Oregon Chapter 743
Chapter 743 — Health and Life InsuranceDownload Full 2005 Oregon Revised Statutes (coming soon!)
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Chapter 743 —
Health and Life Insurance
2007 EDITION
HEALTH AND LIFE INSURANCE
INSURANCE
GENERAL PROVISIONS
743.010 Health
insurance policy and health benefit plan forms; rules
743.013 Disclosure
of differences in replacement health insurance policies; nonduplication for
persons 65 and older; rules
743.015 Filing
and approval of credit life and credit health insurance forms; filing of rates
743.018 Filing
of rates for life and health insurance
743.024 Personal
insurance, insurable interest and beneficiaries
743.027 Consent
of individual required for life and health insurance; exceptions
743.028 Uniform
health insurance claim forms
743.030 Life
insurance for benefit of charity
743.039 Alteration
of application for life or health insurance
743.041 Payment
discharges insurer
743.043 Assignment
of policies
743.046 Exemption
of proceeds of individual life insurance other than annuities
743.047 Exemption
of proceeds of group life insurance
743.049 Exemption
of proceeds of annuity policies; assignability of rights
743.050 Exemption
of proceeds of health insurance
743.053 Prohibition
on requirement that death or dismemberment occur in less than 180 days after
accident
POLICY LANGUAGE SIMPLIFICATION
743.100 Short
title
743.101 Purpose
743.103 Definitions
for ORS 743.100 to 743.109
743.104 Scope
of ORS 743.100 to 743.109
743.106
743.107 When
director may authorize lower standards
743.109 Approval
of certain policy forms containing specified provisions; conditions for
approval
INDIVIDUAL LIFE INSURANCE AND ANNUITIES
(Generally)
743.150 Scope
of ORS 743.150, 743.153 and 743.156
743.153 Statement
of benefits
743.154 Acceleration
of death benefits; rules
743.156 Statement
of premium
(Individual Life Insurance Policies)
743.159 Scope
of ORS 743.162 to 743.243
743.162 Payment
of premium
743.165 Grace
period
743.168 Incontestability
743.171 Incontestability
and limitation of liability after reinstatement
743.174 Entire
contract
743.177 Statements
of insured
743.180 Misstatement
of age
743.183 Dividends
743.186 Policy
loan
743.187 Maximum
interest rate on policy loan; adjustable interest rate
743.189 Reinstatement
743.192 Payment
of claim; payment of interest upon failure to pay proceeds
743.195 Installment
payments
743.198 Title
743.201 Beneficiary
of industrial policies
743.204 Standard
Nonforfeiture Law for Life Insurance; applicability
743.207 Required
provisions relating to nonforfeiture
743.210 Determination
of cash surrender values; applicability to certain policies
743.213 Determination
of paid-up nonforfeiture benefits
743.215 Calculation
of adjusted premiums
743.216 Adjusted
premiums; applicability
743.218 Requirements
for determination of future premium amounts or minimum values
743.219 Supplemental
rules for calculating nonforfeiture benefits
743.221 Cash
surrender values upon default in premium payment
743.222 Policy
benefits and premiums that shall be disregarded in calculating cash surrender
values and paid-up nonforfeiture benefits
743.225 Prohibited
provisions
743.228 Acts
of corporate insured or beneficiary with respect to policy
743.230 Variable
life policy provisions
743.231 “Profit-sharing
policy” defined
743.234 “Charter
policy” or “founders policy” defined
743.237 “Coupon
policy” defined
743.240 Profit-sharing,
charter or founders policies prohibited
743.243 Restrictions
on form of coupon policy
743.245 Variable
life insurance policy provisions
743.247 Notice
to variable life insurance policyholders
(Individual Annuity and Pure Endowment
Policies)
743.252 Scope
of ORS 743.255 to 743.273
743.255 Grace
period for annuities
743.258 Incontestability
743.261 Entire
contract
743.264 Misstatement
of age or sex
743.267 Dividends
743.268 Advancement
of policy loans
743.269 Periodic
payments for period certain
743.270 Reinstatement
743.271 Periodic
stipulated payments on variable annuities
743.272 Computing
benefits
743.273 Standard
provisions of reversionary annuities
743.275 Standard
Nonforfeiture Law for Individual Deferred Annuities; application
743.278 Required
provisions in annuity policies; exception
743.284 Computation
of benefits
743.287 Commencement
of annuity payments at optional maturity dates; calculation of benefits
743.290 Notice
of nonpayment of certain benefits to be included in annuity policy
743.293 Minimum
forfeiture amounts for annuity policies; rules
743.295 Effect
of certain life insurance and disability benefits on minimum nonforfeiture
amounts
GROUP LIFE INSURANCE
743.303 Requirements
for issuance of group life insurance policies
743.306 Required
provisions in group life insurance policies
743.309 Nonforfeiture
provisions
743.312 Grace
period
743.315 Incontestability
743.318 Application;
representations by policyholders and insureds
743.321 Evidence
of insurability
743.324 Misstatement
of age
743.327 Payments
under policy; payment of interest upon failure to pay proceeds
743.330 Issuance
of certificates
743.333 Termination
of individual coverage
743.336 Termination
of policy or class of insured persons
743.339 Death
during period for conversion to individual policy
743.342 Statement
furnished to insured under credit life insurance policy
743.345 Assignability
of group life policies
743.348 Certain
sales practices prohibited
743.351 Eligibility
of association to be group life policyholder; rules
743.354 Requirements
for certain group life policies issued to trustees of certain funds; rules
743.356 Continuing
coverage upon replacement of group life policy
743.358 Borrowing
by certificate holders under group life policy
743.360 Alternative
group life insurance coverage
CREDIT LIFE AND CREDIT HEALTH INSURANCE
743.371 Definitions
for credit life and credit health insurance provisions
743.372 Applicability
of credit life and credit health insurance provisions
743.373 Forms
of credit life and credit health insurance
743.374 Limits
on amount of credit life insurance
743.375 Limit
on amount of credit health insurance
743.376 Duration
of credit life and credit health insurance
743.377 Credit
life and credit health insurance policy or group certificate; contents;
delivery of policy, certificate or copy of application
743.378 Charges
and refunds to debtor
743.379 Status
of remuneration to creditor
743.380 Claim
report and payment
HEALTH INSURANCE
(Individual)
743.402 Exceptions
to individual health insurance policy requirements
743.405 General
requirements
743.408 Mandatory
provisions
743.411 Entire
contract; changes
743.414 Time
limit on certain defenses; incontestability
743.417 Grace
period
743.420 Reinstatement
743.423 Notice
of claim
743.426 Claim
forms
743.429 Proofs
of loss
743.432 Time
of payment of claims
743.435 Payment
of claims
743.438 Physical
examinations and autopsy
743.441 Legal
actions
743.444 Change
of beneficiary
743.447 Optional
provisions
743.450 Change
of occupation
743.453 Misstatement
of age
743.456 Other
insurance in same insurer
743.459 Insurance
with other insurers; expense incurred benefits
743.462 Insurance
with other insurers; other than expense incurred benefits
743.465 Relation
of earnings to insurance
743.468 Unpaid
premium
743.471 Cancellation
743.472 Permissible
reasons for cancellation or refusal to renew
743.474 Conformity
with state statutes
743.477 Illegal
occupation
743.483 Arrangement
of provisions
743.486 Scope
of term “insured” in statutory policy provisions
743.489 Extension
of coverage beyond policy period; effect of misstatement of age
743.492 Policy
return and premium refund provision
743.495 Use
of terms “noncancelable” or “guaranteed renewable”; synonymous terms
743.498 Statement
in policy of cancelability or renewability
(Group and Blanket)
743.522 “Group
health insurance” described
743.523 Certain
sales practices prohibited
743.524 Eligibility
of association to be group health policyholder; rules
743.526 Determination
of whether trustees are policyholders; consequences; rules
743.527 When
group health insurance policies to continue in effect upon payment of premium
by insured individual
743.528 Required
provisions in group health insurance policies
743.529 Continuation
of benefits after termination of group health insurance policy; rules
743.530 Continuation
of benefits after injury or illness covered by workers’ compensation
743.531 Direct
payment of hospital and medical services; rate limitations
743.533 Leased
workers; offering group health insurance
743.534 “Blanket
health insurance” defined
743.537 Required
provisions for blanket health insurance policies
743.540 Application
and certificates not required for blanket health insurance policies
743.543 Payment
of benefits under blanket health insurance policies
743.546 Exemption
of policy form approval for blanket health insurance policies
743.549 Restriction
on reduction of benefits provisions in group and blanket health insurance
policies
743.550 Student
health insurance
743.552 Guidelines
for application of ORS 743.549; rules
743.560 Minimum
grace period; notice upon termination of policy; effect of failure to notify
743.562 Applicability
of ORS 743.560
743.565 Separate
notice to policyholder required before cancellation of individual or group
health insurance policy for nonpayment of premium
743.566 Rules
for certain notice requirements
(Continuation)
743.600 Availability
of continued coverage under group policy for surviving, divorced or separated
spouse 55 or older
743.601 Procedure
for obtaining continuation of coverage under ORS 743.600
743.602 Premium
for continuation of coverage under ORS 743.600; termination of right to
continuation
743.610 Continuation
of coverage under group policy upon termination of employment or membership or
dissolution of marriage; applicability of waiting period to rehired employee
(Long Term Care)
743.650 Long
Term Care Insurance Act; purpose; application
743.652 Definitions
for ORS 743.650 to 743.664
743.653 Prohibition
on certain policies
743.655 Rules;
disclosure; contents of policy
743.656 Eligibility
for benefits; providers required to be covered
743.662 Rescission
of policy and denial of claims
743.664 Offer
of nonforfeiture benefit; rules
(Medicare Supplement)
743.680 Definitions
for ORS 743.680 to 743.689
743.682 Application
of ORS 743.680 to 743.689
743.683 Policy
contents; standards for benefit and claims payments; rules
743.684 Filing
of policy; loss ratio standards; insurance producer compensation
743.685 Outline
of coverage; information brochure; rules
743.686 Right
to return of policy; premium refund
743.687 Advertising
743.688 Rules
743.689 Director’s
authority upon violation of ORS 743.680 to 743.689
(Small Employer, Group, Individual and Portability
Health Insurance, Generally)
743.730 Definitions
for ORS 743.730 to 743.773
743.731 Purposes
743.733 Issuance
of group health benefit plan to affiliated group of employers; determination of
number of employees for purpose of determining eligibility; small employer
carrier
743.734 Group
health benefit plans subject to provisions of specified laws; exemptions
743.736 Requirements
for basic health benefit plans; approval of plans and forms; offering of plan
by carriers
743.737 Requirements
for small employer health benefit plans
743.745 Health
Insurance Reform Advisory Committee; appointment; duties
743.748 Submission
of information by carriers offering health benefit plans
743.749 Certifications
and disclosure of coverage
743.751 Use
of health statements in group health benefit plans
743.752 Coverage
in group health benefit plans; consideration of prospective enrollee health
status restricted; effect of discontinuing offer of plans; exceptions; coverage
by multiple employer welfare arrangements
743.754 Requirements
for group health benefit plans
743.757 Health
benefit coverage for guaranteed association
743.758 Implementation
of Health Insurance Portability and Accountability Act of 1996; rules
743.760 Approval
of portability plans; offering of plans by carriers; required provisions;
actuarial certification
743.761 Satisfaction
of requirements of ORS 743.760 by carrier offering individual health benefit
plans
743.766 Use
of health statements in individual health benefit plans; exclusions or
limitations on coverage; eligibility to apply for Oregon Medical Insurance
Pool; renewal; discontinuation of coverage
743.767 Premium
rates for individual health benefit plans
743.769 Carrier
marketing of individual health benefit plans; rules; duties of carrier
regarding applications; effect of discontinuing offer of plans
743.773 Rules
for ORS 743.766 to 743.769
743.775 Submission
of information by carriers offering individual health benefit plans
743.787 Definitions
for ORS 743.788
743.788 Prescription
drug identification card
743.790 Rules
for prescription drug identification cards
MISCELLANEOUS
743.801 Definitions
743.803 Medical
services contract provisions; nonprovider party prohibitions; future contracts
743.804 Requirements
for insurer offering health benefit plan
743.806 Utilization
review requirements for medical services contracts to which insurer not party
743.807 Utilization
review requirements for insurers offering health benefit plan
743.808 Requirements
for insurers that require designation of participating primary care physician;
exceptions
743.811 Applicability
743.814 Requirements
for insurers offering managed health insurance; quality assessment; rules
743.817 Requirements
for insurers offering managed health or preferred provider organization
insurance; rules; opportunity to participate
743.819 Reporting
requirements; rules
743.821 Required
managed health insurance contract provision; enrollee liability
743.823 Enforcement
of Newborns’ and Mothers’ Health Protection Act of 1996
743.827 Health
Care Consumer Protection Advisory Committee
743.829 Decisions
regarding health care facility length of stay, level of care and follow-up care
743.831 Consortium
established; managed health care performance
743.834 Insurer
prohibited practices; patient communication and referral
743.837 Prior
authorization requirements
743.839 Disclosure
of information
743.842 Emergency
eye care services without referral from primary care provider
743.845 Designation
of women’s health care provider as primary care provider; direct access to
women’s health care provider
743.847 Medicaid
not considered in coverage eligibility determination; claims by state Medicaid
agency; prohibited ground for denial of enrollment of child; insurer duties
RIGHTS OF ENROLLEES
743.854 Continuity
of care
743.856 Referrals
to specialists
743.857 External
review
743.858 Director
to contract with independent review organizations to provide external review;
rules
743.859 Inclusion
of statements regarding external review in health benefit plans
743.861 Enrollee
application for external review
743.862 Duties
of independent review organizations
743.863 Civil
penalty for failure to comply by insurer that agreed to be bound by decision
743.864 Private
right of action
743.871 Definitions
for ORS 743.871 to 743.893
743.874 Estimate
of costs for in-network procedure or service
743.876 Estimate
of costs for out-of-network procedure or service
743.878 Submission
of methodology used to determine insurer’s allowable charges
743.883 Alternative
mechanism for disclosure of costs and charges
743.893 Rules
PAYMENT OF CLAIMS
743.911 Payment
or denial of health benefit plan claims; rules
743.913 Interest
on unpaid claims
743.003 [1967 c.359 §335; renumbered 742.001 in 1989]
743.006 [Formerly 736.300; renumbered 742.003 in
1989]
743.009 [1967 c.359 §337; 1969 c.336 §11; 1973 c.608
§1; renumbered 742.005 in 1989]
GENERAL
PROVISIONS
743.010
Health insurance policy and health benefit plan forms; rules. In addition to all other powers of the
Director of the Department of Consumer and Business Services with respect
thereto, the director may issue rules with respect to policy forms and health
benefit plan forms described in ORS 742.005 (6)(a) and (b):
(1) Establishing minimum benefit
standards;
(2) Requiring the ratio of benefits to
premiums to be not less than a specified percentage in order to be considered
reasonable, and requiring the periodic filing of data that will demonstrate the
insurer’s compliance; and
(3) Establishing requirements intended to
discourage duplication or overlapping of coverage and replacement, without
regard to the advantage to policyholders, of existing policies by new policies.
[1979 c.857 §2; 1997 c.96 §1; 1999 c.987 §4a]
743.011 [1985 c.827 §2; repealed by 1989 c.255 §15]
743.012 [1967 c.359 §338; 1989 c.700 §13; renumbered
742.007 in 1989]
743.013
Disclosure of differences in replacement health insurance policies;
nonduplication for persons 65 and older; rules. (1) The Director of the Department of
Consumer and Business Services shall adopt by rule requirements for disclosure
by group and individual health insurers to individual and group health
insurance policyholders the difference between coverage under the existing
policy and coverage being offered to replace that coverage.
(2) The provisions of this section do not
apply to disability income insurance.
(3) The director shall adopt by rule
requirements for nonduplication and replacement of major medical, Medicare
supplement, long term care and special illness policies for applicants 65 years
of age and older. The insurance producer shall offer to compare for any
applicants 65 years of age and older the applicant’s existing policy or
policies and coverage being offered to replace or supplement the applicant’s
existing coverage. [1989 c.474 §2; 2003 c.364 §106]
743.015
Filing and approval of credit life and credit health insurance forms; filing of
rates. (1) All credit life
and credit health insurance policies subject to ORS 743.371 to 743.380, and all
certificates of insurance, notices of proposed insurance, applications for
insurance, indorsements and riders used in connection with such kinds of
policies, delivered or issued for delivery in this state and the schedules of
premium rates pertaining thereto shall be filed with the Director of the
Department of Consumer and Business Services. Such forms are subject to
approval, disapproval or withdrawal of approval by the director as provided in
ORS 742.003, 742.005 and 742.007.
(2) An insurer may revise the schedules of
premium rates from time to time and shall file the revised schedules with the
director. An insurer may not issue any credit life or credit health insurance
policy for which the premium rate exceeds that determined by the schedules of
the insurer as then on file with the director.
(3) If a group policy of credit life or
credit health insurance has been or is delivered in another state, the insurer
shall file only the group certificate, the individual application and the
notice of proposed insurance delivered or issued for delivery in this state as
specified in ORS 743.377 (2) and (4). The director shall approve the group
certificate, the individual application and the notice of proposed insurance if
the forms conform with the requirements specified in ORS 743.377 (2) and (4)
and the schedules of premium rates applicable to the insurance evidenced by the
certificate or notice are not in excess of the insurer’s schedules of premium
rates filed with the director. [Formerly 739.595; 1969 c.336 §12; 1971 c.231 §20;
2005 c.185 §3]
743.018
Filing of rates for life and health insurance. (1) Except for group life and health
insurance, and except as provided in ORS 743.015, every insurer shall file with
the Director of the Department of Consumer and Business Services all schedules
and tables of premium rates for life and health insurance to be used on risks in
this state, and shall file any amendments to or corrections of such schedules
and tables.
(2) Except as provided ORS 743.737 and
743.760 and subsection (3) of this section, a rate filing by a carrier for any
of the following health benefit plans subject to ORS 743.730 to 743.773 shall
be available for public inspection immediately upon submission of the filing to
the director:
(a) Health benefit plans for small
employers.
(b) Portability health benefit plans.
(c) Individual health benefit plans.
(3) The director, upon request by a
carrier, may exempt from disclosure any part of the filing that the director
determines to contain trade secrets and that would, if disclosed, harm
competition. The part that the director determines to be exempt from disclosure
shall be considered confidential for purposes of ORS 705.137. The director may
not disclose a part of a filing subject to a carrier’s request pending the
director’s determination under this subsection. [1967 c.359 §340; 2007 c.391 §1]
743.021 [1967 c.359 §341; 1971 c.231 §21; 1973 c.525
§1; renumbered 742.009 in 1989]
743.024
Personal insurance, insurable interest and beneficiaries. (1) Any individual of competent legal
capacity may procure or effect an insurance policy on the individual’s own life
or body for the benefit of any person. However, except as provided in ORS
743.030, no person shall procure or cause to be procured any insurance policy
upon the life or body of another unless the benefits under such policy are
payable to the individual insured or the personal representatives of the
individual, or to a person having, at the time such policy was entered into, an
insurable interest in the individual insured.
