risks, shall not:

1.  Use an insurance score that is calculated using income, gender, address, zip code, ethnic group, religion, marital status, or nationality of the consumer as a factor;

2.  Deny, cancel or fail to renew a policy of personal insurance solely on the basis of credit information, without consideration of any other applicable underwriting factor independent of credit information and not expressly prohibited by paragraph 1 of this section;

3.  Base an insured's renewal rates for personal insurance solely upon credit information, without consideration of any other applicable factor independent of credit information;

4.  Take an adverse action against a consumer solely because he or she does not have a credit card account, without consideration of any other applicable factor independent of credit information;

5.  Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance, unless the insurer does one of the following:

a. treats the consumer as otherwise approved by the Insurance Commissioner, if the insurer presents information that such an absence or inability relates to the risk for the insurer,

b. treats the consumer as if the applicant or insured had neutral credit information, as defined by the insurer, or

c. excludes the use of credit information as a factor and use only other underwriting criteria;

6.  Take an adverse action against a consumer based on credit information, unless an insurer obtains and uses a credit report issued or an insurance score calculated within ninety (90) days from the date the policy is first written or renewal is issued;

7.  Use credit information unless not later than every thirty-six (36) months following the last time that the insurer obtained current credit information for the insured, the insurer recalculates the insurance score or obtains an updated credit report.  Regardless of the requirements of this subsection:

a. at annual renewal, upon the request of a consumer or the consumer's agent, the insurer shall reunderwrite and rerate the policy based upon a current credit report or insurance score.  An insurer need not recalculate the insurance score or obtain the updated credit report of a consumer more frequently than once in a twelve-month period,

b. the insurer shall have the discretion to obtain current credit information upon any renewal before the thirty-six (36) months, if consistent with its underwriting guidelines, and

c. no insurer need obtain current credit information for an insured, despite the requirements of paragraph 7 of this section, if one of the following applies:

(1) the insurer is treating the consumer as otherwise approved by the Commissioner,

(2) the insured is in the most favorably priced tier of the insurer, within a group of affiliated insurers.  However, the insurer shall have the discretion to order such report, if consistent with its underwriting guidelines,

(3) credit was not used for underwriting or rating such insured when the policy was initially written.  However, the insurer shall have the discretion to use credit for underwriting or rating such insured upon renewal, if consistent with its underwriting guidelines, or

(4) the insurer reevaluates the insured beginning no later than thirty-six (36) months after inception and thereafter based upon other underwriting or rating factors, excluding credit information; and

8.  Use the following as a negative factor in any insurance scoring methodology or in reviewing credit information for the purpose of underwriting or rating a policy of personal insurance:

a. credit inquiries not initiated by the consumer or inquiries requested by the consumer for his or her own credit information,

b. inquiries relating to insurance coverage, if so identified on a consumer's credit report,

c. collection accounts with a medical industry code, if so identified on the consumer's credit report,

d. multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the home mortgage industry and made within thirty (30) days of one another, unless only one inquiry is considered, and

e. multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry and made within thirty (30) days of one another, unless only one inquiry is considered.

Added by Laws 2003, c. 127, § 4, eff. Nov. 1, 2003.

§36-954.  Reunderwriting and rerating of insured - Refund of overpayment.

If it is determined through the dispute resolution process set forth in the federal Fair Credit Reporting Act, 15 USC 1681i(a)(5), that the credit information of a current insured was incorrect or incomplete and if the insurer receives notice of such determination from either the consumer reporting agency or from the insured, the insurer shall reunderwrite and rerate the consumer within thirty (30) days of receiving the notice.  After reunderwriting or rerating the insured, the insurer shall make any adjustments necessary, consistent with its underwriting and rating guidelines.  If an insurer determines that the insured has overpaid premium, the insurer shall refund to the insured the amount of overpayment calculated back to the shorter of either the last twelve (12) months of coverage or the actual policy period.

Added by Laws 2003, c. 127, § 5, eff. Nov. 1, 2003.

§36-955.  Disclosure statement.

A.  If an insurer writing personal insurance uses credit information in underwriting or rating a consumer, the insurer or its agent shall disclose, either on the insurance application or at the time the insurance application is taken, that it may obtain credit information in connection with such application.  Such disclosure shall be either written or provided to an applicant in the same medium as the application for insurance.  The insurer need not provide the disclosure statement required under this section to any insured on a renewal policy, if such consumer has previously been provided a disclosure statement.

B.  Use of the following example disclosure statement constitutes compliance with this section:  "In connection with this application for insurance, we may review your credit report or obtain or use a credit-based insurance score based on the information contained in that credit report.  We may use a third party in connection with the development of your insurance score".

Added by Laws 2003, c. 127, § 6, eff. Nov. 1, 2003.

§36-956.  Adverse action based upon credit information - Notification to consumer.

If an insurer takes an adverse action based upon credit information, the insurer shall:

1.  Provide notification to the consumer that an adverse action has been taken, in accordance with the requirements of the federal Fair Credit Reporting Act, 15 USC 1681m(a); and

2.  Provide notification to the consumer explaining the reason for the adverse action.  The reasons must be provided in sufficiently clear and specific language so that a person can identify the basis for the insurer's decision to take an adverse action.  Such notification shall include a description of up to four factors that were the primary influences of the adverse action.  The use of generalized terms such as "poor credit history", "poor credit rating", or "poor insurance score" does not meet the explanation requirements of this subsection.  Standardized credit explanations provided by consumer reporting agencies or other third-party vendors are deemed to comply with this section.

Added by Laws 2003, c. 127, § 7, eff. Nov. 1, 2003.

§36-957.  Filing of scoring models or other scoring processes.

A.  Insurers that use insurance scores to underwrite and rate risks must file their scoring models or other scoring processes with the Insurance Department.  A third party may file scoring models on behalf of insurers.  A filing that includes insurance scoring may include loss experience justifying the use of credit information.

B.  Any filing relating to credit information is considered trade secret under Section 85 et seq. of Title 78 of the Oklahoma Statutes.

Added by Laws 2003, c. 127, § 8, eff. Nov. 1, 2003.

§36-958.  Indemnification of agents.

An insurer shall indemnify, defend, and hold agents harmless from and against all liability, fees, and costs arising out of or relating to the actions, errors, or omissions of an agent who obtains or uses credit information or insurance scores for an insurer, provided the agent follows the instructions of or procedures established by the insurer and complies with any applicable law or regulation.  Nothing in this section shall be construed to provide a consumer or other insured with a cause of action that does not exist in the absence of this section.

Added by Laws 2003, c. 127, § 9, eff. Nov. 1, 2003.

§36-959.  Sale of data or lists by consumer reporting agencies.

A.  No consumer reporting agency shall provide or sell data or lists that include any information that in whole or in part was submitted in conjunction with an insurance inquiry about a consumer's credit information or a request for a credit report or insurance score.  Such information includes, but is not limited to, the expiration dates of an insurance policy or any other information that may identify time periods during which a consumer's insurance may expire and the terms and conditions of the consumer's insurance coverage.

B.  The restrictions provided in subsection A of this section do not apply to data or lists the consumer reporting agency supplies to the insurance agent from whom information was received, the insurer on whose behalf such agent acted, or such insurer's affiliates or holding companies.

C.  Nothing in this section shall be construed to restrict any insurer from being able to obtain a claims history report or a motor vehicle report.

Added by Laws 2003, c. 127, § 10, eff. Nov. 1, 2003.

§36-981.  Short title and purposes of act.

Short Title and Purposes of Act.

A.  Sections 981 through 998 of this title and Sections 22, 23 and 24 of this act shall constitute a part of the Oklahoma Insurance Code and shall be known and may be cited as the "Property and Casualty Competitive Loss Cost Rating Act".

B.  The purposes of the Property and Casualty Competitive Loss Cost Rating Act are:

1.  To promote price competition among insurers so as to provide rates that are responsive to competitive market conditions;

2.  To protect policyholders and the public against the adverse effects of excessive, inadequate or unfairly discriminatory rates;

3.  To prohibit unlawful price-fixing agreements and other anticompetitive behavior by insurers;

4.  To provide regulatory procedures for the maintenance of appropriate data reporting systems;

5.  To provide regulatory controls in the absence of a competitive marketplace; and

6.  To authorize essential cooperative action among insurers in the ratemaking process and to regulate such activity to prevent practices that substantially lessen competition or create a monopoly.

Added by Laws 1999, c. 83, § 1, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 591, § 12, eff. Nov. 1, 2004.

§36-982.  Definitions.

Definitions.

As used in the Property and Casualty Competitive Loss Cost Rating Act:

1.  "Accepted actuarial standards" means the standards adopted by the Casualty Actuarial Society Statement of Principles regarding property and casualty ratemaking or the Standards of Practice adopted by the Actuarial Standards Board;

2.  "Advisory organization" means any corporation, unincorporated association, partnership or person, whether located inside or outside this state, that is licensed in accordance with Section 991 of this title and which assists insurers in ratemaking-related activities such as enumerated in Section 993 of this title;

3.  "Classification system" or "classification" means the process of grouping risks with similar risk characteristics so that differences in costs may be recognized;

4.  "Commercial risk" means any kind of risk that is not a personal risk;

5.  "Commissioner" means the Commissioner of Insurance of this state;

6.  "Competitive market" means a market which has not been found to be noncompetitive pursuant to Section 984 of this title;

7.  "Developed losses" means losses, including loss adjustment expenses, adjusted using accepted actuarial standards, to eliminate the effect of differences between current payment or reserve estimates and those which are anticipated to provide actual ultimate loss, including loss adjustment expense payments;

8.  "Expenses" means that portion of a rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses and fees;

9.  "Experience rating" means a rating procedure utilizing past insurance experience of the individual policyholder to forecast future losses by measuring the policyholder's loss experience against the loss experience of policyholders in the same classification to produce a prospective premium credit, debit or unity modification;

10.  "Joint underwriting" means a voluntary arrangement established to provide insurance coverage for a risk pursuant to which two or more insurers jointly contract with the insured at a price and under policy terms agreed upon between the insurers;

11.  "Loss adjustment expense" means the expenses incurred by the insurer in the course of settling claims;

12.  "Market" means the statewide interaction between buyers and sellers of identical or readily substitutable products that provide insurance protection of identifiable perils to buyers;

13.  "Mass marketed plan" means a method of selling property-liability insurance wherein the insurance is offered to employees of particular employers or to members of particular associations or organizations or to persons grouped in other ways, and the employer or association or other organization has agreed to, or otherwise affiliated itself with, the sale of such insurance to its employees or members;

14.  "Noncompetitive market" means a market for which there is a ruling in effect pursuant to Section 984 of this title that a reasonable degree of competition does not exist;

15.  "Personal risk" means homeowners, tenants, private passenger nonfleet automobiles, manufactured homes and other property and casualty insurance for personal, family or household needs, including any property and casualty insurance that is otherwise intended for noncommercial coverage;

16.  "Pool" means a voluntary arrangement, established on an ongoing basis, pursuant to which two or more insurers participate in the sharing of risks on a predetermined basis.  The pool may operate through an association, syndicate or other pooling agreement;

17.  "Prospective loss costs" means historical aggregate losses and may include loss adjustment expenses, including all assessments that are loss based, projected through development to their ultimate value and through trending to a future point in time;

18.  "Pure premium rate" means that portion of the rate which represents the loss costs per unit of exposure including loss adjustment expense;

19.  "Rate" or "rates" means that cost of insurance per exposure unit whether expressed as a single number or as a prospective loss cost with an adjustment to account for the treatment of expenses, profit, and individual insurer variation in loss experience, prior to any application of individual risk variations based on loss or expense considerations, and does not include minimum premium;

20.  "Residual market mechanism" means an arrangement, either voluntary or mandated by law, involving participation by insurers in the equitable apportionment among them of insurance which may be afforded applicants who are unable to obtain insurance through ordinary methods;

21.  "Special assessments" means guaranty fund assessments, Special Indemnity Fund assessments, Vocational Rehabilitation Fund assessments, and other similar assessments.  Special assessments shall not be considered as either expenses or losses;

22.  "Statistical plan" means the plan, system or arrangement used in collecting data;

23.  "Supplementary rating information" means any manual or plan of rates, classification, rating schedule, minimum premium, policy fee rating rule and any other information needed to determine the applicable premium in effect or to be in effect.  This includes, rating plans, territory codes and descriptions and rules which include factors or relativities such as increased limits factors, deductible discounts or relativities, classification relativities or similar factors used to determine the rate in effect or to be in effect;

24.  "Supporting information" means the experience and judgment of the filer and the experience or data of other insurers or advisory organizations relied upon by the filer, the interpretation of any other data relied upon by the filer, descriptions of methods used in making the rates and any other information required by the Commissioner to be filed; and

25.  "Trending" means any procedure for projecting losses to the average date of loss, or premiums or exposures to the average date of writing, for the period during which the policies are to be effective.

Added by Laws 1999, c. 83, § 2, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 519, § 13, eff. Nov. 1, 2004.

§36-983.  Scope of act.

The Property and Casualty Competitive Loss Cost Rating Act applies to all forms of property and casualty insurance written in this state by insurers licensed in this state.  The Property and Casualty Competitive Loss Cost Rating Act shall not apply to:

1.  Reinsurance;

2.  Life insurance;

3.  Accident and health insurance;

4.  Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine, excluding inland marine, insurance as determined by the Commissioner; and

5.  Title insurance.

Added by Laws 1999, c. 83, § 3, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 519, § 14, eff. Nov. 1, 2004; Laws 2005, 1st Ex.Sess., c. 1, § 3, eff. July 1, 2005.

§36-984.  Competitive market.

Competitive Market.