(2) If the beneficiary, assignee or other
payee under any policy made in violation of this section receives from the
insurer any benefits thereunder accruing upon the death, disablement or injury
of the individual insured, the individual insured or the individual’s executor
or administrator, as the case may be, may maintain an action to recover such
benefits from the person so receiving them.
(3) An insurer shall be entitled to rely
upon all statements, declarations and representations made by an applicant for
insurance relative to the matter of insurable interest. No insurer shall incur legal
liability, except as set forth in the policy, by virtue of any untrue
statements, declarations or representations so relied upon in good faith by the
insurer.
(4) This section does not apply to annuity
policies. [1967 c.359 §342]
743.027
Consent of individual required for life and health insurance; exceptions. No life or health insurance policy upon an
individual, except a policy of group life insurance or of group or blanket
health insurance, shall be made or effectuated unless at the time of the making
of the policy the individual insured, being of competent legal capacity to
contract, applies therefor or has consented thereto in writing, except in the
following cases:
(1) A spouse may effectuate such insurance
upon the other spouse.
(2) Any person having an insurable
interest in the life of a minor, or any person upon whom a minor is dependent
for support and maintenance, may effectuate insurance upon the life of or
pertaining to such minor.
(3) Family policies may be issued insuring
any two or more members of a family on an application signed by either parent,
a stepparent, or by a husband or wife.
(4) A person may effectuate insurance that
provides for the final expenses of an adult who is dependent upon the person
for support and maintenance. [1967 c.359 §342a; 1991 c.182 §2]
743.028
Uniform health insurance claim forms. The Director of the Department of Consumer and Business Services shall
prescribe uniform health insurance claim forms which shall be used by all
insurers transacting health insurance in this state and by all state agencies
that require health insurance claim forms for their records. [1973 c.109 §2]
743.030
Life insurance for benefit of charity. (1) Life insurance policies may be effected although the person paying
the consideration has no insurable interest in the life of the person insured
if a charitable, benevolent, educational or religious institution is designated
irrevocably as the beneficiary.
(2) In making such policies the person
paying the premium shall make and sign the application therefor as owner. The
application also must be signed by the person whose life is to be insured. Such
a policy shall be valid and binding between and among all of the parties
thereto.
(3) The person paying the consideration
for such insurance shall have all rights conferred by the policy to loan value
at any time during the premium-paying period, but not at maturity,
notwithstanding such person has no insurable interest in the life of the person
insured. [Formerly 739.420]
743.033 [1967 c.359 §344; renumbered 742.011 in
1989]
743.036 [Formerly 736.330; 1973 c.823 §149; repealed
by 1973 c.827 §83]
743.037 [1973 c.521 §2; renumbered 743.721 in 1989]
743.039
Alteration of application for life or health insurance. (1) An application for a life insurance
policy may not provide for alterations by any person other than the applicant
in either the application or the policy to be issued thereon with respect to
the amount of insurance, classification of risk, plan of insurance or the benefits
unless the application contains a statement that no such changes are effective
until approved in writing by the applicant.
(2) No alteration of any written
application for any health insurance policy shall be made by any person other
than the applicant without the written consent of the applicant, except that
insertions may be made by the insurer, for administrative purposes only, in
such manner as to indicate clearly that such insertions are not to be ascribed
to the applicant. [1967 c.359 §346]
743.041
Payment discharges insurer.
Whenever the proceeds of or payments under a life or health insurance policy
become payable in accordance with the terms of such policy, or the exercise of
any right or privilege under such policy, and the insurer makes payment in
accordance with the terms of the policy or in accordance with any written
assignment of the policy, the person so designated as being entitled to the
proceeds or payments shall be entitled to receive them and to give full
acquittance therefor, and such payments shall fully discharge the insurer from
all claims under the policy unless, before payment is made, the insurer has
received at its home office written notice by or on behalf of some other person
that such other person claims to be entitled to such proceeds or payments or
some interest in the policy. [Formerly 743.084]
743.042 [1967 c.359 §347; 1985 c.465 §1; renumbered
742.013 in 1989]
743.043
Assignment of policies. A
policy may be assignable or not assignable, as provided by its terms. Subject
to its terms relating to assignability, any life or health insurance policy,
under the terms of which the beneficiary may be changed upon the sole request
of the insured or owner, may be assigned either by pledge or transfer of title,
by an assignment executed by the insured or owner alone and delivered to the
insurer, whether or not the pledgee or assignee is the insurer. Any such
assignment shall entitle the insurer to deal with the assignee as the owner or
pledgee of the policy in accordance with the terms of the assignment, until the
insurer has received at its home office written notice of termination of the
assignment or pledge, or written notice by or on behalf of some other person
claiming some interest in the policy in conflict with the assignment. [Formerly
743.087]
743.045 [Formerly 736.305; 1971 c.231 §22; 1985
c.465 §2; renumbered 742.016 in 1989]
743.046
Exemption of proceeds of individual life insurance other than annuities. (1) When a policy of insurance is effected
by any person on any person’s own life or on another life in favor of some
person other than that person having an insurable interest in the life insured,
the lawful beneficiary thereof, other than that person or that person’s legal
representative, is entitled to its proceeds against the creditors or
representatives of the person effecting the policy.
(2) The person to whom a policy of life
insurance is made payable may maintain an action thereon in the person’s own
name.
(3) A policy of life insurance payable to
a beneficiary other than the estate of the insured, having by its terms a cash
surrender value available to the insured, is exempt from execution issued from
any court in this state and in the event of bankruptcy of such insured is
exempt from all demands in legal proceeding under such bankruptcy.
(4) Subject to the statute of limitations,
the amount of any premiums paid in fraud of creditors for such insurance, with
interest thereon, shall inure to their benefit from the proceeds of the policy.
The insurer issuing the policy shall be discharged of all liability thereon by
payment of its proceeds in accordance with its terms unless, before such
payment, the insurer has received at its home office written notice by or in
behalf of some creditor, with specifications of the amount claimed, claiming to
recover for certain premiums paid in fraud of creditors.
(5) The insured under any policy within
this section shall not be denied the right to change the beneficiary when such
right is expressly reserved in the policy.
(6) This section does not apply to annuity
policies. [Formerly 739.405 and then 743.099]
743.047
Exemption of proceeds of group life insurance. (1) A policy of group life insurance or the
proceeds thereof payable to a person or persons other than the individual
insured or the individual’s estate shall be exempt from debts and claims of
creditors or representatives of the individual insured and, in the event of
bankruptcy of the individual insured, from all demands in legal proceedings
under such bankruptcy.
(2) The provisions of subsection (1) of
this section do not apply to group life insurance issued to a creditor covering
the creditor’s debtors to the extent that such proceeds are applied to payment
of the obligation for the purpose of which the insurance was so issued. [Formerly
743.102]
743.048 [Formerly 736.315; renumbered 742.018]
743.049
Exemption of proceeds of annuity policies; assignability of rights. (1) The benefits, rights, privileges and
options which are due or prospectively due an annuitant under any annuity
policy issued before, on or after June 8, 1967, shall not be subject to
execution, nor shall the annuitant be compelled to exercise any such rights,
powers or options, nor shall creditors be allowed to interfere with or terminate
the policy, except:
(a) As to amounts paid for or as premium
on any such annuity with intent to defraud creditors, with interest thereon,
and of which the creditor has given the insurer written notice at its home
office prior to the making of the payments to the annuitant out of which the
creditor seeks to recover. Any such notice shall specify the amount claimed or
such facts as will enable the insurer to ascertain such amount, and shall set
forth such facts as will enable the insurer to ascertain the annuity policy,
the annuitant and the payments sought to be avoided on the ground of fraud.
(b) The total exemption of benefits
presently due and payable to any annuitant periodically or at stated times
under all annuity policies under which the person is an annuitant shall not at
any time exceed $500 per month for the length of time represented by such
installments. Such periodic payments in excess of $500 per month shall be
subject to garnishee execution to the same extent as are wages and salaries.
(c) If the total benefits presently due
and payable to any annuitant under all annuity policies under which the person
is an annuitant shall at any time exceed payment at the rate of $500 per month,
the court may order such annuitant to pay to a judgment creditor or apply on
the judgment, in installments, the portion of such excess benefits as to the
court may appear just and proper, after due regard for the reasonable
requirements of the judgment debtor and family, if dependent upon the judgment
debtor, as well as any payments required to be made by the annuitant to other
creditors under prior court orders.
(2) If the policy so provides, the
benefits, rights, privileges or options accruing under the policy to a
beneficiary or assignee shall not be transferable nor subject to commutation,
and if the benefits are payable periodically or at stated times, the same
exemptions and exceptions contained in this section for the annuitant shall
apply with respect to such beneficiary or assignee. [Formerly 743.105; 1991 c.182
§3]
743.050
Exemption of proceeds of health insurance. Except as may otherwise be expressly provided by the policy, the
proceeds or avails of all health insurance policies and of provisions providing
benefits on account of the insured’s disability which are supplemental to life
insurance policies, issued before, on or after June 8, 1967, shall be exempt
from all liability for any debt of the insured, and from any debt of the
beneficiary existing at the time the proceeds are made available for the use of
the beneficiary. [Formerly 743.108]
743.051 [1967 c.359 §350; renumbered 742.021 in
1989]
743.052 [1971 c.372 §2; renumbered 743.719 in 1989]
743.053
Prohibition on requirement that death or dismemberment occur in less than 180
days after accident. A life
insurance policy or health insurance policy, whether group or individual, that
contains provisions providing benefits in case of death or dismemberment by
accident shall not require that the death or dismemberment occur less than 180
days after the date of the accident in order for benefits to be paid under the
policy. [1991 c.182 §8]
743.054 [1967 c.359 §351; renumbered 742.023 in
1989]
743.055 [1991 c.875 §2; repealed by 1995 c.506 §11]
743.057 [1967 c.359 §352; renumbered 742.026 in
1989]
743.060 [1967 c.359 §353; renumbered 742.028 in
1989]
743.063 [1967 c.359 §354; renumbered 742.033 in
1989]
743.066 [1967 c.359 §355; 1971 c.231 §23; renumbered
742.036 in 1989]
743.069 [1967 c.359 §356; renumbered 742.038 in
1989]
743.072 [Formerly 736.310; 1971 c.231 §24; 1973
c.149 §1; renumbered 742.041 in 1989]
743.075 [1967 c.359 §358; 1975 c.391 §1; 1977 c.742 §8;
renumbered 742.043 in 1989]
743.078 [1967 c.359 §359; renumbered 742.046 in
1989]
743.080 [1971 c.231 §5; 1983 c.249 §1; renumbered
742.048 in 1989]
743.081 [1967 c.359 §360; renumbered 742.051 in
1989]
743.084 [1967 c.359 §361; renumbered 743.041 in
1989]
743.087 [1967 c.359 §362; renumbered 743.043 in
1989]
743.090 [Formerly 736.335; repealed by 1973 c.827 §83]
743.093 [1967 c.359 §364; renumbered 742.053 in
1989]
743.096 [1967 c.359 §365; renumbered 742.056 in
1989]
743.099 [Formerly 739.405; renumbered 743.046 in
1989]
POLICY
LANGUAGE SIMPLIFICATION
743.100
Short title. ORS 743.100 to
743.109 may be cited as the Life and Health Insurance Policy Language
Simplification Act. [Formerly 743.350]
743.101
Purpose. (1) The purpose of
the Life and Health Insurance Policy Language Simplification Act is to
establish minimum standards for language used in policies and certificates of
life insurance and health insurance delivered or issued for delivery in this
state in order to facilitate ease of reading.
(2) ORS 743.100 to 743.109 is not intended
to increase the risk assumed by insurers or to supersede their obligation to
comply with the substance of other Insurance Code provisions applicable to
insurance policies. ORS 743.100 to 743.109 is not intended to impede
flexibility and innovation in the development of policy forms or content or to
lead to the standardization of policy forms or content. [Formerly 743.353]
743.102 [1967 c.359 §367; renumbered 743.047 in
1989]
743.103
Definitions for ORS 743.100 to 743.109. As used in ORS 743.100 to 743.109, “policy” has the meaning given in
ORS 731.122 and, in addition, includes a certificate issued pursuant to a group
insurance policy delivered or issued for delivery in this state. [Formerly
743.357]
743.104
Scope of ORS 743.100 to 743.109. (1) ORS 743.100 to 743.109 apply to all policies delivered or issued
for delivery in this state, except:
(a) Any policy that is a security subject
to federal jurisdiction.
(b) Any group policy covering a group of
1,000 or more lives at date of issue, other than a group credit life insurance
policy or a group credit health insurance policy. However, this paragraph shall
not exempt any certificate issued pursuant to a group policy.
(c) Any group annuity contract that serves
as a funding vehicle for a pension, profit-sharing or deferred compensation
plan.
(d) Any form used in connection with, as a
conversion from, as an addition to, or, pursuant to a contractual provision, in
exchange for, a policy delivered or issued for delivery on a form approved or
permitted to be issued prior to the date the form must be approved under
section 9, chapter 708, Oregon Laws 1979.
(e) The renewal of a policy delivered or
issued for delivery prior to the date the policy form must be approved under
section 9, chapter 708, Oregon Laws 1979.
(f) Any certificate issued pursuant to a
group policy not delivered or issued for delivery in this state.
(2) A non-English language policy will be
deemed to comply with ORS 743.106 if the insurer certifies that the policy is
translated from an English language policy that complies with ORS 743.106. [Formerly
743.362]
743.105 [1967 c.359 §368; renumbered 743.049 in
1989]
743.106
(a) The policy text achieves a score of 40
or more on the Flesch reading ease test, or an equivalent score on any
comparable test as provided in subsection (3) of this section;
(b) The policy, except for specification
pages, schedules and tables is printed in not less than 10-point type, one
point leaded;
(c) The style, arrangement and overall
appearance of the policy give no undue prominence to any portion of the text,
including the text of any indorsements or riders; and
(d) The policy contains a table of
contents or an index of the principal sections of the policy, if the policy has
more than 3,000 words of text printed on three or less pages, or regardless of
the number of words if the policy has more than three pages.
(2) For the purposes of this section, a
Flesch reading ease test score shall be calculated as follows:
(a) For policy forms containing 10,000
words or less of text, the entire form shall be analyzed. For policy forms
containing more than 10,000 words, two 200-word samples per page may be
analyzed instead of the entire form. The samples shall be separated by at least
20 printed lines.
(b) The number of words and sentences in
the text shall be counted and the total number of words divided by the total
number of sentences. The figure obtained shall be multiplied by a factor of 1.015.
(c) The total number of syllables in the
text shall be counted and divided by the total number of words. The figure
obtained shall be multiplied by a factor of 84.6.
(d) The sum of the figures computed under
paragraphs (b) and (c) of this subsection subtracted from 206.835 equals the
Flesch reading ease test score for the policy form.
(e) For purposes of paragraphs (b) and (c)
of this subsection, the following procedures shall be used:
(A) A contraction, hyphenated word or
numbers and letters, when separated by spaces, shall be counted as one word.
(B) A unit of words ending with a period,
semicolon or colon shall be counted as a sentence.
(C) A “syllable” means a unit of spoken
language consisting of one or more letters of a word as divided by an accepted
dictionary. If the dictionary shows two or more equally acceptable
pronunciations of a word, the pronunciation containing fewer syllables may be
used.
(f) As used in this section, “text”
includes all written matter except the following:
(A) The name and address of the insurer;
the name, number or title of the policy; the table of contents or index;
captions and subcaptions; specification pages; schedules or tables; and
(B) Policy language drafted to conform to
the requirements of any state or federal law, regulation or agency
interpretation; policy language required by any collectively bargained
agreement; medical terminology; and words that are defined in the policy.
However, the insurer shall identify the language or terminology excepted by this
subparagraph and shall certify in writing that the language or terminology is
entitled to be excepted by this subparagraph.
(3) Any other reading test may be approved
by the Director of the Department of Consumer and Business Services as an
alternative to the Flesch reading ease test if it is comparable in result to
the Flesch reading ease test.
(4) Each policy filing shall be
accompanied by a certificate signed by an officer of the insurer stating that
the policy meets the minimum required reading ease score on the test used, or
stating that the score is lower than the minimum required but should be
authorized in accordance with ORS 743.107. To confirm the accuracy of a
certification, the director may require the submission of further information.
(5) At the option of the insurer, riders,
indorsements, applications and other forms made a part of the policy may be
scored as separate forms or as part of the policy with which they may be used. [Formerly
743.365]
743.107
When director may authorize lower standards. The Director of the Department of Consumer and Business Services may
authorize a lower score than the Flesch reading ease test score required by ORS
743.106 when, in the director’s sole discretion, the director finds that a
lower required score:
(1) Will provide a more accurate
reflection of the readability of a policy form;
(2) Is warranted by the nature of a
particular policy form or type or class of policy forms; or
(3) Is caused by certain policy language
drafted to conform to the requirements of any state law, regulation or agency
interpretation. [Formerly 743.368]
743.108 [1967 c.359 §369; renumbered 743.050 in
1989]
743.109
Approval of certain policy forms containing specified provisions; conditions
for approval. A policy form
meeting the requirements of ORS 743.106 shall not be disapproved because of
other provisions of the Insurance Code that specify the content of policies, if
the policy form provides the policyholders and claimants protection not less
favorable than they would be entitled to under such provisions. [Formerly
743.370]
743.111 [Formerly 744.090; renumbered 742.058 in
1989]
743.114 [Formerly 736.325; 1971 c.123 §1; 1981 c.667
§1; renumbered 742.061 in 1989]
743.115 [1987 c.774 §46; 1989 c.376 §1; renumbered
742.063 in 1989]
743.116 [1971 c.603 §2; 1981 c.422 §1; 1981 c.891 §2;
renumbered 743.701 in 1989]
743.117 [1967 c.271 §§2,3; renumbered 743.703 in
1989]
743.118 [1987 c.720 §2; renumbered 743.704 in 1989]
743.119 [1981 c.254 §2; renumbered 743.706 in 1989]
743.120 [1975 c.135 §2; renumbered 743.707 in 1989]
743.123 [1975 c.338 §2; renumbered 743.709 in 1989]
743.125 [1979 c.268 §6; renumbered 743.710 in 1989]
743.128 [1979 c.785 §20; renumbered 743.712 in 1989]
743.132 [1979 c.1 §15; renumbered 743.713 in 1989]
743.135 [1981 c.422 §5; 1989 c.721 §54; 1989 c.1080 §1;
renumbered 743.714 in 1989]
743.138 [1987 c.739 §§2,4b; renumbered 743.715 in
1989]
743.140 [1985 c.536 §1; renumbered 743.716 in 1989]
743.143 [1985 c.312 §2; renumbered 743.717 in 1989]
743.145 [1985 c.747 §59; renumbered 743.700 in 1989]
743.147 [1987 c.530 §2; renumbered 743.718 in 1989]
INDIVIDUAL
LIFE INSURANCE AND ANNUITIES
(Generally)
743.150
Scope of ORS 743.150, 743.153 and 743.156. This section and ORS 743.153 and 743.156 apply only to policies of
life insurance, other than group life insurance. [1967 c.359 §372]
743.153
Statement of benefits. A
life insurance policy shall contain a provision stating the amount of benefits
payable or the method to be used or procedure to be followed in determining
such amount, the manner of payment and the consideration therefor. [Formerly
739.310]
743.154
Acceleration of death benefits; rules. (1) A life insurance policy or a rider to a life insurance policy may
provide for the acceleration of death benefits as part of the life insurance
coverage. For purposes of this section, accelerated death benefits are benefits
that:
(a) Are payable to the policy owner or
certificate holder during the lifetime of the insured, in anticipation of death
or upon the occurrence of specified life-threatening or catastrophic conditions
as defined by the policy or rider;
(b) Reduce the death benefit otherwise
payable under the life insurance policy; and
(c) Are payable upon the occurrence of a
single qualifying event that results in the payment of a benefit amount fixed
at the time of acceleration.