A.  A competitive market is presumed to exist for a line of insurance unless the Commissioner, after a hearing, issues an order stating that a reasonable degree of competition does not exist in the market.  The burden of proof in any hearing shall be placed on the party or parties advocating the position that competition does not exist.  Any ruling that a market is not competitive shall identify the factors causing the market not to be competitive.  Such order shall expire no later than one (1) year after issue unless rescinded earlier by the Commissioner or unless the Commissioner renews the rule after a hearing and a finding as to the continued lack of a reasonable degree of competition.  Any ruling that renews the finding that competition does not exist shall also identify the factors that cause the market to continue not to be competitive.

B.  1.  In determining whether a reasonable degree of competition exists within a line of insurance, the Commissioner shall consider the following factors:

a. the number of insurers actively engaged in writing coverage,

b. market shares of the leading writers and the changes in market shares over a reasonable period of time,

c. existence of financial or economic barriers that could prevent new firms from entering the market,

d. measures of market concentration and changes of market concentration over time,

e. whether long-term profitability for insurers in the market is reasonable in relation to industries of comparable business risk, and

f. the relationship of insurers' costs to revenue over a reasonable period of time.

2.  All determinations by the Commissioner shall be made on the basis of findings of fact and conclusions of law.

3.  The ruling may be challenged in the district court.

C.  The Commissioner shall monitor the degree and continued existence of competition in this state on an ongoing basis.  In doing so, the Commissioner may utilize existing relevant information, analytical systems and other sources, or rely on some combination thereof.  Such activities may be conducted internally within the Insurance Department, in cooperation with other state insurance departments, through outside contractors or in any other appropriate manner.

Added by Laws 1999, c. 83, § 4, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 519, § 15, eff. Nov. 1, 2004.

§36-985.  Ratemaking standards.

Ratemaking Standards.

A.  A rate may not be excessive, inadequate or unfairly discriminatory.

1.  No rate in a competitive market may be determined to be excessive.  A rate in a noncompetitive market may be determined to be excessive if it is likely to produce a profit that is unreasonably high for the insurance provided.

2.  A rate may not be determined to be inadequate unless:

a. the rate is clearly insufficient to sustain projected losses, expenses and special assessments, and

b. the rate is unreasonably low and use of the rate by the insurer has tended or, if continued, will tend to create a monopoly in the market.

3.  Unfair discrimination may be determined to exist if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses.  A rate may not be determined to be unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense levels, or like expenses but different loss exposures, or if it averaged broadly among persons insured within a group, franchise or blanket policy or a mass-marketed plan.  No rate in a competitive market shall be considered unfairly discriminatory unless it classifies risk on the basis of race, color, creed, or national origin.

B.  In determining whether rates in a noncompetitive market are excessive, inadequate, or unfairly discriminatory, due consideration may be given to:

1.  Past and prospective loss experience within and outside this state, in accordance with accepted actuarial principles;

2.  Conflagration and catastrophe hazards;

3.  A reasonable margin for underwriting profit and contingencies;

4.  Loadings for leveling premium rates over time for dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers;

5.  Past and prospective expenses both countrywide and those specially applicable to this state; and

6.  Provisions for special assessments; and to all other relevant factors including judgment within and outside this state.

C.  Risks may be grouped by classifications for the establishment of rates and minimum premiums.  Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both.  Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.  No risk classification however, may be based on race, creed, national origin, or the religion of the insured.

D.  The expense provisions included in the rates for use by an insurer or group of insurers may differ from those of any other insurer or group of insurers to reflect the requirements of the operating methods of the insurer or group of insurers.

E.  The rates may contain provision for contingencies and an allowance permitting a reasonable profit.  In determining the reasonableness of the profit, consideration shall be given to the investment income attributable to the line of insurance.

F.  Risks may be classified in any way except that no risk may be classified on the basis of race, color, creed, or national origin.

Added by Laws 1999, c. 83, § 5, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 519, § 16, eff. Nov. 1, 2004.

§36-985.1.  Regulation of rates in market without competition.

A.  If the Commissioner determines that competition does not exist in a market and issues a ruling to that effect pursuant to Section 984 of Title 36 of the Oklahoma Statutes, the rates applicable to insurance sold in that market shall be regulated in accordance with the provisions of Sections 985 through 989 of Title 36 of the Oklahoma Statutes that are applicable to noncompetitive markets.

B.  Any rate in effect at the time the Commissioner determines that competition does not exist pursuant to Section 984 of Title 36 of the Oklahoma Statutes shall be deemed to be in compliance with the laws of this state unless disapproved pursuant to the procedures and rating standards contained in Sections 985 through 989 of Title 36 of the Oklahoma Statutes that are applicable to noncompetitive markets.

C.  Any insurer having a rate filing in effect at the time the Commissioner determines that competition does not exist pursuant to Section 984 of Title 36 of the Oklahoma Statutes may be required to furnish supporting information within thirty (30) days of a written request by the Commissioner.

Added by Laws 2004, c. 519, § 17, eff. Nov. 1, 2004.

§36-986.  Rate administration.

Rate Administration.

A.  In only those markets found to be noncompetitive pursuant to Section 984 of this title, insurers and advisory organizations shall file with the Commissioner and the Commissioner shall review reasonable rules and plans for recording and reporting their rates, loss and expense experience and other information determined by the Commissioner to be necessary or appropriate for the administration of the Property and Casualty Competitive Loss Cost Rating Act.  The Commissioner may designate one or more advisory organizations or other agencies to assist in gathering such experience and making compilation thereof.

B.  Reasonable rules and plans may be promulgated by the Commissioner for the exchange of data necessary for the development and application of rating plans.

C.  In order to further uniform administration of rate regulatory laws, the Commissioner and every insurer and advisory organization may exchange information and experience data with insurance supervisory officials, insurers and advisory organizations in other states and may consult with them with respect to the application of rating systems.

D.  Cooperation among advisory organizations or among advisory organizations and insurers in ratemaking or in other matters within the scope of the Property and Casualty Competitive Loss Cost Rating Act is authorized.  The Commissioner may review such cooperative activities and practices, and if, after a hearing, any such activity or practice is found to violate the provisions of the Property and Casualty Competitive Loss Cost Rating Act, a written order may be issued specifying that such activity or practice violates the provisions of this act and requiring the discontinuance of such activity.

Added by Laws 1999, c. 83, § 6, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 519, § 18, eff. Nov. 1, 2004.

§36-987.  Rate filings.

Rate Filings.

A.  In a competitive market, every insurer shall file with the Commissioner all rates and supplementary rate information to be used in this state no later than thirty (30) days after the effective date; provided, that the rates and supplementary rate information need not be filed for commercial risks, which by general custom are not written according to manual rules or rating plans.

B.  In a noncompetitive market, every insurer shall file with the Commissioner all rates, supplementary rate information and supporting information at least thirty (30) days before the proposed effective date.  The Commissioner may give written notice, within thirty (30) days of receipt of the filing, that the Commissioner needs additional time, not to exceed thirty (30) days from the date of the notice to consider the filing.  Upon written application of the insurer, the Commissioner may authorize rates to be effective before the expiration of the waiting period or an extension thereof.  A filing shall be deemed to meet the requirements of the Property and Casualty Competitive Loss Cost Rating Act and to become effective unless disapproved pursuant to Section 988 of this title by the Commissioner before the expiration of the waiting period or an extension thereof.

In a noncompetitive market, the filing shall be deemed in compliance with the filing provision of this section unless the Commissioner informs the insurer within ten (10) days after receipt of the filings as to what supplementary rate information or supporting information is required to complete the filing.

C.  Every authorized insurer shall file with the Commissioner, except as to rates for those lines of insurance exempted from the provisions of the Property and Casualty Competitive Loss Cost Rating Act by the Commissioner under subsections E and F of this section and except for those risks designated as special risks under Section 997 of this title, all rates, supplementary rate information and any changes and amendments which it proposes to use.  An insurer may file its rates by either filing its final rates or by filing a multiplier and, if applicable, an expense constant adjustment to be applied to prospective loss costs that have been filed by an advisory organization as permitted by Section 993 of this title.  Such loss cost multiplier filing and expense constant filings made by insurers shall remain in effect until amended or withdrawn by the insurer.  Every filing shall state the effective date.

D.  Under rules as may be adopted, the Commissioner may, by written order, suspend or modify the requirement of filing as to any kind of insurance, subdivision or combination thereof, or as to classes of risks.

E.  Notwithstanding any other provision of the Property and Casualty Competitive Loss Cost Rating Act, upon the written consent of the insured in a separate written document, a rate in excess of that determined in accordance with the other provisions of the Property and Casualty Competitive Loss Cost Rating Act may be used on a specific risk.

F.  A filing and any supporting information required to be filed shall be open to public inspection once the filing becomes effective except information marked confidential, trade secret, or proprietary by the insurer or filer.

Added by Laws 1999, c. 83, § 7, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 519, § 19, eff. Nov. 1, 2004; Laws 2005, c. 129, § 7, eff. Nov. 1, 2005.

§36-988.  Repealed by Laws 2004, c. 519, § 37, eff. Nov. 1, 2004.

§36-989.  Improper rates - Disapproval - Hearing.

Improper Rates; Disapproval; Hearing.

A.  Basis for disapproval.

1.  The Commissioner shall disapprove a rate in a competitive market only if the Commissioner finds, pursuant to subsection B of this section, that the rate is inadequate or unfairly discriminatory pursuant to Section 985 of this title.

2.  The Commissioner may disapprove a rate for use in a noncompetitive market only if the Commissioner finds, pursuant to subsection B of this section, that the rate is excessive, inadequate or unfairly discriminatory under this subsection.

B.  Procedures for disapproval.

1.  Prior to the expiration of a waiting period or an extension thereof, made pursuant to subsection B of Section 987 of this title, the Commissioner may disapprove, by written order, rates filed pursuant to subsection B of Section 987 of this title with a hearing.  The order shall specify in what respects the filing fails to meet the requirements of this act.  Any insurer whose rates are disapproved pursuant to this section shall be given a hearing upon written request made within thirty (30) days of disapproval.

2.  If, at any time, the Commissioner finds that a rate applicable to insurance sold in a noncompetitive market does not comply with the standards set forth in Section 985 of this title, the Commissioner may, after a hearing held upon not less than twenty (20) days' written notice, issue an order pursuant to subsection C of this section, disapproving such rate.  The hearing notice shall be sent to every insurer and advisory organization that adopted the rate and shall specify the matters to be considered at the hearing.  The disapproval order shall not affect any contract or policy made or issued prior to the effective date set forth in the order.

3.  If, at any time, the Commissioner finds that a rate applicable to insurance sold in a competitive market is inadequate or unfairly discriminatory under paragraph 2 or 3 of subsection A of Section 985 of this title, the Commissioner may issue an order pursuant to subsection C of this section disapproving the rate.  The order shall not affect any contract or policy made or issued prior to the effective date set forth in the order.

C.  Order of disapproval.

If the Commissioner disapproves a rate pursuant to subsection B of this section, the Commissioner shall issue an order within thirty (30) days of the close of the hearing specifying in what respects the rate fails to meet the requirements of this act.  The order shall state an effective date no sooner than thirty (30) business days after the date of the order when the use of the rate shall be discontinued.  This order shall not affect any policy made before the effective date of the order.

D.  Appeal of orders and establishment of reserves.

If an order of disapproval is appealed pursuant to Section 990 of this title, the insurer may implement the disapproved rate upon notification to the court, in which case any excess of the disapproved rate over a rate previously in effect shall be placed in a reserve established by the insurer.  The court shall have control over the disbursement of funds from such reserve.  The funds shall be distributed as determined by the court in its final order except that de minimus refunds to policyholders shall not be required.

E.  All determinations made by the Commissioner under this section shall be on the basis of findings of fact and conclusions of law.

Added by Laws 1999, c. 83, § 9, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 519, § 20, eff. Nov. 1, 2004.

§36-990.  Challenge and review of application of rating system.

Challenge and Review of Application of Rating System.

A.  Every advisory organization and every insurer subject to the Property and Casualty Competitive Loss Cost Rating Act which makes its own rates shall provide within this state reasonable means whereby any insured aggrieved by the application of its rating system may, upon that insured's written request, be heard in person or by the insured's authorized representative to review the manner in which such rating system has been applied in connection with the insurance afforded the aggrieved insurer.

B.  An insurer or any party affected by the action of an advisory organization may, within thirty (30) days after written notice of that action, make application, in writing, for an appeal to the Commissioner, setting forth the basis for the appeal and the grounds to be relied upon by the applicant.

C.  Within thirty (30) days, the Commissioner shall review the application and, if the Commissioner finds that the application is made in good faith and that it sets forth on its face grounds which reasonably justify holding a hearing, the Commissioner shall conduct a hearing held not less than ten (10) days after written notice to the applicant and to the advisory organization or insurer.  The Commissioner, after a hearing, shall affirm or reverse the action of the advisory organization or insurer.

Added by Laws 1999, c. 83, § 10, eff. Nov. 1, 1999.  Amended by Laws 2004, c. 519, § 21, eff. Nov. 1, 2004.

§36-991.  Licensing advisory organizations.

Licensing Advisory Organizations.

A.  No advisory organization shall provide any service relating to the rates of any insurance subject to the Property and Casualty Competitive Loss Cost Rating Act, and no insurer shall utilize the services of such organization unless the organization has obtained a license.

B.  No advisory organization shall refuse to supply any services for which it is licensed in this state to any insurer authorized to do business in this state and offering to pay the usual compensation for the services.

C.  1.  An advisory organization applying for a license shall include with its application:

a. a copy of its constitution, charter, articles of organization, agreement, association or incorporation, and a copy of its bylaws, plan of operation and any other rules or regulations governing the conduct of its business,

b. a list of its members and subscribers,

c. the name and address of one or more residents of this state upon whom notices, process affecting it, or orders of the Commissioner may be served,

d. a statement showing its technical qualifications for acting in the capacity for which it seeks a license,

e. a biography of the ownership and management of the organization, and

f. any other relevant information and documents that the Commissioner may require.

2.  Every organization which has applied for a license shall notify the Commissioner of every material change in the facts or in the documents on which its application was based.  Any amendment to a document filed under this section shall be filed at least thirty (30) days before it becomes effective.

3.  If the Commissioner finds that the applicant and the natural persons through whom it acts are competent, trustworthy and technically qualified to provide the services proposed, and that all requirements of the law are met, he or she shall issue a license specifying the authorized activity of the applicant.  The Commissioner shall not issue a license if the proposed activity would tend to create a monopoly or to substantially lessen the competition in the market.

4.  Licenses issued pursuant to this section shall remain in effect unless suspended or revoked.  The Commissioner may at any time, after a hearing, revoke or suspend the license of any advisory organization which does not comply with the requirements and standards of the Property and Casualty Competitive Loss Cost Rating Act.

Added by Laws 1999, c. 83, § 11, eff. Nov. 1, 1999.  Amended by Laws 2005, c. 129, § 8, eff. Nov. 1, 2005.

§36-992.  Insurers and advisory organization - Prohibited activity.

Insurers and Advisory Organization; Prohibited Activity.

A.  No insurer or advisory organization shall:

1.  Attempt to monopolize, or combine or conspire with any person or persons to monopolize an insurance market;

2.  Engage in a boycott, on a concerted basis, of an insurance market; and

3.  Except as set forth in subsection B of this section, agree to mandate adherence to or to mandate use of any rate, prospective loss cost, rating plan, rating schedule, rating rule, policy or bond form, rate classification, rate territory, underwriting rule, survey, inspection or similar material.  Insurers and advisory organizations may agree to develop and adhere to statistical plans permitted by Section 993 of this title.

B.  The fact that two or more insurers, whether or not members or subscribers of an advisory organization, use consistently or intermittently the same rates, prospective loss costs, rating plans, rating schedules, rating rules, policy or bond forms, rate classifications, rate territories, underwriting rules, surveys or inspections or similar materials is not sufficient in itself to support a finding that an agreement exists.

C.  Two or more insurers having a common ownership or operating in this state under common management or control may act in concert between or among themselves with respect to any matters pertaining to those activities authorized in the Property and Casualty Competitive Loss Cost Rating Act as if they constituted a single insurer.

D.  Except as specifically permitted under Section 993 of this title, no advisory organization shall compile or distribute recommendations relating to rates that include expenses (other than loss adjustment expenses or loss-based taxes and assessments) or profit.

Added by Laws 1999, c. 83, § 12, eff. Nov. 1, 1999.  Amended by Laws 2005, c. 129, § 9, eff. Nov. 1, 2005.

§36-993.  Advisory organization - Permitted activity.

Advisory Organization; Permitted Activity.

Any licensed advisory organization, in addition to other activities not prohibited, is authorized on behalf of its members and subscribers to:

1.  Develop statistical plans including territorial and class definitions;

2.  Collect statistical data from members, subscribers or any other source;

3.  Prepare, file and distribute prospective loss costs which may include provisions for special assessments and taxes;

4.  Prepare, file and distribute factors, calculations or formulas pertaining to classification, territory, increased limits and other variables;

5.  Prepare, file and distribute manuals of rating rules, rating schedules and other supplementary rating information that do not include final rates, expense provisions, profit provisions or minimum premiums;

6.  Distribute information that is required or directed to be filed with the Commissioner;

7.  Conduct research and on-site inspections in order to prepare classifications of public fire defenses;

8.  Consult with public officials regarding public fire protection as it would affect members, subscribers and others;

9.  Conduct research and collect statistics in order to discover, identify and classify information relating to causes or prevention of losses;

10.  Conduct research and collect information to determine the impact of statutory and other law changes upon prospective loss costs and special assessments;

11.  Prepare, file and distribute policy forms and endorsements and consult with members, subscribers and others relative to their use and application;

12.  Conduct research and on-site inspections for the purpose of providing risk information relating to individual structures;

13.  Conduct on-site inspections to determine rating classifications for individual insureds;

14.  Collect, compile and publish past and current prices of individual insurers, provided such information is also made available to the general public for a reasonable price;

15.  Collect and compile exposure and loss experience for the purpose of individual risk experience ratings;

16.  File final rates, for residual market mechanisms; and

17.  Furnish any other services, as approved or directed by the Commissioner, related to those enumerated in this section.

Added by Laws 1999, c. 83, § 13, eff. Nov. 1, 1999.

§36-994.  Advisory organizations - Filing requirements.

Advisory Organizations; Filing Requirements.

Every advisory organization shall file with the Commissioner for approval every statistical plan, all prospective loss costs, provisions for special assessments and all supplementary rating information and every change or amendment or modification of any of the foregoing proposed for use in this state at least thirty (30) days prior to its effective date.  Such filings will be deemed approved unless disapproved within the waiting period.

Added by Laws 1999, c. 83, § 14, eff. Nov. 1, 1999.

§36-995.  Joint underwriting, joint reinsurance pool and residual market activities.

Joint Underwriting, Joint Reinsurance Pool and Residual Market Activities.

A.  This section shall not apply to transactions involving the Oklahoma State Insurance Fund.

B.  Notwithstanding paragraph 3 of subsection A of Section 12 of this act, insurers participating in joint underwriting, joint reinsurance pools or residual market mechanisms may in connection with such activity act in cooperation with each other in the making of rates, rating systems, policy forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss and expense statistics or other information, or carrying on research.  Joint underwriting, joint reinsurance pools and residual market mechanisms shall not be deemed an advisory organization.

C.  Except to the extent modified by this section, joint underwriting, joint reinsurance pool and residual market mechanism activities are subject to the other provisions of the Commercial Property and Casualty Competitive Loss Cost Rating Act.

D.  If, after a hearing, the Commissioner finds that any activity or practice of an insurer participating in joint underwriting or a pool is unfair, is unreasonable, will tend to lessen competition in any market or is otherwise inconsistent with the provisions or purposes of the Commercial Property and Casualty Competitive Loss Cost Rating Act, the Commissioner may issue a written order and require the discontinuance of such activity or practice.

E.  Every pool shall file with the Commissioner a copy of its constitution, articles of incorporation, agreement or association, bylaws, rules and regulations governing its activities, list of members, the name and address of a resident of this state upon whom notice, orders of the Commissioner, or process may be served, and any changes in amendments or changes in the foregoing.

F.  Any residual market mechanism, plan or agreement to implement such a mechanism, and any changes or amendments thereto, shall be submitted in writing to the Commissioner for consideration and approval, together with such information as may be reasonably required.

Added by Laws 1999, c. 83, § 15, eff. Nov. 1, 1999.

§36-996.  Assigned risks.

Assigned Risks.

Agreements may be made among insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but who are unable to procure such insurance through ordinary methods, and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance, such agreements and rate modifications to be subject to the approval of the Commissioner.  Nothing in the Commercial Property and Casualty Competitive Loss Cost Rating Act shall permit disapproval of a residual market plan permitting an insurer to elect voluntary direct assignment.

Added by Laws 1999, c. 83, § 16, eff. Nov. 1, 1999.

§36-997.  Commercial special risks.

Commercial Special Risks.

A.  The following categories of commercial lines risks, excluding employer's liability line, are special risks and are exempted from the filing and review requirements set forth in Sections 7 and 8 of this act:

1.  Risks which are written on an excess or umbrella basis;

2.  Those commercial lines insurance risks, or portions thereof which are not rated according to manuals, rating plans, or schedules including "a" rates;

3.  Commercial lines insurance risks which produce a minimum annual premium total of Ten Thousand Dollars ($10,000.00); and

4.  Specifically designated special risks, including:

a. risks insured under the provisions of the Highly Protected Risks Rating Plan,

b. all commercial insurance aviation risks,

c. all credit insurance risks,

d. all boiler and machinery risks,

e. all inland marine risks,

f. all fidelity and surety risks, and

g. any other risk that the Commissioner determines to fall within the special risk category.

B.  Underwriting files, premiums, loss and expense statistics, financial and other records with regard to special risks written by an insurer shall be maintained by the insurer and shall be subject to examination by the Commissioner.

Added by Laws 1999, c. 83, § 17, eff. Nov. 1, 1999.

§36-998.  Appeals from Commissioner.

Appeals from Commissioner.

A.  Any party aggrieved by an order or decision of the Commissioner may, within thirty (30) days after receiving the Commissioner's notice, make written request for a hearing.

B.  Any order, decision or act of the Commissioner pursuant to the Commercial Property and Casualty Competitive Loss Cost Rating Act is subject to judicial review upon petition of any person aggrieved.  The appeal shall be in accordance with the Administrative Procedures Act.

Added by Laws 1999, c. 83, § 18, eff. Nov. 1, 1999.

§36-999.  Examination to ascertain compliance - Records - Cost - Report of examination in another state.

A.  The Commissioner may examine any insurer, pool, advisory organization, or residual market mechanism to ascertain compliance with the Property and Casualty Competitive Loss Cost Rating Act.

B.  Every insurer, pool, advisory organization, and residual market mechanism shall maintain adequate records from which the Commissioner may determine compliance with the provisions of the Property and Casualty Competitive Loss Cost Rating Act.  The records shall contain the experience, data, statistics and other information collected or used and shall be available to the Commissioner for examination or inspection upon reasonable notice.

C.  The reasonable cost of an examination made pursuant to this section shall be paid by the examined party upon presentation to the party of a detailed account of the costs.

D.  The Commissioner may accept the report of an examination made by an insurance supervisor official of another state in lieu of an examination pursuant to this section.

Added by Laws 2004, c. 519, § 22, eff. Nov. 1, 2004.

§36-999.1.  Short title.

Sections 1 through 7 of this act shall constitute Article 9C of the Insurance Code and shall be known and may be cited as the "Oklahoma Subsidence Insurance Act".

Added by Laws 2005, c. 118, § 1, eff. Jan. 1, 2006.

§36-999.2.  Purpose of act.

The purpose of the Oklahoma Subsidence Insurance Act is to make mine subsidence insurance coverage available for residences, living units and commercial buildings located in this state.

Added by Laws 2005, c. 118, § 2, eff. Jan. 1, 2006.

§36-999.3.  Definitions.

As used in the Oklahoma Subsidence Insurance Act:

1.  "Commercial building" means any building, other than a residence or living unit, permanently affixed to realty located in this state, including basements, footings, foundations, septic systems and underground pipes directly servicing the building, but does not include sidewalks, driveways, parking lots, swimming pools, patios, pilings, piers, wharves, docks, retaining walls, fences, land, trees, plants, crops or agricultural field drainage tile;

2.  "Commercial coverage" means mine subsidence insurance for a commercial building;

3.  "Insurer" or "insurers" means insurance companies and reciprocals licensed and authorized to write homeowner's insurance and commercial property insurance policies in this state;

4.  "Living unit" means the physical portion designated for separate ownership or occupancy for residential purposes, of a building or group of buildings, permanently affixed to realty located in this state, having elements which are owned or used in common, including an apartment unit, a condominium unit, a cooperative unit or any other similar unit, including appurtenant structures, basements, footings, foundations, septic systems and underground pipes directly servicing the dwelling or building, but does not include swimming pools, patios, pilings, wharves, docks, retaining walls, fences, sidewalks, driveways, land, trees, plants, crops or agricultural field drainage tile;

5.  "Living unit coverage" means mine subsidence insurance for a living unit;

6.  "Mine subsidence" means lateral or vertical ground movement caused by a failure initiated at the mine level, of man-made underground mines, including, but not limited to, coal mines, clay mines, lead and zinc mines, limestone mines, and fluorspar mines that directly damage residences or commercial buildings.  "Mine subsidence" does not include lateral or vertical ground movement caused by earthquake, landslide, volcanic eruption, soil conditions, soil erosion, soil freezing and thawing, improperly compacted soil, construction defects, roots of trees and shrubs or collapse of storm and sewer drains and rapid transit tunnels;

7.  "Policy" or "policies" means any contract or contracts of insurance providing the coverage of the Standard Fire Policy and Extended Coverage Endorsement on any residence, living unit or commercial building.  It does not include those insurance contracts that are referred to as marine or inland marine policies;

8.  "Residence" means a building used principally for residential purposes up to and including a four-family dwelling, permanently affixed to realty located in Oklahoma, including appurtenant structures, basements, footings, foundations, septic systems and underground pipes directly servicing the dwelling or building, but does not include living units, swimming pools, patios, pilings, wharves, docks, retaining walls, fences, sidewalks, driveways, land, trees, plants, crops or agricultural field drainage tile; and

9.  "Residential coverage" means mine subsidence insurance for a residence.

Added by Laws 2005, c. 118, § 3, eff. Jan. 1, 2006.

§36-999.4.  Subsidence coverage for residences, living units and commercial buildings - Exemption.

A.  Beginning January 1, 2006, every insurer, as defined by Section 3 of this act, may offer mine subsidence coverage, upon the request by the policyholder, on policies, as defined by Section 3 of this act, issued or renewed, insuring residences, living units and commercial buildings.

B.  The Insurance Commissioner may exempt policies insuring residences, living units or commercial buildings located in any specified county of this state from the provisions of this section if the Commissioner determines that such coverage is not necessary for a specified county.

Added by Laws 2005, c. 118, § 4, eff. Jan. 1, 2006.