(2) For purposes of this section, a
qualifying event is one or more of the following:
(a) A medical condition that will result
in a drastically limited life span, as specified in the policy or rider, not
exceeding 24 months.
(b) A medical condition that has required
or requires extraordinary medical intervention, such as a major organ
transplant or continuous artificial life support, without which the insured
would die.
(c) Any condition that usually requires
continuous confinement in an eligible institution, as defined in the policy or
rider, if the insured is expected to remain there for the rest of the insured’s
life.
(d) A medical condition that in the
absence of extensive or extraordinary medical treatment will result in a
drastically limited life span. Such conditions may include but are not limited
to one or more of the following:
(A) Coronary artery disease resulting in
an acute infarction or requiring surgery;
(B) Permanent neurological deficit
resulting from cerebral vascular accident;
(C) End-stage renal failure; or
(D) Acquired Immune Deficiency Syndrome.
(e) Any other event determined by the
Director of the Department of Consumer and Business Services to be
life-threatening.
(3) A policy or rider that provides for
the acceleration of death benefits:
(a) Must also provide for the continuation
of the policy as to the amount of the death benefit that is not accelerated.
(b) Must allow the policy owner or the
certificate holder to request payment at any time during the period that the
qualifying event continues.
(4) A policy or rider that provides for
the acceleration of death benefits under this section shall not be described or
marketed by an insurer as long term care insurance or as providing long term
care benefits.
(5) The director shall adopt rules
establishing minimum benefits, criteria for the payment of accelerated
benefits, disclosure requirements and actuarial standards. [1991 c.571 §2; 1993
c.17 §1]
743.156
Statement of premium. A life
insurance policy shall contain a provision separately stating the premium for
each benefit provision of the policy for which such separate statement is
necessary, as determined by the Director of the Department of Consumer and
Business Services, to give adequate disclosure of the terms of the policy. [1967
c.359 §374]
(Individual
Life Insurance Policies)
743.159
Scope of ORS 743.162 to 743.243. ORS 743.162 to 743.243 apply only to policies of life insurance other
than group life insurance, and do not apply to annuity or pure endowment
policies. Such sections apply to such policies that are policies of variable
life insurance, except to the extent the provisions of such sections are obviously
inapplicable to variable life insurance or are in conflict with other
provisions of such sections that are expressly applicable to variable life
insurance. [1967 c.359 §375; 1973 c.435 §16]
743.162
Payment of premium. A life
insurance policy shall contain a provision relating to the time and place of
payment of premium. [1967 c.359 §376]
743.165
Grace period. A life
insurance policy shall contain a provision that a grace period of 30 days, or,
at the option of the insurer, of one month of not less than 30 days, or of four
weeks in the case of industrial life insurance policies the premiums for which
are payable more frequently than monthly, shall be allowed within which the
payment of any premium after the first may be made, during which period of
grace the policy shall continue in full force. The insurer may impose an
interest charge not in excess of six percent per annum for the number of days
of grace elapsing before the payment of the premium. If a claim arises under
the policy during such period of grace the amount of any premium due or
overdue, together with interest and any deferred installment of the annual
premium, may be deducted from the policy proceeds. [1967 c.359 §377]
743.168
Incontestability. (1) A life
insurance policy shall contain a provision that the policy shall be
incontestable after it has been in force for two years from its date of issue
during the lifetime of the insured, except for nonpayment of premiums. At the
option of the insurer the two-year limit within which the policy may be
contested shall not apply to the provisions for benefits in the event of total
and permanent disability and provisions which grant additional insurance
specifically against death by accident.
(2) A provision in a life insurance policy
providing that such policy shall be incontestable after a specified period
shall preclude only a contest of the validity of the policy, and shall not
preclude the assertion at any time of defenses based upon provisions in the
policy which exclude or restrict coverage, whether or not such restrictions or
exclusions are excepted in such provision. [1967 c.359 §378]
743.171
Incontestability and limitation of liability after reinstatement. (1) A reinstated policy of life insurance
may be contested on account of fraud or misrepresentation of facts material to
the reinstatement only for the same period following reinstatement, and with
the same conditions and exceptions, as the policy provides with respect to
contestability after original issuance.
(2) When any policy of life insurance is
reinstated, such reinstated policy may exclude or restrict liability to the
same extent that such liability could have been or was excluded or restricted
when the policy was originally issued, and such exclusion or restriction shall
be effective from the date of reinstatement. [1967 c.359 §379]
743.174
Entire contract. A life
insurance policy shall contain a provision that the policy constitutes the
entire contract between the parties. [1967 c.359 §380]
743.177
Statements of insured. A
life insurance policy shall contain a provision that all statements made by or
on behalf of the insured shall, in the absence of fraud, be deemed
representations and not warranties, and that no such statement shall be used in
defense of a claim under the policy unless contained in a written application
and unless a copy of such application is indorsed upon or attached to the
policy when issued. [1967 c.359 §381]
743.180
Misstatement of age. A life
insurance policy shall contain a provision that if it is found at any time
before final settlement under the policy that the age of the insured or of any
other person whose age is considered in determining the premium or benefit
accruing under the policy has been misstated, the amount payable or benefit accruing
under the policy shall be such as the premium would have purchased at the
correct age or ages, or the premium may be adjusted and credit given to the
insured or to the insurer, according to the insurer’s published rate at date of
issue. [1967 c.359 §382]
743.183
Dividends. (1) A life
insurance policy other than a nonparticipating policy shall contain a provision
that the policy shall participate in the divisible surplus of the insurer
annually, beginning not later than the end of the third policy year. Any policy
containing provision for participation beginning at the end of the first or the
second policy year may provide that dividends for either or both of such years
shall be paid subject to the payment of the premium for the next ensuing year.
The owner of the policy shall have the right each year to have the dividend
arising from such participation paid in cash, and if the policy provides other
dividend options, it shall further provide which dividend option is effective
if the owner does not elect one of such options on or before the expiration of
the period of grace allowed for the payment of the premium.
(2) In participating industrial life
insurance policies, in lieu of the provision required in subsection (1) of this
section, there shall be a provision that, beginning not later than the end of
the fifth policy year, the policy shall participate annually in the divisible
surplus in the manner set forth in the policy.
(3) This section does not apply to any
form of paid-up insurance or temporary insurance or endowment insurance issued
or granted in exchange for lapsed or surrendered policies. [1967 c.359 §383]
743.186
Policy loan. (1) A life
insurance policy shall contain a provision that after three full years’
premiums have been paid and after the policy has a cash surrender value and
while no premium is in default beyond the grace period for payment, the insurer
will advance, on proper assignment or pledge of the policy and on the sole
security thereof, an amount equal to or, at the option of the party entitled
thereto, less than the loan value of the policy, at a rate of interest not
exceeding the maximum rate permitted by the policy loan provision. The interest
rate provision shall comply with ORS 743.187. The loan value of the policy
shall be equal to the cash surrender value at the end of the then current
policy year, less any existing indebtedness not already deducted in determining
such cash surrender value including any interest then accrued but not due, any
unpaid balance of the premium for the current policy year, and interest on the
loan to the end of the current policy year. The policy may also provide that:
(a) Interest on any indebtedness that is
90 or more days past due shall be added to the existing indebtedness and shall
bear interest at the rate applicable to the existing indebtedness; and
(b) Except as provided in ORS 743.187, if
the total indebtedness on the policy, including interest due or accrued, equals
or exceeds the amount of the loan value of the policy, the policy shall
terminate and become void upon 30 days’ notice by the insurer mailed to the
last-known address of the insured or other policy owner and of any assignee of
record at the home office of the insurer.
(2) The policy shall reserve to the
insurer the right to defer the granting of a loan, other than for the payment
of any premium to the insurer, for six months after application therefor.
(3) The policy, at the insurer’s option,
may provide for automatic premium loan.
(4) This section does not apply to term insurance
policies or term insurance benefits provided by rider or supplemental policy
provisions, or to industrial life insurance policies. [1967 c.359 §384; 1975
c.575 §1; 1981 c.412 §18; 2001 c.318 §12]
743.187
Maximum interest rate on policy loan; adjustable interest rate. (1) Except as provided otherwise in this
section, the maximum interest rate in the policy loan provision required by ORS
743.186 shall be eight percent per year. The insurer may include in the policy
loan provision, in lieu of a fixed maximum interest rate, a provision for an
adjustable interest rate. The adjustable interest rate provision must comply
with this section. A limitation on interest rates under state law, other than a
limitation contained in the Insurance Code, shall not apply to interest rates
for life insurance policy loans unless the limitation specifically applies to
life insurance policy loans.
(2) The adjustable interest rate
provision:
(a) Shall state in substance that in
accordance with the policy and the law of the jurisdiction in which the policy
is delivered, the insurer will establish from time to time the interest rate
for an existing or a new policy loan; and
(b) Shall set forth the dates on which the
insurer will determine policy loan interest rates. These determination dates
shall be at regular intervals no longer than one year and no shorter than three
months.
(3) The maximum interest rate permitted
for a policy loan under the adjustable interest rate provision shall be
established by the provision as the higher of:
(a) The interest rate used to calculate
cash surrender values under the policy during the same period, plus one
percent; and
(b) The Moody’s Corporate Bond Yield
Average - Monthly Average Corporates, as published by Moody’s
Investors Service, Inc., for the calendar month which precedes by two months
the month in which the determination date for the policy loan interest rate
falls. However, if the Moody’s Corporate Bond Yield Average - Monthly
Average Corporates is no longer published by Moody’s Investors Service, Inc.,
or if the National Association of Insurance Commissioners determines that the
Moody’s Corporate Bond Yield Average - Monthly Average Corporates is
no longer an appropriate rate for this purpose, the Director of the Department
of Consumer and Business Services by rule may establish the method of
determining the rate under this paragraph. The director’s rule, to the maximum
extent reasonable, shall be consistent with the pertinent actions of the
National Association of Insurance Commissioners.
(4) On any date specified in the
adjustable interest rate provision of the policy for determining the policy
loan interest rate:
(a) The insurer may increase the existing
rate if the maximum rate permitted by the provision exceeds the existing rate
by at least one-half of one percent. The increase shall not be less than
one-half of one percent or more than the amount by which the permitted maximum
rate exceeds the existing rate; and
(b) The insurer shall decrease the
existing rate if the existing rate exceeds the maximum rate permitted by the
provision by at least one-half of one percent. The decrease shall not be less
than the amount by which the existing rate exceeds the permitted maximum rate.
(5) The insurer under the adjustable
interest rate provision shall give notice of the policy loan interest rate and
related matters to the policy owner and all other persons entitled to notice by
the policy, as follows:
(a) In the case of a loan other than for
payment of a premium to the insurer, the insurer shall give notice of the
initial interest rate on the loan when the loan is made.
(b) In the case of a loan for payment of a
premium to the insurer, the insurer shall give notice of the initial interest
rate on the loan as soon as reasonably practicable after the loan is made.
However, the insurer need not give this notice when an additional premium loan
is made at the same interest rate then applicable to an existing premium loan
to the borrower.
(c) In the case of a policy with an
outstanding loan, the insurer shall give notice of each increase in the loan
interest rate reasonably in advance of the increase.
(d) Notices given under this subsection
shall include in substance the information required by subsection (2) of this
section.
(6) Notwithstanding ORS 743.186, a policy
shall not terminate in a particular policy year solely because a change in the
policy loan interest rate during that year caused the total indebtedness under
the policy to reach the policy loan value. The policy shall remain in force
during that year unless and until it would have terminated in the absence of
any policy loan interest rate change during that year. [1981 c.412 §20]
743.189
Reinstatement. A life
insurance policy shall contain a provision that if in the event of a default in
premium payments the value of the policy has been applied to provide a paid-up
nonforfeiture benefit, and if this benefit is currently in force and the
original policy has not been surrendered to the insurer and canceled, and if a
period of not more than three years has elapsed since the default (or two years
in the case of an industrial life insurance policy), the policy may be
reinstated upon furnishing evidence of insurability satisfactory to the insurer
and payment of arrears of premiums and payment or reinstatement of any other
indebtedness to the insurer under the policy, with interest at a rate not
exceeding the maximum permitted by the policy loan provision. [1967 c.359 §385;
1981 c.412 §21]
743.192
Payment of claim; payment of interest upon failure to pay proceeds. (1) A life insurance policy shall contain a
provision that when the policy becomes a claim by the death of the insured,
settlement shall be made upon receipt of due proof of death and of the interest
of the claimant.
(2) If the insurer fails to pay the
proceeds of or make payment under the policy within 30 days after receipt of
due proof of death and of the interest of the claimant, and if the beneficiary
elects to receive a lump sum settlement, the insurer shall pay interest on any
money due and unpaid after expiration of the 30-day period. The insurer shall
compute the interest from the date of the insured’s death until the date of
payment, at a rate not lower than that paid by the insurer on other
withdrawable policy owner funds. At the end of the 30-day period, the insurer
shall notify the named beneficiary or beneficiaries at their last-known address
that interest at the applicable rate will be paid on the lump sum proceeds from
the date of death of the insured.
(3) Nothing in this section shall be
construed to allow an insurer to withhold payment of money payable under a life
insurance policy to any named beneficiary for a period longer than reasonably
necessary to transmit the payment. [1967 c.359 §386; 1983 c.754 §2]
743.195
Installment payments. A life
insurance policy shall contain a table showing the amounts of installments, if
any, by which its proceeds may be payable. [1967 c.359 §387]
743.198
Title. A life insurance
policy shall contain a title briefly and correctly describing the policy. If an
industrial life insurance policy, it shall have the words “industrial policy”
imprinted on the face thereof as part of the descriptive matter. [1967 c.359 §388]
743.201
Beneficiary of industrial policies. An industrial life insurance policy shall have the name of the
beneficiary designated thereon, or in the application or other form if attached
to the policy, with a reservation of the right to designate or change the
beneficiary after the issuance of the policy unless such beneficiary has been
irrevocably designated. The policy may also provide that no designation or
change of beneficiary shall be binding on the insurer until indorsed on the
policy by the insurer, and that the insurer may refuse to indorse the name of
any proposed beneficiary who does not appear to the insurer to have an
insurable interest in the life of the insured. The policy may also provide that
if the beneficiary designated in the policy does not make a claim under the
policy or does not surrender the policy with due proof of death within the
period stated in the policy, which shall not be less than 30 days after the
death of the insured, or if the beneficiary is the estate of the insured, or is
a minor, or dies before the insured, or is not legally competent to give a
valid release, then the insurer may make any payment thereunder to the executor
or administrator of the insured, or to any relative of the insured by blood or
legal adoption or connection by marriage, or to any person appearing to the
insurer to be equitably entitled thereto by reason of having been named
beneficiary, or by reason of having incurred expense for the maintenance,
medical attention or burial of the insured. The policy may also include a
similar provision applicable to any other payment due under the policy. [1967
c.359 §389]
743.204
Standard Nonforfeiture Law for Life Insurance; applicability. (1) ORS 743.204 to 743.222 may be cited as
the Standard Nonforfeiture Law for Life Insurance.
(2) The operative date of the Standard
Nonforfeiture Law for Life Insurance as to any policy is the earlier of:
(a) January 1, 1948; or
(b) The date specified in a written
notice, filed with the Director of the Department of Consumer and Business
Services by the insurer, of election to comply with the Standard Nonforfeiture
Law for Life Insurance as to such policy as of the specified date.
(3) The Standard Nonforfeiture Law for
Life Insurance shall not apply to:
(a) Any reinsurance, group insurance, pure
endowment, annuity or reversionary annuity policy.
(b) Any term policy or renewal thereof, of
uniform amount, which provides no guaranteed nonforfeiture or endowment
benefits, of 20 years or less expiring before age 71, for which uniform
premiums are payable during the entire term of the policy. For this purpose,
the age at death for a joint term life insurance policy shall be the age at
death of the oldest life.
(c) Any term policy of decreasing amount,
which provides no guaranteed nonforfeiture or endowment benefits, if each
adjusted premium, calculated as specified in ORS 743.215 and 743.216, is less
than the adjusted premium so calculated on a term policy or renewal thereof of
uniform amount, which provides no guaranteed nonforfeiture benefits or
endowment benefits, which is issued at the same age, for the same initial
amount of insurance and for a term of 20 years or less that expires before age
71 and for which uniform premiums are payable during the entire term of the
policy. For this purpose, the age at death for a joint term life insurance
policy shall be the age at death of the oldest life.
(d) Any policy which provides no
guaranteed nonforfeiture or endowment benefits, and for which policy the cash
surrender value or present value of paid-up nonforfeiture benefit calculated
for the beginning of any policy year as specified in ORS 743.210, 743.213,
743.215 and 743.216 does not exceed two and one-half percent of the amount of
insurance at the beginning of such year. [Formerly 739.340; 1977 c.320 §13;
1981 c.609 §12]
743.207
Required provisions relating to nonforfeiture. (1) A life insurance policy shall contain in
substance the following provisions, or corresponding provisions which in the
opinion of the Director of the Department of Consumer and Business Services are
at least as favorable to the defaulting or surrendering policyholder as are the
minimum requirements specified in this section, and which are essentially in
compliance with ORS 743.221:
(a) That in the event of default in any
premium payment the insurer will grant, upon proper request not later than 60
days after the due date of the premium in default, a paid-up nonforfeiture
benefit on a plan stipulated in the policy, effective as of such due date, of
the amount required by ORS 743.213. In lieu of this stipulated benefit the
insurer may substitute, upon proper request made not later than 60 days after
the due date of the premium in default, another paid-up nonforfeiture benefit
which is actuarially equivalent and provides a greater amount or longer period
of death benefit or, if applicable, a greater amount or earlier payment of
endowment benefit.
(b) That upon surrender of the policy
within 60 days after the due date of any premium payment in default after
premiums have been paid for at least three full years in the case of ordinary
life insurance or five full years in the case of industrial life insurance, the
insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash
surrender value of the amount required by ORS 743.210.