§36-999.5.  Coverage for additional living expenses.

The residential coverage provided pursuant to the Oklahoma Subsidence Insurance Act may also cover the additional living expenses reasonably and necessarily incurred by the owner of a residence who has been temporarily displaced as the direct result of damage to the residence caused by mine subsidence if the underlying policy also covers this type of loss; provided, however, that the loss covered under living unit coverage shall be limited to losses to improvements and betterments and reimbursement of additional living expenses and assessments made against the insured on account of mine subsidence loss.

Added by Laws 2005, c. 118, § 5, eff. Jan. 1, 2006.

§36-999.6.  Refusal to cover unrepaired damage.

An insurer may refuse to provide mine subsidence coverage on a residence, living unit or commercial building evidencing unrepaired mine subsidence damage until such damage has been repaired.

Added by Laws 2005, c. 118, § 6, eff. Jan. 1, 2006.

§36-999.7.  Right of subrogation.

All insurers issuing mine subsidence policies shall retain the right of subrogation.

Added by Laws 2005, c. 118, § 7, eff. Jan. 1, 2006.

§36-1000.  Exemption from regulation of Property and Casualty Rate Board - Exclusivity.

A line of insurance regulated pursuant to the Property and Casualty Competitive Loss Cost Rating Act shall be exempt from regulation of the Property and Casualty Rate Board under the provisions of Section 331 et seq. of this title.  The administration and enforcement of the Property and Casualty Competitive Loss Cost Rating Act shall be governed solely by the provision of this act except as provided in this act.  No other law relating to insurance and no other provisions in this Code heretofore or hereafter enacted shall apply to or be construed as supplementing or modifying the provisions of the Property and Casualty Competitive Loss Cost Rating Act unless such other law or provision expressly so provides and specifically refers to the sections of this act which it intends to supplement or modify.

Added by Laws 2004, c. 519, § 23, eff. Nov. 1, 2004.

§36-1001.  Judicial review.

Any order, ruling, finding, decision or other act of the Oklahoma Insurance Commission made pursuant to the Property and Casualty Competitive Loss Cost Rating Act shall be subject to judicial review.

Added by Laws 2004, c. 519, § 24, eff. Nov. 1, 2004.

§361101.  Representation of unauthorized insurers prohibited.

A.  No person in Oklahoma shall in any manner:

1.  Represent or assist any insurer not then duly authorized to transact insurance in Oklahoma, in the soliciting, procuring, placing, or maintenance of any insurance coverage upon or with relation to any subject of insurance resident, located, or to be performed in Oklahoma.

2.  Inspect or examine any risk or collect or receive any premium on behalf of such insurer.

B.  Any person transacting insurance in violation of this section shall be liable to the insured for the performance of any contract between the insured and the insurer resulting from such transaction.

C.  This section shall not apply as to reinsurance, to surplus line insurance lawfully procured pursuant to this article, to transactions exempt under Section 606 of Article 6 (Authorization of Insurers and General Qualifications), or to professional services of an adjuster or attorneyatlaw from time to time with respect to claims under policies lawfully solicited, issued, and delivered outside of Oklahoma.

D.  The investigation and adjustment of any claim in this state arising under an insurance contract issued by an unauthorized insurer shall not be deemed to constitute the transacting of insurance in this state.

E.  Insurance companies not licensed in the State of Oklahoma shall not contract with the trustees of any fund which will insure residents in this state without the previous written approval of the State Insurance Commissioner.

Laws 1957, p. 256, § 1101; Laws 1976, c. 98, § 1, emerg. eff. May 10, 1976.  

§361102.  Validity of contracts illegally effectuated.

A contract of insurance effectuated by an unauthorized insurer in violation of this Code shall be voidable except at the instance of the insurer.

Laws 1957, p. 256, § 1102.  

§36-1103.  Service of process on unauthorized insurers.

A.  Delivery, effectuation, or solicitation of any insurance contract, by mail or otherwise, within this state by an unauthorized insurer, or the performance within this state of any other service or transaction connected with such insurance by or on behalf of such insurer, shall be deemed to constitute an appointment by the insurer of the Insurance Commissioner and the Commissioner's successors in office as its attorney, upon whom may be served all lawful process issued within this state in any action or proceeding against such insurer arising out of any such contract or transaction.

B.  Such service of process shall be made by delivering to and leaving with the Insurance Commissioner three copies thereof.  At time of service the plaintiff shall pay Twenty Dollars ($20.00) to the Insurance Commissioner, taxable as costs in the action.  The Insurance Commissioner shall mail by registered mail one of the copies of the process to the defendant at its principal place of business as last known to the Insurance Commissioner, and shall keep a record of all process so served.

C.  Service of process in any such action or proceeding, in addition to the manner provided herein, shall also be valid if served upon any person within this state who, in this state on behalf of such insurer, is soliciting insurance, or making, issuing, or delivering any insurance policy, or collecting or receiving any premium, membership fee, assessment, or other consideration for insurance.

D.  Service of process upon such an insurer in accordance with this section shall be as valid and effective as if served upon a defendant personally present in this state.

E.  Means provided in this section for service of process upon such insurer shall not be deemed to prevent service of process upon the insurer by any other lawful means.

F.  An insurer which has been so served with process shall have the right to appear in and defend such action and employ attorneys and other persons in this state to assist in its defense or settlement.

Added by Laws 1957, p. 256, § 1103.  Amended by Laws 1985, c. 328, § 8, emerg. eff. July 29, 1985; Laws 1997, c. 418, § 38, eff. Nov. 1, 1997.

§361104.  Exemptions from service of process provisions.

Sections 1103 and 1105 of this article shall not apply to surplus line insurance lawfully effectuated under this article, or to reinsurance, nor to any action or proceeding against an unauthorized insurer arising out of:

1.  Ocean marine and foreign trade insurance,

2.  Insurance on subjects located, resident, or to be performed wholly outside this state, or on vehicles or aircraft owned and principally garaged outside this state,

3.  Insurance on property or operations of railroads engaged in interstate commerce, or

4.  Insurance on aircraft or cargo of such aircraft, or against liability, other than employers' liability, arising out of the ownership, maintenance, or use of such aircraft, where the policy or contract contains a provision designating the Insurance Commissioner as its attorney for the acceptance of service of lawful process in any action or proceeding instituted by or on behalf of an insured or beneficiary arising out of any such policy, or where the insurer enters a general appearance in any such action.

Laws 1957, p. 257, § 1104.  

§361105.  Attorneys' fees.

In any action against an unauthorized insurer pursuant to section 1103 of this article, if the insurer has failed for thirty (30) days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract of insurance, and it appears to the court that such refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney's fee and include such fee in any judgment that may be rendered in such action.  Such fee shall not exceed onethird (1/3) of the amount which the court or jury finds the plaintiff is entitled to recover against the insurer, but in no event shall such a fee be less than One Hundred Dollars ($100.00). Failure of an insurer to defend any such action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause.

Laws 1957, p. 257, § 1105.  

§361106.  Surplus lines - Brokers.

If the amount of insurance required to protect the interest of the assured cannot be procured from authorized insurers, such amount, hereinafter designated as "surplus line", may be procured from unauthorized insurers subject to the following conditions:

1.  The unauthorized insurer must have a certificate of approval from the Commissioner, and meet all relevant statutory requirements, including the following:

a. the insurer is financially stable, and

b. the insurer is controlled by persons possessing competence, experience and integrity, and

c. the insurer, if a foreign insurer, posts a special deposit in an amount to be determined by the Commissioner, or

d. the insurer, if an alien insurer, is listed on the National Association of Insurance Commissioners Non-Admitted Insurers Quarterly Listing.

The Commissioner may withdraw a certificate of approval or refuse to renew a certificate upon finding that the insurer no longer meets the criteria for approval set out herein;

2.  The insurance must be procured through a licensed surplus line broker, hereinafter in this article referred to as the "broker"; and

3.  The amount of insurance required to protect the interest of the assured is not procurable, after diligent effort has been made to do so, from a majority of the insurers accessible to the broker which are authorized to transact that kind and class of insurance in this state, and the placing of insurance with an unauthorized insurer must not be for the purpose of securing advantages either as to premium rate or terms of the insurance contract.

Added by Laws 1957, p. 257, § 1106.  Amended by Laws 1986, c. 134, § 3, emerg. eff. April 17, 1986; Laws 1991, c. 146, § 1, eff. Sept. 1, 1991; Laws 1993, c. 79, § 4, eff. Sept. 1, 1993.

§361107.  Broker's affidavit and report.

A.  After procuring any surplus line insurance, the broker shall execute and file with the Insurance Commissioner his report thereof in duplicate and under oath, setting forth facts from which it may be determined whether the requirements of Section 1106 of this title have been met, and in addition thereto the following:

1.  Name and address of the insurer, and name and address of the person named in the policy pursuant to Section 1118 of this title to whom the Insurance Commissioner shall send copies of legal process;

2.  Number of the policy issued;

3.  Name and address of the insured;

4.  Nature and amount of liability assumed by the insurer;

5.  Premium, and any membership, application, policy or registration fees; and

6.  Other information reasonably required by the Insurance Commissioner.

B.  The Insurance Commissioner shall prescribe and furnish the required report form.  The Insurance Commissioner shall have the authority to grant approval to the surplus line broker for the master bordereau style reporting of surplus line activity on a quarterly basis.

C.  Failure to file the report shall result, after notice and hearing, in censure, suspension, or revocation of license or a fine of up to Five Hundred Dollars ($500.00) for each occurrence or by both such fine and licensure penalty.

D.  The brokers' affidavits and report shall be submitted on or before the end of each month following each calendar quarter.

Amended by Laws 1987, c. 175, § 7, eff. Nov. 1, 1987; Laws 1991, c. 146, § 2, eff. Sept. 1, 1991.

§361108.  Recognized surplus lines.

A.  If after a hearing thereon the Insurance Commissioner finds that a particular insurance coverage or type, class, or kind of coverage is not readily procurable from authorized insurers, he may by order declare such coverage or coverages to be recognized surplus lines until the Insurance Commissioner's further order.  The broker's affidavit provided for in Section 1107 of this article shall not be required as to coverages while so recognized.  Before holding any such hearing the Commissioner shall give notice to admitted insurers authorized to write such lines of insurance, to rating organizations licensed to make rates for such lines of insurance and to other interested persons in the manner provided by Article 3 of this Code.

B.  Any such order shall be subject to modification, and the Insurance Commissioner shall so modify as to any coverage found by him to be no longer entitled to such recognition after a hearing held upon his own initiative or upon request of any insurance agent, surplus line broker, broker, insurer, rating or advisory organization, or other person.

Laws 1957, p. 257, § 1108.  

§361109.  Validity of surplus line insurance  Notice of limitations of coverage.

A.  Insurance contracts procured as surplus line coverage from unauthorized insurers in accordance with this article shall be fully valid and enforceable as to all parties, and shall be given recognition in all matters and respects to the same effect as like contracts issued by authorized insurers.

B.  Insurance contracts procured as surplus line coverage shall contain in bold-face type notification stamped on the declaration page of the policy that such contracts are not subject to the protection of any guaranty association in the event of liquidation or receivership of the insurer.

Amended by Laws 1986, c. 251, § 10, eff. Nov. 1, 1986; Laws 1991, c. 146, § 3, eff. Sept. 1, 1991.

§361111.  Acceptance of surplus line business by brokers.

A licensed surplus line broker may accept and place surplus line business from any insurance agent or broker licensed in this state for the kind of insurance involved, and may compensate such agent or broker therefor.  The broker shall have the right to receive from the insurer the customary commission.

Laws 1957, p. 258, § 1111.  

§361112.  Solvent insurer required  License  Approval.

A.  A surplus line broker shall not knowingly place any such coverage in an insurer which is in an unsound financial condition.  To be considered financially sound, a surplus line company shall have a minimum capital and surplus of not less than Fifteen Million Dollars ($15,000,000.00).  A surplus line broker shall not place any such coverage in an insurer unless the insurer has been approved in writing by the Commissioner as a surplus line insurer and such approval has not been withdrawn.  A surplus line broker shall not place any surplus line insurance in an insurer that has been disapproved by the Commissioner as a surplus line insurer.

B.  For violation of this section, in addition to any other penalty provided by law, the broker's license shall be revoked, and the broker shall not again be so licensed within a period of two (2) years thereafter.  In addition, any surplus line broker who violates this section shall be guilty of a misdemeanor and upon conviction thereof shall be punished for each offense, by a fine of not more than One Thousand Dollars ($1,000.00) or by confinement in jail for not more than ninety (90) days, or by both such fine and imprisonment.

Added by Laws 1957, p. 258, § 1112, operative July 1, 1957.  Amended by Laws 1965, c. 132, § 1, eff. Oct. 1, 1965; Laws 1991, c. 146, § 4, eff. Sept. 1, 1991; Laws 2002, c. 307, § 10, eff. Nov. 1, 2002.

§361113.  Records of surplus line brokers.

Each surplus line broker shall keep in the broker's office in this state a full and true record of each surplus line contract procured by the broker, and such record may be examined at any time within three (3) years thereafter by the Insurance Commissioner.  The record shall include the following items as are applicable:

1.  Name and address of the insurer;

2.  Name and address of the insured;

3.  Amount of insurance;

4.  Gross premium charged;

5.  Return premium paid, if any;

6.  Rate of premium charged on the several items of coverage;

7.  Effective date of the contract and the terms thereof; and

8.  Brief general description of the risks insured against and the property insured.

Added by Laws 1957, p. 258, § 1113.  Amended by Laws 1997, c. 418, § 39, eff. Nov. 1, 1997.

§361114.  Broker's annual statement.

Each surplus line broker shall on or before the first day of April of each year file with the Insurance Commissioner a verified statement of all surplus line insurance transacted by him during the proceding calendar year.  The statement shall be on a form prescribed and furnished by the Insurance Commissioner and shall show:

1.  Gross amount of each kind of insurance transacted,

2.  Aggregate gross premiums charged,

3.  Aggregate of return premiums paid to insureds,

4.  Aggregate of net premiums, and

5.  Such additional information as may reasonably be required by the Insurance Commissioner.

Laws 1957, p. 259, § 1114.  

§36-1115.  Tax on surplus lines - Unauthorized insurers.

A.  On or before the end of each month following each calendar quarter, each surplus line broker shall remit to the State Treasurer through the Insurance Commissioner a tax on the premiums, exclusive of sums collected to cover federal and state taxes and examination fees, on surplus line insurance subject to tax transacted by the broker for the period covered by the report.  Such tax shall be at the rate of six percent (6%) of the gross premiums less premiums returned on account of cancellation or reduction of premium, and shall exclude gross premiums and returned premiums upon business exempted from surplus line provisions pursuant to Section 1119 of this title.

B.  Except as provided in subsection C of this section, for the purpose of determining the surplus line tax, the total premium charged for surplus line insurance placed in a single transaction with one underwriter or group of underwriters, whether in one or more policies, shall be allocated to this state in such proportion as the total premium on the insured properties or operations in this state, computed on the exposure in this state on the basis of any single standard rating method in use in all states or countries where such insurance applies, bears to the total premium so computed in all such states or countries.  Policies sold to federally recognized Indian tribes shall be reported as provided in Section 1107 of this title; however, such policies shall be exempt from the surplus line tax to the extent that the Insurance Commissioner can identify that coverage is for risks which are wholly owned by a tribe and located within Indian Country, as defined in Section 1151 of Title 18 of the United States Code.

C.  The surplus line tax on insurance on motor transit operations conducted between this and other states shall be paid on the total premium charged on all surplus line insurance less:

1.  The portion of the premium determined as provided in subsection B of this section charged for operations in other states taxing such premium of an insured maintaining its headquarters office in this state; or

2.  The premium for operations outside of this state of an insured maintaining its headquarters office outside of this state and branch office in this state.

D.  1.  Every person, association, or legal entity procuring or accepting any insurance coverage from an unauthorized insurer, upon, covering, or relating to a subject of insurance resident or having a situs in the this state, or any such insurance coverage which is to be performed in whole or part in this state, except such coverages as are lawfully obtained through a licensed surplus line broker in this state, shall report, within thirty (30) days next succeeding the issuance of evidence of coverage, the purchase of such coverages of insurance to the Insurance Commissioner, on forms prescribed by the Commissioner, and at the same time shall remit to the Insurance Commissioner a tax in the amount of six percent (6%) of the annual premium agreed to be paid, or paid, for such insurance.  Such insurance coverages, providing for the payment of retrospective premiums, or coverages on which the premiums are not determinable at the time of issuance, shall be reported to the Insurance Commissioner, by the insured, within thirty (30) days next succeeding the date such coverages are issued and the tax payable on such coverages shall be remitted, by the insured, to the Insurance Commissioner within thirty (30) days next succeeding the date such premiums can be determined.  The tax on renewal premiums shall be paid by the insured in accordance with this section, in like manner as provided for payment of the original premium tax, within thirty (30) days next succeeding the date such premiums can be determined.

2.  The taxes imposed by the provisions of this section on surplus lines shall be paid into the State Treasury and deposited to the General Revenue Fund of this state.

Added by Laws 1957, p. 259, § 1115.  Amended by Laws 1959, p. 134, § 1, emerg. eff. July 8, 1959; Laws 1961, p. 268, § 1, emerg. eff. July 5, 1961; Laws 1963, c. 48, § 1, emerg. eff. May 2, 1963; Laws 1965, c. 270, § 1, emerg. eff. June 23, 1965; Laws 1967, c. 194, § 1, emerg. eff. May 1, 1967; Laws 1968, c. 111, § 1; Laws 1969, c. 82, § 1, emerg. eff. March 18, 1969; Laws 1970, c. 288, § 1, emerg. eff. April 27, 1970; Laws 1971, c. 67, § 1, emerg. eff. April 12, 1971; Laws 1972, c. 54, § 1, emerg. eff. March 20, 1972; Laws 1983, c. 248, § 5, emerg. eff. June 21, 1983; Laws 1991, c. 146, § 5, eff. Sept. 1, 1991; Laws 1997, c. 418, § 40, eff. Nov. 1, 1997; Laws 1999, c. 96, § 1, emerg. eff. April 19, 1999.

§361116.  Penalty for failure to remit tax.

A.  Any surplus line broker who fails to remit the surplus line tax provided for by Section 1115 of this title for more than sixty (60) days after it is due shall be liable to a civil penalty of not to exceed Twenty-five Dollars ($25.00) for each additional day of delinquency.  The Insurance Commissioner shall collect the tax by distraint and shall recover the penalty by an action in the name of the State of Oklahoma.  The Commissioner may request the Attorney General to appear in the name of the state by relation of the Commissioner.  All penalties shall be paid into the General Revenue Fund of this state.

B.  If any person, association or legal entity procuring or accepting any insurance coverage from an unauthorized insurer, otherwise than through a licensed surplus line broker in this state, fails to remit the surplus line tax provided for by subsection D of Section 1115 of this title, such person, association or legal entity shall, in addition to said tax, be liable to a civil penalty in an amount equal to one percent (1%) of the premiums paid or agreed to be paid for such policy or policies of insurance for each calendar month of delinquency or a civil penalty in the amount of Twenty-five Dollars ($25.00) whichever shall be the greater.  The Insurance Commissioner shall collect the tax by distraint and shall recover the civil penalty in an action in the name of the State of Oklahoma.  The Commissioner may request the Attorney General to appear in the name of the state by relation of the Commissioner.  All civil penalties shall be paid into the General Revenue Fund of the state.

Added by Laws 1957, p. 259, § 1116.  Amended by Laws 1959, p. 135, § 1, eff. July 8, 1959; Laws 1991, c. 146, § 6, eff. Sept. 1, 1991; Laws 1992, c. 65, § 2, eff. Sept. 1, 1992; Laws 1997, c. 418, § 41, eff. Nov. 1, 1997.

§36-1118.  Legal process against surplus line insurer.

A.  Every unauthorized insurer issuing or delivering a surplus line policy through a surplus line broker in this state shall conclusively be deemed thereby to have irrevocably appointed the Insurance Commissioner as its attorney for acceptance of service of all legal process, other than a subpoena, issued in this state in any action or proceeding under or arising out of such policy, and service of such process upon the Insurance Commissioner shall be lawful personal service upon such insurer.

B.  Each surplus line policy shall contain a provision stating the substance of subsection A of this section, and designating the person to whom the Insurance Commissioner shall mail process as provided in subsection C of this section.

C.  Triplicate copies of legal process against such an insurer shall be served upon the Insurance Commissioner, and at time of service the plaintiff shall pay to the Insurance Commissioner Twenty Dollars ($20.00), taxable as costs in the action.  The Insurance Commissioner shall forthwith mail one copy of the process so served to the person designated by the insurer in the policy for the purpose, by mail with return receipt requested.  The insurer shall have forty (40) days after the date of mailing within which to plead, answer, or otherwise defend the action.

Added by Laws 1957, p. 260, § 1118.  Amended by Laws 1986, c. 251, § 11, eff. Nov. 1, 1986; Laws 1997, c. 418, § 42, eff. Nov. 1, 1997.

§361119.  Exemptions from surplus lines provisions.

The sections of this article relative to surplus line coverages shall not apply to reinsurance.

Laws 1957, p. 260, § 1119.  

§361120.  Records of insureds.

Upon request of the Insurance Commissioner any person in Oklahoma who is the insured under any policy issued by an unauthorized insurer upon a subject of insurance resident, located, or to be performed in Oklahoma at the time the policy was issued, shall produce for examination all policies and other documents evidencing and relating to the insurance, and shall disclose the amount of the gross premiums paid or agreed to be paid for the insurance, through whom the insurance was procured, and such other information relative to the placing of such insurance as may reasonably be required.

Laws 1957, p. 260, § 1120.  

§361201.  Declaration of purpose.

The purpose of this article is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the Act of Congress of March 9, 1945 (Public Law 15, 79th Congress), by defining, or providing for the determination of, all such practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.

Laws 1957, p. 260, § 1201.  

§361202.  Definitions.

When used in this article:

1.  "Person" shall mean any individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd's insurer, Lloyd's Name, Lloyd's Syndicate Name, fraternal benefit society, and any other legal entity engaged in the business of insurance, including agents, brokers and adjusters;

2.  "Commissioner" shall mean the Insurance Commissioner of this state; and

3.  "Name" shall mean any individual or corporate entity underwriting insurance for their own account through the Lloyd's of London market and any agents or employees of any such individual or corporate entity.

Added by Laws 1957, p. 260, § 1202.  Amended by Laws 1996, c. 246, § 1, eff. July 1, 1996.

§361203.  Unfair methods of competition or unfair and deceptive acts or practices prohibited.

No person shall engage in this state in any trade practice which is defined in this article as, or determined pursuant to this article to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.

Laws 1957, p. 260, § 1203.  

§361204.  Unfair methods of competition and unfair or deceptive acts or practices defined.

The following are hereby defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

1.  Misrepresentations and false advertising of policy contracts.  Making, issuing, circulating, or causing to be made, issued or circulated, any estimate, illustration, circular or statement misrepresenting the terms of any policy issued or to be issued or the benefits or advantages promised thereby or the dividends or share of the surplus to be received thereon, or making any false or misleading statement as to the dividends or share of surplus previously paid on similar policies, or making any misleading representation or any misrepresentation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates, or using any name or title of any policy or class of policies misrepresenting the true nature thereof, or making any misrepresentation to any policyholder insured in any company for the purpose of inducing or tending to induce such policyholder to lapse, forfeit, or surrender his insurance.

2.  False information and advertising generally.  Making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business which is untrue, deceptive or misleading.  No insurance company shall issue, or cause to be issued, any policy of insurance of any type or description upon life, or property, real or personal, whenever such policy of insurance is to be furnished or delivered to the purchaser or bailee of any property, real or personal, as an inducement to purchase or bail said property, real or personal, and no other person shall advertise, offer or give free insurance, insurance without cost or for less than the approved or customary rate, in connection with the sale or bailment of real or personal property, except as provided in subsection B, Section 4101 of Article 41 (Group Life Insurance and Group Annuity Contracts).  No person that is not an insurer shall assume or use any name which deceptively infers or suggests that it is an insurer.

3.  Defamation.  Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting or encouraging the making, publishing, disseminating or circulating of any oral or written statement or any pamphlet, circular, article or literature which is false, or maliciously critical of or derogatory to the financial condition of an insurer, and which is calculated to injure any person engaged in the business of insurance.

4.  Boycott, coercion and intimidation.  Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.

5.  False financial statements.  Filing with any supervisory or other public official, or making, publishing, disseminating, circulating or delivering to any person, or placing before the public or causing directly or indirectly, to be made, published, disseminated, circulated, delivered to any person or placed before the public, any false statement of financial condition of an insurer with intent to deceive.

Making any false entry in any book, report or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom such insurer is required by law to report, or who has authority by law to examine into its condition or into any of its affairs, or, with like intent, willfully omitting to make a true entry of any material fact pertaining to the business of such insurer in any book, report or statement of such insurer.

6.  Stock operations and advisory board contracts.  Issuing or delivering or permitting agents, officers, or employees to issue or deliver agency company stock or other capital stock, or benefit certificates or shares in any commonlaw corporation, or securities or any special or advisory board contracts or other contracts of any kind promising returns and profits as an inducement to insurance.

7.  Unfair discrimination.  (a)  Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract.

(b)  Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of accident or health insurance or in the benefits payable thereunder, or in any of the terms or conditions of such contract, or in any other manner whatever.

(c)  As to kinds of insurance other than life and accident and health, no person shall make or permit any unfair discrimination in favor of particular persons, or between insureds or subjects of insurance having substantially like insuring, risk, and exposure factors, or expense elements, in the terms or conditions of any insurance contract, or in the rate or amount of premium charged therefor.  This subsection shall not apply as to any premium rate in effect pursuant to Article 9 of the Insurance Code.

8.  Rebates.  (a)  Except as otherwise expressly provided by law, knowingly permitting or offering to make or making any contract of insurance or agreement as to such contract other than as plainly expressed in the contract issued thereon; or paying or allowing, or giving or offering to pay, allow or give, directly or indirectly, as inducement to any contract of insurance, any rebate of premiums payable on the contract, or any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract; except in accordance with an applicable rate filing, rating plan or rating system filed with and approved by the Board or filed with and approved by the Commissioner; or giving or selling or purchasing or offering to give, sell, or purchase as inducement to such insurance, or in connection therewith, any stocks, bonds or other securities of any company, or any dividends or profits accrued thereon, or anything of value whatsoever not specified in the contract or receiving or accepting as inducement to contracts of insurance, any rebate of premium payable on the contract, or any special favor or advantage in the dividends or other benefit to accrue thereon, or any valuable consideration or inducement not specified in the contract.

(b)  Nothing in subsection 7 or paragraph (a) of this subsection shall be construed as including within the definition of discrimination or rebates any of the following practices:

(1)  In the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided, that any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interest of the company and its policyholders;

(2)  In the case of life or accident and health insurance policies issued on the industrial debit or weekly premium plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expense;

(3)  Making a readjustment of the rate of premium for a policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year;

(4)  In the case of life insurance companies, allowing its bona fide employees to receive a commission on the premiums paid by them on policies on their own lives;

(5)  Issuing life or accident and health policies on a salary saving or payroll deduction plan at a reduced rate commensurate with the savings made by the use of such plan;

(6)  Paying commissions or other compensation to duly licensed agents or brokers, or allowing or returning to participating policyholders, members or subscribers, dividends, savings or unabsorbed premium deposits.