(c) That a specified paid-up nonforfeiture
benefit will become effective as specified in the policy unless the person
entitled to make such election elects another available option not later than
60 days after the due date of the premium in default.
(d) That, if the policy has become paid up
by completion of all premium payments or if it is continued under any paid-up
nonforfeiture benefit which became effective on or after the third policy
anniversary in the case of ordinary life insurance or the fifth policy
anniversary in the case of industrial life insurance, the insurer will pay,
upon surrender of the policy within 30 days after any policy anniversary, a
cash surrender value of the amount required by ORS 743.210.
(e)(A) In the case of all policies other
than those provided for in subparagraph (B) of this paragraph, a statement of
the mortality table and interest rate used in calculating the cash surrender
values and the paid-up nonforfeiture benefits available under the policy,
together with a table showing the cash surrender value, if any, and paid-up
nonforfeiture benefit, if any, available under the policy on each policy
anniversary either during the first 20 policy years or during the term of the
policy, whichever is shorter. Such values and benefits shall be calculated on
the assumption that there are no dividends or paid-up additions credited to the
policy and that there is no indebtedness to the insurer on the policy. At the
option of the insurer such table may also show such values and benefits for any
year or years beyond the 20th policy year.
(B) In the case of policies which provide,
on a basis guaranteed in the policy, for unscheduled changes in benefits or
premiums, or which provide an option for changes in benefits or premiums other
than by change to a new policy, a statement of the mortality table, interest
rate and method used in calculating cash surrender values and paid-up
nonforfeiture benefits available under the policy.
(f)(A) A statement that the cash surrender
values and the paid-up nonforfeiture benefits available under the policy are
not less than the minimum values and benefits required by or pursuant to the
insurance law of the state in which the policy is delivered.
(B) An explanation of the manner in which
the cash surrender values and the paid-up nonforfeiture benefits are altered by
the existence of any paid-up additions credited to the policy or any
indebtedness to the insurer on the policy.
(C) If a detailed statement of the method
of computation of the cash surrender values and paid-up nonforfeiture benefits
shown in the policy is not stated in the policy, a statement that the method of
computation has been filed with the insurance supervisory official of the state
in which the policy is delivered.
(D) A statement of the method to be used
in calculating the cash surrender value and paid-up nonforfeiture benefit
available under the policy on any policy anniversary beyond the last
anniversary for which such values and benefits are shown for consecutive years
in the policy.
(2) Any of the provisions set forth in
subsection (1) of this section, or portions of the provisions, not applicable
by reason of the particular plan of insurance may, to the extent inapplicable,
be omitted from the policy.
(3) The insurer shall reserve the right to
defer the payment of any cash surrender value for a period of six months after
demand therefor with surrender of the policy. [Formerly 739.345; 1981 c.609 §13]
743.210
Determination of cash surrender values; applicability to certain policies. (1) Except as otherwise provided in
subsections (2) and (3) of this section, any cash surrender value available
under a life insurance policy in the event of default in a premium payment due
on any policy anniversary, whether or not required by ORS 743.207, shall be an
amount not less than the excess, if any, of the present value, on such
anniversary, of the future guaranteed benefits which would have been provided
for by the policy, including any existing paid-up additions, if there had been
no default, over the sum of:
(a) The present value on such anniversary
of the adjusted premiums, as defined in ORS 743.215 and 743.216, corresponding
to premiums which would have fallen due on and after such anniversary; and
(b) The amount of any indebtedness to the
insurer on the policy.
(2) This subsection applies to a life
insurance policy issued on or after the operative date defined in ORS 743.215
which provides supplemental life insurance or annuity benefits by rider or
supplemental policy provision at the option of the insured and for an identifiable
additional premium. For such a policy, the cash surrender value shall be an
amount not less than the cash surrender value required by subsection (1) of
this section for a policy otherwise similar to the subject policy but without
such rider or supplemental policy provision, plus the cash surrender value
required by subsection (1) of this section for a policy which provides only the
benefits provided by such rider or supplemental policy provision in the subject
policy.
(3) This subsection applies to a family
life insurance policy issued on or after the operative date defined in ORS
743.215 which policy defines a primary insured and provides term insurance on
the life of the spouse of the primary insured with a term that expires before
age 71 of the spouse. For such a policy, the cash surrender value shall be an
amount not less than the cash surrender value required by subsection (1) of
this section for a policy otherwise similar to the subject policy but without
such term insurance on the life of the spouse, plus the cash surrender value
required by subsection (1) of this section for a policy which provides only the
benefits provided by such term insurance on the life of the spouse in the
subject policy.
(4) Any cash surrender value available
within 30 days after any policy anniversary under any policy which has been
paid up by completion of all premium payments or any policy which has been
continued under any paid-up nonforfeiture benefit, whether or not required by
ORS 743.207, shall be an amount not less than the present value, on such
anniversary, of the future guaranteed benefits provided for by the policy,
including any existing paid-up additions, decreased by the amount of any
indebtedness to the insurer on the policy. [Formerly 739.350; 1981 c.609 §14]
743.213
Determination of paid-up nonforfeiture benefits. Any paid-up nonforfeiture benefit available
under a life insurance policy in the event of default in a premium payment due
on any policy anniversary shall be such that its present value as of such
anniversary shall be at least equal to the cash surrender value then provided
for by the policy or, if none is provided for, that cash surrender value which
would have been required by ORS 743.207 in the absence of the condition that
premiums have been paid for at least a specified period. [Formerly 739.355;
1981 c.609 §15]
743.215
Calculation of adjusted premiums. (1) This section applies to all life insurance policies issued on or
after the operative date defined in this subsection for the issuing insurer.
After January 1, 1982, any insurer may file with the Director of the Department
of Consumer and Business Services a written notice of its election to comply
with the provisions of this section with regard to any number of plans of
insurance after a specified date before January 1, 1989. The specified date
shall be the operative date of this subsection for the plan or plans, but if an
insurer elects to make this subsection operative before January 1, 1989, for
fewer than all plans, the insurer must comply with rules adopted by the
director. There is no limit to the number of times that an insurer may make the
election. If an insurer makes no such election, the operative date of this
section for the insurer shall be January 1, 1989.
(2) Except as provided in subsection (8)
of this section, the adjusted premiums referred to in ORS 743.210 for any life
insurance policy to which this section applies shall be calculated as provided
in this subsection, on an annual basis, as a uniform percentage of the
respective premiums specified in the policy for each policy year, excluding
amounts payable as extra premiums to cover impairments or special hazards and
excluding any uniform annual contract charge or policy fee specified in the
policy statement of the method to be used in calculating the cash surrender
values and paid-up nonforfeiture benefits. This percentage shall be such that
the present value, at the date of issue of the policy, of all such adjusted
premiums shall equal the sum of:
(a) The present value at the policy issue
date of the future guaranteed benefits provided for by the policy;
(b) One percent of either the amount of
insurance, if the insurance is uniform in amount, or the average of the amounts
of insurance at the beginning of each of the first 10 policy years; and
(c) One hundred twenty-five percent of the
nonforfeiture net level premium as defined in subsection (3) of this section.
For this purpose, any excess of the nonforfeiture net level premium over four
percent of such uniform or average amount of insurance shall be disregarded.
(3) The nonforfeiture net level premium
referred to in subsection (2) of this section shall equal the present value, at
the date of issue of the policy, of the guaranteed benefits provided for by the
policy divided by the present value, at the date of issue of the policy, of an
annuity of one per annum payable on the date of issue and on each anniversary
of the policy on which a premium falls due.
(4) In the case of policies which provide,
on a basis guaranteed in the policy, for unscheduled changes in benefits or
premiums, or which provide an option for changes in benefits or premiums other
than by change to a new policy, the adjusted premiums and present values shall
initially be calculated on the assumption that future benefits and premiums do
not change from those stipulated by the policy at the date of issue. At the
time of any such change in the benefits or premiums the future adjusted
premiums, nonforfeiture net level premiums and present values shall be
recalculated as provided in subsection (5) of this section on the assumption
that future benefits and premiums do not change from those stipulated by the
policy immediately after the change.
(5) Except as otherwise provided in
subsection (8) of this section, the recalculated future adjusted premiums
referred to in subsection (4) of this section shall be calculated as provided
in this subsection, on an annual basis, as a uniform percentage of the
respective future premiums specified in the policy for each policy year,
excluding amounts payable as extra premiums to cover impairments and special
hazards and excluding any uniform annual contract charge or policy fee
specified in the policy statement of the method to be used in calculating the
cash surrender values and paid-up nonforfeiture benefits. This percentage shall
be such that the present value, at the date of change to the newly defined
benefits or premiums, of all such future adjusted premiums shall equal A plus B
minus C, where these amounts are defined as follows:
(a) “A” equals the present value, as of
the date of change, of the future guaranteed benefits provided for by the
policy.
(b) “B” equals the additional expense
allowance, if any, for the policy, as defined in subsection (6) of this section.
(c) “C” equals the cash surrender value
under the policy, if any, or present value of any paid-up nonforfeiture benefit
under the policy, as of the date of change.
(6) The additional expense allowance at
the date of the change to the newly defined benefits or premiums, as referred
to in subsection (5) of this section, shall equal the sum of:
(a) One percent of the excess, if
positive, of the average of the amounts of insurance at the beginning of each
of the first 10 policy years subsequent to the change, over the average of the
amounts of insurance, as defined before the change, at the beginning of each of
the first 10 policy years subsequent to the last previous change or the policy
issue date if there has been no change.
(b) One hundred twenty-five percent of the
change, if positive, in the amount of the nonforfeiture net level premium from
the amount applicable prior to the change in policy benefits or premiums to the
amount of the recalculated nonforfeiture net level premium determined from subsection
(7) of this section as of the date of the change in policy benefits or
premiums.
(7) The recalculated nonforfeiture net
level premium referred to in subsection (6) of this section shall equal Y
divided by Z, where these amounts are defined as follows:
(a) “Y” equals the sum of:
(A) The nonforfeiture net level premium
applicable prior to the change times the present value at the date of change of
an annuity of one per annum payable on each anniversary of the policy, on or
subsequent to the date of the change, on which a premium would have fallen due
had the change not occurred; and
(B) The present value at the date of
change of the increase in future guaranteed benefits provided for by the
policy.
(b) “Z” equals the present value at the
date of change of an annuity of one per annum payable on each anniversary of
the policy, on or subsequent to the date of change, on which a premium falls
due.
(8) Notwithstanding any other provisions
of this section, the provisions of this subsection shall apply in the case of a
policy issued on a substandard basis which provides reduced graded amounts of
insurance determined so that, in each policy year, the policy has the same
tabular mortality cost as for an otherwise similar policy of a higher nongraded
amount or amounts of insurance issued on the standard basis. Adjusted premiums
and present values for a policy on such a substandard basis may be calculated
as if the policy were issued to provide such a higher nongraded amount or
amounts of insurance on the standard basis.
(9) Except as provided in subsection (10)
of this section, all adjusted premiums and present values referred to in the
Standard Nonforfeiture Law for Life Insurance shall, for all policies of life
insurance to which this section applies, be calculated on the mortality and
interest bases as follows:
(a) For ordinary life insurance mortality:
(A) The Commissioners 1980 Standard
Ordinary Mortality Table shall be used; or
(B) At the option of the insurer for any
one or more specified plans of life insurance, the Commissioners 1980 Standard
Ordinary Mortality Table with Ten-Year Select Mortality Factors may be used
instead of such table without Ten-Year Select Mortality Factors.
(b) For industrial life insurance
mortality, the Commissioners 1961 Standard Industrial Mortality Table shall be
used.
(c) For all policies issued in a
particular calendar year, an interest rate shall be used which does not exceed
the nonforfeiture interest rate, as defined in subsection (11) of this section,
for policies issued in that year.
(10) The following provisions shall also
apply, for policies to which this section applies, to the calculation of
premiums and values referred to in the Standard Nonforfeiture Law for Life
Insurance:
(a) At the option of the insurer, such
calculations for all policies issued in a particular calendar year may be made
on the basis of an interest rate which does not exceed the nonforfeiture
interest rate, as defined in subsection (11) of this section, for policies
issued in the last preceding calendar year.
(b) Under any paid-up nonforfeiture
benefit, including any paid-up dividend additions, any cash surrender value
available, whether or not required by ORS 743.207, shall be calculated on the
basis of the mortality table and interest rate used in determining the amount
of such paid-up nonforfeiture benefit and paid-up dividend additions.
(c) An insurer shall calculate the amount
of any guaranteed paid-up nonforfeiture benefit, including any paid-up
additions, on the basis of an interest rate no lower than that specified in the
policy for calculating cash surrender values.
(d) In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if any, offered as
a nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1980 Extended Term Insurance Table for
policies of ordinary life insurance, and not more than those shown in the
Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial
life insurance.
(e) For insurance issued on a substandard
basis, the calculation of premiums and values may be based on appropriate
modifications of the mortality tables referred to in subsection (9) of this
section and in this subsection.
(f) Any ordinary life mortality tables
adopted after 1980 by the National Association of Insurance Commissioners that
are approved under rules issued by the director for use in determining the
minimum nonforfeiture standard may be substituted for the Commissioners 1980
Standard Ordinary Mortality Table with or without Ten-Year Select Mortality
Factors, or for the Commissioners 1980 Extended Term Insurance Table.
(g) Any industrial life mortality tables
adopted after 1980 by the National Association of Insurance Commissioners that
are approved under rules issued by the director for use in determining the
minimum nonforfeiture standard may be substituted for the Commissioners 1961
Standard Industrial Mortality Table or the Commissioners 1961 Industrial
Extended Term Insurance Table.
(11) The nonforfeiture interest rate for
any policy issued in a particular calendar year shall equal 125 percent of the
calendar year statutory valuation interest rate for such policy as defined in
the Standard Valuation Law, rounded to the nearer one-quarter of one percent.
(12) Notwithstanding any other provision
in this chapter or ORS chapter 743A, for any previously approved policy form,
any refiling of nonforfeiture values or their methods of computation which
involves only a change in the interest rate or mortality table used to compute
nonforfeiture values shall not of itself require refiling of any other
provisions of that policy form. [1981 c.609 §17; 1983 c.282 §1]
743.216
Adjusted premiums; applicability. This section applies only to life insurance policies issued before the
operative date defined in ORS 743.215. For such policies:
(1) Except as provided in subsection (3)
of this section, the adjusted premiums referred to in ORS 743.210 shall be
calculated on an annual basis and shall be such uniform percentage of the
respective premiums specified in the policy for each policy year, excluding any
extra premiums charged because of impairments or special hazards, that the
present value, at the date of issue of the policy, of all such adjusted
premiums shall be equal to the sum of:
(a) The present value at the policy issue
date of the future guaranteed benefits provided for by the policy.
(b) Two percent of the amount of insurance
if the insurance is uniform in amount, or of the equivalent uniform amount as
defined in subsection (2) of this section if the amount of insurance varies
with duration of the policy.
(c) Forty percent of the adjusted premium
for the first policy year. For this purpose, any excess of the adjusted premium
over four percent of the amount of insurance or equivalent uniform amount shall
be disregarded.
(d) Twenty-five percent of either the
adjusted premium for the first policy year or the adjusted premium for a whole
life policy for the same uniform or the same equivalent uniform amount of
insurance with uniform premiums for the whole of life issued at the same age,
whichever is less. For this purpose, any excess of the adjusted premium over
four percent of the amount of insurance or equivalent uniform amount shall be
disregarded.
(2) In the case of a policy providing an
amount of insurance varying with duration of the policy, the equivalent uniform
amount of the subject policy for the purpose of this section shall be the
uniform amount of insurance provided by an otherwise similar policy, containing
the same endowment benefit or benefits, if any, issued at the same age and for
the same term, the amount of which does not vary with duration and the benefits
under which have the same present value at the date of issue as the benefits
under the subject policy. However, in the case of a policy providing a varying
amount of insurance issued on the life of a child under age 10, the equivalent
uniform amount may be computed as though the amount of insurance provided by
the subject policy prior to the attainment of age 10 were the amount provided
by the subject policy at age 10.
(3) The adjusted premiums for any policy
providing term insurance benefits by rider or supplemental policy provision
shall be calculated in accordance with this subsection. The amounts specified
in paragraphs (a) and (b) of this subsection shall be calculated separately.
Each such amount shall be calculated as specified in subsections (1) and (2) of
this section. However, for the purposes of subsection (1)(b), (c) and (d) of
this section, the amount of insurance or equivalent uniform amount of insurance
used in the calculation of the adjusted premiums referred to in paragraph (b)
of this subsection shall be equal to the excess of the uniform or equivalent
uniform amount determined for the entire policy over the amount used in the
calculation of the adjusted premiums in paragraph (a) of this subsection. The
adjusted premiums for the entire policy shall equal the sum of:
(a) The adjusted premiums for an otherwise
similar policy issued at the same age without such term insurance benefits; and
(b) During the period for which premiums
for such term insurance benefits are payable, the adjusted premiums for such
term insurance benefits.
(4) Except as provided in paragraphs (a)
and (b) of this subsection and subsection (5) of this section, all adjusted
premiums and present values referred to in the Standard Nonforfeiture Law for
Life Insurance shall for all policies of ordinary life insurance to which this
section applies be calculated on the basis of the Commissioners 1941 Standard
Ordinary Mortality Table. Such calculations for any category of ordinary life
insurance issued on female lives may, however, be based on an age not more than
six years younger than the actual age of the insured. Except as provided in
paragraphs (a) and (b) of this subsection and subsection (7) of this section,
such calculations of adjusted premiums and present values for all policies of
industrial life insurance shall be made on the basis of the 1941 Standard
Industrial Mortality Table. All calculations shall be made on the basis of the
rate of interest, not exceeding three and one-half percent per annum, specified
in the policy for calculating cash surrender values and paid-up nonforfeiture
benefits. The following exceptions pertain:
(a) In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if any, offered as
a nonforfeiture benefit, the rates of mortality assumed may be not more than
130 percent of the rates of mortality according to the respective table.
(b) For insurance issued on a substandard
basis, the calculation of adjusted premiums and present values may be based on
such other table of mortality as may be specified by the insurer and approved
by the Director of the Department of Consumer and Business Services.
(5) This subsection applies only to
policies of ordinary life insurance to which this section applies and which are
issued on or after the operative date of this subsection as defined in
subsection (6) of this section. For such policies, all adjusted premiums and
present values referred to in the Standard Nonforfeiture Law for Life Insurance
shall, except as provided in paragraphs (a) and (b) of this subsection, be calculated
on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and
the rate of interest specified in the policy for calculating cash surrender
values and paid-up nonforfeiture benefits. Such calculations for any category
of ordinary life insurance issued on female lives may, however, be based on an
age not more than six years younger than the actual age of the insured. Such
rate of interest shall not exceed three and one-half percent, except that a
rate of interest not exceeding four percent may be used for policies issued
from January 1, 1974, to December 31, 1977, and a rate of interest not
exceeding five and one-half percent may be used for policies issued on or after
January 1, 1978, and with the further exception that for any single premium
whole life or endowment insurance policy a rate of interest not exceeding six
and one-half percent may be used. The following exceptions pertain:
(a) In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if any, offered as
a nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1958 Extended Term Insurance Table.
(b) For insurance issued on a substandard
basis, the calculation of adjusted premiums and present values may be based on
such other table of mortality as may be specified by the insurer and approved
by the director.
(6) After August 9, 1961, any insurer may
file with the director a written notice of its election to comply with the
provisions of subsection (5) of this section after a specified date before
January 1, 1966. After the filing of such notice, such specified date shall be
the operative date of subsection (5) of this section for the insurer with
respect to the ordinary life policies it thereafter issues. If an insurer makes
no such election, such operative date for the insurer shall be January 1, 1966.
(7) This subsection applies only to
policies of industrial life insurance to which this section applies and which
are issued on or after the operative date of this subsection as defined in
subsection (8) of this section. For such policies, all adjusted premiums and
present values referred to in the Standard Nonforfeiture Law for Life Insurance
shall, except as provided in paragraphs (a) and (b) of this subsection, be
calculated on the basis of the Commissioners 1961 Standard Industrial Mortality
Table and the rate of interest specified in the policy for calculating cash
surrender values and paid-up nonforfeiture benefits. Such rate of interest
shall not exceed three and one-half percent, except that a rate of interest not
exceeding four percent may be used for policies issued from January 1, 1974, to
December 31, 1977, and a rate of interest not exceeding five and one-half
percent may be used for policies issued on or after January 1, 1978, and with
the further exception that for any single premium whole life or endowment
insurance policy a rate of interest not exceeding six and one-half percent may
be used. The following exceptions pertain:
(a) In calculating the present value of
any paid-up term insurance with accompanying pure endowment, if any, offered as
a nonforfeiture benefit, the rates of mortality assumed may be not more than
those shown in the Commissioners 1961 Industrial Extended Term Insurance Table.
(b) For insurance issued on a substandard
basis, the calculation of adjusted premiums and present values may be based on
such other table of mortality as may be specified by the insurer and approved
by the director.
(8) After September 2, 1963, any insurer
may file with the director a written notice of its election to comply with the
provisions of subsection (7) of this section after a specified date before
January 1, 1968. After the filing of such notice, such specified date shall be
the operative date of subsection (7) of this section for the insurer with
respect to the industrial life insurance policies it thereafter issues. If an
insurer makes no such election, such operative date for the insurer shall be
January 1, 1968. [Formerly 739.360; 1973 c.636 §6; 1977 c.320 §14; 1981 c.609 §16]
743.218
Requirements for determination of future premium amounts or minimum values. In the case of policies of life insurance
which provide for determination of future premium amounts by the insurer on the
basis of current estimates of future experience, or policies of life insurance
which are of such a nature that minimum values cannot in the judgment of the
Director of the Department of Consumer and Business Services be determined by
the methods otherwise described in the Standard Nonforfeiture Law for Life
Insurance, the following requirements shall apply:
(1) The director must be satisfied that
the policy benefits are substantially as favorable to policyholders and
insureds as the minimum benefits otherwise required by the Standard
Nonforfeiture Law for Life Insurance;
(2) The director must be satisfied that
the benefits and the pattern of premiums of the policy are not misleading to
prospective policyholders or insureds; and
(3) The cash surrender values and paid-up
nonforfeiture benefits provided by the policy must not be less than the minimum
values and benefits required for the policy as calculated by a method
consistent with the principles of the Standard Nonforfeiture Law for Life Insurance,
as determined under rules issued by the director. [1981 c.609 §18]
743.219
Supplemental rules for calculating nonforfeiture benefits. (1) Any cash surrender value and any paid-up
nonforfeiture benefit available under a life insurance policy in the event of
default in a premium payment due at any time other than on the policy
anniversary date shall be calculated with allowance for the lapse of time and
the payment of fractional premiums beyond the last preceding policy
anniversary.
(2) All values referred to in the Standard
Nonforfeiture Law for Life Insurance may be calculated on the assumption that
any death benefit is payable at the end of the policy year of death.
(3) The net value of any paid-up
additions, other than paid-up term additions, shall not be less than the
amounts used to provide the additions. [Formerly 739.365; 1981 c.609 §19]
743.221
Cash surrender values upon default in premium payment. (1) This section shall apply to all life
insurance policies issued on or after January 1, 1986.
(2) Any cash surrender value available in
the event of default in a premium payment due on any policy anniversary under a
life insurance policy to which this section applies shall be in an amount which
does not differ, by more than two-tenths of one percent of the amount of
insurance, if uniform, or the average of the amounts of insurance at the
beginning of each of the first 10 policy years, from A plus B minus C, where
these amounts are defined as follows:
(a) “A” equals the basic cash value on
such anniversary as defined in subsection (3) of this section.
(b) “B” equals the present value on such
anniversary of any existing paid-up additions.
(c) “C” equals the amount of any
indebtedness to the insurer under the policy on such anniversary.
(3)(a) The basic cash value referred to in
subsection (2) of this section shall equal the present value, on a particular
subject policy anniversary, of the future guaranteed benefits which would have
been provided for by the policy if there had been no premium default, excluding
any existing paid-up additions and before deduction of any indebtedness to the
insurer, less the present value on such anniversary of the nonforfeiture
factors, as defined in subsection (4) of this section, corresponding to
premiums which would have fallen due on and after such anniversary. The basic
cash value shall be taken as zero if this calculation produces a negative
result.
(b) Supplemental life insurance or annuity
benefits and family coverage, as described in ORS 743.210 or 743.216, whichever
is applicable to the policy, shall affect the basic cash value in the same
manner as is provided in ORS 743.210 or 743.216 for their effect on the cash
surrender values.
(4)(a) Except as provided in paragraph (b)
of this subsection, the nonforfeiture factor referred to in subsection (3) of
this section shall for each policy year equal a percentage of the adjusted
premium for that policy year as defined in ORS 743.215 or 743.216, whichever is
applicable to the policy. This percentage must:
(A) Be uniform for each policy year
between the second policy anniversary and the later of:
(i) The fifth policy anniversary; and
(ii) The first policy anniversary at which
there is available under the policy a cash surrender value in an amount, before
including any paid-up additions and before deducting any indebtedness, at least
equal to two-tenths of one percent of the amount of insurance, if uniform, or
of the average of the amounts of insurance at the beginning of each of the
first 10 policy years; and
(B) Be such that no percentage after the
later policy anniversary defined in subparagraph (A) of this paragraph applies
to fewer than five consecutive policy years.
(b) No basic cash value may be less than
the value which would be obtained if the adjusted premiums for the policy as
defined in ORS 743.215 or 743.216, whichever is applicable to the policy, were
substituted for the nonforfeiture factors defined in this subsection in the
calculation of the basic cash value.
(5) All adjusted premiums and present
values referred to in this section shall for a particular policy be calculated
on the same mortality and interest bases as are used in demonstrating the
compliance of the policy with the Standard Nonforfeiture Law for Life
Insurance. The cash surrender values referred to in this section shall include
any endowment benefits provided for by the policy.
(6)(a) Any cash surrender value available
other than in the event of default in a premium payment due on a policy
anniversary, and the amount of any paid-up nonforfeiture benefit available
under the policy in the event of default in a premium payment, shall be
determined in a manner consistent with the manner specified for determining the
analogous minimum amounts under the Standard Nonforfeiture Law for Life Insurance.
(b) The amounts of any cash surrender
values and any paid-up nonforfeiture benefits granted in connection with
additional benefits such as those described in ORS 743.222 shall conform with
the principles of this section. [1981 c.609 §21]
743.222
Policy benefits and premiums that shall be disregarded in calculating cash
surrender values and paid-up nonforfeiture benefits. (1) Notwithstanding ORS 743.210, in
ascertaining minimum cash surrender values and paid-up nonforfeiture benefits
required by the Standard Nonforfeiture Law for Life Insurance, benefits and
their respective premiums provided for in a life insurance policy shall be
disregarded where the benefits are payable:
(a) In the event of death or dismemberment
by accident or accidental means;
(b) In the event of total and permanent
disability;
(c) As reversionary annuity or deferred
reversionary annuity benefits;
(d) As term insurance benefits provided by
a rider or supplemental policy provision to which, if issued as a separate
policy, the Standard Nonforfeiture Law for Life Insurance would not apply;
(e) As term insurance on the life of a
child or on the lives of children provided in a policy on the life of a parent
of the child, if such term insurance expires before the child’s age is 26, is
uniform in amount after the child’s age is one, and has not become paid up by
reason of the death of a parent of the child; or
(f) As other policy benefits additional to
life insurance and endowment benefits.
(2) No benefits such as are described in
subsection (1) of this section are required to be included in any paid-up
nonforfeiture benefits. [Formerly 739.370; 1981 c.609 §20]
743.225
Prohibited provisions. No
life insurance policy shall contain any of the following provisions:
(1) A provision limiting the time within
which any action at law or suit in equity may be commenced to less than three
years after the cause of action or suit accrues.
(2) A provision by which the policy
purports to be issued or to take effect more than six months before the
original application for the insurance was made.
(3) A provision for forfeiture of the
policy for failure to repay any loan on the policy or any interest on such loan
while the total indebtedness on the policy is less than the loan value thereof.
[Formerly 739.315]
743.228
Acts of corporate insured or beneficiary with respect to policy. (1) Whenever a corporation organized under
the laws of this state or qualified to do business in this state has caused to
be insured the life of any director, officer, agent or employee, or whenever
such corporation is named as a beneficiary in or assignee of any life insurance
policy, due authority to effect, assign, release, relinquish, convert,
surrender, change the beneficiary or take any other or different action with
reference to such insurance shall be sufficiently evidenced to the insurer by a
written statement under oath showing that such action has been approved by a
majority of the board of directors. Such a statement shall be signed by the
president and secretary of the corporation and bear the corporate seal.
(2) Such a statement shall be binding upon
the corporation and shall protect the insurer concerned in any act done or
suffered by it upon the faith thereof without further inquiry into the validity
of the corporate authority or the regularity of the corporate proceedings.
(3) No person shall be disqualified by
reason of interest in the subject matter from acting as a director or as a
member of the executive committee of such a corporation on any corporate act
touching such insurance. [Formerly 739.415]
743.230
Variable life policy provisions. A variable life insurance policy shall contain in substance the
following provisions:
(1) A provision that there will be a
period of grace of 30 days within which payment of any premium after the first
may be made, during which period of grace the policy will continue in full
force. If a claim arises under the policy during such period of grace, the
amount of any premiums due or overdue, together with interest not in excess of
six percent per annum and any deferred installment of the annual premium, may
be deducted from the policy proceeds. The policy may contain a statement of the
basis for determining any variation in benefits that may occur as a result of
the payment of premium during the period of grace.
(2) A provision that the policy will be
reinstated at any time within three years from the date of a default in premium
payments, unless the cash surrender value has been paid or the period of
extended insurance has expired, upon the production of evidence of insurability
satisfactory to the insurer and the payment of an amount not exceeding the
greater of:
(a) All overdue premiums and any other
indebtedness to the insurer upon said policy with interest at a rate not
exceeding six percent per annum; and
(b) One hundred ten percent of the
increase in cash surrender value resulting from reinstatement.
(3) A provision for cash surrender values
and paid-up insurance benefits available as nonforfeiture options in the event
of default in a premium payment after premiums have been paid for a specified
period. If the policy does not include a table of figures for the options so
available, the policy shall provide that the insurer will furnish, at least
once in each policy year, a statement showing the cash value as of a date no
earlier than the next preceding policy anniversary.
(a) The method of computation of cash
values and other nonforfeiture benefits shall be as described either in the
policy or in a statement filed with the Director of the Department of Consumer
and Business Services, and shall be actuarially appropriate to the variable
nature of the policy.
(b) The method of computation must result,
if the net investment return credited to the policy at all times from the date
of issue equals the specified investment increment factor, with premiums and
benefits determined accordingly under the terms of the policy, in cash values
and other nonforfeiture benefits at least equal to the minimum values required
by the Standard Nonforfeiture Law for a policy with such premiums and benefits.
The method of computation may disregard incidental minimum guarantees as to the
dollar amounts payable. Incidental minimum guarantees include, but are not
limited to, a guarantee which provides that the amount payable at death or
maturity shall be at least equal to the amount that would be payable if the net
investment return credited to the policy at all times from the date of issue is
equal to the specified investment increment factor.
(4) A provision specifying the investment
increment factor to be used in computing the dollar amount of variable benefits
or other variable payments or values under the policy, and guaranteeing that
expense and mortality results will not adversely affect such dollar amounts. [1973
c.435 §18]
743.231
“Profit-sharing policy” defined. “Profit-sharing policy” means:
(1) A life insurance policy which by its
terms expressly provides that the policyholder will participate in the
distribution of earnings or surplus other than earnings or surplus
attributable, by reasonable and nondiscriminatory standards, to the
participating policies of the insurer and allocated to the policyholder on
reasonable and nondiscriminatory standards; or
(2) A life insurance policy the provisions
of which, through sales material or oral presentations, are interpreted by the
insurer to prospective policyholders as entitling the policyholder to the
benefits described in subsection (1) of this section. [Formerly 739.705]
743.234
“Charter policy” or “founders policy” defined. “Charter policy” or “founders policy” means:
(1) A life insurance policy which by its
terms expressly provides that the policyholder will receive some preferential
or discriminatory advantage or benefit not available to persons who purchase
insurance from the insurer at future dates or under other circumstances; or
(2) A life insurance policy the provisions
of which, through sales material or oral presentations, are interpreted by the
insurer to prospective policyholders as entitling the policyholder to the
benefits described in subsection (1) of this section. [Formerly 739.710]
743.237
“Coupon policy” defined. “Coupon
policy” means a life insurance policy which provides a series of pure
endowments maturing periodically in amounts not exceeding the gross annual
policy premiums. The term “pure endowment” or “endowment” is used in its
accepted actuarial sense, meaning a benefit becoming payable at a specific
future date if the insured person is then living. [Formerly 739.715]
743.240
Profit-sharing, charter or founders policies prohibited. No profit-sharing, charter or founders
policy shall be issued or delivered in this state. [Formerly 739.720]
743.243
Restrictions on form of coupon policy. Coupon policies issued or delivered in this state shall be subject to
the following provisions:
(1) No detachable coupons or certificates
or passbooks may be used. No other device may be used which tends to emphasize
the periodic endowment benefits or which tends to create the impression that
the endowments represent interest earnings or anything other than benefits
which have been purchased by part of the policyholder’s premium payments.
(2) Each endowment benefit must have a
fixed maturity date and payment of the endowment benefit shall not be
contingent upon the payment of any premium becoming due on or after such
maturity date.
(3) The endowment benefits must be
expressed in dollar amounts rather than as percentages of other quantities or
in other ways, both in the policy itself and in the sale thereof.
(4) A separate premium for the periodic
endowment benefits must be shown in the policy adjacent to the rest of the
policy premium information and must be given the same emphasis in the policy
and in the sale thereof as that given the rest of the policy premium
information. This premium shall be calculated with mortality, interest and
expense factors which are consistent with those for the basic policy premium. [1967
c.359 §403]
743.245
Variable life insurance policy provisions. A variable life insurance policy shall contain a provision stating the
essential features of the procedures to be followed by the insurer in
determining benefits thereunder. Such a policy, and any certificate evidencing
such a policy, shall contain on its first page a clear and prominent statement
to the effect that benefits thereunder are variable. [1973 c.435 §14]
743.247
Notice to variable life insurance policyholders. An insurer issuing individual variable life
insurance policies shall mail to each policyholder at least once in each policy
year after the first, at the last address of the policyholder known to the
insurer:
(1) A statement reporting the investments
held in the applicable separate account.
(2) A statement reporting as of a date not
more than four months preceding the date of mailing:
(a) In the case of an annuity policy under
which payments have not yet commenced, the number of accumulation units
credited to such policy and the dollar value of a unit, or the value of the
policyholder’s account; and
(b) In the case of a life insurance
policy, the dollar amount of the death benefit. [1973 c.435 §15]
(Individual
Annuity and Pure Endowment Policies)
743.252
Scope of ORS 743.255 to 743.273. ORS 743.255 to 743.273 apply only to annuity and pure endowment
policies, other than reversionary annuity policies except as provided in ORS
743.273, and other than group annuity policies, and shall not apply to
reversionary or deferred annuity benefits included in life insurance policies.
Such sections apply to such policies that are variable annuity policies, except
to the extent the provisions of such sections are obviously inapplicable to
variable annuities or are in conflict with other provisions of such sections
that are expressly applicable to variable annuities. [1967 c.359 §404; 1973
c.435 §19]
743.255
Grace period for annuities.
An annuity or pure endowment policy shall contain a provision that there shall
be a period of grace of one month, but not less than 30 days, within which any
stipulated payment to the insurer falling due after the first such payment may
be made, subject at the option of the insurer to an interest charge thereon at
the rate specified in the policy but not exceeding six percent per annum for
the number of days of grace elapsing before such payment, during which period
of grace the policy shall continue in full force. In case a claim arises under
the policy on account of death prior to expiration of the period of grace
before the overdue payment to the insurer or the deferred payments of the
current policy year, if any, are made, the amount of such payments, with
interest on any overdue payments, may be deducted from any amount payable under
the policy in settlement. [1967 c.359 §405]
743.258
Incontestability. If any
statement other than those relating to age, sex and identity are required as a
condition to issuing an annuity or pure endowment policy, the policy shall
contain a provision that the policy shall be incontestable after it has been in
force during the lifetime of the person or of each of the persons as to whom
such statements are required, for a period of two years from its date of issue,
except for nonpayment of stipulated payments to the insurer. At the option of
the insurer the two year limit within which the policy may be contested shall
not apply to any provisions relative to benefits in the event of disability and
any provisions which grant insurance specifically against death by accident or
accidental means. [1967 c.359 §406]
743.261
Entire contract. An annuity
or pure endowment policy shall contain a provision that the policy, including a
copy of the application if indorsed upon or attached to the policy when issued,
shall constitute the entire contract between the parties. [1967 c.359 §407]
743.264
Misstatement of age or sex.
An annuity or pure endowment policy shall contain a provision that if the age
or sex of the person or persons upon whose life or lives the policy is made, or
of any of them, has been misstated, the amount payable or benefits accruing
under the policy shall be such as the stipulated payment or payments to the
insurer would have purchased according to the correct age or sex, and that if
the insurer has made any overpayment or overpayments on account of any such misstatement,
the amount thereof with interest at the rate specified in the policy but not
exceeding six percent per annum may be charged against the current or next
succeeding payment or payments to be made by the insurer under the policy. [1967
c.359 §408]
743.267
Dividends. If an annuity or
pure endowment policy is participating, it shall contain a provision that the
insurer shall annually ascertain and apportion any divisible surplus accruing
on the policy. [1967 c.359 §409]
743.268
Advancement of policy loans.