(c)  As used in this section, the word "insurance" includes suretyship and the word "policy" includes bond.

9.  Coercion prohibited.  Requiring as a condition precedent to the purchase of, or the lending of money upon the security of, real or personal property, that any insurance covering such property, or liability arising from the ownership, maintenance or use thereof, be procured by or on behalf of the vendee or by the borrower in connection with such purchase or loan through any particular person or agent or in any particular insurer, or requiring the payment of a reasonable fee as a condition precedent to the replacement of insurance coverage on mortgaged property at the anniversary date of the policy; provided, however, that this provision shall not prevent the exercise by any such vendor or lender of the right to approve or disapprove any insurer selected to underwrite the insurance; but any disapproval of any insurer shall be on reasonable grounds.

10.  Inducements.  No insurer, agent, broker, solicitor, or other person shall, as an inducement to insurance or in connection with any insurance transaction, provide in any policy for or offer, sell, buy, or offer or promise to buy, sell, give, promise, or allow to the insured or prospective insured or to any other person in his behalf in any manner whatsoever:

(a)  Any employment.

(b)  Any shares of stock or other securities issued or at any time to be issued or any interest therein or rights thereto.

(c)  Any advisory board contract, or any similar contract, agreement or understanding, offering, providing for, or promising any special profits.

(d)  Any prizes, goods, wares, merchandise, or tangible property of an aggregate value in excess of Twentyfive Dollars ($25.00).

(e)  Any special favor, advantage or other benefit in the payment, method of payment or credit for payment of the premium through the use of credit cards, credit card facilities, credit card lists, or wholesale or retail credit accounts of another person.  The provisions of this paragraph shall not apply to individual policies insuring against loss resulting from bodily injury or death by accident as defined by Article 44 of the Oklahoma Insurance Code.

11.  Premature disposal of premium notes prohibited.  No insurer or agent thereof shall hypothecate, sell, or dispose of a promissory note received in payment of any part of a premium on a policy of insurance applied for prior to the delivery of the policy.

12.  Fraudulent statement in application; penalty.  Any insurance agent, examining physician, or other person who knowingly or willfully makes a false or fraudulent statement or representation in or relative to an application for insurance, or who makes any such statement to obtain a fee, commission, money, or benefit shall be guilty of a misdemeanor.

Added by Laws 1957, c. 261, § 1204, operative July 1, 1957.  Amended by Laws 1965, c. 261, § 2, emerg. eff. June 22, 1965; Laws 1980, c. 196, § 1, eff. Oct. 1, 1980; Laws 1987, c. 210, § 34, eff. July 1, 1987; Laws 2005, c. 129, § 10, eff. Nov. 1, 2005.

§361205.  Power of commissioner.

The Commissioner shall have power to examine and investigate into the affairs of every person engaged in the business of insurance in this state in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by Section 1203 of this article.

Laws 1957, p. 263, § 1205.  

§36-1206.  Statement of charges and notice of hearing - Opportunity to be heard.

A.  Whenever the Insurance Commissioner shall have reason to believe that any person has been engaged or is engaging in this state in any unfair method of competition or any unfair or deceptive act or practice defined in Section 1204 of this title, and that a proceeding by the Commissioner in respect thereto would be to the interest of the public, the Commissioner shall issue and serve upon the person a statement of the charges in that respect and a notice in accordance with the Administrative Procedures Act.

B.  At the time and place fixed for a hearing, the person shall have an opportunity to be heard and to show cause why an order should not be made by the Commissioner requiring the person to cease and desist from the acts, methods or practices so complained of.  Upon good cause shown, the Commissioner shall permit any person to intervene, appear and be heard at the hearing by counsel or in person.

Added by Laws 1957, p. 263, § 1206.  Amended by Laws 1997, c. 418, § 43, eff. Nov. 1, 1997.

§361207.  Cease and desist orders and modifications thereof.

A.  If, after a hearing or waiver of the right to a hearing, the Insurance Commissioner shall determine that the method of competition or the act or practice in question is defined in Section 1204 of this title and that the person complained of has engaged in a method of competition, act or practice in violation of this article, the Commissioner shall reduce these findings to writing and shall issue and cause to be served upon the person charged with the violation an order requiring the person to cease and desist from engaging in such method of competition, act or practice.

B.  Until the expiration of the time allowed under subsection A of Section 1208 of this title for filing a petition for review, if no such petition has been duly filed within such time, or if a petition for review has been filed within such time, then until the transcript of the record in the proceeding has been filed in the court, as hereinafter provided, the Commissioner may at any time, upon such notice and in such manner as the Commissioner shall deem proper, modify or set aside in whole or in part any order issued by the Commissioner under this section.

C.  After the expiration of the time allowed for filing a petition for review, if no petition has been duly filed within such time, the Commissioner may at any time, after notice and opportunity for hearing, reopen and later, modify or set aside, in whole or in part, any order issued by the Commissioner under this section whenever in the Commissioner's opinion conditions of fact or of law has so changed as to require such action or if the public interest shall so require.

Added by Laws 1957, p. 264, § 1207.  Amended by Laws 1957, p. 264, § 1207; Laws 1997, c. 418, § 44, eff. Nov. 1, 1997.

§361208.  Judicial review of cease and desist orders.

A.  Any person required by an order of the Insurance Commissioner under Section 1207 of this title to cease and desist from engaging in any unfair method of competition or any unfair or deceptive act or practice defined in Section 1204 of this title may obtain a review of such order by filing in the district court of Oklahoma County, or the county in which the order was served, within thirty (30) days from the date of service of such order, a written petition praying that the order of the Commissioner be set aside.  A copy of the petition shall be served upon the Commissioner, and thereupon the Commissioner shall certify and file in such court a transcript of the entire record in the proceeding, including all the evidence taken and the report and order of the Commissioner.  Upon filing the petition and transcript, the court shall have jurisdiction of the proceeding and of the question determined therein, shall determine whether the filing of the petition shall operate as a stay of the order of the Commissioner, and shall have power to make and enter upon the pleadings, evidence, and proceedings set forth in the transcript a decree modifying, affirming or reversing the order of the Commissioner, in whole or in part.  The findings of the Commissioner as to the facts, if supported by the evidence, shall be conclusive.

B.  To the extent that the order of the Commissioner is affirmed, the court shall thereupon issue its own order commanding obedience to the terms of the order of the Commissioner.  If either party shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of the court that additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the proceeding before the Commissioner, the court may order additional evidence be taken before the Commissioner, and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper.  The Commissioner may modify findings of fact, or make new findings by reason of the additional evidence so taken, and shall file such modified or new findings which, if supported by the evidence, shall be conclusive, and his recommendation, if any, for the modification or setting aside of his original order, with the return of such additional evidence.  Appeal may be taken from the district court as provided in other civil cases.

C.  A cease and desist order issued by the Commissioner under Section 1207 of this title shall become final:

1.  Upon the expiration of the time allowed for filing a petition for review if no such petition has been duly filed within such time; except that the Commissioner may thereafter modify or set aside an order to the extent provided in subsection B of Section 1207 of this title; or

2.  Upon the final decision of the court if the court directs that the order of the Commissioner be affirmed or the petition for review dismissed.

D.  No order of the Commissioner under this article or order of a court to enforce the same shall in any way relieve or absolve any person affected by such order from any liability under any other laws of this state.

Added by Laws 1957, p. 265, § 1208.  Amended by Laws 1997, c. 418, § 45, eff. Nov. 1, 1997.

§361209.  Procedure as to unfair methods of competition and unfair or deceptive acts or practices which are not defined.

A.  Whenever the Insurance Commissioner shall have reason to believe that any person engaged in the business of insurance is engaging in this state in any method of competition or in any act or practice in the conduct of such business which is not defined in Section 1204 of this title, that the method of competition is unfair or that the act or practice is unfair or deceptive and that an administrative proceeding in respect thereto would be to the interest of the public, the Commissioner may issue and serve such person a statement of the charges in that respect and a notice in accordance with the Administrative Procedures Act.  The Commissioner shall, after a hearing or waiver of the right to a hearing, make a report in writing stating findings as to the facts and serve a copy thereof upon such person.

B.  If such report charges a violation of this article and if such method of competition, act or practice has not been discontinued, the Commissioner may cause a petition to be filed in the district court of Oklahoma County or the district court of this state within the district wherein the person resides or has his or her principal place of business, to enjoin and restrain such person from engaging in such method, act or practice.  The Commissioner may request the Attorney General to appear in the name of the state by relation of the Commissioner.  The court shall have jurisdiction of the proceeding and shall have power to make and enter appropriate orders in connection therewith and to issue such writs as are ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public pendente lite.

C.  A transcript of the proceedings before the Commissioner including all evidence taken and the report and findings shall be filed with such petition.  If either party shall apply to the court for leave to adduce additional evidence and shall show, to the satisfaction of the court, that additional evidence is material and there were reasonable grounds for the failure to adduce evidence in the proceeding before the Commissioner, the court may order additional evidence to be taken before the Commissioner and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper.  The Commissioner may modify findings of fact or make new findings by reason of the additional evidence so taken, and he shall file such modified or new findings with the return of such additional evidence.

D.  If the court finds that the method of competition complained of is unfair or that the act or practice complained of is unfair or deceptive, that the proceeding by the Commissioner with respect thereto is to the interest of the public and that the findings of the Commissioner are supported by the weight of the evidence, it shall issue its order enjoining and restraining the continuance of such method of competition, act or practice.

Added by Laws 1957, p. 265, § 1209.  Amended by Laws 1997, c. 418, § 46, eff. Nov. 1, 1997.

§361210.  Judicial review by intervenor.

If the final order of the Insurance Commissioner does not charge a violation of this article, then any intervenor in the proceedings may, within thirty (30) days after the service of such order, cause an action for judicial review to be filed in the district court of Oklahoma County for a review of such order.  Upon such review, the court shall have authority to issue appropriate orders and decrees in connection therewith, including, if the court finds that it is to the interest of the public, orders enjoining and restraining the continuance of any method of competition, act or practice which it finds, notwithstanding such order of the Commissioner, constitutes a violation of this article.

Added by Laws 1957, p. 266, § 1210.  Amended by Laws 1997, c. 418, § 47, eff. Nov. 1, 1997.

§36-1211.  Civil penalty.

Any person who violates a cease and desist order of the Insurance Commissioner issued and served pursuant to the provisions of Section 1207 of this title, after it has become final, and while such order is in effect, shall, upon proof thereof to the satisfaction of the court, forfeit and pay to the State of Oklahoma a civil penalty of not less than One Hundred Dollars ($100.00), nor more than One Thousand Dollars ($1,000.00) for each violation.

Added by Laws 1957, p. 266, § 1211.  Amended by Laws 1983, c. 68, § 10, eff. Nov. 1, 1983; Laws 1997, c. 418, § 48, eff. Nov. 1, 1997.

§361212.  Provisions of act additional.

The powers vested in the Commissioner by this article shall be additional to any other powers to enforce penalties, fines or forfeitures authorized by law with respect to the methods, acts and practices hereby declared to be unfair or deceptive.

Laws 1957, p. 266, § 1212.  

§361213.  Immunity from prosecution.

If any person shall ask to be excused from attending and testifying or from producing any books, papers, records, correspondence or other documents at any hearing on the ground that the testimony or evidence required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture, and shall notwithstanding be directed to give such testimony or produce such evidence, the person must nonetheless comply with such direction, but shall not thereafter be prosecuted or subjected to any criminal penalty of forfeiture for or on account of any evidence which the person may testify or produce pursuant thereto.  No testimony so given or evidence produced shall be received against the person upon any criminal action, investigation or proceeding; provided, however, individuals so testifying shall not be exempt from prosecution or punishment for any perjury committed by them while so testifying and the testimony or evidence so given or produced shall be admissible against them upon any criminal action, investigation or proceeding concerning such perjury, and such individuals shall not be exempt from the refusal, revocation or suspension of any license, permission or authority conferred, or to be conferred, pursuant to the insurance law of this state.

Added by Laws 1957, p. 266, § 1213.  Amended by Laws 1997, c. 418, § 49, eff. Nov. 1, 1997.

§361214.  Fair disclosure  Protection against misleading sales methods.

The purpose of this act is to assure fair disclosure of relevant facts in the sale of life insurance and annuity contracts. This act is also designed to protect citizens of the State of Oklahoma as purchasers and prospective purchasers of life insurance policies or annuity contracts against the use of sales methods which are misleading because of:

1.  The omission of facts fairly describing the subject matter as a life insurance policy or annuity contract and the benefits obtainable thereunder;

2.  An undue emphasis upon facts which, even though correct, are not relevant to the sale of life insurance or annuities; or

3.  An undue emphasis upon features which are of incidental or secondary importance to the life insurance aspects of a policy.

This act is deemed necessary for the effectuation of Section 1201 et seq., Title 36, Oklahoma Statutes, known as the Unfair Practices and Frauds Act; Section 1401 et seq., Title 36, Oklahoma Statutes; and Sections 2741 and 2742, Title 36, Oklahoma Statutes; and shall be construed as supplemental and cumulative to existing laws.

Laws 1972, c. 223, § 1, operative Jan. 15, 1974.  

§361215.  Definitions.