(1) An insurer may advance a policy loan equal to or less than the loan value
of an annuity policy or a pure endowment policy if:
(a) The policy premium is not in default
beyond the grace period for payment;
(b) The insured has properly assigned or
pledged the policy on the sole security thereof; and
(c) The interest rate provision complies
with ORS 743.187 and does not exceed the maximum interest rate permitted by the
policy loan provision.
(2) An insurer may establish a minimum
loan amount that may not exceed $1,000.
(3) Except as provided in subsection (4)
of this section, the loan value of the policy shall be equal to the cash
surrender value of the policy, less any existing indebtedness and interest due
that is not already deducted in determining the cash surrender value, plus any
interest then accrued but not credited.
(4) Subsection (3) of this section does
not apply to a policy for which the loan value is established by federal law.
When the loan value is established by federal law, the policy shall indicate
the loan value as a dollar amount, a percentage of the cash surrender value or
a combination of both.
(5) Except as provided in ORS 743.187, if
the total indebtedness on the policy, including interest due or accrued, equals
or exceeds the amount of the loan value of the policy, the policy shall
terminate and become void upon 30 days’ notice by the insurer mailed to the
last-known address of the insured or other policy owner and of any assignee of
record at the home office of the insurer. However, if there is any remaining
cash surrender value under the policy after deducting the total indebtedness on
the policy, an insurer may not terminate the policy.
(6) A insurer may provide for automatic
premium loans in an annuity policy or a pure endowment policy.
(7) An annuity policy or a pure endowment
policy may reserve to the insurer the right to defer the granting of a loan,
other than for payment of any premium to the insurer, for six months after
application for the loan if the insurer makes a written request to and receives
written approval from the chief insurance regulator of the state of domicile of
the insurer prior to exercising a deferral. [2005 c.185 §5]
743.269
Periodic payments for period certain. An annuity policy meeting the requirements of this section may provide
that periodic payments shall be made under the policy for a period certain.
Payments under such a policy shall begin on a date less than 13 months after
the date on which the insurer issues the policy. The policy shall provide that
payments will be made for a period of five years or more. The periodic payments
may be fixed or variable in amount. If such policy offers commuted values on
the annuity, such values must be based on an interest rate not more than one percent
in excess of the interest rates that were used in determining the payments when
the annuity was purchased. [1995 c.632 §2]
743.270
Reinstatement. An annuity or
pure endowment policy shall contain a provision that the policy may be
reinstated at any time within one year from a default in making stipulated
payments to the insurer, unless the cash surrender value has been paid, but all
overdue stipulated payments and any indebtedness to the insurer on the policy
shall be paid or reinstated with interest at the rate specified in the policy
but not exceeding six percent per annum, and in cases where applicable the
insurer may also include a requirement of evidence of insurability satisfactory
to the insurer. [1967 c.359 §410]
743.271
Periodic stipulated payments on variable annuities. A variable annuity policy requiring periodic
stipulated payments to the insurer shall contain in substance the following
provisions:
(1) A provision that there will be a
period of grace of 30 days within which any stipulated payment to the insurer
after the first may be made, during which period of grace the policy will
continue in full force. The policy may include a statement of the basis for
determining the date as of which any such payment received during the period of
grace will be applied.
(2) A provision that, at any time within
one year from the date of a default in making periodic stipulated payments to
the insurer during the life of the annuitant, and unless the cash surrender
value has been paid, the policy may be reinstated upon payment to the insurer
of the overdue payments and all indebtedness to the insurer on the policy, with
interest. The policy may include a statement of the basis for determining the
date as of which the amount to cover such overdue payments and indebtedness
will be applied.
(3) A provision specifying the options
available in the event of a default in a periodic stipulated payment. Such
options may include an option to surrender the policy for a cash value as
determined by the policy, and shall include an option to receive a paid-up
annuity if the policy is not surrendered for cash, the amount of the paid-up
annuity being determined by applying the value of the policy at the annuity
commencement date in accordance with the terms of the policy. [1973 c.435 §21]
743.272
Computing benefits. (1) A
variable annuity policy shall specify the investment increment factors to be
used in computing the dollar amount of variable benefits or other variable
payments or values under the policy, and may guarantee that expense or
mortality results or both will not adversely affect such dollar amounts. In the
case of an individual variable annuity policy under which the expense or
mortality results may adversely affect the dollar amount of benefits, the
expense and mortality factors shall be correspondingly specified in the policy.
“Expense” as used in this subsection may exclude some or all taxes, as
specified in the policy.
(2) In computing the dollar amount of
variable benefits or other policy payments or values:
(a) The annual net investment increment
assumption shall not exceed five percent, except with the approval of the
Director of the Department of Consumer and Business Services; and
(b) To the extent that the level of
benefits may be affected by future mortality results, the mortality factor
shall be determined from the Annuity Mortality Table for 1949, Ultimate, or any
modification of that table not having a lower life expectancy at any age or, if
approved by the director, from another table. [1973 c.435 §22]
743.273
Standard provisions of reversionary annuities. A policy of reversionary annuity shall
contain in substance the following provisions:
(1) The provisions specified in ORS
743.255 to 743.267, except that under ORS 743.255 the insurer may at its option
provide for an equitable reduction of the amount of the annuity payments in
settlement of an overdue payment in lieu of providing for deduction of the
overdue payment from an amount payable upon settlement under the policy.
(2) A provision that the policy may be
reinstated at any time within three years from the date of default in making
stipulated payments to the insurer, upon production of evidence of insurability
satisfactory to the insurer, and upon the condition that all overdue payments and
any indebtedness to the insurer on account of the policy be paid or reinstated
with interest at the rate specified in the policy but not exceeding six percent
per annum. [1967 c.359 §411]
743.275
Standard Nonforfeiture Law for Individual Deferred Annuities; application. (1) ORS 743.275 to 743.295 may be cited as
the Standard Nonforfeiture Law for Individual Deferred Annuities.
(2) The Standard Nonforfeiture Law for
Individual Deferred Annuities does not apply to:
(a) Reinsurance.
(b) A group annuity policy purchased under
a retirement or deferred compensation plan established or maintained by an
employer, including a partnership or sole proprietorship, or by an employee
organization, or by both. This exclusion does not apply, however, to a plan providing
individual retirement accounts or individual retirement annuities under section
408 of the federal Internal Revenue Code.
(c) A premium deposit fund.
(d) A variable annuity policy.
(e) An investment annuity policy.
(f) An immediate annuity policy.
(g) A deferred annuity policy after
annuity payments have commenced.
(h) A reversionary annuity.
(i) A policy delivered outside this state
through an agent or other representative of the insurer issuing the policy. [1977
c.320 §2; 2003 c.370 §1]
743.278
Required provisions in annuity policies; exception. (1) An annuity policy shall contain in
substance the following provisions, or corresponding provisions that in the
opinion of the Director of the Department of Consumer and Business Services are
at least as favorable to the policyholder:
(a) That upon the termination of
considerations under the policy, or upon the written request of the
policyholder, the insurer shall grant a paid-up annuity benefit on a plan
stipulated in the policy, of the value specified in ORS 743.284 and 743.287.
(b) That, if the policy provides for a
lump sum settlement at maturity or any other time, the insurer shall pay upon
surrender of the policy on or before the start of annuity payments, in lieu of
a paid-up annuity benefit, a cash surrender benefit of the amount specified in
ORS 743.284 and 743.287. The insurer may reserve the right to defer the payment
of the cash surrender benefit for a period not to exceed six months after
demand therefor with surrender of the policy, if the insurer makes a written
request and receives written approval from the director. The request shall
address the necessity and equitability to all policyholders of the deferral.
(c) A statement of the mortality table, if
any, and interest rates used in calculating any minimum guaranteed paid-up
annuity, cash surrender or death benefits that are guaranteed under the policy,
together with sufficient information to determine the amount of the benefits.
(d) A statement that any paid-up annuity,
cash surrender or death benefits available under the policy are not less than
the minimum benefits required by any statute of the state in which the policy
is delivered and an explanation of the manner in which the benefits are altered
by the existence of any additional amounts credited by the insurer to the
policy, any indebtedness to the insurer on the policy or any prior withdrawals
from or partial surrenders of the policy.
(2) Notwithstanding subsection (1) of this
section, a deferred annuity policy may provide that if no considerations have
been received for two full years and the portion of the paid-up annuity benefit
at maturity on the plan stipulated in the policy arising from prior
considerations paid would be less than $20 monthly, the insurer at its option
may terminate the policy by payment in cash of the then present value of the
portion of the paid-up annuity benefit. The value shall be calculated on the
basis of the mortality table, if any, and the interest rate specified in the
policy for determining the paid-up annuity benefit. By this payment the insurer
shall be relieved of further obligations under the policy. [1977 c.320 §3; 2003
c.370 §2]
743.281
[1977 c.320 §4; repealed by
2003 c.370 §9]
743.284
Computation of benefits. (1)
Any paid-up annuity benefit available under an annuity policy shall be such
that its present value on the date annuity payments are to commence is at least
equal to the minimum nonforfeiture amount on that date. The present value shall
be computed using the mortality table, if any, and the interest rate specified
in the policy for determining the minimum paid-up annuity benefits guaranteed
in the policy.
(2) For annuity policies that provide cash
surrender benefits, the cash surrender benefits available prior to maturity shall
not be less than the present value as of the date of surrender of the portion
of the policy maturity value of the paid-up annuity benefit that would be
provided under the policy at maturity arising from considerations paid prior to
the time of cash surrender, reduced by appropriate amounts reflecting any
previous withdrawals from or partial surrenders of the policy. The present
value shall be calculated using an interest rate not more than one percent
higher than the interest rate specified in the policy for accumulating the net
considerations to determine maturity value, shall be decreased by the amount of
any indebtedness to the insurer on the policy, including interest due and
accrued, and shall be increased by any existing additional amounts credited by
the insurer to the policy. In no event shall the cash surrender benefit be less
than the minimum nonforfeiture amount on the date of surrender. The death
benefit under an annuity policy that provides cash surrender benefits shall be
at least equal to the cash surrender benefit.
(3) For annuity policies that do not
provide cash surrender benefits, the present value of the paid-up annuity
benefit available as a nonforfeiture option at any time prior to maturity may
not be less than the present value of the portion of the maturity value of the
paid-up annuity benefits provided under the policy arising from considerations
paid before the policy is surrendered in exchange for, or changed to, a
deferred paid-up annuity. The present value shall be calculated for the period
prior to the maturity date on the basis of the interest rate specified in the
policy for accumulating the net considerations to determine the value, and
shall be increased by any additional amounts credited by the insurer to the
policy. For annuity policies that do not provide any death benefits before
annuity payments start, present values shall be calculated on the basis of such
interest rate and the mortality table specified in the policy for determining
the maturity value of paid-up annuity benefit. In no event, however, shall the
present value of a paid-up annuity benefit be less than the minimum
nonforfeiture amount at that time. [1977 c.320 §5; 2003 c.370 §5]
743.287
Commencement of annuity payments at optional maturity dates; calculation of
benefits. (1) For the
purpose of determining the benefits calculated under ORS 743.284 (2) and (3) in
the case of annuity policies under which an election may be made to have
annuity payments commence at optional maturity dates, the maturity date shall
be considered to be the latest date for which such election is permitted by the
policy, but not later than the policy anniversary next following the annuitant’s
70th birthday or the 10th anniversary of the policy, whichever is later.
(2) Any paid-up annuity, cash surrender or
death benefits available at any time, other than on the policy anniversary of a
policy with fixed scheduled considerations, shall be calculated with allowance
for the lapse of time and the payment of any scheduled considerations beyond
the start of the policy year in which termination of considerations occurs. [1977
c.320 §6; 2003 c.370 §6]
743.290
Notice of nonpayment of certain benefits to be included in annuity policy. An annuity policy that does not provide cash
surrender benefits or does not provide death benefits at least equal to the
minimum nonforfeiture amount prior to the start of annuity payments shall
include a statement in a prominent place in the policy that the benefits are
not provided. [1977 c.320 §7; 2003 c.370 §7]
743.293
Minimum forfeiture amounts for annuity policies; rules. (1) The minimum values as specified in ORS
743.284 and 743.287 of any paid-up annuity, cash surrender or death benefits
available under an annuity policy shall be based on minimum nonforfeiture
amounts as described in this section.
(2) The minimum nonforfeiture amount at or
prior to the commencement of any annuity payments shall be equal to an
accumulation up to that time at rates of interest as indicated in subsection
(4) of this section of the net considerations previously paid, decreased by the
sum of the following:
(a) Any prior withdrawals from or partial
surrenders of the contract accumulated at rates of interest as indicated in
subsection (4) of this section;
(b) An annual contract charge of $50,
accumulated at rates of interest as indicated in subsection (4) of this
section;
(c) Any premium tax paid by the insurer
for the policy, accumulated at rates of interest as indicated in subsection (4)
of this section; and
(d) The amount of any indebtedness to the
insurer on the policy, including interest due and accrued.
(3) For purposes of subsection (2) of this
section, the net considerations for a given policy year used to define the
minimum nonforfeiture amount shall be an amount equal to 87.5 percent of the
gross considerations credited to the policy during that policy year.
(4)(a) The interest rate used in
determining minimum nonforfeiture amounts shall be an annual rate of interest
determined as the lesser of three percent per annum and the rate established
under paragraph (b) of this subsection. The rates established shall be
specified in the policy if the interest rate is reset.
(b) The following provisions apply to the
rate:
(A) The rate shall be the five-year
constant maturity treasury rate reported by the Federal Reserve as of a date
certain or an average over a period, rounded to the nearest one-twentieth of
one percent, that is specified in the policy and that is no longer than 15
months prior to the policy issue date or redetermination date under paragraph
(c) of this subsection, reduced by 125 basis points.
(B) The resulting interest rate under
subparagraph (A) of this paragraph may not be less than one percent.
(c) The interest rate shall apply to an
initial period and may be redetermined for additional periods. The
redetermination date, basis and period, if any, shall be stated in the policy.
The basis is the date certain or an average over a specified period that
produces the value of the five-year constant maturity treasury rate to be used
at each redetermination date.
(5) During the period or term that a
policy provides substantive participation in an equity indexed benefit, it may
increase the reduction described in subsection (4)(b) of this section by up to
an additional 100 basis points to reflect the value of the equity index
benefit. The present value on the policy issue date and at each redetermination
date thereafter, may not exceed the market value of the benefit. The Director
of the Department of Consumer and Business Services may require a demonstration
that the present value of the additional reduction does not exceed the market
value of the benefit. If a demonstration is not acceptable to the director, the
director may disallow or limit the additional reduction.
(6) The director may adopt rules to
implement subsection (5) of this section and to provide for further adjustments
to the calculation of minimum nonforfeiture amounts for policies that provide
substantive participation in an equity index benefit and for other policies
that the director determines justify an adjustment. [2003 c.370 §4]
743.295
Effect of certain life insurance and disability benefits on minimum
nonforfeiture amounts. (1)
For an annuity policy that includes, by rider or supplemental contract
provision, both annuity benefits and life insurance benefits that exceed the
greater of cash surrender benefits or a return of the gross considerations with
interest, the minimum nonforfeiture benefits shall equal the sum of the minimum
nonforfeiture benefits for the annuity portion and the minimum nonforfeiture
benefits, if any, for the life insurance portion, computed as if each portion
were a separate policy.
(2) Notwithstanding ORS 743.284 and
743.287, additional benefits payable in the event of total and permanent
disability, as reversionary annuity or deferred reversionary annuity benefits,
or as other policy benefits additional to life insurance, endowment and annuity
benefits, and considerations for all such additional benefits, shall be disregarded
in ascertaining the minimum nonforfeiture amounts and paid-up annuity, cash
surrender and death benefits required by the Standard Nonforfeiture Law for
Individual Deferred Annuities. The inclusion of such benefits may not be
required in any paid-up benefits unless the additional benefits would
separately require minimum nonforfeiture amounts and paid-up annuity, cash
surrender and death benefits. [1977 c.320 §8; 2003 c.370 §8]
GROUP LIFE
INSURANCE
743.303
Requirements for issuance of group life insurance policies. Policies of group life insurance are subject
to the following requirements:
(1) The policy shall be issued upon the
lives of persons who are associated in a common group formed for purposes other
than the obtaining of insurance, except that either of the following kinds of
policies may be issued to persons other than those in a common group:
(a) Group policies of credit life
insurance; or
(b) Group policies of mortgage life
insurance on first and second mortgages secured by real estate.
(2) No fewer than two lives are insured at
the date of issue of the policy.
(3) The amounts of insurance under the
policy shall be based on some plan precluding individual selection, except that
optional supplemental insurance may be available to persons insured under the
policy, if the amounts of such supplemental insurance are based upon age,
salary, rank or similar objective standards.
(4) The premium for the policy must be
paid from the funds of the group policyholder or from funds contributed by
persons insured under the policy, or from both sources.
(5) For the purposes of this section, the
term “mortgage” includes trust deeds.
(6) As used in this section, “trust deed”
has the meaning given in ORS 86.705. [1967 c.359 §412; 1971 c.231 §44; 1991
c.182 §4; 1993 c.426 §1; 2007 c.560 §2]
743.306
Required provisions in group life insurance policies. (1) Except as provided in subsection (2) of
this section a group life insurance policy shall contain in substance the
provisions described in ORS 743.309 to 743.342.
(2) The provisions described in ORS
743.327 to 743.339 shall not apply to policies of group credit life insurance. [1967
c.359 §413]
743.309
Nonforfeiture provisions. If
a group life insurance policy is on a plan of insurance other than the term
plan, it shall contain nonforfeiture provision or provisions which in the
opinion of the Director of the Department of Consumer and Business Services are
equitable to the insured persons and to the policyholder, but nothing in this
section shall be construed to require that group life insurance policies
contain the same nonforfeiture provisions as are required for individual life
insurance policies. [1967 c.359 §414]
743.312
Grace period. A group life
insurance policy shall contain a provision that the policyholder is entitled to
a grace period of 31 days for the payment of any premium due except the first,
during which grace period the death benefit coverage shall continue in force,
unless the policyholder shall have given the insurer written notice of
discontinuance in advance of the date of discontinuance and in accordance with
the terms of the policy. The policy may provide that the policyholder shall be
liable to the insurer for the payment of a pro rata premium for the time the
policy was in force during such grace period. [1967 c.359 §415]
743.315
Incontestability. A group
life insurance policy shall contain a provision that the validity of the policy
shall not be contested, except for nonpayment of premiums, after it has been in
force for two years from its date of issue; and that no statement made by any
person insured under the policy relating to the insurability of the person
shall be used in contesting the validity of the insurance with respect to which
such statement was made after such insurance has been in force prior to the
contest for a period of two years during such person’s lifetime nor unless it
is contained in a written instrument signed by the person. [1967 c.359 §416]
743.318
Application; representations by policyholders and insureds. A group life insurance policy shall contain
a provision that a copy of the application, if any, of the policyholder shall
be attached to the policy when issued, that all statements made by the
policyholder or by the persons insured shall be deemed representations and not
warranties, and that no statement made by any person insured shall be used in
any contest unless a copy of the instrument containing the statement is or has
been furnished to such person or the beneficiary of the person. [1967 c.359 §417]
743.321
Evidence of insurability. A
group life insurance policy shall contain a provision setting forth the
conditions, if any, under which the insurer reserves the right to require a
person eligible for insurance to furnish evidence of individual insurability
satisfactory to the insurer as a condition to part or all of the coverage. [1967
c.359 §418]
743.324
Misstatement of age. A group
life insurance policy shall contain a provision specifying an equitable
adjustment of premiums or of benefits or of both to be made in the event the
age of a person insured has been misstated, such provision to contain a clear
statement of the method of adjustment to be used. [1967 c.359 §419]
743.327
Payments under policy; payment of interest upon failure to pay proceeds. (1) A group life insurance policy shall
contain a provision that any sum becoming due by reason of the death of a
person insured shall be payable to the beneficiary designated by the person
insured, subject to the provisions of the policy in the event there is no
designated beneficiary, as to all or any part of such sum, living at the death
of the person insured, and subject to any right reserved by the insurer in the
policy and set forth in the certificate to pay at its option a part of such sum
not exceeding $500 to any person appearing to the insurer to be equitably
entitled thereto by reason of having incurred funeral or other expenses
incident to the last illness or death of the person insured.