As used in this act, the following words, terms and phrases shall have the respective meanings hereinafter set forth, unless the context shall otherwise require:

1.  A "coupon policy" is any policy or contract of life insurance, other than annuity, which contains, in addition to basic life insurance benefits, annual endowment benefits evidenced in the policy contract by coupons which mature as annual endowment benefits.  For the purposes of this act, policies containing annual endowment benefits evidenced by coupons, passbooks or other devices generally identified with savings, banking or investment institutions shall be considered to be coupon policies;

2.  A "profitsharing policy" is that form of life insurance policy or annuity contract which contains provisions representing or tending to create the understanding that the policyholder will be eligible to participate in any future distribution of general corporate profits, with special advantage not available to persons holding other types of policies issued by the insurer to individuals of the same class and equal expectation of life; and

3.  A "charter policy" or "founders policy" is that form of life insurance policy or annuity contract, usually issued by a newly organized insurer, which is sold on the basis that its availability will be limited to a specific predetermined number of units of a fixed dollar amount and which generally provides that the policyholder shall participate in the earnings resulting from either the participating policies or the nonparticipating policies sold by the insurer, or both.

Laws 1972, c. 223, § 2, operative Jan. 15, 1974.  

§361216.  Prohibitions and regulations concerning use of certain types of policy forms, policy provisions and annuity contracts.

In accordance with the purpose expressed in Section 1 of this act, the use of certain types of policy forms, policy provisions and annuity contracts shall be subject to the following prohibitions and regulations:

1.  No life insurance policy or annuity contract containing a series of guaranteed annual endowment benefits evidenced by coupons, passbooks or similar devices generally identified with investment or banking operations shall be approved for use, and no such policy or contract heretofore approved shall be issued or delivered in this state after January 15, 1974;

2.  No life insurance policy or annuity contract containing a series of guaranteed annual endowment benefits shall be approved for use and no such policy or contract heretofore approved shall be issued or delivered in this state after January 15, 1974, unless the following requirements are satisfied:

a.  the gross premium for the guaranteed annual endowment benefit shall be shown conspicuously and separately in the policy, distinct from the gross premium for the life insurance benefits and, unless the gross premium is so prominently and separately shown on the schedule of benefits and premiums page in the policy, the language shall be sub stantially in the following form: "The premium shown includes an additional (annual, semiannual, quarterly, monthly, etc.) premium of $_____ for endowment benefits,"

b.  the insured shall be entitled to withdraw the guaranteed annual endowment benefits not less frequently than at the end of each policy year.  The number of oneyear guaranteed endowment benefits shall equal the number of annual premiums for such benefits unless the insurance contract clearly and distinctly provides otherwise,

c.  payment of any guaranteed annual endowment benefits shall not be made contingent on the payment of premiums falling due on or after the time the guaranteed annual endowment benefit has matured,

d.  the separately stated gross premium for the series of guaranteed annual endowment benefits shall be based on reasonable assumptions, consistent with the basic policy form as to interest, mortality and expense,

e.  the guaranteed annual endowment benefit shall be expressed in dollars, both in the policy and in any sales or advertising material relating thereto, and not as a percentage of any premium or benefit,

f.  no guaranteed annual endowment benefit shall be described, either in the policy or in any sales or advertising material, as anything other than a guaranteed benefit for which a premium is being paid by the policyholder, and

g.  at the time the policy form is filed with the Insurance Department for approval, said policy form shall be accompanied by all sales, advertising or other material which the insurer proposes to use in connection with the sale of such policy; such sales, advertising or other material shall be approved by the State Insurance Commissioner.

Nothing in this subsection shall apply to any policy in which the amount of any endowment or periodic benefit or benefits payable during any policy year is greater than the total annual premium for such year;

3.  No coupon policy shall be approved or issued in this state after the effective date of this act, nor shall any coupon policy heretofore approved be issued or delivered in this state after January 15, 1974;

4.  No profitsharing policy shall be approved for use in this state after the effective date of this act, nor shall any profit sharing policy heretofore approved be issued or delivered in this state after January 15, 1974.  Nothing contained in this section shall apply to variable annuity contracts to the extent that such are permitted under the laws of this state.

This subsection shall not be construed to restrict or prohibit the sale in this state of any participating life insurance policy where the dividend or abatement of premium is derived solely from the profits of that class of participating business;

5.  No charter, founders or coupon policy or policy with a name of similar connotation shall be approved for use in this state after the effective date of this act and no charter, founders or coupon policy or policy with a name of similar connotation heretofore approved shall be issued or delivered in this state after January 15, 1974; and

6.  No annual endowment shall be described as being a guaranteed dividend, nor as earnings on the premium investment. Nothing in this section shall be construed to prohibit a representation that a holder of a participating life insurance policy or annuity contract will participate in the share of the divisible surplus, if any, apportioned to the policy or contract by the insurer.

Laws 1972, c. 223, § 3, operative Jan. 15, 1974.  

§361217.  Prohibitions and regulations relating to insurers, agents of insurers, representatives of insurers and brokers  Group insurance and group annuity contracts exempt.

In accordance with the purpose expressed in Section 1 of this act, insurers, agents of insurers, representatives of insurers and brokers shall be subject to the following prohibitions and regulations:

1.  No insurer, agent of an insurer or representative of an insurer shall deliver within this state, or issue for delivery within this state, any policy of life insurance or annuity contract which uses as its name or title a phrase which does not include the words, "Life Insurance" or "Annuity Contract" unless such phrase is accompanied by other language elsewhere in the policy or contract which indicates that it is a life insurance policy or annuity contract;

2.  The use of the terms "Investment," "Investment Plan," "Expansion Plan," "Profit," "Profitsharing" and similar terms in connection with a policy of life insurance or an annuity contract, in a context or under such circumstances or conditions as to have the capacity or tendency to mislead a purchaser or prospective purchaser of such policy or contract to believe that he will receive, or that it is possible that he will receive, something other than a life insurance policy or annuity contract or some benefit not provided in the policy or contract or some benefit not available to other persons of the same class and equal expectation of life, is unlawful and is prohibited;

3.  No insurer, agent or broker shall within this state:

a.  make any statement or reference relating to the growth of the life insurance industry in connection with any solicitation of an application for life insurance or annuity contract in a context which could reasonably be understood to interest a prospect in the purchase of shares of stock in an insurer rather than in the purchase of a life insurance policy or annuity contract,

b.  make any statement which reasonably gives rise to the inference that an insured or a prospective insured, by virtue of purchasing a policy of life insurance or an annuity contract, will enjoy a status common to a stockholder or will acquire a stock ownership interest in the insurer; provided, however, that nothing in this paragraph is intended to prohibit the practice of pointing out those aspects in which the status of a policyholder in a mutual life insurer is similar to that of a stockholder in a stock life insurer,

c.  make any reference to or statement concerning an insurer's "Investment Department," "Insured Investment Department" or similar terminology, in such a manner as to imply that the policy was sold or issued by the investment department of the life insurer,

d.  make any statement or reference which would reasonably tend to imply that, by purchasing a policy, the purchaser or prospective purchaser will become a member of a limited group of persons who may receive special advantages or favored treatment in the payment of dividends, unless such benefits are specifically provided in the insurance contract. This paragraph shall not apply to policies under which insured persons of one class of risk may receive dividends at a higher rate than persons of another class of risk,

e.  state or imply that a particular kind of policy is available for only a limited time or that only a limited number of a particular kind of policy will be offered for sale or that only a limited number of persons, or a limited class of persons, will be eligible to buy a particular kind of policy, unless such limitation is specifically provided in the insurance contract,

f.  state or imply that policyholders who are said to act as "centers of influence" or as an advisory board for an insurer will share, because of so acting, in the insurer's surplus earnings in some manner not available to other policyholders who are otherwise in the same class,

g.  describe or refer to premium payments in language which states that the payment is a "deposit" unless:

(1) the payment sets up a debtorcreditor relationship between the life insurance company and the policyholder and a showing is made as to when and how the deposit may be withdrawn,

(2) the term is used in conjunction with the word "premium" in such a manner as to indicate clearly the true character of the payment, or

(3) the term is used in connection with pension trust or deposit administration plans,

h.  use the words "dividends," "cash dividends," "surplus" or similar phrases in such a manner as to state or imply that the payment of dividends is guaranteed or certain to occur,

i.  state or imply that a purchaser of a policy will share in a stated percentage or portion of the earnings of the insurer. Nothing in this paragraph is intended to prohibit a representation that a holder of a participating life insurance policy or annuity contract will participate in the share of the divisible surplus, if any, apportioned to the policy or contract by the insurer,

j.  make any statement or implication that dividends under a participating policy will be sufficient at any time to assure the receipt of benefits, such as a paidup policy, without the further payment of premiums, unless the statement is accompanied by an adequate explanation as to what benefits or coverage would be provided at such time and the conditions under which this would occur,

k.  state that the insured is guaranteed certain benefits if the policy is allowed to lapse without making an adequate explanation of the nonforfeiture benefits,

l.  describe a life insurance policy or annuity contract or premium payments therefor in terms of "units of participation" unless accompanied by other language clearly indicating the reference to a life insurance policy or annuity contract or to premium payments, as the case may be,

m.  include in sales kits and prepared sales presentations proposed answers to a prospect's questions as to whether life insurance policies or annuity contracts are being sold, which are designed to avoid a clear and unequivocal statement that life insurance or annuities are the subject matter of the solicitation,

n.  display in any manner to a prospective policyholder any material which includes illustrations, using dollar amounts, in connection with the proposed sale of a life insurance or annuity contract unless the printed material clearly identifies that the subject, to which the dollar amounts pertain, has an economic relationship to guaranteed values and dividends of the policy,

o.  make any general statement that an insurer makes a profit as a result of policy lapses or surrenders,

p.  make comparisons to the past experience of other life insurers as a means of projecting possible experience of the soliciting insurer when those comparisons are designed to enhance the characteristics of the policy being sold by confining the comparisons to insurers having favorable experience with that type of policy without a fair disclosure of other insurers which have had unfavorable experience with such type of policy,

q.  state that a policy contains certain features which are not found in other life insurance policies or annuity contracts, unless that be true,

r.  represent an option to purchase insurance in the future in such a manner that the policyholder might reasonably infer that he is purchasing term insurance or some other form of life insurance that would result in a payment to the beneficiary in the event of the death of the policyholder, or

s.  make any reference to a policy of life insurance or an annuity contract in such a manner as to misrepresent the true nature of the policy contract;

4.  No insurer, agent for an insurer or representative for an insurer shall, as a competitive or "twisting" device, inform any policyholder or prospective policyholder that any other insurer is required to change a policy form or related material to comply with the provisions of this act; and

5.  This section shall not apply to group insurance policies nor to group annuity contracts.

Laws 1972, c. 223, § 4, operative Jan. 15, 1974.  

§36-1219.  Clean claims - Reimbursement - Notice of defective claims - Interest of overdue payments - Attorney's fees.

A.  In the administration, servicing, or processing of any accident and health insurance policy, every insurer shall reimburse all clean claims of an insured, an assignee of the insured, or a health care provider within forty-five (45) calendar days after receipt of the claim by the insurer.

B.  As used in this section:

1.  "Accident and health insurance policy" or "policy" means any policy, certificate, contract, agreement or other instrument that provides accident and health insurance, as defined in Section 703 of this title, to any person in this state, and any subscriber certificate or any evidence of coverage issued by a health maintenance organization to any person in this state;

2.  "Clean claim" means a claim that has no defect or impropriety, including a lack of any required substantiating documentation, or particular circumstance requiring special treatment that impedes prompt payment; and

3.  "Insurer" means any entity that provides an accident and health insurance policy in this state, including but not limited to, a licensed insurance company, a not-for-profit hospital service and medical indemnity corporation, a health maintenance organization, a fraternal benefit society, a multiple employer welfare arrangement, or any other entity subject to regulation by the Insurance Commissioner.

C.  If a claim or any portion of a claim is determined to have defects or improprieties, including a lack of any required substantiating documentation, or particular circumstance requiring special treatment, the insured, enrollee or subscriber, assignee of the insured, enrollee or subscriber, or health care provider shall be notified in writing within thirty (30) calendar days after receipt of the claim by the insurer.  The written notice shall specify the portion of the claim that is causing a delay in processing and explain any additional information or corrections needed.  Failure of an insurer to provide the insured, enrollee or subscriber, assignee of the insured, enrollee or subscriber, or health care provider with the notice shall constitute prima facie evidence that the claim will be paid in accordance with the terms of the policy.

D.  Upon receipt of the additional information or corrections which led to the claim's being delayed and a determination that the information is accurate, an insurer shall either pay or deny the claim or a portion of the claim within forty-five (45) calendar days.

E.  Payment shall be considered made on:

1.  The date a draft or other valid instrument which is equivalent to the amount of the payment is placed in the United States mail in a properly addressed, postpaid envelope; or

2.  If not so posted, the date of delivery.

F.  An overdue payment shall bear simple interest at the rate of ten percent (10%) per year.

G.  In the event litigation should ensue based upon such a claim, the prevailing party shall be entitled to recover a reasonable attorney's fee to be set by the court and taxed as costs against the party or parties who do not prevail.

H.  The Insurance Commissioner shall develop a standardized prompt pay form for use by providers in reporting violations of prompt pay requirements.  The form shall include a requirement that documentation of the reason for the delay in payment or documentation of proof of payment must be provided within ten (10) days of the filing of the form.  The Commissioner shall provide the form to health maintenance organizations and providers.

I.  The provisions of this section shall not apply to the Oklahoma Life and Health Insurance Guaranty Association or to the Oklahoma Property and Casualty Insurance Guaranty Association.