(2) If the insurer fails to pay the proceeds
of or make payment under the policy within 30 days after receipt of due proof
of death and of the interest of the claimant, and if the beneficiary elects to
receive a lump sum settlement, the insurer shall pay interest on any money due
and unpaid after expiration of the 30-day period. The insurer shall compute the
interest from the date of the insured’s death until the date of payment, at a
rate not lower than that paid by the insurer on other withdrawable policy owner
funds. At the end of the 30-day period, the insurer shall notify the designated
beneficiary or beneficiaries at their last-known address that interest at the
applicable rate will be paid on the lump sum proceeds from the date of death of
the insured.
(3) Nothing in this section shall be construed
to allow an insurer to withhold payment of money payable under a group life
insurance policy to any designated beneficiary for a period longer than
reasonably necessary to transmit the payment. [1967 c.359 §420; 1983 c.754 §3]
743.330
Issuance of certificates. A
group life insurance policy shall contain a provision that the insurer will
issue to the policyholder for delivery to each person insured an individual
certificate setting forth a statement as to the insurance protection to which
the person is entitled, to whom the insurance benefits are payable, and the
rights and conditions set forth in ORS 743.333, 743.336 and 743.339. [1967
c.359 §421]
743.333
Termination of individual coverage. A group life insurance policy shall contain a provision that if the
insurance, or any portion of it, on a person covered under the policy ceases
because of termination of employment or of membership in the class or classes
eligible for coverage under the policy, such person shall be entitled to have
issued by the insurer, without evidence of insurability, an individual policy
of life insurance without disability or other supplementary benefits, provided
application for the individual policy shall be made, and the first premium paid
to the insurer, within 31 days after such termination, and provided further
that:
(1) The individual policy shall, at the
option of such person, be on any one of the forms, except term insurance, then
customarily issued by the insurer at the age and for the amount applied for;
(2) The individual policy shall be in an
amount not in excess of the amount of life insurance which ceases because of
such termination, less the amount of any life insurance for which such person
is or becomes eligible under the same or any other group policy within 31 days
after such termination, provided that any amount of insurance which shall have
matured on or before the date of such termination as an endowment payable to
the person insured, whether in one sum or in installments or in the form of an
annuity, shall not, for the purposes of this provision, be included in the
amount which is considered to cease because of such termination; and
(3) The premium on the individual policy
shall be at the insurer’s then customary rate applicable to the form and amount
of the individual policy, to the class of risk to which such person then
belongs, and to the age attained on the effective date of the individual
policy. [1967 c.359 §422]
743.336
Termination of policy or class of insured persons. A group life insurance policy shall contain
a provision that if the group policy terminates or is amended so as to
terminate the insurance of any class of insured persons, every person insured
thereunder at the date of such termination whose insurance terminates and who
has been so insured for at least five years prior to such termination date
shall be entitled to have issued by the insurer an individual policy of life
insurance, subject to the same conditions and limitations as are provided by
ORS 743.333, except that the group policy may provide that the amount of such
individual policy shall not exceed the smaller of:
(1) The amount of the person’s life
insurance protection ceasing because of the termination or amendment of the
group policy, less the amount of any life insurance for which the person is or
becomes eligible under any group policy issued or reinstated by the same or
another insurer within 31 days after such termination; and
(2) $10,000. [1967 c.359 §423; 1989 c.784 §16]
743.339
Death during period for conversion to individual policy. A group life insurance policy shall contain
a provision that if a person insured under the group policy dies during the
period within which the person would have been entitled to have an individual
policy issued in accordance with ORS 743.333 or 743.336 and before such an
individual policy shall have become effective, the amount of life insurance
which the person would have been entitled to have issued under such individual
policy shall be payable as a claim under the group policy, whether or not
application for the individual policy or the payment of the first premium
therefor has been made. [1967 c.359 §424]
743.342
Statement furnished to insured under credit life insurance policy. A group credit life insurance policy shall
contain a provision that the insurer will furnish to the policyholder for
delivery to each debtor insured under the policy a form which will contain a
statement that the life of the debtor is insured under the policy and that any
death benefit paid thereunder by reason of death shall be applied to reduce or
extinguish the indebtedness. [1967 c.359 §425]
743.345
Assignability of group life policies. Nothing in the Insurance Code or in any other law shall be construed
to prohibit any person insured under a group life insurance policy from making
an assignment of all or any part of the incidents of ownership under such
policy, including but not limited to the privilege to have issued an individual
policy of life insurance pursuant to the provisions of ORS 743.333 to 743.339
and the right to name a beneficiary. Subject to the terms of the policy or an
agreement between the insured, the group policyholder and the insurer relating
to assignment of incidents of ownership under the policy, such an assignment by
an insured is valid for the purpose of vesting in the assignee, in accordance
with any provisions included in the assignment as to the time at which it is to
be effective, all of such incidents of ownership so assigned, but without
prejudice to the insurer on account of any payment it may make, or individual
policy it may issue in accordance with ORS 743.333 to 743.339, prior to receipt
of notice of the assignment. [1971 c.231 §6; 2005 c.22 §491]
743.348
Certain sales practices prohibited. (1) No person selling group life insurance is authorized to sell
membership in a common group for the purpose of qualifying an applicant who is
an individual for group life insurance.
(2) No person selling membership in a
common group is authorized to offer group life insurance for the purpose of
selling membership in the common group. [1989 c.784 §6]
743.350 [1979 c.708 §2; renumbered 743.100 in 1989]
743.351
Eligibility of association to be group life policyholder; rules. (1) An insurer shall not offer a policy of
group life insurance in this state to an association as the policyholder or
offer coverage under such a policy, whether the policy is issued in this or
another state, unless the Director of the Department of Consumer and Business
Services determines that the association satisfies the following requirements:
(a) The association must have had an
active existence for at least one year;
(b) The association must insure under the
policy the employees or members of the association, or employees of members of
the association, for the benefit of persons other than the association or its
officers or trustees; and
(c) The association must be maintained
primarily for purposes other than the procurement of insurance.
(2) An insurer shall submit evidence to
the director that the association satisfies the requirements of subsection (1)
of this section. The director shall review the evidence and may request
additional evidence as needed.
(3) An insurer shall submit to the
director any changes in the evidence submitted under subsection (2) of this
section.
(4) The director may order an insurer to
cease offering group life insurance to an association if the director
determines that the association does not meet the requirements under subsection
(1) of this section.
(5) For purposes of this section:
(a) An association includes a labor union.
(b) “Employees” may include retired
employees.
(6) The director may adopt rules to carry
out this section. [1989 c.784 §7]
743.353 [1979 c.708 §3; renumbered 743.101 in 1989]
743.354
Requirements for certain group life policies issued to trustees of certain
funds; rules. (1) An insurer
shall not offer in this state a policy of group life insurance that is
described in this section and insures persons in this state, or shall not offer
coverage under such a policy, whether the policy is to be issued in this or
another state, unless the Director of the Department of Consumer and Business
Services determines that the requirements of subsections (2) and (3) of this
section are satisfied. This section applies to a policy to be issued to the
trustees of a fund established for:
(a) Two or more employers in the same or
related industry;
(b) One or more labor unions;
(c) One or more employers and one or more
labor unions; or
(d) An association determined by the
director to satisfy the requirements of ORS 743.351 (1).
(2) A policy of group life insurance shall
provide coverage for the benefit of employees of the employers, members of the
unions or members of the association. The policy may include as employees the
officers and managers of the employer, and the individual proprietor or
partners if the employer is an individual proprietor or a partnership. In
addition to such employees, the policy may also insure retired employees and
the trustees or their employees, or both, if their duties are principally
connected with the trust.
(3) The director shall determine with
respect to a policy whether the trustees are the policyholder. If the director
determines that the trustees are the policyholder and if the policy is issued
or proposed to be issued in this state, the policy is subject to the Insurance
Code. If the director determines that the trustees are not the policyholder,
the evidence of coverage that is issued or proposed to be issued in this state
to a participating employer, labor union or association shall be deemed to be a
group life insurance policy subject to the Insurance Code. For purposes of this
section, the director may determine that the trustees are not the policyholder
if:
(a) The evidence of coverage issued or
proposed to be issued to a participating employer, labor union or association
is in fact the primary statement of coverage for the employer, labor union or
association; and
(b) The trust arrangement is under the
actual control of the insurer.
(4) An insurer shall submit evidence to
the director showing that the requirements of subsections (2) and (3) of this
section are satisfied. The director shall review the evidence and may request
additional evidence as needed.
(5) An insurer shall submit to the
director any changes in the evidence submitted under subsection (4) of this
section.
(6) The director may adopt rules to carry
out this section. [1989 c.784 §8]
743.356
Continuing coverage upon replacement of group life policy. When coverage under a group life insurance
policy is replaced by coverage under another group life insurance policy, the
insurer offering the policy that is replaced shall continue to provide coverage
for each certificate holder under the replaced policy whose premium payments
are suspended because the certificate holder is disabled. [1989 c.784 §9]
Note: 743.356 was enacted into law by the
Legislative Assembly but was not added to or made a part of ORS chapter 743 or
any series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.
743.357 [1979 c.708 §4; renumbered 743.103 in 1989]
743.358
Borrowing by certificate holders under group life policy. (1) An insurer of a group life insurance
policy may authorize certificate holders under the policy to borrow upon the
policy, subject to the following provisions:
(a) The insurer may require a certificate
holder, in order to borrow on the policy, to have been a certificate holder
under the policy for a minimum period specified by the insurer.
(b) The insurer may require that no
premium on the policy be in default beyond the grace period for payment.
(2) An insurer authorizing a certificate
holder under a group life insurance policy may establish a minimum loan amount,
but the amount may not exceed $1,000.
(3) An insurer may charge a fixed interest
rate not exceeding eight percent per year, or an adjustable interest rate. The
policy provision establishing an adjustable interest rate must comply with ORS
743.187. The exemption from a limitation on interest rates under state law
established in ORS 743.187 for individual life insurance policies also applies
to interest rates established pursuant to this section.
(4) The loan value of a certificate shall
be equal to 90 percent of the cash surrender value of the certificate at the
time of the loan, less any existing indebtedness not already deducted,
including any unpaid interest. This subsection does not apply to certificates
issued under a group policy for which the loan value is established by federal
law. [1991 c.182 §9]
743.360
Alternative group life insurance coverage. (1) Group life insurance coverage offered to a resident in this state
under a group life insurance policy issued to a group other than one described
in ORS 743.351 or 743.354 may be delivered if:
(a) The Director of the Department of
Consumer and Business Services finds that:
(A) The issuance of the policy is in the
best interest of the public;
(B) The issuance of the policy would
result in economies of acquisition or administration; and
(C) The benefits are reasonable in
relation to the premiums charged;
(b) The premium for the policy is paid
either from funds of a policyholder, from funds contributed by a covered person
or from both; and
(c) An insurer has the discretion to
exclude or limit coverage for a voluntary plan on any person for whom evidence
of individual insurability is not satisfactory to the insurer.
(2) The requirements of ORS 743.303 do not
apply to a policy authorized under subsection (1) of this section. [2001 c.943 §3]
743.362 [1979 c.708 §5; renumbered 743.104 in 1989]
743.365 [1979 c.708 §6; renumbered 743.106 in 1989]
743.368 [1979 c.708 §7; renumbered 743.107 in 1989]
743.370 [1979 c.708 §8; renumbered 743.109 in 1989]
CREDIT LIFE
AND CREDIT HEALTH INSURANCE
743.371
Definitions for credit life and credit health insurance provisions. (1) “Credit life insurance” means insurance
on the life of a debtor pursuant to or in connection with a specific loan or
other credit transaction.
(2) “Credit health insurance” means
insurance on a debtor to provide indemnity for payments becoming due on a
specific loan or other credit transaction while the debtor is disabled as
defined in the policy.
(3) “Creditor” means the lender of money
or vendor or lessor of goods, services, property, rights or privileges for
which payment is arranged through a credit transaction, or any successor to the
right, title or interest of any such lender, vendor or lessor, and an
affiliate, associate or subsidiary of any of them or any director, officer or
employee of any of them or any other person in any way associated with any of
them.
(4) “Debtor” means a borrower of money or
a purchaser or lessee of goods, services, property, rights or privileges for
which payment is arranged through a credit transaction.
(5) “Indebtedness” means the total amount
payable by a debtor to a creditor in connection with a loan or other credit
transaction. [Formerly 739.565 and then 743.561]
743.372
Applicability of credit life and credit health insurance provisions. (1) All life or health insurance in
connection with loans or other credit transactions shall be subject to ORS
743.371 to 743.380, except:
(a) Insurance in connection with a loan or
other credit transaction of more than 10 years’ duration; or
(b) Insurance, the issuance of which is an
isolated transaction on the part of the insurer not related to an agreement or
a plan for insuring debtors of the creditor.
(2) Notwithstanding subsection (1) of this
section, credit life and credit health insurance may be issued for up to 10
years in connection with a loan or other credit transaction of any duration. [Formerly
739.570 and then 743.564]
743.373
Forms of credit life and credit health insurance. Credit life and credit health insurance
shall be issued only in the following forms:
(1) Individual policies of life insurance
issued to debtors on the term plan.
(2) Individual policies of health
insurance issued to debtors on a term plan, or disability benefit provisions in
individual policies of credit life insurance.
(3) Group policies of life insurance
issued to creditors providing insurance upon the lives of debtors on the term
plan.
(4) Group policies of health insurance
issued to creditors on a term plan insuring debtors, or disability benefit
provisions in group credit life insurance policies. [Formerly 739.575 and then
743.567]
743.374
Limits on amount of credit life insurance. (1) The initial amount of credit life insurance shall not exceed the
total amount repayable under the contract of indebtedness and, where an
indebtedness is repayable in substantially equal installments, the amount of
insurance shall at no time exceed the scheduled or actual amount of unpaid
indebtedness, whichever is greater.
(2) Notwithstanding the provisions of
subsection (1) of this section, insurance on agricultural credit transaction
commitments not exceeding 18 months in duration may be written up to the amount
of the loan commitment, on a nondecreasing or level term plan.
(3) Notwithstanding the provisions of
subsection (1) of this section, insurance on educational credit transaction
commitments may include the portion of such commitment that has not been
advanced by the creditor. [Formerly 743.570]
743.375
Limit on amount of credit health insurance. The total amount of periodic indemnity payable by credit health
insurance in the event of disability, as defined in the policy, shall not
exceed the aggregate of the periodic scheduled unpaid installments of the
indebtedness; and the amount of each periodic indemnity payment shall not
exceed the original indebtedness divided by the number of periodic
installments. [Formerly 741.425 and then 743.573]
743.376
Duration of credit life and credit health insurance. (1) The term of any credit life or credit
health insurance shall, subject to acceptance by the insurer, commence on the
date when the debtor becomes obligated to the creditor, except that, where a
group policy provides coverage with respect to existing obligations, the insurance
on a debtor with respect to such indebtedness shall commence on the effective
date of the policy. Where evidence of insurability is required and such
evidence is furnished more than 30 days after the date when the debtor becomes
obligated to the creditor, the term of the insurance may commence on the date
on which the insurer determines the evidence to be satisfactory, and in such
event there shall be an appropriate refund or adjustment of any charge to the
debtor for insurance.
(2) The term of the insurance shall not
extend more than 15 days beyond the scheduled maturity date of the indebtedness
except when extended without additional cost to the debtor.
(3) If the indebtedness is discharged
because of renewal or refinancing prior to the scheduled maturity date, the
insurance in force shall be terminated before any new insurance may be issued
in connection with the renewed or refinanced indebtedness.
(4) In all cases of termination of the
insurance prior to the scheduled maturity date of the indebtedness, a refund
shall be paid or credited as provided in ORS 743.378. [Formerly 739.585 and
then 743.576]
743.377
Credit life and credit health insurance policy or group certificate; contents;
delivery of policy, certificate or copy of application. (1) All credit life or credit health
insurance shall be evidenced by an individual policy or, in the case of group
insurance, by a certificate of insurance, which individual policy or group
certificate of insurance shall be delivered to the debtor.
(2) Each individual policy or group
certificate of credit life or credit health insurance, or both shall, in
addition to other requirements of law, set forth:
(a) The name and home-office address of
the insurer;
(b) The name or names of the debtor, or in
the case of a certificate under a group policy, the identity by name or
otherwise of the debtor;
(c) The premium or amount of payment by
the debtor separately for credit life insurance and for credit health
insurance;
(d) A description of the coverage
including the amount and term thereof, and any exceptions, limitations and
restrictions; and
(e) A statement that the benefits shall be
paid to the creditor to reduce or extinguish the unpaid indebtedness and,
wherever the amount of insurance may exceed the unpaid indebtedness, that any
such excess shall be payable to a beneficiary, other than the creditor, named
by the debtor or to the estate of the debtor.
(3) Such individual policy or group
certificate of insurance shall be delivered to the insured debtor at the time
the indebtedness is incurred except as provided in subsection (4) of this
section.
(4) If such individual policy or group
certificate of insurance is not delivered to the debtor at the time the
indebtedness is incurred, a copy of the application for insurance or a notice
of proposed insurance, signed by the debtor and setting forth the name and
home-office address of the insurer, the name or names of the debtor, the
premium or amount of payment by the debtor separately for credit life insurance
and for credit health insurance, and the amount, term and a brief description
of the coverage provided, shall be delivered to the debtor at the time the
indebtedness is incurred. The copy of the application for insurance or notice
of proposed insurance shall also refer exclusively to insurance coverage, and
shall be separate and apart from the loan, sale or other credit statement of
account, instrument or agreement, unless the information required by this
subsection is prominently set forth therein. Upon acceptance of the insurance
by the insurer and within 30 days of the date upon which the indebtedness is
incurred, the insurer shall cause the individual policy or group certificate of
insurance to be delivered to the debtor. The application for insurance or notice
of proposed insurance shall state that upon acceptance by the insurer, the
insurance shall become effective as provided in ORS 743.376.