Added by Laws 1975, c. 301, § 1, eff. Oct. 1, 1975.  Amended by Laws 1986, c. 251, § 12, eff. Nov. 1, 1986; Laws 1987, c. 175, § 8, eff. Nov. 1, 1987; Laws 1992, c. 74, § 1, eff. Sept. 1, 1992; Laws 1997, c. 156, § 1, eff. Nov. 1, 1997; Laws 1997, c. 418, § 50, eff. Nov. 1, 1997; Laws 2001, c. 65, § 1, eff. Nov. 1, 2001; Laws 2003, c. 197, § 52, eff. Nov. 1, 2003.

§36-1219.1.  Short title.

Sections 4 through 6 of this act shall be known and may be cited as the "Health Care Fraud Prevention Act".

Added by Laws 2000, c. 353, § 4, eff. Nov. 1, 2000.

§36-1219.2.  Definitions.

As used in the Health Care Fraud Prevention Act:

1.  "Accident and health insurance policy" means any policy, certificate, contract, agreement or other instrument that provides accident and health insurance, as defined in Section 703 of this title, to any person in this state;

2.  "Health care provider" means a physician, hospital, ambulatory surgical center, pharmacy, pharmacist, laboratory, or any other state-licensed or state-recognized provider of health care services;

3.  "Insured" means any person entitled to reimbursement for expenses of health care services and procedures under an accident and health insurance policy issued by an insurer;

4.  "Insurer" means any entity that provides an accident and health insurance policy in this state, including but not limited to a licensed insurance company, a not-for-profit hospital service and medical indemnity corporation, a fraternal benefit society, a multiple employer welfare arrangement, or any other entity subject to regulation by the Insurance Commissioner;

5.  "Perferred provider organization" means any entity defined as a "preferred provider organization (PPO)" in Section 6054 of this title; and

6.  "Third-party administrator" means any person defined as an "administrator" in Section 1442 of this title.

Added by Laws 2000, c. 353, § 5, eff. Nov. 1, 2000.

§36-1219.3.  Discounted reimbursement and disclosure of reimbursement terms prohibited.

A.  An insurer or third-party administrator shall not reimburse a health care provider on a discounted fee basis for covered services that are provided to an insured unless:

1.  The insurer or third-party administrator has contracted with either:

a. the health care provider, or

b. a preferred provider organization which has contracted with the health care provider;

2.  The health care provider has agreed to provide health care services under the terms of the contract; and

3.  The insurer or third-party administrator has agreed to provide coverage for those health care services under an accident and health insurance policy.

B.  A party to a preferred provider contract, including a contract with a preferred provider organization, may not sell, lease, or otherwise transfer information regarding the payment or reimbursement terms of the contract without the express authority and prior adequate notification of the other contracting parties.

Added by Laws 2000, c. 353, § 6, eff. Nov. 1, 2000.

§36-1219.4.  Definitions - Requirements for discount medical plan organizations - Penalties.

A.  As used in this section:

1.  "Direct contract" means a contractual arrangement tying the ultimate seller purporting to offer discounts through the discount card to the health care provider, which expressly states the intent of this agreement to be used for the purpose of offering discounts on health-related purchases to uninsured or noncovered persons;

2.  "Discount card" means a card or any other purchasing mechanism or device, which is not insurance, that purports to offer discounts or access to discounts in health-related purchases from health care providers;

3.  "Discount medical plan" means a business arrangement or contract in which a person, in exchange for fees, dues, charges, or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount.  The term discount medical plan does not include any product regulated as an insurance product, group health service product or health maintenance organization (HMO) product in the State of Oklahoma or discounts provided by an insurer, group health service, or health maintenance organizations (HMOs) where those discounts are provided at no cost to the insured or member and are offered due to coverage with a licensed insurer, group health service, or HMO;

4.  "Discount medical plan organization" means a person or an entity which operates a discount medical plan;

5.  "Health care provider" means any person or entity licensed by this state to provide health care services including, but not limited to, physicians, hospitals, home health agencies, pharmacies, and dentists;

6.  "Health care provider network" means an entity which directly contracts with physicians and hospitals and has contractual rights to negotiate on behalf of those health care providers with a discount medical plan organization to provide medical services to members of the discount medical plan organization;

7.  "Marketer" means a person or entity who markets, promotes, sells or distributes a discount medical plan, including a private label entity that places its name on and markets or distributes a discount medical plan but does not operate a discount medical plan;

8.  "Medical services" means any care, service or treatment of illness or dysfunction of, or injury to, the human body including, but not limited to, physician care, inpatient care, hospital surgical services, emergency services, ambulance services, dental care services, vision care services, mental health services, substance abuse services, chiropractic services, podiatric care services, laboratory services, and medical equipment and supplies.  The term does not include pharmaceutical supplies or prescriptions;

9.  "Member" means any person who pays fees, dues, charges, or other consideration for the right to receive the purported benefits of a discount medical plan; and

10.  "Person" means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, limited liability company, or any other government or commercial entity.

B.  1.  Before doing business in this state as a discount medical plan organization, an entity shall be a corporation, limited liability corporation, partnership, limited liability partnership or other legal entity, organized under the laws of this state or, if a foreign entity, authorized to transact business in this state, and shall be registered as a discount medical plan organization with the Insurance Department of the State of Oklahoma or be licensed by the Insurance Department of the State of Oklahoma as a licensed insurance company, licensed HMO, licensed group health service organization or motor service club.

2.  To register as a discount medical plan organization, an applicant shall:

a. file with the Insurance Department of the State of Oklahoma an application on the form that the Insurance Commissioner requires, and

b. pay to the Department an application fee of Two Hundred Fifty Dollars ($250.00).

3.  A registration is valid for a one-year term.

4.  A registration expires one year following the registration unless it is renewed as provided in this subsection.

5.  Before it expires, a registrant may renew the registration for an additional one-year term if the registrant:

a. otherwise is entitled to be registered,

b. files with the Department a renewal application on the form that the Insurance Commissioner requires, and

c. pays to the Department a renewal fee of Two Hundred Fifty Dollars ($250.00).

6.  The Insurance Commissioner may deny a registration to an applicant or refuse to renew, suspend, or revoke the registration of a registrant if the applicant or registrant, or an officer, director, or employee of the applicant or registrant:

a. makes a material misstatement or misrepresentation in an application for registration,

b. fraudulently or deceptively obtains or attempts to obtain a registration for the applicant or registrant or for another,

c. in connection with the administration of a health care discount program, commits fraud or engages in illegal or dishonest activities, or

d. has violated any provisions of this section.

7.  Prior to registration by the Insurance Department of the State of Oklahoma, each discount medical plan organization shall establish an Internet web site.

8.  All amounts collected as registration or renewal fees shall be deposited into the General Revenue Fund.

9.  Nothing in this subsection shall require a provider who provides discounts to his or her own patients to obtain and maintain a registration as a discount medical plan organization.

10.  a. Nothing in this subsection shall apply to an affiliate of a licensed insurance company, HMO, group health service organization or motor service club, provided that the affiliate registers with and maintains registration in good standing with the Insurance Department of the State of Oklahoma in accordance with subparagraphs b and c of this paragraph.

b. An affiliate shall register as a discount medical plan organization on a form prescribed by the Insurance Commissioner prior to the sale, marketing or solicitation of a discount medical plan and pay an application fee of One Hundred Dollars ($100.00).

c. A registration shall expire one (1) year after the date of registration, and each year on that date thereafter.  A registrant may renew the registration if the registrant pays an annual registration fee of One Hundred Dollars ($100.00) and remains in good standing with the Insurance Department of the State of Oklahoma.

d. For purposes of this section, "affiliate" means a person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with an insurance company, HMO, group health service organization or motor service club licensed in this state.

C.  1.  The Department may examine or investigate the business and affairs of any discount medical plan organization.  The Department may require any discount medical plan organization or applicant to produce any records, books, files, advertising and solicitation materials, or other information and may take statements under oath to determine whether the discount medical plan organization or applicant is in violation of the law or is acting contrary to the public interest.  The expenses incurred in conducting any examination or investigation shall be paid by the discount medical plan organization or applicant.  Examinations and investigations shall be conducted as provided in Sections 309.1 and 309.3 through 309.7 of this title.  Discount medical plan organizations shall be governed by the provisions of this section and shall not be subject to the provisions of the Insurance Code unless specifically referenced.

2.  Failure by the discount medical plan organization to pay the expenses incurred under paragraph 1 of this subsection shall be grounds for denial or revocation of the discount medical plan organization's registration.

D.  1.  A discount medical plan organization may charge a reasonable one-time processing fee and a periodic charge.

2.  If the member cancels the membership within the first thirty (30) days after receipt of the discount card and other membership materials, the member shall receive a reimbursement of all periodic charges paid.  The return of all periodic charges shall be made within thirty (30) days of the date of the cancellation.  If all of the periodic charges have not been paid within thirty (30) days, interest shall be assessed and paid on the proceeds at a rate of the Treasury Bill rate of the preceding calendar year, plus two (2) percentage points.

3.  The right of cancellation shall be set out in the contract on the first page, in ten-point type or larger.

4.  If a discount medical plan charges for a time period in excess of one (1) month, the plan shall, in the event of cancellation of the membership by either party, make a pro rata reimbursement of all periodic charges to the member.

E.  1.  A discount medical plan organization may not:

a. use in its advertisements, marketing material, brochures, and discount cards the terms "insurance", "health plan", "coverage", "copay", "copayments", "preexisting conditions", "guaranteed issue", "premium", "PPO", "preferred provider organization", or other terms in a manner that could reasonably mislead a person to believe that the discount medical plan is health insurance,

b. except for hospital services, have restrictions on free access to plan providers including waiting periods and notification periods, or

c. pay providers any fees for medical services.

2.  A discount medical plan organization may not collect or accept money from a member for payment to a provider for specific medical services furnished or to be furnished to the member unless the organization has an active license from the Insurance Department of the State of Oklahoma to act as an administrator.

F.  1.  The following disclosures, to be printed in not less than twelve-point type, shall be made in writing to any prospective member and shall appear on the first page of any advertisements, marketing materials or brochures relating to a discount medical plan:

a. that the plan is not insurance,

b. that the plan provides discounts with certain health care providers for medical services,

c. that the plan does not make payments directly to the providers of medical services,

d. that the plan member is obligated to pay for all health care services but will receive a discount from those health care providers who have contracted with the discount plan organization, and

e. the name and the location of the registered discount medical plan organization, including the current telephone number of the registered discount medical plan organization or other entity responsible for customer service for the plan, if different from the registered discount medical plan organization.

2.  If the discount medical plan is sold, marketed, or solicited by telephone, the disclosures required by this section shall be made orally and provided in the initial written materials that describe the benefits under the discount medical plan provided to the prospective or new member.

G.  1.  All providers offering medical services to members under a discount medical plan shall provide such services pursuant to a written agreement.  The agreement may be entered into directly by the health care provider or by a health care provider network to which the provider belongs if the provider network has contracts with the health care provider that allow the provider network to contract on behalf of the health care provider.

2.  A health care provider agreement shall provide the following:

a. a description of the services and products to be provided at a discount,

b. the amount or amounts of the discounts or, alternatively, a fee schedule which reflects the health care provider's discounted rates, and

c. a provision that the health care provider will not charge members more than the discounted rates.

3.  A health care provider agreement with a health care provider network shall require that the health care provider network have written agreements with its health care providers that:

a. contain the terms described in paragraph 2 of this subsection,

b. authorize the health care provider network to contract with the discount medical plan organization on behalf of the provider, and

c. require the network to maintain an up-to-date list of its contracted health care providers and to provide that list on a quarterly basis to the discount medical plan organization.

4.  The discount medical plan organization shall maintain a copy of each active health care provider agreement into which it has entered.

H.  1.  There shall be a written agreement between the discount medical plan organization and the member specifying the benefits under the discount medical plan and complying with the disclosure requirements of this section.

2.  All forms used, including the written agreement pursuant to the provisions of paragraph 2 of this subsection, shall first be filed with the Department.  Every form filed shall be identified by a unique form number placed in the lower left corner of each form.  A filing fee of Twenty-five Dollars ($25.00) per form shall be payable to the Insurance Department of the State of Oklahoma for deposit into the General Revenue Fund.

I.  1.  Each discount medical plan organization required to be registered pursuant to this section except an affiliate shall, at all times, maintain a net worth of at least One Hundred Fifty Thousand Dollars ($150,000.00).

2.  The Insurance Department of the State of Oklahoma may not allow a registration unless the discount medical plan organization has a net worth of at least One Hundred Fifty Thousand Dollars ($150,000.00).

J.  1.  The Insurance Department of the State of Oklahoma may suspend the authority of a discount medical plan organization to enroll new members, revoke any registration issued to a discount medical plan organization, or order compliance if the Department finds that any of the following conditions exist:

a. the organization is not operating in compliance with the provisions of this section,

b. the organization does not have the minimum net worth as required by this section,

c. the organization has advertised, merchandised or attempted to merchandise its services in such a manner as to misrepresent its services or capacity for service or has engaged in deceptive, misleading or unfair practices with respect to advertising or merchandising,

d. the organization is not fulfilling its obligations as a discount medical plan organization, or

e. the continued operation of the organization would be hazardous to its members.

2.  If the Insurance Department of the State of Oklahoma has cause to believe that grounds for the suspension or revocation of a registration exist, the Department shall notify the discount medical plan organization in writing, specifically stating the grounds for suspension or revocation, and shall provide opportunity for a hearing on the matter in accordance with the Administrative Procedures Act and the Oklahoma Insurance Code.

3.  When the registration of a discount medical plan organization is surrendered or revoked, such organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs transacted under the registration.  The organization may not engage in any further advertising, solicitation, collecting of fees, or renewal of contracts.

4.  The Insurance Department of the