(5) If an insurer other than the named
insurer accepts the risk, then the debtor shall receive a policy or certificate
of insurance setting forth the name and home-office address of the substituted
insurer and the amount of the premium to be charged, and if the amount of
premium is less than that set forth in the notice of proposed insurance an
appropriate refund shall be made. [Formerly 739.590 and then 743.579]
743.378
Charges and refunds to debtor.
(1) Each individual policy or group certificate of credit life or credit health
insurance, or both, shall provide that in the event of termination of the
insurance prior to the scheduled maturity date of the indebtedness, any refund
of an amount paid by the debtor for insurance shall be paid or credited
promptly to the person entitled thereto. However, the Director of the
Department of Consumer and Business Services shall prescribe a minimum refund
and no refund which would be less than such minimum need be made. The formula
to be used in computing such refund shall be filed with and approved by the
director.
(2) If a creditor requires a debtor to
make any payment for credit life insurance or credit health insurance and an
individual policy or group certificate of insurance is not issued, the creditor
shall immediately give written notice to such debtor and shall promptly make an
appropriate credit to the account.
(3) The amount charged to a debtor for
credit life insurance and for credit health insurance shall not exceed the
respective premiums charged by the insurer, as computed at the time the charge
to the debtor is determined. [Formerly 739.600 and then 743.582]
743.379
Status of remuneration to creditor. Notwithstanding the provisions of any other law of this state which
may expressly or by construction provide otherwise, any commission or service
fee or other benefit or return to any creditor arising out of the sale or
provision of credit life and credit health insurance shall not be deemed
interest or charges in connection with loans or credit transactions. [Formerly
739.603 and then 743.585]
743.380
Claim report and payment.
(1) All claims under policies of credit life or credit health insurance, or
both, shall be promptly reported to the insurer or its designated claim
representative and the insurer shall maintain adequate claim files. All claims
shall be settled as soon as possible and in accordance with the terms of the
policy.
(2) All claims shall be paid either by
draft drawn upon the insurer or by check of the insurer to the order of the
claimant to whom payment is due pursuant to the policy provisions or, upon
direction of such claimant, to the one specified. [Formerly 739.610 and then
743.588]
HEALTH
INSURANCE
(Individual)
743.402
Exceptions to individual health insurance policy requirements. Nothing in ORS 743.405 to 743.498, 743A.160
and 743A.164 shall apply to or affect:
(1) Any workers’ compensation insurance
policy or any liability insurance policy with or without supplementary expense
coverage therein;
(2) Any policy of reinsurance;
(3) Any blanket or group policy of
insurance; or
(4) Any life insurance policy, or policy
supplemental thereto which contains only such provisions relating to health
insurance as:
(a) Provide additional benefits in case of
death or dismemberment or loss of sight by accident; or
(b) Operate to safeguard such policy
against lapse, or to give a special surrender value or special benefit or an
annuity in the event the insured shall become totally and permanently disabled,
as defined by the policy or supplemental policy.
(5) Coverage under ORS 735.600 to 735.650.
[Formerly 741.022; 2001 c.356 §5]
743.405
General requirements. An
individual health insurance policy must meet the following requirements:
(1) The entire money and other
considerations therefor shall be expressed therein.
(2) The time at which the insurance takes
effect and terminates shall be expressed therein.
(3) It shall purport to insure only one
person, except that a policy may insure, originally or by subsequent amendment,
upon the application of an adult member of a family who shall be deemed the
policyholder, any two or more eligible members of that family, including
husband, wife, dependent children or any children under a specified age which
shall not exceed 19 years and any other person dependent upon the policyholder.
(4) The policy may not be issued
individually to an individual in a group of persons as described in ORS 743.522
for the purpose of separating the individual from health insurance benefits
offered or provided in connection with a group health benefit plan.
(5) Except as provided in ORS 743.498, the
style, arrangement and overall appearance of the policy may not give undue
prominence to any portion of the text, and every printed portion of the text of
the policy and of any indorsements or attached papers shall be plainly printed
in lightfaced type of a style in general use, the size of which shall be
uniform and not less than 10 point with a lower case unspaced alphabet length
not less than 120 point. Captions shall be printed in not less than 12-point
type. As used in this subsection, “text” includes all printed matter except the
name and address of the insurer, name or title of the policy, the brief
description if any, and captions and subcaptions.
(6) The exceptions and reductions of
indemnity must be set forth in the policy. Except those required by ORS 743.411
to 743.477, 743A.160 and 743A.164, exceptions and reductions shall be printed
at the insurer’s option either included with the applicable benefit provision
or under an appropriate caption such as EXCEPTIONS, or EXCEPTIONS AND
REDUCTIONS. However, if an exception or reduction specifically applies only to
a particular benefit of the policy, a statement of the exception or reduction
must be included with the applicable benefit provision.
(7) Each form constituting the policy,
including riders and indorsements, must be identified by a form number in the
lower left-hand corner of the first page of the policy.
(8) The policy may not contain provisions
purporting to make any portion of the charter, rules, constitution or bylaws of
the insurer a part of the policy unless such portion is set forth in full in
the policy, except in the case of the incorporation of or reference to a
statement of rates or classification of risks, or short rate table filed with
the Director of the Department of Consumer and Business Services. [Formerly 741.120;
1999 c.987 §5]
743.408
Mandatory provisions. Except
as provided in ORS 742.021, a health insurance policy shall contain the
provisions set forth in ORS 743.411 to 743.444 and 743A.160. Such provisions
shall be preceded individually by the caption appearing in such sections or, at
the option of the insurer, by such appropriate individual or group captions or
subcaptions as the Director of the Department of Consumer and Business Services
may approve. [1967 c.359 §428]
743.411
Entire contract; changes. A
health insurance policy shall contain a provision as follows: “ENTIRE CONTRACT;
CHANGES: This policy, including the indorsements and the attached papers, if
any, constitutes the entire contract of insurance. No change in this policy
shall be valid until approved by an executive officer of the insurer and unless
such approval be indorsed hereon or attached hereto. No insurance producer has
authority to change this policy or to waive any of its provisions.” [1967 c.359
§429; 2003 c.364 §107]
743.412 [1977 c.632 §2; 1981 c.319 §1; 2001 c.900 §230;
renumbered 743A.160 in 2007]
743.414
Time limit on certain defenses; incontestability. (1) A health insurance policy shall contain
a provision as follows: “TIME LIMIT ON CERTAIN DEFENSES: After two years from
the date of issue of this policy no misstatements, except fraudulent
misstatements, made by the applicant in the application for such policy shall
be used to void the policy or to deny a claim for loss incurred or disability,
as defined in the policy, commencing after the expiration of that period.”
(2) The policy provision set forth in
subsection (1) of this section shall not be so construed as to affect any legal
requirement for avoidance of a policy or denial of a claim during such initial
two-year period, or to limit the application of ORS 743.450 to 743.462 in the
event of misstatement with respect to age or occupation or other insurance.
(3) A policy which the insured has the
right to continue in force subject to its terms by the timely payment of premium
until at least age 50 or, in the case of a policy issued after age 44, for at
least five years from its date of issue, may contain in lieu of the provision
set forth in subsection (1) of this section the following provision, from which
the clause in parentheses may be omitted at the insurer’s option: “INCONTESTABLE:
After this policy has been in force for a period of two years during the
lifetime of the insured (excluding any period during which the insured is
disabled), it shall become incontestable as to the statements contained in the
application.”
(4) The policy shall contain a provision
as follows, which shall be a separate paragraph under the same caption as, and
immediately following, the provision set forth in subsection (1) or (3) of this
section: “No claim for loss incurred or disability, as defined in the policy,
commencing after two years from the date of issue of this policy shall be
reduced or denied on the ground that a disease or physical condition not
excluded from coverage by name or specific description effective on the date of
loss had existed prior to the effective date of coverage of this policy.” [1967
c.359 §430; 1969 c.159 §1]
743.417
Grace period. (1) An
individual health insurance policy shall contain a provision as follows: “GRACE
PERIOD: A minimum grace period of 10 days after the premium due date will be
granted for the payment of each premium falling due after the first premium,
during which grace period the policy shall continue in force.”
(2) A policy that contains a cancellation
provision may add the following clause at the end of the provision set forth in
subsection (1) of this section: “subject to the right of the insurer to cancel
in accordance with the cancellation provision hereof.”
(3) A policy in which the insurer reserves
the right to refuse renewal shall have the following clause at the beginning of
the provision set forth in subsection (1) of this section: “Unless not less
than 30 days prior to the premium due date the insurer has delivered to the
insured or has mailed to the last address of the insured as shown by the
records of the insurer written notice of its intention not to renew this policy
beyond the period for which the premium has been accepted. The insurer shall
state in the notice the reason for its refusal to renew this policy.” [1967
c.359 §431; 1989 c.784 §19; 2001 c.943 §9]
743.420
Reinstatement. (1) A health
insurance policy shall contain a provision as follows: “REINSTATEMENT: If any
renewal premium is not paid within the grace period, a subsequent acceptance of
premium by the insurer or by any insurance producer duly authorized by the
insurer to accept such premium, without requiring in connection therewith an
application for reinstatement, shall reinstate the policy; provided, however, that
if the insurer or such insurance producer requires an application for
reinstatement and issues a conditional receipt for the premium tendered, the
policy will be reinstated upon approval of such application by the insurer or,
lacking such approval, upon the 45th day following the date of such conditional
receipt unless the insurer has previously notified the insured in writing of
its disapproval of such application. The reinstated policy shall cover only
loss resulting from such accidental injury as may be sustained after the date
of reinstatement and loss due to such sickness as may begin more than 10 days
after such date. In all other respects the insured and insurer shall have the
same rights thereunder as they had under the policy immediately before the due
date of the defaulted premium, subject to any provisions indorsed hereon or
attached hereto in connection with the reinstatement. Any premium accepted in
connection with a reinstatement shall be applied to a period for which premium
has not been previously paid, but not to any period more than 60 days prior to
the date of reinstatement.”
(2) The last sentence of the provision set
forth in subsection (1) of this section may be omitted from any policy which
the insured has the right to continue in force subject to its terms by the
timely payment of premiums until at least age 50 or, in the case of a policy
issued after age 44, for at least five years from its date of issue. [1967
c.359 §432; 2001 c.943 §10; 2003 c.364 §108]
743.423
Notice of claim. (1) A
health insurance policy shall contain a provision as follows: “NOTICE OF CLAIM:
Written notice of claim must be given to the insurer within 20 days after the
occurrence or commencement of any loss covered by the policy, or as soon
thereafter as is reasonably possible. Notice given by or on behalf of the
insured or the beneficiary to the insurer at ___ (insert the location of
such office as the insurer may designate for the purpose), or to any authorized
agent of the insurer, with information sufficient to identify the insured,
shall be deemed notice to the insurer.”
(2) In a policy providing a loss-of-time
benefit which may be payable for at least two years, an insurer may at its
option insert the following between the first and second sentences of the
provision set forth in subsection (1) of this section: “Subject to the
qualifications set forth below, if the insured suffers loss of time on account
of disability for which indemnity may be payable for at least two years, the
insured shall, at least once in every six months after having given notice of
claim, give to the insurer notice of continuance of such disability, except in
the event of legal incapacity. The period of six months following any filing of
proof by the insured or any payment by the insurer on account of such claim or
any denial of liability in whole or in part by the insurer shall be excluded in
applying this provision. Delay in the giving of such notice shall not impair
the insured’s right to any indemnity which would otherwise have accrued during
the period of six months preceding the date on which such notice is actually
given.” [1967 c.359 §433]
743.426
Claim forms. A health
insurance policy shall contain a provision as follows: “CLAIM FORMS: The
insurer, upon receipt of a notice of claim, will furnish to the claimant such
forms as are usually furnished by it for filing proof of loss. If such forms
are not furnished within 15 days after the giving of such notice, the claimant
shall be deemed to have complied with the requirements of this policy as to
proof of loss upon submitting, within the time fixed in the policy for filing
proofs of loss, written proof covering the occurrence, the character and the
extent of the loss for which claim is made.” [1967 c.359 §434]
743.429
Proofs of loss. A health
insurance policy shall contain a provision as follows: “PROOFS OF LOSS: Written
proof of loss must be furnished to the insurer at its office in case of claim
for loss for which this policy provides any periodic payment contingent upon
continuing loss within 90 days after the termination of the period for which
the insurer is liable and in case of claim for any other loss within 90 days
after the date of such loss. Failure to furnish such proof within the time
required shall not invalidate or reduce any claim if it was not reasonably
possible to give proof within such time, provided such proof is furnished as
soon as reasonably possible and in no event, except in the absence of legal
capacity, later than one year from the time proof is otherwise required.” [1967
c.359 §435]
743.432
Time of payment of claims. A
health insurance policy shall contain a provision as follows: “TIME OF PAYMENT
OF CLAIMS: Indemnities payable under this policy for any loss other than loss
for which this policy provides any periodic payment will be paid immediately
upon receipt of due written proof of such loss. Subject to due written proof of
loss, all accrued indemnities for loss for which this policy provides periodic
payment will be paid ______ (insert period for payment which must not be less
frequently than monthly) and any balance remaining unpaid upon the termination
of liability will be paid immediately upon receipt of due written proof.” [1967
c.359 §436]
743.435
Payment of claims. (1) A
health insurance policy shall contain a provision as follows: “PAYMENT OF
CLAIMS: Indemnity for loss of life will be payable in accordance with the
beneficiary designation and the provisions respecting such payment which may be
prescribed herein and effective at the time of payment. If no such designation
or provision is then effective, such indemnity shall be payable to the estate
of the insured. Any other accrued indemnities unpaid at the insured’s death
may, at the option of the insurer, be paid either to such beneficiary or to
such estate. All other indemnities will be payable to the insured.”
(2) The following provisions, or either of
them, may be included with the provision set forth in subsection (1) of this
section at the option of the insurer:
(a) “If any indemnity of this policy shall
be payable to the estate of the insured, or to an insured or beneficiary who is
a minor or otherwise not competent to give a valid release, the insurer may pay
such indemnity, up to an amount not exceeding $___ (insert an amount which shall
not exceed $1,000), to any relative by blood or connection by marriage of the
insured or beneficiary who is deemed by the insurer to be equitably entitled
thereto. Any payment made by the insurer in good faith pursuant to this
provision shall fully discharge the insurer to the extent of such payment.”
(b) “Subject to any written direction of
the insured in the application or otherwise all or a portion of any indemnities
provided by this policy on account of hospital, nursing, medical or surgical
services may, at the insurer’s option and unless the insured requests otherwise
in writing not later than the time of filing proofs of such loss, be paid
directly to the hospital or person rendering such services; but it is not
required that the service be rendered by a particular hospital or person.” [1967
c.359 §437]
743.438
Physical examinations and autopsy. A health insurance policy shall contain a provision as follows: “PHYSICAL
EXAMINATIONS AND AUTOPSY: The insurer at its own expense shall have the right
and opportunity to examine the person of the insured when and as often as it
may reasonably require during the pendency of a claim hereunder and to make an
autopsy in case of death where it is not forbidden by law.” [1967 c.359 §438]
743.441
Legal actions. A health
insurance policy shall contain a provision as follows: “LEGAL ACTIONS: No
action at law or in equity shall be brought to recover on this policy prior to
the expiration of 60 days after written proof of loss has been furnished in
accordance with the requirements of this policy. No such action shall be
brought after the expiration of three years after the time written proof of
loss is required to be furnished.” [1967 c.359 §439]
743.444
Change of beneficiary. (1) A
health insurance policy shall contain a provision as follows: “CHANGE OF
BENEFICIARY: Unless the insured makes an irrevocable designation of
beneficiary, the right to change of beneficiary is reserved to the insured and
the consent of the beneficiary or beneficiaries shall not be requisite to
surrender or assignment of this policy or to any change of beneficiary or
beneficiaries or to any other changes in this policy.”
(2) The first clause of the provision set
forth in subsection (1) of this section, relating to the irrevocable designation
of beneficiary, may be omitted at the insurer’s option. [1967 c.359 §440]
743.447
Optional provisions. Except
as provided in ORS 742.021, provisions in a health insurance policy respecting
the matters set forth in ORS 743.450 to 743.477 and 743A.164 shall be in the
words which appear in such sections. Any such provision contained in the policy
shall be preceded individually by the appropriate caption appearing in such
sections or, at the option of the insurer, by such appropriate individual or
group captions or subcaptions as the Director of the Department of Consumer and
Business Services may approve. [1967 c.359 §441]
743.450
Change of occupation. A
health insurance policy may contain a provision as follows: “CHANGE OF
OCCUPATION: If the insured be injured or contract sickness after having changed
occupation to one classified by the insurer as more hazardous than that stated
in this policy or while doing for compensation anything pertaining to an
occupation so classified, the insurer will pay only such portion of the
indemnities provided in this policy as the premium paid would have purchased at
the rates and within the limits fixed by the insurer for such more hazardous
occupation. If the insured changes occupation to one classified by the insurer
as less hazardous than that stated in this policy, the insurer, upon receipt of
proof of such change of occupation, will reduce the premium rate accordingly,
and will return the excess pro rata unearned premium from the date of change of
occupation or from the policy anniversary date immediately preceding receipt of
such proof, whichever is the more recent. In applying this provision, the
classification of occupational risk and the premium rates shall be such as have
been last filed by the insurer prior to the occurrence of the loss for which
the insurer is liable or prior to date of proof of change in occupation with
the state official having supervision of insurance in the state where the
insured resided at the time this policy was issued; but if such filing was not
required, then the classification of occupational risk and the premium rates
shall be those last made effective by the insurer in such state prior to the
occurrence of the loss or prior to the date of proof of change in occupation.” [1967
c.359 §442]
743.453
Misstatement of age. A
health insurance policy may contain a provision as follows: “MISSTATEMENT OF
AGE: If the age of the insured has been misstated, all amounts payable under
this policy shall be such as the premium paid would have purchased at the
correct age.” [1967 c.359 §443]
743.456
Other insurance in same insurer. (1) A health insurance policy may contain a provision as follows: “OTHER
INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness
policy or policies previously issued by the insurer to the insured be in force
concurrently herewith, making the aggregate indemnity for _____ (insert type of
coverage or coverages) in excess of $___ (insert maximum limit of indemnity or
indemnities), the excess insurance shall be void and all premiums paid for such
excess shall be returned to the insured or to the estate of the insured.”
(2) In lieu of the provisions set forth in
subsection (1) of this section, the policy may contain a provision as follows: “OTHER
INSURANCE IN THIS INSURER: Insurance effective at any one time on the insured
under a like policy or policies in this company is limited to the one such
policy elected by the insured, the beneficiary or the estate of the insured, as
the case may be, and the insurer will return all premiums paid for all other
such policies.” [1967 c.359 §444]
743.459 Insurance with other insurers; expense incurred benefits. (1) A health insurance policy may contain a provision as follows: “INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for such proportion of the loss as the amount whi